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Information Technology Enables Transformation of Hollywood

by Devendra Mishra

Adjunct Professor, Decision Sciences and Marketing, Graziadio School of Business and Management, Pepperdine University, and Chief Strategist, MESA

The 2012 HITS Conference was an affirmation of a personal belief that CIOs of the Hollywood studios have an unprecedented role to enable the transformation of the entertainment industry in the wake of the perfect storm of disruptive technologies.

While the studio executives have a vision for addressing the challenges of the disruptive technologies unleashed by digital technology, Internet and broadband, mobility, web-enabled consumer electronics, and social media, the fact remains that the information systems executives are increasingly engaged in meeting the demands of an ever-changing marketplace driven by the consumer. The reason for the unique vantage point of the information systems group is their overarching view of all the functional departments of an enterprise, the flow of information across the enterprise, and their responsibility for B2B relationships with suppliers and customers in the supply chain.

The Emerging, Expanded Role of the CIO

Insatiable demand for content — film, TV, games, Blu-ray discs, and DVDs — finds the consumer at the epicenter of the marketplace. As a result, the interaction with the mobile consumer has become ubiquitous, yielding much needed insight for content owners and involvement of consumers. The result is a game-changing role for the CIO, enabling access to the consumer like never before.

Today the CIOs at studios are addressing a number of key initiatives:

1.     Capture of big data of social media and enabling near real time decision making;

2.     Analysis of social media data to influence purchases of products and services for enhanced entertainment experiences;

3.     Establishment of standards for unique product and service identification and metadata to be used by trading partners;

4.     Security and privacy requirements in the network;

5.     Development of consumer-centric content for the web;

6.     Establishment of B2B networks among the growing number of supply chain partners in the digital world; and

7.     Building data warehouses to support the infrastructure needs of the transformational initiatives.

The digital world has brought the consumer closer to the studio where the Internet has become a universal channel of distribution. While a web presence provides product information, its interactivity yields an unprecedented opportunity to build a relationship with the customer. By integrating customer data from all platforms of emails, social media, web analytics, display networks and publishers, billing systems and search engines, marketing executives are able to better manage global advertising programs for films and subsequently for TV and home entertainment by optimizing media placement for short-term awareness and sentiment. Creation of a repository of marketing campaign metrics by film genre has become a powerful asset.

Utilization of big data to leverage the new media for improved user personalization, analytics for product recommendation, path analysis of web navigational data, and resultant creation of the enhanced entertainment experience is producing additional revenues. The traditional product-driven marketing is being transformed to a consumer-centric strategy.

Partnership of CIOs and CTOs

The technology challenges of production and information systems over the product life cycle are bringing about a new partnership between the CIO and the CTO. Particularly, content digitized at its inception enables an efficient repurposing for growing channels of distribution. Deployment of information systems in various operations of the studio, while recognizing the product life cycle and the shifting windows of exhibition, has led to creating significant value for the overall business. An ongoing IT strategy has been to link with business operations, focus on business processes, modify organizational structures where necessary and apply technology. Alignment of technology with information systems has led to automation efficiency and an ability to scale business value.

On another front, the radically changing business of advertising for films, TV, and home entertainment across numerous channels and devices has become very complex while representing potential streams of revenue. The IT departments have embraced Twitter, Facebook, and the like, to help forever change the world of marketing.

Advanced analytics extracted from customer information for a film, TV show and theme park in an enterprise data warehouse is being utilized for management decision making, both operational as well as strategic. The implications of the system over the product life cycle of studio content are vital in the various channels of distribution for revenue growth, efficiency in the supply chain, and brand building.

Flixster has enabled a film-driven, online business in the environment of social media networking data to drive and capitalize on UltraViolet, which makes purchased content available to the consumer on all the devices seamlessly. The CIOs and CTOs are successfully deploying cloud computing and virtual storage to enable consumers to enjoy content whenever and wherever on whatever personal device they desire.

Restructuring for Digital, Mobile, and Social Media

Certain studios have begun to restructure their businesses to achieve alignment of supporting functions for digital distribution of film, TV, and home entertainment in order to maximize revenue in the global marketplace, reduce time to market, and eliminate redundancies in the divisions of the overall business. The coming together of CIOs and CTOs augurs well for the future. While technology operations from filmmaking to delivering digital content have been deemed a core competency, Information Systems is moving up the value chain. Today one wonders whether the CTO and the CIO should report to the COO of a studio. Traditional management of Information Systems by the CFO has yielded dividends in the past in terms of financial control, cost reduction, earnings predictability, and compliance with governmental requirements. It may be opportune to consider restructuring of organizations in a revenue-driven business model for a consumer-centric marketplace.

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