Originally Published: December 4, 2006
Will virtual worlds kill the broadcast star, revitalize the video star, or both?
Until now, the build-out of virtual worlds has been the purview of software and game developers, and more recently, aggressive global telecoms. Certainly, a few media properties including BBC, Reuters, NPR, even SONY, are dipping their toes within pre-existing worlds like SecondLife.com, but MTV Networks is the first programmer to jump in with both feet and build from the ground up.
In an exclusive interview withJack Myers Media Business Report Van Toffler, MTV Networks' Music/Logo/Film Group president, spoke about MTVN's ambitious undertaking.
The first of MTV Networks' worlds to launch is Virtual Laguna Beach, which had its soft launch this September 20th. While the minds behind VLB have clearly been influenced by Second Life, Toffler has given his staff marching orders to create the least intimidating user experience possible. His takeaway lesson from the success of the Internet: "Simple has won the day. Content creators need to rethink the process and unlearn their experience."
To achieve that end Virtual Laguna Beach developers have been advised by the founders of There.com and MIT's resident expert on convergence culture, Professor Henry Jenkins. Even their project name, Leapfrog, is a double-duty moniker. It is at once a non-competitive children's game where everyone advances, while also echoing the military tactic of engaging the enemy while simultaneously advancing. Sun Tzu, anyone?
Strong Enough for a Man but Made for a Woman
If one wanted to assess the economic potential of a virtual world, she'd be hard-pressed to find a better test tube than Laguna Beach, where shopping is what prayer is to the Bible Belt. While advertisers cottoned to an early VLB presentation, MTV is quick to indicate that this program is still in its infancy. Generating revenue is not its first priority, learning about the space is. That said, the demo of the TV series has survived online intact: the ratio of women to men is 6:1, the median age is twenty. One can see why P&G's Secret and other advertisers targeting young females would want to lend their support as sponsors.
MTVN was savvy enough to create the perception of exclusivity within VLB. Recalling Google Mail's launch, only 100,000 invitations were offered to prospective charter VLB residents, nurturing a desire to get behind the virtual velvet rope. Since then it has seen an explosion of registrants as the community has grown 5,000 members a day with little publicity. At their own initiative residents have started 5,000 clubs and mounted their own prom in parallel to the show's event.
While Fox webcast the The O.C. season debut in MySpace, MTV outdid them by hosting a screening of the Laguna Beach season premiere within Virtual Laguna Beach. As the show's season has wrapped, VLB not only remains open, but continues to aggressively grow. In time guardians of VLB will have unprecedented access to community behavior via data that quantifies every action taken in-world: the number of times a user has altered their avatar, and what specific body part, what their retail experiences are like, their responses to entertainment streams. The phrase "vote with your feet" might be updated to "vote with your mouseclick."
Unplugged Goes Wireless and Wi-Fi
While shopping is an attribute of Laguna Beach and The Hills, music is after all the raison d'etre of MTV. While Urge Radio is the wallpaper within VLB, MTVN's next virtual franchise will be MusicWorld, which promises to truly leverage MTV's core competency. Set to debut in the first quarter of 2007, details of MusicWorld are still under wraps, but it's not difficult to imagine what experiences might be had in a 3-D environment. Recently Wolfgang's Vault opened the Concert Vault, an inventory of more than 300 full-length live concerts dating back to the sixties. We're talking Sly and the Family Stone, The Cure, Springsteen, The Clash. Imagine experiencing these shows for the first time in a virtual world that replicates the physical music scene of the 1960s and 1970s, in some cases bringing classic musicians in-world to perform and chat about these gigs. Toffler views this space as a catalyst for "the complete reinvention of music."
Logo As a Blank Canvas
Perhaps most intriguing are MTVN's plans for LogoWorld, also set to launch in early 2007. While the Net has made three recent acquisitions, AfterEllen, AfterElton, and 365 Gay, LogoWorld will be completely built bottom-up. While denizens of Virtual Laguna Beach will soon be able to purchase a hooptie and a crib as part of a monthly subscription model, LogoWorld will come closer in pioneering spirit to Second Life. One can imagine that House of Style's Todd Oldham, soon to star in his own Bravo show, Top Design, will find his services in demand in-world.
Echoing the clarion call of his visionary peers, Toffler maintains that "media companies need to accept the notion of letting go." But will MTVN walk the walk? While adult content is a mainstay of Second Life, given the median age of VLB, that community is wisely pitched as PG-13. Feminists and fundamentalists alike who once railed at the sexual objectification of MTV's videos would find the space practically an abstinence-only PSA.
But in virtual worlds, brands are no longer under lock and key and will, to a greater extent, reflect what the audience wants. LogoWorld, for example, could become a leading force for the forthcoming floor fight on Capitol Hill for hearings on "Don't Ask, Don't' Tell." Or, it could more closely mirror the consumerist underpinnings of Virtual Laguna Beach and be all about booking passage for Rosie's R Family Vacation cruise lines, gay adoption, and financial advice. Toffler suggests virtual worlds "add a layer of protection that is not there in MySpace or Facebook."
Immersion Pays
While MTVN is soft-pedaling the revenue aspect of building virtual worlds around its media franchises, that doesn't mean that it hasn't modeled and quantified CPMs for this emerging medium. While it's always gratifying to have a ratings behemoth be it Ozzie or Flava Flav, costs-per-thousand for video advertising delivered to highly targeted engaged residents of virtual worlds can reach $75 and beyond. "It's about another level of engagement," Toffler believes. MTVN tags the value of residents who put down roots in-world at $150 CPM, according to an industry expert. If this algorithm achieves proof of concept, you can bet that more media brands will be quickly acquiring virtual real estate.
Early data on Virtual Laguna Beach shows users spend quadruple the amount of time they do on normal websites. Toffler believes virtual worlds will eventually extend to traditional media. "I hope there will be more content from virtual worlds that makes compelling TV," he says. MTVN is developing virtual experiments throughout the company and Toffler expects extensions of the company's brands to be developed across all platforms. "We want to leap into the next phase of 24/7 social networking with VOIP (voice over Internet protocol), Web 2.0, and virtual worlds."