TV set makers want to reach the same audiences as TV show producers. Same goes for the people who create music and the companies that make devices to store and playback audio. In the newer videogame industry, the connection between hardware and content is often closer.

Yet the two sides of the entertainment equation often speak different languages. Because their financial models are so different, the makers of devices and the creators, producers and distributors of entertainment and information have operated on different wavelengths. Often the technologists for each industry have been the primary connection making sure via technical standards that sound and images—audio and video—can be produced, distributed and heard/seen as the creators and consumers expect from creation to reception.
“Over the next three years value will be created by companies that marry tech with content.”
-Laura Martin

The escalating emergence of wireless, broadband and “over-the-top” systems makes the relationship even more vital and complicated. As companies find new synergies between conventional one-way delivery and the more sophisticated interactive, on-demand entertainment ecosystem, both sides are looking for innovative ways to assure growth.

It hasn’t always been a comfortable process. Beyond the decades-old battle over copyright issues (the landmark “Betamax” decision in 1984), the ensuing years have seen more organizations putting a stake into the entertainment industry. The entry of the telephone oligopoly (AT&T, Verizon and others) into the video and broadband wireless world, along with cable operators’ expansion into new digital realms (plus their growing vertical integration with content packagers) add to the complexities—and the opportunities—for entertainment delivery.

“Over the next three years, value will be created fastest by companies that marry technology with content,” says Laura Martin, senior analyst of entertainment, cable and media at investment company Needham and Co. She cites the expanding focus on the big entertainment picture at CES as a showcase for “companies that are on the cutting-edge of integrating technology into a wide variety of content.”

Indeed, CES’s expanding “Entertainment Matters” program—which has brought more than 32,000 entertainment industry professionals, including executives from 20th Century Fox, Facebook, Paramount, Universal Studios, Viacom, Warner Brothers Television and YouTube to CES to explore the tech side of the industry—underscores the growing convergence of industries. It also enables studio and network managers to see how their content will be seen and heard, a vital factor in designing their future programming.

The value of seeing what’s coming applies to “traditional” media as well as “new media,” which itself is a shifting category of broadband, wireless and hybrid (e.g. two-screen) entertainment.
Scott L. Brown, senior vice president of technology and strategic relations at the Nielsen Company, characterizes CES as “the directional compass for the confluence of technology, innovation and the media experience.”

Brown says, “No other show provides such a rich networking opportunity, maximum exposure to breathtaking technology advances and exceptional value afforded to media entertainment attendees.”

From the perspective of Drew Baldwin, founder of Tubefilter, a company that curates online video entertainment, this intersection of content and conduit “allows companies to explore new ways to connect with new devices and new types of distribution.”

“It unlocks creative opportunities, not just to monetize audiences but also to create new experiences,” adds Baldwin, who coordinated a popular CES session a couple years ago, showcasing “Secrets of YouTube Superstars.” Baldwin notes that YouTube “has enabled content creators, story-tellers and producers to take more control in how they reach their audiences, creating direct relationships.”

His perception augurs a scenario for the next phase in the re-invention of entertainment. Major studios, such as Warner Bros., NBCUniversal and Sony Pictures, are already deeply involved in online content. Some of them have invested in competitive digital studios such as Machinima, Fullscreen, Maker Studios, Big Frame and Super Deluxe. In turn, many of these operations are using YouTube as a launch pad into future entertainment.

That’s one reason why the Cable & Telecommunications Association for Marketing (CTAM) has annually brought about 80 members to CES for the past dozen years. CTAM President Char Beales describes her objectives as seeing “what’s next and how it’s going to apply to our business either offensively or defensively.” Demonstrations may tip them off to what “a competitor will offer.”
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She explains that her contingent of cable and product marketing and licensing executives look for “something they could integrate into their products.” When CTAM started the CES pilgrimages, “it was all about HDTV. Now it’s about tablets and second-screen apps and connected TVs,” Beales adds.

UltraViolet at CES

Another demonstration of the need for converged content and distribution tactics is UltraViolet, the cloud+packaged video service, which is launching its marketing strategy at CES.

“CES has been a second home for the DEG,” explains Amy Jo Smith, executive director of the Digital Entertainment Group, which is UltraViolet’s umbrella organization. “It’s a favorite destination for our studio members, and serves as a critical link between technology and content. It is also the site where discussions among content providers and the consumer electronics industry occur which can lead to exciting new possibilities for the entire industry.”

Expectations run high for synergies among the scattered array of media and technology companies. Examples already abound of cross-over content including R. Kelly’s “Trapped in the Closet” hip hopera, a 24-webisode series that recently migrated to the Independent Film Channel. NBCU’s backing of “Defiance,” a futuristic TV series and companion $80 million videogame exemplifies a rare co-creation designed for multi-platform introduction.

These examples of digital entertainment opportunities that will affect how viewers consume media, and disrupt operations for companies that make both content and digital reception devices.