THOUGHT (aka Centric's Blog)

Have you thought about turning your advertising into a profit center?

No. I’m serious.

And I’m not just talking about setting up a company store to hawk your products with paid keyword ads. Although that does work—we helped a major name turn a serious profit on their e-Store, even though they were selling at full retail price against discount outlets. The secret’s in the message. Think “the security of buying direct from the manufacturer.” While this may not resonate with the 18-24 crowd, it can be very enticing to someone in their 40s or 50s who’s still a little uncomfortable about putting their credit card info into an online form.

But that’s just one way. What about the ad for entertainment? What about entertainment itself? Would your customers respond to a online challenge by creating a branded video that has real entertainment value? Sure. Especially if you’re a strong brand like Apple or Sony or Nike.

Take these branded videos and do the smart thing. Bypass YouTube. Put them up on Revver, where they put other ads in front of them, and pay you based on the number of times the clips are watched.

Yes. They pay you.

Are you getting this yet? Share the revenue with your customers who are producing these videos, and you have:

• Free ads
• Viral and word of mouth propagation
• Enough money to pay for a few ad agency lunches

Can ads be a profit center? Sure, if they’re engaging enough. If two kids can make a Diet Coke and Mentos fountain and make over $15,000 on Revver in a few days, what can you do.

Wacky idea? Sure. Worth thinking about? Sure!

I was asked to speak on a panel recently, addressing the top studio executives in Hollywood. For this panel, I was “the outsider,” brought in specifically to try to answer a question nobody could (or would) answer:

What will the entertainment industry look like in five years? Or ten?

Now, I’ll readily admit that I’m biased. I believe we’ll end up with an all-content, subscriber-supported pervasive network with popularity-proportional revenue sharing that I call the MediaPool. Everyone will contribute, and there’s plenty of money in there so that the loss of control of distribution (and perhaps even copyright) won’t mean disaster for the creative community.

But in five years, we’ll still be in transition. And I think the two power blocs will come down to this:

Open-Source Production. The next step for user-generated content. Someone will fix CBS’s broken InnerTube model and add user-generated content to their advertising-supported online content hub. Someone even smarter will have the great idea to redistribute ad revenues to the user-generated content producers based on popularity. And someone else will have the brilliant idea to say, “Hey, why don’t we take the most popular user-generated content and turn it into shows?” With this kind of revenue and reward model, small groups of people can come together and produce higher-quality user-generated content, with the intention of “fishing for dollars.” These small groups–from one person to run the camera and another to do the editing, to much larger groups with directors, DPs, actors, and more–will be participating in “open-source production.” In other words, they’re doing this on spec with the intention of building a fanbase and making some money. The most popular of these open-source production groups will do very well indeed from advertising revenue sharing alone.

Immersive Studio Experience. On the other hand, studios will have gotten smarter. Some of them, at least. They’ll start inviting fans into their worlds, through shared fan wikis and immersive gaming (perhaps unlocked through the purchase of physical media, such as a Blu-ray disc). They’ll monitor the most popular memes that run through these virtual worlds, and incorporate them in their ongoing storylines. They will, in effect, be building complete alternate universes, using their characters and their worlds. With a few smart game-developer acquisitions, they can create uniquely compelling worlds that make users come back and visit, again and again. This drives an advertising, merchandising, and downloadable media revenue model.

The good news? There’s room for both of these models in people’s need for entertainment. And the overall narrative structure, the need for great stories, and the need for escape aren’t going to go away. In five years, both models will still be evolving, and there may be conflicts as they do.

In ten years, I suspect we’ll all look back on this and laugh, and wonder why there was ever any panic. There will be a complete continuum, from very sophisticated open-source production to people wearing heads-up displays and living in the studios’ alternate worlds as an overlay on their reality.