In this fourth installment from frequent guest blogger Chris Dorr, he tries to make sense of what Paramount's innovative viral campaign for Paranormal Activity really means going forward:
One “truth” that you hear quoted over and over is that there is no way to make money from user generated content. Paramount, to its delight, is currently finding out that this “truth” is actually a lie.
PARANORMAL ACTIVITY will deliver to Paramount the largest return on investment (aka ROI) of any movie it has ever distributed. It could even deliver more cash to Paramount’s bottom line than TRANSFORMERS 2, its largest grossing movie of 2009.
All of this from a piece of user generated content that runs 86 minutes and cost its creator $11,000 to make.
But now you say, “It is not user generated content, it’s a movie!” And I respond by pointing out that if someone gets an idea, has a little money, writes a script, finds a cast and crew that works for free, shoots digitally, and creates something that lasts 1 minute, 20 minutes, 86 minutes or 5 hours--- it is user generated content.
We are living in an age where the tsunami of user generated content is just beginning and the distinctions between these pieces of content and professional content will matter less and less. What matters most of all is something Paramount discovered during the release of this piece of UGC. Does someone really want to see it?
If you approach your audience in a relevant way they will pay for this UGC and the number of people who will pay can get very large. And in this case the relevant way to get the audience for PARANORMAL ACTIVITY was through a marketing strategy called crowd sourcing.
Crowd sourcing means the “delegation of a task to a large diffuse group usually without monetary compensation”. It has been used, for example, to create Wikipedia, the online encyclopedia and Linux, the operating system that is used on over 40% of the world’s servers.
In this case Paramount delegated much of their marketing to an ever growing group of people who embraced the movie through early screenings and then demanded that the movie open in their city by signing up with Eventful. Through some early influencers the filmmakers/Paramount reached out to a potential audience and entered into a conversation with them. During this conversation they convinced this potential audience that the experience of the movie was significant enough to demand it. The crowd “for free” helped the movie reach them to they could then “pay” to see it. The crowd took ownership in the movie’s release.
Many will claim that this is just standard word of mouth, which the movie business has employed for years. Actually I think it is something different and more significant. Here you have audiences take actions that are way beyond the standard, “ I will mention it to my friends”. Now they are taking actions more like what paid street teams do when they pass out leaflets, plaster walls with signs, or give out goodies. And they do it for FREE.
Now you will respond by saying that Paramount spent a lot of money on TV ads to promote this movie. Yes, they did, but only after the crowd sourcing strategy began to create real results.
Can this be repeated? Most will insist that this is a phenomenon that occurs only once every ten years (remember BLAIR WITCH!) and only with genre movies of a certain type (remember BLAIR WITCH again!). Those who insist on this line of reasoning don’t see how the world is changing around them.
So remember the following.
1. The pool of UGC, of more PARANORMAL ACTIVITIES, is going to get much larger, as the digital tools to make them get better, cheaper and more widespread.
2. The ability to have a discussion with a potential audience and to crowd source marketing is going to accelerate, as the digital tools to reach an audience get better, cheaper, and more widespread.
3. The combination of UGC creation and crowd source marketing will cover every genre of entertainment that human beings of all ages enjoy.