Just because “it worked on cable,” it doesn’t mean it will work on digital.
Dan Goman is the founder and CEO of OWNZONES Media Network, a global “tribrid” media company that combines content, distribution and technology solutions for the motion picture, television and digital content creation industries. Prior to creating OWNZONES, Goman spent 15 years in the computer science industry as a technical engineer and consultant, directing large cross- disciplinary teams.
In this weeks ‘5 Questions,’ Goman discusses the impact of SVOD on Hollywood, 420TV, and why weed, an untouched landscape for most advertisers, will soon be impossible to ignore.
VideoInk: You’re working with a lot of the major providers for internet-based entertainment, what’s a common problem that they all face? (or two)
Dan Goman: We usually see two problems across all of our partners:
- People usually tend to underestimate how difficult it is to launch and operate an over-the- top service from a technical perspective. Just because “it worked on cable,” it doesn’t mean it will work on digital. The digital eco-system is incredibly complex and presents daily challenges. In order to provide a good customer experience, all back-end elements need to work together in harmony (24×7) — from storage, DRM, security and others. That’s easier said than done if for no other reason than the fact that the solution typically involves technology from multiple vendors that requires really tight integration. As content providers, we faced the same challenges with our OWNZONES platform and spent years perfecting our own propriety solution that we are now offering to other companies.
- Getting “discovered” by your viewers/customers is extremely difficult and
expensive. I tell our partners that unlike the Kevin Costner’s “Field of Dreams,” in the OTT space, if you build it, they probably won’t come. Unless you happen to have an unlimited supply of cash, you need a “discovery strategy” before you launch your service — even if you already have an existing, well-known consumer brand.
You launched 420TV to service video around cannabis. This area of video is fast growing as major publishers like Vice and High Times create educational and entertaining formats around weed uses and weed culture, but is it brand safe? As an ad-supported platform, how are brand responding to running ads against content that is becoming less and less taboo?
We are developing 420TV as a 4K premium video platform since Cannabis is emerging into a powerful industry that mainstream media won’t touch. Cannabis retail businesses have nowhere to advertise on television, so we are giving them an opportunity to market their products. This is very similar to what happened with television in the 1950s. Generally speaking, advertisers will follow disposable income, and the average Cannabis customer age is 37 years old, which is higher than one might expect given stereotypes about marijuana users. When adding in the 36-to- 45-year- old demo, a total of 58% of cannabis consumers are in the age group of professional adults, and for every dollar consumers spend at dispensaries or recreational stores, another $3 in economic benefits are created for cities and states, creating an economic windfall of close to $24 billion in 2017. As we see Cannabis evolve into the pop-culture lifestyle, it will be something that mainstream advertisers won’t be able to ignore.
As TV, Film and digital continue to converge, what do you think is accelerating this shift? And will TV/film really come crashing down at the hands of digital when the financial economics in digital have yet to catch up?
Consumers have always desired more freedom when it comes to when, where, and how they consume their content, but the cable model had them locked and their hands tied. Who doesn’t like the idea of binge watching their favorite show without the annoying interruption of advertisements? Recent technological advancements allowed for things like streaming and the dam broke wide open. I don’t think you will see things come crashing down all at once; there will always be a place for TV and film. Instead of a hard crash, you will see an evolution and everyone who adapts will be just fine, irrespective of the doom-and-gloom predictions you hear from some parts of the content world. In general, the content world has always been dragged kicking and screaming by the tech world, and they have always adapted — the world did not end. I will say that on the digital side, there will need to be a lot more maturing, and you will definitely see other models emerge before things settle down. There is a lot of ongoing experimentation, data being collected and optimizations implemented very frequently. That’s the good thing about going digital — if you do it right, you have the data to be able to react quickly.
420 TV was OWNZONES’ first foray into owning its own destination brand, correct? What other big niche categories might OWNZONES consider? Are you? One of the greatest things about digital is that we can “niche” an audience. This week, we are shooting a food series featuring a well-known vlogger for a women’s lifestyle channel we plan to launch this fall, prior to 420TV. We are also currently in process of launching the “Best Westerns Ever” network on Amazon US and OWNZONES.com. Here’s a popular genre that has virtually disappeared on television.
Any trends you’re seeing on the international side that impact how video companies do business currently?
Anybody operating a video platform is desperate to find content that will attract younger audiences. We just launched PASSPORT Romania, which is part of a new international localized digital franchise that is performing exceedingly well, featuring top Romanian and U.S. celebrity influencers, local millennial-focused news and a rich offering of independent feature films. We also found a lot of interest from European cable operators in the
women’s lifestyle network we’re developing. We intend to replicate our strategy to produce local programming in every market we enter around the world.
With Netflix buying international/worldwide rights at first window, how do you think that’s positively or negatively impacting the economics for Hollywood?
The most common dynamic in our business today is change. So we might as well get used to it. Hollywood has been kicking and screaming about the emergence of Netflix and other online platforms, but it’s what the consumer wants and it’s a good thing. Just like any other change, there will be winners and losers. By and large, Netflix has been great for Hollywood’s production community, but it’s probably not a plus for broadcasters. We also believe in the emergence of Amazon and we plan to grow internationally with them. Having said that, I believe that studios have an enormous advantage over everyone due to the fact that they have content — and a lot of it. If they are able to leverage technology to create their own rich direct-to- consumer offerings, the benefits would be substantial because most studio content is created to appeal to an international audience and that is the area with the biggest potential.