Netflix is key buyer but biz still big on basics

While Netflix has turned into an important buyer of TV shows for Hollywood, studios and TV networks don’t want to strike deals that may affect their current core biz.

“The advertising business is tremendously strong and the licensing business is on fire. International is on fire, as well,” said Steve Mosko, president of Sony Pictures Television on Monday during a panel discussion on the state of the entertainment content biz at Variety’s Entertainment & Technology Summit at the Ritz-Carlton in Marina del Rey.

Kevin Beggs, president of Lionsgate TV, agreed, saying, “Making and selling shows couldn’t be more rich right now.”

Still, Mosko and other execs see “enormous growth” in new digital distribution platforms like Netflix and Sony’s own Crackle, which is developing new forms of programming.

Reps from Warner Bros., Lionsgate, Virgin Produced and entertainment law firm Greenberg Glusker agreed that Netflix has created a market for serialized shows and older library fare.

Given Netflix’s deep pockets and attempts to lock down content from rivals, “if anyone jumps in and takes on Netflix, that would be a huge gamechanger,” Mosko said.

But other technologies like UltraViolet, which will enable consumers to purchase and digitally store content to access from any digital device with an Internet connection, starting this fall, will also promote the purchasing, rather than renting, of TV shows and movies.

“Consumers want a lot of options to consume content,” said Thomas Gewecke, president of Warner Bros. Digital Distribution, which is one of UltraViolet’s biggest backers. “You must figure out what your consumer wants and give it to them every way you can.”

But Hollywood needs to be careful not to leave consumers behind as it adopts new distribution platforms.

The industry is still struggling with “how to explain what it means to own something when it’s digital,” Gewecke said. “There is a lot more we can do to make the benefits of ownership clear.”

Studios like Warner Bros. are convinced that consumers still want to collect content, saying it’s a way for them to express themselves the same way some built up libraries of DVDs and now Blu-rays.

“Consumers really do like and want ownership,” Gewecke said. “But we haven’t made it as easy as it should be.”

As it helps launch UltraViolet, Warner Bros. continues to try out multiple business models to which takes off with consumers.

“It’s critical and important to experiment,” Gewecke said.

That has recently included offering more films to rent on the fan pages for films on Facebook, including “The Dark Knight.”

By doing so, the studio wanted to “take content to where fans are and make it available where social interaction is happening,” Gewecke said.

That effort is also part of helping promote a property, including TV shows.

Digital distribution isn’t “just about making money,” but using “a great marketing tool,” Mosko said.

That includes digital distribution on airlines, which Jason Felts is pursuing as he produces more films and TV shows through Virgin Produced, the entertainment arm of Richard Branson’s Virgin biz, which owns five airlines around the world.

There are limits to such promos, however. After two seasons of hyping its Spike TV show “Blue Mountain State” with episodes online, Beggs said Lionsgate is considering making the show “a little less available” to earn more revenue from the series.

Digital also brings up issues that Hollywood still needs to deal with, as well.

Premium VOD was cited as one, with Candace Carlo, partner and chairman of the entertainment group at law firm Greenberg Glusker, saying “from a talent perspective, they’re trying to figure out how does it affect them artistically and financially.”

Carlo reps such filmmakers as James Cameron, who recently sided with NATO to oppose the rollout of a 60-day premium VOD window.

The fear is that premium VOD will encourage more moviegoers to stay home, causing smaller theaters to go out of business and affect platforming releases.

That would “put a greater emphasis on studios wanting to only produce what’s commercial” and not take risks on funding films like “The King’s Speech,” Carlo said.

Panelists agreed that if digital has done one thing, it’s “forced everyone to talk” about how these deals are done,” Mosko said. “It’s brought the company closer together.”

And “expectations are more realistic now when it comes to compensation,” Mosko said.

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