Entertainment in cyberspace: business opportunities and exciting options for fun await those who venture online

Black Enterprise, Dec, 1995 by Matthew S. Scott

Hollywood film studios along with the recording, publishing and video game industries, have all found a new toy. It's the Internet, and they're betting that sooner or later, you'll want to come out and play with it.

Over the last year, entertainment-based sites on the World Wide Web have multiplied at what seems like warp speed. Why? Because in their insatiable quest for your almighty dollars, the powers within the entertainment industry have decided to hit you where you live-literally. With the help of personal computers, they plan to use the Internet as a direct line into your home to promote their music, films, magazines, games and related products.

It's a high-stakes game of coaxing consumers away from traditional sources of entertainment onto what has proven to be an efficient and cost-effective distribution system that's available 24 hours a day. Consumers experience the luxury of viewing movies and CDs before their release and can purchase them from the privacy of their own homes. Or, they can access up-to-the-minute information about popular stars or recording artists. They can even play video games against multiple players in different states.

For entertainment companies, the sales generated from the on-demand availability of entertainment products and user fees for access to entertainment services make the development of such sites on the Internet a potentially lucrative gamble.

"If you include all the online services worldwide, revenues are a little over $2 billion," says Pick Spence of Dataquest, an organization that tracks computer usage and conducts surveys. Will these entertainment Web sites produce similar revenues? That will depend on how many people are ready for an entertainment experience in cyberspace.

WHY THE ONLINE RUSH?

"Everybody needs and wants to be entertained and informed," says Lee Bailey, president of Bailey Broadcasting Services in Los Angeles (www.trib.com/bbs/bailey.html). "People will come online looking for the same things that they look for off line." Bailey publishes the Electronic Urban Report (EUR), a free online newsletter/e-zine that provides inside news on black and urban celebrities and entertainers. The report is actually an electronic companion to Bailey's flagship Radioscope urban entertainment broadcasts, which air in three-and-a-half minute segments and for an hour on weekends over about 110 urban radio stations nationwide.

Much of what is published in the EUR is compiled from the news gathering efforts of the Radioscope staff. This access to a steady stream of exclusive content made it easier and cheaper for Bailey to create his online service. "I saw EUR as a way to get a foothold in the cyberspace arena and at the same time establish a vehicle to promote Radioscope," he says.

Bailey's use of the Internet as a promotional tool is representative of the approach of most industry players. For example, Warner Music Group has a major presence on the Internet, including Web sites for the Warner Bros. Records Black Music Division (www.wbr.com/black), Elektra Entertainment Group (www.elektra.com), WarnerActive CD-ROM games division (www.warneractive.com) and Radio Aahs (www.pathfinder. com), a children's music magazine.

"We see the online form as reaching a variety of consumers. It's not just the college kids surfing the Net. It's also older people who like a sense of community and who like to explore," says Camille Hackney, manager of New Media Market Development for Warner Music Group.

In addition to using the Internet to reach specifically targeted audiences, other companies, such as Walt Disney, look to use the Net for greater strategic purposes. "We're taking the long-term view, says Dennis Hightower, president of Walt Disney Television and Telecommunications. "The Internet can become a fruitful foothold strategy--to acquaint both children and parents to the Disney brand, and begin to build loyalty at an early age."

WHAT CONSUMERS SHOULD LOOK FOR

So what kind of entertainment offerings should you expect to see in cyberspace? Dataquest's Spence says consumers should anticipate having "the ability to interact with people in a more compelling manner, with better graphics as well as with real-time audio and video, versus having to download something. That makes for much richer experiences, because the entertainment business isn't based only on text, but on pictures and audio too."

The technology, that allows you to see pictures and hear sound immediately while online is called XING technology. It is especially important for record and film companies trying to sell CDs or videotapes. Short samples of music and videos are available through this technology on some Internet sites now.

Darrell Gunn, Web site director for Def Jam Records, explains how he's making good use of the XING technology: "We're going to have touring information files, artist bios, a newsletter with the latest in hip-hop, audio samples, video samples and screen savers." Def Jam Records is part of Rush Communications, No. 22 on the BE INDUSTRIAL/SERVICE 100.