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Biz told to alter its DNA at tech summit

Revolution Studios' Joe Roth addresses confab

With the coming of the digital media age, should studios once again be allowed to own movie theaters?

Joe Roth suggested Monday during Variety ‘s Entertainment and Technology Summit that studios could be much more nimble about profiting from their pics if the 60-year-old prohibition against theater ownership was lifted. That way, pics could be moved out of multiplexes after four weekends, when attendance tends to drop significantly, and onto DVD and other forms of home entertainment.

“Wouldn’t we be better off if studios owned movie theaters?” the former studio boss quizzed the crowd during his keynote conversation with Variety executive editor Steven Gaydos. “We’re sitting with a 60-year-old consent decree, which really makes no sense whatsoever.”

Roth, who held top-ranking posts at Fox and Disney before founding Revolution Studios, inadvertently got caught in the battle between the Disney and international exhibs over the theatrical windows on “Alice in Wonderland,” the movie he produced for the Mouse House. Disney cut one month off the typical four-month window between the theatrical run and release of the DVD.

While Roth agreed with Disney CEO Bob Iger’s stance on shortening windows, he admitted he didn’t enjoy having “Alice” become a test case for the studio.

Some overseas exhibs initially refused to book Tim Burton’s adaptation, but eventually relented. The movie is now closing in on $1 billion worldwide box office grosses, the majority of it from international markets.

Roth, who joked about being one of the least technologically informed people in the room, also urged Hollywood to take more advantage of digital innovations by stepping up its social media marketing efforts. He cited his success with it on his Seattle soccer team, noting that fans helped name the team.

“People want to be connected,” he said. “You have to create a community for your content.”

He wasn’t the only one to sound that note at the confab, part of Digital Hollywood at the Loews Hotel in Santa Monica. Apparently, Hollywood, land of the power schmooze, could work on its social networking skills online.

The problem, several veteran execs said, is that those making marketing decisions haven’t yet adjusted to consumer shift to digital media.

“Agencies and brands understand intellectually that they’ve got to move their dollars online,” said BermanBraun co-owner Lloyd Braun, a former top exec at ABC and Yahoo. “It’s not in their DNA yet.”

He predicted that the change, which he once thought would be here by now, won’t come until people that grew up with the Internet become chief marketing officers or CEOs.

Brands still love television, concurred John McCarus, Digitas VP and brand director, but more are coming to appreciate “earned distribution” of content through social media sites such as Facebook and Twitter. He said the metrics to measure such social engagement are becoming more refined and monitored more closely.

“Brands have got to tap into social media,” said Jason Goldberg, co-founder of Katalyst with Ashton Kutcher. “You cannot go to sleep when it comes to the web.”

He said that at Katalyst, “we look at everything as liquid now. Whether it’s ‘Punk’d’ or ‘Beauty and the Geek,’ we look at all platforms.”

On the TV side, networks and cablers are still struggling to adjust to consumers’ shift to online viewing and changing value of content in syndication.

“It’s total and complete chaos,” said Peter Tortorici, CEO of GroupM Entertainment and a former CBS exec. “I say that because we’re still in a sorting out period.”

The good news, according to USA Network president of original programming Jeff Wachtel, is the industry is more receptive to change than it once was.

“When a company acknowledges that things are in trouble, then they’re open to change,” Wachtel added.

Several suggested that the very definition of networks may be changing to include tech companies.

“Xbox is a cable network – they just don’t know it,” Roth said, citing the gaming company’s “8 to 10 million subscribers.” He said Apple, Microsoft and Google could easily become networks serving up original content.

Daniel Scheinman, senior VP and general manager of Cisco Media Solutions, said his company is examining ways it can distribute content and make coin in the process.

“What we see is a world that is moving to where it’s all data,” he said. “We want to create a world where data and content have value.”

Yes, the DVD market has declined and TV ratings are also dropping, Roth said. But new opportunities are opening up.

“The world is spinning faster,” he said. “Heat burns quicker. You have to make adjustments for that.”

Related: Live from Digital Hollywood

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