Theatrical Window Status Quo Creating “Innovator’s Dilemma,” Studio Execs Say

Get Out Box Office

Changes in how movies get to movie fans won’t come anytime soon and not in one solid package, a trio of Hollywood insiders said today. “It’s the innovator’s dilemma,” Benjamin Mogil, Stifel Nicolaus’ Managing Director Equity Research, Media and Entertainment, told LA Film Czar Ken Ziffren today during UCLA Law School’s 41st annual Entertainment Symposium at Freud Playhouse.

“In the current market, the Pay TV deals will not allow the studios to make a subscription service deal,” Ziffren said bluntly during the discussion about the realities of imposing a new movie distribution format on the industry. “Under the rules of the game today, the only revenues that count in terms of license fees…is if these revenues are theatrical,” he said. “It’s trading Pay TV dollars for non-Pay TV dollars, and therefor not making as much money.”

“Designing the right model is complicated,” added Thomas Gewecke, Warner Bros Entertainment Chief Digital Officer and EVP Strategy and Business Development.

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Mogil, Ziffren and Gewecke were joined on the panel by Amazon Studios Worldwide Head of Motion Pictures Jason Ropell. Ziffren, the often-circumspect Tinseltown legal heavyweight, moderated the discussion, entitled “Breaking Windows.”

“No one size fits all,” Gewecke said, weighing in on the idea of a full-scale remaking of the way movies get to audiences, “but they need to fit together to grow the pie.” He highlighted the notions of genre, Premium VOD and accessibility as key elements in how the industry might find a new footing. “Exactly what those models are really needs to makes sense for the ecosystem as a whole.”

As an example, he pointed to the surging success of Jordan Peele’s small-budget hit Get Out scoring amid the current tentpole landscape. “You have to have movies that break through and find their audiences,” the Warner Bros exec said. In that pic’s case, “the initial 90 days” in the traditional theatrical distribution model “is a very important part of the business.”

Overall, Gewecke presented an optimistic picture of the film industry based on growing box office — though he noticeably sidestepping declining attendance trends and actual studio growth. “Overall, we find the business healthy.”

“I was told there would be no math,” Ropell joked to wide applause at the end of the panel.

As for Ropell’s Amazon, a new entry into the distribution game, he reiterated that it uses third parties to get its films booked in theaters — as it did with Roadside Attractions on this year’s Oscar nominee Manchester By The Sea. “We’ve only been in business for a year so we don’t have the infrastructure,” he noted, while hedging on whether the Jeff Bezos conglomerate would ever take on the duties directly themselves. “We’ll innovate where we need,” he added.

“We are a filmmaker-friendly studio,” he said, adding that right now Amazon sees itself “in the prestige space.” The exec also emphasized that the Amazon philosophy when working with high-caliber talent is, “you need to stay out of their way.”

The two-day symposium wraps this afternoon.

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