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Netflix Disruption Assessed at Variety’s Business Managers Event

 

Subscription VOD may be a massively disruptive force to the TV industry, but some top executives are optimistic their businesses will weather a time of turbulent change despite the challenge companies like Netflix pose.

That was the prevailing sentiment at the keynote panel Friday at Variety’s annual Business Managers Elite breakfast presented by City National Bank.

Lionsgate TV Group president Sandra Stern expressed an optimistic outlook for the TV industry, but acknowledged Hollywood isn’t going to look the same as it did five years from now.

“A lot of money is being thrown at the business and it remains to be seen how the business can survive in the iteration that we currently have,” said Stern. “Do smaller networks survive? Is there a way to grab eyeballs? Those of us who make TV are looking at how we break through the clutter.”

Netflix’s pledge to spend $8 billion on original and licensed content in 2018 emerged as a concern in the panel discussion. Primary Wave Entertainment president Jeff Gaspin noted the possibility that the TV industry could be in for quite a hangover should the streaming service eventually curb its free-spending ways. Content producers feasting in the short term could be left high and dry in the long term.

When Netflix cuts their spend in half, when mergers have taken place that reduced the demand in the marketplace, when broadcasters and cablecasters pull back on their content needs because of margins, i think we’re looking at a bit of a bloodbath,” Gaspin warned.

But he also said it’s possible another huge content buyer like Apple could ease the pain of a Netflix pullback by stepping up its own spend, though that’s hardly guaranteed. Apple pledged to spend $1 billion on content earlier this year.

FX Networks COO Chuck Saftler discussed the balancing act his company has to maintain between protecting its core linear channel business with newer non-linear efforts like FX+, a subscription add-on  to the basic cable package giving consumers access to its content library that some pay-TV distributors have begun offering recently. Citing the importance of an SVOD strategy, Saftler noted the FX+ strategy could position FX Networks to face a very different market in the future.

“It’s possible that there will be a day when FX goes over the top or direct to consumer, although that day hasn’t been declared yet,” he said.

Shelley Zimmerman, president of scripted TV at AwesomenessTV, talked about how her company distributes all kinds of content across 30 platforms because that’s where the Generation Z viewers it’s targeting are active.

“These are voracious content consumers, they are just going to different places,” said Zimmerman. “It’s not only Netflix. It’s Snapchat, Instagram and all of these platforms.”

Rob Crabbe, executive producer of CBS’ “Late Late Show with James Corden,” touted how digital platforms have become a bustling global distribution point for derivative and repurposed content from his show, which still manages to do healthy ratings on linear TV.

“As a content creator, there’s never been a greater opportunity for more of your content to get seen,” he said. “It still works incredibly effectively for us.”

Speaking prior to the panel, City National Bank CEO Russell Goldsmith emphasized the importance of Los Angeles’ business community “to understand the economics of the industry and how it’s evolving and what it does for jobs, opportunities and profits in the future.”

The Business Managers event closed with the honoring of its annual award to Mark Landesman of ML Management Associates. It was presented by one of his more famous clients, comedian Eddie Murphy.

 

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