Loving the disruptions

Hollywood's New Leaders 2012

As media formats continue to morph and grow at an alarming rate, one of the biggest challenges facing Hollywood’s new leaders will be how to determine not what a property is worth today, tomorrow or even a few years from now, but over the span of decades.

The question is not a new one, but today’s platform proliferation has given it new urgency. “The motion picture industry has gotten smart about these sorts of issues,” says attorney Ken Basin of Greenberg Glusker. He notes that “for some years now, when dealing with rights grants, almost inevitably you’ve got this broad, inclusive language — ‘all media now known or hereafter devised throughout the universe.’ ”

In many ways, technology is already in a galaxy far, far away, waiting for the industry to catch up.

A case in point is Qualcomm Labs’ Vuforia, an augmented-reality software development kit that enables app developers to overlay a user’s physical surroundings with virtual content through the lens of a smartphone, making the entire physical world clickable and opening up new vistas for both creativity and revenue.

According to some reports, “there are over six billion mobile connections today, and people look at their phones 150 times a day,” says Liz Gasser, senior director of business development for Qualcomm. “So it’s a massive opportunity with new, potentially lucrative modes of interaction, and we in the tech community say, ‘Boy, we need the help of the Hollywood, the content industry and the media industry to figure out how to actually make that happen.’ ”

Will the revenue trickle down from the corporations to the talent? At present, the minimum new media payments outlined in the AMTP contracts with the various Hollywood talent guilds are unlikely to make anyone rich. But many stars are cutting their own deals, including Shaquille O’Neal, Russell Simmons, Jay-Z and Pharell Williams, who recently launched their own YouTube channels.

“YouTube is selling ad inventory into all these channels, and there’s revenue shares that are being cut around them,” says Beverly Macy, CEO of Gravity Summit. YouTube has substantial income from ad revenue, but “is celebrity X who now has a food channel on YouTube going to make money off that channel? We will see.”

Celebs have been flocking to Funny or Die to appear in the web portal’s irreverent ultra-low-budget comedic shorts. The company raked in $30 million in revenue in 2011, two thirds of which came from ad revenue from its site and the rest from branded entertainment it creates for movies and other producers. The stars themselves receive no compensation other than the creative satisfaction of flexing their comedic muscles, and the media buzz and hip cachet it generates.

“For people who aren’t known for comedy, it (gives them and their reps) a great piece of content they can build off of,” says Mike Farah, Funny or Die’s production prexy.

As an example, Farah points to a recent clip in which model-actress Bar Rafaeli makes a faux pitch for a Kickstarter campaign to fund her sex tape. “She’s already gotten a lot of interest for new roles based on that piece,” he says.

Do aspiring artists, typically long on integrity and short on cash, have issues with the ads their works are linked with on the web?

With few exceptions, no, according to Drew Baumann, CTO of Fullscreen, which enables artist to set up their own YouTube channels and monetize them through ads and participation in cross-promotional campaigns.

“Only about 1% of our content creators ever have an issue that they report to us,” Baumann says. “For example, there was a guy who offered guitar lessons who was getting competing ads from guitar lesson services and that was upsetting him.”

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