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Digital Hollywood Panelists Talk Changing Models

22 Oct, 2013 By: Chris Tribbey

MARINA DEL REY, Calif. — For all the constant changes in technology and content distribution, not much has changed with studios and TV windows, according to Wedbush Securities analyst Michael Pachter.

“The studios feared TV because they were worried people wouldn’t go to the movie theater ever again, so they held content off TV for 14 years,” he said, speaking Oct. 22 during a panel at Digital Hollywood. “Here we are more than 60 years later and it’s still a 14-year window.”

Old distribution models and whether or not they’re still viable was one of many themes Pachter and fellow panelists tackled, covering consumer data collection, the need for distributors to take China into account, and which companies were doing best at adapting to the anywhere, anytime content world consumers now live in.

Whether older models — like non-a-la-carte pay-TV — are worth protecting was a theme that popped up repeatedly.

“The reality is, when things like this happen, consumers suffer,” said Guy Finley, executive director of the Media and Entertainment Services Alliance, speaking about recent carriage deal squabbles between pay-TV operators and content distributors. “When these things happen, the second screen is a path around it. I think it’s silly that we as an industry, in this platinum age of television, are going through these growing pains.”

Bryan Burns, former ESPN analyst and current president and CEO of sports consulting firm The Forward Direction Group, made a case for protecting the old models, saying there’s a reason they’re still around in the digital content age.

“It’s a really exciting time as video starts to move [everywhere],” Burns said. “[But] I think we have to be cautious as we make these moves. There are revenue streams that have to be protected.”

Wedbush Securities analyst Michael Pachter disagreed. He pointed to the final season of “Breaking Bad,” where there were at minimum 7.5 million more viewers of the live episodes, compared with the rest of the series. Why?

“Because they all caught up on Netflix,” he said.

Netflix was brought up more than once during the discussion, especially when it came to companies like it getting into the content creation business.

“There are a lot of blurred lines today,” said Cindy McKenzie, managing director of American entertainment, media and communications for PricewaterhouseCoopers. “[It used to be] if you were a content creator you were a content creator; if you were a distributor you were a distributor. Now we’re all in everyone else’s business.”

Pachter pointed to the sharing of production costs for limited window exclusivity, with Netflix and its original series, having a huge impact on the content creation world. He predicted Microsoft would be the next to do so with its Xbox Live platform.

“You’re seeing a shift in the model with how content is created,” he said.

Larry Namer, president and CEO of Metan Development Group, a China-centric media company, said along with adapting to new technology and distribution methods, content companies need to revamp their U.S.-centric view of the business.

“Today you can’t pick up a newspaper or trade publication without seeing the word ‘China,’” he said. “It changes the way you look to market to people.”

Wherever content is consumed, everyone in the business needs to pay more attention to who the viewers are. They’re much, much different from any other generation, panelists agreed.

“You should see what they’ll opt in for to get a $5 Starbucks card,” Finley said, adding that younger viewers think 1984 is only a Van Halen album and “Big Brother” is only a reality TV show.

McKenzie said the content anywhere, everywhere generation wants what they want, and they want it now. And they have no problem paying for it, one way or the other.

“People are fine with ads, as long as it’s in lieu of fees,” she said. “And people like the idea of targeted ads. They’re willing to give up some personal information, and that’s a shift. Part of it is the quality of the ads as well. The big issue is how to track the numbers. Who’s watching what? Better metrics … is the holy grail.”

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