Speaking at the NATPE conference, Vinciquerra echoed the comments of numerous media and entertainment CEOs in emphasizing that the drive for global scale in creating and distributing entertainment content is forcing companies to look for ways to bulk up in market share and reach. Pointing to Disney’s pending acquisition of 21st Century Fox assets, Vinciquerra said he expects the ranks of the major studios to shrink from six to three or four in a couple of years.
“If we don’t grow, we will be somebody’s purchase,” Vinciquerra told moderator Soledad O’Brien. “I didn’t take the job to do it for a year and sell the company.”
The 45-minute Q&A with the veteran journalist marked Vinciquerra’s first major sit-down since he took the reins of Sony Pictures last June. The conversation ranged from the studio’s response to the #MeToo movement to the opportunities presented by burgeoning VR technology to the decline in moviegoing in the U.S.
Vinciquerra said among the first priorities he had in taking over the studio was reorganizing the executive team and stressing to everyone on the Culver City lot that the company needs to adjust to monumental swings in the market for its core film and TV products.
Coming in, there was pressure to “create a sense of urgency and making sure people are aware the business is changing rapidly,” Vinciquerra said. “If we’re not on our toes, we’re not going to be in business very long.”
Like other traditional Hollywood operations, Sony is feeling the pressure of the emerging competition with the FAANG field. He noted the vast difference in market cap between Facebook, Amazon, Apple, Netflix, and Google. “We’re a tiny little minnow fighting against all these gigantic companies,” he said. “If they want to step on us, they could do it.”
But Vinciquerra also noted the vast difference in the strategic agendas for some of the tech giants, who see entertainment content as a means of attracting the attention of consumers to drive their other businesses — hardware in the case of Apple, search advertising in the case of Google, and retail commerce in the case of Amazon.
Big as they are, the tech giants do appreciate the creative and production expertise that traditional Hollywood offers. “We are the engine for creativity for them,” he said. “We bring new ways to bring customers into their eco-systems.”
Among other highlights from the session:
#MeToo: Vinciquerra said the key to addressing systemic harassment is to make sure that victims come forward without fear of repercussions or retaliation. Anonymous complaints are harder to investigate, he said. Sony hasn’t changed its procedures in light of the post-Harvey Weinstein outpouring of accusations. “When complaints are made, we do an investigation immediately,” he said.
Disney-Fox and CBS Corp.: Sony tried to get into the running for the 21st Century Fox assets, but never got any real traction as the negotiations with Disney were far along. Vinciquerra knows Fox well, having served as CEO of Fox Networks Group for nearly a decade. But that doesn’t mean Sony is no longer in the market for deals. O’Brien pressed him on the question of a deal with CBS Corp., but Vinciquerra insists the subject has not come up in his conversations with CBS Corp. boss Leslie Moonves. “You will see us do several new partnerships and mergers with other companies as we go forward,” he said. “I do have some thought on how we can expand.”
New Fox Talks: Rupert Murdoch and others have said the Fox broadcast network (which is not being acquired by Disney) will be open for business in a big way with Sony TV and other independent studios once the 20th Century Fox TV studio sibling is absorbed by Disney. “There have been some preliminary discussions,” Vinciquerra said. “I think new Fox will be a terrific new customer for us, for sure.”
‘Binary’ Movie Business: “The movie business has become very binary — either it works or it doesn’t,” he said. The importance of social media in driving awareness cannot be overstated, he said, pointing to the box office success of “Jumanji: Welcome to the Jungle” thanks to the huge social followings of stars Dwayne Johnson and Kevin Hart. Moviegoing in the U.S. is generally in decline, but the rest of the world is still growing. He noted that “Jumanji” is on no less than 20,000 screens at present in China.
MoviePass: Vinciquerra doesn’t get the math behind the fast-growing service that offers consumers the chance to go to the movies as often as once a day for a $10 monthly fee. “I’m questioning how that can be economically feasible,” he said. “It seems like the more they sell, if (subscribers) use it aggressively, they’ll be in a lot of trouble.”
Growth in VR: Sony is investing in developing VR options as a mainstream entertainment vehicle. A VR production facility is under construction on the Culver City lot. The studio has had good feedback from a VR installation that has accompanied “Jumanji: Welcome to the Jungle” in theaters. “The challenges today is that the (VR) rendering of images is not quite there yet,” he said, but he predicted “location-based entertainment centers will start popping up very soon.”
Cable’s Future: The cable bundle is inevitably fraying, which is having a big impact on how entertainment companies make their profits as consumers lean toward on-demand options. “We’re seeing the stratification of the (content) marketplace,” he said. “People will self-select what they want.”