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Digital Delivery’s Promise and Challenges Discussed at EMA Conference

24 Sep, 2013 By: Stephanie Prange

(L-R): Morgan Spurlock and EMA's Mark Fisher

The Entertainment Merchants Association’s fifth annual Digital Media Pipeline event gathered content, retail and technology executives

Speakers discussed the growth of digital delivery domestically and internationally, digital retail, and emerging digital content and technologies at the Entertainment Merchants Association’s fifth annual Digital Media Pipeline, held Sept. 24 at the Skirball Cultural Center in Los Angeles.

Oscar-nominated filmmaker Morgan Spurlock (Super Size Me), a keynote speaker at the event, praised digital services such as Netflix and Amazon Prime for helping to make documentaries more widely available.

“Suddenly to have them streaming through all these services is massive,” he said.

Spurlock’s latest documentary, One Direction: This Is Us, hit theaters Aug. 30 from Sony Pictures Home Entertainment. As for Super Size Me, the documentary about eating only at McDonald’s that put him on the map, Spurlock joked that 2003 was the last time he had eaten at that particular fast food establishment.

The EMA presented Spurlock with a Visionary Award at the conference.

Finding a way to harness digital growth and extract profit was a key theme of the conference.

“Physical has begun to flatten out,” noted Derek Grey, VP of digital distribution with Warner Bros. Home Entertainment.

Grey pointed to UltraViolet, the studio-backed, cloud-based digital locker, as a catalyst for growth in the digital realm. But “we also acknowledge the challenges” in its launch, he said. Grey noted that with $1 billion in yearly revenue, digital is a “meaningful part of the business, but we know EST [electronic sellthrough] has to improve.”

“We have to improve ownership models,” Grey said.

Futuresource Consulting’s Alison Casey presented research showing UltraViolet had 37% awareness in the United States and 17% in the United Kingdom, but only 9% in Germany (where packaged media is still going strong) and 8% in France.

Panelists noted the confusion in the marketplace as content owners test different windows and pricing, and consumers face an exploding list of digital services.

“You have to find out where the customers are,” noted Mitch Mallon, SVP of digital sales for indie RLJ Entertainment.

“It’s definitely confusing,” Grey said, when asked about the varied windows and content offerings that consumers face from various digital services.

He noted that Warner is looking hard at windows.

“We are trying to test as much as we can,” he said, pointing to early EST as one such experiment.

“Nothing is set in stone,” Mallon said, noting that even Netflix is changing with its greater focus on original content.

Dave Miller, VP of marketing at Warner Bros. Interactive Entertainment, pointed to incremental revenue as a way to extract profit from games, even if they are initially free. “Clash of Clans,” he noted, brings in millions a month in additional in-game purchases.

Chris Early, VP of digital publishing with Ubisoft, suggested a game model in which content owners charge less than the usual $60 for a game and perhaps charge half or a third that price for less upfront content. Consumers who want more content could add it later for an additional cost.

Digital retailers on another panel noted the assist they get from brick-and-mortar partners. FlixFling has just partnered with MovieStop, a 44-store chain based in Atlanta, said CEO Thomas Ashley. The retail presence helps educate the consumer, he said.

Christopher Allen, GM of digital video at Best Buy/CinemaNow said the association with the chain made placement with hardware companies — key sellers to Best Buy — easier.

Panelists agreed that young people were more tied into digital delivery than other demographic groups — and that they had no trouble watching lots of content on the small screen. Brian Lerner, creative producer at Disney Interactive, noted that he had talked to a 20-year-old that watched the entire season of “House of Cards,” the Netflix original series that just won an Emmy for director David Fincher, on his phone.

Finally, Danny Bilson, co-writer of the 1991 superhero film The Rocketeer, another keynote speaker, talked about how entertainment would change with new digital outlets. He said creating a world in which to anchor entertainment properties of all kinds, from games to movies to user-generated content, would be the wave of the future. He pointed to the “Harry Potter” universe, “The Walking Dead” franchise and “Star Wars” as such worlds.

“Disney bought the world, [not just characters such as Luke Skywalker],” he said referring to the studio’s recent acquisition of the “Star Wars” franchise.
Also at the conference, EMA presented Amazon, Netflix and the online campaign for Warner Bros. Interactive Entertainment’s video game “Injustice: Gods Among Us” with “Digi” Awards for outstanding achievement in digital innovation, retailing, and entertainment content, respectively.

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