If the contraction of DVD revenue has placed Hollywood in a sustained funk, speakers at the Variety’s Entertainment Summit are nevertheless unabashed optimists. They foresee online digital, which shares the video window with physical DVDs, is poised to boom.
“The opportunity in front of us is bigger than it’s ever been,” says Mike Dunn, president of Twentieth Century Fox Home Entertainment. “We’re looking at a renaissance here.”
Panels today at the two-day summit are devoted to movies and technology. Optimism about a movie surge in new digital media is traced to the boom in sales of consumer video devices from wireless tablets to Web-connected game consoles. Pricewaterhouse Coopers’ annual Global Entertainment and Media Outlook 2012-16 report forecasts that revenue in the video window — which combines physical and electronic digital — for filmed entertainment is again rising in North America, which reverses four straight years of decline from 2008-11.
The major studios can also take some credit for elevated expectations. “I’ve seen a lot more willingness to try different business models in the past year alone than in the previous five years,” says Deborah Bothun, U.S. advisory leader for entertainment, media and communications at consultancy PwC. “The studios are starting to move faster and experiment. And that’s key.”
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The expected digital boom comes with a drawback, which studios are trying to remedy. So far, consumers are flocking to subscription VOD, such as the Netflix model, where movie deals are a relatively low-profit proposition for studios. It’s estimated that profit for major studio movies in transactional VOD is seven times more and electronic sell through (EST) is projected at 25 times higher.
“You got to get the price right vs. rental and provide more features in the ownership model than on the rental side,” says David Bishop, president of Sony Pictures home entertainment. “There has to be a reason to move from a 24- or 48-hour rental into something the consumers want to own and collect because it has greater features and ease of use. That will tip the consumer further from rental to ownership.”
Hollywood is closely examining consumer response to product packaging and pricing. The UltraViolet feature — which allows consumers to port movies across their multiple electronics devices — is being embraced across Hollywood and makes digital more attractive.
“What consumers are telling us in research is they want permanent, on-going access to their content and they want the assurance that they’ll be able to stream and download no matter what device they are using,” says Thomas Gewecke, president Warner Bros. digital distribution. “The industry is delivering that today through UltraViolet. We feel really bullish.”
Adds Dunn: “What we learned from all our consumer research is that the product needs to be in hi-def and under $15 to be relevant.”
In a sign of industry enthusiasm, Redbox Instant by Verizon entered the fray by offering subscription, transactional VOD and EST under one roof. “I think you’ll see a few others” entering the online movie business down the road, says Shawn Strickland, CEO of Redbox Instant by Verizon. “Our expectation is that you’ll see more before you see less.”
As for digital technology in filmmaking, Andy Hendrickson, chief technology officer at Walt Disney Animation Studios, says the computer tools required to make ever-more spectacular movies comes with challenges on the human labor side. “It’s more difficult to make (those tools) approachable to the artists,” he says. “We don’t see any end in sight to that complexity.”
Newfangled online social media is buoying a century-old medium: cinema. A panel at today’s Variety Entertainment Summit will examine aggregating audiences online for special one-off screenings, which generate ticket sales for theaters in off-peak times for hard-to-market films.
One such aggregator, Tugg, has arranged hundreds of such screenings since launching nearly a year ago, offering indie films, unreleased fare and movies from three major studios. “It makes for more excitement in being part of a community and engagement, which people miss but want in their day to day lives,” says Nicolas Gonda, Tugg’s CEO and co-founder. “We live in an age where collective action is easier to do than before.”
For Tugg, satellite promoters can vary, from museum curators to, in one instance, a retired urban planning college professor who has built up a following for foreign-language films at a local AMC Theaters multiplex.
Scott Glosserman, founder and CEO of Gathr, which also books theaters, mounts low-cost outreaches targeting very specific demos interested in a given film. “That is a night-and-day difference between traditional (wide release) marketing and the kind of marketing we do for a film,” Glosserman says. Gathr screenings “are found money for everyone in the theatrical distribution food chain.”
9-9:45 a.m.: Studio Technology Roundtable: The Leaders. Moderated by Guy Finley , exec director MESA and the 2nd Screen Society.
Studio techies on how delivering content to auds is evolving and what operational advancements are being made — from advanced theatrical projection to cloud-based entertainment distribution.
Confirmed Speakers: Andy Hendrickson , chief technology officer at Walt Disney Animation Studios; Chris Cookson , president of Sony Pictures Technologies; Darcy Antonellis , president and chief technology officer, Warner Bros. technical operations; Lincoln Wallen , CTO DreamWorks Animation; Hanno Basse , CTO for 20th Century Fox
9:45-10:30 a.m.: Keynote Q&A with Anthony Bay, VP worldwide video at Amazon.com, moderated by Andrew Wallenstein , editor at Variety
10:30-10:45 a.m.: Networking Break
10:45-11:30 a.m.: Creative Technology Trendsetters
What does the future hold for technology to create, market and distribute films, as well as empowering filmmakers to reach auds and make the projects they want to make?
Confirmed Speakers: Matthew Lillard , actor-director; Nick Gonda , co-founder of Tugg/producer (“The Tree of Life,” “To the Wonder”); Scott Glosserman , CEO of Gathr; Hank Green , VP of studio partnerships at AMC Theaters; Scilla Andreen , CEO & Co-Founder of IndieFlix
11:30 a.m.-12:15 p.m.: Conquering the Film Distribution Maze. Moderated by Deborah Bothun , U.S. advisory leader, entertainment, media and communications, PwC
Studio distribution chiefs and their tech service partners make sense of the available options in delivering films to audiences. How are tech services working to improve content options for customers and maximize revenue potential?
Confirmed Speakers: David Bishop , worldwide president, Sony Pictures Home Entertainment; Mike Dunn , worldwide president, Twentieth Century Fox home entertainment; Thomas Gewecke , president Warner Bros. digital distribution; Shawn Strickland , CEO of Redbox Instant by Verizon