Heard the unfortunate news that Screenlife, LLC, developer of the popular Scene It? entertainment trivia games was shut down today. Apparently Paramount Pictures, the owner of the long time Seattle game developer decided they were unwilling to invest in the business any longer.
I worked at Screenlife from May 2010 until September 2011 and Senior Vice President of Digital Strategy. I was responsible for the company's digital games including Facebook, mobile and console games as well as product development for digital and DVD games. It was a great company with some really passionate people, and a shame to see it go away.
I left in September 2011 (for an amazing opportunity at Korrio) but honestly the writing had been on the wall for a while. Screenlife was built around its signature Scene It? line of DVD board games. If you haven't played them, imagine a trivia board game where some of the clues, questions and game play comes from video clips played from a DVD that was included in box. Screenlife made many editions and variations of this game using movies from Harry Potter to Twilight to TV shows like Star Trek and the Simpsons. It was success with DVD board games the encouraged Paramount Digital to buy the company in 2008 with the hope of expanding the brand into digital games.
However Screenlife was the victim of the same radical changes that all the media companies are facing. Consumers aren't buying as many DVDs and instead relying on digital downloads. Consumers aren't playing board games but instead getting their gaming on mobile phones and tablets, and instead of playing together in a living room they are playing together on Facebook. Movies don't cost $39 on DVD, they cost a few dollars a month to stream on Netflix.
Screenlife, like its studio parent and partners, was too addicted to the "top line" revenue of selling games through big box retailers to give it up in favor of digital products. Even though DVD game sales were continually falling it still looks good to sell a million $20 units through WalMart, Best Buy, Amazon and Toys R Us, but not so good when the thin margins don't help the "bottom line". And when a game doesn't sell those same retailers aren't going to help you deal with all that excess inventory.
In the end it cost too much to make the games, with expenses that included large content licensing fees to the studios and an organization splitting its efforts between physical and digital distribution.
There's a lot to be learned from Screenlife. Did Paramount make a bad acquisition? No. I don't think so. Mistakes were made, I made many of them. But mistakes at a company like Screenlife can become great entrepreneurial lessons for others so I'll leave my post-mortem of the things I know I could have done better in the hopes it helps the next company avoid Screenlife's fate.
- Being an "intra-preneur" is really hard. Building a new organization inside a company like Paramount is so hard it's almost impossible. There's a reason companies like Hulu or VEVO are spun out of big media conglomerates -- the internal politics, budget pressures and general level of organizational inertia is so great as to strangle new ways of doing business. Building a "startup culture" inside a big media company is more than just trying to change process it requires new people and new ways of working. Cultures don't change easily, and when you're inside a big company the incentives are aligned to avoid change not to embrace it.
- Burning the boats is the only way. From my early days at Screenlife I argued passionately that we should divest the DVD business and focus solely on digital distribution. That would have meant cutting the company from about 60 people down to 30 or fewer. We would have made less revenue (top line) selling iPhone games at $1.99 than DVD box games at $19.99 but would have lower expenses, no inventory risk and faster time to market. The executive team, all of them with a long history retail games had no stomach for a strategy that would have cost them their jobs but left Screenlife leaner and stronger. Sometimes the only way forward is to "burn the boats" so that there's no going back. Leave the organization no way to turn back to "the way we've always done it" and instill a real sense of urgency to come up with new creative ways to make a business work. That pressure is there every day in a startup and is never there in a division of a large media company.
- Executives need to be users. One of the first things I did at Screenlife was order new iPads for all the company executives. We were working on our first iPad game (Scene It? Comedy Movies) after the company had launched two iPhone games in 2009. I thought it would be important for all the executives, many of whom were typical Blackberry users and not active digital consumers, to see first hand what it meant to play our games on a tablet or to buy other games from the Apple App Store. Well you can lead a horse to water... but you can't make him (or her) use an iPad. That's not to say they were all bad folks but they were busy doing their day jobs, much of which involved dealing with Paramount or trying to address problems in the DVD business. They didn't have the time, or the incentive, to really invest in learning what was going on in the digital space. The lesson is that company executives need to have their heads in the same space that the company wants to succeed in. For Screenlife that needed to be digital, but just providing tools doesn't really engage anyone.
- Lead by example. As a company Screenlife has more than one executive that didn't live in Seattle, but would fly in to stay in a hotel 3 or 4 days a week before heading home on the weekends. You can't run a company that way. Either you're all the way in, every day, all day or you're not. Even if you believe you're fully committed not being in the office and "on the job" where people can see you, talk to you and you can hear from them what's really happening is a huge disadvantage. I've tried to be a 4 day a week interim executive and CEO before (not a Screenlife, I moved up from LA in May 2010). It never worked for me and I think it was a disadvantage to Screenlife.
- Cut your losses and move on. When I took over as head of digital I inherited a Facebook game that really wasn't getting any traction. What MAUs existed were driven by ongoing PPC social ad campaigns that were driving new users but no one was coming back. Because the company has invested a lot of time and money in the platform, originally developed with a third party, I determined it would be better internally if we didn't just shut the Facebook game down but instead tried to refactor and relaunch it. I was very very wrong. Sunk costs are just that. They are gone. It wasn't at all relevant how much Screenlife had spent on the game to date, it was all about whether or not we could create a game that was going to capture an ongoing user base. We should have cut our losses, moved the team onto new projects and left the existing game to fade away.
- As a games studio, learn to hit singles before you swing for a home run. Because of the pressure of the fading DVD business, there was always the "savior factor" of digital. Everything we did was going to have to be a home run, but when you're starting a new business it doesn't work that way. Every VC will tell you that most business plans need to change and adapt as you go. You want a home run but you may have to start with smaller wins to build up to the right product or game that really catches the imagination of the market. My mistake in the digital business was focusing too much on making the next product on the slate the "next big thing" every time. We released too slowly, and spent too much on each game. We should have been making smaller, cheaper games sooner, failing quickly and learning from our mistakes. Those are hard things to do when there's pressure for revenue success to cover a 60 person business burn rate.
- Sometimes the best brand is none at all. Screenlife had a great brand, "Scene It?". I would often introduce myself, or explaining what I did to friends and family back home, say "Screenlife, you know the people who make Scene It?" What was great was that "Scene It?" would almost always be followed by "I LOVE SCENE IT?" It's great to start with a brand like that to build on. However when your brand defines not only what you stand for, but what your product is and how it works, that's a hard barrier to overcome. Being a "Scene It?" game meant lots of video (expensive), lots of audio (expensive), lots of images (expensive) and multiplayer game play. However doing that on a mobile device meant a huge download instead of relying on streaming and game play that was similar but not close enough to the original Scene It? living room and TV experience. My mistake was not abandoning the brand altogether. We tried, poorly, to drive synergies between the digital and DVD brands, and with the DVD business spending millions on marketing it sounded like a good idea. However the experiences, and the content licenses, were never close enough to really make the connections work and the buyers of the DVD games (often as gifts for others) weren't turning around to play a similar edition on their iPhone or iPad. Breaking with the Scene It? brand sooner would have meant different gameplay (risky), but less media (cheaper) and faster time to market (better). We could have used the brand halo with "from the makers of Scene It?" because nobody knew who Screenlife was anyway.
- Do one thing at a time, succeed and then move on. When I left Screenlife we were had finished the Facebook game relaunch and were planning new games, we'd launched a new multi platform game called Scene It? Daily that was one of the first to have the same multiplayer game experience across Facebook, iOS, Android and the web, we were working on updates to our mobile games including a new Horror Movies iOS game and the first new console releases for XBox Live and Playstation Network since 2009. It was too much. We were trying to boil the ocean because no one thing had been successful enough for us to focus on it. We kept swinging for home runs in every market and with every product. We should have pulled back to just do one thing. Looking back I think we should have focused purely on mobile and abandoned Facebook and avoiding the console market completely. It would have been a much smaller team doing the work, but by focusing just on one market, even if we'd had multiple games and game concepts in the App Store, we could have aligned all our efforts and attention on the space that would have given the best chance for success. Once we'd established that success we would have had the opportunity to move on to bigger things. Doing everything but succeeding at nothing is why Paramount finally pulled the plug today.
Final ThoughtsI'm really sorry for this to have happened to the great team at Screenlife. They were great to work with, and I'm lucky to have led them. I know a lot of lucky Seattle companies will find great new employees in my former colleagues. Hopefully some of them will see this as a chance to start the new venture, or follow the dream they have been putting off for too long. I wish all of them the very best.