Cuban is Hollywood contrarian

Entrepreneur urges 'Produced By' attendees to focus on VOD

Much of the media world is focused on mobile and web content as hot technologies.

Mark Cuban is having none of it.

Cuban, the billionaire entrepreneur whose properties include 2929 Entertainment, Magnolia Pictures and Landmark Cinemas, told the Produced By conference Saturday “If you look where everybody else is looking, that’s the wrong place. Everybody’s looking at the Internet. It’s done!”

And mobile, he said, is never going to be more than a complement to TV. “It’s the equivalent of the newspaper in the bathroom. If you’re stuck somewhere … that’s why you watch on your phone or iPad.”

Instead, in a conversation that ranged from the NBA Finals to to the Movie Futures Exchange to 3D porn, Cuban said video-on-demand is the better opportunity and urged Hollywood to consider radical changes to its windows and distribution structure, including vertical integration and VOD “previews” in advance of theatrical release for some movies.

He suggested smaller — and lower-quality — studio pics would do better going out on VOD in advance of their theatrical release date than going into wide release only to be quickly yanked for bad performance. “You could put it on VOD and make more money at less cost,” he said.

He also said that the model his companies are using, where production, distribution and exhibition are all under one roof, is the future.

“I think eventually the studios will realize they have to buy a theater chain,” he said.

Cuban said he is far more impressed with the potential of VOD via cable and telco TV than with web programming, noting that the web had become boring.

He noted that few people hunt for new, interesting websites anymore, and even with great advances in Internet speed, “The idea that the most amazing application for the Internet is watching ‘Gilligan’s Island’ reruns, it’s disappointing. As a technologist you ask yourself, that can’t be it. So what’s next?”

He predicted that there no amount of bandwidth would ever be enough, because people will always find ways to consume it — which in turn is a danger of net neutality. If consumers get the unfettered ability to upload and download at will, he predicted, they’ll clog networks.

“People complain about the AT&T phone network. But they can do all this stuff on the phones they couldn’t do before, so they do it,” he said, warning that’s a bigger issue than network operators choosing what goes on their pipes.

Asked about piracy, Cuban said flatly that it was a waste of time and money to try to stop students from swapping and downloading files. “We spend more money trying to stop it than we would have made if we had stopped it.”

He drew a distinction between that and pirated DVDs, which he called “counterfeiting,” but said that DRM has become too great an obsession. “Magnolia, we don’t spend the money (on copy protection). It’s not worth it. They’re going to steal it anyway. It’s a function of the times.”

Late in the session, in response a question from the audience, Cuban said he had been contacted by Cantor Fitzgerald’s Hollywood Futures Exchange about being an advocate for it but said he hadn’t made up his mind about whether he liked the Exchange or not.

While the ability to hedge was attractive, he said, and it might encourage people to invest more, “the reality of any exchange today, no matter what it is, is there are always traders trying to hack it. Traders on Wall Street today are just hackers. They look for inefficiencies and exploit them… Because you can’t protect against that, I haven’t really made a decision.”

Cuban rejected the idea put forward by Ted Turner earlier in the day that producers use their influence to advance social change. “Maybe I’ll be at the doors of hell, I don’t know.”

But just minutes later, he said he does like doing stories that expose corruption, including movies like “Enron: The Smartest Guys in the Room” and “Good Night, and Good Luck.”

“The things I think are slimy, if I can tell the story in an enteraining way… those are the things I like to do.”

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