Consumer as gatekeeper

May 09, 2011
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The announcement that Warner has acquired Flixster, a social network for film fans, came in a Time Warner conference call to present the lack-lustre Q1 figures. The media firm’s profits were down 9.9% in the first quarter, a result that Warner attributes to the decline in the number of DVD releases so far this year.

Quite why Warner Bros. Home Entertainment Group (WBHEG) would want to buy the News Corp. cast-off Flixster when times are hard is difficult to understand. Ownership of the Rotten Tomatoes film review site, acquired by Flixster in January 2010, might perhaps hold the key.

CEO Jeff Bewkes delivered the acquisition almost as a footnote to the Time Warner quarterly figures and promised more details in due time, “We’ll use the Flixster brand and platform to launch several initiatives that aim to dramatically improve the consumer proposition of owning digital movies, and we'll do that in a studio-agnostic way that should benefit the whole industry.” So far: so altruistic.

Bewkes continued, “In short order, we plan to expand the functionality of Flixster to allow consumers to organise and access their digital movie collections, on whatever device they like, as well as to buy and rent movies.” This portmanteau description of Warner’s plans for Flixster tells us everything and nothing about why the group would spend a rumoured $80 million to acquire the two sites, plus a further $20 million in bonuses if executives meet performance guarantees.

Neither Flixster nor Rotten Tomatoes has made the breakthrough that could take their websites out of the realms of the ordinary and into the super-league of social networking. Both sites trail some way behind the Amazon-owned Internet Movie Database (IMDb), which CEO Col Needham founded in the UK back in October 1990 and is now the web destination of choice for 100 million film fans each month.

Traffic data from the web analysis company Alexa shows that just five million individual users accessed Rotten Tomatoes last month, while Flixster counted 1.3 million unique visitors. The Alexa data also reveals that the trend in site visitor numbers is in long-term decline. The claimed statistic of 25 million users per month for the combined Flixster sites appears optimistic at best.

The unfulfilled promise of Flixster might be why News Corp. decided to cut its losses and sell. WBHEG was left as the sole bidder after Yahoo, the only other interested buyer, pulled out of negotiations at an early stage. Unless things take a sudden turn for the better under the new owners, it could prove an expensive investment.

Warner could pull one cat out of the mixed bag it has bought into, however, with the highly successful “Movies By Flixster” application for Facebook and smartphones. Although IMDb leads the market in online film data, Flixster has made the smartphone app its own.

More than two billion film reviews from users provide a consensus of what is good and what is not on the Rotten Tomatoes site. A red “fresh” tomato signals films that have attracted positive comments from 60% or more of users, a green “rotten” tomato indicates a preponderance of negative reviews. This human intervention makes the results more valuable than the aggregated data delivered by a computer search engine no matter how impressive the underlying mathematics might be. If Warner has grasped the significance of the role Flixster plays in this evolving market, their investment could yet prove to be timely.

If “Curation Nation”, a book written by producer and filmmaker Steven Rosenbaum and published earlier this year by McGraw Hill, is to be believed, “the future of content is context”. The book has been acclaimed by a wide cross section of the business community and reviewers have commented that it is “required reading for modern retailers” and presents a “road map for developing consumer experience by curating content around your brand”.

Author Rosenbaum says that content overload — including the tweets, emails, voice mails and blogs that assail our senses each day — requires human intervention to reduce what he calls the “fire-hose of data” into a comprehensible and relevant stream. He hijacks the traditional role of a curator to define this process as curation and suggests that humans are back in charge as moderators of good taste in an era of data overabundance.

Rosenbaum writes, “Without a coherent human filter to create contextual and digestible information, the noise is rapidly approaching a place where it drowns out the signal. Un-checked, the data will make our collected heads explode. Kaboom!”

He’s not alone. At the Harvard-Smithsonian Center for Astrophysics, Michael S. Papish focused his research on supercomputer simulations of large-scale structure evolution in the universe. Having tackled the organisation of outer space, he returned to earth-bound content and in 2000 he co-founded the recommendation specialist MediaUnbound. Rovi acquired the company in March 2010, reportedly to secure the services of its talent. Now Rovi Product Development Director, Papish stresses the importance of curation in a conversation with Cue Supply Chain.

Papish says, “Traditional programmers decided what to put on the air; the radio or TV station was the gatekeeper, controlling what you could listen to or watch. With recommendation engines, we have changed the location of the gate. Instead of the broadcaster deciding the line-up, the consumer becomes the aggregator, creating a personal channel that conforms to their own way of looking at content and sending them to their chosen programmes.”

He says this does not disrupt the importance of brands and their curation of content. “Take, for example, MTV or HBO, channels that retain their branding and offer a consistent view to their audience. Or Fox: people who are happy to watch Fox Entertainment may never watch Fox News and vice versa, yet they remain loyal to the brand.”

We should think of the relationship between content owner and consumer as one of trust, he says, and every good recommendation enhances the trust of the consumer just that little bit more: “In domains such as e-commerce, search is about finding the objectively correct thing that you are looking for. So if the batteries are flat in your remote control, the search engine comes right back with the correct batteries. Entertainment is much more subjective and we need to think about how we establish that trusting relationship. Our goal must be to maximise trust over time.”

He is quick to point out that content recommendation does not just mean mathematical formulas that accept one search input and give back a number of related items. “Some people may define it that way but Rovi has always believed that recommendation and discovery is about understanding users’ expectations. Our aim is to help them to find the things that they are looking for already and to discover things that they have yet to learn about,” he says.

There will always be a role for someone to guide you to the source that you are looking for, says Papish. This curation must take into account the environment, subscriptions and device that you will use to access the content: “The history of the entertainment industry shows that there is always a gate-keeping aspect to accessing content since there some restrictions on the ways programmes are licensed. This goes back to the question of objectivity; the reason why consumers trust certain gatekeepers is that they believe they are objective sources, working on their behalf.”

Whether that happens through the intermediary of an apparently automated system or through the intervention of friends on Flixster or Facebook is not important, all interactions are equally valid forms of discovery or recommendation. “Consumers are aggregating reviews from the community — people who are out there, who are like them and who watch and write about movies,” he says.

Flixster benefits clearly from the curation of its many users. The downward trend on its websites might be no more than confirmation of a long-term shift from the web to the wider internet. This is driven by the growth in dedicated applications that take users straight to the information they need. Chris Anderson wrote in Wired magazine last August, “As much as we love the open, unfettered web, we’re abandoning it for simpler, sleeker services that just work.”

Rovi is aware of the pitfalls of expecting consumers to learn complex systems. Papish says, “The more work they have to do, the less they consume. If we want digital commerce to be a large money-making business for the content industries, it must become easier to use: it is a problem we have to solve.”

Warner Bros Home Entertainment Group President Kevin Tsujihara says, “Driving the growth of digital ownership is a central, strategic focus for Warner Bros. The acquisition of Flixster will allow us to advance that strategy and promote initiatives that will help grow digital ownership.”

In the Rotten Tomatoes database there are 250,000 films, 2.3 billion user ratings and 500,000 opinions from respected critics. People visit Flixster to discover information and opinions about the entire film industry, not simply the output of a single studio.

As long as Warner keeps to its promise to allow Flixster to follow an autonomous path, the rewards for both partners could prove substantial.