Entertainment

Jam City signs mobile game development deal with Disney

Posted by | Entertainment, Gaming, jam city, Mobile, Startups, the walt disney company | No Comments

Mobile gaming company Jam City is announcing a multi-year deal to create mobile games based on Pixar and Walt Disney Animation characters and films.

As part of the agreement, Jam City is taking over development of the match-three puzzle game Disney Emoji Blitz, which launched in 2016. Jam City says that everyone at Disney’s Glendale game studio who’s affected by this will be offered new jobs at the company to continue working on the title.

The first new game, meanwhile, will be based on the upcoming sequel to “Frozen” (that’s right, there’s going to be a “Frozen 2”), though the companies aren’t revealing any details, like the type of gameplay or the release date.

“While our licensing business for Disney Animation and Pixar games has grown over the last year and we have several top developers creating Disney games, this deal with Jam City represents a significant long-term opportunity for our games business and for the future slate of Disney and Pixar games,” said Kyle Laughlin, Disney’s senior vice president of games and interactive experiences, in a statement.

Jam City was founded in 2009 by Chris DeWolfe (who previously cofounded and served as CEO of MySpace) and former Fox executive Josh Ygaudo. It was initially focused on social games and was known as MindJolt before becoming the Social Gaming Network (named after a company it acquired) and then rebranding again two years ago as Jam City.

While Jam City has created its own games like Cookie Jam and Panda Pop, it’s also been releasing titles based on well-known franchises and intellectual property, such as “Snoopy Pop” and “Marvel Avengers Academy.” Earlier this year, it launched “Harry Potter: Hogwarts Mystery,” a game that allows players to enroll in J.K. Rowling’s famous school for wizards and features the voices of several actors from the films.

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TC Sessions: AR/VR surveys an industry in transition

Posted by | augmented reality, Developer, Entertainment, Gadgets, Gaming, hardware, Media, Startups, TC, tc sessions, TC Sessions: AR/VR 2018, Venture Capital, Virtual reality, Wearables | No Comments

Industry vets and students alike crammed into UCLA’s historic Royce Hall last week for TC Sessions: AR/VR, our one-day event on the fast-moving (and hype-plagued) industry and the people in it. Disney, Snap, Oculus and more stopped by to chat and show off their latest; if you didn’t happen to be in LA that day, read on and find out what we learned — and follow the links to watch the interviews and panels yourself.

To kick off the day we had Jon Snoddy from Walt Disney Imagineering. As you can imagine, this is a company deeply invested in “experiences.” But he warned that VR and AR storytelling isn’t ready for prime time: “I don’t feel like we’re there yet. We know it’s extraordinary, we know it’s really interesting, but it’s not yet speaking to us deeply the way it will.”

Next came Snap’s Eitan Pilipski. Snapchat wants to leave augmented reality creativity up to the creators rather than prescribing what they should build. AR headsets people want to wear in real life might take years to arrive, but nevertheless Snap confirmed that it’s prototyping new AI-powered face filters and VR experiences in the meantime.

I was onstage next with a collection of startups which, while very different from each other, collectively embody a willingness to pursue alternative display methods — holography and projection — as businesses. Ashley Crowder from VNTANA and Shawn Frayne from Looking Glass explained how they essentially built the technology they saw demand for: holographic display tech that makes 3D visualization simple and real. And Lightform’s Brett Jones talked about embracing and extending the real world and creating shared experiences rather than isolated ones.

Frayne’s holographic desktop display was there in the lobby, I should add, and very impressive it was. People were crowding three or four deep to try to understand how the giant block of acrylic could hold 3D characters and landscapes.

Maureen Fan from BaoBab Studios touched on the importance of conserving cash for entertainment-focused virtual reality companies. Previewing her new film, Crow, Fan noted that new modes of storytelling need to be explored for the medium, such as the creative merging of gaming and cinematic experiences.

Up next was a large panel of investors: Niko Bonatsos (General Catalyst), Jacob Mullins (Shasta Ventures), Catherine Ulrich (FirstMark Capital) and Stephanie Zhan (Sequoia). The consensus of this lively discussion was that (as Fan noted earlier) this is a time for startups to go lean. Competition has been thinned out by companies burning VC cash and a bootstrapped, efficient company stands out from the crowd.

Oculus is getting serious about non-gaming experiences in virtual reality. In our chat with Oculus Executive Producer Yelena Rachitsky, we heard more details about how the company is looking to new hardware to deepen the interactions users can have in VR and that new hardware like the Oculus Quest will allow users to go far beyond the capabilities of 360-degree VR video.

Of course if Oculus is around, its parent company can’t be far away. Facebook’s Ficus Kirkpatrick believes it must build exemplary “lighthouse” AR experiences to guide independent developers toward use cases they could enhance. Beyond creative expression, AR is progressing slowly because no one wants to hold a phone in the air for too long. But that’s also why Facebook is already investing in efforts to build its own AR headset.

Matt Miesnieks, from 6d.ai, announced the opening of his company’s augmented reality development platform to the public and made a case of the creation of an open mapping platform and toolkit for opening augmented reality to collaborative experiences and the masses.

Augmented reality headsets like Magic Leap and HoloLens tend to hog the spotlight, but phones are where most people will have their first taste. Parham Aarabi (ModiFace), Kirin Sinha (Illumix) and Allison Wood (Camera IQ) agreed that mainstreaming the tech is about three to five years away, with a successful standalone device like a headset somewhere beyond that. They also agreed that while there are countless tech demos and novelties, there’s still no killer app for AR.

Derek Belch (STRIVR), Clorama Dorvilias (DebiasVR) and Morgan Mercer (Vantage Point) took on the potential of VR in commercial and industrial applications. They concluded that making consumer technology enterprise-grade remains one of the most significant adoptions to virtual reality applications in business. (Companies like StarVR are specifically targeting businesses, but it remains to be seen whether that play will succeed.)

With Facebook running the VR show, how are small VR startups making a dent in social? The CEOs of TheWaveVR, Mindshow and SVRF all say that part of the key is finding the best ways for users to interact and making experiences that bring people together in different ways.

After a break, we were treated to a live demo of the VR versus boxing game Creed: Rise to Glory, by developer Survios co-founders Alex Silkin and James Iliff. They then joined me for a discussion of the difficulties and possibilities of social and multiplayer VR, both in how they can create intimate experiences and how developers can inoculate against isolation or abuse in the player base.

Early-stage investments are key to the success of any emerging industry, and the VR space is seeing a slowdown in that area. Peter Rojas of Betaworks and Greg Castle from Anorak offered more details on their investment strategies and how they see success in the AR space coming along as the tech industry’s biggest companies continue to pump money into the technologies.

UCLA contributed a moderator with Anderson’s Jay Tucker, who talked with Mariana Acuna (Opaque Studios) and Guy Primus (Virtual Reality Company) about how storytelling in VR may be in very early days, but that this period of exploration and experimentation is something to be encouraged and experienced. Movies didn’t begin with Netflix and Marvel — they started with picture palaces and one-reel silent shorts. VR is following the same path.

And what would an AR/VR conference be without the creators of the most popular AR game ever created? Niantic already has some big plans as it expands its success beyond Pokémon GO. The company, which is deep in development of Harry Potter: Wizards Unite, is building out a developer platform based on their cutting-edge AR technologies. In our chat, AR research head Ross Finman talks about privacy in the upcoming AR age and just how much of a challenger Apple is to them in the space.

That wrapped the show; you can see more images (perhaps of yourself) at our Flickr page. Thanks to our sponsors, our generous hosts at UCLA, the motivated and interesting speakers and most of all the attendees. See you again soon!

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Why IGTV should go premium

Posted by | Entertainment, Facebook, Facebook Watch, IGTV, instagram, Jeffrey Katzenberg, Media, meg whitman, Mobile, newtv, Quibi, Snapchat, Social, Subscription model, Video, WndrCo, youtube red | No Comments

It’s been four months since Facebook launched IGTV, with the goal of creating a destination for longer-form Instagram videos. Is it shaping up to be a high-profile flop, or could this be the company’s next multi-billion-dollar business?

IGTV, which features videos up to 60 minutes versus Instagram’s normal 60-second limit, hasn’t made much of a splash yet. Since there are no ads yet, it hasn’t made a dollar, either. But, it offers Facebook the opportunity to dominate a new category of premium video, and to develop a subscription business that better aligns with high-quality content.

Facebook worked with numerous media brands and celebrities to shoot high-quality, vertical videos for IGTV’s launch on June 20, as both a dedicated app and a section within the main Instagram app. But IGTV has been quiet since. I’ve heard repeatedly in conversations with media executives that almost no one is creating content specifically for IGTV and that the audience on IGTV remains small relative to the distribution of videos on Snapchat or Facebook. Most videos on it are repurposed from a brand’s or influencer’s Snapchat account (at best) or YouTube channel (more common). Digiday heard the same feedback.

Instagram announced IGTV on June 20 as a way for users to post videos up to 1 hour long in a dedicated section of the app (and separate app)

Facebook’s goal should be to make IGTV a major property in its own right, distinct from the Instagram feed. To do that, the company should follow the concept embodied in the “IGTV” name and re-envision what television shows native to the format of an Instagram user would look like.

Its team should leverage the playbook of top TV streaming services like Netflix and Hulu in developing original series with top talent in Hollywood to anchor their own subscription service, but in it a new format of shows produced specifically for the vertically oriented, distraction-filled screen of a smartphone.

Mobile video is going premium

Of the 6+ hours per day that Americans spend on digital media, the majority on that is now on their phone (most of it on social and entertainment activities) and video viewing has grown with it. In addition to the decline in linear television viewing and rise of “over-the-top” streaming services like Netflix and Hulu, we’ve seen the creation of a whole new category of video: mobile native video.

Starting at its most basic iteration with everyday users’ recordings for Snapchat Stories, Instagram Stories and YouTube vlogs, mobile video is a very different viewing environment with a lot more competition for attention. Mobile video is watched as people are going about their day. They might commit a few minutes at a time, but not hour-long blocks, and there are distracting text messages and push notifications overlaid on the screen as they watch.

“Stories” on the major social apps have advanced vertically oriented, mobile native videos as their own content format

When I spoke recently with Jesús Chavez, CEO of the mobile-focused production company Vertical Networks in Los Angeles, he emphasized that successful episodic videos on mobile aren’t just normal TV clips with changes to the “packaging” (cropped for vertical, thumbnails selected to get clicks, etc.). The way episodes are written and shot has to be completely different to succeed. Chavez put it in terms of the higher “density” of mobile-native videos: packing more activity into a short time window, with faster dialogue, fewer setup shots, split screens and other tactics.

With the growing amount of time people spend watching videos on their social apps each day — and the flood of subpar videos chasing view counts — it makes sense that they would desire a premium content option. We have seen this scenario before as ad-dependent radio gave rise to subscription satellite radio like Sirius XM and ad-dependent network TV gave rise to pay-TV channels like HBO. What that looks like in this context is a trusted service with the same high bar for riveting storytelling of popular films and TV series — and often featuring famous talent from those — but native to the vertical, smartphone environment.

If IGTV pursues this path, it would compete most directly with Quibi, the new venture that Jeffrey Katzenberg and Meg Whitman are raising $2 billion to launch (and was temporarily called NewTV until their announcement at Vanity Fair’s New Establishment Summit last Wednesday). They are developing a big library of exclusive shows by iconic directors like Guillermo del Toro and Jason Blum crafted specifically for smartphones through their upcoming subscription-based app.

Quibi’s funding is coming from the world’s largest studios (Disney, Fox, Sony, Lionsgate, MGM, NBCU, Viacom, Alibaba, etc.) whose executives see substantial enough opportunity in such a platform — which they could then produce content for — to write nine-figure checks.

TechCrunch’s Josh Constine argued last year Snapchat should go in a similar “HBO of mobile” direction as well, albeit ad-supported rather than a subscription model. The company indeed seems to be stepping further in this direction with last week’s announcement of Snapchat Originals, although it has announced and then canceled original content plans before.

Snapchat announced its Snap Originals last week

Facebook is the best positioned to win

Facebook is the best positioned to seize this opportunity, and IGTV is the vehicle for doing so. Without even considering integrations with the Facebook, Messenger or WhatsApp apps, Facebook is starting with a base of more than 1 billion monthly active users on Instagram alone. That’s an enormous audience to expose these original shows to, and an audience who don’t need to create or sign into a separate account to explore what’s playing on IGTV. Broader distribution is also a selling point for creative talent: They want their shows to be seen by large audiences.

The user data that makes Facebook rivaled only by Google in targeted advertising would give IGTV’s recommendation algorithms a distinct advantage in pushing users to the IGTV shows most relevant to their interests and most popular among their friends.

The social nature of Instagram is an advantage in driving awareness and engagement around IGTV shows: Instagram users could see when someone they follow watches or “likes” a show (pending their privacy settings). An obvious feature would be to allow users to discuss or review a show by sharing it to their main Instagram feed with a comment; their followers would see a clip or trailer, then be able to click-through to the full show in IGTV with one tap.

Developing and acquiring a library of must-see, high-quality original productions is massively capital-intensive — just ask Netflix about the $13 billion it’s spending this year. Targeting premium-quality mobile video will be no different. That’s why Katzenberg and Whitman are raising a $2 billion war chest for Quibi and budgeting production costs of $100,000-150,000 per minute on par with top TV shows. Facebook has $42 billion in cash and equivalents on its balance sheet. It can easily outspend Quibi and Snap in financing and marketing original shows by a mix of newcomers and Hollywood icons.

Snap can’t afford (financially) to compete head-on and doesn’t have the same scale of distribution. It is at 188 million daily active users and no longer growing rapidly (up 8 percent over the last year, but DAUs actually shrunk by 3 million last quarter). Snapchat is also a much more private interface: it doesn’t enable users to see each others’ activity like Facebook, Instagram, LinkedIn, YouTube, Spotify and others do to encourage content discovery. Snap is more likely to create a hub for ad-supported mobile-first shows for teens and early-twentysomethings rather than rival Quibi or IGTV in creating a more broadly popular Netflix or Hulu of mobile-native shows.

It’s time to go freemium

Investing substantial capital upfront is especially necessary for a company launching a subscription tier: consumers must see enough compelling content behind the paywall from the start, and enough new content regularly added, to find an ongoing subscription worthwhile.

There is currently no monetization of IGTV. It is sitting in experimentation mode as Facebook watches how people use it. If any company can drive enough ad revenue solely from short commercials to still profit on high-cost, high-quality episodic shows on mobile, it’s Facebook. But a freemium subscription model makes more sense for IGTV. From a financial standpoint, building IGTV into its own profitable P&L while making substantial content investments likely demands more revenue than ads alone will generate.

Of equal importance is incentive alignment. Subscriptions are defined by “time well spent” rather time spent and clicks made: quality over quantity. This is the environment in which premium content of other formats has thrived too; Sirius XM as the breakout on radio, HBO on linear TV, Netflix in OTT originals. The type of content IGTV will incentivize, and the creative talent they’ll attract, will be much higher quality when the incentives are to create must-see shows that drive new subscribers than when the incentives are to create videos that optimize for views.

Could there be a “Netflix for mobile native video” with shows shot in vertical format specifically for viewing on smartphone?

The optimization for views (to drive ad revenue) have been the model that media companies creating content for Facebook have operated on for the last decade. The toxicity of this has been a top news story over the last year with Facebook acknowledging many of the issues with clickbait and sensationalism and vowing changes.

Over the years, Facebook has dragged media companies up and down with changes to its newsfeed algorithm that forced them to make dramatic changes to their content strategies (often with layoffs and restructuring). It has burned bridges with media companies in the process; especially after last January, how to reduce dependence on Facebook platforms has become a common discussion point among digital content executives. If Facebook wants to get top producers, directors and production companies investing their time and resources in developing a new format of high-quality video series for IGTV, it needs an incentives-aligned business model they can trust to stay consistent.

Imagine a free, ad-supported tier for videos by influencers and media partners (plus select “IGTV Originals”) to draw in Instagram users, then a $3-8/month subscription tier for access to all IGTV Originals and an ad-free viewing experience. (By comparison, Quibi plans to charge a $5/month subscription with ads with the option of $8/month for its ad-free tier.)

Looking at the growth of Netflix in traditional TV streaming, a subscription-based business should be a welcome addition to Facebook’s portfolio of leading content-sharing platforms. This wouldn’t be its first expansion beyond ad revenue: the newest major division of Facebook, Oculus, generates revenue from hardware sales and a 30 percent cut of the revenue to VR apps in the Oculus app store (similar to Apple’s cut of iOS app revenue). Facebook is also testing a dating app which — based on the freemium business model Tinder, Bumble, Hinge, and other leading dating apps have proven to work — would be natural to add a subscription tier to.

Facebook is facing more public scrutiny (and government regulation) on data privacy and its ad targeting than ever before. Incorporating subscriptions and transaction fees as revenue streams benefits the company financially, creates a healthier alignment of incentives with users and eases the public criticism of how Facebook is using people’s data. Facebook is already testing subscriptions to Facebook Groups and has even explored offering a subscription alternative to advertising across its core social platforms. It is quite unlikely to do the latter, but developing revenue streams beyond ads is clearly something the company’s leadership is contemplating.

The path forward

IGTV needs to make product changes if it heads in this direction. Right now videos can’t link together to form a series (i.e. one show with multiple episodes) and discoverability is very weak. Beyond seeing recent videos by those you follow, videos that are trending and a selection of recommendations, you can only search for channels to follow (based on name). There’s no way to search for specific videos or shows, no way to browse channels or videos by topic and no way to see what people you follow are watching.

It would be a missed opportunity not to vie for this. The upside is enormous — owning the Netflix of a new content category — while the downside is fairly minimal for a company with such a large balance sheet.

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iOS 12.1 will come with new emojis

Posted by | Apple, emoji, emojis, Entertainment, Mobile, TC | No Comments

Apple is about to release the public beta version of iOS 12.1. And before everybody freaks out, the company announced that this update will feature new emojis — best feature update ever.

In other words, Apple is releasing its own take on Unicode 11.0 emojis. Other devices and major services will soon all support the same emojis, but with a different design.

Apple already previewed some of these new emoji designs back in July for World Emoji Day. So here’s what you should expect.

Curly hair, grey hair, bald people, red hair…

As always, you’ll be able to find five skin colors in addition to yellow, and all characters come in male and female variants. The Unicode 11.0 specs said that vendors should add “curly hair” emojis. But it looks like Apple concluded “alright let’s put a ’stache on that face!”

As for everything else, you’ll find a new emojis for outdoor accessories, such as luggage, compass and hiking shoes. On the food front, you’ll find bagels, salt, cupcakes, leafy greens, mango, moon cake, etc.

And when it comes to animals, there’s finally a mosquito emoji as well as new llama, swan, raccoon, kangaroo, lobster, parrot and peacock emojis.

Animals

Faces

Food

Everything else

Every time I’ve written about emojis, the number one comment has always been about red hair. It took a few years but red hair people, the Unicode consortium has finally heard you!

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SoftBank leads $35M investment in sports engagement startup Heed

Posted by | Apps, Endeavor, Entertainment, Heed, Media, Mobile, Sports, Startups | No Comments

Heed, a startup looking to create new ways for sports leagues and clubs to engage with fans, is announcing that it has raised $35 million led by SoftBank Group International.

As laid out for me by CEO Danna Rabin, the company sits at the intersection of sports and IoT — which makes sense, since it was founded by Internet of Things company AGT International and talent agency Endeavor .

“Our primary mission is to connect the young audience with sports leagues and clubs,” Rabin said. “[Those] audiences are consuming less broadcast TV, consuming less of anything linearly. Sports clubs and brands are having more and more issues connecting with and reengaging those younger audiences.”

To create that connection, Heed places sensors around the match or game venue, even potentially on players’ clothing and equipment.

For example, the team let me make a couple punches using gloves with sensors inside, which were created for the mixed martial arts league UFC. Afterwards, I could see the measured force of each of my swings. (I didn’t really have any points of comparison, but I think it’s safe to say that my numbers weren’t too impressive.)

Heed

Rabin emphasized that Heed’s real focus isn’t on building fancy hardware, but rather on the artificial intelligence it uses to take that data (which can also be drawn from video and audio footage of the match) and transform it into a general narrative that can be viewed on the Heed smartphone app.

Pointing to the UFC glove, Rabin said, “We extract, only from this sensor, 70 different data points. What’s happening is, the fusion of these data points is what creates the stories.”

Put another way, the goal is to replace the generic commentary that you often get in sports coverage and live games with unique details about how the game or match is unfolding. Those aren’t just numbers like how hard someone is punching, but also inferences about a player’s emotional state based on the data.

“One of our core promises is that it’s not editorial driven,” Rabin added. “The AI is selecting what’s interesting in a match. Of course, we have a creative team that designs the formats, the visuals, how the packaging should look like, but that’s incorporated into the technology, which is automatically selecting the moments and creating the experiences with no human interpretation.”

So does Heed aim to be a technology provider or a sports media company of its own? Well, Rabin said it didn’t make sense to simply provide the tech to individual leagues or teams.

“A specific club does not have the breadth of technologies to keep evolving,” she said. Plus, she argued that the audience isn’t looking for just a one-off site with stories about one team, but an all-around destination where they can “get a bit of everything.”

In addition to the UFC, Heed is also working with EuroLeague (the European basketball league), various soccer clubs and Professional Bull Riding. In the latter case, it’s not just creating content, but actually working with the organization to create a more automated and objective form of judging.

“By leveraging AI and IoT, HEED has developed a unique platform that is changing the way fans watch and interact with sports,” said Softbank President and CFO Alok Sama. “HEED is taking a traditionally static experience and providing fans with deeper insights into the physical and emotional aspects of the sporting event by gathering and analyzing large, complex data in real time.”

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Rockstar releases second Red Dead Redemption 2 gameplay trailer

Posted by | Entertainment, Gaming, PS4, red dead redemption, red dead redemption 2, rockstar games, TC, xbox | No Comments

We are less than a month away from the release of Red Dead Redemption 2, the sequel to one of the most popular games of the PS3/Xbox era. Red Dead Redemption launched in 2010, meaning that fans of the franchise have waited for almost a decade to continue their adventure through the early American frontier.

Today, Rockstar Games has released a little over 4 minutes of gameplay footage, showing off a special glimpse of first-person mode. Usually a third-person game, Rockstar has let slip that the next game will have a first-person mode for folks who want to fully immerse.

Watch Gameplay Video Part 2: https://t.co/ZlRCx5DyC7

Red Dead Redemption 2: Coming October 26, 2018.

Pre-Order Now: https://t.co/Dse5wKDeZr pic.twitter.com/Rh7TIhD7Md

— Rockstar Games (@RockstarGames) October 1, 2018

Part of the draw to RDR comes from the beauty of its open world experience. With RDR2, Rockstar has challenged itself to make everything bigger, better, and more dynamic. In this trailer, the company shows off small but significant details like the dynamic weather (see Arthur Morgan’s frosty breath in the snow) and also gives us a deeper look at important game mechanics like Dead Eye.

As part of the expansion of the RDR world itself, players are also getting even more customization options, with the ability to decide what Arthur wears, eats, and how well he handles his own physical hygiene. Though it’s not show in this particular trailer, we’ve also learned that players can customize their horses as well.

You can check out the full gameplay trailer below. Red Dead Redemption 2 is available starting October 26.

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Live streams of karate and niche sports are terrifying major sports leagues

Posted by | Endeavor, Entertainment, espn, esports, Facebook Live, Gaming, Hulu, Media, mlb, NBA, Netflix, nfl, Sports, streaming TV, Twitch, ufc, Video, YouTube Live | No Comments

Of the 100 most-watched live telecasts in the US in 2005, 14 were sporting events; in 2015, sporting events comprised 93 of the top 100 telecasts. That shift occurred because TV shows are shifting to online or on-demand viewing, and live broadcasts of the biggest sports are the main thing TV networks have left to draw in live audiences. But the need to keep those sports on TV and off streaming services is only accelerating the rate at which young people are tuning into other sports leagues instead.

The rapid adoption of subscription video streaming services like Netflix and Hulu and of social live streams on Facebook, YouTube, and Twitch is enabling massive growth by sports leagues that you won’t normally see on TV. In the streaming era, more sports – and new types of sports like esports – keep thriving while interest in traditional pro leagues like the NFL and MLB declines.

OTT is where the growth is

The central narrative in the global film/TV industry right now is the response of incumbent companies to the growing dominance of Netflix, Amazon, and other streaming (aka “OTT” or over-the-top) services. The incumbents are merging to consolidate ownership of must-have shows onto a smaller number of new OTT services that will each be stronger.

The majority of American households have a Netflix subscription (i.e. access to one of Netflix’s 56M US accounts), another 20M have a Hulu subscription, the number of OTT-only households has tripled in 5 years, and 50% of US internet users use a subscription OTT service at least weekly. Almost one-third (29%) of Americans say they watch more streaming TV than linear TV, and among those age 18-29 it’s 54% (with 29% having cut the cord on linear TV entirely). People, especially young people, want to watch shows on their own time and on any device, and they get more value from a few $8-40 per month subscription platforms than a $100+ per month cable bill.

Meanwhile, social live-streaming platforms that got their start enabling people to either vlog or watch video gaming are expanding to all sorts of live broadcasting: Twitch averaged 1 million viewers at any given point of day in January, and there were 3.5 billion broadcasts over Facebook Live in the first two years after it launched (with 2 billion users viewing at least one).

We’ve hit the pivot point where media is streaming-first. Netflix is now the leading studio in Hollywood, spending $13 billion this year on content. Linear TV viewing is declining: every major cable network (except NBC Sports) has declining viewership and aging viewers. Between 2007 and 2017, the median age of primetime viewers on ABC, CBS, NBC, and Fox went up 8-11 years and are all in the 50s or 60s.

Major pro sporting events are the last bastion of TV networks because the dominant brands are, for the most part, only available live on TV. Beyond those, the only content getting large audiences to tune in simultaneously are a couple Hollywood awards shows and premieres or finales of a couple hit shows (Big Bang Theory and NCIS).

The exclusive broadcast rights to those live sports events – particularly the NFL, NBA, MLB, and top NCAA basketball and football games – are the last defense for major broadcast networks. They are the reason for younger Americans to not cut the cord. ESPN makes $7.6 billion per year in carriage fees from cable companies paying for the right to carry the main ESPN channel (the other ESPN channels add another $1 billion); that number is increasing even as ESPN’s viewership is declining.

Disney (ESPN’s owner) and other leading broadcasters don’t want to let people watch major sporting events online instead (at least not easily or cheaply) because doing so would pull the rug out from under their traditional revenue stream and OTT revenue (subscription + ads) won’t make up for it quickly enough. This problem is only exacerbated by the fact that TV networks are paying record sums for exclusive broadcast rights to top sports leagues out of fear that losing them to a rival could be a nail in their coffin.

This strategy is delaying, not stopping the shift in consumption habits. More and more young people are tuning out (or never tuning in) to the major pro sports on TV, and the median age of their audiences shows that: 64 for the PGA Tour, 58 for NASCAR, 57 for MLB, 52 for NCAA football and men’s basketball, and 50 for the NFL…and all are getting older. (Cable news networks, the other holdouts who are still doing well on live TV face the same situation: the average age of Fox News, MSNBC, and CNN viewers is now 65, 65, and 61 respectively.)

The major pro sports staying on linear TV has expanded the market opening for new sports to fill the open space with young people who mainly consume content online. In fact, a growing marketplace of different sports leagues (including esports) developing their own fanbases is an inevitability of the shift to OTT video as it lowers the barrier to entry to near-zero and let’s geographically dispersed fans unify in one place.

1. Lower barrier to entry for distribution

Lawn bowling is no longer your grandfather’s sports league. Mint Images/Getty Images

Niche sports leagues – or frankly, even big sports leagues that just aren’t at the scale of professional football, baseball, basketball, and hockey – have always had a hard time getting coverage on television. But you can produce and distribute video for an online audience more cheaply than for a television audience.

In fact with Facebook Live and Twitch, you can stream live video for free, and you can share clips across every social channel to attract interest. To launch your own OTT service or partner with an existing one, you don’t need to start with a massive audience from the beginning and you don’t need millions of dollars from sponsors just to break even.

Having signed over 150 new deals this year alone for its 20+ sports verticals (which will stream 2,500 live events in 2018), Austin-based FloSports has established itself as the go-to OTT partner for sports leagues with an established, passionate following that aren’t massive enough to garner regular ESPN-level coverage.

From rugby, track & field, and wrestling to bowling, competitive marching band, and ballroom dance, millions of Americans have participated in these activities in their youth and through clubs as adults but rarely see them on television. In fact, the rare instances when such sports are on TV – like their national championships – the league is usually paying large sums (potentially hundreds of thousands of dollars) for that airtime rather than getting paid by the broadcasters.

FloSports gives a home to the superfans of its partner leagues, with full coverage of the sport and commentary meant for real fans. It produces events in the manner best fit to highlight the action and turns superfans – who generally pay a subscription – into evangelists who recruit friends. There are numerous sports that have millions of participants yet no active, high-quality event coverage; those are underserved markets.

By tapping into this, FloSports properties (like FloWrestling, FloTrack, etc.) have gained hundreds of thousands of subscribers and created a surge of interest in teams like Oklahoma State’s wrestling team, which saw an 144% increase in live stream viewing and 68% growth in event attendance after joining FloWrestling (leading to them to set an all-time attendance record in the university’s basketball arena of 14,059 people). In the first half of 2018, FloSports’ various Instagram accounts collectively received 307M video views, more than the collective accounts of Fox Sports or of all NFL teams (and NFL Network).

2. Going global right away.

Johanne Defay of France at a World Surf League event. Mark Ralston/AFP/Getty Images

The top pro sports leagues have geographically concentrated fan-bases that fit the geographic restrictions of TV broadcasters, which end at a country’s border. Online streaming empowers sports that have large fan bases who aren’t geographically concentrated to aggregate in the digital sphere with enough eyeballs (and paying subscriptions) to drive engagement with the sport’s content through the roof.

Since being acquired in 2015 and renamed World Surf League, the governing body of professional surfing has developed a large global following – with 6.5M Facebook fans and 2.9M Instagram followers – through the launch of live streams and on-demand video on its website and mobile app, plus partnering with third-parties like Bleacher Report’s OTT service B/R Live. Only 20-25% of WSL’s viewers are in the US but since its competitions are streamed direct-to-consumer online, they were able to reach surfers around the world right away. After seeing WSL’s Facebook Live streams garner over 14M viewers in 2017, Facebook paid up to become the exclusive live-stream provider for WSL competitions for two years, beginning this past March.

3. Immediate data on audience engagement.

As with all offline-to-online shifts, OTT video streaming captures dramatically more data on audience demographics and engagement than television does, and it does it in real-time. This makes it easier for emerging sports leagues to partner with advertisers and show immediate ROI on their sponsorships, plus it informs their understanding of how to produce their particular type of sporting event for maximum audience engagement.

Karate Combat is a year-old league that builds off the existing base of karate participants and fans around the world (numbering in the tens of millions) with a new competition format specifically intended for OTT. The league allows full-contact fighting and sets the match in a pit (rather than a traditional fighting ring) for better camera angles. It also replaces the traditional focus on having a big in-person audience (which is expensive) and instead sets the fights in exotic locations (like the fight this coming Thursday night on top of the World Trade Center).

Like many emerging sports leagues, Karate Combat is vertically integrated: the league organizing the competitions is also the one producing and streaming the event coverage over its website, mobile apps, and social channels. This not only means it captures the content-related revenue from subscribers, advertisers, and numerous OTT distribution partners, but it sees every data point about fans’ viewing behavior and their interaction with various dashboards (like biometrics on each fighter) so they can optimize both online and offline aspects of the production.

4. Online means interactive

Jujitsu fighting is now an OTT service. South_agency/Getty Images

Online viewing creates the opportunity for functionality you can’t achieve with linear TV: interactive displays overlayed on or next to live video. Viewers can pull up and click through real-time stats, change camera views, or switch overlays (think the the yellow first-down line in NFL broadcasts or coloring around a hockey puck to help you track it on the ice). Ultimately, a more interactive experience means a more social and more entertaining experience (and the sort of deep engagement advertisers value too).

FloSports’ ju-jitsu live streams (FloGrappling) give subscribers multiple live cameras each covering simultaneous matches on different mats so they can click between them. This is a more personalized experience than passively watching one broadcast on TV and it gets that subscriber actively engaged, with their behavior providing valuable data points for FloSports and their deeper interaction likely more compelling to event sponsors.

The display might also highlight live comments from friends or friends-of-friends in order to draw viewers into a more social experience. Discussion of a specific live stream with others watching it has been a central feature for Twitch and Facebook Live and enables the league or team streaming the event to directly engage with fans around the world.

An exception to the OTT-first strategy may be in sports that are entirely new and have zero existing base of participants or fans. Karate, surfing, and video-gaming all have millions of passionate participants around the world, going back decades. A new league like the 3-year-old Drone Racing League (DRL), which has raised $21M in venture capital to develop the sport of competitive drone racing, has to artificially stimulate the development of a fanbase if it doesn’t want to wait years for grassroots competitions to create a critical mass of fans even for a niche OTT service. It’s unsurprising then that DRL has focused on striking TV deals with ESPN, Sky Sports, ProSiebenSat.1, and others to thrust it in front of large audiences from the start, like a new game show hoping its format will entice enough people to take interest.

Power is in the hands of the league owners

Ari Emanuel, chief executive officer of William Morris Endeavor Entertainment. Jonathan Alcorn/Bloomberg via Getty Images

The best position to be in right now is the owner of a sports league that’s rapidly growing in popularity. The competition for audience by both traditional media companies and tech platforms leaves a long list of distribution partners eager for must-have, exclusive content – especially content like sports events that fans want to want live together – and willing to pay up.

Moreover, vertical integration to control your fans’ content viewing experience and own your relationship with them has never been easier. There are direct subscriptions, advertisers, event sponsors, event tickets, a portfolio of possible OTT distribution deals, and merchandising. The potential revenue streams a league can develop are only more numerous when you add in launching a fantasy sports league – like World Surf League has done – and the recent nationwide legalization of sports betting in the US.

Endeavor, the parent company of Hollywood’s powerful WME-IMG talent agency, seems to have recognized this and is an early mover in the space. It bought two sports leagues that have relied on TV deals and event attendance revenue – UFC for $4B and the smaller but rapidly growing Professional Bull Riders for $100M – and, since they each own their content, launched direct-to-consumer subscription platforms (UFC Fight Pass and PBR Ridepass) for super-fans and cord-cutters. (Endeavor also paid $250M to acquire Neulion, the technology company whose infrastructure powers the OTT services of the UFC, PBR, World Surf League, and dozens of others.)

There’s opportunity for new streaming platforms focused on being the media partner for these emerging sports leagues. Inevitably, the opportunity for bundling will consolidate many of the niche subscriptions onto a small number of leading sports OTT platforms, and that’s a powerful market position for those platforms.

What is unclear is if they can defend themselves as the incumbent media and tech companies come around to this phenomenon and commit billions toward capturing the market. The leading sports broadcasting companies all have OTT offerings and want to make them as compelling to potential subscribers as possible even if they exclude content from the biggest pro sports. A larger company that can afford to spend huge sums on exclusive sports streaming rights (like Disney with ESPN/ABC, Comcast with NBC/Sky Sports, CBS with CBS Sports Network, or Discovery with Eurosport) might opt to buy a company like FloSports as part of their deep dive into the space or they might just aim to outbid them when a league’s contract comes up for renewal.

The hope for an independent OTT platform devoted to emerging sports leagues is they get big enough, fast enough that they can afford to keep winning the rights to emerging leagues as those leagues grow and offers from competitors bid prices up. These dedicated OTT services will likely have to secure long-term – think ten years – streaming rights deals or acquire control of some popular new sports leagues outright to hold their own.

Like online distribution triggered an explosion of digital publishing brands and social influencers for every imaginable niche, the rise of high-quality live streaming and subscription OTT services will allow a lot more sports leagues to build an audience and revenue base substantial enough to thrive. There’s more variety for consumers and resources than ever for those with a rapidly growing league to attract fans worldwide.

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Sony is bundling Red Dead Redemption 2 with a 1TB PlayStation 4 Pro

Posted by | Entertainment, Gaming, PlayStation 4, PS4, red dead redemption 2, Sony, TC | No Comments

Considering it’s been eight years since Red Dead Redemption came out, it’s no surprise that fans of the franchise are ravenous for the next installment of the game, which launches October 26.

Last week, Rockstar Games offered some publications the opportunity to preview the game, giving gamers even more to salivate over. But Sony is offering a way to take action.

Sony is offering a RDR2 + PlayStation 4 Pro bundle that actually makes sense for the game. Instead of changing up the physical design of the console, Sony is offering 1TB of storage on a jet black PS4 Pro alongside the RDR2 disc and a dual-shock controller.

Ready for Red Dead Redemption 2? Grab a new bundle including the game and a 1TB PS4 Pro system starting October 26: https://t.co/rOS2mTXrT9 pic.twitter.com/cANcYmRDlF

— PlayStation (@PlayStation) September 24, 2018

Now, for a game like Red Dead Redemption, which offers a massive open world to explore and an extensive campaign, storage is key. That storage will come in handy for folks playing Red Dead alongside other games without forcing those players to make decisions about what to keep and what to delete.

Pre-orders for the bundle went live today on Amazon for customers in the U.S. and Canada, and costs $399 or $499 CAD.

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Old media giants turn to VC for their next act

Posted by | 21st century fox, Activision Blizzard, Axel Springer, bertelsmann, Entertainment, epic games, Gaming, Hearst, Media, Naspers, Netflix, Sky, Tencent, Venture Capital, WndrCo | No Comments

The Web 1.0 and Web 2.0 eras weren’t kind to the world’s largest media conglomerates, throwing their business models into question, creating whole new categories of content consumption, and bringing online competition to subscription and ad pricing. Many of the media giants from the 1990s and early 2000s remain market leaders with multi-billion dollar valuations, however, and have become active investors in startups as a tactic to help themselves evolve.

Of the traditional media companies that have committed to corporate venturing, there are two distinct strategies: those whose investing seems to be about replacing the historic classifieds section of newspapers and diversifying into a range of consumer-facing marketplaces, and those whose investing is concentrated on capturing an early glimpse (and early equity stake) in startups reshaping media.

Replacing Classifieds, Investing in Marketplaces

Mathias Doepfner, CEO of Axel Springer. The company’s startup accelerator is one of the most active in Europe. (Photo by Michele Tantussi/Getty Images)

Given the first crisis newspaper groups faced from tech startups in the 1990s and early 2000s was the rise of online classifieds sites (like Craigslist) and transactional marketplaces (like eBay and Amazon), the disruption of their lucrative classified ads revenue stream drove their attention to e-commerce.

Aside from Hearst, the major US newspaper and magazine chains – like Gannett, News Corp, Meredith Corp / Time Inc, and Digital First Media – haven’t made many investments in startups. Perhaps the financial straits of most US newspaper companies have left little cash for VC investments that won’t pay off for years in the future.

But in Northern and Central Europe, where news readership and even print publishing remain healthy by comparison, the leading media groups have been aggressively investing in marketplace and e-commerce startups across the continent over the last decade.

Europe’s leading publisher, Axel Springer has made itself an established player in the European startup scene. Axel Springer’s Digital Ventures team has backed marketplaces from Caroobi (for cars) to Airbnb, and their Berlin-based accelerator (run in partnership with Plug & Play) has invested in over 100 young startups, like digital bank N26, boat rental marketplace Zizoo, and influencer-brand marketplace blogfoster. In a move more strategic to its business, the 15,000-employee group made a large investment in augmented reality unicorn Magic Leap this past February as well, forming a partnership to leverage its content IP in the process.

Meanwhile, Norway’s Schibsted, Sweden’s Bonnier, and Germany’s Hubert Burda Media (best know to many in tech for their annual DLD conference in Munich) and Holtzbrinck Publishing are each globally active, multi-billion dollar publishers who operate active early- or growth-stage VC portfolios composed mainly of e-commerce brands and marketplaces.

The most iconic corporate venture investment by a newspaper conglomerate (or any company for that matter) is without question the $32M check written into 3-year-old Chinese social web startup Tencent in 2001 by the South African publishing group Naspers (founded in 1915). Tencent, now valued around $400B, is Asia’s largest and most powerful digital media company and Naspers’ 31% stake was worth roughly $175B in March 2018 when it sold $10B in shares.

As a result, Naspers has transformed into a holding company that incubates, acquires, and invests in online marketplace businesses around the globe (though it still maintains a relatively small publishing unit).

The challenge for traditional media companies investing in startups beyond the realm of media is that even if wildly successful, those investments neither give them a distinct advantage in media itself nor make their business model like that of a tech company by way of osmosis. These investments can be flashy distractions to make management and shareholders call the company innovative while it fails to actually re-envision its core operations. Investing in Airbnb or BaubleBar doesn’t address the key challenges or opportunities a traditional publishing group faces.

Therefore the best case scenario in this strategy seems to be that these companies find enough financial success that they just transition out of the content game and become holding companies for other types of consumer-facing brands the way Naspers has. But even then the path seems uncertain: despite all its other activities, Naspers’ market cap is less than the value of its Tencent shares…it’s not clear that the best case scenario necessarily transforms the core organization.

Investing in the Next Generation of Media

Thomas Rabe, CEO of German media group Bertelsmann. Bertelsmann is unique in treating startup investments as a dedicated division of the conglomerate. (TOBIAS SCHWARZ/AFP/Getty Images)

The other track for “old media” giants has been to focus on venture capital as a means to uncover the future of the media business so the old guard can learn from the new generation of media entrepreneurs and react to market changes sooner than competitors. Intriguingly, it is consistent that the conglomerates who have taken this strategy are ones whose operations in television, radio, data, and telecom outweigh any involvement in newspapers.

Bertelsmann, Hearst, and 21st Century Fox have been the most aggressive corporate venture investors in startups working to shape the future of media, whether it be through streaming video services, crowdsourced storytelling platforms, or augmented reality.

With annual revenue over €17B, Bertelsmann is one of the largest media companies in the world, spanning television production and broadcasting (RTL Group), book publishing (Penguin Random House), newspapers, magazine publishing (Grüner + Jahr), and education. Unlike of media companies though, it treats venture investments in media startups as a key division of its company rather than as a side project.

The company’s core Bertelsmann Digital Media Investments (BDMI) invests across the US and Europe in companies like Audible, Mic, The Athletic, and Wondery (and in funds like Greycroft and SV Angel) but there are also the 3 regionally-focused funds investing in China, India, and Brazil plus the education-focused University Ventures fund it anchors in NYC. Collectively, Bertelsmann teams made 40 new startup investments in 2017 and generated €141M in venture returns, according to their 2017 Annual Report.

The investment arm of Hearst, one of America’s largest publishers with $10.8B in 2017 revenue, has likewise been a major backer of BuzzFeed, Pandora, Hootesuite, and Roku not to mention Chinese language app LingoChamp, live entertainment brand Drone Racing League, VR capture startup 8i, and dozens of other media-related startups. Hearst’s ownership in these ventures makes strategic sense: they provide market insights relevant to the core businesses, offer immediate partnership opportunities, and would be strategic acquisition targets that evolve the company’s position in a changing market.

21st Century Fox and Sky Plc (in which 21st Century Fox owns a 39% stake and is trying to acquire outright) have both made a whole slate of startup investments across the media sector in the last few years. In addition to its $100M investment in live-streaming platform Caffeine (announced on September 5) and similarly massive investment in WndrCo’s NewTV venture led by Meg Whitman, Fox has invested repeatedly in sports-centric OTT service fuboTV, hit newsletter brand TheSkimm, VR studio WITHIN, and fantasy sports app Draftkings with Sky often co-investing or building meaningful stakes in international startups like iflix (a leading streaming video service in Southeast Asia and the Middle East).

Since traditional media giants own extensive intellectual property of hit shows, films, and often exclusive rights to popular live events – not to mention established distribution channels to tens or hundreds of millions of people – there are immediate partnerships that can be signed to benefit both a startup and the incumbent. The incumbents often re-invest repeatedly to build their ownership and deepen the alignment between the companies, which rarely happens when media companies invest in marketplace startups.

Tencent’s always-be-evolving model

The new crop of digital media giants that includes Netflix, Snap, VICE, and BuzzFeed aren’t doing much if any strategic investing. Instead they’re keeping focused on growth of their core product offering. The notable exception is China’s Tencent.

In addition to dominating China’s booming messaging app sector with WeChat and QQ, owning 75% market share of music streaming in China, and being the world’s leading games publisher through its own studios (Riot Games, Supercell, etc.) and its minority stakes in Activision Blizzard, Epic Games, and others, Tencent has taken a strategy of investing often and early in promising digital media startups…and it has its tentacles in everything.

Based on Crunchbase data, Tencent has done over 300 investments in startups. It is likely the most active venture investor in China, where most of its portfolio is concentrated, but also backs Western media startups like SoundHound, Wattpad, Spotify, Smule, and Wonder Workshop.

Tencent can give distribution to these upstarts through its vast portfolio of digital properties and it can keep tabs on what new content formats or business models are gaining traction. It operates from a mindset of perpetually evolving, and trying to snatch up startups whose products could be key assets in the future of content creation, distribution, or monetization. This approach is one both old media giants and the next gen of unicorn media startups should consider.

The pace of innovation is moving so fast, and so many new doors are opening up – from subscription streaming and esports to voice interfaces and augmented reality – that corporate venture as a core strategy can unlock opportunities for the organization to evolve early, before it ends up being categorized as “old media”.

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GameFly to shutter streaming service this month

Posted by | closing, ea, Electronic Arts, Entertainment, gamefly, Gaming, streaming | No Comments

GameFly, the video game rental company, will be shutting down its streaming service at the end of the month, Variety reported earlier this week. This closure comes just over three years after the streaming service launched in 2015.

GameFly, the no-console streaming service for gamers, offered packages for $7 and $10 per month that gave users unlimited access to titles — as long as they had a smart TV like an Amazon Fire or Samsung Smart TV, in addition to a controller and access to the internet. Just as GameFly’s original snail-mail rental service for games mimicked Netflix’s from days of yore, many touted the streaming service as the Netflix of gaming.

Support for the service will be maintained through the end of August and accounts will not be charged for the service after that date, according to Variety. But people can still rent physical games (and movies) from the company for $9.50 per month (one rental at a time) or $13.50 per month (two rentals at a time.)

This news comes about three months after EA acquired the technology and team members from GameFly’s cloud gaming division — a division that helped make it possible to save your progress to the cloud while gaming on the streaming service. But the acquisition did not include GameFly’s streaming service.

“We acquired the team in Israel and the technology they’ve developed, we did not acquire the Gamefly streaming service,” an EA spokesperson told Variety. “We have not been involved in any decisions around the service.”

TechCrunch reached out to GameFly for comment but the company did not respond by the time of publication regarding the reasons behind this closure.

Meanwhile, the world of streaming games appears to be continuing on just fine. Sony’s PlayStation Now continues to add titles to its service, French startup Blade’s streaming service is expanding availability this week in the U.S. and EA itself announced at E3 this summer plans to start work on its own streaming service.

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