InformationWeek
Defining The Business Value Of Technology
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October 23, 2000 |
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Hollywood's New Star Is IT
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Other entertainment companies are getting into analysis as well. NBC West, the Burbank, Calif., division of NBC that handles the network's entertainment programs, has built a business-intelligence system to monitor customer demand. When VP of IT Steve Boehm arrived at the company a little over a year ago, he deployed Cognos Inc. business-intelligence software then in use at NBC's nonentertainment parent, General Electric Co. The software, which draws on an Oracle data mart, analyzes Nielsen ratings to help NBC's programmers decide how to promote its television shows. If a show targets 18-to 25-year-olds, the Cognos software helps determine where and how long a promotional spot for it should run. The software makes sure NBC's promotions are used wisely, freeing up unused time for paying advertisers.
By adding customer surveys to the mix, NBC can also plan its programming. Cognos can pull out data from the survey to help execs shape existing shows as well as those in the hopper. Still, even Boehm says there may be limits to what technology can do. "There's a huge creative element in this business, and at the end of the day, our products and our brands are 100% emotional," he says. The more decisions are based on emotion, the less technology applies.
Of course, there's a precedent for the technology that Hollywood CIOs hope will create more salable product. CRM, data warehouses, business intelligence--they're all just more powerful descendants of the focus groups that are already used to shape films. M. Night Shyamalan, writer and director of The Sixth Sense, changed the ending of his movie when preview audiences found it too confusing and depressing. And $300 million in box-office dollars later, The Sixth Sense is the 10th-highest grossing movie ever, proving that audience participation isn't always a bad thing.
It will take more than a few visionaries to change how Hollywood views technology. CAA CIO Keithley's background is in aeronautics, and he had no intention of joining the entertainment world when a headhunter attempted to recruit him to CAA 10 years ago. When the recruiter first asked him to meet with the unnamed company's CEO, Keithley said no. So the headhunter called him at home all night. Finally Keithley's wife asked, "If you meet with them, will he stop bothering us?" Keithley went to the interview surly and arrogant, which turned out to be just what the legendary Michael Ovitz, then the head of CAA, wanted. "I had no idea I had just talked to God," Keithley says.
He also had no idea that he had stumbled upon one of the few entertainment companies that understood that IT was crucial for bringing the entertainment industry into the 21st century. CAA's Media Lab, cosponsored by Intel, incorporates the latest in video and audio streaming technology to demonstrate its capabilities to high-powered clients. A 287-Mbps connection helps CAA show off the future of IT in Hollywood--video conferencing, digital transmission of dailies, and remote editing--for big shots who don't want to schlepp across town in their Range Rovers.
But even Keithley has seen his role change in recent years. "IT was a cost center to be controlled," he says. "Now, CEOs are recognizing that IT is critical to success or failure." CAA's ability to survive centers upon its ability to make deals, and IT has finally become a dealmaker. When Ben Affleck and Matt Damon's new-media venture, LivePlanet, first launched, it was a visit to the Media Lab and consequent discussions with CAA that convinced them to sell Internet rights to its first television show through an Internet auction. CAA helped LivePlanet hook up with the technology vendors who could make it happen.
For other CIOs, the transformation is even more drastic. Fox, which will spend $60 million on IT this year--nearly twice what it spent in 1998--sees technology as so valuable that, at the request of business users, the company is about to restructure its IT organization so that top IT executives report directly to their heads of business, rather than to the CIO. An IT staffer who works on applications for the legal department, for example, will report directly to the legal counsel. It's a decentralized structure that wouldn't have been possible as recently as five years ago. One business executive summed it up best when he told Yaros, "I used to think of you as the guy who's supposed to make E-mail work. Now, what you're doing is nothing less than changing our business."
Although business people may have embraced information technology, it's still a hard sell with the creative types. In fact, while describing CAA's Media Lab to InformationWeek, Keithley was summoned by his boss to handle an IT emergency--he had to show the system to an actor, the type of Hollywood royalty who wins Oscars, makes $15 million a picture, and may become the next new-media player to take on the Internet.
Keithley and his kin don't have stars on Hollywood Boulevard. But don't count them out just yet.
Photo of Boehm by Earl MIller
Illustration by Allen Crawford
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