State of the Industry 2011 – Luncheon Recap
Picture if you will a dimension not only of sight and sound but of mind, a place where content meets revenue through a door which may be locked by Millennials and unlocked with the key of multiple platforms. There's a signpost up ahead, your next stop: the Beverly Hilton.
The 2011 State of the Industry luncheon took place on July 19th and serving as our guides into the new dimension were six panelists representing a cross-section of our industry: Jeff Bader, EVP, Planning, Scheduling & Distribution for ABC Entertainment Group; Kevin Beggs, President, Lionsgate Television Group and President, HRTS; Doug Herzog, President, MTV Networks Entertainment Group; Michael Kassan, Chairman & CEO, MediaLink; Jordan Levin, CEO, Generate; Sean Perry, Partner and Co-Department Head, Non Scripted Television, WME Entertainment.
Moderating this panel of industry heavyweights was The Hollywood Reporter’s Lacey Rose, who jumped right in when she brought up the topic of Charlie Sheen’s new TV show, asking Beggs what it feels like to be Winning? Beggs said that he and his production partners “like to be loud, noisy and relevant and making this kind of move is all of those things”, adding that if “if Charlie Sheen isn’t a good fit for ANGER MANAGEMENT we don’t know what we’re doing”. Beggs also noted that Sheen is “not as much of a risk as you might think, Charlie’s a consummate professional who’s been on a show for eight years and memorizes his lines instantly and wants to work”.
Rose next addressed the entire panel when she asked about the biggest challenge facing them at present.
Perry said that it’s a demographic matter, it’s “this next generation of viewers who didn’t grow up with television as the primary screen”, adding that “for every dollar we make now, in the future it’s going to be having to make it through ten dimes. Will those ten dimes flow to the creators?” Bader said that what keeps him up at night is asking himself “is our balance correct?’ Are we doing what’s right to grow our core business as well as the ancillary businesses?” Levin’s main concern is that “the new media universe kind of commoditizes content and there’s a lack of respect for how difficult content creation is and how valuable content creators are in the process”.
In this new media universe, is an entity like Netflix a friend or a threat? Herzog said that “we see them as a friend. They’re paying us for our content, paying us very well”, though he added a qualification since “in terms of them getting into the production business, we’d rather they spend more money buying content but we’ll see how it goes”. Beggs concurred that Netflix is friend not foe, saying that “some of the shows we’re involved with are hard to sell off-cable”, such as for example “in the case MAD MEN, they’ve been a great supporter in terms of creating back-end value”.
After the writers’ strike there was much discussion about changing the traditional business model and yet Rose noted that we just came off of another $9 billion upfront, asking the panel if this is something we can bank on going forward. Kassan answered that “the dynamics of what makes an upfront have so many different elements, macroeconomics has a lot to do with it, there was a lot of pent-up demand” but that being said, “complacency came back a little this year” with people falling back into the idea that “nobody ever got fired for buying a 30-second spot”. Perry made an optimistic prediction, saying that “we’ll also have a really healthy year next year since it’s an election year, local stations get a tremendous amount of revenue from an election year”. As for the business model, Bader said “I don’t know if the upfront process will ever change” but “everybody is into more year-round programming now”, there is a gradual move in that direction.
Levin noted that the industry’s business model is going to have to adapt to generational differences since “we’re starting to reach the point where how to reach teens and young adults becomes a bigger and bigger challenge”, with the traditional TV audience largely being over the age of 35. For the Millennial audiences, “their definition of television is not the device through which programming is delivered but rather the programming experience itself”. Perry predicted that for this younger generation “we’ll see a growth of online content being converted into long-form network and cable television” and Beggs added that “they have different expectations for each platform”, for the level of production value in a theatrical movie or a television show versus an online video. One way or another, time marches forward and the industry will change to meet the demands of the next generation, Herzog saying that “they want to watch it all, when they want, where they want, how they want and that genie’s not going back in the bottle”.
Rose next asked the panelists if there’s one thing they could change about the current state of affairs in the industry, what would it be? Beggs noted that Great Britain has established their version of Fin-Syn and so independent production companies can flourish but over here “network ownership and in-house production, from an independent standpoint it’s always a challenge” and “to overcome that challenge you always have to have better stuff”. Kassan would like to see more convergence and integration, he would like to see “a different relationship between content creators, networks and advertisers” since if “people are going to consume their content in a different way then they have to maintain that inextricable link between the brand messages and the content”. Bader added that “in all the discussions of the Hulus and the Netflixes, the big issue is that it’s not a fully branded environment and we want it to be as branded as possible, we want people to know that these are ABC shows”.
As to the future of the industry, Perry struck a reassuring note, saying that “it always comes back to content, since as Shakespeare said, ‘the play is the thing’”. Herzog concurred, adding “I tell my guys every day ‘there is no Netflix, there is no Hulu, there is no YouTube, without what we do”.
We have not entered the Twilight Zone but there are multiple dimensions to be expanded and explored. The good news for everyone in this industry is that no matter the platform or business model there will always be a strong appetite for professionally-produced content and so the future is bright.
(Photos by Chyna Photography)