Today we present for you consideration an informative and insightful panel from the C3 Summit in New York City, a prestigious meeting of international business people and officials seeking to boost commercial ties and build partnerships between the United States and the Arab world. The September 13-14 event, dubbed “A U.S.-Arab Global Event,” was the first of an annual series called C3 Summits, for “Community, Collaboration and Commerce, and featured many distinguished speakers including President Bill Clinton and former Saudi Commerce Minister Abdullah Alireza ["Saudi-US Relations: Flourishing in Challenging Times – Abdullah Alireza"]. This panel, one of the many that SUSRIS transcribed and features here, was named, “Movies and Video Games Press ‘Play’ in the Middle East,” and it was described in the C3 Summit agenda:
“Job creation, fostering creativity, promoting cultural understanding and generating investment opportunities are just some of the benefits that result from connecting Western filmmaking and video game companies with the Arab world. The swift proliferation of smart phones, tablets and high speed internet has dramatically increased the potential worldwide audience of digital entertainment. A powerful film can give voice to significant issues and create worldwide awareness while at the same time being honored for artistic achievement. Video games can bring players, youth and international online communities together like no other medium. Several countries in the Arab world have already taken steps to attract western filmmakers and video game companies. So come and hear from those who know what it takes to be successful.”
The distinguished panel of industry leaders walked through a hypothetical case where creative people in the business designed a Middle East based transmedia enterprise and talked through the process of launching and promoting it. They provided an overview of developments in their field in the Middle East and the role of education and creativity in cultivating talent in the region. As moderator Rudy Vogel explained to his panel “team”:
“Our panel of world-leading experts as I said has been recruited to advise on establishing the lead film and video game entertainment companies headquartered in the Middle East, and it’s called Salam Studios. The studio’s mission is to work closely with the west, and this team – their mission possible – is to evaluate the strategies for success in the key aspects of this enterprise. And the company’s goal is to create a slate of original IP [intellectual property], both films and video games, which will resonate from the Middle East, but have western appeal, and will be globally successful. Each team member has his respective role, and will share his insights and expertise based upon his own global experience. Over the next thirty minutes, our panel will evaluate the strategies necessitated to launch, and then summarize their recommendation for moving forward. Okay gentlemen. That’s your mission. You chose to accept it?”
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C3 SUMMIT: Community, Collaboration, Commerce – A U.S.-Arab Global Event
New York City
September 13-14, 2012
Movies and Video Games Press “Play” in the Middle East
Moderator: Rudy Vogel, President, Vogel Associates
Nolan Bushnell, Founder, Atari Corporation
Nicholas Fortugno, CCO, Playmatics, LLC
Jon Patricof, President, COO, Board of Directors, Tribeca Enterprises & Film Festival
Joe Minton, President, Digital Development Management
Dr. Reza Aslan, Co-founder and Chief Creative Officer, Broom Gen Studios
Jason Reed, Former General Manager and EVP, Walt Disney Studios
Harri Koponen, COO, Rovio Entertainment Ltd.
[Remarks as delivered]
[Rudy Vogel] We’re very fortunate to have with us this morning Dr. Reza Aslan. Reza is co-founder and Chief Executive Officer of BoomGen Studios, the premier entertainment brand to create content from and about the greater Middle East, and he is President of AppOvation Labs, a mobile applications company. He’s an incredible writer and scholar of religions, and is the founder of AslanMedia.com, an online journal for news and entertainment about the Middle East and the world. Welcome Reza.
Nicholas Fortugno. Nick is an American game designer and educator, and he’s teaching courses on game design at the esteemed Parsons School of Design in New York City. He’s Chief Creative Officer of Playmatics, LLC, a New York City based game development studio focusing on casual games. And he’s perhaps best known for designing Diner Dash, a top selling casual game developed by GameLab. Welcome Nick.
Mr. Jon Patricof. Jon is President and Chief Operating Officer and member of the Board of Directors of Tribeca Enterprises, co-founded by Robert De Niro, and it’s the parent company of Tribeca Film Festival and related entities such as the Doha Film Institute in Qatar. He was also a member of the investment team at Quadrangle Group, a New York City based investment firm, and served as an executive in charge of strategic planning for the Walt Disney Company. Welcome Jon.
Mr. Harri Koponen. Hello, Harri. Harri is currently Chief Operating Officer for one of the coolest companies in the world, Rovio, creator of the global video game sensation, Angry Birds. And Mr. Koponen was the Swedish TELE2 CEO from 2008 to 2010, and from 2004 to 2008 he served as the managing director of Kuwait-Wantaniya Telecom. He’s also held positions with Hewlett-Packard and Shell Oil. He was chairman of the board at Tecnotree, and is a member of the board of Stonesoft Corporation and Ainacom Corporation. Welcome Harri.
Mr. Joe Minton. Hey, Joe. As President of Digital Development Management, Joe has overseen the growth of the firm to a global company, establishing it as the leading agency and business advisory in the video game industry. He has expanded the firm to Europe and Japan, and additional industries in China and the Middle East. Under his direction the firm is practically working in every modern gaming platform and business model in the industry. He was recently honored as one of Variety Magazine’s top ten dealmakers in 2011, and he’s also served as President of Cyberlore Studios. Welcome, Joe.
And finally, last but certainly not least, Mr. Jason Reed. Hello, Jason. Over fifteen years Jason rose from a creative associate at Hollywood Pictures to Executive Vice President and General Manager of Walt Disney Studios Motion Pictures Production. In that position, he was essentially given green light authority on a slate of pictures he was developing with local teams in foreign countries around the world. He has since founded Seedstock which is a company dedicated to fostering innovation and entrepreneurship in sustainable agricultural. Welcome, Jason.
And just a sound bite or two about me. I’m founder of Vogel Associates, an international business and market development group. I advise senior management and boards of directors for Fortune 500 companies and startups in high and low-tech sectors around the world. I’ve also counseled ministers in foreign ministries, in governments, in our own government including the U.S. Agency for International Development. Recently I’ve co-founded Trans Technologies, LLC., which is based in Tucker, Massachusetts. It’s a new company formed three months ago devoted to investing in entertainment and technology initiatives.
[Nolan Bushnell] The Natural History Museum is gorgeous this morning.
[Rudy Vogel] Thank you for showing up, Nolan. I appreciate it. Nolan Bushnell, well what can I say? Nolan is a technology pioneer. He’s a serial entrepreneur and scientist, and he’s often cited as the father of the video game industry. We have the father, and we have the son over there, Harri cool, and is best known as the founder of Atari Corporation and Chuck E. Cheese Pizzatime Theatre. He was named ASI 1997 Man of the Year. He’s been inducted into the Video Game Hall of Fame, into the Consumer Electronics Association Hall of Fame, and was named one of Newsweek Magazine’s Fifty Men that Changed America. Welcome, Nolan.
So with these introductions as backdrops, let me set the stage for you the audience this morning. Our panel of world-leading experts as I said has been recruited to advise on establishing the lead film and video game entertainment companies headquartered in the Middle East, and it’s called Salam Studios. The studio’s mission is to work closely with the west, and this team – their mission possible – is to evaluate the strategies for success in the key aspects of this enterprise. And the company’s goal is to create a slate of original IP [intellectual property], both films and video games, which will resonate from the Middle East, but have western appeal, and will be globally successful. Each team member has his respective role, and will share his insights and expertise based upon his own global experience. Over the next thirty minutes, our panel will evaluate the strategies necessitated to launch, and then summarize their recommendation for moving forward. Okay gentlemen? That’s your mission. You chose to accept it.
Nolan, you’re the industry builder. Dr. Reza, you’re the cultural attaché. Nick, you’re our content creator. Jon, you’re the international financier okay? Harri, the operations expert. Joe, you’re the global connector. And finally Jason, you’re the head of business development. Okay, gentlemen? Let’s get started.
Mr. Industry Builder for Salam Studios, what are the three main tenants under which this company should be created, and why?
[Nolan Bushnell] I believe that the purview should be slightly larger. It’s important to catch the trends very, very, very quickly. Movies have been around a long time, video games have actually been around a long time, because you can tell by my white beard. I believe that the current convergence between film, game, and education is the key trend. And I think that the Salam Studios should look to be a leader in Middle East education, technology, because much of it is “gameified”. The skill sets are the same, but more than that I think that the studio needs to be a creator of talent, not just a consumer of talent. And the only way you can do that is to teach young people how to be an entrepreneur, how to create games, how to program games, how to be creative, how to be optimistic. And without those underlying assets in place that I think have to be self-created, the studio will not have the resources in terms of people and manpower that they need to fix.
And they can also take a leadership position at this point in time. Leadership is really, has what I call the innovator’s bonus. When you do something new and powerful, everybody wants to talk about you. When you just repeat what everybody else has done, when you’re a follower, nobody gives a care. I usually say something else. But nobody gives a care. And I just believe that the innovator’s bonus is always necessary for any new enterprise to be truly remarkable in the world setting.
[Rudy Vogel] Well Nolan, that’s a lofty goal, and much appreciated, but as the program manager for our consulting team here, how do you teach entrepreneurship in a region where they don’t really know what that word means?
[Nolan Bushnell] I don’t know. I can do it.
[Rudy Vogel] Well where would you begin?
[Nolan Bushnell] Well I think that it’s very – the first thing that is necessary is to believe that it can be done. There are a lot of countries in the world where it’s basically a fool’s errand to start a business. In Greece right now it takes three years to get through efficient permits to start a business. And you wonder why Greece is struggling.
I believe that the best way to teach entrepreneurship is to have people be adjacent to it. Steve Jobs worked for me, and I’ve always felt that he saw that hey, if this idiot can do it, so can I. And I think that Silicon Valley has this self-perpetuating thing where everybody says hey, I know that guy, and he’s not so cool, and I know that person, she’s not that cool. So example is a good one.
But the first part is a lot of people just don’t know the first thing about how you organize a company; they think that it’s somehow mystical and magical. Every one of my kids – I have eight kids – every one of my kids I’ve gone through the entrepreneurial steps with them, and they get curious about it about eighteen. You can tell them over and over before that. But I believe that you can do incubators. Like Salam Studios should have an incubator. And you don’t have to put a lot of money into an incubator. You just put a little bit and you take them through the process of naming your company. Believe it or not, if you can get someone to name their company, all of a sudden they put on the role of an entrepreneur. Simple.
Then you choose a logo, and then you get business cards. And all of a sudden it’s like you give the person the hat and they grow into it. And they need to know a little bit of accounting, they need to know a little bit of business law, they need to know a few other things. And by picking up those things they start putting on the dress and the mantle and the epaulets of an entrepreneur. And I know it can be done – I’ve seen it done, I’ve done it, my friends have done it, I’ve taught people how to do it, they’ve taught other people how to do it.
Let’s create the Nolan Bushnell Institute for Entrepreneurship Incubator right next to Salam Studios. Very doable. Very, very doable.
[Rudy Vogel] Okay, I’ll buy that. And we’re talking about video games, we’re talking about films. Atari is a cool company. This is all about coolness. How do you create coolness?
[Nolan Bushnell] There’s nothing more cool than owning your own company.
[Rudy Vogel] How about coolness within the content? We want this to be a successful – Salam Studios should be as successful as Atari. How do we..?
[Nolan Bushnell] By getting the right social structure and the right attitude on the part of the creatives. Creative thought, everybody has it. Most of it is squashed out by the time you’re in high school.
It’s very interesting how many of the most creative people are the outliers, the rabble-rousers, the nightmares. Steve Jobs was not an easy employee, and I believe that you cannot mandate creativity, but you can create the environment in which creativity can flow – very, very different thing. And you do that by encouraging a little bit of out of the box thinking. Many people are in boxes that they don’t realize they’re in. And you can break that through a series of little tests to find out how locked in the box they are, and start challenging them. And you can get anybody out of the box. Some kids it’s very hard.
[Rudy Vogel] Okay. Thank you, Nolan. Now with that in mind, we’ve heard that we need entrepreneurship skills, we need coolness, we need creativity. We should do some training. Mr. Cultural Attaché – Reza – how should Salam Studios then go about determining the content which will work broadly in the Arab world, yet remain relevant to western and even more global audiences? How would you dovetail to what Nolan just said?
[Dr. Reza Aslan] You know what’s funny is that for me this is not just a thought experiment. I mean my company BoomGen is Salam Studios. This is what we do, except that we’re not in the region, we’re actually here in Dumbar [phonetic]. Our whole philosophy is founded on thinking of ourselves as the twenty-first century version of the 19th century oil explorers, except that the new natural resource, the untapped gold mind in that region is its stories. This is the cradle of storytelling.
Stories were invented in the Middle East. Angels and demons, good and evil. God was invented in the Middle East. Everything that you need for a big, dramatic, globally relevant story with universal moral values – it’s all there, whether you’re talking about the first story to have ever been told in Anuma Elish, Gilgamesh, or the Shahnameh, or the Bible for God’s sake. So in essence you don’t need to look that far. It’s not as though you need to dig very deep to find the kinds of stories from this region that would resonate along the global landscape. It’s in the blood, it’s in the ground, and it’s in the sand.
[Rudy Vogel] Well given the current headlines, and the geopolitical scope of today, are you saying that if we, Salam Studios, created a piece of content with a gen and scorpions and demons, that that would be successful in the Gulf?
[Dr. Reza Aslan] Oh, absolutely. In fact it would be hugely successful.
[Rudy Vogel] Why? How?
[Dr. Reza Aslan] Because these are the mythologies that the kids in this region grow up with. The idea of gens and spirits and demons and angelic beings, the notion of the epic battle between good and evil. Where do you think Star Wars came from? Where do you think Lord of the Rings came from? These stories that we think of as defining western literature or filmmaking were heavily influenced by the mythologies of the Middle East.
I think it’s a mistake to think that this is a region that would bristle at the idea of using the very mythological framework that gives them an identity to begin with to exploit it on these multiple platforms.
And that’s the other thing too that I think is really important about the kinds of stories that I’m talking about. These are big, big stories. In fact they’re too big. They’re the kind of stories that you can’t just put into a ninety minute film, but that’s what’s so fantastic about the opportunities that Salam Studios has before it, because we’re in a world now because of trans-media and the ability that people have to consume these kinds of large stories on multiple platforms.
This is the framework; this is the place, the source for precisely those kinds of stories. You can’t tell the story of the Bible in a movie. You cannot tell the story of the Shanameh, the great Persian thousand-year-old epic of kings in a movie. It just wouldn’t work, it’s too big of a story, but if you broke that story down and told it in a video game, in comic books, in web-isodes, in a film, in an animated series, and actually interconnected those stories so that you have multiple entry points to this larger story, then you’re sitting on a gold mind.
[Rudy Vogel] So this game that we’re going to create with gens and scorpions and demons that’s been created by enormous talent that no one has found, you’re saying that would work somewhere in the Gulf, but then how does that parlay into Iowa? Is a kid in Iowa going to play that game?
[Dr. Reza Aslan] Absolutely. Look, I can think of actual examples in which this has been very successful – for instance Prince of Persia I think is a really good example. Assassin’s Creed is a really good example. You can think of a bunch more. But in general that kid in Iowa is looking for new sources of mythology.
Okay, we got Star Wars – yeah, we get it. We understand that world. We understand the world of these sort of large stories like for instance the Lord of the Rings. But that kid is hungry for new material, new worlds to explore, new gods, and new myths to become a part of. And as I keep saying, this is the cradle for mythology. This is the cradle for storytelling.
So whether he is introduced to a gen as opposed to a sprite, or whether he’s talking about scorpions as mythical monsters as opposed to centaurs as mythical monsters, it’s all about the power of mythology to speak to universal values, to really allow particularly young people to engulf themselves in new worlds.
And this is a world that has infinite varieties and can open itself up to whether you’re Chinese, or whether you’re Indian, or whether you’re American. I’ll give just one example here – I know I’m going over my time – but the greatest story of all. The most famous story in the history of the world outside of perhaps the Bible is 1001 Nights. But 1001 Nights, although its source is from the Arabian world, actually Iran thank you, but it has Chinese characters, and Indian characters, and European characters, and African characters. It’s the most truly universal story I think that’s ever been written, and the idea that it could only work in one region or another I think is ridiculous. One of the highest selling video games, one of the most popular video games in Russia is based on 1001 Nights.
[Rudy Vogel] Okay, all right. Okay, I’ll buy that.
[Dr. Reza Aslan] After Angry Birds, of course. 1001 Angry Birds, yes.
[Rudy Vogel] Well, Mr. Content Creator, Nick. You’ve heard from the industry creator, you’ve now heard from our cultural attaché, and he’s told our team that we have a property that’s going to be based on scorpions and gens and demons. How are you going to go about creating that content?
[Nicholas Fortugno] Well it sounds to me like the strategy that Salam’s taking is a trans-medial strategy, which I think is interesting that Salam’s coming at this from a single property perspective – that’s a riskier way to start. There’s a lot of trust going into an individual property to make it work. I wouldn’t necessarily recommend that right off the bat, especially since you are going to be incubating. You probably want to try to seed one thousand ideas and sort of see what comes out of it. That’s probably the best way to move.
I think the other thing is that when you think about games in that region, you’re not really thinking about console development or PC development. I would assume that we’re talking about a window here of probably – it depends on how you want to roll out your trans-medial strategy – but let’s just say there’s a window of a year of ramping up before anything could possibly hit the market, so what’s the marketplace penetration going to look like? It’s probably not going to look like console, because console’s not going to last in any meaningful way that we understand it today.
[Rudy Vogel] How long do you give it?
[Nicholas Fortugno] Well consoles aren’t going to die immediately, but console penetration in the international marketplaces is obviously a really scattered thing, and there isn’t a lot of penetration in the Middle East of consoles, so I don’t think it’s a worthwhile thing to pursue given that you’re seeing – it’s a combination of not having a historical path with those devices, and the diminishment of those devices as we go forward.
I would definitely be looking at Android. Google is making a very large play to make cheaper Android devices, and those are going to spread across the world, and someday someone is going to figure out how to make an app store on Android that will sell anything. So once those two things happen you’re going to see an explosion of content there.
And then I think I would be developing towards a sort of PC-ish direction, either through Windows 8 or Steam, and then trying to cross build for that and figure out which horse to bet on.
But I think in terms of content – all right, so if we start with a property, and we assume we’re going to take stuff from these stories, I think what you want to do is create a holistic trans-medial strategy, and that’s something that still hasn’t really effectively been done from the side of the entertainment industry. I think certain properties, Angry Birds being one of them, have done a really good job of becoming trans-medial properties, but Angry Birds didn’t initiate itself as a trans-medial property from an entertainment perspective.
Like it wasn’t like a film that came out at the same time as the rest of the property. And I think that we have examples now of properties that have done this from starting in one position and moving forward. I think the time is right now for a company to approach trans-medial direction from start to finish, just sort of plan a full-fledged trans-medial strategy from the get go, and say okay we’re going to build a comic, we’re going to build a game – not a game, we’re going to build several games – we’re going to build several storytelling things, like animations and films, and we’re going to have a rollout strategy that actually makes all of this stuff possible.
I think to make that happen you need to have test cases early on that can explore the narrative to make sure that it’s powerful, make sure it’s adaptive. So what I would say is start off by building some cheap properties that are going to explore the narrative in a way and see if they catch. I would look at particularly Android development, and there’s absolutely no reason – I’m assuming that we have funding here, but maybe we don’t.
[Rudy Vogel] But wait a second, Nick. Hold on, wait a second. Remember last week when we had the meeting with the chairman of Salam Studios, and he told us that his son has six mobile phones. Six. An iPhone, a Samsung, an Android, God knows what else, and he wants us to have games for each one of those. We have limited funds. How are we going to do this?
[Nicholas Fortugno] Oh well that’s not impossible to do, as long as you design the games intelligently. I think what you don’t want to do is – I mean this is content creation. The big danger is we don’t want to throw six million dollars at an idea, and that’s the first manifestation of an idea in the marketplace, and then have that fail. That’s very dangerous.
But you don’t have to do that with mobile. And since mobile is probably the way that people are going to pursue this at first, what I would do, what I would suggest is create a few fairly simple games that introduce the narrative to the populous, and if you can do it make them freemium so that people can just access them immediately. Don’t charge out the gates. Make games that people can access for free. You should always be monetizing, so build in a micro economy. There’s tons of ways to do this now. But release the game so people can start consuming the narrative, and they can start seeing the narrative and see what’s attaching to people about it.
Use the metric systems that we have now on these mobile devices for mobile games to start tracking what people are doing, what they’re interested in. I would deliberately try to build in some narrative hooks to see if those things catch. And then as you see those things explode that should dictate your content strategy going forward. And I think that there are – I mean game playing patterns in the Middle East clearly point towards certain kinds of casual play being very successful. Board game culture has a long history there, and has yet to really explode with the renaissance of board games we’ve seen today. So I think there’s a lot of opportunity for you to find simple, turn-based multiplayer games, or simple casual experiences that can explore these kinds of ideas, and then when you see those things develop out you move forward in directions that those tell you to go.
[Rudy Vogel] Okay. All right. Thank you, Nick.
[Nolan Bushnell] I think he is 100% right.
[Rudy Vogel] So you agree, industry builder?
[Nolan Bushnell] Absolutely.
[Rudy Vogel] So it sounds to me like we’re going to have to raise $50 million, Mr. Financier.
[Nicholas Fortungo] No, no, no. No, no, no, no.
[Nolan Bushnell] That’s not what he said.
[Nicholas Fortungo] No, no. We can do that for less than fifty.
[Rudy Vogel] For six? Five?
[Nicholas Fortungo] I don’t know, how much would you want to do all this stuff?
[Nolan Bushnell] It’s one of those things – a lot of times companies are like building a pier and hoping you can keep building it fast enough that it turns into a bridge.
[Rudy Vogel] Well I want to hear from our international financier over there. I mean you’ve heard this discussion now. We’ve been talking about this, Jon, and Salam Studios just can’t take the full risk, you know? Once our slate and stable plans are in place, what do we do? What’s the best way to approach securing global investment partners?
[Jon Patricof] Well, I’m glad the chairman’s answer wasn’t we need to raise fifty million dollars, because … I think we’re going to take two approaches. One is from an individual project perspective. I think that there is money out there from organizations like we work with actually in Doha, the Doha Film Institute, and in Abu Dhabi and other places from individual project financing. And so I think we’re going to try to approach some of those groups for small amounts of capital, potentially related to, in those cases, the film aspects of the projects we’re working on.
And then I think separately from a corporate financing perspective I think we really are going to go and look at investors who are particularly focused really in kind of two big areas of opportunity. One is mobile. I think that’s what we’ve laid out as a strategy. I think that’s clearly the big trend, the big development. We know that people are now not only consuming games which is probably obvious on mobile platforms, but film as well, and so there’s a much broader understanding of the mobile universe and what that means from a platform perspective than there is from really an appetite for financing individual pieces of content, I agree.
I think going out and trying to raise money around our particular creative concepts or any particular film or game is a very difficult undertaking in the U.S., in Europe, and in the region as well. So I think you really have to focus on the mobile aspects, and I think we want to have in place potentially one or more distribution partners from the outside. I think that’s an important piece of this …
[Rudy Vogel] Well what would those distribution partners look like?
[Jon Patricof] Yeah – and I don’t know – off the bat I think the mobile operators in all these various countries are certainly potential targets, and those platforms, I like the idea. I think in the U.S. we’ve seen a very rapid transformation even in the film world, which historically has been the probably least attractive investment sector for professional investors. But in the last two years alone we’ve seen in the U.S. independent film space fifteen new companies come into the marketplace interested in distributing films largely because of companies like iTunes and Netflix and YouTube and others who are now really starting to create ways to monetize intellectual property, to monetize filmed entertainment content.
And I think what we’re going to be talking about when we’re talking to investors is you know that these players or others are coming to this region. You know that with the mobile operators and finally creating a way for commerce and transactions to happen around intellectual property, this is coming. And so it’s probably not a matter of – it’s certainly not ten years, it’s probably not five years – it’s probably more two to three, so now’s the right time to put something in place that’s going to be able to allow …
[Rudy Vogel] But Jon, our chairman is saying that we have to look for synergy amongst the game and the movies, so are you saying that we’re going to have to go out and raise funds to now create a movie about scorpions and gens?
[Jon Patricof] No, I mean certainly not. And I think we – I think first of all the opportunities which we see on the game side in terms of lower cost of production are really applicable on the filmed entertainment side as well. I mean people are able to, and you can make films for more modest amounts of money.
I think we should try to finance the film separately. It’s going to be individual investors. We probably want to look for a pocket of capital maybe that finances the filmed aspect in particular, because quite frankly it’s not that interesting to bigger institutions.
But I think the idea of a multi-platform property, this concept of trans-media, especially the idea that it’s rooted in a game makes it only that much more attractive. I mean we are going to be positioning ourselves – I mean that is where the studios are focused on a global level, right? In these bigger franchise properties, many of which come out of comic books or come out of games themselves. So I think that piece of the strategy is going to align very well, going to be attractive to investors.
[Rudy Vogel] Okay. I think our chairman’s going to come back to you on that. So that leads me to the next question of our operations expert, and I know that Salam Studios is your first start up, so I don’t know how much experience you have with that. But tell me, Harry – how should we setup the structure of Salam Studios? I mean you’ve heard from our industry builder now, you’ve heard from our financier – how are we going to set it up? How do we do it in the Middle East? Have you been there?
[Harri Koponen] Yes, I spent some time there, and I think that’s a challenge. Because first of all, the region is not culturally – well everybody thinks that they are like the same, but they are not. We have to look which of these countries supposes to give us the best talent pool in the future.
So let’s have a talent pool that is young, enthusiastic, and not spoiled by this black stuff. So there is kind of enthusiasm to do the work, and there’s incentive to go to work and actually produce an output. So we have to first find the place where we can kind of build the people who feel the proud of what they start to produce. And they have to love what they do. They have to be a kind of a passion that hey, I want to really make this as a massively big thing. Not cheap, but inexpensive. There’s a little difference.
We would like to be an inexpensive company to people to afford to start to use this stuff, but they have to be youngsters and also the old people, because I actually agree a little bit with the … cultural side of the business that great stories combine all the great stories of the Middle East and the North Africa actually. Create this kind of fantastic place to work where the people like to come every morning, eight o’clock latest. And they would like to leave no later than eight o’clock in the evening. It’s not okay to come at twelve o’clock and leave one o’clock. That’s not giving us enough productivity in a work place.
So we have to find the place in the Gulf where all these kind of requirements – the place, easy access to international people, so no visa problems. And then we have to have a fantastic scene to work with, so that it inspires the people, a kind of creative environment, creates the creativeness. And no tyrannical organization, which is a difficult thing. And then we have to have expats, a decent amount of expats.
[Rudy Vogel] Why?
[Harri Koponen] It’s must. We need to change the way the people think, because we have to insert the talent in the area.
[Rudy Vogel] But aren’t we going to dilute their own culture if we bring in a bunch of expats?
[Harri Koponen] It’s not going to be dilution, it’s actually making secure what you said will happen, so that the stories are also sellable on the international scene. If they are only locals, I would almost kind of have a feeling that this is going to be an uphill battle for a marketing department, whoever that is then going to be in Salam Studios.
Because in quite fairness, we need to have the cultural respect and honor, honor and respect the cultural aspects both ways, because it’s not only a one way stream, you know take this and just push it to the marketplace, it’s not going to work. On top of this because we have this fantastic distribution channel, what everybody has in their pockets – this is pretty easy then to distribute to the world, very famously very fashioned way, because we have four plus billion people.
[Rudy Vogel] So if our chairman said to you Harri, we want to locate Salam Studios in Riyadh, would you be adverse to that?
[Harri Koponen] Actually it’s very interesting that you picked that place, because I would most probably go there, because that’s the youngest nation, and they have about thirty million people in the country. And that place, the people are not all rich – they need to work. So that’s kind of in a good spot. Obviously you have some knowledge about the region, but you have some other issues there so that our cultural attaché will have a little bit more stuff to do in order to make that export, but in place it’s not bad.
[Rudy Vogel] So how about Doha? What if we went to Doha?
[Harri Koponen] Doha is okay, but then the question is how much talent pool we have there, because you have locals only six hundred, seven hundred thousand?
[Rudy Vogel] Right, but we’re going to bring in expats, so is that a problem?
[Harri Koponen] I don’t know how many expats you can bring in that place?
[Rudy Vogel] I don’t know, you tell me. You’re the expert.
[Harri Koponen] We fix the relations and we can bring as many as we like. So it’s not a problem. Like in Kuwait where I used to work. You have nine hundred thousand locals, and we have two point eight million foreigners. So it’s kind of a – we have to figure out who is doing the actually work, because we need Indians – everybody can’t be the chiefs. So we have to have Indians, plenty of them – and good, bloody Indians so that they love to come into work, they are excited to come into work, and they have a passion for what they do.
That’s the kind of operationally key thing – you know every morning when I get the people coming in their office they are kind of in flames, I refuse to go home, I want to stay here, and they continue to work. That’s the kind of a type of environment that we have to create. And then you know, the heaven is still in it.
[Reza Aslan] Rudy, let me just second that – the importance of expats. It’s incredibly important. The enthusiasm is there, the skills are there too, but the management needs to come from over here, and there’s no shortage of that either. I mean just pick fifty of the top tech companies in the United States and go to their executive team and just see how many are named Mohammed.
[Harri Koponen] And by the way there’s a great incentive, that’s something that we have to work here in the U.S. that the IRS will also stop taxation globally, because in these countries as you know the taxation level is pretty positive. So that its in the first place what I’ve been working with is a tax refund. So there’s negative taxation. You actually get money without paying taxes.
[Rudy Vogel] But how is the notion of bringing in expats going to conflict with what our industry builder just said about training indigenous talent? Is there going to be that kind of conflict?
[Harri Koponen] I would say from an operational point of view the key is the attitude. The people who go there what attitude they have. Do I come here as a conqueror, or do I come here as kind of a teacher, a mentor. The mentorship is the key, so that I’m coming here to give you everything that I know, but at the same time I’m actually also here to learn everything that you have to give to me.
So that’s the way the world comes to a better place, because then we kind of increase this understanding about cultural background and kind of these historical things – what has happened two thousand years ago to their grand, grand, grandfather. You don’t actually have to anymore fight to the guy, because it happened two thousand years ago, but now it’s now. And we can teach this kind of hey, let’s look at what we are now facing here, and then move on.
[Rudy Vogel] Okay. Which leads me to our global connector, Joe. I mean you’ve heard everyone thus far – we have to still hear from Jason – but given the challenge here and the operations and funding plans, what relationships are we going to need to have put into place to really maximize our global success while minimizing our expenditures.
[Joe Milton] Well I’m more excited about the business opportunity now than the twenty years I’ve been doing business deals in this industry. It is an incredibly exciting time, and things have changed in just a few years so dramatically that we don’t all yet realize what that’s going to mean.
So just a few years ago just to give perspective you have the Xbox, you have the Playstation, you have Nintendo’s consoles. And those are the ways to the digital market. That’s the way that games come out. There’s not the same kind of Internet penetration. We’re now taking phones and iPads for granted. These didn’t exist just a very short time ago. The entire way to the market was through those companies, and it was a stranglehold. And when you looked at other regions outside of the U.S. and Europe and Japan, and these what we call tertiary territories, which of course are anything but, they did not have the penetration of these consoles for a variety of reasons, whether it just wasn’t worth Microsoft or Sony’s time and effort to get into that market because it didn’t have that many people, or the piracy issues.
And so games would be just forgotten about in those regions, and they would get copies of junk. That’s changed “mammothly.” And so now we’re in a situation where the consoles are still relevant, but also relevant – what’s in the pocket, what we all have – and that is allowing regions like the Middle East to immediately catch up with the entire rest of the world in just a couple of years. Where we have gone through these cycles of consoles and all these business dealings to arrive where we’re at in the west, in just a couple of years at a snap of a finger we can do business deals now to access the one hundred and ninety million youth in the region.
This is an incredible opportunity. Where can you see a market that is this many folks with Internet penetration who love their phones, who are savvy, and can immediately be a market? So doing business deals is actually going to be an incredible joy for Salam.
Now it’s hard, because you can’t just go to one place. It’s no longer just all right, go to Electronic Arts they take care of everything. No, we’re going to have to do business deals all over the place in regions for people who are specific to a region. It’s no longer just one person who is the licensing person for an entire area or region, and you go to them and they get it on the shelf in those countries. No, you need to actually work with people who know the regions very well. You need to deal with yourself, with how you’re going to handle customer service, community support, all of the various production services and localizations. These are lots of deals, lots of different companies, but now we can do all those ourselves because technology has democratized it.
So a small studio can come from notch L.A. and take over the world with their properties. This can happen from the Middle East the same way it can happen from Scandinavia, the same way it can …
[Harri Koponen] Nordic.
[Joe Milton] Sorry.
[Harri Koponen] If you say Scandinavia, it excludes the Swedes and the Norwegians – things are not included.
[Rudy Vogel] We have to be careful with our geography.
[Joe Milton] We do, and our terminology. And you can take … from down under with slicing fruit and suddenly that is all over the place. This can come from Salam, this can come from the Middle East. In a year we can be in that same place. It’s incredibly exciting.
[Rudy Vogel] Excellent. Mr. Business Developer, the pressure is on you now. You’ve heard from everybody on the team. I want you to sum it up now. Our slate, our talent stable plans, our operations, our training, and our expenditures – everything is now underway. How should we approach creating a diversified package of entertainment and film projects targeted at different markets? Because we want to be a global success. So Jason, the pressure’s on you.
[Jason Reed] Actually the pressure’s kind of off me in many ways – there’s been great ideas, and a lot of these ideas are being put into practice now, and there’s examples of them all working in individual companies.
But actually what is the most exciting thing for me putting on my business development hat is that we’re building this studio from the ground up. And one of the things that allows us to do is really embrace the trans-media nature of these properties. In traditional big media, global media companies, they tend to have started as one thing. And if you’re a Paramount or a Disney, or a hundred year old institution that can only think in certain ways, and as you get bigger and bigger and bigger you specialize into different divisions – the TV division, and the game division, and the online division, and the feature division.
And strangely politics begin to emerge, and none of them talk to each other, and they’re all motivated by different things, and their P&L statements don’t coordinate properly. And what you end up is having great ideas about how to roll out a slate of trans-media properties, and what you end up in is a conversation about what accounting goes where, and who gets the money from the video game if it’s really development for a feature film, and things like that.
Because we’re building this studio from the ground up, we can influence that culture from day one, and through operations and staffing and all of these great things, we can make sure that we look holistically at the entertainment experience, which then allows us to take advantage of exactly what Reza said: there is a great well of stories. There are stories that found the basis of global storytelling that we can then tap into and look at how we exploit them in multiple ways.
So starting off, I think we’re starting from a fantastic place, because we’re not burdened by institutional resistance, and we have a new look at the world because of the youth, because of the energy of the people that are going to be working at the company. So that I think is great.
Secondly I think that because we have that advantage, we can actually really press, we can really use trans-media in the way that it should be used, which is exactly as Nick was saying, to seed a number of ideas. To go look at your audience, take a look at – now this is a very diverse region all the way through. We talk about MENA as if it’s one thing, but everybody here knows how incredibly different the various parts of the region are, even differences within countries. So we have to look at that.
We have to look at that audience. We have to look at the psychographics that appear in all of these audiences. There’s an emerging young female demographic, which hasn’t been really dealt with. We’re seeing companies like Virtana with their music, and NBC with pushing music into that. That’s really responsive to that demographic, but it’s not just youth. It’s not just Kuwaiti, it’s not just Saudi, it’s all kinds of different audiences that we can service, so we should look at that.
We should build content against them, launch that content out as quickly as we can and as inexpensively as we can, whether it’s casual games or comic books, music videos with some narrative in it; different ideas that we can get out into the audience, into the market now, so that we can start to get feedback.
One of the things that I think becomes really interesting for how we approach this is marketing actually becomes sort of part of the creative process, because there’s a constant feedback loop, and there’s constant iteration of the content itself, so as we move forward we can seed fifty ideas, we can see what people respond to, and then we can increase our investment in that, take it to a higher level. We can take a casual game to multiple versions of that, then we can take it to a television show, then we can take it to a feature film that allows us to build equity, build awareness with the audience, build knowledge about what people are responding to so that our bigger bats down the road, our feature film bats, our series television bats, are actually lower risk than they would’ve been before because we have this information already. And also – I know that we’re pushing on time, so I’ll..
[Rudy Vogel] Thank you Jason. Well I just got messaged by my chairman. My chairman is messaging me and he wants the answer real quick, so we’ve got our summary now, we have our strategy. Now I want each of you, two sentences, summarize – is Salam Studios going to be success? Jason.
[Jason Reed] Absolutely. There’s no reason why it shouldn’t be, as long as there’s a diversified slate that is tailored to the audience that it’s trying to serve. Which also, to go to the globalized issue, one point I want to make – choice of language and choice of dialect is important. Certainly the films that tend to work regionally use the Egyptian dialect, because that’s traditionally where most of the filmmaking has come. Television has traditionally been more oriented out of Syria. If you want to compete on a global scale I think you want to use English, because that is easier to sell into foreign countries, even if they are not English language speakers. It’s easier to sell an English language movie into China or Germany than it would be to sell a movie in Arabic. So a mix of that, a diversified slate at various budget levels, with a diversity of targets. And there’s no reason it shouldn’t work.
[Rudy Vogel] Thank you. Jon – success or failure?
[Jon Patricof] Absolute success. On the video game side and on the animation side there’s a longer history of kind of institutional investment and interest. Those same trends are now coming to film, and therefore the combination and this trans-media approach is absolutely more attractive than ever. The costs of production on the film side have come down. The avenues for distribution have greatly proliferated, so I think we should be able to take advantage of that, and the trans-media aspect therefore is more attractive than ever.
[Rudy Vogel] Thank you, Jon. Reza – success, failure: which one?
[Reza Aslan] Big success. We’re swimming in a sea of stories with a very low barrier of entry. We can acquire these things for almost nothing. We can develop them very cheaply, and as Nick said develop them so that they’re ready to be exploited in every platform that you can imagine from day one. I think yeah, the sky’s the limit.
[Rudy Vogel] Excellent. Harri, what do you think? We go forward?
[Harri Koponen] Success. This horizontal virtualization, which happens all these other companies, they will be knocked out so quickly out of this game that they don’t even figure it out what happened.
[Rudy Vogel] Excellent. I love that. We’re going for it. Joe, what do you think? Yes, no?
[Joe Milton] Absolute yes. We’re moving from a stranglehold to a democratization, and with content finally really going to be king, and we’re going to make great content.
[Rudy Vogel] Thank you, Joe. Nick – I’m waiting for your yes. Do we have a yes?
[Nicholas Fortugno] Uhh, experienced expat managers governing clever, creative, enthusiastic people. Roll enough dice, you eventually roll a seven. If you give them runway, you have a success.
[Rudy Vogel] Excellent. Mr. Industry Builder, what do you think? It comes down to you.
[Nolan Bushnell] I think that you have to define more clearly what success is. And you know, making a billion dollars? Unlikely. Doing a couple of really good, profitable projects? Certainly. I think that the real issue is can you create something that’s self-sustainable? That it can make enough money that it can continue forever and hopefully get that Star Wars, or Avatar, or Gone With the Wind, or Halo that makes a very, very unique statement in the world. And those are hard to do. Those are like getting struck with lightning. Getting some good standup singles? Absolutely. We have a challenge, and we’re ready to meet it.
[Rudy Vogel] So Mr. Chairman, I think we have a winner. Audience, what do you think?
[Remarks as delivered]
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