Ex-MPAA chief addresses Visual Effects Society confab

The movie industry must change its time-based windows model in response to the rise of the Internet and the decline in homevideo revenue, former MPAA prexy Bob Pisano said Sunday.

Speaking to the Visual Effects Society Production Summit in BevHills, Pisano, whose resignation only recently became effective, said that while the industry must find a way to replace the revenue lost with the decline of packaged-goods homevideo, “I don’t think you can do it by rigidly adhering to time-based windows. A four-month window between theatrical and homevideo may have been quite effective pre-Twitter, pre-Facebook, pre-social media, but today to ask somebody to wait four months is not the way to approach business.

“I’m advocating a system of availabilities that is driven in part by when it’s available, and therefore how you price it,” he added. “A system that recognizes that sequencing is not a bad thing; it’s just how long you make people wait and how you sequence it.”

While some might call such a change “the end of the world,” he noted that that cry has been heard with each step forward in distribution tech. “Yes, it will change some parts of the world, but in the end, the world will be stronger,” he said.

Pisano called for “a simple, effective model for electronic sell-through.” He noted the music industry was floundering until Apple’s iTunes made online music purchases “simple, convenient and fun to access.” Today, he noted, music industry revenues have bottomed out and are rising.

With per-capita admissions basically flat over the last 15 years, warned Pisano, the industry must act quickly and forcefully in this decade. He cited Netflix CEO Reed Hastings’ dictum that no company dies by moving too quickly, but many companies die by moving too slowly. Pisano cited Eastman Kodak as an example of a company that moved too slowly.

In addition to changes in windowing strategy, Pisano called for more consumer education on the effect on artists of intellectual property theft and stricter enforcement aimed at people who profit from IP theft but not consumers.

He said cable operators must begin monitoring illegal traffic on their networks. “We see when a country builds out a vast broadband network, homevideo drops like a rock. There’s no legitimate home-video business in Korea. There’s no legitimate homevideo business in Spain. Because those countries have faster and bigger broadband networks than our broadband network, so most traffic on those networks is illegal.”

Pisano said government support for intellectual property protection has been disappointing in the U.K. and Canada, and he called for more lobbying of friendly governments.He said he was cautiously optimistic about progress on IP protection in China because the government there is sponsoring the growth of its media industry and the entrepreneurs in that industry are complaining to the government that they are being ripped off. “I think intellectual property reform will come from within,” Pisano said. “It will come. It won’t come as fast as we’d want, but it will come in the Chinese way.”

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