PLAYING THE INTERACTIVE GAME : So Jeff, How Do You <i> Create </i> Content and Then Become King?

To: Jeffrey Katzenberg/DreamWorks

From: Mickey the Agent

RE: Content ain’t (the Lion) King

Jeffrey Katzenberg--you’ve just launched a venture with two of the most successful pop media moguls in America; gotten the two wealthiest software entrepreneurs in the world to invest in it, and appeared on the cover of Time magazine. What are you going to do now, go to Disney World?

Just kidding. . . . Got to hand it to you, Jeff. That $500 million from Paul Allen is one heckuva deal. Half-a-billion for 20% of a start-up is a big bone for even the most golden of retrievers. Bet it tastes real sweet. . . . And now, with this DreamWorks Interactive venture with Microsoft, the Buena Vista Mouse must be turning a pale green.

Now, Jeff, you know me. I wouldn’t dream of telling you how to run a studio or David how to cut an album or--God forbid!--Steven how to shoot a film. That would be crazy. You guys are tops. The best! You define everything that’s gutsy and entrepreneurial about Hollywood. I mean that. Sincerely.

But I gotta tell you, Jeff, I’m worried. Not about the old media but about the new stuff. Particularly with this Microsoft deal. I see all these DreamWorks quotes about the future of multimedia, CD-ROMs and “digital studios” and--it hurts me to say this--it sounds like you guys actually believe what’s in the newspapers. Well, we all know how dangerous that can be.

Now, nobody on earth has better pop media instincts than you three, so I’m sure you intuitively appreciate why the conventional multimedia wisdoms are so wrong. You know today’s software shtick is that “Content is King.” Everybody everywhere believes you’ve got to own what’s slapped on a CD or flows down those cables, fibers or satellites.

It’s better to own Beavis and Butt-head than the cable system that broadcasts them. That’s why Sony and Matsushita bought Columbia and MCA; that’s why the Baby Bells are frantically spawning joint-ventures like salmon with Creative Artists Agency and Disney, and, frankly, that’s why billionaire techno-nerds like Paul Allen and Bill Gates get star-struck by guys like you.

If Content is King, you guys are indisputably the Kings of Content.

The problem, though, Jeffrey, is that Content really isn’t King. It’s a great business, of course, but it’s not the biggest or the best media business. It’s certainly not the pop culture business of tomorrow. No one doubts that you guys will produce the next “Lion King” or “Jurassic Park” or Guns N’ Roses, but let’s be serious: you’re not going to make an extra billion or two by slapping the word “interactive” in front of them anymore than a studio is guaranteed a hit by turning a comic book character like--oh, let’s say, Dick Tracy--into a feature film. That’s not what the new media are about.

The new media are about a different kind of content; the kind of content I’m not sure you guys are really comfortable with. Consider a nice little $100-billion-plus multimedia business in the United States with nifty margins. That’s the telephone business. Every day there are hundreds of millions of telephone conversations. If you think about it, what are these people really doing? They’re creating their own content!

The telephone network is a medium that enables people to do that. Fax machines and answering machines add value to the network because they give people more options about how to create content. Same thing with talk radio and the TV talk shows: the people literally become the programming.

Look at the explosion of the Internet and on-line services. Does the value of these networks reside in their content? Of course not! People use these network media to create their own content on chatlines, bulletin boards and home pages. The real value is in the interaction, not just the information.

Photography is a $20-billion-plus industry in the United States alone: photographers create their own content. Don’t forget that camcorders and video cameras are still one of the fastest growing segments of the consumer electronics market. Personal computer software is now a $10-billion, fast-growing business: what do spreadsheets, word processors and databases do? They create digital structures that let people create their own content.

That’s why games are so interesting. They represent a hybrid of contents. A deck of cards is “content” but it is the rules of bridge or poker or gin rummy that transform that content into an interactive game. Video games have “content”--but it is content that creates more content, the content of the interaction. That’s why the PacMans, Super Marios and Streetfighters are so successful: they are content that let hormonally charged teen-agers create their own content of interaction.

No matter what Bill Gates tells you, Jeff, real interactivity isn’t about giving people more content to choose from, it’s about letting people create their own content.

The new media challenge, then, is how do you create content that creates content? That’s not just an issue of technical expertise, it represents an entirely different creative sense. Now, Jeff, I look at you and David and especially Steven, and I’ve gotta ask: Is that really your competitive edge? You three come from the tradition of telling stories--not creating conversations. The Microsofties have only a few decent games. Do they understand that the issue isn’t making interactive versions of your content? I hope so, Jeff, because I’d hate for all this newfangled multimedia to be a distraction for you guys as you try to make truly great movies--the kind of stuff you’re undeniably great at.

Gotta hop--See you at the Academy Awards. Hey, I’ve Got Howie Stringer on the other line. . . . Gee, he says his cable TV’s been cut off. . . .

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Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology. He writes this column independently for The Times. He can be reached at schrage@latimes.com by electronic mail via the Internet.

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