Deluxe Announces New Division, Deluxe Events. Here’s What That Offers The Entertainment Industry And Beyond
“I think that the pandemic galvanized the moment to move into this space,” explained Anna Lee, Global Chief Strategy Officer at Deluxe, as we discussed the announcement that Deluxe has formed a new division.
The new arm is simply called Deluxe Events. The announcement will allow the company, which already provides digital and cloud-based solutions to the world’s leading content production studios and distributors, to offer content mastering, localization, and distribution for Physical, Virtual, and Hybrid experiences.
“I think that it was definitely a melding of necessity and also things heading in that direction based on the demands and the technological advances in this area,” added Lee, who previously spent 12 years at Netflix VP Supply Chain Development and Content Acquisition.
But what does this all mean? I asked the CSO to spell out what this offers both clients and consumers, why the needs of giants like Disney and Apple allowed Deluxe to put the plan into practice, and why they are ready for competitors who want to steal Deluxe’s thunder.
Simon Thompson: For the uninitiated, what are the benefits of this new arm and this move into the events space?
Anna Lee: Deluxe has a tradition of being very heavily involved in the physical event space. Whether it be theatrical distribution or servicing films for festivals, we have always had a really strong footprint in that area, given the legacy of what Deluxe does as a company. Like everyone else, in early 2020, when physical events came to a screeching halt, the industry was faced with the challenge of not being able to stage any live events. That ranged from awards season, what we call For Your Consideration events, product launches at Apple technology to advertising upfronts, so it was really about asking how we pivot very quickly into the digital space. Fortunately, Showcase, Deluxe’s secure, cloud-based content hub, had already existed for many years as a standalone OTT platform. Having the capability to stream in 4K video and 5.1 audio on this very robust, very secure platform gave us the foundation to be able to incorporate live video streams taking what would have or should have, been a physical event into a virtual event. The question we asked was, ‘How do you give it an experiential feeling so that people who are viewing it don’t feel like it’s another zoom meeting?’ What we wanted to do was make them feel like, for example, with a premiere, it’s as close as they were going to be able to get to being immersed and being there.
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Thompson: How much of a part has the pandemic played in this? Was this going to be a natural evolution anyway, but that sped things up?
Lee: I think that the pandemic galvanized the moment to move into this space. I believe that streaming was the primary perpetrator of moving into internet viewing and internet streaming of any content, whether on Netflix or wherever, and being able to stream content or stream live events directly off the same type of user interface. I think that it was definitely a melding of necessity and things heading in that direction based on the demands and technological advances in this area.
Thompson: How open has the industry been to this? It talks a big game when it comes to evolution, but often many major players want someone else to be the creative and commercial guinea pig, especially when it comes to ROI.
Lee: The industry has been incredibly receptive to the whole virtualization of physical events. Not only that, even now, as the theatrical spaces are starting to open and live events are beginning to happen, the Showcase digital part of it remains integral because there’s no way to get a global audience without it. They’ve seen that not everyone lives in New York or LA, so if you want to have people tuning in from Japan, Singapore, and Madrid, Showcase will add that element of being able to engage audiences from all across the world. In addition to that, Deluxe offers localization as well, which is one of our other core pillars of expertise. When it comes to localizing experience in different languages, we can subtitle events in Japanese, Castilian Spanish, Mandarin Chinese, or whatever language you need.
Thompson: With Deluxe’s three pillars of localization, distribution, and content creation, do the importance and value shift depending on the market, the climate, and project?
Lee: It constantly shifts with the project and with the needs and the changes of the industry. In 2020, when Disney first moved Mulan, that was the title that started at all. Disney decided, ‘You know what? We have Disney+ and theatrical, so how do we blend and coexist without cannibalizing each other? Let’s launch what we call day and date, Mulan is going straight to Disney+, and it’s also going straight to theaters to be able to engage in both sides of the equation.’ In a situation like that, Deluxe, on our cinema side of it, handled the digital cinema package, mastering, asset development, distribution, everything that we can do with our eyes closed, quite frankly, in the digital cinema space. The question was, ‘Can you serve, simultaneously, content that’s going to hit the service as well? Can you service Interoperable Master Format (IMF) creation, which is a completely different format for a platform space? Can you serve us closed captioning? Can you serve us many other languages which may not have been necessary for theatrical?’ So, it’s title-driven; it’s a very fluid process where we don’t know what we’re in for until we get the project coming in. The good thing is that we’re so cross-functional across those three pillars that we’re able to shift and move from one to the other or do it simultaneously.
Thompson: Has there been an element of Deluxe feeling its way around as this evolution and application shifted and the urgency and demand increased?
Lee: In the beginning, in the early days of 2020, we didn’t even know what we didn’t know at that point. We didn’t even know what the problems were until we tested it. It was like Jonas Salk trying the polio vaccine on himself. We did a tremendous amount of internal testing, and then it had to come down to the first live event, which happened to be an Apple event. Cupertino called when they were going to do a live press event to launch the new Mac Pro. They couldn’t get the press to the Steve Jobs Building because of the lockdown, so we were able to quickly pivot from our standalone OTT into being able to do a live stream from the theater. That was our first one that started it all.
Thompson: How do you quantify the ROI for this?
Lee: For us, it’s supplementary. We don’t want to negate the fact that cinema is still very core to who we are, and it’s core to our theatrical distributors and our content creators and studios. Showcase is supplementary to that. We will take that content and disseminate that, whether it be digital or whether you want traditional or a hybrid. It does have its own revenue stream at this point because of the sheer demand that virtual events have experienced over the past several months.
Thompson: With theatrical continuing to be the significant sandpit for this, where do you see the other potential major growth areas? Also, what sort of timeline is Deluxe looking at when it comes to an acceptable return? Would three to five years be acceptable?
Lee: Quite frankly, I think it is less than that. Even in this first year, I believe that Showcase, as an entity, really stood on its own as far as being a revenue stream. We had the built-in capability of having the platform already there, so it was a matter of tech and development work to invest in those added features and bells and whistles that would entice our end customers. Digital cinema really stands on its own, and Showcase is a part of our platform and fulfillment business, all in the cloud.
Thompson: Audiences and consumers buying products or tickets to movies are key indicators of this impact. Are you watching the ebb and flow of people going back to movie theaters and then factoring that into the flexibility of the business plan and expectation management?
Lee: At Deluxe, we pay very close attention to the weekend box office. We also pay attention to the release schedules because, in large part, our business relies on that. The physical component, the theatrical experience, our district distribution model, is depending on that. What Showcase does is enhance the visibility of that title via premieres, press screenings, or events. Hopefully, we can navigate that entire workstream and supply chain, whether it goes direct to Netflix, goes to a theater, or goes day and date. The biggest challenges right now are finding ways to innovate on Showcase and finding ways to broaden our reach to consumers and end-users outside of the traditional entertainment space. We’ve now amassed an excellent portfolio of different use case scenarios for Showcase ranging from advertising upfronts to premieres to product launches, music events, but what about town halls? What about the medical space? What about the educational space? How do we find ways to proliferate this into other industries that also have that need?
Thompson: Are you looking at applying this to projects in a development state, where it’s a multi-year process, or are you able to apply this effectively at the late stage of production or even just before release?
Lee: We’re incredibly nimble. We’ve been given assignments ten days before launch because something has just dropped onto the slate last minute. We have also had cases where something has gone wrong with an internal infrastructure, or I hate to say it, but with a competitor, where Deluxe has had to come in and use Showcase. So we have the ability to be able to take the platform, repurpose it or reskin it or have the power to put a creative implementation and move very quickly on it. We don’t prefer it that way, but it has happened.
Thompson: With this already bearing fruit, how concerned is Deluxe about competitors jumping on the bandwagon and trying to steal your thunder?
Lee: Competition is out there; you’re absolutely right. In the beginning, we were the first out of the gate, we felt that we were the best, and competition was much more of a rearview mirror type of thing. There are competitors out in the marketplace and competitors with varying price ranges, but our complete package offering and fully managed service are second to none. The localization, the added benefit of having Deluxe as a content creator and distributor in the background, is our unique selling proposition. I believe that is our strongest suit.
Thompson: Your background includes over a decade at Netflix. How instrumental do you think your experience there has been in not only understanding the market and what consumers want but developing this next level product most effectively?
Lee: My experience at Netflix has been invaluable. It’s allowed me to be fluent in two languages, one as a consumer and the other as a vendor. Having come from Netflix, I ran the screening business, so I was an end-user of the Deluxe Showcase. For four years, we used Showcase for our For Your Consideration platform, so I knew what worked and what didn’t work. Coming over to Deluxe, sometimes when I’m in Netflix meetings, I hear and see and learn how to add value because I come from that world. I know what is going to work and what is not going to work, how we can drive the needle forward, and how we can collaborate in a better way, in a smarter way, that I don’t think that competitors have at this point. Having that added benefit, it’s like having a natural fluency in another language. It is all about working holistically. You need to navigate up and downstream, know what the customer is looking for, and be several steps ahead of it. We sometimes do things on our side before they even have to ask us what to do. Having that added benefit of knowing both sides makes that a lot more doable.