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3 Steps to Thinking Like a Media Company: PlayStation Keynote

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"We had to transform the way we think into a media company," said Susan Panico, senior director for the PlayStation Network. Panico delivered the opening day keynote for the Streaming Media West conference in Los Angeles. (Scroll down for video of the keynote.)

The Sony PlayStation is on a path to total media convergence, Panico said, one that aims to marry hardware, software, and services, while offering one centralized device that does the work of several smaller connected devices. The PlayStation Network, the agent that's making that convergence possible, offers movies, games, TV shows, music, original programming, and community, she said.

PlayStation has grown from a gaming platform to something broader, all while catering to its core user. In her keynote, Panico broke down the lessons learned along the way into three steps: start with the audience, content is king, and monetization.

Starting with the audience, for the PlayStation Network, meant recognizing what appeals to the console's gamer user base and serving that audience. Those in the "gamer lifestyle," she said, have an insatiable appetite for entertainment. They're also an engaged audience: 76 percent use the PlayStation Network weekly, two-thirds game online weekly, and they use three different areas of the network per week, on average.

Content, then, needed to be relevant to that audience. The company created partnerships with services like Netflix (50 percent of Netflix streaming is through game consoles, she offered) and DirecTV NFL Sunday Ticket. The console also offers a video-on-demand library of TV shows and movies that emphasizes irreverent comedies, action flicks, and anime.

The PlayStation Network also began creating original programming, using HBO as a model. It created Core, a digizine on game makers, and Pulse, a bi-weekly look into the world of PlayStation. It also reached to Sony in Japan to create an original anime series that did well on the network. Its best known original series, however, might be The Tester, in which hardcore gamers compete to become a PlayStation tester. It's now entering its third season and pulls the same numbers as a cable hit show. When it comes to shooting original programming, Panico said, creators should either go fast-and-loose Handycam style or make it completely professional; nothing in the middle works.

To monetize its dedicated audience, Panico said her group sold advertisers on an unconventional metric: engagement. The console's die-hard gamer audience spends significant time gaming, and that can be monetized when combined with original games that feature brand content. Ads can be content, she said: immersive and "gamified."

"PlayStation 3 is that magnificent Trojan horse in the living room," Panico said. While sold as a gaming device, it brings a variety of connected features.

As for what's next for the PlayStation Network, Panico said the company is working on a global ID for all PlayStation and Sony devices that will let users access all their content in one place.

Scroll down to view the entire keynote address. The presentation begins at about 3:15.

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