I once asked a happy couple I knew why they loved horror movies. "It's exciting to be scared," the wife explained. So I suggested three large henchmen would be arriving shortly with all sorts of farming implements in order to slice them both into small, but even pieces. They didn't seem to find that exciting at all.
Still, people seem so able to divorce their fantasies from their realities that one should not be agog that "Paranormal Activity," a movie whose sole purpose seems to be to part your nervous system from the solar system, is a success.
However, one might offer a little agogness to the socially networked marketing methods that helped it along its way.
You see, the makers of this movie, which CNN reports cost around $11,000 to produce, didn't bother making something you might describe as a conventional trailer. Instead, they made a little clip largely about how defibrillators were inadequate during test screenings in college towns.
The initial victims seem to have enjoyed leaping out of their vintage Levi's so much that they began to Twitter about the experience. And that gave the movie studio some online marketing ideas.
Originally, the movie fell into the lap of Dreamworks (part of Paramount Pictures) after its success at the 2008 Slamdance Festival (which is, I believe, an event where a lot of people get drunk and frighten each other with fire extinguishers).
After seeing the startling amount of word-of-mouth buzz the movie was getting, it seems that Paramount's first inclination was to pat writer/director Oren Peli on his head and bottom and reshoot it with, you know, famous and expensive people. However, Steven Spielberg suggested this might not be necessary since the movie was already resonating with early viewers. Hence, after a little editing and the addition of a new and, guess what, scarier ending, they organized some midnight college town screenings.
Once the college town tweeters began to champion its cause, Paramount launched ParanormalMovie.com, a cheery little site that encouraged thrill-seekers to threaten their local movie theater owners with phantasms, limb severance, and immolation if they did not agree to screen "Paranormal Activity".
OK, I might be slightly exaggerating about the limb severance and immolation. But, with the same kind of dexterity employed by British Prime Minster Tony Blair when, upon the death of Princess Diana, he described her as "the People's Princess," this lovely little film became the People's Movie.
ParanormalMovie.com claims that it received more than 1 million demands from moviegoers, which is why "Paranormal Activity" is, according to the site, "the first-ever movie release demanded by you." (This is obvious nonsense as I and several of my friends and former amorous consorts demanded another idiotic Nicolas Cage "searching for treasure" movie and it appeared almost before we had finished speaking.)
Still, CNN reported that the online buzz created such a haunting atmosphere that "Paranormal Activity" frightened $7.1 million out of the public's pockets last weekend, while only gracing some 200 theaters.
So a movie that enjoys innovations such as inviting you to tweet your scream appears set to swamp your screens with its happy happenings. The Paranormal folks are equal opportunity social networkers, of course. You can also express your screams on Facebook at Facebook.com/paranormalacitivity.
Paramount's Josh Greenstein offered CNN some fun marketing speak to describe the online groundswell that was, well, very cheap: "When people saw the movie, they loved it so much and there is such a slow build of terror that you have to sit through to experience the full effect of the movie, so we changed the marketing techniques in advertising and online to make it more experiential."
Should you choose to partake of this slow build of terror, please be warned of the effect it might have on you. As Facebook screamer Phil Osher declared: "had to crawl into bed with my friend."
If the potential of this behavior doesn't put you off, please let me know how it was. As I would rather remove my body hair with a chisel than watch this no doubt highly enjoyable movie.
In Barry Diller's paleontological view of the Internet, we're still just coming out of the primordial ooze and slouching toward the "click to buy" button.
The IAC/InterActiveCorp CEO and self-professed opportunist, rather impatiently told CBS News' Katie Couric earlier this week that the day is coming when people will regularly pay for content. As he has before, he trotted out the example of Apple, which has managed turn its iTunes store into a "multimillion-dollar business" based on the once-heretical notion of asking people to spend money on digital music and video.
"We're still so young at this," Diller said of where the world is on the Internet timeline. "We don't even have, really, a first real generation. We're just kinda getting one."
In due time, he said, content companies will be unburdened of "this mythology of 'the Internet is free,'" which was perpetrated by a seemingly prehistoric tribe that cared only about bandwidth and availability.
"The Internet, you have to remember, was started by tech people," Diller said.
For more from Couric's joint interview of Diller and Tina Brown, who is editor in chief of IAC's The Daily Beast, see "@KatieCouric: Tina Brown and Barry Diller."
The Internet offers everything from searching to shopping to social networking, but Net users still spend most of their time on plain old content sites, according to a survey from the Online Publishers Association.
In the latest installment from its monthly Internet Activity Index, the OPA reported that Internet users are now spending 42 percent of their time online using content sites, more than any other category. That figure represents a 24 percent jump from 2003 when Net users spent 34 percent of their time on content sites.
Content sites include those that offer news, information, and entertainment, such as NYTimes.com, ESPN.com, MapQuest.com, and Edmunds.com.
Analyzing five different categories--commerce, communications, community, content, and search--the OPA also found that people are gravitating to community sites, such as Facebook and LinkedIn, at the expense of communication sites or software that provide just e-mail or instant messaging.
"In 2008, we introduced the Community category based on the emergence and popularity of sites like Facebook, MySpace and LinkedIn," Pam Horan, president of the OPA, said in a statement. "These new sites have had significant impact on the Communications category, which saw a 41 percent decline, due to the fact consumers are using Community sites where they can conduct these same activities more efficiently."
Among the other categories, people spend 5 percent of their time on search sites, up slightly from 3 percent in 2003, and 13 percent of their time at commerce sites, down from 16 percent five years ago.
The OPA also tracked how much time per month, on average, that people spend in a particular category. Net users will stay almost 7 hours at a content site, around 3 hours at a community site, and just under an hour at a search site.
Launched in 2003, the Internet Activity Index is conducted and compiled by Nielsen Online and posted online each month at the OPA Web site.
PASADENA, Calif.--InterActiveCorp CEO Barry Diller says he ended up with a huge Internet conglomerate, but said that was never really his goal.
"I don't really believe in synergies," Diller said Friday, speaking at Fortune's Brainstorm: Tech conference here.
InterActiveCorp CEO Barry Diller (right) talks with Fortune's Andy Serwer at the Brainstorm: Tech conference.
(Credit: Ina Fried/CNET)In the past few years, IAC has already spun off Home Shopping Network, Expedia, LendingTree, and Ticketmaster. He'd eventually like to see the Ask.com search and Citysearch local businesses stand alone as well.
"They are in formation, he said. "They are not sufficiently landed. I'm hopeful that they will be."
Fortune managing editor Andy Serwer challenged Diller on whether he is really improving the entities under his domain. "Are you creating value or are you just a shark that needs to keep swimming?"
Diller quipped that it's probably somewhere in between, before explaining his rationale. "It's not really serial deal making," he said.
The Internet empire, he said, really started with Home Shopping Network, which Diller called the "most primitive form of interactivity."
From there, he said, curiosity forced him onto the Internet.
"We're not really deal junkies," he said. "We just followed the opportunity."
NEW YORK--Barry Diller doesn't want to predict the future.
"I'm not a great predictor of these things," the IAC/InterActiveCorp CEO said onstage at his Wednesday keynote for the Advertising 2.0 conference, when interviewer and BusinessWeek reporter Jon Fine asked him when he thought the depressing economic news would finally end. (His personal belief is that it won't get much worse.) "Not that, by the way, anybody's predictions are worth very much to anybody." And he was particularly wary of commenting on the macro economy. "Oh, you certainly don't want to hear from me on that," Diller said. "You've heard from every baboon in the world on the macro economy."
IAC's Barry Diller
Advertising 2.0 was co-hosted by IAC and held in the digital conglomerate's airy, glass-walled headquarters along the West Side Highway in Manhattan's Chelsea neighborhood. The building, designed by architect Frank Gehry, opened in 2007. Less than a year later, Diller announced plans to split the sprawling IAC into five separate publicly traded businesses. The slimmed-down company now focuses primarily on online media brands like Citysearch, Match.com, Evite, and Ask.
"What we thought was that agglomeration, putting disparate assets together was fine in the great building stage...where we started about 12 years ago," Diller said. "We built up a fairly large number of disparate businesses. All of them had some form of interactivity, but they were all from selling mortgages to dating...It wasn't giving investors or commentators or anyone else a clear picture of what the company was."
Then there was a battle for board control with shareholder John Malone of Liberty Media. The two now have a "good relationship," Diller said.
While much of the "new IAC" relies on advertising revenue, Diller declared at the conference that strictly relying on advertising as a business model is not sustainable. "I absolutely believe that the Internet is passing from its free phase into a paid system," he predicted (though, keep in mind, Diller did say he doesn't like to predict). "Inevitably, I promise you, it will be paid. Not every single thing, but everything of any value. Again, take commodity away from it."
The wealth of free content on the Internet was a matter of short-sightedness, Diller explained. In his opinion, it came out of the fear of piracy.
"People were so frightened of not being dinosaurs, and baring their heads, and not having what happened to the music industry happen to them, they just slapped everything up on the Internet for free," he said. "That's an accidental historical moment that will absolutely be corrected."
Diller doesn't believe that the poor economy will make it more difficult to get people to pay for things online. One of his subscription-based businesses, dating site Match.com, is doing very well right now: "It would not shock any of you that I think that of the things that, actually, people will do when enduring a storm, financial disaster, or otherwise, is want to hook up in one way or another with other people," Diller said.
Why is he such a believer in the triumph of paid content? Look at the iPhone, Diller told the audience, and the wild success of its App Store.
"The iPhone is a great example of what's going to happen," he pointed out. ""One of the greatest barriers to buying things is the steps that it takes, and we all know the difference when you go to Amazon and you just push your little thing and it's bought, paid for, delivered, billed, et cetera., instantly, and how much that has enabled or how much that has made the difference between just browsing and buying...that little thing, that in fact you scroll it, you do it, it comes, everything else is taken care of, is the answer to what's going to happen on the Internet when, in fact, we get the applicability of that broadly."
He acknowledged that media outlets' readership rates may drop, but that their profits will stabilize once again.
Another thing that Diller was willing to predict? His own demise. Sort of. Interestingly enough, he said he's of the belief that a modern media company is unlikely to outlast its original founder successfully.
"News Corp. makes sense because News Corp. is the absolute extension, to the fingertips, of one person," he said, referring of course to Rupert Murdoch. "I think (in) every case other than that, is that once that original founder has gone, for whatever reason, then the truth is it should all be taken apart because they make no sense. You can't replace with a suit somebody who's built the thing up and understands all of its bits and pieces in the rhythm of their heartbeat."
Interviewer Jon Fine wanted to know if that would be IAC's fate, too.
"I think that's true," Diller said.
Ask.com said on Tuesday that its chief executive, Jim Safka, is leaving the company after 18 months in the job.
"Jim has decided to move on from Ask.com, following the recent passing of his brother which has led him to re-evaluate his personal and professional priorities. We wish him the very best and thank him for his efforts at Ask.com," Ask spokeswoman Mary Osako said in a statement. "Ask will be led by Scott Garell, who has been promoted to President of Ask Networks, who has already been principally involved every day with the global business over the past 18 months as President of Ask.com."
In addition to Ask.com, the broader Ask Networks also covers the site's partner network and sponsored listings program as well as Dictionary.com.
Safka, a former Match.com CEO, took over as head of Ask in January 2008, after then-CEO Jim Lanzone departed as part of a shake-up at parent company InterActiveCorp.
"Jim has demonstrated tremendous leadership during his tenure at IAC, first at Match.com and most recently at Ask.com, where he helped the Ask Network become the 6th largest in the U.S. and created the foundation for a new growth strategy that is showing early positive traction," InterActiveCorp CEO Barry Diller said in an e-mail to the company's staff.
Safka's departure comes as Ask continues to badly trail its larger rivals in the search market. As of March, Ask had 2.1 percent of the U.S. search market, as compared to 10 percent for Microsoft, 15 percent for Yahoo and 64 percent for Google, according to Nielsen Online.
Garell, like Safka, joined Ask in January 2008. Before that, he served as CEO of IAC Consumer Applications & Portals. Before that he served as executive vice president of domestic sites and search for IAC. Prior to that, he worked at Computer Associates, Citysearch and Clorox.
Safka's departure was reported earlier on Tuesday by The Wall Street Journal.
Update at 8:12 a.m. PST: Analyst comments and stock price added.
InterActiveCorp turned a profit in the fourth quarter but took a 7 percent revenue hit, amid a sharp downturn in its advertising and media business, the company said Tuesday.
Barry Diller's media conglomerate reported revenue of $351 million in the quarter, down from $378.9 million in the same quarter a year earlier. That performance missed Wall Street expectations of $368 million, analyst Imran Khan of J.P. Morgan said in a note.
The company, however, posted a profit of $227.4 million, or $1.57 a share, in the quarter, compared with a net loss of $369.9 million, or $2.53 a share, during the same period a year ago.
But when excluding the sale of one of its investments and the write-down of other investments, IAC posted a profit of 18 cents a share. Analysts were expected a profit of 20 cents a share on that basis, Khan said.
IAC was up less than 1 percent to $14.94 a share in morning trading.
During the quarter, the company's media and advertising businesses, such as Ask.com, Fun Web Products, Dictionary.com, and Citysearch, posted revenue of $183.7 million, a 19 percent decline compared with the year-ago quarter.
Khan's note also commented on IAC's weakness in media and advertising:
Revenue reflects a significant decline in network revenue, which we believe is due to increased competition from Google with this business line. We think other companies with similar exposure could also show weakness. Query declines at Ask.com reflect significantly lower marketing spend in the period. Revenue per query also declined due to fewer clicks per visit.
IAC attributed a portion of that decline to scaling back on some of its partnerships after it renewed its partnership with Google.
IAC's Match.com revenue fell a modest 3 percent to $88.1 million over the same period a year earlier. Despite the revenue decline, worldwide subscriber growth increased by 5 percent in the quarter, reaching its highest level of paid membership.
The company did post double-digit revenue growth in its ServiceMagic.com business and emerging businesses, such as Shoebuy.com, Pronto.com, Gifts.com, and InstantAction.com.
Functional MRI brain scans show how searching the Internet dramatically engages brain neural networks (in red). The image on the left displays brain activity while reading a book; the image on the right displays activity while engaging in an Internet search.
(Credit: UCLA Newsroom)The University of California at Los Angeles this week gave us the perfect antidote to Nick Carr's musings in The Atlantic about how the Internet is turning us into multitasking scatterbrains with diminishing attention spans.
A group of scientists found that searching the Internet doesn't make computer-savvy, middle-aged and older adults stupid. It actually triggers key centers in the brain that control decision making and complex reasoning. In other words, we might not have to resort to word puzzles and pinochle to fend off senility.
The study, reportedly the first of its kind to assess the impact of Internet searching on brain performance, will be published in an upcoming issue of the American Journal of Geriatric Psychiatry.
"The study results are encouraging, that emerging computerized technologies may have physiological effects and potential benefits for middle-aged and older adults," said principal investigator Dr. Gary Small, a professor at UCLA's Semel Institute for Neuroscience and Human Behavior. "Internet searching engages complicated brain activity, which may help exercise and improve brain function."
Researchers tested out 24 volunteers between the ages of 55 and 76. Half were experienced Web searchers, the other half had no experience. The participants performed Web searches and book-reading tasks while undergoing MRI scans.
All participants showed significant brain activity during the book-reading tasks. But there was a major difference between the groups when doing the Internet searches, according to a UCLA press release. "While all the participants demonstrated the same brain activity that was seen during the book-reading task, the Web-savvy group also registered activity in the frontal, temporal, and cingulate areas of the brain, which control decision making and complex reasoning."
So while we, the digerati, may end up easily distracted, fat due to physical inactivity, and in chronic pain due to gadget-related repetitive stress injuries, at least we'll be more likely to keep our wits about us.
A bleary-eyed Greg Sandoval, the News.com reporter who spent a night on the street for a chance at the iPhone 3G, interviews blogger Robert Scoble.
(Credit: James Martin/CNET Networks)SAN FRANCISCO--The first bad omen for our experience with Apple's iPhone 3G came late Thursday night, when some of us waiting outside the Apple store here may have insulted a priest.
Sitting on the sidewalk in front of the store, a group of us, giddy with excitement about Apple's new handset, noticed a priest walk by. "Hi, Father," I quipped. "Tomorrow, will you bless our iPhones?"
The priest wasn't amused. Things really took a turn for the worse when someone tried to explain to him why the iPhone was worth the money and a night on the streets.
"You have to understand," the man said, straight-faced. "It's the Jesus phone." Of course, he was referring to one of the iPhone's popular nicknames used by fans to describe what they consider awesome power. It dawned on me that I must be the only one in the group who went to Sunday School. I quickly explained that the man didn't mean any disrespect.
Now, I can't help wondering whether there was anything divine involved with Apple's system troubles on Friday morning, which resulted in delayed transactions and spotty phone activations, as well as some disappointed customers. Isn't Apple's customer service typically a slice of heaven?
During last year's launch of the original iPhone, customers were moved in and out of the store rapidly. In San Francisco on Friday, however, the experience was anything but speedy.
After spending about 11 hours in line (I entered at 9:30 p.m. PDT on Thursday), I was one of the lucky first let into the store at 8 a.m. Friday. I didn't leave until 57 minutes later. Out of the first 40 or so people who entered the store, I was the first person to walk out with an iPhone 3G. (Apple employees failed to activate it.)
I felt sorry for the poor souls at the tail end of the line. Their day promised to be a long one.
The first sign of trouble came after entering the store when Joe Wilson, an Oracle software engineer and the guy who stood in line ahead of me all night, turned to me red-faced and said, "The journalists are taking cuts."
Apple let a dozen or so cameramen and photographers into the store to record customers coming in. Some of them decided to hop in line instead of shoot their pictures and video. Not in front of us. Wilson told them very quietly but sternly to move back. To their credit, they did.
Then, one by one, each of the customers was instructed to follow an Apple employee to a workstation. That's when the iPhone experience began to look as disorganized and mediocre as that of any other phone retailer.
First, I was given the pitch for MobileMe, Apple's package of Internet services and software. This was followed by an explanation of the benefits of a two-year warranty. That was followed with a short discussion about accessories. Then came the big blow: the male employee helping me looked up from his handheld computer and quietly said, "I'm sorry, we're down."
I'm told that the iPhone 3G itself will make up for the morning aggravation. Truth be told, I had a blast hanging out with the so-called Apple fanboys and gadget freaks. Sharing food and exchanging news about the iPhone and the new applications, trading insults with people who thought we were goofy for waiting in the cold for "a toy." All of it was worth the trouble.
As it turns out, the best thing about Apple is its customers.
I shot this video just after being allowed to enter the store and minutes after I was told Apple's system went down. You can see the guy helping me is trying to reboot and other employees are prevented from helping customers.
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