Peter Bart, Vice President, Editor-in-Chief, Variety
America's leading export industry is facing up to the realities of the recession and taking action to ensure its continuing efficacy at providing consumers with the high quality content they demand. Peter Chernin, President and CEO of News Corporation, sees consumers as "staggeringly smart and often way ahead of the studios in adapting and adopting new approaches to consuming content." They will not be legislated or slow their migration to digital content.
In many ways, industry challenges remain the same: create good content, develop new opportunities for consumption and maximize monetization. The new media and mobile applications complement existing capabilities, though the industry is still in the process of sorting out the monetization. A self-proclaimed "old television guy," Leslie Moonves of CBS sees broadcast remaining an integral part of the media portfolio, but without the huge margins it once enjoyed. Television is well-suited for "American Idol" and the Super Bowl, whereas Internet services like Hulu can draw audiences with reruns.
The executives' largest concern is with market structure. Moonves concurred with News Corporation's Jon Miller that major productions are bigger than ever and small start-up productions are doing well, since they are so inexpensive to produce and can afford to appeal to niche audiences. The challenge is the middle-market segment, where studios were accustomed to good, steady returns over the years.
While digital migration offers great promise to new talent and big-name superstars, the middle-market segment is filled with established actors and writers who have long been able to make a good living but are now bearing the brunt of changing market conditions. This market segment was at the center of the recent labor strife with no readily apparent solution at hand. While Chernin admits that management perhaps got off on the wrong foot and didn't act quick enough to dispel the us-vs.-them rhetoric in recent labor negotiations, the industry's future depends on bringing all parties together to solve this middle-segment issue.
The panel pointed to Hulu's success as an excellent example of studio work in this area. Miller relayed how Hulu reflects viewer preference for high-quality products and their acceptance of long-form works with advertising over the Internet. Well-suited for television reruns, the Hulu advertising approach is one that agencies know how to do well and offers targeted marketing opportunities. While Moonves noted that targeted marketing efforts can miss portions of the audience, it points to a need within the industry for more insightful means to measure digital media consumption.
Producer Brian Grazer is confident the theater experience will remain strong, while noting revenue streams matter. As Moonves remarked, everyone is trying to keep their heads above water with revenue while figuring out how to monetize the new digital content and outlets, especially mobile applications. "It is about creating quality content that tells a story, whether it is a two-minute clip or a two-hour movie. The challenge is getting enough revenue to continue high quality content."
Miller sees the enterprise-level strategy as a major challenge, while Grazer is concerned about fear within the business that drives management to prognosticate what people like. "As long as it doesn't compromise artistic integrity, the media should be flexible." As this panel revealed, Hollywood is focused on attaining the flexibility to succeed at providing quality content for whatever media the consumer desires.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
