Discovering a Business Model in the Data – VIFF Industry Presentation
Here is a video recording of a presentation I did last week at the Vancouver International Film Festival industry conference (VIFF Industry). It was part of their DNA of Discoverability day (one of my very favourite parts of online business models). It’s 45 minutes but contains lots of useful nuggets (a rough text transcription follows below). Enjoy!
Text Transcription:
INTRO
Discoverability is something I have been talking about for ever in my teaching and business and it is great to hear the industry starting to so fully embrace it.
For me discoverability is a two way street. It’s about the audience discovering you and your work, and it’s also about you discovering your audience. It means you have to know WHO they are, WHERE they are and WHAT they want. This is key for sustainable creative business models, for making your dreams a reality.
The answers to these questions is simply data. And in the online context, this data is more accessible than ever before. In the early stages of discovery and development you often have to rely on third party data, but as you reach and expand your audience this can be much more direct, with few or no gatekeepers involved. Data is the language of the online world. It is the way the audience communicates whether actively or passively.
Your job, as a content or experience creator who wants to build this kind of creative business, is to LISTEN to this data. To RESPOND to what the audience tells you and what it tells you about the audience. This actually gives you a huge competitive advantage because most storytellers are not thinking about their business in this way.
Today, I am going to tell you four stories about some dreamers, who have made their dreams a reality and built sustainable creative businesses by listening and responding to the data. While they are all quite different, there are some universal lessons that you might find helpful.
FRASER & UNIVERSE TODAY (1999)
First, I want to introduce you to Fraser Cain. He is a dreamer who has always dreamed of space. Without any training in the field, his dream was to be a part of the conversation at a high level about space and the future of humanity.
Back in 1999, without any formal education but a lot of passion, Fraser took his dream online and launched the space news website Universe Today. It was a text based, ad supported site that shared daily breaking news stories. It generated decent traffic and he started to see a small & steady ad revenue base building.
Then one day his young daughter asked him, “Daddy what’s the biggest star in the universe?” Fraser wrote an article about it and his traffic and ad revenue went nuts. He started to think “I wonder if there are other questions out there like that I could answer?” And so began his deep dive into keyword research (one of my personal favourite data sources because it really gets you into the mind of the audience and is all about discoverability – what are they actively looking for?) .
He found many of these “evergreen” type topics that he used to guide him in content creation and that supplemented his daily news stories. His content library grew. His audience grew. His ad revenue grew. (By the way that biggest star article is STILL one of his most solidly performing text articles, continuing to pull search traffic to this day.)
So he was making money. But he still had not achieved his dream of being a significant part of that bigger, important space conversation. He realized the text content was interchangeable, easily stolen & copied. Heck, he could get cheap content from India to feed that content beast. But HE needed to build a recognizable brand, one that could not be co-opted by others. And so he launched the Astronomy Cast podcast in 2007. A weekly podcast with a reputable astronomer Dr. Pamela Gay.
When the Internet got fast & strong enough to carry video he also started to create this kind of content. Both the podcast & webseries still going strong, they concentrate primarily on that evergreen type content, although Fraser also leveraged the “live” capabilities of Google+ with Star Parties and weekly Hangouts. And he has found the audience he attracts & engages around this content is more loyal, more active than just text alone. And his voice, his brand was not eroded in the same way as it had been with text content.
In fact he has increased the engagement around Universe Today so much that he has been able to funnel a bunch of this community into a micropatronage program through Patreon, where they get his content ad free and Universe Today gets a steady & growing income of almost $2000 a month at about $3-4 per person.
He still continues to generate significant revenue from Google’s premium AdExchange program but his “micropatrons” provide much higher return on investment, their engagement is increased and the relationship he has with them is MUCH better, more personal & direct.
He continues to use data to inform and grow Universe Today. Although he focus is now more on the data he gets out of YouTube & Twitter (where he tests engagement on space news headlines before deciding which stories to add to the website).
And he also is exploring ways to evolve the relationship with his audience even further, letting 400 of his superfans become Executive Producers on a regular Space Hangout on Google+. They have taken over sourcing interviewees and managing the logistics of the weekly event. Fraser just has to show up and host. He says “I have given up control, but gained everything in return.” He’s not sure exactly how this will grow or change his business model but it’s a new and exciting experiment.
ROVIO & ANGRY BIRDS (2009)
Now I’d like to introduce you to a bunch of guys from Espoo, Finland whose names I cannot pronounce. They dream of games.
They worked for a Finnish software company that was founded in 2003 and had a background of doing work-for-hire for some major game publishers. While this allowed them to survive, it was not a recipe for growth. So, in an effort to develop its own IP the company had successfully and then unsuccessfully dabbled in self-publishing mobile apps and was on the brink of bankruptcy.
Then in 2007, Apple released the iPhone and everything changed. Instead of throwing in the towel, the team spent months researching and analyzing successful and failed mobile games and tried to identify where the holes and opportunities existed with the new iPhone. Based on what they learned they came up with a set of design criteria to fulfill – things the audience was clearly looking for/ wanting to discover in their favourite app games.
No publisher was attached, but they were able to score 100K euros of private investment from an angel investor. And over 6 months, armed with their data, inspired by a sketch by the lead designer of stylized wingless birds, this small team created the first version of a little game called Angry Birds.
It launched on the App Store in December 2009 and for the first three months, didn’t really go very far as they focused on the smaller markets of Denmark, Sweden, Greece and the Czech Republic resulting in about 40,000 downloads. Discoverability was also much easier back then becase there were a lot fewer apps in the app store.
In February 2010, Angry Birds was featured in the UK App Store, a discoverability opportunity the company leveraged by creating 40 new levels, creating a game trailer for YouTube and providing a “lite” version for free . By April, adoption of the game exploded putting it in the #1 spot on the US App Store. By 2011 Angry Birds had been discovered and downloaded over 300 million times from all over the world.
The Rovio team was aware the true gold mine with Angry Birds was their massive user base. They leveraged social media to the fullest and made responsive customer service a priority.
They also understand the power in the data generated by their players. In 2011 its fans were collectively generating 1.4 billion minutes of gameplay data during any given week. And the numbers were growing exponentially. At that point Rovio brought on board a Seattle company that specialized in predictive analytics, Medio Systems, to analyze that consumer behaviourial data in real-time.
And Angry Birds just kept getting better. Big data is used to improve the user experience, engagement and revenues. New game content (both levels and versions) are released constantly to keep fans interested and active and to test and improve and evolve the experiences it provides. And by this point brand recognition was key to their ongoing & exploding discoverability.
Rovio has developed many, many versions of the Angry Birds games, but has also become an entertainment company leveraging this brand and the fan base the data helps them create and grow, to branch into whole new areas of story, experience and products – from animated series to board games to amusement parks and playgrounds to merchandise of all sorts to a feature film that will come out in the summer of 2016.
One side note: the power in all that data has not gone unnoticed by the powers that be and there was a leak from the NSA and the British equivalent earlier this year that revealed Angry Birds and successful apps like it may being used as data sources by these government spy agencies. Not the topic of this presentation but certainly a part of the big data equation.
TAMARA PAULIN (2011)
This woman goes by many names in her professional life but, no, she is not a spy, she is a self-published ebook writer. Meet Tamara Paulin. She was a dreamer who wanted to be an author. Her books have been on the New York Times Bestseller List and she is in the top echelon of Amazon’s stable of e-book authors. Bottom line, she makes a living as a writer, and a pretty darn good living at that.
She started with stars in her eyes, wanting to go the conventional route of an author. Went to conferences & workshops where she got inspired and met lots of (mostly) women just like herself. After doing this for quite a while and not getting anywhere, in 2011 she decided to throw one of her Young Adult novels up on Amazon just to see what would happen. Well, what happened is it sold and fairly well (largely because of a unique program for authors Amazon was offering at the time which allowed her to leverage opportunities in different ways).
A light went on. And she decided to try to seriously tackle self-publishing. She wrote and she wrote and she published and she published. When she couldn’t duplicate her initial success, she started to look around for other opportunities. Really examined the market to see what was selling, what people were looking for. She talked to other self-published author and saw those who found success were very data oriented or, as Tamara would say, truth oriented. She learned to crunch the numbers, to listen to what the data was telling her about her audience and what they wanted to discover.
Under a new pen name she tried her hand at erotic romance and that went very well. So she said, “OK I guess this is what I do now. I write porn.” She wrote a number of stand-alone novels, and then a trilogy that ended up on the NYT bestseller list.
Today, 4+ years into her self-publishing career, with 5 pen names under her belt, and a varied body of self-published work, she feels she has a pretty solid understanding of this industry. She says it is an amazing time to be a creative person. The digital age is an age of fantastic opportunity, mostly because of how much direct access you have to your audience and how the data can provide you with a rich understanding of what they are looking for and will pay for. However, this data often tells very uncomfortable or difficult truths. Truths you have to be willing to hear and respond to.
Some of the truths Tamara has had to face:
Collectively people have pretty low taste. They don’t necessarily want the great masterpiece you have slaved away on for years, you can find “success” from simply making better quality versions of the low quality, popular stories they already know they like. This can be good news because it requires less work. But bad news if you wanted to be the next Hemingway or Truffaut.
Audience aren’t loyal to the people behind the stories. They are more loyal to characters or creative franchises. Try to find a character and story world that has this kind of longevity and that you can be happy creating for a long time.
The digital space is an iterative space. Take advantage of that. If one of her stories gets a lot of consistent critical comments about one particular element, she just goes in and changes the problematic part of the book. While that would be less easy to do with a one-off screen media property, there are other ways to iterate around your story.
Advertisers are the new gatekeeper, and you pay to access their audiences. But these opportunities change. Last year Tamara spent $80K on FB ads and still made a significant profit, but this year things have changed several times, not the least of which what significant differences at Amazon, so she constantly assesses and reassesses her ad spend to find new and better opportunities that provide better returns on her investment.
Today Tamara is writing “clean fiction” under the pen name Angela Pepper about a competent young woman named Stormy Day who has a cat and solves mysteries (a content franchise with much more potential longevity). She says everything she has achieved is because she has participates fully in this creative community, where information and data is shared (something that doesn’t often happen in the world of film and media) and she stayed open to what she learned, even when she didn’t like it. She works hard and continues to experiment, iterate, share, and be profitable.
PEMBERLEY DIGITAL (2012)
Finally I would like you to meet Hank Green and Bernie Su. Believe it or not, these dreamers dream of Jane Austen.
Hank is one of the Vlogbrothers with his brother John Green of “Fault in Your Stars” book & movie fame. Hank’s wife is a big Pride and Prejudice fan and through conversations with her, Hank realized there was a big opportunity with fans of the book. He brought on Bernie who had experience with narrative web series and The Lizzie Bennet Diaries was born (which eventually spawned the transmedia storytelling company Pemberley Digital).
Told through over 100 webisodes and multiple in-story social media feeds, the Lizzie Bennet Diaries came to life in a modern vlog retelling of the classic Austen story. When it comes to initial discoverability, Hank brought his substantial fanbase and Pride & Prejudice fans also found it through searches and word of mouth in their fan communities. Within three months it was breaking even with just YouTube advertising revenue and eventually a producing partner (Deca TV) came on board to run the business side allowing Bernie and his team to concentrate on the creative.
As the story came to its pre-determined end, fans clamoured for merchandise and a DVD box set. To finance this, The LBD team launched a Kickstarter campaign which raised its $60,000 goal within 3 hours and went onto raise over $460,000 in total. Fans just wanted to pay the actors and creators fully for the experience they had been provided.
LBD was massively successful creating a huge online footprint of data but it was not actually tracked diligently. I came on board at the end of this amazing first story as the newly formed Pemberley Digital company looked to leverage the audience they had grown. My job was to track the data footprint around the next Austen adaptation Welcome to Sanditon.
Once again it used the tried and true format of LBD and used an LBD character Gigi Darcy as the protagonist. However, instead of a family at the core of the story, this time it was the town of Sanditon. The audience was invited to participate by becoming part of the town and sharing their own video stories in tandem to the core story created by the Pemberley Digital team. Here data was gathered and analyzed in great detail, especially in regard to the kind of content and experiences the audience enjoyed.
This information was used when the third Austen adaptation was created, Emma Approved. Here instead of a family or town at the heart of the experience, they created a brand around lifestyle coach Emma Woodhouse. The Austen story of Emma provided the backbone and story around which a business model started to take shape, with revenue streams from advertising, affiliate referrals (especially for clothing and accessories) and product placement. Data helped provide shape to the where the highest returns were possible and to attract potential advertisers.
Emmy, Webby and Streamy awards have been won by the Pemberley Digital series. Books have been written around the original LBD series and plans are still in the works to try and leverage a branded spinoff for Emma Approved. Hank continues his YouTube empire with his brother John.
And Bernie has launched a new company called Canvas Media Studios that takes his Pemberley experience out of the literary adaptation genre. He recently launched a web series in partnership with Maybelline Cosmetics and the Style Haul YouTube fashion network, called Vanity. Definitely can see lessons learned from Emma being applied in new ways as he continues to evolve.
CONCLUSION
Four different dreams turned into four sustainable creative businesses. Four examples of discovering an audience and business model in the data.
From a digital space community to an entertainment company that began as a video game to a bestselling e-book writer to transmedia storytellers with a taste for classic literature. Here are some of their universal lessons that are applicable to anyone wanting to use a digital business model:
Start with free. All of these success stories began with giving content away for free, and continue to have “free” as part of their model. Free allows them to grow and engage their audiences and reward their attention and loyalty to get them hooked. It’s part of the “give before you ask” nature of the online economy.
Think beyond the project. Instead of building an audience from scratch with each project, think big picture to your body of work. Finding throughlines through the work that can allow you to bring the audience you have discovered, grown and engaged with you from project to project.
Think franchise. Corallery of #2. Not a franchise in the Marvel Universe sense, remembering that audiences are more loyal to characters and storyworlds than the people behind them. Create a content/story franchise allows you to carry that auidiene forward and collect and leverage data for a long(er) time.
Data=truth. Success comes not just from gathering data but from being open to the truths it has to tell you (even if you don’t like what they are). And yes, I know data can be manipulated. But how about NOT manipulating it and actually trying to understand what it is telling you instead.
Listen & respond. Listen to your audience and then take action based on what they (and their data) tells you.
The digital space changes quickly. You can never afford to stand still but must keep adapting and following new opportunities.
Embrace failure. The digital space is iterative. You can never be “perfect.” Instead experiment, track and use what you learn to improve and get better at what you do. This is especially feasible within the ongoing “big picture”/ franchise model (and another good reason to think this way).
The digital economy is a social economy. It’s built on relationships. And at the end of the day, the data is simply an expression of your relationship with your fans. Listening to the data is listening to what they are telling you. And if you respond authentically you will be rewarded.
Digital business models starts with discoverability. If the audience can’t find you it doesn’t matter how good your story is.
Discoverability starts with audience data. Helping audiences discover your story, starts with discovering who they are, where they are and what they want. The online space gives you the means to do that in the access to data it provides.
Final note about filmmakers & data: Eli Roth & “The Green Inferno” PLUS Selling Your Film Without Selling Your Soul & its followup book