Talking Digital Q&A #10: Simon Joyce, CEO MCM Entertainment Group. “Content remains king and technology is now queen”

2012 has been a strong year for MCM. It has enjoyed solid growth across its core take40 and HotHits properties, and earlier this year added VEVO to its portfolio for the Australian market. These digital assets, combined with MCM’s radio properties (such as My Generation) and digital platform services (such as Movideo and Igloo), place MCM in a unique position in terms of possessing cross platform media products with national footprint both in broadcast and digital.

Talking Digital spoke to MCM Entertainment CEO Simon Joyce about where business is heading for the group.

TD: MCM has made some of the larger financial committments to online video of any of the media companies in Australia over the past 5 years … would you say the development of the video space revenue wise has been slower than anticipated for all of us, and where do you see the next 3-5 years going?

SJ: Yes, it is fair to say that the MCM Entertainment Group has invested heavily in online video. Not only is our Media business (MCM Media) obsessed with premium AVOD content, we have also built from the ground up a separate technology online video player (OVP) business, being Movideo. Movideo is a media-centric and integrated online video platform, delivering an end-to-end video solution, (encoding, storing, managing, syndicating) and delivering audiovisual content to multiple end-user devices coupled with powerful business analytics tool. Whilst this has been a long journey over the last five years there is no doubt that the tipping point has now arrived and no matter what data you look at online video is set to explode around the world over the next five years. Our focus is APAC for Movideo and many Asian markets are only just beginning to understand how to monetize online video and this is where the heavy lifting we have done in this space for a long period of time can really pay off.

TD: I am a big believer in the importance of investment in content, and MCM is a significant investor in content creation and distribution. How important do you think this skillset, and the ability to integrate advertisers into content at the creation stage, will be as the ad market continues to evolve and consolidate?

SJ: Yes content remains king and technology is now queen and MCM is uniquely positioned in both areas. From a content point of view we are obsessed with creating great brands and great content and this will only increase over the next couple of years. From a branded content point of view we have seen an enormous shift in the market as many brands no longer see this space as a ‘nice to have’ on the media schedule. This branded content is now becoming central to many brands strategy and most marketers have significantly increased their appetite in this space. What is also critical is how the branded content is used together with traditional advertising as the right combination can dramatically increase the power of the branded content.

TD: Let’s talk about VEVO. How did the VEVO partnership come about and what plans do MCM and Vevo have within the Australian market?

SJ: VEVO is a particularly exciting addition to the MCM Media business and the synergies between the two businesses are very strong. Prior to the deal announcement, we had been in discussions with VEVO for a long period of time and VEVO was somewhat surprised to find a business like MCM Media in Australia that had already invested heavily in the premium online music video space (they had not seen that anywhere else in the world). Over the last four years MCM Media has cleared all four labels (UMA, Sony, EMI, Warner) plus publishing  and offered our users curated on demand online music video on an ad funded basis via our consumer sites So when VEVO realised that we shared the same passion for online music video and had done an enormous amount of market education around the benefits for the advertiser of such high quality engaging online video content, the discussion quickly turned to how the two companies could work together.

We are now six weeks in and VEVO is off to a stunning start with over six million unique users each month and 50 million streams. Looking ahead our focus is to take this offering to the next level with greater technology, more original content creation, more music videos and even more access for the consumer.

TD: The fight for ad dollars is significant – especially in this market which is very short and barely growing. When looking at a product like VEVO and rev. expectations – where do you see the dollars coming from? Would it be music TV or somewhere else?

SJ: The IAB suggests that online video will grow at around 100% per year for the next few years. In 2011 the online video market was around $50 million and the suggestions are that it will hit $100 million mark this year. There is no doubt that some of the money will come from TV as agencies and marketers start to understand the real value of premium online video wrapped with data efficiencies. The DSP’s are adding to this with a number of agencies now publicly quoting the amount of TV dollars that they anticipate to move to online video. So that is where the majority of the dollars will come from in my view and I don’t think it will be too long until you see marketers who create ‘TVC’s and don’t use broadcast TV (i.e. they may focus on Online Video and Cinema as a combination). In addition to the TV dollars, I think premium online video will also win strong ad share through branded content solutions. The medium of course lends itself to this content creation and with brands more focussed than ever on driving their owned assets there is no doubt that online video advertising has a role to play.

TD: Last year MCM partnered with a variety of people and companies to put together the Gaga show at Sydney Town Hall. What goes into creating something of this magnitude and how is it balancing everyones needs and interests – artist, label, producer, advertiser, media partners etc

SJ: Yes, it was some of the more complex ‘campaign architecture’ that we have ever been involved in with partners including MCM Media, Southern Cross Austereo, Channel 9, [V], Facebook etc. This of course all happened in conjunction with one exclusive advertiser being Vodafone.

The key to our success in this area is quite simply a commitment to creating extraordinary and original music video content. MCM has a very strong production track record in this space going all the way back to 1999 when Live at the Chapel was founded. So once you have the label and artist inspired and you have a track record of credibly balancing the sponsor who makes a major contribution to underwriting costs, the process becomes a little easier. In terms of media partners we have a fantastic relationship with Southern Cross Austereo so once trust is established between the two businesses it becomes a lot easier to balance share of advertising revenue and just focus on creating great content.

TD:  In 2012 what is really exciting you about the media and advertising world?

SJ: All of the above! The shift to on demand video on all connected devices is mind blowing, and the combination of smart video technology meeting great creative opens up so many opportunities in this space. There is still lots of work to be done to get it onto the main buying stock exchange of media but I like where the journey is heading.


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