EventReview

New York, NY
December 11-13, 2001

[itvt] Issue 4.15 1/12/02

By Liam O'Malley for [itvt]

This year, the Streaming Media East conference was co-located with Internet World at the Jacob Javits Center in New York City from December 11th through the 13th. [itvt] attended a keynote speech each day of the conference. While none of the speeches dealt directly with interactiveTV, the message they all contained is very relevant: create compelling content and experiences and you will succeed.

Bob Pittman, COO of AOL Time Warner, gave the opening keynote speech to a packed hall. He began by noting that two thirds of US households are now connected to the Internet-enough to reach "critical mass." The main point of his speech was: now that this critical mass has been reached, what is needed for online success? His answer: building customer relationships. To do this, one must understand what the consumer wants, and Mr. Pittman's opinion is that customers want companies and products "to make my life easier." Most importantly, customers will pay you to make their life easier.

Mr. Pittman went on to discuss what he termed the "4 boxes" in customers' homes, and how the lines are blurring between them, creating a "Digital Household." He distinguished between "active" boxes -- the telephone and PC -- and "passive" boxes -- the television and stereo. In the digital household all these devices will be interconnected: consumers will be able to download music on their PCs to play on their stereo, get Web connectivity through their television, get PDA functionality on their phones, etc. Pittman sees broadband stimulating an explosion of products and services for this digital household, but cautions that for consumer adoption to take place, those products and services must successfully answer the question "is it really more convenient?"

The next day, James McDowell, BMW's VP of marketing, North America, profiled that company's Internet films. Having determined that 85% of BMW buyers research on the Web prior to purchasing, BMW wanted to experiment with a Web promotion for its 7 Series. The company determined that the best approach might not be traditional ads, but a film series. The 5 to 7 minute films, which were directed by Hollywood filmmakers such as Ang Lee and Guy Ritchie (whose entertaining "Star," featuring Madonna as a pop diva, was shown), were available to stream or download. BMW determined from the outset that these films were for a broadband audience, and recognized that those with slower connections would have a less-than-optimal experience.

The response, according to Mr. McDowell, was more than BMW had even hoped for: 10.5 million (and counting) viewings. Most importantly, 2 million visitors submitted personal information, allowing BMW to continue a dialogue with them. One third of the viewers chose to download the films, which they then presumably shared with friends. BMW also discovered that the majority of viewers were on T1 lines and downloaded the films during work hours.

Christie Hefner, president of Playboy, spoke on Thursday, the final day of the conference. Ms. Hefner outlined Playboy's online experience and strategy. In the 80s, Playboy successfully extended its brand from print publishing to television with the Playboy Channel. In the development of content for the channel, Playboy was mindful that television is a social medium, and that its programming would need to appeal to couples and "not just lonely guys." This strategy has since succeeded: according to Ms. Hefner, the Playboy Channel's audience is 75% couples.

In moving to the Internet, Playboy realized that there were no limitations on content, and that customers could be editors, picking and choosing the content they wanted. Ms. Hefner stated that "the content you make, not the brand you bring" is what will make for online success. Playboy was fortunate from the outset, knowing through its television experience that people were willing to pay for its content. The company has multiple sources of revenue from its site, including subscriptions, ecommerce from the Playboy Store, and the streaming of Playboy Events, such as "New Year's at the Mansion." Now print, television and online are able to constantly cross-promote one another.

The take-away from all these speeches was that, in Bob Pittman's words, the "Internet revolution is just beginning" and what it needs now is more innovators and entrepeneurs to make the Digital Household a reality.

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