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Day 2 - Variety Summit - 3/15/99

From: richard hoy _at_ the tenagra corp. <_at_>
Date: Mon, 15 Mar 1999 11:47:07 -0600 (CST)

Below is a special mailing to The Online Advertising
Discussion List about the Variety Summit,
written by Ann Handley, editor-in-chief of The ClickZ
Network. You will receive these reports in addition to your
normal Online Ads posts/digests.

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Variety Summit: Day 2

Ann Handley
Editor in Chief
The ClickZ Network
************************************************************

Warner Brothers Online President Jim Moloshok came charging
out of the pen on the second day of the Variety Summit,
waving his arms wildly and sounding a loud wake-up call to
his entertainment industry brethren.

What has Moloshok fired up is his demonstrated fear that
valuable entertainment brands are being pirated left and
right in the digital age, and being used to build new
companies at the expense of the companies that own the
properties, and indeed spent the money to build them.

"Our tools are being used by new media companies, who then
come back and charge us," said Moloshok.

It was a lively start to the final day of the Variety
conference, held last week in Palm Springs. After a day
Thursday of lackluster content and networking-on-steroids,
Moloshok's take-no-prisoners kick-off keynote was a
refreshing and honest look at the challenges his industry
faces in the digital age.

Moloshok's big beef is with companies who he says are
"stealing" trademarked brands to fashion their content and
build their own businesses. GeoCities, for example, has
427,859 pages featuring bootlegged Warner Brothers brands.
Most of those pages were built by rabid fans, who use images
like Batman and Robin to fashion unofficial fan club pages,
for example.

Moloshok's real problem isn't with the fans, necessarily,
but with the banner ads served up by GeoCities on the top of
each one of these free pages. The ad revenue collected by
GeoCities, technically, is built on the backs of brands
built by Warner Brothers and many, many other companies.

"Our brands are already being stolen from us and being used
to build new companies," Moloshok said.

Speaking only slightly tongue-in-cheek, Moloshok quantified
the problem thusly: the 427,000-plus bootlegged pages
represent 4.2 percent of the total GeoCities community.
Since GeoCities just sold to Yahoo! for $3.5 billion,
Moloshok figures that the company owes Warner Brothers $147
million. "And I want cash, not stock," Moloshok joked.

Warner Brothers isn't alone. Moloshok estimated that
MGM-branded pages total 104,000 within the GeoCities
network, Sony pages total 64,000, Paramount pages total
227,000, and Fox pages total 423,000. Even Disney, which
tightly controls its brands and copyrights, has an estimated
65,000 pirated-brand pages within GeoCities, Moloshok said.

Certainly, it's not just the entertainment industry that is
vulnerable. But with its strong and compelling characters,
the entertainment industry is probably more vulnerable than
most.

"Our materials are being ripped off and used to build other
businesses," Moloshok pointed out.

What's the entertainment industry to do? Moloshok issued
fightin' words: "If we can't beat 'em... we can better 'em."

What that means, specifically, is that entertainment
companies need to take steps online to control their own
futures, building killer sites that make those with pirated
content pale in comparison.


Entertainment companies should exploit their own brands to
the highest degree online that they can. They should build
online sites that will attract fans - for example, Bugs
Bunny fans will hop to the Warner Brothers Bugs site because
it offers a richer and deeper online experience. "We should
give them a better experience, not just a legal experience,"
Moloshok said.

Too many companies are looking toward the web as simply a
promotional tool, rather than looking at it more wholly, he
added.

Here's the take-away:

1. Entertainment companies should fight back for their
   rights to their own brands online.
2. They should take steps to more fully and richly exploit
   their own brands online.
3. They should develop an interactive relationship with
   their fans and online audience.
4. They should not give away their content... which, after
   all, is their most valuable asset.


Seven Deadly Sins

The seven deadly sins that really are holding the online
entertainment industry away from success on the Net,
according to Jim Moloshok, are:

1. Apathy
2. Complacency
3. Lethargy
4. Risk aversion
5. Career security
6. Internal discord
7. Inability to move at Internet speed

Cyber-Stats

There will be 109 million adults online by the year 2003,
representing 53 percent of all adults.

What will people be looking for online? Right now, according
to Warner Bros. Online President Jim Moloshok, online users
seek:

Entertainment... 70 percent of all users
Business information... 68 percent
Local information... 67 percent
Product information... 61 percent
News... 52 percent

Quotes of the Day

"I'm a little unprepared because I was going to do a sales
pitch... so now I'll have to go to my other PowerPoint
presentation." - Jim Moloshok, President, Warner Bros.
Online

"With movies, we need a very fat pipe." - Gordon Paddison,
Director of Interactive Marketing, New Line Cinema

"Who has more brands than us?" -- Jim Moloshok, referring to
the entertainment industry

"You don't have to be a portal or a mega-store to attract a
loyal following." - Gordon Paddison

"You wouldn't create a radio program to deliver over
television, even though you could." - Jim Banister, EVP,
Warner Brothers Online

"It's not the online content, it's the database." - Jim
Moloshok, referring to what more embodies success on the Net

"My definition of broadband is not the size of the pipe, but
the level of articulation." - Jim Banister

"This town has more golf courses than it does dial-ups." -
Jim Banister, referring to the difficulty of getting
Internet access in Rancho Mirage

Tchotchke of the Day

To paraphrase Calvin Klein: What becomes a tchotchke most?

Well, relevance, certainly. And functionality is always
good. But many times the best tchotchkes simply have that je
ne sais quoi that elevates the mundane to the must-have for
conference give-aways.

Today's tchotchke winner clearly has it: Variety.com came
through Friday with a series of mouse pads featuring black
and white movie stills in four different styles: with Frank
Sinatra, for example, and Frances Ford Coppola. Classic? You
bet. Memorable? Absolutely. And best yet: The hands-down
tchotchke of the day winner. No contest.


************************************************************

Copyright (C) 1999 ClickZ Corporation. All rights reserved.
 May be reproduced in any medium for noncommercial purposes
as long as attribution is given.

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Received on Mon Mar 15 1999 - 13:49:05 CST


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