I'm on my soapbox again about the changing landscape for entertainment marketing and sales. I want to do a quick follow-up to my last article about the challenges that face Habbo Hotel, the popular virtual world for teens, when trying to cut a deal with the record labels to feature and sell their music. Today, the popular German teen rock sensation, Tokio Hotel, did an appearance in Habbo's Canadian Hotel and they are not alone. So far over 300 celebrity guests have visited Habbo to chat with fans and promote their projects. Clearly the artists as well as the record labels see the promotional value of following the fans to their online hang-outs. Habbo was subsequently the first virtual world to sign a deal with William Morris Agency. So why not set up a system to easily monetize music in this new media channel?

In a recent chat with Teemu Huuhtanen, President of Habbo in North America, he seemed much more positive that they will have deals in place with the record labels soon. Hey, if I was a record label and I read the news that the number one retailer of music no longer sell physical products (yes, iTunes have now surpassed Walmart in music sales), I would jump at the opportunity to work with a company that has a formula for selling virtual furniture in virtual hotel rooms for real dollars.

Understanding how the Millennial audience think and try to monetize that is not easy. Trust me, I know, I’ve spearheaded the Project Millennials research efforts. The good news is that they are not all pirates. Far from it.

I chatted about this with David Wolf, a senior executive with Accenture’s Media and Entertainment practice yesterday. He has overseen a major research project on digital media (including TV which is the reason he was at NAB).

Wolf confirmed what has been the result of many similar studies – kids get the concept that quality content is not free. They understand that they have to pay for music on iTunes or sit through a commercial on Hulu - and surprising many do.

Bob Iger recently said that Disney expects to collect $1 billion in revenue from online content this fiscal year, a significant rise from estimates for fiscal 2007. The Millennials are not a lost generation for the media and entertainment industry by any means.

“The major media companies get it now. I’ve seen a major change in attitude toward digital media in the last 9 months, there is a whole new willingness among our clients to try new things”, he said.

Let’s just hope that the TV and film industry executives get it before the situation get as critical as it did for the music industry. Accenture is not the first management consultancy (and certainly not the last) to give their clients the following advice: Don’t bet against the Internet.

Joakim Baage

Image By The Untrained Eye