Piracy a prime topic at USC conference

Piracy is the entertainment industry’s biggest menace, according to two of showbiz’s most prominent players — Disney CEO Robert Iger and WME co-topper Ari Emanuel.

Iger sounded the alarm Saturday during his keynote address to the daylong business and entertainment confab hosted by the USC Gould School of Law and Beverly Hills Bar Assn.

In markets where broadband access is widely available, piracy is fast eroding formerly reliable sources of profit, Iger said.

“In South Korea, it obliterated the secondary market so much so that we closed our homevideo operations,” Iger told the crowd of about 600 at USC.

Earlier in the day, Emanuel made a similar declaration during a panel sesh with agency toppers. That gathering marked a rare public powwow of tenpercentery titans: ICM chief Jeff Berg, UTA topper Jim Berkus, Emanuel and CAA partner David O’Connor. (“It’s never been seen before and probably never will be again,” noted moderator Karen Stuart, who heads the Assn. of Talent Agents.)

Although there’s no shortage of competitive fervor among the Big Four agencies, panel was free of fireworks and focused on weighty issues of piracy and the role of agencies in film financing amid a tight credit market.

“It’s really important for us to get into a discussion about piracy because if we don’t get a handle on it, the industry will go away,” Emanuel said.

Emanuel said he endorsed France’s recent move to enact a kind of “three-strikes” legislation in which access is denied to illegal downloaders after two warnings.

Berkus kidded Emanuel about the comments, asking, “Are you going to join Interpol?”

Berkus emphasized how much the role of tenpercenter has changed as studios reduce their production slates and high-end biz players seek non-traditional sources of financing.

“We’re spending the vast majority of our time creating job opportunities for our clients,” Berkus said. “We’re doing everything we can to pick up the slack from the big buyers.”

Berg described the current financing scenario as “a tale of two cities,” with studios readily funding franchise pics costing $150 million to $200 million — but little else. “If it doesn’t have a cape or a ‘man’ in the title, it’s a real problem,” he added.

Berg noted that the disappearance of a number of banks such as CIT from film financing has forced agencies to look for funds from non-traditional sources.

O’Connor noted that the challenges in Hollywood’s traditional core biz of film and TV helped spur CAA’s expansion into the sports arena, where it reps more than 500 clients. “We needed to diversify our revenue stream,” he noted.

In his remarks, Iger offered a somewhat downbeat take on the health of a key Hollywood profit center: the homevid market. He noted consumer demand for Blu-ray DVDs won’t stop the ongoing decline in traditional DVD sales since the average household already has 80 titles in its library — which the new Blu-ray machines can still play — so there’s not as much demand to restock as when DVDs took over for VHS.

Additionally, he noted, customers have far more choices these days — which he sees firsthand by observing his 11- and 7-year-old sons. “They are the best laboratory I know,” he added.

Iger’s address came less than a month after Disney dismissed longtime movie studio chief Dick Cook in favor of Disney Channels Worldwide topper Rich Ross. He did not address either by name but did assert that the “primary responsibility” of a studio chief is to “choose good movies.”

Iger also said Disney executives — more so than those at other studios — are brand managers. “At Disney, a successful film is a huge wavemaker because it performs across multiple platforms for long periods,” he said.

Iger told the audience that his key responsibility when he became CEO four years ago was to revitalize animation by buying Pixar Animation, admitting that Pixar was “fully priced” at $7.4 billion.

“As animation goes, so goes our company because of how much value it can create,” he added.

Saturday’s confab included an address on the state of the music biz from longtime manager and Ticketmaster CEO Irving Azoff.

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