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Q&A with ClickStar's Lori McCreary

Rebecca Weeks
Q&A with ClickStar's Lori McCreary Rebecca Weeks
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These are exciting times for ClickStar, as the new service helps create digital distribution synergy between entertainment content creators and the technology industry. A joint venture of Intel Corporation and Revelations Entertainment -- the production company headed by actor Morgan Freeman and business partner Lori McCreary -- ClickStar addresses the growing consumer desire for premium entertainment through broadband for the PC and the TV. Known for her commitment to becoming a part of how technology affects the way consumers view movies, McCreary and ClickStar hope their strategy will beat the problem of piracy. 


iMedia's Rebecca Weeks sat down with producer, technology strategist and entertainment thought leader McCreary to talk about her company's expectations, challenges and what lies ahead.


Rebecca Weeks: What types of original film content do you believe will be most effective for internet distribution? How does it differ from content developed primarily for the in-theater experience?


Lori McCreary: In terms of content, we don't believe films distributed via broadband will differ from in-theater films; broadband is simply another form of distribution. Today, given the average download speeds, shorter content is preferable. However, as worldwide broadband penetration continues to rise, and broadband speeds get faster, feature length films will be the norm.


Our company, ClickStar, will offer first-run, pre-DVD movies that are scheduled in-between their theatrical and DVD release windows. Our artist created channels will offer original content directly to the consumer, and will be available on the ClickStar service. This essentially allows the artist to directly reach fans globally.


Weeks: From what you know of young audiences, do they not care about the big screen experience?


McCreary: Everyone loves going to see films on the big-screen and that is not going to change. ClickStar is simply another distribution outlet for consumers to enjoy great film in their home theater.


Weeks: Some entertainment executives have called simultaneous entertainment releases a "death threat," and a speaker at this year's ShoWest actually proposed increasing the window instead of shortening it. How will your efforts influence these executives?


McCreary: We are currently in discussions with all of the major studios about this subject. ClickStar is targeting mid-budget films that usually have a limited theatrical release. Studios will profit from an additional distribution outlet by having it accessible to film fans who wouldn't normally have that movie open in their city, or from people who don't live near first-run movie theatres. 


Weeks: A recent Nielsen report found that, when asked what they would do if a movie were to become available for paid download on the same day it premieres in theaters, less than a third of consumer respondents would opt to download. Does ClickStar believe this percentage will increase in the near term?


McCreary: There is clearly a perception that downloading film from the internet is a "small PC screen" experience. ClickStar will target consumers who have high-end plasma screens, for a home-theatre-like experience. And for someone who won't get to a theater anyway, we believe this is a viable alternative.


Weeks: What new business models will emerge for movie distribution?


McCreary: As we see a decline of theatrical revenues and the beginning of a decline in DVD growth, we believe ClickStar is providing consumers what they want, when they want it.
 
The ClickStar service will offer original content, as well as same-day or near-theatrical release, broadband distribution of films. We are giving the consumer direct access to their favorites filmmakers and celebrities, essentially bringing them "closer to the stars."  We think this provides more choices for the consumer and will ultimately drive the service.


Weeks: What advice do you have for studio marketers to more effectively reach consumers who, these days, demand entertainment how, where and when they want it?


McCreary: I don't think studio marketers need our advice!  As filmmakers, Morgan and I want to produce film that entertains and affects people-- and reaches the largest possible audience worldwide. We believe that giving them the choice of how to view a film will ultimately grow the audience.

Publishers and advertisers fight back


Publishers are increasingly threatened by the potential loss of revenue, while advertisers are concerned about reduced visibility and wasted spend. The problem has gotten so big that German publishers sued the creator of Adblock Plus earlier this year for lost revenues. French publishers are considering doing the same. The courts have favored Eyeo so far, however. This trend may lead to a larger contingent of publishers, advertisers, and brands forming a lobby group to eradicate the technology.


Some publishers are not outwardly worried about the impact of ad blockers and are conducting business as usual. Some publishers are uncertain of the future and are doubling-down on short-term revenue maximization by adding new inventory, including auto-play videos, welcome ads, takeovers, pop-ups, and page wraps. I predict this short-term strategy will fail in a big way as consumers become frustrated and advertisers see a drop in performance.


Many more publishers are taking a stand and have developed a multi-pronged strategy to mitigate the impact of ad blockers. The softest approach is to educate ad blocker users regarding the impact of the lost revenue to the publishers and request they whitelist the website which enables the ads. Wired and Mixcloud and others have seen success with this approach. Another approach is to create a paywall (a system that prevents internet users from accessing webpage content without a paid subscription) for users in order to skip the advertising all together. YouTube and The Next Web are planning to take this approach.


A fringe group of publishers are taking a hardline approach to prevent ad blocker users from accessing content. Video streaming sites like Hulu have taken this approach, as have UK's ITV and Channel 4. The downside to this approach is that ad blockers eventually find workarounds, and the publishers tend to lose visitors to competitive websites. Other publishers are utilizing technology to subvert ad blockers, including tweaking URLs and using shorteners. This is, of course, a cat-and-mouse game that will be difficult for either publishers or ad blockers to win. Publishers have the most to lose by not making changes, however.


Vendors have sprung up to take advantage of the evolving ad blocker industry. PageFair measures how many people block ads on publisher sites and allows publishers to display discreet ads to ad-block software users through the platform. Secret Media uses a "polymorphic encryption algorithm" to accomplish the same task. Companies like Sourcepoint provide a content compensation platform to address ad recovery for advertisers and publishers.


Big players like Microsoft and Google are taking a strategic approach by paying to get their ads whitelisted by default within the Adblock Plus software. This is ironic on two levels: advertising platforms paying to avoid getting their ads blocked by third parties and the fact that default blocking of ads creates a moral dilemma. By definition, default ad blocking would violate the principle of network neutrality, which holds that internet providers should treat all types of traffic equally. The conversations are just getting started on this front.


The smartest approach, in my humble opinion, is to improve the user experience with smarter and more user-friendly layouts, ad formats (i.e. native advertising, video, and cinemagraphs), and generally reducing the number of ad options. The idea is that attention will be divided among fewer ads and improve performance. The publisher can also charge more for each ad, and the brands and agencies can spend more time developing compelling creative. Advertisers may migrate to other (social) platforms and solutions, including Facebook and Twitter feeds.

Conclusion


While not hugely impactful for the majority of advertisers and publishers at the moment, widespread adoption of ad blockers driven by the motivations of consumers will force change in the world of digital advertising. I and my team at Anvil believe these changes will be for the better, as it will force advertisers and agencies to be more creative in generating messaging that better integrates with the user experience and more directly relates to the target audience. With the evolution of ad blockers and publisher solutions, consumers will be better informed and empowered to make choices, advertisers will up their game, and it will all gain momentum with Apple's ad-blocker capabilities coming soon in iOS 9. The online advertising landscape continues to evolve, but the future of online advertising doesn't have to be scary.


Resources



Kent Lewis is president and founder of Anvil Media.


On Twitter? Follow iMedia Connection at @iMediaTweet.



"Stop ADS -- Red Sign Painted" image via Shutterstock.

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