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Lesinski Talks

17 Jun, 2006 By: Erik Gruenwedel

Thomas Lesinski

Thomas Lesinski, president of the recently formed Paramount Digital Media Group, is acutely aware that change in home entertainment is inevitable and not necessarily a bad thing. As previously done with other key executives, Home Media Retailing asked Lesinski — previously president of Paramount Pictures Home Entertainment — about the impact the digital revolution is having on the entertainment food chain.

HMR: Will Paramount offer movie downloads, on-demand or download-to-own content on proprietary and/or third-party Web sites other than CinemaNow and Movielink?

Lesinski: We have plans to license our content to multiple content aggregators over the next six to 12 months. They are large, well-known companies that are committed to digital distribution. It is one of these interesting times for the entertainment industry where there is a real inflection point as a new distribution model opens and the studios move to evaluate how to monetize it while minimizing cannibalization on the other businesses.

HMR: As a new distribution window opens, does an old one close?

Lesinski: No. Historically, whenever a new distribution model arrives, whether it is theatrical-to-video or video-to-television, what normally happens is the studios have found a way to make [the model] as incremental as possible. Inevitably, all the windows somewhat overlap because virtually nothing is 100% incremental. What is important is that we continue to look for opportunities in new distribution. Digital distribution is a significant opportunity on the immediate horizon.

In order for this industry to continue to be healthy, we have to continue to evolve in terms of accommodating consumers and delivering content to them whenever and wherever they want. And we have to do it quickly, before we get into a situation that looks similar to what happened in the music business.

HMR: Do you believe digital downloads will circumvent the need for high-definition packaged media?

Lesinski: No. When you think about digital distribution and packaged media and theatrical distribution and television, these new windows don't put other business models out of business. Typically, new distribution models bring new consumers into the fold and ultimately increase overall entertainment consumption.

High-definition packaged media is unlikely to have a significant overlap with digital distribution in the near future. Given the size of the files for high-definition, I can't see HD competing with digital distribution in the short term.

HMR: Will the evolution of digital distribution force day-and-date releases of theatrical and packaged media or at the very least re-jigger the distribution food chain?

Lesinski: No. The filmed entertainment business was built on sequential distribution. It all starts with theatrical, then goes to airlines and hotels, then on to home video and pay-per-view/VOD and on to pay TV and free TV.

Digital distribution is a new distribution model that is being timed simultaneously with current home video availability. It will be very interesting to observe the broad-scale arrival of digital content over broadband in the next six months to 12 months. We believe this new digital distribution model will help invigorate movie consumption the same way that legal music downloading ultimately re-energized music. It really comes down to how quickly the third-party content aggregators will build a consumer relationship and how rapidly consumers adopt this new entertainment option.

HMR: How real is the PSP/iPod video market, considering the screen size, capacity and battery life?

Lesinski: It is very real. If you look at the way it drove the music video and episodic-TV market, it has a good chance of having the same kind of effect in feature-length content. Younger consumers have grown up with small portable devices and are very comfortable with smaller screens. That behavior is going to be reinforced with increased availability of digital content and portable video devices.

HMR: Does portable video lend itself more to television content or feature films?

Lesinski: Both. As long as the storage capacity is there, I think people will download both movie and TV content to portable devices. From a licensing point of view, it has primarily been short-form TV content so far, but I think there will be a significant move soon in which long-form content becomes the next big driver in portable media.

HMR: There has been an increase in video rental kiosks at select supermarkets. Do you see a future that includes a Paramount-branded kiosk offering movie downloads?

Lesinski: I think there will be kiosk businesses that allow you to move digital content onto portable devices in the near future. I think a natural place will be airports, where consumers already are voraciously using portable media devices. I think kiosks are more likely to be multi-studio or third-party kiosks. I doubt you are going to see individual studios getting into the kiosk business, but you never know.

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