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Industry Report: Digital

ZaOza, the multimedia portal of Vivendi giant


- ZaOza: Vivendi new mobile brand. The approach of this new service is to respond to a new consumption model: direct-to-consumer distribution model.

Anne-Carole Nourisson leads the international Licensing strategy for Vivendi Mobile Entertainment, a new service platform for PCs and mobile devices called «zaOza».
Anne Carole’s professional background is international marketing and sales, both in FMCG and Entertainment companies, in the off, on-line and mobile world. She started her marketing career at Unilever, then joined Seagram for Tropicana European HQ division, then she was UK & Ireland marketing manager before moving into the Entertainment industry as marketing director of 20th Century Fox Home Entertainment France.

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What it is ZaOza?
ZaOza (Chinese for «word of mouth») is the brand name of the company called Vivendi Mobile Entertainment which is a new and independent company owned by Vivendi Group. ZaOza is a global brand name. In the digital world there was only one digital player and one brand, which was iTunes. We are built around a concept to provide top quality commitment. We propose to the end user a care hotline open 24 hours, 7 days.
The consumer pays its content. The business model is not advertising-driven.

Where do you think the business is today?
We have been testing new business models and new ways of consuming content. In the last two or three years, there were no real successful convergent models.
Vivendi Mobile Entertainment is trying to find alternative distribution models. The business we develop starts from the idea that the consumer wants to consume entertainment on mobile or PC devices. Whatever the brand, mobile operator or Internet provider, the consumer wants to be free. The approach we have responds to this new consumption model: direct-to- consumer distribution model. We are not married to any telecommunication company, so we can have the freedom to exploit our content in the best possible manner.

How do you implement your strategy?
We follow some fundamental paths. We are a new worldwide direct-to-consumer digital entertainment service. We can offer to the end user music, games, movies and T V properties.
The first element of our strategy is the fact that we are mobile-centric. To be able to access ZaOza you need a mobile phone and a number. The consumer can access our services either via a mobile or via a PC in an independent manner.
The second element is that we operate in a fully controlled environment. We know where the content is and how many times it has been watched. We work on a very strict technical environment.

Why did Vivendi decide to enter this market?
We realised an extensive market research early 2007 in several European countries and in the US. In all the countries there were strong similarities in the way consumers want to consume content.
The main result of the survey was that consumers want to share the content. We hope to snag customers not just with exclusive content but by openly encouraging users to share content with other subscribers.
For about €3/month, French users can download as many DRMed music tracks, video clips, movies and games as they want. The rotating catalogue includes exclusive, non-commercial content from Vivendi’s own Universal label, Sony BMG, E IDOS, Aardman Animations, and plenty others, with Warner Music Group soon to follow.

«Exclusive» is the name of the game here. Users won’t have access to any of the same content found in retail stores or other digital outlets like the iTunes S tore. Instead, ZaOza’s catalogue features content that can only be found on ZaOza. The selection of available content will also rotate, reportedly as quickly as every hour.
Once subscribers download a piece of content, though, they more or less own it. The main appeal of ZaOza is the fact that Vivendi encourages users to share content with up to five others, which is where the business model lies. Subscribers can share an item via any of their device’s supported services, and the recipient must subscribe to ZaOza in order to actually view and save the content.
The service is only available in France right now, with Germany coming in the second half of 2008, and other countries following later. ZaOza has been in beta testing with a private group of 100,000 «VIP members» since last November 2007.

What is the difference between your approach and the telecom companies?
The telecommunication companies are slowly opening up the so called «walled garden». Until now the telcos were closing the content environment. This strategy does not work any longer. Now the telcos are opening room for true B2C players like Vivendi, which are quality-driven.
Telecom operators are launching flat fee consumption packages. This new approach is opening big opportunities for content providers.
Digital entertainment consumption is very high, but the sales are still very limited. The industry is hit by piracy. Consumers do not have the feeling they are pirating content, they think that the content is accessible for free.
We are working on a convergent model, allowing the consumer to use his piece of content whenever he wants. The main element of our strategy is to give this freedom to the consumer.

Which is your target audience?
Our premiere target audience is 15 to 25 years old and the second one is 26 – 45 years old. This target audience has buying power and performing devices but no clue on how to download, buy and store content.

Which kind of content are you looking for?
The content for mobile and PC is very different from what we did for TV. We are an alternative distribution avenue. The shows are very short for mobile and PC usage (maximum two minutes). They can be existing concepts, exclusive new concepts or co-production programmes.

What do independent production companies get from Vivendi?
ZaOza is a super-viral discovery media for the producers’ properties. Thanks to sharing possibilities, the consumer is going to be the producer’s spokes person.
It is a very low risk testing platform. A 60-second pilot is enough to decide to choose a show. It is a highly reactive channel.

What is the business model and the remuneration that producers can get from ZaOza?
We work on dual model. When we place content on the store and the consumer buys the product, it is a revenue share model. When we place content on the flat fee service, we pre-buy the content from the right owner.
For a video which is sold E UR 3 in ZaOza, the telcos get between 40% to 55%. The remaining amount (EUR 1.25) is shared between ZaOza and the producer. The share can vary according to the value and quality of the content and its exclusivity.

Cartoon Master Murcia, Spain, April 2008

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