It's easy to notice that millennials don't watch TV the way their parents do. It's easy to notice that millennials spend a major chunk of their free time on their smartphones and on social media. It's easy to notice that they're cord-cutters who prefer the command and control provided by video-on-demand.
What's hard, if you're in the business of entertainment, is figuring out what to do about those facts.
One company has: Super Deluxe, the fastest growing premium entertainment channel targeted at creative youth. Super Deluxe produces what is truly an ecosystem of content: Scripted and unscripted TV shows, short-form videos, interactive live programming, creative tech products, and branded content.
The driving force behind Super Deluxe is Wolfgang Hammer, a TV and film veteran who launch House of Cards (Netflix's first scripted drama.) Hammer was a film executive at Lionsgate and later the co-president of CBS' feature film division, shepherding movies like Salmon Fishing in the Yemen and Inside Llewyn Davis.
In less than two years, Super Deluxe has garnered 2 billion social views and 5 million subscribers. On average, Super Deluxe videos get more than 150 million views per month, reaching 50 million 14-to-34-year-old viewers. But they don't just accumulate eyeballs; Super Deluxe's engagement rate is a staggering 30-plus percent due in part to interactive storytelling on Facebook Live that allow viewers to participate in the programming as it is created. (Yep: Viewers get to choose plot twists in real time.)
But don't call Super Deluxe a "digital" studio. "We're an entertainment company first and foremost," Hammer says. "Our mission is to be a creative brand that builds a loyal audience. 'Digital' implies 'cheap.' We're really in the flow of what is important to a 25 year-old today, and the experience is unparalleled because we're truly premium."
I know when I write the intro to this I'm going to struggle to describe in a few words what you do since Super Deluxe has fingers in multiple pies.
(Laughs.) Actually, it's easy: Super Deluxe is a premium multi-platform entertainment company. We're a creative company that produces entertainment for any platform.
But doesn't "any platform" make it hard to decide what to produce, and then where to distribute it?
I agree that focus is important. But I disagree that focus is important where your business model is concerned. There's a big difference between creative focus and business models.
Today you'd be foolish to start a company that only makes movies or that only makes television. There is such a huge amount of entertainment being consumed that is not film or television.
So if you start a creative and entertainment company -- because we consider ourselves to be both -- why not cover the entire pyramid? When your goal is to reach an audience for whom no screen has primacy, that kind of limited focus on a single business model is not just limiting -- it's possibly lethal.
That still sounds extremely complicated.
Not when you focus on creative first.
Think about it this way. You're a writer. Would you say to yourself, "I only write for magazines?" If you did, you wouldn't have a book coming out. (Laughs.) Wouldn't you want to do books, articles, etc? Then you can decide where your work gets published.
We take the same perspective: We focus on creativity, and then we focus on the various outlets. People who don't are repeatedly miss out on new business models.
It's also not that complicated because we have specialists who work in the various outlets. The people who make TV are not the people who make YouTube videos, and they're not the people that make Instagram pieces.
But they do all talk to each other so we present ourselves as a unified voice that our audience recognizes. That's the brand aspect. That's the eyes of the consumer aspect.
Since creativity is subjective, how do you select which people to work with and which ideas to pursue?
We work with people who have Academy Awards. We work with people who are making their first short film. We work with people... it's all about being able to pick people that have talent -- like the creator of This Close, which started as a series of shorts and will premier on Sundance Now on February 14th. (Another Super Deluxe project, The Passage, was also selected for Sundance and will premier there next month.)
That is our moat: Being able to pick right. That's a definite skill set.
And we've added a few new skills sets. Usually people compete in the same stream; they find and pay creative people within their stream. We've added a whole bunch of arrows to our the quiver, so that as a company we have a collection of skills no one else has in the entertainment business.
That's exciting. That means our creative brand will always feel differentiated.
Plus I hate competing against people who are using the same tools. (Laughs.)
Truly creative people typically have options. Is it difficult to attract the right people?
Actually no, because we know what we do and what we don't do.
We're lucky that we chose a very different path. While I come from film and TV, I don't discriminate against online video just because it's short. Online video isn't stupid or pointless. It can be substantive and subversive and delightful and meaningful. Last year the New Yorker called our political satire best in show.
That's just one example that proves you can be a premium entertainment company in all segments. Having shows on several networks and platforms, as well as your own YouTube channel, and now we have a full-on mainstream premium TV business... creators and brands love that.
Brands want to reach a younger audience with premium "content," a word I'll use once but never again. (Laughs.)
There are many solutions. Creative people love that. So do brands.
When you're trying new things, you don't have data to support your decisions. I would struggle with how many unknowns you have to accept.
On the short form side, it's a little easier. You start with intuition, hunches, and ideas. You make some stuff; if you're an in-house filmmaker, you can fail and you're still fine. We give real filmmakers the space and room to try things.
Then if you get some traction you can look at the data.
But keep in mind the size of the the audience is not as important as how much the people that like it, love it. Is there an audience that really likes what you're doing? Then you get to do more, spend more, measure success... great creative and a loyal audience, that's the mission of Super Deluxe. Creative IP and a loyal audience.
Trying short-form ideas would be attractive because you can test those ideas.
True, but I don't believe the future of long-form starts in short-form. Our two biggest TV shows did not start on the Internet. They were just creative ideas.
At the same time, a lot of the ideas that have been living on our channels, like YouTube and Facebook, we are now converting to scripted and unscripted shows.
That hasn't really been done well by anyone on a sustained basis, but we are absolutely going to take things we create on the Internet and then transfer them into something like 30-minute shows on Facebook. Or Netflix. Or TBS.
A lot of the online publishers think, "I'm good at 2 minutes... so I'll do 30 minutes." But they have no skill set in that space. Just because you're good at one thing, it doesn't mean you're good at another. There's often a gap there.
We're focused on giving creators on the short-form side the resources to grow into long-term players. We had a TV DNA in the company from day one.
And we know the power of writing.
Since you've successfully done what no one else was doing... what do you see coming in the next few years?
One, I believe you'll see new formats emerging that are created by companies like ours. Like interactive video. We're the world's largest producer of Facebook Live because we made it interactive. Interactive video will see a real spike in 2018, especially with the younger audience, and there are very few companies that can do that well.
Two, you'll see brands sponsoring and financing TV-quality shows that run on the Internet, whether on their own social media channels or on other platforms, or both. You'll see that old-school TV sponsorship model come back.
It's already happening because it's an intuitively sensible path for brands to marry data and targetability with really great content that doesn't normally exist on the Internet. That's something we're very very focused on -- we can do that, and we have a very large audience. So we're destined to be a good partner for brands.
Third, there will be a new creative format. It happens every two years or so. Creators are looking at shows like Game of Thrones or Big Little Lies and are forgetting that there is another genre or another type of show or movie that is equally interesting.
So you'll see a breakout hit next year that looks unlike anything you've seen. Someone will do something courageous.
Take House of Cards. Nobody wanted it. It was something new, so they were suspicious.
In my opinion, that's always where the hits come from.
Do something new and you don't have competition. When we decided to create a truly premium brand, that's in effect what we set out to do: Build a business with no direct competition.