Get a Screenlife: Paramount Goes After New Digital Content

Sep. 5.08 | About: Viacom Inc. (VIAB)

There’s a natural affinity between movies and video games, an overlap apparent in the convergence of story lines and visual techniques. Like many studios, Paramount has seen this and recognizes the potential games bring for ancillary sales and cross media marketing. In March, the Viacom (VIA.B)-owned movie studio formed a division within their interactive department to explore funding the development (and publication) of gaming titles. In July, the studio partnered with Legacy Interactive to build Internet games around their Pretty in Pink, Clueless and Mean Girls films. Now, Paramount has opened their checkbook to make their first gaming related purchase too.

Paramount has bought Washington based ScreenLife, the makers of a popular DVD trivia game called “Scene It.”  Terms and prices have not been disclosed but the purchase price is reported to be below $100m.  The story was first reported last week by Seattle Pi which cited inside sources but couldn’t, at the time, get official confirmation.

If the pricing rumors are accurate, the deal will be consummated at a relatively low multiple to sales. Reportedly (via Seattle PI), retail sales of the game exceed more than $100m annually but the company’s revenue is less than that figure (possibly in the range of $30 to $50m).

ScreenLife’s principal product offerings are DVD based board games sold under brands like Scene It. Variations exist for single brands like Seinfeld or James Bond, or as broader TV and Movie surveys. In game play, a Scene It player moves around the board while answering screen challenges and trivia tied to movie clips. “Who said that?” “What’s Missing?” “Name the Movie” and so on.

Last year, ScreenLife released an Xbox 360 [PDF] version of the game that comes bundled with its own “buzzer” controllers to simulate a “game show feel.”  A mobile variation has also been developed, as have on-demand offerings in partnership with Comcast (NASDAQ:CMCSA).

The Scene It? franchise was first launched in 2002. According to company press materials, in its first year, "Scene It? Movie Edition" sold more units than Trivial Pursuit, Pictionary, and other top-rated board games during their corresponding launch periods.

That success helped secure $7m in Angel funding in 2003 (total funding reported at $10m). Today, ScreenLife products are available in nine languages, across 28 countries and in more than 50,000 retail locations worldwide.

Part of the company’s success tracks back to proprietary technology developed to allow a DVD to randomly access and track the different digital packets of information stored on the disc. The process is called Optreve DVD Enhancement Technology.

From ScreenLife’s product literature: “Think of all the digital elements that make up our games (video clips, audio clips, trivia questions, etc.) as an ordinary deck of cards. Optreve shuffles these elements and deals them out randomly during each game. Optreve also remembers what has already been used, thus eliminating repeats and giving players a different game play after play. The whole process is managed through easy to read on-screen menus that require nothing more than a standard remote control to operate.”

According to Paramount’s press release, on completion of the deal, Screenlife is "expected" to operate as its own entity but it will report to bosses at Paramount Digital Entertainment.  What remains unclear is both the fate of vast licensing contracts, and how the Screenlife products will be used.

Currently,  Screenlife has licensing agreements with film studios including Disney (NYSE:DIS), Dreamworks-SKG (NASDAQ:DWA), Metro-Goldwyn-Mayer Studio, Sony Pictures Entertainment (NYSE:SNE), 20th Century Fox, Universal Studios (NYSE:GE) and Warner Bros. Entertainment (NYSE:TWX). Screenlife games also have licensed material from television studios, sports leagues and recording labels, including ESPN, Rolling Stone and MTV. It’s possible that in the hands of Paramount (which competes with some of these entities), the licenses may lapse or terminate.   

Another possibility or even probability is that Paramount will push for new variations of the games featuring content licensed from their own expansive TV and Film catalog.

In March, when Paramount first announced their expansion into the gaming arena, Sandi Isaacs, Paramount’s VP of interactive and mobile content told Variety that the studio was looking to invest in all types of games from casual and mobile on up to possible console games. “There’s going to be a slate where in some cases we’re publishing, in some cases we’re co-publishing, or in others we’re funding development and another publisher buys it.  It’s important for us to have a flexible model,” she said.

The acquisition of Screenlife appears to fit easily into that “flexible” mold.  Console, mobile and offline variations of the titles already exist. Movie and TV trivia games are also easily matched to Paramount’s apparent early emphasis on lower cost Internet or Mobile games.

In the words of Paramount’s Thomas Lesinski, president of Paramount Digital Entertainment ("PDE"), "The acquisition of Screenlife advances [PDE’s] multiplatform strategy and will enable us to create new digital content that is interactive, entertaining and easily accessible to audiences everywhere."