Foot in the Future: PwC Global Media & Entertainment Outlook
With the recession clearing in digital media, the case is being made via PricewaterhouseCoopers that traditional media will drink more from the digital well, and be forced to take risks with their models.
This redrawing of the traditional/digital value chain will not change the conversion rate of digital dimes to analog dollars overnight, but it accelerates the conversion or transition process, and forces studios to get a “foot in the future,” as Bob Iger said recently.
Via THR: The biggest challenge in running a company as big and varied as Disney is “to maintain the balance between heritage and innovation.” Also tough is to resist those folks who want the company to invest in assets that are not “core or that don’t enhance the brand.”
[Iger] ”We looked at digital media and believed that there was a migration there by consumers whether we were there or not,” he said. “We didn’t want to be marginalized. We have to be where the fish are. [...] We’re in business with a lot of important third parties — theater owners, big-box retailers, satellite providers, TV affiliates — and this was deemed threatening. That was difficult to manage. But I felt it was important to do.”
With PwC’s new outlook, that equates to a validation of the digital subscription and download models. In addition with Blu-Ray and gaming consoles, more digital distribution gives the home entertainment market a slight upward bounce with, we suggest, strong social media marketing drivers. Read more >>
New Medici: Media “Ten Spot”
Deadline / #1 ‘Paranormal Activity’ Scares Away Weekend Rivals
[Nikki Finke] can report that, as it expands for next Halloween weekend, the studio is starting to think the thriller has a shot at $100M. Which would make this the most profitable pic in modern Paramount history. After all, the project was acquired for a mere $300K, and the studio spent under $10M total on prints and advertising, “so this will be the best return Paramount has ever had,” an insider tells me. Amazing, since Paramount had been playing the movie mostly at midnight shows and in just a 100 or so dates. Then again, the hype has been so successful — right down to the claim that Steven Spielberg screened it and returned it in a trash bag.
Circle of Eight tells the story of a young woman who moves into an historic building, The Dante, where she encounters an assortment of neighbors harboring a mysterious secret that unravels in a chain of deaths and supernatural interactions. Multiple levels of interactive content enhance the audience’s connection with Circle of Eight, including hidden clues, an online and mobile game, and exclusive material that can be unlocked through game play.
Viewers can tune into MySpace at www.myspace.com/circleof8 now to watch the first three episodes of the series. Following the online run on MySpace, Circle of Eight will be available for rent exclusively at participating BLOCKBUSTER® stores, as well as by mail and through BLOCKBUSTER On Demand®. The full-length film will have additional scenes and a surprise alternate ending.
FT.com / UK – Hollywood told to rewrite script
Mr Iger advocates a thorough re-examination of costs associated with marketing and film production. The solution, he said, required “research and development, risk-taking . . . real focus on changing the status quo”. Next month Disney plans to unveil Keychest, a new technology that will allow digital copies of films to be stored remotely and then viewed and moved across several platforms, such as smartphones, or games consoles such as Microsoft’s Xbox.
Yahoo! News / Disney CEO calls for rethink of movie model
Iger advocated a fundamental rethink of the costs associated with movie production and marketing. Disney’s movies studios, which account for about 15 percent of the media conglomerate’s revenue, suffered a 12 percent fall in sales in the quarter to June 27 and swung to an operating loss of $12 million.
Broadcasting & Cable / Rupert’s Main Man: Q&A With News Corp.’s Chase Carey
[Chase Carey] I think cable networks are a great business; they have a lot of room to grow. The areas that would be at the top of the list would be international, which is a place to which we bring a unique set of strengths. In some ways, the international market is uniquely appealing. You always want to be an opportunist with the content businesses. There are ways to really expand that content portfolio. If I look at our cable group, it’s not where I’d like it to be today. I look at Discovery, it’s a road map of where I’d like to be.
NYTimes / Eisner’s Web Video Studio, Vuguru, to Emerge With Backing
Bolstered by an investment from Rogers Communications, one of Canada’s largest media companies, the budding new-media mogul Michael Eisner is expanding his Web video studio.
Mr. Eisner [...] intended to increase production of the programming that he started financing two and a half years ago. Under a dozen series have been released by Vuguru to date, but he would like the company years from now to be producing 30 series a year. “The most important thing is volume, honestly,” he said. Mr. Eisner said he expected Vuguru to generate 10 to 12 series in 2010, gradually building up to the goal of 30 a year. Read more >>
Part I: The Curse of the Mogul
A must-read for followers of Big Media – or would it be High Media given the mogul personalities involved(?) – The Curse of the The Mogul delivers an academic treatment on how digital media is forcing the studio or communication mogul’s work to be more transparent and hence more competitive. It’s argued that in the past, the lure or image of Hollywood allowed more mogul leeway as running a studio, handing the creative industry, “managing a Jennifer Lopez,” etc. was harder to quantify. With digital both making the studio returns or numbers easier to read, public and shareable, creating transparency; and, lowering the cost of entry for new digital companies to immediately step into publishing, video and home entertainment, creating more competition, the mogul is more and more clearly “wearing the emperor’s clothes” in a quickly diminishing empire or moguldom. Read more >>
Disney/Marvel: Last of the Independent IP
Disney/Marvel Hybrids: When IP Worlds Collide
Bob (Iger) the Brand Builder, indeed. Who doesn’t love the new Mouse House under Bob Iger? With Pixar as the premium family + crossover adult animation brand acquisition to start (and building direct access to Apple which makes iTunes Video/Apps/Music more lucrative for its properties), followed by Marvel, a brand known originally for its comic books, which is now creating merchandising gold with Iron Man – not to mention the recent Guillermo Del Toro “Disney Double Dare You” line of films/merch, and ImageMovers … and Disneynature – Disney is “crossing genres” while building enormous brand reach in the entertainment marketplace.
Forget the licensing deals that Disney has to earn/work out with competing studios, the real driver is that Iger can start turning on merchandising for upcoming Marvel IP (intellectual property, e.g., the original characters) while cashing in on the current crop of merchandise.
And growing it – meaning every studio salivates at Disney’s ability to merchandise product (and not just Disney DVDs) and grow brand share.
So if Disney can extend the Spider-Man or Iron Man or X-Men brand merchandise, it’s a win-win for all parties until Marvel’s external deals terminate and the Mouse House can own it outright.
The lesson learned many decades ago with George Lucas and a little property called Star Wars is that merchandise rights are extremely valuable, especially as they help build continuity between film and franchise (e.g., sequel) releases.
In Marvel’s case, pre-Disney, they also move you away from a pure for-hire production company. Think of it as entertainment windowing being improved on by actually branding your properties to draw revenue year-round.
Now that Disney is on its acquisitions’ run again, expect the other studios to start trying to create value quickly on both internal IP catalog (Warner Bros’ Robinov taking more control of D.C. Comics) and looking for bargain basement IP acquisitions. We’ll list a few of the more interesting IP catalogs or filmmaker relationships that New Medici would scout after the jump… Read more >>
Media & Entertainment CEO Salary Breakdown
Bernstein Research analyst Michael Nathanson broke out Media CEO and CFO compensation for 2008, with special attention on CBS and Fox, giving Disney a slight pass as its exec bonuses are tied to shareholder returns. The top six include the major studios minus Sony (Stringer, Pascal, Lynton, Wiesenthal), NBC Universal (Immelt, Zucker, Meyer), Viacom/Paramount (Redstone, Grey) and upstart Dreamworks (Spielberg, Katzenberg, Geffen, Snider) .
Via Broadcasting & Cable and Nikki Finke’s Deadline Hollywood Daily:
- CBS CEO Leslie Moonves, who was paid $31.9 million last year
- Disney CEO Robert Iger, who earned $30.6 million
- News Corp #2 Chase Carey, who could haul in $43.1 million over the next year
- News Corp.’s Rupert Murdoch, who took home $27.5 million
- Viacom’s Philippe Dauman, who was paid $23 million
- Time Warner CEO Jeff Bewkes, who made $19.9 million
Highest Paid CEOs, Disney’s Iger #3
Associated Press recently listed its highest-paid CEOs for 2008 list with only one media appointment: Bob Iger of The Walt Disney Company in 3rd place with $51.1 million. With the majority of the top 10 being finance and industrial-based, it’s interesting to see that media/content still has a hold on the environment. With ESPN’s continued growth, Pixar integration, Disney’s recent partnership with NBC/Fox’s Hulu, teen-star “Hannah Montana” and “High School Musical” talent factories, the start of DisneyNature and relatively strong film and tv revenues, not to mention the ongoing international expansion, Disney is running a very diversified content business in a market favoring global tech-based scalability. Alongside a News Corp/20th Century Fox model that slants toward print, news and politics, Disney has maintained a clean global brand while expanding in tech. And, although it’s a big compensation foothold in Iger’s case, it speaks to the power of entertainment and its role in innovating the US. If one of our bigger exports is entertainment, shouldn’t those who drive branded expansion be rewarded? After the jump, a breakdown of the other CEO list-makers and the New Medici “3Ways” to continue innovation… Read more >>