The Future of Entertainment IP

Welcome back to The Innovation Armory. Going forward, I will be posting a new piece here every couple of weeks. Today’s piece is on the convergence of entertainment channels and the future of efficient IP content production across today’s most prominent media vectors. Thank you to Seung-Yoon Lee (CEO of Radish fiction) and Julia Palatovska (CEO of Dorian) for discussing their perspectives with me as part of this piece.

The next piece will be on the rising prevalence of phishing schemes and how cutting edge startups are addressing the cybersecurity challenges posed by phishing through the use of artificial intelligence.

Entertainment intellectual property is increasingly being monetized across media channels in new and creative ways. Audience members are very familiar with books being adapted to movie screenplays throughout Hollywood history. Best adapted screenplay has been an awards category at the Oscars for a while now. Beyond transforming books into movies, best-in-class content in the gaming entertainment sector is now also being monetized into other media formats. For example:

• TBS recently greenlit the first reality TV show based on a video game. The series is called the Sims Spark’d and is based on the Sims video game. Contestants compete against one another in creating Sims worlds, which are then rated by judges

• An increasing number of blockbuster pop culture movies and TV shows originate from video games including The Angry Birds movie, Assassin’s Creed, Sonic the Hedgehog, The Witcher and countless others

Traditional technology and media companies are also acknowledging the convergence of gaming with other parts of the media ecosystem:

• This Summer, Amazon made a groundbreaking move to include Twitch as part of the standard Amazon prime media bundle. This move marks a clear play by Amazon to integrate its separate media lines into a combined multimedia platform that aims to captivate audiences across different engagement vectors including streaming, gaming and music

• Netflix has stated that it is more concerned by the potential threat of Fortnite and other gaming providers than it is about rising competition in video streaming

The 21st Century Entertainment Audience

Media companies are coming to realize the convergence of previously disparate entertainment media segments. Gone are the days where streamers, readers, gamers and cinephiles are treated as independent audiences. For content creators, it is becoming increasingly necessary to think about one’s presence across all of these media vectors simultaneously:

The 21st century media audience is loyal to good intellectual property rather than specific entertainment channels and open to trying new entertainment formats as each generation increases its level of technological sophistication. Disney is an example of a media company that has benefitted over time from a diversified approach to monetizing its audience across available channels. Disney owns best-in-class intellectual property that it uses to attract new users and monetize its audience across numerous segments including television, parks, experiences, games, movies, comic books, merchandise and more. It was one of the first companies to realize that if you have great content, it is in your best interest to push that content to customers in as many ways as possible to maximize your value per audience member and improve your brand awareness. Disney has always viewed the media entertainment ecosystem as an integrated ecosystem. Over the coming years, more and more intellectual property owners and content developers will follow suit and look to expand their produced content into new media channels. This converged multimedia strategy offers numerous benefits to IP owners:

• More reliable audience access - entertainment consumers have limited time amidst a growing slate of content available. Due to differences in media consumption preferences across end users, a multi-channel strategy improves the chance that companies release content in a format that could induce new users to sample its intellectual property depending on how those users like to use their limited entertainment time (i.e. I may prefer to allocate more of my time to gaming vs. streaming)

• Increases the chance that businesses realize a long tail positive outcome on produced content by reaching the widest possible audience, which unlocks greater access to funding to invest in even better content and production quality for subsequent content, establishing a positively reinforcing flywheel effect

• Based on how users uniquely interact with the content in each media channel, it can provide additional insights about how to best iterate on and improve future releases / sequels of that same content

• Lowers the chance of audiences experiencing sequel fatigue because IP instantiation across different media channels creates a more differentiated entertainment experience

Greater probability of discovering the best intellectual property through an openness to develop IP first in the channel that is best suited for its inception, i.e. some content may flourish more in a gaming rather linear TV context if it requires greater user collaboration and interactivity to best tell its narrative.

Rethinking The Traditional Hollywood Content Model

This multimedia convergence necessitates rethinking the traditional linear Hollywood content production model for a modern, circular and multi-vector entertainment model:

The starting point of these two models is vastly different. The traditional model is significantly more rigid in where good content originates from, whereas the modern circular media model is much more open to tailoring the development source of content origination to the particular goals and needs of the intellectual property concept. This begs the question of how to determine the best medium to initially experiment with one’s content idea in the context of a modern multimedia development strategy. There is an inherent tradeoff between production time / investment resource requirements and richness / interactivity of the audience experience. The contrast between literary fiction and gaming best represents this spectrum:

Reducing time and cost to develop is important because modern content developers would ideally like to minimize the upfront investment required to develop their intellectual property until there is a relatively high probability that it will become a hit or at least visibility that they will recoup their continued investment spend. Higher user interactivity and real-time engagement is beneficial to the content development process because it makes it easier to receive, interpret and digest user feedback to iterate and improve subsequent content served to audiences within a specific virtual world. In the context of gaming specifically, users often create their own narratives and gameplay choice can actually help spawn creative new ideas for subsequent content within the gaming context or for different media formats.

Interestingly, Netflix has been trying to incorporate gaming-like features into some of its content with interactive originals including Black Mirror Bandersnatch and Unbreakable Kimmy Schmidt: Kimmy vs. the Reverend. While these interactive originals allow consumers to make some real-time decisions that impact the sequence of events within the TV show, the content feedback is nowhere near as robust as is the case in a video game where audiences are far less restricted in the types of choices they are able to make. Moreover, it is very costly to film these multi-branch endings through video and may not be worth the investment depending on how not only the content performs, but how popular each interactive ending is. Despite the large amount of original content that currently originates from the realm of TV and movie, I believe traditional TV and video streaming is a less optimal way to test out new content and create original IP due to its high production costs and relatively low ability to solicit granular, real-time user feedback on specific parts of content (i.e. within Netflix, play data can show how much an audience member liked a specific episode, but gives less insight into their views of particular scenes and more importantly into how they may want the content to evolve over time). Modular approaches with incremental investment that solicit more user feedback along the way will have greater production potential.

Modern Starting Points for IP Development and Iteration

I believe gaming production and serialized literary fiction represent two of the potentially most cost-effective and powerful ways for future independent content developers to create their intellectual property before expanding into other entertainment media. Two interesting companies I believe will play an important role in the content production / creation lifecycle in each of these segments are Dorian and Radish Fiction:

Dorian empowers storytellers and writers to share their stories and narratives through a no-code game development and storytelling application that provides writers with a cloud-based suite of tools for content creation, monetization, fan engagement and distribution to share interactive stories in an instant. Narrative-based gaming creation tools like Dorian offer numerous powerful benefits to creators as part of the content production process:

• Because Dorian is no / low code, relative to in-house developed games, it provides authors the engagement potential of a traditional game with limited technical know-how and limited investment required by the author / storyteller to create increasingly dynamic content relative to a traditional book

• Game development that is focused on sequences of narrative trees / player choices rather than hi-tech gaming features allow storytellers to realize the content iteration / testing benefits of real-time player choice at a reasonable price point and lower time opportunity cost vs. branched video-based narratives

• Using narrative-based gaming as the content starting point for authors could yield greater virality as games have a community element to them and are often collaborative rather than experienced as an individual activity

• Bridges the gap between online user-generated storytelling and Hollywood content by adding richer features and interactivity to the traditional story-telling model

Radish Fiction is a serialized fiction application that releases high-volume online literary fiction. Their model emphasizes the use of performance marketing and granular user feedback for initial book cover / chapter releases to determine whether a piece of content is bingeworthy before making the decision to hyper-serialize and mass produce micro-chapters, constantly incorporating user feedback in the next micro-chapter released by the author. Serialized fiction also offers unique benefits as a starting point for content production:

• Traditional writing has one of the cheapest marginal costs of production, especially when you look at it on a chapter-by-chapter basis, only greenlighting the next chapter to the extent there is strong interest in prior chapters and the extended release continues to be profitable

• When you serialize traditional writing, you also can then realize the interactivity / user benefits of more gaming-type models because you get more granular user metrics on individual micro-chapters and can actively involve users in the writer’s creative decision making process for subsequent releases

• Blends data-driven production methods with a serialized collaborative writer’s room Hollywood model to combine new / old economy methods of content production

I caught up with the CEOs of each of Dorian and Radish Fiction to understand how their visions play into the broader creative, media and entertainment landscape.

My Discussion with Julia Palatovska (CEO of Dorian)

SN: Could you discuss the suite of tools that you provide to authors and content creators? 

JP: Dorian provides creation, monetization and distribution tools for interactive stories. The creation tools are cloud-based so people can create stories collaboratively in the same space and time. We enable authors to create interactive stories that they can share in an instant in our mobile app. The tools are no-code and easy to use so you can create new episodes everyday. Authors write in a visual drag and drop format using our character creation engine and a library of art assets. The engine allows authors to preview a fully playable story instantly.  It takes just a few hours to create an engaging episode with many endings. 

SN: How do you help expand the ability of writers to monetize their creative content? 

JP:  Most of the fiction writers are not realizing their full monetization potential. Amateur writers cannot monetize well on fanfiction websites or most writing platforms if they are not already one of a few highly popular authors. We allow authors to tap into free to play game monetization to leverage multiple monetization opportunities in their games. In gaming, you can have super fans and whales that will spend significantly more to interact with your content in meaningful and innovative ways. 

SN: Could you discuss IP ownership and the potential to leverage IP to other entertainment media or platforms? 

JP: Dorian is an open platform where authors own their own IP. We do create some IPs in-house but our first focus is on enabling creators to build their IPs and fan bases on Dorian. If they have existing IPs, we can help them adapt linear content into interactive format. We are planning multiple high profile collaborations with popular existing IP holders. 

SN: What are the benefits you bring to existing IPs brought into the interactive format? 

JP: We can offer existing IP holders and popular content creators additional monetization streams that they can access with only limited incremental investment. For example, if there are ten different endings and each will serve one tenth of the audience, it isn’t necessarily prudent to film all of them before knowing how exactly an audience will engage with them. We help bridge the gap between gaming and traditional storytelling in a way that i) users love because they have more control of their content and get releases faster and ii) that allows partners and authors generate new revenue streams with high LTV potential.

SN: Do you see the highest potential in partnerships with existing IP owners or in helping amateur authors build user-generated content and eventually brand new IPs on Dorian

JP: Both models are compelling, however, we see high growth potential with new creators on our platform. Many of the top growing apps this year are UGC-driven and when it comes to UGC, creator’s agency and authenticity are fundamentally important for the rise of new UGC stars as opposed to a studio model of planning and programming. Take the TikTok star Charli: it would have been impossible to predict Charli would reach nearly 100M followers on TikTok when she released her first piece of content. We expect amateurs to use our creation and audience engagement tools for offering content that will surprise even us!

My Discussion with Seung-Yoon Lee (CEO of Radish Fiction)

SN: What is your mission and vision for Radish? What do you innovate on within the traditional entertainment process?

SL: There is a large trend in traditional media of taking IP that is already proven from serialized online literature. These range from romance serial novels to war epics to fantasy to genre fiction. If you look at the top ~80% of TV dramas and games in China, it is all adapted from this literature. You see similar trends in South Korea and Japan. I saw an opportunity to build something similar in America. Radish is innovating on the production of stories. Our key advantage is the speed of production. For a specific IP, we often come up with 10 episodes within a week, 1,000 episodes within 6 months. We have the unique approach of before production, coming up with a title, book cover and summary and then we put it out in performance marketing and get feedback from users right before making a pilot. We look at conversion on early chapters and if it is proven we hyper-serialize. By that, I mean we update the chapters at least 5x per day to make it a very bingeable experience. With Netflix, you may have to wait months or a year plus between season releases. On Radish, if you consume 1,000 episodes, the next episode will come to you by the next day. In the future, I’d love to be able to test IP and storylines very quickly to gauge demand, then fast serialize it and adapt it 360 degrees to other types of entertainment like gaming, movies and more. That is the ultimate vision.  Our first niche genre is romance, but we want to expand into other genres and into other media channels.

SN: Why to-date has serialized reading not materialized as a larger trend in the US vs. Asia? How large is the US opportunity?

SL: The space has been steadily growing. WEBTOON is a serialized comic platform that has 50+ million monthly users and over a quarter of that base is in the US. It is one of the top grossing applications in the app store and has grown nicely over the past couple of years. Everything from Fifty Shades of Grey to The Martian was consumed this way online. There is a large fan fiction community that consumes content this way. There is also a company called Wattpad that claims to have 80 million MAU, a large portion of which are in the US. They had many titles adapted to Netflix and Hulu. Wattpad is like the Youtube of fiction with user generated content. I saw an opportunity to create the Netflix of fiction. This trend has existed and is growing in the US, but we have a unique approach of investing in premium content for this vertical which previously was very user-generated content (UGC) focused so far. We are bringing the writer’s room model, seasoned TV writers who have won Emmy’s and talented creators with a data-driven approach. In China, South Korea and Japan, we didn’t really have the e-reader phase, we went straight to mobile. People were looking at genre fiction converted to digitized first. There is that delay in the US because of the existence of e-readers, but serialized fiction is still very much a growing trend.

SN: How do you view the relative opportunity in high quality originals vs. UGC?

SL: There is already the Youtube model for creating serialized fiction. To be able to serialize this content with many episodes for consumers it requires a seasoned writer. It is difficult to churn out quality writing daily. If there is already a consumer behavior around consuming this content, it is beneficial to put a more professionalized and polished touch on it. Content producers want to create their own IP platforms. Being able to create originals in a very cost efficient way is a large competitive advantage. Ultimately, as a media company, you have to go into that business. You want to be able to own that professional IP and do it the most cost effectively.

SN: How do you attract authors to your platform?

SL: There are two types of authors. First are those that work in the writer’s room format. These are traditional TV writers. We have primarily been bringing in folks from soap opera backgrounds. That market has been shrinking and we have brought them on to participate in this new genre without the limitations of traditional TV budgets. Having those experienced soap writers creating stories for a mobile-savvy audience has been very effective for us. Second, we have also been getting writers who are self-publishing through Kindle, etc. They like the fact that they can serialize, make money on the go and get feedback right away from the readers vs. waiting a month or more to get feedback only after the book is published.

SN: What do you view as the main benefit of the author’s direct relationship with and communication with the reader? Is it optimizing the ability to use data to better tailor content? Or, is it making the end user base stickier as they are happy to exercise influence over the content they are reading?

SL: Strengthening the community element makes the experience a lot stickier for the users. We see a lot of fan created content for our top IP (like fan art). There are a lot of ways to empower our IP through that fan participation as well. Bringing that fan engagement and participation in-house is definitely a large benefit to the platform. It provides a double moat for the business for both of the reasons you mentioned.

SN: As you compare this to serialization of other media (like Quibi in short form video), what makes serialization of short form different in the context of literature?

We are very different. We may be short form in structure but we are very long over the span of many episodes. Our top series have thousands of episodes. People are into binging, not reading snippets. We found that our hardcore users love to binge for hours. We have users that have spent thousands of dollars in a month continuing to binge to the next chapter. The whole thesis is about extremely quick updates of new content in a series but a long relationship of high engagement with the user. This is more like hyper-Netflix rather than a Quibi type model. 

SN: As you look to realize your  vision of taking a 360 degree view of serialized iP to other channels, do you want to be a producer of other media eventually or simply license your IP?

SL: It definitely depends on the vertical. We have to have a very tailored approach depending on the IP. Over the long-term, the decision to create or license in a new media vertical outside of literature will depend on the genre, fan engagement metrics and nuances of that media channel. Depending on the property, it could make sense to either license it or produce on our own and we plan to take a dual-pronged approach.

Modern Production Will Shift to a Minimally Viable Content Model

Moving forward, I see strong parallels between Eric Ries’ Lean Startup Model and what it will take to be successful in content production in the modern media landscape. Storytellers should leverage platforms like Dorian and Radish to release engaging content in a cost-effective format that allows them to quickly solicit and incorporate user engagement metrics into subsequent content releases before further monetizing their intellectual property into other more expensive entertainment segments like film, TV, etc. This model consists of a dual-pronged approach of releasing minimally viable content and then iterating on future releases to incorporate learnings from rich and granular user engagement data to incrementally invest and improve IP before taking a 360 degree view with other entertainment vectors:

The future of content production and lifecycle management will be impacted more by production innovations in interactive gaming and serialized fiction than by traditional Hollywood sourcing and production processes. The convergence between disparate entertainment media will advantage content producers who transition to a minimally viable content production model by leveraging best-in-class technology tools for production, gamification and audience engagement measurement to create the highest quality content in the shortest time to launch.

All Innovation Armory publications and the views and opinions expressed at, or through, this site belong solely to the blog owner and do not represent those of people, employers, institutions or organizations that the owner may or may not be associated with in a professional or personal capacity. All liability with respect to the actions taken or not taken based on the contents of this site are hereby expressly disclaimed. These publications are the blog owners’ personal opinions and are not meant to be relied upon as a basis for investment decisions.