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Rovio Hits Hollywood With a Knock-Out Boulder

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When Angry Birds came out of nowhere, many people thought it was a fluke. The Finnish startup that had gone through a series of name changes and launched dozens of games that failed to take off. Finally, they had a game that people were playing. Given their track record, the odds of Rovio doing it again were slim. But maybe there's something in the cold, unpolluted air of Finland that enabled Rovio's leadership to figure out the subtle truth of the entertainment industry: You don't have to do a hundred things well -- you just have to do one thing so brilliantly that it sustains through a hundred iterations.

Within five years, Rovio had turned their Angry Little Birds into a business empire with valuation estimates ranging between $8-9 billion and speculation that there will be an IPO sometime later this year. Angry Birds were licensed to products and became commercial "spokespersons" for a number of brands. Their YouTube channel has accumulated more than 500,000 subscribers with more than a billion views. The next logical step would be a cartoon series -- which is exactly what Rovio just announced that they have decided to pursue. But the innovative twist they've maneuvered may prove to be the most significant game changer in the history of cartoon programming.

The Angry Birds game app (in both free and paid versions) has been downloaded 1.7 billion times. Instead of using the old school model of distributing their cartoon series through a television or cable network, Rovio has invented a new distribution silo. Beginning on March 17 -- which may be symbolic of the 1.7 billion users or a sly association to St. Patrick who specialized in banishing snakes -- Angry Birds Toons will be viewable through the Angry Birds app. This business model will enable Rovio to retain all advertising proceeds. Given a willing market of that size, there was no reason to go through a secondary delivery system.

The same business model was recently tried -- with great success -- by comedian Louis C.K. In 2010, C.K. released an independently produced concert special through his personal website. Priced at $5, the digital download earned him at least $1 million in the first year. He plans to use this business model for subsequent projects. And why wouldn't he?

While television networks make every effort to cling to the antiquated models that ensured success in recent decades, independents are moving into the digital world with great gusto. The ingredients for success include:

1. A content creator with a large email list that is based on opt-in affinity.

2. A target demographic that has demonstrated an appetite for this creator's content.

3. Technology that enables a direct connection between the two.

But here's the secret sauce that's easy to miss: All of this is contingent upon building a relationship between the content/talent and the audience. Given the one-on-one connectivity element that is required in relationships, this is one of the biggest hurdles that have to be faced by the networks. Relationships between content/talent and their audience are emotional. Yet, networks continue to consider the content/talent as one of their properties that exist only for the purpose of corporate monetization. In recent decades, networks have been able to control the talent. Now, thanks to Rovio and Louis C.K., all bets are off.

While the networks focus on spreading the message of their corporate brand identity, content has become the only brand that matters. If the networks are unwilling to accept this, they will be smashed by a boulder of audience rebellion. And as they lie in the rubble of their corporate bottom line, they'll seem as clueless as the pigs who never thought those Angry Little Birds from Finland could break through their secure edifice.