In a move tinged with irony, most of the studios have relocated their top international home entertainment execs from London to Burbank, Culver City, Century City, Hollywood and other L.A.-area ports of call in a bid to consolidate global operations.
Indeed, Warner, Disney, Sony, Fox and Paramount have all moved their international chiefs to L.A. over the last couple years, a move they say allows for a more coordinated and efficient global strategy.
Amy Heller, president of research firm Media Control GfK International, says that the emergence of digital distribution has led to the need for a more cohesive global strategy.
“You can’t have a totally disconnected organization,” she says. “It’s especially true now with TV product going online.”
Sony worldwide home entertainment president David Bishop says his studio moved top international exec Matt Brown to L.A. from London to “create an attitude within our organization that there is a free flow of ideas.”
Having the studio’s top international guy in L.A. means the domestic group hears what international is doing and international is part of DVD strategy.
“The key challenge is to balance the requirements of leading a multicontinent international operation with the need to interface and collaborate with L.A.-based studio executives, decisionmakers, producers and filmmakers,” says Century City-based Keith Feldman, exec VP and g.m. of Fox Intl.
Walt Disney Studios Home Entertainment g.m. Asia Pacific, Latin America and emerging markets Daniel Solnicki — who calls Burbank his workplace — says piracy and digital releases have increased the need for a global structure.
Principally, such global coordination is useful in regard to taming Russia, China and other emerging markets that have been traditionally troubled by piracy, with a strategy of putting out movies cheaply in shorter windows.
Warner and Fox, for example, have set up operations in China over the last two years — in fact, Warner distributes product in the country not only for itself, but for Universal, Paramount and DreamWorks.
“When we first launched our homevideo business in China, we were able to put product into 1,000 outlets,” says Warner exec VP and g.m., worldwide operations and new packaged media Mark Horak. “Presently, we have over 2,500 traditional retail outlets as well as 20,000 smaller outlets that were previously selling only pirated materials of Hollywood product, now selling legitimate product.”
Still dogged by pervasive piracy, other studios say China’s immediate growth prospects remain questionable for American studios. Russian inroads, however, appear on the way to being made.
Fox — which has charged international veteran Gary Ferguson with developing the Russian and Chinese markets — boasts that it shipped a previously unimaginable 1 million copies of “Live Free or Die Hard” (or “Die Hard 4.0,” as it is known overseas) to Russia.
Indeed, Fox says its Russian sales have doubled year over year since it entered the market.
Sony, meanwhile, reports its Russian sales are up 400% year over year, with recent release “Open Season” selling 300,000 units.
Taming the market
Universal Pictures Intl. Entertainment president Eddie Cunningham estimates that when the new Motion Picture Assn. numbers come out, they will show Russian piracy in the low 80%, down from 95% several years ago.
The growing retail infrastructure has helped the disc biz increase, too, with Russians buying more players and DVDs. DVD player penetration has gone from 8% of Russian TV households in 2004 to 35% in 2006, according to London-based research firm Screen Digest.
Universal has been putting out DVDs in Russia priced at around $5-$6 in as little as four weeks after the theatrical release. (The studio also distributes product for Warner in the market.)
“The retail market is changing enormously,” Cunningham says. “There’s huge investment going into Russia.”