Summer 2007

The View From the Top

Warner Bros. Chariman and CEO Barry Meyer surveys the entertainment landscape as it is now-and how it might look in the future.

Barry Meyer1. A lot has been written about competition for content between old media companies like Warner Bros. and new media companies like Google and Yahoo! What are your thoughts on that?

There’s an enormous amount of competition that exists now in all content areas. Look at our business: You’ve got six major studios and all kinds of independents constantly competing with each other every weekend in the theatrical arena, competing with each other every day on television for ratings. But I don’t think there’s competition of the kind you’re talking about. I think that Google, Yahoo!, AOL, are new and efficient means to distribute content. So to the extent that they are developing some of their own, I think there is room for that. But from our standpoint, we view them as extremely efficient platforms to distribute either new creative content that we form, or as an additional use of creative content that we’ve created for other platforms. So we view them as totally complementary to us and not necessarily competitive.

2. What do you see as the future of programming on devices like mobile phones and iPods?

I think we’re all experimenting with new forms of content that might be susceptible to that kind of small screen—on-the-go, short-form-type content. I’m not sure right now that people are ready to sit down and watch a two-hour movie on their cellphone. But that doesn’t mean to say that there won’t be other forms of content emerging that might not be right for that. I know that here at the studio, with Studio 2.0 and a couple of production entities we’ve set up, we’re experimenting strongly in that area. We’ll see what works.

3. Overall, the home video revenue for the first quarter of 2007 slipped by about 5.1 percent. That’s the biggest dip in the DVD era. What do you think the future of home video is?

What we’re seeing now is some shifting as to how it’s being delivered to the home. Video can be delivered to the home digitally; it can be delivered by a satellite; it can be delivered by a cable; it can be delivered by going to Blockbuster and buying it; it can be delivered by Netflix. But I think home video has got an incredibly robust future both in the U.S. and outside of the U.S.

4. What about the DVD?

I’m a strong believer in packaged goods. I think people enjoy going into stores, looking at what’s on the shelf, reacting to some of the marketing, and taking some home. Videos are really one of the most ubiquitous kinds of products because you can use them anywhere: it’s compact, it’s high quality, and it’s got a lot of additional elements that we all strive to put on them. So I think packaged video goods are going to be around for a long, long time.

5. Tentpole movies have been an important part of Warner Bros. theatrical strategy. Do you see that continuing to be viable as budgets keep escalating?

Well, the whole industry is constantly fighting that battle of the expanding waistline of movie budgets—both production budgets and marketing budgets. But I see tentpoles continuing for Warner Bros. because, first of all, we’re finding pretty effective ways for us to share these costs now and, secondly, I think the big movie is one of the things that we can best do to help preserve that theatrical experience for consumers. A big tentpole movie is not usually an experience that can be exactly duplicated at home, even on a large flat-screen TV or a home theater. So we’re going to continue doing that. But we have a very optimistic view of the business. Our goal is to release as balanced a slate of movies as we possibly can. So we’ll make animated films and we’ll make big action-adventure films. We’ll make comedies. We’ll really try to create as much balance in our stories as possible.

6. Piracy is obviously one of the biggest issues facing the industry today. What do you think needs to be done in this area?

Piracy is a difficult issue for all of us. But we’ve always felt that there’s really a three-pronged approach to take to piracy. First of all, we need strong laws and we need diligent, strong and consistent enforcement of those laws, both here in the United States and especially outside of the country. There has to be an understanding that intellectual property needs to be protected just the same way as physical property needs to be protected. But I also think that we need a very strong program of public education. We need to make people aware of the fact that what they’re doing when they illegally download or buy a DVD from a blanket on the street is really hurting people and it is against the law. And then probably the most important thing that we can do is provide a reasonable alternative. You know, if you’re asking somebody to not pirate, not download or not buy an illegal DVD, you have to give them something that they can afford, something that is good quality, something that is reasonably priced.

7. Has the industry been doing that?

I think we’ve done an effective job with this. You have to give the public some choices as to how they can obey the law without it being too expensive. That’s why we’re such strong advocates of digital rights management because once you can control how the product is used, you can price it according to what an individual wants to pay. Somebody may want to just see a movie once, some may want to own it, some may want to burn it from their hard drive onto a DVD. Why charge exactly the same price for people who want to use it in different ways? So it’s that alternative that I think is a key component to beating piracy.

8. What kind of window do you think is appropriate for the theatrical release of movies? Do you see a time when that will be day-and-date with home video?

Well, from our standpoint, maybe there’ll be a time for that. But at Warner Bros., if we’re releasing a movie theatrically, we’re committed to protecting our exhibition partners with a robust theatrical window. If we’re going the theatrical route, we’re committed to protecting that window. What is the right length of that window is hard to say. I think once you get much below 90 days it could become problematic. But you know, whatever those windows are could change if you need to get a theatrical release into the market earlier because of a special holiday consideration or something seasonal. So there’s some flexibility there.

9. With television shows becoming significantly more complicated and with better production values, do you see a rise in the director-producer role?

I think there’s a greater role than ever for directors because you need the best creative voices that you can find. However, television, as differentiated from features, has always been about scheduling and the inexorability of making airdates. So I think one of the reasons why the director’s role was always different in television is because of scheduling a director’s time and the scheduling of the series. It’s a very tough, rigorous schedule and often, especially on dramas, there are three, four, five directors that alternate on episodes of a series. So adapting to that kind of scheduling becomes a big issue. I think there can be a rise in that role if directors are willing to stay with a series. What the experience has been most times is that directors move from series to series, so it’s hard to develop a consistency of voice. But it could be a role that rises. It remains to be seen.

10. What would you say is the biggest change in the business since you started out?

I’ve been here so long the biggest change could be electricity. But really, the biggest change would be the advent of digital technology because we’re right at the beginning of that. The technology exists, but how we all wind up using and benefiting from the technology and migrating from analog to digital, I think is going to be one of the biggest changes. And it’s a story still to be written.

10 Questions

Question and answer sessions with prominent figures outside the Guild about current creative and business issues.

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