Before becoming Executive Editor of ICG Magazine, in July 2008, David Geffner covered film/TV and new media for more than ten years as a freelance journalist. Geffner has written stories about green architecture, health care, eco-travel, and pulp fiction for outlets like Humanities Magazine, Westways, UCLA Medicine and The Surfer’s Path. A screenwriter and documentary filmmaker, Geffner lives in the San Fernando Valley with his wife and children. He has moderated panels at NAB for the last five consecutive years, and his stewardship has helped ICG Magazine win fifteen Maggie Awards, including Best Overall Trade Publication, 2012.
Justin Wagman is a Los Angeles based Post Production Supervisor currently working out of Amblin Partners entertainment. He formally served as Director, Worldwide Distribution Services at Paramount Pictures where he oversaw international distribution workflow across all media platforms on such franchise films as “Transformers,” “Star Trek” and “Mission Impossible.” He recently wrapped post production on Dreamworks & Paramount Pictures, “Ghost in The Shell.”
[ 00:00:19 ] Digital means something different at every studio.
[ 00:00:22 ] Really every company today but at Lionsgate it means that I help sell our films and television content across transactional platforms globally that is iTunes Google Play VUDU Comcast DirecTV dish all the cable companies plus I do hotels airlines libraries campsites. I mean anything that’s not theatrical pretty much will touch.
[ 00:00:49 ] MARGARET The entertainment business is still built on a windowing model today and I don’t see that going away in the short term or even the long term the success of a film in the theatrical window drives so much of what happens to that film downline and for that we are very dependent on that model today. Lionsgate is a unique company in that we produce film and television across a wide swath of networks. Clients of all kinds. We have 90 shows on 40 networks globally. A lot of people don’t know. For example I was just in this panel and did a little splurge and said orange is New Black is a Lionsgate original series that we produce for Netflix and the moderator stopped me and said How many in the audience know that Orange Is The New Black is a Lionsgate show over well over half the hands went up. And you know Netflix pays us a lot of money for that show. So it is a Netflix original series but we make it not to get out of my lane just talking about Lionsgate as a company. What I do is manage the client set and our product where people are buying where the customer is paying for that particular piece of content whether they’re renting it from their favorite cable platform or iTunes or Google Play or some other platform or they’re renting it. Ansari buying it back or whether they’re buying it from their favorite platform to own as part of their library.
[ 00:02:39 ] We call that in the business Esti or electronic sell through but by no stretch Are we done with physical media.
[ 00:02:54 ] Lionsgate sells lots of discs and particularly in the flyover states we call it. It’s still a wonderful form of media that guess what. Everybody knows how to use and it works. Nobody has to change anything. They’re comfortable with what they’re doing. By the way mom can still put it in the minivan and take it with her. All of these things will catch up and I’m the digital guy but I still believe in this physical media and it’s a very collectible thing that people still like to put on a shelf and line up and show off their collection maybe even loan this to a friend.
[ 00:03:37 ] Absolutely there is there are enough new ancillary windows to help offset any form of an earlier window that is falling off a bit and I’ll give you a perfect example. Netflix has existed for some time but I’ve only been streaming media within the last 6 years or so and I know that because prior to being at Lionsgate I was at another Hollywood studio MGM and MGM did one of the first streaming deals with Netflix on the deep library content. And so here’s a new business that many years ago that didn’t exist.
[ 00:04:16 ] And now look at what it’s become and it has lots of competitors too. Like Amazon Prime Hulu crackle now YouTube bread. Everybody’s doing original content back to mindscape doing 90 shows across 40 networks globally. We have a dog in a lot of those hunts as we say in the south.
[ 00:04:37 ] And we can we consider ourselves to use our line that my Vice-Chairman uses all the time a benevolent arms dealer we make content we know how to make good content and we’ll sell it anywhere that we can when doing today is an important part of film and television entertainment both theatrically released and content as is produced for television. The theatrical windows first and then there’s normally about a 75 to 90 day period before we offer it for sale. And then we offer it for rent and then it goes to a pay network and then there are other ancillary distribution windows down the line all the way to free television. And in some cases subscription networks like those that we’ve talked about Netflix Amazon Prime and others. Television the similar situation in television is it a network buys a show we produce that show for them. They have the first window and some period of exploitation around that. And then we take it to those other windows downstream. Today success in those downstream Windows is largely driven off what happens in the first window. Whether that’s Nielsen ratings of a show on a network or how much box office a movie generated in its first theatrical window and that that’s going to continue for a while the margins vary from window to window and it really has to do with the demand curve of the client or the customer or really the customer today.
[ 00:06:25 ] It is a business that we think and most of our partners think is fair on both sides and it continues to work.
[ 00:06:33 ] There will always be margin pressure in our business. Margin pressure in every business every retail business where the customer was reached. So you know that’s going to be a continuing discussion. So much of it is ad supported. Right. So much of everything that we consume as viewers watchers of entertainment is ad supported.
[ 00:07:00 ] You’ve got to imagine that that’s really going to play a factor in the future. I’ll tell you it’s fun to see how this conference has changed. I was just talking with some of my panelists that were on this panel I was just on. And I realize now I’ve been coming in maybe for 30 years. I started as a college student at the University South Carolina and the media people brought me with them to the for my first B which was in Atlanta that many years ago. And content has become such a cool and relevant part of this conference. It’s been a fun transition to watch.
The Academy reconstituted its Science and Technology Council in 2003, and as its first director, Maltz is responsible for developing and implementing its operational plan, administering the Council’s day-to-day operations, for individual contributions to selected Council initiatives and for representing the Academy on science and technology issues at industry, government and academic forums. Previous to the Academy, Maltz was CEO of Avica Technology Corp., where he led the first worldwide commercial deployment of digital cinema servers, drove the development of key technologies for digital cinema, and was heavily involved with the digital releases of many major motion pictures in the U.S., Europe, and Asia. Previous to Avica, Maltz served as a consultant to companies such as Sharp Electronics and Microsoft, where he spearheaded the development of the Advanced Authoring Format. Prior to these assignments, he was executive vice president of operations and engineering for nonlinear editing pioneer Ediflex Digital Systems.
[ 00:00:19 ] Look I think there is always a little bit of that struggle between the creative side and the business side at the end of the day you want to run a profitable business but you realize you do have to go out and take calculated risks in terms of launching new programs. You know from my perspective I am not a creative guy. I’m a finance guy so I do lean heavily on the other executives at Fox television stations that handle the creative and you know a lot of times will just sit together in a room will discuss the upside potential risks and we’ll reach a mutual decision. But there’s a lot of collaboration involved as you’d imagine because you essentially don’t ever want to have a finance guy figuring out what shows should be on TV. Yeah I think for us if you look at what how we program our stations a vast majority of our programming is local news. So that’s kind of that. We already know that that’s a program that has longevity and you know given the state of affairs today we’ll continue to have longevity. Local Sports is another product that we have a lot on our air so there’s not much question there. I think when the question does arise it’s really when we look at new first run syndication. So for us this year we launched page 6 television. But the question becomes well. How much do you want to get behind it. And we do we get behind it but we try to structure the deals that are fairly short term in nature. So in two or three years time you have some flexibility to change your programming lineup if you feel like the is not working. Yes. I think on sports deals you certainly want them longer term and to the extent you can get an exclusive you look to do that. So really programming that’s proving its value that shows sustain ratings shows a large predictable sustained audience.
[ 00:02:36 ] Again local news not the same size audience as sports but certainly large predictable audiences so you’re comfortable with that. It’s really the new programs that you want to limit your risk so to speak but you also generally work out the deals so if you want to renew you have the first right to do so.
[ 00:03:05 ] I think certainly it’s something that we constantly look at the ad load on our programming. You have a lot of control over that especially in local news and the first run syndicated programming local sports the ad loads are kind of built in so the NFL is kind of a traditional ad load that hasn’t really changed even though even there there’s some experimentation where you may do a split screen where you have some advertising on one side but you still have a live shot of what’s going on at the stadium on the screen.
[ 00:03:37 ] So there I think there’s going to be what you’ll see is a lot of experimentation. Tonsure where that you’re not burdening the audience too much with an ad load and losing. I think where the bigger risk comes in is on the general entertainment side because that’s really the type of programming that people would go to a Netflix or a Hulu for and sit down and watch it from beginning to end without interruption. So there I think what you’re seeing really more at the national level is product integration things of that trying to monetize advertising that way in an effort to be able to reduce the ad load that somebody would sit and view at home.
[ 00:04:28 ] I agree. But I think luckily sitting on the broadcast television side with local television stations these these are still must have networks for most pay-TV platforms. You know it’s it’s much easier to give up a second or third tier cable network that has a very niche audience and say I’m going to give up. I’m not going to carry CBS I’m not going to carry Fox. You know there’s between the sports the local news and the programming these networks are must have. And what’s interesting is if you look at total viewership about 40 percent of total viewership. Is on the backs of the broadcast networks yet the broadcast networks only garner about 15 percent of the cable subscription rate you were to look at what Comcast pays all the cable networks and purses the television stations the cable networks are over indexing on their rate versus viewership while the broadcast networks are under indexing currently. Look I think there there is some of that. I mean the number of programming options today are much greater than they were ever. And as you’d imagine the quality of programming is you know runs that same scale. What I think what you see are a lot of the cable networks are investing more in high quality programming so the programming that you would see on an eFax or an AMC today is is very high quality versus if you were to look at a cable gen entertainment show 15 years ago you know from a local television perspective we actually try to focus more on live topical shows so if we’re not broadcasting local news or sports we’re trying to fill those hours with shows that are you know nationally syndicated first run shows like A TMZ or a page six television shows that are topical and relevant and hopefully complimentary to the news. And the other programming and the sports that we have on the network Yeah look I think we are certainly when you compare us to a Facebook or a Google we certainly don’t have the same level of data that they do that they can offer.
[ 00:07:11 ] NTSC 3.0 does promise that you would have that ability but I think there’s also existing technology today that if you have a web enabled smart television you’d be able to get much better data of people what people are viewing versus traditional Nielsen rating. So you know certainly. There I would believe there is upside. I do believe ATSI 3.0 will create new opportunities. What those are. I don’t know yet but I would imagine there’s new business models that could come out of that.
[ 00:07:56 ] Yeah look at it. It all goes back to really determining what type of programming you want to put on the air that you believe will keep your station relevant for us. The focus maintains is.
[ 00:08:12 ] Staes live topical programming. The more that you have that the better off we believe will be because that’s the type of programming that somebody someday is not DVR in tonight’s five o’clock news and saying you know what I’m going to watch it next Monday. So it’s DVR proof it’s alive. Predictable audience but it just goes into you know it’s very judgmental and you do a little bit of a cost benefit analysis of what the upside is. You know there’s always a risk that it costs more than the ultimate benefit. When I say live topical it’s some of it is recorded so some of the first run syndication is dên date focused but it may have been recorded you know a day in advance two days in advance and cut. But we have the experience of doing live programming whether it’s us producing local news live on a daily basis we’re producing like 900 hours of live news a week across it across a group. So I would say. We are very comfortable producing live programming but if nothing else you want to present programming that appears to be live.
[ 00:09:39 ] Well for us it actually works to our benefit because you know I think when you hear about fake news a lot of it’s national news whether it’s a cable news network. So the more noise about the fake news and news that skews left or right it actually benefits local news organizations because I think audiences kind of still view us as old fashioned which isn’t necessarily a great thing but old fashion is also in the sense that if they want straight news that’s where you turn. You know during the hurricane in Houston we went live local news coverage on our FOX station for 150 hours straight without commercial interruption. And I think a lot of people especially the people in Houston turned into that tuned into that coverage because they wanted to know what areas were being flooded where they needed to be where they had to go versus tuning into a cable news network who may be talking about Melania Trump wearing the wrong type of shoe to flood area.
[ 00:10:47 ] Yeah I think it depends on the market. You know certainly markets where the news leader the more news you put on the air generally the better off you are.
[ 00:10:58 ] People tune in. It’s it’s we control the costs of producing the news. And as a Fox affiliate there’s really only two hours that the network fills for us so there’s another 22 hours in the day that we can program. So you know I think on average are Fox television stations broadcast nine hours of local news per weekday. And we were in some markets where it’s you know getting up near 12 hours a day and we have some markets where even when you’re not broadcasting news on the air we do kind of a live stream online that we can point people to. So we are adapting to that environment. And for us it’s actually good business and generally profitable programming for us. I think when it comes from a financial perspective I think a lot of times when when people think about local television they kind of think of it as kind of old fashioned sleepy business. It’s a it’s not Google it’s not Amazon it’s not Facebook. But I think what people miss is it’s actually a very resilient business. I think it’s still and I know it’s still a very profitable business it still generates a tremendous amount of cash flow and we’re serving a need in the marketplace that really no cable network can provide the local focus of our stations are a huge draw for the audience. It’s like going back to the Houston example. They want to know what’s happening in their neighborhood. They’re going to tune in to the station that they trust. You know I would prefer to be number one in all of our markets and local news. We’re not. But you know certainly you’re providing that service.
Below is a transcript of the Backstage Conversation with Alan Breznick, Editor of Light Reading
[ 00:00:17 ] There’s a couple of big forces of change. One is the move to I.P which is the broadcasters and seeing just as much as the cable and the other service providers. Everybody is trying to make the transition to all IP delivery of media and some industries are better positioned to do that than others. Broadcasters are starting probably from more from scratch than some of the other folks with cable operators are going through a lot of the same transition trying to figure out the best way to get to all IP delivery because it’s a messy involved process. That’s a good question and probably has to be a mixture of both. You definitely need a new a new group of people coming in who are trained in IPs from the beginning but that won’t do the whole trick because it’s just not enough for those people so you have to retrain some of the folks you have now. But it can be pretty tough to retrain somebody who’s had 20 30 years experience in SDI and teach them a whole new thing.
[ 00:01:22 ] On the cable side though people are excited about some of the new next gen architectures that they’re looking at that will allow cable operators to provide a faster broadband speeds provide more innovative video services compete better with the OT video players or incorporate T.T. video into their video offerings and basically find ways to streamline their operations and do things cheaper and more effectively. So there’s a lot of initiatives going on in the cable and broadband space that sort of mirror what’s going on in the broadcast space basically trying to deliver seeing video and broadband quicker cheaper more efficiently and at higher speeds.
[ 00:02:10 ] Well there’s all sorts of obstacles technical obstacles as training obstacles financial obstacles operational competitive obstacles to everybody. The common element like that like I mentioned earlier is everybody wants to get to IP. So everybody is working. Each industry is working at it at his own pace and in its own way.
[ 00:02:30 ] But they’re all going to get to the same point where they’re all delivering one media over IP technology rather than over over the air technology or in cable space of a quantum technology or things like that. Not too well I mean it’s a huge issue. There’s a lot of data that can flow in and people are trying to figure out how they’re going to manage that how they’re going to make sense of it how they’re going to organize it how they’re going to extract what they need out of it because you can get a lot of data in but if you can do anything with the data it’s not doing you much good.
[ 00:03:06 ] So Another problem is that a lot of data comes in but it goes into different silos and silos don’t mix. So you can’t pull out the data that you need from one place and use it in another place. So there’s all sorts of data analytics things that have happened data management things that have to happen and it’s not an easy issue to sort out.
[ 00:03:32 ] Right. I don’t know enough about the specific tools to say which is going to be the winners and which are going to be the losers. But there’s so much pressure to produce these tools and vendors are working on it so that there will be tools. It’s just a question of how long it’s going to take which you’re going to be the best tools and how much is going to cost because it’s going to cost a lot of money.
[ 00:03:58 ] That’s a good question. They probably go about it by doing. I know when the cable exec case they go about it by very incrementally. So they do a little bit and see whether they can make money on it and do a little bit more and see what they can make as they move cautiously hopefully methodically and work their way there. But it’s a messy transition. You don’t just throw out everything you have now and adopt something new. So the monetization angle means that they’re going to have to go slowly and figure out each step of the way how they can pay for it.
[ 00:04:36 ] You know our audience or is that there’s a broad swath of people who are involved in communications technology and it extends from the enterprise space to the consumer space and takes and video it takes and broadband it takes and telco takes in wireless.
[ 00:04:53 ] So it’s it’s it’s a it’s a lot of engineers but it’s also a lot of strategists and marketers and it’s a pretty big a pretty big order. It’s hard to work with you us because you’re getting both CAS and clarity at the same time. Things that the market is getting bigger and yet there’s a lot of consolidation going on and a lot of cross-pollination pollination going on. So people are getting into each other’s spaces and faces. So it’s it’s hard to make sense of it and the beauty of it for us is that it gives us a lot of interesting things to cover. But it’s going to be it’s going to be a real mess for a few years into the next decade.
[ 00:05:45 ] I guess it’s both the beauty and the and the the difficulty of the St.. The challenge at the same time. But it does keep our readers coming back for more because it’s so much so much to write about so much to cover so much to delve into. It’s almost it’s such an abundance of hot topics and interesting issues to get into. And then it raises also besides the technology issues and the operational issues the financial issues it raises a lot of policy issues that raises regulatory issues all sorts of all sorts of things. So it keeps it interesting.
[ 00:06:23 ] That’s a good question. We do produce more video. We do. We are starting more sister Web sites to light reading we used to just be one Web site covering the basics that’s already covered now we have a family of five or six different Web sites that cover all sorts of areas. We’ve created a tech encyclopedia of terms for each of the industries we do specialize videos. We do custom research we do webinars.
[ 00:06:45 ] We do our own conferences so we our business model keeps changing and in accordance with the way the business is changing. So different than where we were five that the company is almost 20 years old and we’re so different from where we were when we started and was so different from when I joined 11 years ago and so different from when I switched positions within the company four years ago.
[ 00:07:23 ] It’s a good question I don’t know if we haven’t yet.
[ 00:07:26 ] It’s not when we’re let out happening in the future but we’re we’re mostly focused on creating new Web sites and redesigning the old ones right now and making them more mobile making them almost more mobile friendly.
[ 00:07:46 ] I guess one thing I mentioned briefly is that we’re getting much more into the enterprise space because before we’ve been focusing on businesses going after consumers now focusing on what the enterprises are doing because everything is coming together. And as for instance with video technology enterprises using the same kind of video technology that service providers are using so that that’s a first. So in that way that with technologies coming together it allows us to cover more vertical markets and we have before.
