Jeffrey Katzenberg's world of WndrCo and TV's new frontier
In the ever-evolving scatter of content making its way to the small screen, many players are continuing to emerge — but there may be no one better poised to push reinvention forward than Hollywood legend Jeffrey Katzenberg.
Speaking on stage last week at Cannes Lions Entertainment in a MediaLink-led fireside with Michael Kassan, MediaLink founder, chairman and chief executive, Katzenberg laid out a very compelling case for big-screen and quality TV entertainment making its way, more profoundly, to mobile devices.
This marks what Kassan characterized as Katzenberg’s “sixth at bat” or reinvention. Leading that charge is WndrCo, Katzenberg’s venture built around finding and investing in digital and technology concerns, especially in the media field, which has raised around $600m so far.
“I've actually been very lucky in that I have actually [been able] to start over multiple times in my career, and maybe even more blessed in that each time, what's come next has been exciting, challenging, and ultimately very, very rewarding,” he said on stage in Cannes.
Past habits informing the future
Reinvention is the critical word. According to Katzenberg, the field is still ripe for players to make a significant dent in the mobile content ecosystem — but not necessarily in the short-term — that requires and demands a real exploration of what can become viable for both consumers and the wider worlds of content creation and brands.
“I believe this is the next mega-media opportunity,” he said.
Indeed, there is a track record of disruption that goes back decades — and listening to Katzenberg, co-founder of DreamWorks (which was purchased by Comcast a little over a year ago) and longtime leader at Disney, is a master class in the history of how entertainment has changed. But, in the end, it comes down to the simple principles of how new technology and consumption forms and habits work.
At the turn of the 20th century, the movie camera was the groundbreaking technology.
“The form was two hours, give or take, of storytelling,” noted Katzenberg. “And the consumption habit was to go to a movie theater every couple of weeks to see a film.”
In the 50s, over-the-air television was the disruptive technology that, once again, engendered a new consumption medium and habit.
“This time, it's the television set in your home, over the air. The form is 30 and 60 minutes. So it was going from two hours to 30 and 60 minutes, and the reason for that really answered two needs — which is the consumption habit, which created a reliable, predictable schedule when people could find what they wanted to on a regular basis,” said Katzenberg. “So you could actually make an appointment, whether it was to see the news or a talk show or your favorite TV show. And out of that built this amazing enterprise of television.”
From there, Katzenberg believes that we are well into the “third evolutionary term,” where short-form, 5 to 10 minutes, is becoming de rigeur and enticing for all stakeholders.
“The same opportunity exists for us today to build an incredibly valuable enterprise in which there's perfect alignment, as there has been for many decades, around the contents of suppliers, the content creators, the advertisers, and the platform itself,” he said.
Forging ahead with premium short-form
A super-premium, mobile universe, which Katzenberg is loosely calling 'New TV', certainly makes sense as consumer habits have changed. In some ways, the platform has been reengineered, but this is not foreign territory to address content that works well within what he calls “in-between times,” moments when snackable, short-form content can fill one's day with great storytelling.
Book publishing is, according to Katzenberg, a great example of creators adapting to the changing consumption landscape.
“James Patterson and Dan Brown actually changed the form of their storytelling. And here's an interesting thing, which is that The Da Vinci Code has 464 pages. In the traditional novel, it’s usually 20-40 pages in a chapter,” he noted.
The Da Vinci Code has 105 chapters, Katzenberg added: "It has fantastic storytelling. It has amazing arcs for characters. But what Dan Brown did brilliantly, ingeniously, is he allowed, through these chapters that were from three to seven pages long, for us to consume this in a completely satisfying way in smaller bits. It doesn't make the whole any less valuable, any less interesting.”
Re-architechting for the smaller screen is something that suppliers are well-placed to achieve. Networks, telcos and showrunners, for example, are familiar with the existing model.
“I believe that the companies that are going to drive this and have the biggest stake in this, in ‘New TV’, are in fact going to be Comcast, Newscorp, Disney, Time Warner,” said Katzenberg. “They are going to have a big leadership position in this. So creating a business model that works for them is essential.”
Another consideration are the storytellers themselves. The idea of 'New TV' doesn’t necessarily change the spirit of what some of Hollywood’s most talented are doing already — but rather could afford new, dynamic ways to tell stories. To that end, Katzenberg has met with “maybe 100, 150 creative talents” such Vince Gilligan (Breaking Bad creator), JJ Abrams and his longtime friend, Ron Howard.
“What I said to Ron is, one of the most exciting and fun forms of content that flourished in the '70s, '80s, part of the '90s were these four-camera sitcom comedies that were shot in front of a live audience,” said Katzenberg. “I said to Ron, ‘imagine today that you actually went back and had a four-camera comedy. You created a story arc that was say, 120 or 140 minutes long in which you were going to tell a beginning, a middle, and an end, but you were going to write it and shoot it again in that same way, with a live audience, with four cameras and do it as a single end-to-end piece, but one that could be consumed in seven, eight minute chapters.’ And I have to say, only because Ron is such an innovative storyteller and producer, he started to get very excited about it.”
The final topic that binds it all together is distribution and cost — and a model that rewards the creators.
In the early days of mobile video and, some can argue, today, YouTube roamed as king of the ecosystem. Facebook and Snapchat were and are key players as well, but YouTube was the original place for user-generated content (UGC), which is created at dollars per minute. This, according to Katzenberg, evolved to what he calls 'Pro GC' content that is more professional and can be monetized by creators.
“They created an economic model supported by advertising, in which you have the Vices, the Buzzfeeds, the AwesomenessTV, Whistle Sports, Tastemade,” noted Katzenberg. “There's amazing talent and amazing work that's being done and very creative things that are coming out of it today, in spite of an economic model that has a ceiling on it.”
Content in the Pro GC area is being created in the $500 to $5,000 a minute range, with a handful topping out at $10,000 a minute. Comparatively, traditional television, whether broadcast or cable, in primetime, is being produced at about $100,000 to $125,000 per minute.
“So basically, three-and-a-half to four-and-a-half, five million dollars for 45 to 55 minutes of content,” said Katzenberg. “We can keep going up the ladder to House of Cards, The Crown ... 200,000 dollars a minute. Or go to the tippy tippy top, which is Game of Thrones. 300,000 a minute. That money has created an ecosystem and a rewarding system for the best talent to be able to make great livings, if not great fortunes. I want to replicate that.”
Working with advertisers to create new disruption
To make that a reality, advertisers and brands need to be part of the conversation and be out in front of how to make an impact on the screen, aside from the traditional 30 or 60-second spot.
“The challenge and the opportunity is the advertisers are going to have to be as innovative and creative in their storytelling and about how they adapt to a four or five to ten minutes and how sponsorship integration [works],” said Katzenberg. “You’re not going to be able to put a 30-second commercial in the middle of a six-minute piece of content. We all know that that's not going to be a good experience. But that's not to say that there isn't a great opportunity for an ad-supported super-premium environment where they know that they are getting the best content, made by great talent, celebrity talent, [in a] safe environment where they can actually continue brand building.”
The latter point, brand safety, often on the top of marketer’s minds, does play into the endeavor. With brands watching much more closely in light of the brand safety issues put into stark relief earlier this year and, much like the creative side of the content, the idea of being in a 100% safe space could be a critical carrot that may perk brand ears up a bit.
“In traditional television, you had brand safety,” said Katzenberg. “You had a set of standards and parties that was reliable and dependable, and I would certainly expect this [as part of] the enterprise and distribution platform.
All told, though, according to Kassan, advertisers and brands appear to be interested in what he and Katzenberg have to say.
“We’ve not heard one advertiser [this week in Cannes] that wasn’t leaning in, in a very meaningful fashion, to this conversation,” said Kassan. “The financing model that's breaking is also the marketing model that's breaking, and so if you can have that respect for each other's problem and each other's challenge, that's where you're going find a solution.”
The long but promising road to New TV
As Katzenberg pointed out, 'New TV' is a long game and may not reach critical mass for some time — maybe a decade, though he strongly believes that it can be as a big of a business as TV is today and, by a magnitude, bigger than television today due to the continuing global nature of the business.
So, what exactly would this platform look like? What exactly is it?
Some hints lie in honing in on the audiences who are best-primed and behaviorally relevant.
“My ambition for this is that 18 to 34 year olds are, in fact, the generation that's native to this. I think that they are the ones today we already know are devoting more minutes to short form content than long form content,” said Katzenberg.
Knowing that, the user experience is key — as the audience will determine fates.
“We need a user interface, we need a UX, there's so many things that have to be fantastic about this,” Katzenberg said in conversation after the on-stage chat. “So when you start to think through it, you can't take anything for granted here. Because the viewer experience to me, they're the boss. We work for the audience.”
Where Katzenberg will likely find the answers is in bringing together the prowess and industry knowhow of Northern California and Southern California — and he has deep experience in both.
“DreamWorks animation was a technology company,” said Katzenberg. “When you look at the creation of digital imaging, we were at the very top of the waterfall. We had state-of-the-art hardware before anybody else in the marketplace. Being in the heart of Silicon Valley, we had our studio and 800 employees there. So our enterprise was uniquely straddling those two worlds for 20 years.”
His new Silicon Valley collaborators include Sujay Jaswa, the former co-founder and chief finance officer of Dropbox and ChenLi Wang, a highly-respected computer scientist and engineer who was Dropbox’s director of product management. Additionally, his long-time collaborator, Ann Daly, former DreamWorks Animation president, is part of the team and a WndrCo officer and it is clear that Katzenberg is not only on to something, but that he has yet another tailwind.
“I'm loose, I feel like I'm 25 years old. I feel like I found a brand new Everest,” enthused Katzenberg. “That’s what I've done my whole life, and you know that, I love [the idea that] the higher the mountain, the more challenging, the more interesting it is to me. And I think in this and in the WndrCo team I have found both the group of people to go mountaineering with and I think in this particular idea we have found an Everest. And, you know, you can't get there without the team.”