Following PART ONE and TWO, this is the second in a series of posts on Transmedia written by FOV Ventures Entrepreneur-In-Residence Tiago Correia. Transmedia storytelling is a way of independently telling a single story across different types of media and platforms like film, TV, books, comics, games, or even IRL experiences.

Today, we are witnessing a remarkable era in the creative industries, deeply rooted in the historical context of media.

‘Transmedia’ underpins our vision of scalable, high-return content operations, leveraging tools like Scenario and M-XR to create engaging, enduring online worlds. This aligns with our vision for media's future: dynamic, accessible content that fosters community and connection.

The 3rd Age of Transmedia: 2010s-present 

 Through parts ONE and TWO we have seen how storytelling has remained the same despite the progressing mediums. But Transmedia, a way of independently telling a single story across different types of media, has been growing in its ability to scale throughout history.

So where are we now?

This social first present we are living in, we revisit enduring economic principles through the lens of the final five of our Transmedia 8 – the economic minds that created the frameworks within which these media could thrive.

Nobel laureate Paul Samuelson, in 1954, differentiated between private and public goods, concepts later refined by Richard Musgrave with the introduction of rivalry and excludability.

Private goods, like a diamond ring, are exclusive and rivalrous—one purchase means one less available. In contrast, public goods, akin to the air we breathe, are non-excludable and non-rivalrous, available to all without direct competition. 

Then, in 2004, Professor Steven Weber expanded on the concept of public goods by introducing 'anti-rival goods,' where increased consumption actually enhances value.

Language and Fandoms

A language exemplifies this; the more people speak Catalan, the greater its value to the community.

Something else that falls in that bucket? Entertainment properties. Why? Because of the social nature of fandoms.

If in the pre-internet days fandoms were harder to connect and still found a way to do so, through mail-in fan club magazines for example, with the advent of interconnected instant communication networks they did so much more. And they’ll derive more value from it.

“The network effect” was first denoted by Theodore Vail, the president of Bell Telephone in 1908, as he was observing more than 4000 different local and regional telephone exchanges in the US.

It wasn’t until 1980, however, that Robert Metcalf, the last of our Transmedia 8 and co-creator of Ethernet, popularised this observation into Metcalfe's Law.

 He articulated a formula that quantifies a network's value, affirming that the more people in a network, the more valuable it is to its users. This has been evidenced by extensive data from social platforms like Facebook and, despite some criticism, the law’s essence remains relevant: as a network grows, so does the value it provides, a concept that is inherently true for both communication and the content that flows through it.

Content is King

While there is a heated debate around the saying that ‘Content is King’, we would argue that there’s real value in the social connectivity found in fandoms, and that’s where we see true multiplier value in IP.

If you need more proof, just walk to any consumer fandom even like a Comicon.

The current era in which we are in, we can all agree was kicked off when Disney acquired Marvel in 2009. It’s been a never-ending parade of superhero movies as part of the extended Marvel Cinematic Universe that even led to the now coined term of ‘Marvel fatigue’.

But it’s not just Disney.

Everyone seems to be, all of a sudden (although we would argue it’s not so sudden at all), betting on how they can capitalise on their IP in multiple formats with more than just flash-in-the-pan adaptations.

Gaming, due to its interactive nature delivering higher session times and a level of repeat consumption, has taken centre stage.

Let’s look at some small case studies:

• Sony outlined Playstation’s corporate strategy in 2022 a key determinant was “expanding IP beyond gaming”. In 2019, they quietly created Playstation Productions, with a focus on adapting the company's video game franchises into films and TV shows. They started with the “Unchartered” movie, followed it up with the massive hit of “The Last Of Us”, are currently releasing their “Gran Turismo” film.

• Netflix’s 2021 game studio acquisitions (Night School, Boss Fight Entertainment, Next Games) signal its foray into mobile gaming, utilizing games to amplify fandom for their shows and potentially adapting successful games into new film/TV content.

• The Embracer Group, known for its expansive growth, faced shareholder skepticism even as it strategically acquired Middle-Earth Enterprises, holder of the "Lord of the Rings" and Tolkien IP, eyeing opportunities in TV and gaming.

• Skybound, perhaps the lesser known but more interesting case studies. The multi-platform entertainment company that houses projects ranging from television, film, digital content, comics, gaming, and live events and is responsible for hits like “The Walking Dead”, “Fear the Walking Dead” and “Outcast”. The company recently launched its own big screen title with Nicolas Cage’s vampire comedy “Renfield” and after launching its games publishing division five years ago, has already won a BAFTA award with “Before Your Eyes”.

Leave it to David Alpert, Skybound’s CEO to explain why they view themselves as an entertainment company first and foremost and not a comics, gaming, or film company.

"We grew up where switching costs between mediums was really difficult. If I was watching a TV show and wanted to play a video game, I had to go behind the TV, flip a whole UHF converter, switch over to channel 3 and boot up my console. Or if I wanted to go to a movie, I'd have to convince my parents to drive me. With my kids and the way consumers are now, everything lives on one device. Whether you want to play it, read, watch it, comment on it, share it, it's all in the same place.” 

Consumption and Distribution

Alpert’s quote perfectly encapsulates the shift in consumption felt in recent years. New platforms have become available for consumers to experiment with and they are naturally spending time on them.

This naturally entices, nay, demands creators, artists and content companies to become more holistic in their approach, blending verticals even further. If previously different types of content were consumed in different devices, through different interfaces. But now, music, film, gaming are all on the same devices. This ease of access means that from a consumer’s perspective these content types are more substitutional to each other than ever before.

In turn, this also has an effect on the distribution.

Entertainment companies now battle for consumer time against a wide array of leisure activities, not just direct category competitors. This is why platforms like Apple and Amazon are bundling various content types. As Netflix articulated to shareholders in 2019, "We compete with (and lose to) Fortnite more than HBO," highlighting the broad scope of competition. Content flexibility is increasing, with consumers valuing entertainment over specific formats.

To stay ahead, companies either need a blockbuster product like "Game of Thrones" or a presence across multiple types of media. They're leveraging their IPs across different formats, with discoverability being key.

Discoverability here works to the advantage of customer acquisition, which is why if you’re fan of the “Star Wars: Rebels” animated show for example, you are naturally more willing to try out the new Star Wars “Ashoka” live-action series. Or a new AAA-game based on similarly-successful IPs, which is what our portfolio company Iconic is doing. With a transmedia approach, IP owners are potentially lowering the average customer acquisition cost, independently to the cost of production. 

Production

This takes us to the final effect to observe, the one happening on production. The ‘picks and shovels’ play.

The well-known strategy popularised in the California Gold Rush in the mid 1800s, consists of investing in or operationalising the tools that a specific industry uses to produce a product.

This strategy is very well-known to VCs, who have been investing in the technological products that underpin a variety of industries. If we look at the content space, these have been a source of significant value for years.

Epic Games, famously sold the “Gears of Wars” franchise, despite its success, because it saw more value in the business of Unreal Engine. Adobe, famously profits off of the various creators using its suite, because it understood a similar point.

Like the distribution side, tools are becoming more standardised.

Interface design is increasingly seeking familiarity to enhance customer satisfaction, a trend that simplifies learning new tools by aligning with previous experiences. This cross-domain ease of use is exemplified by Unreal Engine, which has transcended its gaming roots to become a staple in modern filmmaking. 

This amalgamation of functions into one app has, in turn, further benefits which studios are already taking advantage of: want to create a game extension of a film? Great. Just use the same scenery assets you’ve used in Unreal to automatically have a game world.

Real change has come from AI advancements.

Technologies like style transfers and generative models now allow creators to rapidly prototype and produce assets. Move.ai's markerless motion capture and Anything World's 3D asset generation are prime examples, significantly cutting production time and costs in the visual creative domain. Similarly, conversational content generation leveraged by firms like Inworld is being transformed by language models and advanced NLP, streamlining the text-based creative process.

This is the basis for the tech-driven cost reduction happening in the creative space right now. But, while the ‘picks and shovels’ of AI become the ‘new gold rush’, there’s a particular aspect of it which is worth noting. From the, impossible to keep-up, whirlwind of advance, a large portion of it is academic in source, being published openly on Githubs for everyone to benefit or rather contribute to, in the true social fashion of our generation. We’ve already seen hundreds of companies popping up purporting to do a better LLM than OpenAi, or a better version of this and that, and this trend doesn’t look to stop this year. This is nothing but another dominant design battle, like many industries have seen before, but one which will rely on attracting users onto their ranks with significant pricing discounts, sometimes even at a loss-leading approach.

Companies will aggressively seek market share, potentially sacrificing margins for the promise of recurring revenue and banking on switching costs for customer retention. Yet, as creative tools become more user-friendly and similar, switching barriers lower. Coupled with rapid advancements in technology, creators may find it easier and more tempting to switch to superior tools, even from newer market entrants.

This competitive environment could benefit creators, inverting the ‘picks and shovels’ equation, leading to an abundance of affordable, high-quality tools, and possibly shifting the focus back to the value of content creation itself (the gold). 

The Future

Historically we’ve argued that, all throughout mankind, the creative industries had been a product of user-generated content, tried and tested through generations of collaborative filtration feedback loops, and finally given the scale it deserved with the benefits of tech-driven cost reductions.

We’ve seen how the concepts of economies of scale, scope, the anti-rivalrousness of goods and the network of effects of Metcalfe’s Law served as the economic basis for the incentives behind transmedia. And we’ve finally laid out that, underpinning this era of transmedia and the companies that will rise from it, are significant forces happening on the consumption, the distribution and the production parts of the entertainment value chain.

This is why it’s exciting to see what’s going to come out of this era, what worlds, IP and, naturally, companies are going to be conjured up out of these pipelines.

At FOV, we’re excited about these, the companies that will bring forth this promise of a more scalable content operation than ever, with returns closer to those of traditional tech investments (did anyone say ‘venture-backable’?).

Companies like Iconic and the comically-named Absurd Ventures, from Dan Houser of GTA fame, are already looking at IP with a fresh set of eyes, thinking of fandom first, and finding an audience base before launching their product. This product, is ever expanding, will live online and be accessible for years to come for fans to congregate and socialise around. To build it, they will be using companies like Scenario, M-XR, etc. as well as github codebases, to create a product pipeline which not only delivers on the cost reduction, but could itself be used for 3rd party services.

Whether it’s on UEFN game, via a Roblox verch item, or by social immersive experiences, this fits the vision that FOV has for the future of media.