While reading his post I came across a new term, “micro-listening”.

Ward writes about Harper Reed, the CTO of the Obama campaign,

“In June 2011, about one month after taking the job on the Obama campaign — his first job on any political campaign ever — Reed went to Foo Camp, an annual get-together of the technorati organized by Tim O’Reilly, founder of O’Reilly Media and an influential advocate for open source technology.

I called Reed to find out more about what he learned. He told me that at one session, he asked for input from others.

“I sat there and I basically said, ‘I’m the CTO for Obama’s reelection campaign, and I want to know what you guys think we should be focusing on,’” Reed said.

O’Reilly sat across from him and said, Reed recalled, “You hear a lot about micro-targeting in campaigns. I want to suggest that there should be more micro-listening.”

“That really resonated with me,” Reed said. “How do I activate those people to tell me more?’”

It is fascinating to read that Tim O’Reilly suggested the term “micro-listening”.  O’Reilly is a very smart man when it comes to understanding the evolution of web technology. He coined the phrase, “architecture of participation” to describe the social web.

The term, micro-targeting, is used by many who work in the world of Big Data– that area that promises that if brands can gather enough data points about each consumer, they can more effectively sell their wares because now they can craft the perfectly tailored sales pitch.

The “micro-listening” approach turns the micro-targeting strategy on its head.

Instead of pushing out the perfect message to get the consumer to say yes, it aspires to create a relationship by building trust.

It believes that someone is more likely to trust your message when you have allowed them to tell you what they think and care about. Only then will they join you, either to give you their vote (as with a campaign),  and/or their money (as with a campaign or a product).

The listening approach is more sophisticated and nuanced. It takes more time and effort because there is a lot of back and forth.

It is also more finely tuned to a networked society where consumers and citizens comment and share within their social networks.  As Tim O’Reilly would say, they are operating within an “architecture of participation”.

The micro-targeting approach still relies on a mass media model that pumps out a singular message to large numbers of people.  It refines the model slightly by making adjustments to the content of the  message or the form in which it is delivered. But it is clearly not interested in what the consumer has to say.  Listening is not part of the equation.

Ward goes on to quote another member of the Obama campaign staff.

“The biggest thing is listening and not just barking at [voters]. People don’t want to know our 10 point plan,” Jeremy Bird, the 34-year-old organizer who oversaw the Obama campaign’s field operation, told me. “They want to know that we’re listening to them, and that last time we talked to them, and they told us their son was an Iraq war vet, we listened to that and therefore we’re going to talk to them about that and not come at them like political marketers.”

“That was just huge for us. People stopped thinking of us as political marketers once they knew we were listening to them.”

The Obama campaign used technology to reinforce the human touch of their ground campaign.  They were able to harness the power of their campaign workers and volunteers by letting them know who they had to reach, how to reach them and finally, how to listen.

What Can We Learn From All This?

Anyone who wants to reach consumers with a value proposition, be they a big brand or an indie artist can learn from the Obama campaign.  Each company who says “buy my soap” or record label who says “listen to my music” or indie film maker who says “watch my movie” can emulate this strategy.

They each have to ask themselves the question that Harper Reed asked early in the campaign,  “How do I activate those people to tell me more?”

So how do you take advantage of digital technology in our networked  society and get people to buy what you are selling?

Listen carefully.

Last year’s Sundance festival certainly did that for Benh Zeitlin and his movie, Beasts of the Southern Wild.  A masterful film done on a low budget with unknown actors it has received richly deserved praise and box office success. It shows that the current system of indie development and funding can still support a worthy indie movie and help it reach a large audience.

Unfortunately, however, this kind of story is all too rare. Most of the indie films that go to film festivals do not get a distribution deal nor do they achieve anything close to this level of success.  This has always been the case. By and large,  films that go to Sundance and other well known film festivals never reach an audience beyond the festival.  They remain obscure–even after a major festival showing.

I assume that every film that makes it into a film festival has an audience beyond the festival itself. It just has to be found. And today, getting a distribution deal with a traditional distributor is not the only way to find that audience.

Another Way To Seek An Audience

There is another film that premiered at Sundance a year ago that won praise and found its audience.   And remarkably, this film, Indie Game: The Movie, did so without a traditional distribution deal.  As such, the example of Indie Game: The Movie provides a glimpse into how filmmakers can find an audience using a little bit of the old (getting into a film festival to gain attention) and a little bit of the new (reaching their audience before, during and after production).

Fortunately for the indie film business, Lijan Pajot and James Swirsky created a case study that lays out the details of the journey from the conception of their film through its release.  They have left a treasure trove of data that should inspire other filmmakers who might consider taking a similar path.  I will concentrate on just a couple of their many data points.

Usually a filmmaker uses a film festival to begin the process of gathering an audience.

Pajot and Swirsky did something markedly different.  They gathered an audience while they made their movie, long before they even applied to a festival.

A key vehicle for this gathering of fans was Kickstarter.  They did two campaigns on Kickstarter.  Through these two campaigns they gathered 2,893 supporters who contributed a total of $94,676 toward the film.  In addition to the monies raised, Pajot and Swirsky gathered a significant number of fans with whom they could regularly connect with over the course of the film’s production and release–with Kickstarter updates, tweets and email conversations.

Essentially they followed Kevin Kelly’s 1,000 True Fans Strategy.  By the time they were accepted by Sundance they had close to 3,000 fans in tow.  Importantly they had a fan base with whom they could share their major film festival experience.  You can imagine that their excited group of fans were more than happy to share their involvement with this film.  You can see the tweets: “The movie I supported on Kickstarter got into Sundance!” This in turn gathered a larger audience.

Pajot and Swirsky used the Sundance festival as their midpoint in gathering their audience–not their starting point.

As a result the normal amplification of buzz that festivals provide was even greater as they had a solid base to build on.

This is a scenario that will become increasingly common in the future as more independent filmmakers begin to use the 1,000 fans strategy early in the film making process.  And it will create another situation that Pajot and Swirsky  encountered at the festival.

Direct Distribution

Though they were offered several  traditional distribution deals, they said no to all of them. With their ever increasing fan base in their back pocket, another route was made possible.  They made deals that allowed them to directly distribute their film through a number of digital channels, ranging from Netflix, iTunes to downloads from their own website.  They were also able to get Adobe to underwrite a series of special theatrical screenings around the country.

One more thing to notice as well. As a result of their strategy, they held on to the ownership of their movie, which means that they alone control its future.

Much of their success can be directly traced to a decision they made early in their film making process– to gather their audience long before they entered their first festival.

It will be fascinating to observe which films come to Sundance this year with their fans in tow and take a similar route out.

Zoe continues to be a leader. She recently posted a piece entitled, What I want from Internet radio, where she says the following.

“I want my data and in 2012 I see absolutely no reason why I shouldn’t own it. It seems like everyone has it, and exploits it…everyone but the creators providing the content that services are built on. I wish I could make this demand: stream my music, but in exchange give me my listener data. But the law doesn’t give me that power. The law only demands I be paid in money, which at this point in my career is not as valuable as information. I’d rather be paid in data.

For the first 6 months of 2012, I calculate I had more than 1.5 million listens on Pandora, for which I received $1652.74.  That seems great on the surface and I’m grateful for the extra money, but I want to know:  Do these listeners also own my music?  How many of these listens are on Zoë Keating stations? What other user stations do I pop up in, and sandwiched between what other artists? How many listeners gave me a “thumbs up”? How do I reach them? Do they know I’m performing nearby next month? How can I tell them I have a new album coming out?

The new model says that in the future I’m not supposed to sell music: I’m supposed to sell concert tickets and tshirts. Ok fine, so put me in touch with the people who will buy concert tickets and tshirts (p.s. I’d like the same from on-demand services like Spotify too).

In short, I think I’m solving my obscurity problem…”

If you read tech related blogs, you are constantly bombarded with pronouncements about “Big Data” and how it will play a a big role in the future of big brands and how they market to the consumer.

Zoe shows how individual artists need to also think about how they can wrestle with Big Data as well. Pandora and Spotify collect huge amounts of data from their listeners.  As Zoe points out this data tracks the behavior and location of her fans.  Access to that data is literally gold for Zoe and any other artist as it allows them to create an ongoing connection with their fans that can be monetized in a variety of ways–as she indicates.

What Zoe says about music services is also applicable to every other form of artistic expression and the digital services that sell them– be they films, tv series, web series, audio books, ebooks–the list goes on.  These services have something in addition to money to give artists.  They have the real data about their fans that artists can use to create sustainable businesses over time that support their art.

This is also why every artist needs a central place to interact with their fans that they own and control–be that a blog, a website, a twitter feed, or a facebook page.  If they have this central place they can deal directly with their fans and gather their own Big Data, while also letting their fans know how to find them on iTunes, Amazon, Netflix or Pandora.

At the same time, as Zoe indicates, these third party digital stores need to provide greater value to the artists whose work they sell by providing them with the data they collect while selling their music, films, web series or ebooks.

To repeat, this is a two fold process:

1.  Gather your own data on your own social media/web properties and

2. Get the data collected by others who sell your art.

As Zoe says, this is how you can solve the greatest problem each individual artist has–the problem of obscurity.

Within the pages of this document there is active debate about whether HBO Go should be tethered to the MSOs for sales and promotion or whether HBO Go should become a consumer facing product that is sold directly by HBO to its customers. As each year passes the debate framed by this document becomes more intense.

Why?

1. Each year, the cost of creating and delivering HBO Go to its customers (all of whom must have a linear HBO TV subscription though they may or may not use it) continues to decline.

2.  Each year, the MSOs, as HBO’s reseller, continue to take a large share of the $15 monthly subscription fee that HBO charges for its service. (Let’s assume 1/3 to 1/2.)

3.  Each year, it becomes clearer to the corporate strategy folks who run the numbers that HBO is leaving ever larger sums of money on the table because it is unable to sell HBO Go directly to consumers online.  (Assume they lose $5 to $7.50 per month per subscriber to Comcast, etc.) This money would contribute greatly to their bottom line. (It is has grown from tens of millions to hundreds of millions in the past 5 years.) This is not chump change.

Every year the corporate strategy folks lay out these numbers to their bosses at HBO and to their bosses at Time Warner.  And every year the debate rages within HBO.  They ask themselves:  Do we cut HBO Go loose from the requirement that one has to buy a linear HBO subscription from Comcast? Do we grab that larger profit per customer that is waiting for us if we eliminate the middleman?

This is but one instance of the general dilemma that all mass media companies face today. In our larger media world we are moving from distribution networks that are centrally controlled, ie, cable systems and broadcast networks to a distribution network that is based on a distributed architecture–i.e. the Internet.

As this shift to the Internet occurs, mass media companies have the opportunity to deal directly with their customers as they never have. Large creators and publishers of content, like HBO, can now interact with their customers and understand their wants and desires in a completely new manner.  And they can do so at a much lower cost than going over legacy mass media networks.  This cost will only continue to go down as the price of all things digital continues to fall.

Not to mention that HBO has a lower priced competitor that already deals directly with its customers on the Internet.   It is called Netflix.  It is starting to do exactly what HBO does.  It licenses Hollywood content and creates original content that will shortly be on par with HBO.  (House of Cards comes in 2013 and more to follow.)

So HBO, on the one side, is squeezed by competition from the Internet and on the other, held back by legacy middleman agreements through its arrangements with the large cable companies. These debates within HBO would be fascinating drama in themselves.

Ironically, HBO has to ask the very same question that is asked by many of us who subscribe to cable. 

When do I cut the cord?

The first was an interview with Thom Powers by Amanda Lin Costa on PBS MediaShift, Thom Powers: For Film Festivals, Twitter Is Mandatory, Apps Are Not.  Thom talks about what filmmakers should be doing to effectively use festivals and promote their movies. He makes a few points about social media and how important it is for filmmakers to acquire a new tool.  A tool, by the way, that is not taught in film school.

“…you have to incorporate social media, with the basics being Twitter, Facebook and YouTube. If a filmmaker isn’t at least covering those three bases, they are a step behind.

It’s also about building a database. It used to be two tools you needed as a filmmaker: a camera and an editing machine. Now there’s a third tool, which is a database of your followers, and not just for one project but as something you’re going to nurture and grow for your career. I think this is a new approach, because the old approach was to think about this as film-to-film.”

Thom suggests that filmmakers need to think beyond their current film and think instead like a company that is continually producing movies and therefore can build up a following over several films.  The database is crucial to that process. It allows you to keep in constant contact with the fans of your current project and the potential fans of your future project.

Then I came across a fascinating post, INDIE GAME: THE MOVIE: THE CASE STUDY , written by Lisanne Pajot and James Swirsky, who are the filmmakers who made Indie Game: The Movie. They did what Thom suggests all filmmakers do and achieved great success. I urge everyone to read all the posts that compose their case study.  (Here is hoping that they come out with an ebook version soon).

There is much to praise about the film and the case study they have created.  I was struck by one section particularly because they highlight just what it takes to pull off what Thom suggests.  Above all, notice that all this audience development and database stuff takes a lot of work–if you want to succeed.   As they write,

“In terms of numbers, here’s what that audience engagement actually meant. Between the 2 filmmakers, over the course of the 33 months of production (and distribution):

• 10,286 IGTM-related emails were written or replied to
• 13,783 Tweets were sent off from @indiegamemovie
• 182 blog posts were made on IndieGameTheMovie.com
• 88 minutes of extra video web content was published prior to release, resulting in over 1.3 million views.
• 51 Updates were given to Kickstarter Backers
• 2,784 emails were support/fan emails personally responded to after the June 12th release.”

You do not have to read between the lines to realize that Lisanne and James spent a lot of time in front of their computers pounding out emails, tweets, blog posts, and updates, often to one audience member at a time. Time not spent doing all the other things filmmakers (and people in general) would prefer to do, like relax, listen to music, maybe see or make a new movie.

But you can bet that as a result they have a very active database of followers who are seeing their current movie and eagerly awaiting what they do next.

And what independent filmmaker would not want to be in their position?

“What is originality?  To see something that has no name as yet and hence cannot be mentioned although it stares us all in the face.  The way men usually are, it takes a name to make something visible to them.”

                      Friedrich Nietzsche

We know that we are in the midst of a massive media transition as we watch the Internet reshape the world of mass media. We see new forms of entertainment and marketing emerge that use this massive distributed network. These new forms do not treat people as passive mass media consumers. Instead people exist as active “users” who engage with immersive experiences that they have a hand in shaping and guiding.

The traditional lines between marketing, advertising and entertainment blur within these experiences.  This blurring causes even more confusion.  We do not even know what to call these new forms and as a result– they are not yet truly visible to us.  Words like transmedia, story worlds, gamification or spreadable media are used to give these forms definition but they do not seem to capture them completely.  We know a 30 second TV spot when we see it.  But what is all this other stuff?

Understanding The Blur: No Interruptions Please

Fast Company has been diligent at detailing some of these new forms.  Recently they analyzed  The Hunger Games  and Prometheus and how Ignition Interactive employed a variety of techniques to engage with people online in order to persuade them to leave their homes and see these movies in movie theaters. Each piece gives a glimpse into the future of movie marketing and is worth a close read.

In each example, Ignition Interactive created large story worlds that immersed their participants in a variety of media.  These story worlds have game play, various kinds of video and user generated content that is spread across multiple platforms, (Facebook, Twitter and tumblr, among others) and move across multiple screens.  They weave a story that is inspired by the film’s narrative and additional narrative that is created by fans.

This approach capitalizes on a massive shift in consumer behavior brought about by technology.  As Steve Coulson, Partner and Creative Director at Campfire put it in a comment on an earlier post of mine;

 “Interruptive advertising, like TV commercials and banner ads will increasingly be filtered by technology like ad blockers and DVRs.  To gain attention and interaction, you need to move to permission marketing tactics, that excite people rather than interrupt them…  The Prometheus campaign emerged on multiple platforms, and spread primarily via social media WOM.  In that sense, these types of campaigns – free creative prequels to paid entertainment experiences – work in the way that a free product sample does to drive awareness.  Try before you buy, coupled with an organic distribution method that does not end when a media buy is finished.”

Evan DeHaven, President/Executive Creative Director of Ignition Interactive, seconds Coulson’s point when he comments;

“Consumers don’t want to be force fed ads anymore and in most mediums we can bypass ads quickly and easily so they have become less and less effective. For instance try naming the last site you saw a banner ad on. This is hard to answer although they are on every website. The reason is we know where they are placed, their shapes and sizes, so our eyes are trained to look around them.

Instead if we bring a story world to the mediums users frequent and allow them numerous and easy entries along with opportunities to participate, your marketing effortlessly becomes pleasurable instead of an annoyance. This pleasure in many cases converts to a purchase and/or share.”

He ends his comment with a sentence in all caps so we can really get the point.

 “STOP INTERRUPTING WHAT PEOPLE ARE INTERESTED IN AND BECOME WHAT PEOPLE ARE INTERESTED IN”

The New World of Movie Marketing

It is clear that in this new world, whose contours we are beginning to see, interruptive advertising such TV or online banner ads will face greater resistance from consumers. With any form of advertising, the film company (or any brand one might argue) has to seduce the viewer with its message.  But the terrain for the seduction has completely changed. The consumer may still want to be “seduced” but she does not want to be “interrupted”.

Does this new method work?  Can a movie company get people to see its movies in theaters without an immense TV ad spend?

In at least one case the answer appears to be yes.

Ronald Grover of  Reuters reports that Lionsgate spent 15 to 20 million dollars less in TV advertising on The Hunger Games because of its successful social media efforts.  This means it cut a 1/3 of its normal spend on TV ads and still achieved a large box office return.  And though their social media campaign was extensive, it cost much less than 20 million dollars.

Fewer dollars were spent to gain an equivalent large box office result that only TV ads would have previously enabled. Put simply, Lionsgate discovered that it did not need to place as many TV ads as it normally did to fill theater seats.

As Greg Verdino, the author of MicroMarketing  notes in a comment,

 “…is it more efficient and/or effective than pumping money into traditional advertising? …signs are starting to point to yes. I’d much rather invest my money (even if it is 7-figures’ worth) in building consumer buy-in and participation, and in creating the kind of social ownership that fills theaters opening weekend – rather than in spray and pray advertising that looks, sounds and feels pretty much the same as everyone else’s.”

What effect would this have if this change in spending were to spread throughout the movie studio system?

In 2011 the movie studios collectively spent $2.9 billion on television advertising to convince people to show up at movie theaters for their new releases.  If every studio cut its TV ad spend by 1/3 as Lionsgate did, that would mean one billion dollars less spent on TV ads on an annualized basis.

Of course this means one billion dollars less in revenue for the broadcast and cable networks that normally show movie advertising to their viewers.  A big drop in revenue, no matter how you slice it.

Will Studios Cut Back TV Ad Spends?

A fascinating paradox is now set up within the larger mass media ecosystem.

The Internet helps the movie business find a new way to connect with its customers at a much lower cost, thus helping the studios’ bottom line. However, by doing so, less money flows to other members of the mass media ecosystem—the broadcast and cable networks–that are often owned by the same companies.  So some large mass media companies will save money in one division–only to see reduced revenue simultaneously in another division.

We might see that some studios do not reduce TV ad budgets even when they can achieve the same result by using less expensive social media campaigns like The Hunger Games. Part of this will be attributable to their strongly held belief (illusion?) that they must always spend big on TV to achieve large box office grosses. After all it is the way of mass media.

In addition, their corporate masters might not allow them to reduce what they spend—after all the company needs that revenue. This could act as a brake on marketing innovation.

However, companies like Lionsgate, who are not owned (yet) by larger entities will benefit by using these new methods—as they already have.

And perhaps, when these new forms finally gain a name and are therefore easier to see, innovation could accelerate and TV ads will no longer be the king of movie marketing.

Note: This is a revision of an earlier post of mine titled Another Crack In The Mass Media Wall.  Thanks to everyone who commented on that post, especially those whose comments contributed to this piece.

“Lesson one: Audience development is equally as important as great content. By creating fantastic content and spending zero time on audience development, you are certain that you will not succeed on YouTube. You have to focus on audience development as much as you focus on creating content.”

Kyncl goes on to discuss how the task of TV programming and marketing have to be combined in the new world of on demand content viewing. Kafka then asks who is supposed to do audience development, the content creator or YouTube. Kyncl responds:

“The content creator… As things go more and more on-demand and less linear, the prime-time flow expertise is less needed. You have to learn how you program in an on-demand world, which is a much different skill set.”

What is remarkable is that Kyncl states that this new category of “audience development”, which was the responsibility of the TV channel, now resides with the content creator (and not with YouTube).

Imagine you have just created a prime time TV series and the network  informs you that you are responsible for getting your audience to show up. You would think they had lost their mind.

Yet here it makes total sense.

You see, YouTube, as well as other Internet services, are built on a distributed network.  They are not mass media networks built on a centralized model.  On a centralized (mass media) network, a passive consumer is constantly being reminded what shows are coming up and when to watch. On a distributed network (the Internet), an active viewer grabs what she wants, when she wants it, from a large constantly changing selection. On a platform like YouTube, the service may not be even aware of everything that is available at that instant, let alone what will be available tomorrow.  The platform brings you access to the whole globe in an instant.  But you have to get the people of the globe to take notice and take action on your behalf.

Thus, it falls to the content creator to take up the task of gathering and holding onto her audience. The good news is that content creators can have a direct relationship with their users on YouTube.  The bad news is that it is their responsibility to create and maintain those relationships.

The necessity of audience development falls upon larger companies like Machinima as well as any small team that creates an original web series or individual film. Now everyone can become a creator, a publisher.  But they also have to become programmers, marketers, and experts in “audience development”.

This is a whole new world for people who have previously concentrated on creating great stories. Now they need to entice people into their stories, get them to stay around and get them to come back.

This will be a very difficult transition for those who have worked within the legacy mass media business of networks and studios.  It will require the unlearning of accepted practices as well as learning new ones. It used to be that great content from creators and great promotion and scheduling from the network brought success. No more. Now the creators have to do it all.

Who will successfully navigate these uncharted waters?

Bond Strategy and Influence is hosting The Film Experience Hackathon which takes place this coming weekend, October 13-14 in New York.  They are calling for coders, designers and visual artists to participate.  As they describe it on their website:

The Film Experience Hackathon is a weekend-long event whereby hackers, filmmakers and visual artists will join forces to create new and innovative ideas in how technology can enhance the world of film.

The goal of this hackathon is to build hacks that bring together technology, multimedia, and data to enrich the end-to-end movie experience. Hacks must improve the overall experience of seeking out, watching, and engaging with movies.

Film Independent is partnering with ZEFR and Indiewire to create a Movie Hackathon which will culminate on October 21st in Los Angeles.  They describe the hackathon as an event:

which will be devoted to creating new tools designed specifically for indie filmmakers, and Indiewire has partnered to collect the raw material for the interactive experience from its vast readership.

Here’s how it works: We invite the Indiewire community to brainstorm ideas for new digital tools that you would want for helping your movies find audiences and audiences find your movies. Meanwhile, FIND has recruited a group of high-end tech developers who are ready to take a crack at creating these tools and applications over a high-intensity 40-hour period.

What is a hackathon?  Wikipedia defines it this way:

A hackathon (also known as a hack day, hackfest or codefest) is an event in which computer programmers and others in the field of software development, like graphic designers, interface designers, project managers and computational philologists^[1], collaborate intensively on software projects.

Hackathons have been popular in the tech world for the past several years within large companies and within groups of independent developers who are trying to come up with a new solution to certain problems.

What both of these events do is add two things to the hackathon concept:

1. They focus the event on film related issues and,

2. They add filmmakers into the participant mix.  (Though one hopes that this still leaves room for the “computational philologist”.)

The New York event creates teams of filmmakers, visual artists and developers who work together over a weekend to create new software products–whether applications, tools or platforms.

The Los Angeles approach is slightly different.  They solicit ideas from filmmakers through Indiewire, these ideas get voted on and then the winning ideas are turned over to developers for execution and presentation.

I believe that the New York model will bear more fruit then the Los Angeles model. Here is why.

As Steve Johnson so eloquently points out in his book Where Good Ideas Come From: The Natural History of Innovation, the best environments for innovation are ones where people of diverse backgrounds create new ideas through constant discussion in a common setting.  As he states, “An idea is a network”.  The more diverse the network, the better the idea.

In the New York hackathon, each team will be diverse, with filmmakers working in concert with designers and coders throughout the weekend. An intimate network of diversity is built into the model.

On the other hand, in Los Angeles, the filmmakers separately come up with the ideas and then these ideas are handed over to the coders who do all the work.  That separation cuts off the network, creates silos and weakens any potential idea.

Don’t get me wrong, I applaud both of these efforts.  These experiments are sorely needed to bring the technology and film worlds together in a fruitful way. But they have to be brought together in ways that create real collaboration and innovation.

Developers have as much to learn from filmmakers as filmmakers have to learn from developers.

But they have to speak to each other in order to learn each others language.

And being in the same room helps them do so.

This was brought into relief for me recently while I was reading Steven Johnson’s new book, Future Perfect: The Case For Progress In A Networked Age, and simultaneously came across an interview in which James Schamus, the indie film legend and CEO of Focus Pictures, discusses the new world of distribution for filmmakers. 

 Scott Macaulay summarizes the key elements of Schamus’ perspective in his piece, 12 Tips From James Schamus and Christine Vachon At IFP Film Week.

 “The people with the power are the people closest to the consumer dollar,” James said. “The power is moving from the people who distribute to the people with the algorithms.” James, of course, was referring to Big Data and the Information Age companies (Google, Facebook, et al) whose business models are based on it. Every time you click — on a “like” button, or a download link — you are producing, said James. You’re producing “exhaust data,” information about yourself that is then used to market to you and others like you. “Filmmakers need to be aware of this new model,” said James. “Other people are monetizing it now, but they don’t have the same relationship to film culture” as the previous generation of distributors.”

In the interview Schamus paints a world in which we are all passive consumers who create data for the big guys that will be used to further shape and govern our consumption.  We (consumers and filmmakers alike) will be left with less control and will miss the guidance of knowledgeable film people.

His view is shared widely among many people in the film world, whether they work at studios or as independents. They see the Internet as the destroyer of the legacy media system to which they are wedded.  And they believe that little good will come from this destruction.

It is true that the Internet is dismantling the world of mass media.  Yet something new is also being built in its place.  Media makers need to understand what this “something new” is and what it means for them and for their audiences.  To do so, they need to know what is really driving this new media ecosystem.

Steve Johnson, a man who has been part of several Internet startups and has written about the Internet, agrees with Schamus that it is about algorithms.  As he states:

“The Net, is ultimately, software, and software is all about shape—shifting and simulation… Software interfaces are not fixed properties, they are possibility spaces, open to a near infinite range of experimentation, which means that the defining affordances of the medium are more elastic than those of traditional media.”

Then Johnson comes to a different conclusion about who gets to control this new medium.

“Because the software networks are more malleable than earlier forms of media, they tend to engage more people in the process of how they should work…  A medium that displays a capacity for reinvention tends…to build up a much larger community of people who want to help reinvent it…That capacity for shape-shifting leads to another affordance: digital networks like the Web can simulate and experiment with different social architectures more easily than other forms of media… On the Internet, the rules are up for grabs.”

Where Schamus sees Big Data domination, Johnson sees democracy.  Where Schamus sees destruction and loss, Johnson sees reinvention and renewal.  Where Schamus sees loss of control, Johnson sees more opportunity for individual action.

It is logical that mass media companies see this as a threat.  They have traditionally acted as the exclusive gateways to the consumer. They have been comfortable with the rules and they have profited by them. Now they have to work within a new universe where the “rules are up for grabs”.

Johnson makes one additional point:

 “At the most elemental level, the Internet and its descendants possess this defining property: they make it easier and cheaper to share information… So what does the Internet want?  It wants to lower the costs for creating and sharing information.”

What we see happening today is much like the media revolution of the 15^th Century, when Johannes Gutenberg invented the printing press.  If you were a medieval scribe, you were threatened. You believed that you represented “culture” and that this printing press would surely destroy a way of life which you viewed as the only way of life worth having.

Like the Internet, the printing press “lowered the cost for creating and sharing information”.  It disrupted the medieval world and helped usher in the modern era of science and democracy.

Johnson’s approach to understanding the Internet is deeper, more nuanced and more accurate.   Shamus reacts as you might expect a medieval scribe to react. (And for the record, medieval scribes produced work that is beautiful and enduring, as has Schamus.)  His reaction is not unique among filmmakers and distributors, whether part of the studio system or not.  It is actually quite widespread.

Instead of deeply investigating and shaping this new world—they mourn the world that is passing.

What Schamus misses, along with his mass media brethren, is that the Internet is making it possible for anyone in media to get close to consumers and their dollars.

Anyone can be “the people with the algorithms”.  This is not restricted to Amazon, Apple or Google. Algorithms can be shaped by those who create, market and distribute films whether big or small.  As Johnson points out, “software interfaces are possibility spaces”.

But you can only see these “possibility spaces” if you are willing to shed your basic assumptions about how this new world works.

You have to think your way out of the old world in order to shape the new one. 

Then you can become one of those “people with the algorithms”.

MoviePass offers a monthly subscription plan priced from $25 to $40 based on the movie ticket prices in your area. So, for example, New York City is more expensive than Omaha. This allows you to attend one movie a day during the month. So a maximum of 30 to 31 movies for $25 to $40. A great deal for avid moviegoers.

They have added a MoviePass debit card for each subscriber that works at any movie theater that takes credit cards.  When you go to the theater you use the MoviePass application on your smart phone (available on the Apple application store and soon to be available on Android) to find the movie you want to see at that location and select it. This loads the card with the right amount needed for the ticket.

Once selected, you slide the card into the credit card machine and out pops your ticket.  Because you have a prepaid subscription, you do not pay for the ticket–MoviePass does.

The Hollywood Reporter covered the release of this new feature by looking for any theater owners that might have given permission to MoviePass.  To their astonishment they found none.  Thinking this a bit peculiar they just moved on.  You could read between the lines and see that The Hollywood Reporter thought this would soon fail.  After all, don’t the exhibitors have to agree to this?  Actually–no.

You see, here The Hollywood Reporter missed the key point.  When it comes to successful innovation in this new connected world the best thing a new company can do is find solutions that do not require permission. The inherent nature of the distributed network we call the Internet is that anyone can get on and no one can say no. This “no permission structure” has created huge companies like Facebook and Twitter, as well as many others big and small.

However, if you live in the world of a centralized network (the world of mass media, i.e. the world of Hollywood) you have to ask permission at every turn. Your whole world is a series of permissions.  This sea (a cesspool perhaps?) of permissions is what has caused Hollywood innovation to lag behind the Internet world. One could even say that innovation as we know it today does not even exist in Hollywood.

So the brilliance of the Movie Pass move is undetected by general Hollywood observers because it can not fathom a world where someone could sell tickets to a movie without the theater “giving permission”–i.e. getting a cut. Yet that is what Movie Pass has created.  The movie theater gets it full ticket price but it does not get what Movie Pass will now possess and which is very valuable in today’s world.

What will Movie Pass have and why is it valuable?

1.  MoviePass gets direct contact with the customer, with an email address and a physical address.

2. MoviePass knows what movies each subscriber sees, at what theater, at what time and on what day–and this crosses all theaters, not just one chain or location.

3. Through its location aware application Movie Pass has the opportunity to allow each subscriber to opt in to other services.  Want to find a restaurant in the area?  Coupons for local entertainment options?  Want to find other movies similar to the movie you just saw and liked? What are other people on MoviePass recommending? The list of these layered services is endless and each is valuable.

Movie Pass gets to know its (and the theater’s) customers.  The movie theater gets paid and flies blind.

It will take time for theaters to figure this out because they have not traditionally been in the “know your customer” business.  They have always flown a little blind.  But when movie  theaters discover what MoviePass is finding out about their own customers, the tables will turn–now the theaters will ask MoviePass for permission.

And innovation will be afoot, even in Hollywood.