Cynopsis: DIGITAL
06/18/12

Good morning. It’s Monday, June 18, 2012, and this is your first early morning digital briefing. If you would like to read this or any other Cynopsis editions online, click here.

When it comes to online video, Vuguru, which is backed by former Disney CEO Michael Eisner, is one of the more proactive studios in the space. The company has partnered with the likes of AOL, Yahoo, Hulu, and YouTube to develop original, scripted programming that would exist online, but also be available for multiplatform distribution (linear and VOD) across multiple territories above the border and beyond the sea. I spoke with Vuguru‘s current CEO, Larry Tanz, about the programming the studio is developing as well as how it produces and distributes it.

Vuguru has partnered with four of the six founding Digital Content NewFronts (DCNF) partners. How did this all come about?

We came to realize that AOL, Yahoo, YouTube, and the others had an invigorated effort around premium original content. Vuguru, ever since it was started by Michael Eisner over four years ago, has always been about creating original, scripted content for digital. As we started to see these big distribution partners get deeper into premium original content, our business models and strategies really meshed. We came together on the notion that Vuguru develops and finances scripted content and these distribution platforms deliver them to huge audiences. The other reason why some of these bigger deals are able to happen is that Vuguru is set up in a way that allows us to finance a fairly large slate of projects. Previously, most digital projects had been brand or advertiser funded. That’s changed now, especially since the beginning of the YouTube initiative. We are able to step in and say we can finance and develop this project, similar to what you see with television when it comes to studios like Warner Bros. Television and Lionsgate Television. We can be a supplier, at scale, for these new networks that want premium original content.

What kind of programming are you producing for them?

We have a deal in place to do some scripted projects for Yahoo and we are close to announcing them. We will be doing multiple projects with them over this year, but we can’t say more than that about what we’re developing for Yahoo as of yet.

For AOL, we have a six-project deal. We just launched the first one, Little Women Big Cars, about a month ago. It reached 5.5 million views within its first few weeks. The second one launches this week and is called Fetching. It’s a romantic comedy about a woman who quits her job and her wedding, and essentially starts a new life by opening her own business, which is a doggie day care place. The series is created by Amy Harris, one of the producers for Sex and the City and Gossip Girl, as well as the showrunner for Carrie Diaries on The CW. Two more are coming this year  Greetings From Home, developed in partnership with BermanBraun, a family comedy about a dad who has to run the household while mom is serving overseas; and Play Date, a dark comedy about two moms whose rivalry escalates past the point of no return. There are two more on the back end that we have not announced yet.

Stan Lee’s World of Heroes on YouTube is going to launch at Comic Con. He’s the “Godfather of Comic Con”; we will talk about a bunch of the shows that we’re launching on the channel.

For Hulu, we’re bringing season two of The Booth at the End in July and internationally after that.

There are other properties, which we will be distributing on some other platforms that we also haven’t announced yet. Overall, we’ll probably finance and produce another 10 projects this year.

Would you say there is a link between the types of programming you’re developing for these online companies and the companies themselves? For example, why’d you select YouTube as the platform for Stan Lee’s World of Heroes?

There’s definitely an element of that. We work closely with distributors, especially if we have deals in place. We see what they want to do. AOL really happens to have a strong female audience, so it’s a good home for that type of programming. For the project with Stan Lee, it’s a very specific audience that you can micro-target through YouTube, which you can’t do on other platforms. So there is collaboration with our distribution partners to bring them projects that fit their needs and the interest of their audience. However, we also try to find great stories and great story-driven ideas. At some point, if we love a story, we’ll just go ahead and make it and then find it a home.

One of the big hurdles for online video is the concept of “premium video.” How do you compete with film and TV budgets to create content that looks and feels like something you’d see on TV?

It’s all about how we select our projects. We select projects really carefully based on the story and the ability to produce and finance that story without requiring vast budgets. We end up passing on a lot of projects that just can’t be done because of the number that story requires. At the same time, we also select a lot of projects that can be made. Beyond that, we work with a number of professionals who have had extensive experience in production. And this extends to the quality of the performances from the actors we cast. Ultimately it’s really good writing, great direction, acting, just great execution from skilled talent that allows us to compete with the quality of film and TV projects.

There are also some other things working in our favor. You can get incredible cameras for very little. Editing costs have gone down. There have been a number of tech advancements to help minimize the cost of developing premium-grade digital content.

You’ve said that Vuguru likes to develop content that can be broken down into “chapters.” Could you explain what you mean by that? How is it different from regular short-form programming?

The way we do it is that we develop a storyline that has a long-form arc, but is also broken down into very natural chapter breaks, like you’d find in a book. Which, by the way, is similar to the way you watch shows on TV — it’s broken down by advertising breaks. However, we’re not trying to tell four-minute narratives. These narrative arcs span 100 minutes, and the chapter breaks have their own cliffhangers and such that makes the audience really want to keep watching.

Also, in some parts of the world, our projects get distributed in a longer format. For example, The Booth at the End, we originally developed this show as two-minute chapters. However, when it ran on Hulu, it ran as five, 22-minute episodes. Our international distributors like to use the shorter format for online and mobile, and then the longer version for TV. It allows us to reach the audience in ways that are optimized to the device on which they’re watching the content.

How would you describe Vuguru’s distribution strategy for every new piece of original content?

First and foremost, we want to distribute it on a digital platform in the US. AOL, Yahoo, Syfy.com, MySpace, YouTube, Hulu, Alloy, etc. That is the first window for us. Secondly, we have deals with Rogers Media, which is the biggest cable company and broadband provider in Canada, to distribute content online, on mobile, and often times via television since they also own TV stations. It’s true multiplatform distribution, and we have similar deals with other international distributors such as FOX International Channels and Sony International Channels. They want content for their digital presence online and also for their TV channels. Beyond that, there are also windows for electronic sell-through via iTunes and Amazon as well as second-run distribution.

Speaking of your international distribution, would you say it’s easier to distribute content across multiple platforms at the same time than it is in the US? Are they more open to it?

I think that is the case. And why is that? I think it’s because a lot of programming in the US has a first-run deal for TV, and then the digital runs are limited, held back, or tightly windowed. The programming is also often not held by the same exhibitor of the television run. So there’s a much bigger divide. Whereas internationally, the buyers are interested in purchasing rights for multiple platforms to run them simultaneously. They would like a more integrated offering. In the US, the TV networks so far have been less focused on having the same programming on their websites as they do on their TV channels.

Is the ability to repackage digital content for linear distribution something you think every studio within this space should consider? How important is it to make online programming available across multiple screens?

Right now it’s where the market is. Ideally you want people to find content wherever they are. Because Vuguru is producing content at broadcast quality, it is a good thing to have our content exhibited in a high quality environment.

However, there is also some value to having content on-demand. We do believe our content is valuable. We are not against the notion of windowing or having limitations on where our stuff appears. Vuguru is one of the first companies to segment markets by geography, and ensure that if we do a deal in a territory, it’s geo-blocked so that it only appears in that territory. In that we way we have a more traditional view of our intellectual property. It should provide value to whoever pays for it and distributes it. And that’s different from the YouTube mentality, which is to put it up for everyone to see, wherever they are and on whichever device.

In short, there are different models defined by different goals.

Speaking at the Reuters Media and Technology Summit late last week, Salar Kamangar, SVP/YouTube, said YouTube is considering selling subscriptions for some of its original programming. If it elects to launch such a service, YouTube would share the profits with the content providers, reports Reuters. A little over a month ago, The New York Post had reported the possibility of YouTube venturing into offering paid subscriptions alongside its free content.

CBS has won a bidding war to develop a primetime game show based on Zynga’s (once) popular Draw Something game, according to a report from Variety. The pilot will be produced by Sony Pictures Television, Ryan Seacrest Productions (RSP), and Embassy Row, and even though no official on-air commitment has been made, the show could be ready for CBS’ midseason lineup. Details of the deal haven’t been made public, but Variety says the show will consist of teams of celebrities and everyday users testing out their drawing skills in front of a live studio audience, and may also include a second-screen element that will allow viewers to play along from home in order to win prizes. Zynga bought OMGPOP, the maker of Draw Something, for about $210 million in March. The “Pictionary”-style game, which was a massive hit around the time Zynga picked it up, has seen its user traffic drop considerably over the past few months.

Lifetime is launching a multi-format social campaign to promote the 10th season of Project Runway. Dubbed “Make It Work,” the campaign will use Instagram, Pinterest, Piictu, and Viddy to share images and videos with viewers, as well as encourage them to do the same in order to boost engagement and interest around the upcoming season of the fashion-focused reality competition, which is set to premiere on July 19. On Instagram, @OfficialProjectRunway will post photos (hashtagged #MakeItWork) of existing work from the upcoming season’s cast of designers; on Pinterest, LifetimeTV will use its “Fashion Time” board to post and repin photos from the Pinterest community (also hashtagged #MakeItWork); on Piictu, @ProjectRunway will create “piicture” streams by posting photos of fabric, accessories, colors, and patterns well as encourage users to show off their own fashion sense by prompting them with various design challenges; on Viddy, the show will post 15-second video clips introducing each contestant from the upcoming season, and will continue to post videos from the show throughout the season; and on Twitter, @ProjectRunway will encourage followers to tweet images of their favorite #MakeItWork moments and will reward best looks with a weekly prize.

Livestream will broadcast every conference and event from Web Summit, a series of technology events across Europe that take place throughout the year. The flagship event is set in Dublin and occurs each October. Web Summit, which was launched in 2010, has attracted over 10,000 cumulatively across all of its events, and has featured the founders of Skype, Twitter, and LinkedIn, among others, in previous years. The live stream of any Web Summit event will be available for free here and on the Web Summit site.

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StopBadware, a nonprofit organization that seeks to clean up the web by protecting users against unsafe websites, has launched the Ads Integrity Alliance. It’s an initiative focused on making the online advertising ecosystem more trustworthy, and its charter members include some internet heavyweights, such as Google, Facebook, Twitter, AOL, and the Interactive Advertising Bureau (IAB). “No one can address internet-scale threats on their own, so we’re bringing together industry leading organizations to tackle the problem collaboratively,” said Maxim Weinstein, Executive Director at StopBadware. To that end, among the Alliance’s tasks will be to develop and share definitions, industry policy recommendations, and best practices; serve as a platform for sharing information about bad actors; and share relevant trends with policymakers and law enforcement agencies, all in order to curtail the dangers of harmful online advertising.

Staree is a recently launched social platform from social media sponsorship company IZEA that allows users to share photos and videos with friends and followers on Facebook and Twitter from their mobile devices and computers. The platform enables users to make money via display ads that are targeted to their content and produce placement within their photos and videos. Initially, this ability to monetize shared content is available to celebrities on Staree. This includes Mario Lopez, who has joined the platform as a celebrity ambassador. As part of the deal, Lopez will contribute photos and videos as well as promote Staree in various marketing and public relations efforts, says IZEA. And to give Staree an added boost, IZEA has announced that device-maker Lenovo will run a sponsored photo campaign on the social platform. In the campaign, a promoted tweet will direct users to a page on Staree that contains a photo of Lenovo’s M0520 speakers and an oversized display ad unit for desktop visitors and a mobile optimized one for those accessing the page through smartphones or tablets. IZEA says it will soon launch an automated platform that will allow everyone to sponsor and promote products and make some money.

Facebook has settled a lawsuit regarding its “Sponsored Stories” ad unit by agreeing to pay $10 million to charity, reports Reuters. The settlement was actually reached last month but was made public over this past weekend. In the suit, the plaintiffs accused Facebook of violating California law by promoting and profiting off of users’ “likes” of brands within its Sponsored Stories ad unit without compensating the users or giving them a way to opt out. The ad unit, which Facebook has positioned as the centerpiece of its advertising model, utilizes a user’s name, profile picture, and “like” of a particular brand as a way to promote that brand within the newsfeed in the form of a trusted recommendation. Per Reuters, US District Court Judge Lucy Koh said, “California has long recognized a right to protect one’s name and likeness against appropriation by others for their advantage.”

Microsoft is holding an event in LA today at which it may announce that the company will manufacture and bring-to-market its own, branded tablet device, according to separate reports from The Wrap and AllThingsD. The new tablets may include models that run on an ARM microprocessor, which power Windows RT, a new version of Microsoft’s Windows 8 operating system, as well as other, more traditional processors. As both reports indicate, the development and production of its own tablet would allow Microsoft to more directly compete with the current king of the tablet landscape, Apple.

In other YouTube news, Google has launched a new YouTube app within Google+ Hangouts that allows users to create, control, and save video playlists, as well as share them with friends. To start, users just have to begin a Hangout and load the app that appears at the top of the screen, and then start adding videos from YouTube. The app is available worldwide and supports 60 languages.

Facebook’s Chief Technology Officer, Bret Taylor, will be leaving the social networking giant later this summer to start a new company, he announced on his Timeline. Aside from being Facebook’s soon to be former CTO, Taylor has also spent time at Google, where he worked on Google Maps.

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Band of the Day is a free music discovery and magazine app for iOS devices that features a new band/artist for every day of the year. It provides users with playable full songs, artist bios, photos, reviews, interviews, video content, and more. Featuring a very slick design and user interface, the app was a runner-up to Apple’s iPhone App of the Year in 2011 (coming behind only Instagram). Developed by 955 Dreams, a self-described digital publishing company based in California, the app currently boasts over 2 million users. Give it a look, it’s easy on the eyes and isn’t too shabby either if you’re in the mood to add to your iTunes (or Spotify) library.

Later – Sahil
Sahil Patel, Associate Editor for Cynopsis Digital
06.18.12

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