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STRAIGHT TO INTERNET - publishing and selling media products without detours

a pocket guide from Media Evolution


Media Evolution This publication is published by the media cluster Media Evolution. We are working to boost growth in the media industries in southern Sweden. One of our key areas is gathering intelligence to monitor what’s going on in the media industries across the globe. We take that information and use it to highlight opportunities and business models that our members, and media industries in general, can exploit and develop. www.mediaevolution.se


INTRO by Media Evolution

Turning negative into positive

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traight to video is a bit of a disgrace, used by the film industry for a film that isn’t good enough to be shown in the cinema.

“Straight to internet gives everyone the chance to sell the products of their ideas.”

As digital distribution takes over from physical distribution, the term is taking on a more positive edge. Internet-based platforms will soon be the most important channels through which media producers sell film, games, music and text. Straight to internet gives everyone the chance to sell the products of their ideas. This publication is about new opportunities and the new expectations they bring with them. We’ll be telling you about the services different industries can use to sell their products and asking how this will change our creativity. For example Christina Mohlin writes about how to succeed in the world of internet TV and Martin Walfisz will be telling us about his latest game concept. 4 Creating for the internet 8 Selling your product straight to the customer 11 From a graphics-heavy strategy game to a web-based quiz 14 4 tips for starting your own internet TV channel 16 iPhone pioneers – with balls 18 Literature direct, and only on the web 20 Will literature, film and music look different in the future? 22 Contemporary buzzwords

Straight to Internet December 2010 Published by: Media Evolution Editor: Martin Thörnkvist martin@mediaevolution.se Design: You Us and Them


WHY by Martin Thörnkvist

Creating for the Internet

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he internet and applications that are based on the internet have increased the opportunities for creators to spread and sell the products of their work. The channels are increasing in number and as they improve, consumers’ willingness to pay is growing too. But there’s a huge responsibility on the creators to understand what these new channels and customers’ new behaviours require. All forms of media have historically had structures with gatekeepers who creators have to get past before they can turn their idea into reality. This resulted in few people having access to the knowledge, the tools and the money needed to produce films, music, computer games, newspapers and books. Not any more. Today absolutely Grindslanten by August Malmström anyone who has an idea can offer the resulting product to the public. The digitalisation of the media industries has led to the price of the tools of creation coming down. Where there used to be several gatekeepers standing between creator and consumer, it’s now a cleared runway. A computer game developer can come up with an idea, develop it for the web or for mobile platforms and press publish. It’s immediately available for the whole world to play, love and spread the word to their friends. The Swedish game Minecraft is a good example.


Games developer Markus Persson started creating his game in May 2009. Just over a year later he released an early alpha version on www.minecraft.net. Besides playing the game, you can also buy the complete game from the site at a discount. Five months after release, 5,000 people are buying the game every day, joining the ranks of a total of over half a million people who have done the same. This is just over 30% of the total number of players and together they have paid about 9 million dollars. New platforms with new requirements As the gates stand ajar and the channels are opening up, it’s a whole new ball game out there. The products that go straight to the internet have a different reality to adapt themselves to compared with those that used to end up packaged in shops or on the cinema screen. The amount on each price tag needs to be lower and ideally there should be an element that doesn’t cost anything at all (freemium). In return, the number of potential customers is huge. But in the majority of cases, the turnover is still lower. You can’t hide from that fact and it’s clear that that affects the size of the production budget. The silver lining that makes up for less income is that it isn’t just the tools for creating the product and distributing it to users that have got cheaper. The expectations in terms of technical quality on the Internet is lower too. We don’t demand the same top quality graphics of a web game as we do on the Playstation. We make the same lower demands of the popular gaming platform Facebook or when we are choosing games on our mobiles.

“Where there used to be several gatekeepers standing between creator and consumer, it’s now a cleared runway.”


A new ecosystem Selling straight to the internet isn’t just about 1. Low cost creation distribution and sales. It’s just as much about 2. Free marketing adapting production to this new reality. The 3. Building a close relationship with consumers three things go together. Cheaper produc4. Selling through internet-based channels tion is essential for achieving profitability in an internet-based “ecosystem”, or at least makes it easier. It’s only once you have made sure you’ve adapted all the steps to the new regime that you can create a sustainable business for yourself as a creator.

The new ecosystem

When cheap recording tools ended up in the hands of musicians, they started to create songs on those terms. The launch of Myspace in 2003 gave them a new place to market them. At the same time the iTunes Music Store opened, as did other internet music outlets which made it possible to receive payment online. A whole digital value chain was in place. These are opportunities in all media sectors but far from all creators are exploiting them. Nor is every industry, the entire film industry is one example where this trend has been slow to get off the ground. We are still seeing multimillion production budgets, cinema and DVD release are the main channels for reaching an audience and the financing system (e.g. the Swedish Film Institute) makes funding conditional on cinema distribution. As a result, very few Swedish films make a profit and the lower price tags that an internet audience expects feel like a insult to the work the creator has created. Something has to change. I would like to see a film making manifesto that fits the above ecosystem. Ideally inspired by the Dogme manifesto drawn up by Danish film makers in the late 1990s. Imagine if a number of film makers took the bull by the horns and created rules for producing films for the web. Limitations that offer a real opportunity for your film to make a profit.

“The new reality involves amazing opportunities. But it isn’t going to happen without sacrifices”


But a great responsibility rests with the creators as well not to dream about contracts looking the way they looked in the 1990s and to let go of the idea that once the contract has been signed and sealed, a life as a praised artist, drinking champagne for breakfast and attending parties limos awaits.

“To put it another way, you can’t have the analogue gooey chocolate cake and eat the digital cupcake”

The new reality involves amazing opportunities. But it isn’t going to happen without sacrifices. A lot of work and creativity will be behind every successful film, computer game, literature or music project even in the future. To put it another way, you can’t both have the analogue gooey chocolate cake and eat the digital cupcake. Let’s do it Why take the long way round? If you’ve already got off the ground: Carry on producing for the internet and use it as a new, home base platform and as a springboard to the cinema, the bookshelf, the shop window and sold out gigs. If you see the traditional channels as your only option: Don’t let great ideas go to waste. There are plenty of opportunities out there and they are opportunities even if you haven’t got lots of money and lots of contacts. As creators we have the chance to go straight to internet. It’s time to stop thinking of the internet as a secondary channel that you casually add in a few months after the traditional release.

flickr.com/mikeleeorg (CC)

Creators have a responsibility too It is easy to blame the big music and film companies (when will you start releasing films online at the same time as releasing them for the cinema?) for being stuck in a antiquated 1990s time-warp. Don’t they get that people want to listen and watch on the internet at the same time the work is released in a different channel?


WHAT by Sara Ponnert & Martin Thörnkvist

Selling your product straight to the customer

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or many years now, we’ve been able to publish media on the internet. Since the dawn of the web (that’s 1990) it’s been easy to just paste text into a website. Myspace (2003) and YouTube (2005) made it even easier for anyone to also distribute sound and video. But although these channels mean fantastic new opportunities to publish your work, they lacked a way for the creator to receive payment for the work they put online. But this is changing fast. Shops and services are constantly developing. The established players are converting their models from physical items to making them available digitally.

MUSIC

“The services lacked the opportunity for creators to receive payment for what they had published online”

Unestablished artists and small music companies can’t just upload their songs to digital music services such as Spotify or iTunes. However, there are distributors such as tunecore.com and theorchard.com where you can upload music in one place and have it spread to the above outlets and all the others there are. The distributors usually take a cut of about 20% of the store income.

The media industries have come different distances along the way towards creating opportunities for receiving payment for products online. In some sectors there are distributors who make sure that the content is available on dozens of services while in others you’ll be lucky to find a service at all. There is no reason to think that this won’t level out, except possibly for games.

Reaching your customers through digital distribution There were lots of us dreaming that the distribution would be eradicated in the wake of digitalisation. With no need for a distributor, the producer’s margin would increase. But in a world where the consumers themselves want to decide how and through which service they consume their media, it quickly becomes unsustainable to upload material your-


self to a constant stream of new services being launched worldwide. The role of the distributor is therefore more important than it has been in a long while. Spreading the same content to many services and stores assumes that there is a standard format or that converting between different formats is easy. This is possible for text, music, film and TV. For literature and music there are well-developed digital distributors who make content available on services across the globe. Film makers still have a way to go before they see digital distribution as their first choice but even here too straight to internet is starting to be a way for new (often young) film makers to both get their film out and receive payment for it. Straight to service For game developers, fragmentation is an issue. You can’t develop a game that works everywhere, different platforms use different programming languages and the hardware varies. This means that you can only develop for, and so sell to, one service at a time. As a game developer, you have to carefully analyse which platform best serves your idea and use the ones that look most profitable. The trend is to start developing for one platform and well, diversify to others.

FILM

The traditional film distributors also distribute to digital outlets. If you want to access digital channels on your own, you have to contact the services directly. For example, you can put your film on headweb.com if you e-mail them. That lets you embed the film (including a payment solution) on your own site. Music distributor theorchard.com also distributes film to international stores such as iTunes, Netflix and Amazon.

LITERATURE

Amazon and the internet sites of major booksellers sell ebooks. If you want to sell your books on services such as iBookstore and Amazon, you can do that via for example ebookit.com. Ebookit charges a fee for making books available and retains a fee per copy sold.

if that goes


Some of the platforms are extensions of existing games consoles, such as Xbox Live where players download games from the internet. In recent years social networks have grown to become one of the most important platforms for game distribution. Facebook has half a billion users and half of them play games on the platform. Apple’s App Store and Google’s Android Market have opened the mobile doors to game developers. A lot has happened to the technology since we were playing Snake back in 1997. Developing has got easier and now phone manufacturers build their models around the fact that other people are developing software for their handsets.

GAMES

Because different gaming platforms use different programming standards, games developers have to create specifically for the different environments. Development kits are available for download, then all you have to do is register and upload your games. On the mobile side, Apple’s iOS (developer. apple.com) and Google Android (developer. android.com) dominate the market. For the console market there’s Xbox Live (create. msdn.com).  Social networks Facebook (developers.facebook.com) and Orkut (code. google.com/apis/orkut) have good documentation on developing for all their users.

Selling through your own domain The advantage of selling through your own site is that you get to keep all the money the customer pays and that you yourself “own” your customers. You get their e-mail addresses, know where they live and other useful information. Tools for doing this are available for free. Using the publishing tool Wordpress as a base, you can create your own site on which to install a store. The payment solution can be run through Paypal, for example. If you don’t want to put a price tag on what you have created, if you have a blog for instance, you can install a Flattr button which Flattr users can press to give you a chunk of their monthly amount. To sum up Even if things look different in different media industries, there is now no type of media where it is not possible to sell direct to customers over the internet. It’s completely possible to have an idea, put it into action, distribute it and sell it. The gatekeepers belong to the past.

“It’s completely possible to have an idea, put it into action, distribute it and sell it. The gatekeepers are a thing of the past.”


INTERVIEW by Martin Thörnkvist

From a graphics-heavy strategy game to a web-based quiz

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artin Walfisz spent over 10 years developing major strategy games at Massive Entertainment. Last year he left the company he founded to focus on a new idea. The new company Planeto is developing a web-based quiz that uses the power of people’s digital social networks.

“At Planeto we want to make the best and the biggest game in the world”

“I wanted to be a proper entrepreneur again. At Massive Entertainment I wanted to make the best game in the world, at Planeto we want to make the best and the biggest game in the world. When it comes to ambition, the sky’s the limit,” says Martin Walfisz with a smile. Planeto is about answering questions, collecting points, performing tasks, discovering new areas and so using and improving your own knowledge. Martin describes it as a mixture of the online game World of Warcraft Martin Walfisz, Planeto and the TV quiz Who Wants To Be A Millionaire. You compete on knowledge, with and against friends and strangers. How did you come up with the idea for Planeto? “I realised that quizzes are basic game mechanics. It’s intuitive and fun, everyone knows what to do when they are faced with a question and four possible answers. It really does suit a global mass market and with Planeto we’re taking the quiz to a whole new level.”


What are the big differences between making games directly for the web and the PC games you made at Massive? “At Massive we were forced to have a game completely ready before we could start selling it. Now we can use an iterative methodology where we develop in small steps together with the players. Instead of having to invest 100 million kronor (15 million dollars) before the first player sits behind the controls, we can now start much smaller and improve the experience as we go based on the feedback we get from our users.” “This also means that we can have income at a much earlier stage of the process and avoid having to take 95% of the development costs up front. One disadvantage though is that while production is cheaper, the experience is more limited in the beginning to a some extent.” You use Facebook to put people in touch with each other but they don’t play at Facebook.com. How does that work? “To get most of the power of Facebook’s social network it doesn’t matter whether you are on facebook.com or planeto.com. The browser is the platform. We felt that 700 pixels, which is the maximum width for games on facebook.com, was too great a limitation. We want to maximise the Planeto experience and also make it as focussed as possible.” How do you earn money on the web? “The web is an infrastructure to work on top of. Basically you earn money in the same way as you do in the ‘real world’, offer something that someone is prepared to pay for. Our model is that playing is free but you can pay to get certain benefits, mechanisms that create value, e.g. get-


“Today it’s about offering quality and reaching your customers through the media noise”

ting to new levels more quickly or virtual objects that improve the gaming experience. Planeto is about developing your knowledge and constantly feeling that you are making progress. And some players choose to accelerate and expand their experience by paying.” Straight to web goes without saying Martin Walfisz thinks that the concept of creating “straight to web” will only be relevant for a brief transitional period. Soon it will go without saying that everything that can go straight to web will do so. The web is a distribution channel where everyone can reach everyone else and the barriers to putting your ideas into action are shrinking all the time. “A publisher or someone else deciding whether a game should come out or not doesn’t come into it any more. The web democratises all distribution. Today it’s about offering quality and reaching your customers through the media noise.”


HOW by Christina Mohlin

4 tips for starting your own internet TV channel

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n the second quarter of 2010 4.3 million Swedes , around half of the population, watched internet TV at some point. There’s no doubt that we are facing a paradigm shift in how and where we watch TV. flickr.com/bendodson (CC)

Lots of people are getting in on the game. So far, however, the TV channels, mainly the large commercial ones, are a step ahead in creating their own income-generating TV channels on the internet. They are ahead of the pack thanks to their experience of creating content that someone is ultimately willing to pay for. TV on new and more kinds of screens

For everyone else who wants to grab their chance of making TV for the web, here are a few ideas and steps along the way. 1. The DNA of the channel and the lives of its viewers A common mistake many companies make when starting out with internet TV is to forget about the viewer. They think more about what they themselves want to communicate to the market than about the interests of their potential audience. This means it’s important that you define your content on the basis of what you have to offer viewers and in what way that is unique. Ten years ago there was a saying that “content is king”. With increasingly discriminating viewers, that’s even more crucial today. Relevant and well-planned content opens up exciting opportunities to communicate with


the target group, which will appreciate and show loyalty to high quality, relevant programmes made just for them. 2. What’s the best business model? There are plenty of business models to consider for internet TV: traditional advertiser funding, advertiser funded programmes, pay-per-view and subscriptions are just a few. Internet TV combined with e-commerce (shopTV) has proved to be a magic combination that can increase conversion by almost 2%. Editorial programmes, product films and clickable layers on top of the internet TV programme create a new playing field for e-commerce. 3. What software fits the bill? To be able to earn money from internet TV you have to have a technical platform that gives you opportunities to build a brand, test and try out different business models and implement an advertising system. Look for a platform that offers solutions across different screens (computers, mobile phones and tablets). 4. If they can’t see you, you don’t exist Very very few people manage to attract really high viewing figures – the trend is more towards smaller, niche channels. Many people make the mistake of launching internet TV and then thinking that viewers will find their internet TV channel all by themselves. That isn’t going to happen. You have to actively work the market – all the time. This can be done by traditional marketing, strategic collaboration, social media, PR or by turning the power of bloggers to your advantage. Christina Mohlin is internet TV strategist at This Zentury which helps companies to start their own internet TV channels.

“4.3 million Swedes aged 15-74 watch internet TV at some point every month”


INTERVIEW by Martin Thörnkvist

iPhone pioneers – with balls

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abyrinth, Touchgrind, Foosball and Sway. Sound familiar? If you play games on your mobile, there’s a big chance you’ll have played one of the creations of Malmöbased Illusion Labs. Three years ago Andreas Alptun and Carl Loodberg resigned from TAT to start Illusion Labs. To start with they worked as consultants for other people but soon got tired of all the time they were forced to spend on legal issues and middle management only to end up with only 10% of the profit. Now Illusion Labs sells all its games straight to end consumers with an iPhone, iPad or an Android phone and get to keep 70% of the money they make. What made you decide to work straight Andreas Alptun, Illusion Labs to mobile? “We bought the first iPhone when it was released in the US in 2007 and were fascinated by what you “Our recipe for succould do with it. We rummaged around in the software and cess comes down looked at what technical properties it had. We managed to link the built-in accelerometer to the graphic interface in a to skill, timing and prototype where you could make a ball roll when you tilted luck.” the phone. This ended up as our first game, a digital version of the classic labyrinth game,” says Andreas Alptun. This was before Apple allowed programmers to create their own applications. But developers had hacked (jailbroken) the iPhone and created a platform of their own to distribute and sell applications.


“We put up a free version of Labyrinth and let people who liked the game buy a registration that unlocked all the levels. That was when the money started rolling in.” When the App Store was about to open Apple phoned them up. “We were a bit worried that they were going to have a go at us for using the hacked platform. But they said they liked our game and wondered whether we would like to sell it through the App Store instead.” At that time there weren’t many games and only a handful of apps that were any good. Labyrinth was the first iPhone game that anyone earned money on. Paid versions of Illusion Labs’ games have now been downloaded three million times at between 0.99 and 4.99 dollars each. What’s the secret of getting into the top charts? “Do something unique. Have an innovative idea and carry it out in a great-looking, polished way. People will talk about it and the game will spread virally. We tried spending 100,000 kronor (15,000 dollars) on marketing and it didn’t really work. For us, the ability to cross promote our new games in our old ones works very well. This means that we can easily get new products out to satisfied customers. Our recipe for success comes down to skill, timing and luck.” Straight to internet, is that an option for everyone? “Absolutely. Publishing and selling straight to the internet is the future. In 10 years no-one will be buying computer games in actual shops. All digital media will be on the net. Again, if you’ve got a good and a unique idea, people will like it and send it to their friends.

“Do something unique. Have an innovative idea and carry it out in a great-looking, well polished way.”


CASE STUDY by Malin Norlander

Literature direct, and only on the web

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fter many years in the graphics industry and with a huge interest in text and pictures, we had long wanted to start our own publishing company. But printing costs, managing print runs and work on physical distribution put us off. Last spring our plans for an ebook company started to bear fruit. “If we created an internet-based publisher, with an e-commerce solution for downloadable ebooks, we could manage the publishing and the sales ourselves. The idea was an attractive one. The opportunity We realised that reading ebooks hadn’t yet really got off the ground in Sweden, but looking Pupill publishing at trends abroad we thought it wasn’t that unreasonable to assume it might take off here too. At least it was worth a try. The business concept is to have a wide, high quality range of books with the focus on short texts, to be downloaded to digital devices, with prices based on the size and content of each book. Our cheapest book at the moment is a short story for five kronor (less than a dollar) and the most expensive is a photo-illustrated travelogue about Africa for fifty kronor (about 8 dollars).

“You can’t charge a hundred kronor for a short collection of poetry or a short story in ebook format.”


Pricing Our prices are relatively low but we think they’re reasonable for an ebook. We have no printing costs and our cheapest books are very short. You can’t charge a hundred kronor for a short collection of poetry or a short story in ebook format. We also hope that people will buy our books in the same way that they might buy an app. It’s not that expensive, it attracts your attention and you give it a go. This also means that people take the risk of exploring literature that they might not otherwise spend money on. Today, three months after we started, we have about thirty titles, many of them short stories and shorter collections of poetry. Some genres are still not covered but the aim is to have a well-stocked site by the time digital reading goes mainstream in Sweden. As soon as the site was launched, we started to get manuscripts sent in. Collaboration and range We’ve just started working with Sluggerfilm to develop interactive and animated ebooks, primarily for children. In the future we hope to also be able to offer film, sound and picture files, as well as literature in English. We distribute some titles via Elib. This means we get our books out to internet bookshops and Swedish libraries. We also develop book apps for direct download via Apple’s App Store. This opens up the market, the more places you can find our books the better.

Malin Norlander is editor, designer, and publisher at Pupill, a publishing start-up that only publishes ebooks.

“The more places you can find our books the better.”


HOW by Martin Thörnkvist

Will literature, film and music look different in the future?

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ow do changes in technology and behaviour patterns change the way we create? To dig deeper we questioned three media producers with expertise in different creative areas. Camilla Malmberg is a film producer and the woman behind the documentary film club Doc Lounge, Thomas Andersson runs the publishing company Rámus and the literature club Stanza, Stellan Colt is a musician and runs the sound production company Sonic Branding. Does media production change when the opportunity to sell direct to your fans over the web increases? Camilla: I’m absolutely certain that the format will change, for example become more product specific and adapted to the new windows that the internet offers. Thomas: I think that faster and shorter forms of text will be forced through. But I believe in two split tracks, a new text form might appear but another branch will accentuate slowness. Stellan: I’m surprised how artists and bands are still sticking within the straitjacket of the album format. It’s obvious that the artists of the future will be publishing and spreading their work more conceptually. I also believe in a more even flow of material leading to more faithful fans. Camilla: Digitalisation makes the distribution chain tighter and faster. I believe in greater accessibility outside the cinema system. Audiences will have more influence and greater interest will bring new income-generating product opportunities and services.

Camilla, Thomas & Stellan


How do you meet the new needs of consumers in your work? Camilla: Film audiences are discerning consumers who demand quality, as well as comfort and added value. I try to be as consumer-oriented as humanly possible. Integration with the audience, added value and elements of surprise are important ingredients. By encouraging the audience to get involved we are reducing the gap between the film maker and the consumer.

“Integration with the audience, added value and elements of surprise are important ingredients”

Thomas: We’ve got a project underway with Medea which is currently in the technical phase. This is step one, seeing whether there’s a need and what we can do to meet it. I’m completely convinced that what is known as quality literature can be changed and maybe even say something new with the help of developments in technology. Literature is slow-moving but it has a function to perform.

“Literature is slowmoving but it has a function to perform”

Stellan: We cut out the middleman who is still doing everything according to old, tried and tested patterns. The enthusiasm you exude yourself will always make an impression on customers. We will be developing the payment models and make it possible for customers to have individual prices depending on how much they buy, plus them feeling that they are influencing the music.

“I believe in a more even flow of material leading to more faithful fans”

Camilla: For example, we have chosen to run a current feature film project with parallel short film productions using the material that didn’t make it into the final cut and to create exhibitions with the script, the short films and installations to build a committed audience and fans for the film that is to come.


WORDLIST by Media Evolution

Contemporary buzzwords Digitalisation The transition from analogue-based production tools and distribution channels to digital ones. With the consequence that the tools get cheaper to buy and the products you create can be spread faster and further. The internet A global network that connects networks and computers to each other. We can use this network to send e-mail, surf the web and so on. Streaming A way of consuming media where music, film, etcetera. is stored on someone else’s computer or server rather than your own. Instead of downloading a piece of music to your computer, you can play it from Spotify’s servers for example. Viral When a film, a game or anything else spreads from user to user without distribution being carried out by the producer. Based on the producer making their work accessible for others to spread, and having created something that is so unique or such fun that other people think it’s worth spreading to their network voluntarily. Because the distribution is generated by many sources independent of each other it has the potential to be explosive.


About this publication This publication comprises texts previously published at www.mediaevolution.se. The idea is to repackage our regular analysis as focused in-depth looks at areas that we think the media industries need to understand a little bit better. We release four publications annually. At our web site you can download or order mail copies of previous and future editions. Straight to Internet is published under the Creative Commons licence by-nc-sa. Read more at creativecommons.se

Contact Media Evolution info@mediaevolution.se +46 (0)737-57 71 06 (Petra Berggren) Media Evolution Anckargripsgatan 3 211 19 Malmรถ Sweden mediaevolution.se twitter.com/mediaev facebook.com/mediaevolution


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Straight to Internet - A guide to publishing and selling media products without detours  

Straight to video is a bit of a disgrace, used by the film industry for a film that isn’t good enough to be shown in the cinema. As digital...