Sony Pictures Technologies – FY13 Three Year Plan Review
Agenda Page
I. Group Overview
. Group Mission & Prime Objectives ……..………………………………………………………………… . SP Tech Showcases: Distribution Backbone, WPF Supply Chain, DECE, Colorworks .……………….… . SP Tech Genesis and Functional Organizational Chart ……………….…………………………………… . Departmental Overviews – Core Functions, Financials & Key Facts/Achievements: . Colorworks ………………………………………………………………………………………… . Digital Media Group ………………………………………………………………………………. . Technology Development …………………………………………………………………………. . WPF – Asset Management ………………………………………………………………………… . WPF – Global Logistics …………………………………………………………………………… . WPF – Client Operations ………………………………………………………………………….. . Digital Policy Group ………………………………………………………………………………. . Corporate Alliances ……………………………………………………………………………….. . 3D Tech Center …………………………………………………………………………………….
II. Three Year Plan
. SP Tech EBIT Improvement (Revenue Enhancement & Cost Reduction) Actions .………………………. . Proposed New Functional Org Chart ……………………………………………………………………… . Three Year Plan Headcount Roll ………………………………………………………………………….. . Other Strategic Opportunities & Considerations …..……………………………………………………….
V. Appendix
. FY13 Budget Data ………………………………………………………………………………………….. . SP Technologies Organization Charts ……………………………………………………………………… . DMG Usage Chart …………………………………………………………………………………………. . Territory Account Growth …………………………………………………………………………………..
SPE Confidential 1 2
SP Tech Group Overview Sony Pictures Technologies – FY13 Three Year Plan Review
Mission
Mission Statement:
Where is the mission statement from previous years?
We’ve realized these core objectives for the benefit of SPE in many ways – some of the higher impact initiatives that showcase SP Technologies contributions include the Distribution Backbone, WFP manufacturing savings, DECE and Colorworks Production Support ……
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Recurring Themes
. Protect long term asset value . Technology should be transparent . Faster, Better, Cheaper
These themes will be active across the division
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SP Tech Showcase: Distribution Backbone
The Challenge: . The costs of physical duplication and distribution labor, materials and transportation are increasing • The work is repetitive and mechanical . The market has changed from a few large customers to hundreds of customers in a wide range of sizes • Unit distribution volumes are increasing while individual unit transaction values decrease • Physical distribution systems do not scale economically • The costs of supplying the increased volume through traditional methods would be cost prohibitive
The Solution: . Digital technologies have transformed the creation, distribution and consumption of entertainment media. . A change to file-based media deliveries allows the opportunity for an automated workflow . In partnership with Sony DADC, the Distribution Backbone was developed to automate the repetitive tasks, eliminate physical media and transportation costs. • SPE businesses will deliver approximately 80K file-based media assets to our customers this year • Expected to grow to 180K by FY15 (60K related to Ultraviolet) • To deliver these 180K files would cost approximately $35M existing 3rd-party offerings, even taking into consideration the downward pressure on rates, vs. $11M with DBB • After FY16, the cost of using the DBB will drop by an additional $2.6M as the build costs will have been completely amortized
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SP Tech Showcase: Distribution Backbone
The Results: . 80% of WPF deliveries are currently file-based . SPE is on track to utilize the DBB for 35% of deliveries this year and that will grow to near 100% within 2 years . The DBB’s ability to meet the shrinking timelines and increased volumes has helped SPT and SPHE fulfill the ever-increasing demand for SPE product around the world . Using the DBB, the cost for delivering 180K files in FY15 will be approximately $11M, saving the company $43M in costs over the next two years!
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SP Tech Showcase: WPF Supply Chain Savings
The Challenge:
. Beyond distribution to clients, WPF purchases outsource services: . Dubbing . Subtitling . Editing for airlines, broadcasting, etc. . Ingesting new assets for distribution – audio, video, metadata, rights management data . Etc. . Volume and types of requests serviced by WPF are increasing . Technological advances in the industry have created opportunities to dictate workflows and drive cost savings . WPF manages a consolidated supply chain and workflows across divisions, allowing maximum leverage in defining workflows and, with SPE Procurement, leveraging purchasing power to identify potential time and cost saving opportunities
The Solution: . Since FY10, WPF and Procurement have undertaken over 20 RFPs . RFPs are regularly renegotiated on a 1, 2 or 3 year cycle. On average, each RFP takes 2 to 5 months and are conducted on a global basis
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SP Tech Showcase: WPF Supply Chain Savings
The Results: . Of the 20 RFPS, 16 have resulted in annual savings of at least $1M . Based on actual volumes, the cumulative savings to the title owner since FY10 has been $57M
Manufacturing Spend
$150.0M 19% $57.0 $125.0M 17% $100.0M 15% $75.0M 13% $50.0M 11% $25.0M 9% $0.0M 7% FY10 FY11 FY12 FY13
Actual Spend Total w/o RFP Savings Percent Savings Annual Savings Cumulative Savings
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SP Tech Showcase: Digital Entertainment Content Ecosystem
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SP Tech Showcase: Shooting 3D on a 2D schedule and budget
Conception Development Operation
The Problem “The bottom line is, if you want to do Screen Gems good 3D, it’s very expensive. The 3D Systems Testing “Planet B Boys” feature shoots in 3D on camera equipment is expensive because • Speed of initial set up Screen Gems normal 2D schedule of 35 it comes with a lot of techs, the labor. • Ability to not need repeated days. Average 40 set ups a day, three […] And there’s a lot of tech fixes -- it’s adjustments rigs in simultaneous use. Only not easy shooting 3D.” • Time to change lens incremental cost of 3D is rig and three -- Michael Bay • Resilience to real-world handling crew members. Never waited for 3D. No 3D correction or conversion needed for rig footage. The Proposition With the right plan and the right Trial Runs SPT’s Left Bank Productions equipment you can shoot 3D on the Successfully shot episodes of “Happy Episode of BSkyB’s “Little Crackers” same schedule as 2D, with at most 3 Endings” and “Days of Our Lives” in 3D shoots in 3D in 4 days after one day additional crew and 3D post is primarily on the same schedule as normal. 2D training for crew. Incremental cost of 3D for adjusting depth to meet creative version taken from one camera on each is rig and two crew members. Producers intent. rig and aired as part of normal run. want to shoot more Sky shows in 3D.
The Skills • Knowing what makes good 3D. Workflow • Experience with rigs. Colorworks designs near-set dailies • Workflows for productions from TV to system for “Planet B Boys”, footage major motion pictures stored and managed on Production Backbone.
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SP Tech Showcase: Shooting with the F65
Conception Development Operation Camera Testing • Initial tests with Sony including two The Goal shorts developed Colorworks Sony’s new F65 camera produces capability stunning imagery with 45% more pixels “After Earth” • Lens tests – spherical and than its nearest competitor and a • The Colorworks designed near-set anamorphic dynamic range of 14 stops dailies system deployed in Costa Rica • Comparison tests for SPE and Philadelphia Technology Partners • Worked closely with production and • Work with Sony to improve camera Sony on F65 issues (e.g. data loss, The Challenge operation. fan noise) • New camera. • Work with FilmLight to produce tools • Footage managed and stored on PBB • Large amount of data. for dailies and DI. • Needs image processing tools. • Work with Otto Nemez (rental co.) on • Develop the skills to assist camera accessories and operation filmmakers “Smurfs 2” Workflow Development • Respond to production when The Skills Colorworks adds F65 support to near- Technicolor near-set dailies had • Practical experience with shooting set dailies systems, establishes problems and post for F35, Red Epic, Arri workflow on Production Backbone. • Footage managed and stored on PBB Alexa. • Workflows for productions from TV to Education major motion pictures. Partner with Production to train directors • Knowing how directors and DPs use and DPs on the F65.. cameras.
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SP Tech Showcase: Better workflows for F65 productions
Conception Development Operation
The Proposition The F65 has more latitude than film so Partner with Screen Gems you can shoot with the camera just like Screen Gems wanted to shoot with F65 “No Good Deed” you would with film. because of camera characteristics and • xxx • No need for a Digital Imaging creating a 4k asset. Technician (DIT) or a video village • Saves cost, less to move, less reviewing on set • Reduce lighting costs using available Workflow Development light. Determine workflow without a DIT, for example design solution for simple “look” management.
The Skills • Extensive practical experience F65. “About Last Night” Camera Testing • Workflows for productions from TV to • Shoots in Los Angeles without a DIT Work with DP to characterize the major motion pictures. • Production is more agile, camera camera for the lighting and locations. • Knowing what a director and DP need moves are quicker to view on set. • DP reports it’s the best footage he’s ever shot.
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SP Tech Showcase: 4k TV Production
Conception Development Operation
The Proposition Shooting TV shows in 4k makes the TV Production Backbone assets more valuable in the future. Production Backbone already providing “xxx” services for TV production. Add a 4k • xxx capability.
The Challenge Hi-def finishing has to cost the same and be done on the same schedule. Workflow Development Create a workflow that maintains “yyy” characteristics of current HD production • yyy while adding 4k archiving.
The Skills 4k Finishing • Extensive practical experience Create a workflow that creates 4k assets production and post production for for consumer 4k markets (e.g. Sony’s 4k TV. project).
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SP Tech Showcase: Colorworks – Production Support
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SP Technologies Genesis
. Sony Pictures Technologies was formed in 2009 and was primarily created from existing operations / assets around SPE . As a consolidated entity, SPTech is able to provide improved vision, strategy and service to all areas of SPE while optimizing resources and reducing costs Department Former Alignment Original Dept. Head Current Dept. Head New Media &Technical Strategy Legal Mitch Singer Mitch Singer Corporate Alliances Corporate Operations Toshino Yuhaku Toshino Yuhaku Business Affairs SPT Don Loughery Don Loughery Advanced Technology Imageworks George Joblove Spencer Stephens Digital Cinema Motion Picture Group Al Barton Eliminated Blu-Print SPHE Don Eklund Eliminated Digital Media Group IT Ben Masek Ben Masek WPF Corporate Operations Jeff Hargleroad Eliminated
. From the original organization, SPTech Operations and WPF have eliminated 11 senior management positions and added only 4, resulting in a annual net savings of $3.3M (salary, fringe & bonus).
SPTech Operations Staffing Changes (VP and above) WPF Staffing Changes (VP and above) Eliminations Additions Eliminations Additions George Joblove Spencer Stephens Jeff Hargleroad Ryan Kido Don Eklund Scot Barbour Richard Berger Tim Wright (promo to VP) Peter Ward
Al Barton Rich DeRosa
Tony Beswick 15 SPE Confidential Nina Louie
Kerri Wilson
Ken Bartlett Sony Pictures Technologies – FY13 Three Year Plan Review
Chris Cookson, President SP Technologies Current Functional Org Executive Oversight • Production & Post Production Technology Vision and Strategy Chart • Administration of SP Technologies Division • Content Preservation and Distribution • Digital Strategy and Policy Development • Application Development Studio • Sony Product Technology Strategy Alignment • Technology Partnerships / Business Affairs Services ( Gary Martin)
Mitch Singer Charlie Falcetti Executive Vice President Executive Vice President Digital Policy Group Production Services (Studio Ops, Sound, Colorworks) • Digital Licensing Policy and Strategy • Digital Intermediate Services • Digital Entertainment Content Ecosystem (DECE) • Trailer Finishing • Worldwide Anti-Piracy / Content Protection • TV Finishing • Content Protection Technology Evaluation • Creative Editorial Services • Asset Restoration Services • VFX / Cosmetic Fixes • Theatrical & HE Deliverables Spencer Stevens Executive Vice President Technology Development
Terri Davies, • Digital Media Technology Evaluation and Development Executive Vice President • Media format, content protection and digital cinema WPF Client Operations standards • Studio-wide Technology Initiatives • Manage Content Preparation and Fulfillment • Supply Chain Management • Metadata Procurement, Creation & Maintenance Grover Crisp • Content Protection Executive Vice President • Quality Control Asset Management
• Asset Restoration & Preservation • Supply Chain Management Ben Masek • New Release & Catalog Mastering Senior Vice President • Asset Storage and Global Logistics Digital Media Group
• Digital Asset Management • Digital Workflow Automation Toshino Yuhaku • Video Streaming & Transcoding Senior Vice President • Forensic Watermarking & Content Fingerprinting • Digital Media Research & Development Corporate Alliances • Inter-Company Coordination and Communications • Sony Corp Strategy Alignment • Project Management SPE Confidential 16 Sony Pictures Technologies – FY13 Three Year Plan Review Colorworks
Core Functions Key Facts & Achievements
Digital Intermediate/Color Grading Services Final color correction of high resolution data with 46 feature titles completed and 6 underway, including: The Amazing Spiderman, Total Recall, Hotel T, Cloudy with a Chance of Meatballs, TV Finishing Services SALT, and Smurfs 1 & 2. Examples of integrated Studio services: The Amazing Spiderman utilized simultaneous 2-D and 3-D color correction theaters while Sound mixing next door. Total Recall Sound mixed during the day and color corrected at night in the facility for 27 straight days to meet Creative Editorial Services the release date. VFX/ Cosmetic Fixes Services Working closely with SPT to streamline workflows for color finishing for network, cable and MOWs. 2011: 2 series, 2012: 6 series and MOWs, 2013: 10 series and MOWs. Trailer Finishing Services Integrated Editorial into Colorworks and continued to broaden and provide quality theatrical and television versioning to multiple users throughout SPE. Restoration Services VFX/Cosmetic Fixes - 150% growth in the last 2 years, offering a cost effective solution for Theatrical DCP Creation cosmetic and VFX manipulation in place of traditional Digital Effects. Colorworks is working with the feature post department to begin End Credits creation to streamline the process and lower costs. Home Entertainment Versioning Worked closely with marketing to move Trailer Finishing from a third party vendor. Originally projected savings were in excess of $500,000. The volume of services have increased annually and will exceed $1,000,000 savings to SPE this year. Expanding into TV Spots that will drive further savings to SPE Colorworks is the industry leader in 4K restoration, delivering the 50th anniversary of Lawrence of Arabia and the 35th anniversary of Taxi Driver. Notable third party projects included The Leopard Financial Summary for Fox/Film Foundation, The Spy who Loved Me for MGM, Tora Tora Tora for Fox, and Rosemary’s Baby for Criterion Collection. FY13 Budget: Revenue – $28.9M Colorworks creates the digital cinema masters and all film elements for worldwide release along with text-less materials for the foreign language release. ● EBIT – $5.9M Colorworks creates all Home Entertainment deliverables, with separate image and color manipulation as necessary for differing display technology. FY13 Budget Headcount: 53
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Core Functions Key Facts & Achievements
Develops and maintains Colorworks technical ISO27001 cert infrastructure 4k at less than outside cost for HD/2K Consults with film makers, Theatrical ACES workflow Production and TV Production to Delivered 10 4K movies to SEL Develop content creation Workflows Evaluate and select camera systems Seamless 4K workflow for AE, etc. Plan and choose post-production Fixed Technicolor issues for Smurfs2 technologies Positioned SPE to gain advantages of higher resolution cameras Advises WPF on streamlining methods for Colorworks handling, processing and delivering content , and more specifically the Colorworks technology team, establish standards of post-production methods for maintaining the highest level of quality Represents SPE in standards organizations to throughout the post-production process. Working closely with Columbia, Screen Gems, SPA, SPI, SPTech, PPF, WPF, Asset Management, DMG, DMC and other groups, the Colorworks engineers improve technologies that benefit SPE help to establish technical workflows at the studio for the benefit of all involved.
Develops specifications for Asset Management Colorworks has, by utilizing the expertise of a technical staff that has over 100 years of combined post-production and production experience, partnered with the other post-production companies at the studio to establish technologies that benefit the studio at large; namely 4k and higher resolution post- and SPE standards for post-production production, Digital Cinema, the Production Backbone, high-quality YCM archives, the ACES colorspace, digital master archives and the Interoperable processes. Master Format (IMF). The Colorworks engineers also work with industry organizations like the American Society of Cinematographers (ASC), Society of Motion Picture and Works with PMC and Sound to develop efficient Television Engineers (SMPTE), the Academy of Motion Picture Arts and Sciences (AMPAS), Digital Cinema Initiatives (DCI), as well as Sony electronics workflows for collaborative sharing of and other technology vendors to help implement standards on behalf of the studio and the industry at large. Working closely with Sony Pictures Technologies, the Colorworks engineering staff helps to develop and test various emerging technologies, such as Digital production content. Cinema, 3D, high frame-rate 3D, 4K to the home, that eventually help the studio to create more compelling content. Collaborates with other Sony organizations as Colorworks’ engineers are collaborating with many of the groups on the lot to help create the digital studio of the future, so that SPE can maintain a leadership position, while helping to lower costs through the application of technology. needed This includes new 4k workflows for theatrical and HE distribution, as well as establishing new methods of mastering within the organization to help pave the way to the future.
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Digital Media Group
Core Functions Key Facts & Achievements
Digital Asset Management The estimated cost avoidance for SPE due to implemented DMG solutions for FY13 is Digital Archive $10.5M Content Management System Generated nearly $400K in revenue by licensing EAGL (Entertainment Assets Global Library) to Sony Computer Entertainment and Sony DADC High Speed Digital Transfers Digital Workflow Automation The volume of digital assets managed by DMG continues to double year-over-year (see transfer volume slide in Appendix) Video Streaming Video Transcoding Implemented an integrated tape library storage solution to significantly reduce DMG operating costs Forensic Watermarking Actively pursuing ISO 27001 certification Content Fingerprinting Digital Rights Management New 4K watermarking of content which will be provided with the new Sony 4K 84” flat screen televisions Studio Screeners – Digital & Physical Digital Media Research and Development Implemented automated digital workflow solution for international digital distribution of Theatrical and Home Entertainment spots eliminating the creation and distribution of physical elements – annual savings over $4M
Financial Summary Rolled out new secure Digital Screeners applications with support for tablets
FY13 Budget: $1.1M * FY13 Budget Headcount: 17 * $4.2M in operating costs offset by service charge-backs to SPE LOBs and other Sony Entities
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Technology Development
Core Functions Key Facts & Achievements
Content protection Developing new workflows for feature production using digital cameras, provided on-set Provide and review content protection and usage rule expertise on this workflow to About Last Night allowing Screen Gems to shoot faster and schedules for licensing deals. without D.I.T. Technical expertise for anti-piracy, government affairs and litigation. Developing and deploying Content Finishing Platform for better title version management in collaboration with PMC, WPF, SPTI. Further the development of systems and standards for content protection, delivery and consumer offerings. Content protection and usage rules for over 200 Home Entertainment and television deals in Participate in the development of formats. partnership with Digipol. Improve the consumer experience and Content protection and usage rules schedules for over 40 IFE non-theatrical and FilmBank Maximize value of SPE content deals, instituted contractual protection requirements in non-theatrical deals, and driving Ultraviolet technical group, Common File Format industry standards for IFE content protection as industry expands from in-seat to passenger completed owned devices. Provide business units with technology to improve processes from camera to screen. Specifying and promoting next generation enhanced content protection appropriate for high value 4k and early window offerings. (Our 4k activities reach well beyond Sony’s F1 Provide hands-on expertise in new technology to feature and TV productions. project). Develop new production workflows. On-going contribution to the SPTI EMEA Media Center project. Developed very cost-effective workflow for 3D production allowing productions to shoot on Financial Summary 2D schedules and with small increment in budget in conjunction with 3DTC. Provided on-set expertise in 3D workflow for productions including Screen Gems’ Battle of FY13 Budget: $1.7M* the Year and SPT’s newly acquired Left Bank’s production Little Crackers to great success. Done in conjunction with 3DTC. FY13 Budget Headcount: 11 * $700K in operating costs offset by service charge-backs to Sony Contributed to industry discussions to make 4k more attractive to consumers enhancement of Corp. Center-of-excellence for a broad range of technology relevant color and dynamic range (e.g. definition in dark areas of the picture) to SPE’s business. Ongoing participation in Ultraviolet and other industry Interactivity WGs. Participation in BDA next generation Blu-ray working group. Conducted in-house, and participated in production, camera and lens tests (After Earth, No SPE Confidential Good Deed, White House Down, etc). 20 Trained over 300 DPs, directors and crew on the new F65 digital camera used on Columbia’s After Earth, and Screen Gems’ No Good Deed and About Last Night. French regulatory investigation that could make content protection on Blu-ray discs meaningless. Technical consultation for Government Affairs in a variety of EU Commission actions that could, for example, remove our ability to enter into licenses for a particular territory within Europe Working with anti-piracy and litigation to drive our agenda with search engines such as Google. Negotiated with Fox to ensure consistency between Crackle’s and channels’ content protection and Fox’s contractual requirements. Project managed the technical component of the Sony F1 project, working to resolve differences between Sony’s approach and our expectations of industry requirements for 4k. Sony Pictures Technologies – FY13 Three Year Plan Review
Asset Management
Core Functions Key Facts & Achievements
Mastering Increased restoration/preservation/mastering of titles to a full 4k Workflow from 2-4 titles Create new feature video masters per year to more than 80 in the next 12 months Create foreign language masters for 19 The volume of data archived this year is 80% increase over 2011-2012. This is the result of Languages/Territories more comprehensive data acquisition, the transition of production from 2K to 4K and Create new assets as required to service library titles increase in elements (i.e., multiple versions, 3D data) to be archived. Restoration Research, identify and create elements as necessary to Reduction in costs in data archive expenditures through cost analysis and asset retention preserve and restore titles where materials have review deteriorated 15 – 20 Studio new release features each year, for which Asset Management creates the Identify titles or assets needing upgrade (e.g. High Definition) to meet current market standards servicing masters for all lines of business- including formatting and Quality Assurance of HD masters, home theater and extended version audio mixes, and localized versions for Manage preservation policies and procedures territories; as well as archiving the component pieces for these versions. Create back up elements to insure survival of assets There are more than 3 Million videotape, audio, film, Data Integrity - Create and update records for servicing elements in “Gold” data base – more and file elements and records in “GOLD” database than 5,000 updates per year inventory system Support Home Entertainment diversification via MOD (120 titles a year, since 2010) and sublicensing (300 titles in 2011-2012) , with additional 1,000 titles over next 3 years Reduced number of audio M+E conforms due to revamp of the dubbing workflow for a 60% cost savings (24K). Financial Summary Manage the digital archive ? titles produced digitally since 2004, establish and institute FY13 Overhead Budget: $2.0M long-term data preservation policies FY13 Manufacturing Budget: $27.1M FY13 Budget Headcount: 17* * Includes Management
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Global Logistics (Inwood)
Core Functions Key Facts & Achievements
Asset Management Protection and Preservation Responsible for Protection and Preservation of $662M of Corporate Assets Oversee maintenance of 3M+ assets across Manage in excess of 3M physical media assets, 250K Blu-ray and 320K Digital text assets multiple storage locations, Distributed 1M advertising and publicity materials supporting SPE Marketing efforts across all Inwood primary BU’s Iron mountain Support SPT EU & APAC digital on-boarding efforts by managing product reverse logistics, Protec degaussing and client Cineshare screener delivery Supply Chain Logistics, Distribution and Collaborated with SPT and PMC to internalize SPT Marketing Library Digitization Project Inventory Management Internalized SPC DCP trailer duplication and distribution to achieve $260K annual savings Advertising and Publicity materials Saved SPE $129K by internalized editing of syndicated TV series masters Film and TV elements Initiated proactive vinegar assessment of 60K primary elements and collaborative plan with Quality control Asset Management to triage affected units to increase their preservation Creation and distribution of physical screeners Implemented import procedure across BU’s to adhere to US Customs ISF filing and protect Application of Corporate and Government against Government penalties Standards and Regulations Manage $10M of Global Transportation and TSA Certified Cargo Screening Facilities TSA Certified
Financial Summary
FY13 Overhead Budget: $4.6M* FY13 Manufacturing Budget: $11.7M** FY13 Budget Headcount: 52 * Excludes storage costs of $1.8M ** Includes freight
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WPF – Client Operations
Core Functions Key Facts & Achievements
File Volume increase since FY10: SPHE Digital +286%, SPT +93% Supports all SPE Divisions Trailers: due to One Sony release events, increased regional demands & EST/VOD requirements, WPF Supply chain & fulfillment including research, cost has supported a 443% volume increase since FY10 analysis, ordering, delivery & tracking of all materials Airline/TV Editorial: since FY10, Editorial has experienced +76% growth due to increased cuts On-boarding of file-based clients, preparation of core required by multiple clients media assets including picture, audio, subtitles & CC Digital Supply Chain: supported SPHE & SPT growth in EST & VOD by deployment of a 3 year for digital distribution strategy to implement & manage organizational & process change to transition from physical to file Cost management, aggressively leveraging overall based distribution SPE volume & spend to procure best service & rates Distribution Backbone: To support transition from physical to file, WPF successfully launched DBB in Manages metadata procurement, creation & 2012. DBB is currently deployed for all SPHE Digital fulfillment & SPT Digital is in transition with maintenance in GPMS & GOLD including expected completion by FY14. By end of FY13, 79% of all WPF file volume to be through DBB development of new metadata schemas Cumulative RFP strategy since FY10 resulted in overall $57M savings based on budgeted volumes eg: Manages Feature & TV editorial for Airlines & TV reduced Barter Syndication costs by 79% over 3 years; reduced Encoding costs by 80% over the last including talent, legal & client approvals 12 months, reduced Tape Duplication by 25% Manages centralized evaluation & acceptance of Non-theatrical language dubbing: reduced timelines by average 33% and costs by average 8% Theatrical & HE trailers & new TV Episodes & Accelerated Next Day TV – successfully implemented secure, timely delivery of new TV product for MOWs for downstream distribution next day exhibition to various worldwide clients Manages non-theatrical language dubbing & Ultraviolet: supporting SPHE Ultraviolet initiative by managing EIDR registration (23k titles),design subtitling, repurposes existing language assets for & implementation of the digital supply chain for CFF rollout downstream distribution SPHE Joint Ventures: supported SPHE JVs by managing creation of 25k 3rd party titles in GPMS in less than 9 months Financial Summary FCC Closed Caption regulation – successfully implemented process to support new regulation for FY13 Overhead Budget: $9.8M Internet exhibition FY13 Manufacturing Budget: $101.0M Support of annual SPE events: eg: SPT May Screenings, Regional Sales meetings & Academy & Guild award screener distribution FY13 Budget Headcount: 88* * Includes WPF Management Organisation:70% of WPF CO Management have been promoted from within. WPF CO utilizes DISC, MBTI & Emergenetics & are fully invested in staff development & growth
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Digital Policy Group (1 of 2)
Core Functions Key Facts & Achievements
Establish digital policy across all SPE Business Negotiated and closed over 200 complex SPHE and SPT distribution deals covering different usage Units on a worldwide basis rules and content protection for early window, VOD, SVOD, EST, pay TV, free and basic TV, AVOD, and Internet streaming, in coordination with the Technology Development Group. Approve all SPE distribution deals on a worldwide basis Modified digital policy as required based on new technologies and user experiences. Implemented procedures and policies across all SPE business units to protect SPE’s intellectual property in all SPE Maintain legal, regulatory, technical and distribution deals contractual foundation to assure support of the Closed the royalty deal with HDBaseT that begins generating royalties paid to SPE in 2013. Digital Millennium Copyright Act Anticipated royalty of $30K in 2013 increasing to $100K in 2014. Has potential for over $1M in Key lobbyist and SPE representative for copy royalties in 4-5 years. protection initiatives in both government , the Serves on the Board of Directors on HDBT, Verance, MovieLabs, DVD CCA, Entertainment entertainment industry and across industry Technology Center, and HQME, all focused on protecting Sony Pictures intellectual property and Ultraviolet driving SPE’s digital strategy. Develop copy protection standards for new digital Conducted primary research in Kansas City designed to establish a baseline of media consumption and formats piracy levels prior to the launch of Google Fiber. This research will form the basis of Copyright policy around broadband deployment in the US. Review and analyze disruptive trends 3 to 5 years out and develop new business models National Academics: Appointed to a Committee on the Board of Science Technology And Economic Policy to draft and publish a report on the Impact of Copyright Policy on Innovation in the Digital Review new technologies to protect Sony Pictures Era. Intellectual Property Raised over $8M in outside financing and, after 4 years in development, launched Ultraviolet, the Content Protection & Anti-Piracy new industry cloud service for digital distribution. Financial Summary Collaborating with the National Venture Capitalist Association (NVCA) to find common ground in connection with supporting legislation to protect intellectual property. FY13 Budget: $1.4M Working with the Information Technology Industry Council (ITIC), an advocacy and policy FY13 Budget Headcount: 4 organization for IT companies, to bridge the gap between content and technology and effectively advocate policy to protect intellectual property. Identifying new business opportunities for Sony pictures including: Digital first sale model for Ultraviolet Theatrical Serial project with SPT and SP Distribution
SPE Confidential “On Location” film clip application 24 Managed legal and information security groups in drafting and implementing SPE’s Content Protection Manual, securing SPE’s intellectual property from point of capture through distribution. Oversee Verance WM embedding in SPE motion pictures. Prepared and testified before the U.S. Copyright Office to limit further exceptions to the Digital Millennium Copyright Act, resulting in a successful outcome for the motion picture industry. Sony Pictures Technologies – FY13 Three Year Plan Review
Digital Policy Group (2 of 2)
Core Functions Key Facts & Achievements
Review and analyze disruptive trends 3 to 5 years Raised over $8M in outside financing and, after 4 years in development, launched Ultraviolet, the new out and develop new business models industry cloud service for digital distribution. Review new technologies to protect Sony Pictures Collaborating with the National Venture Capitalist Association (NVCA) to find common ground in Intellectual Property connection with supporting legislation to protect intellectual property. Content Protection & Anti-Piracy Working with the Information Technology Industry Council (ITIC), an advocacy and policy organization for IT companies, to bridge the gap between content and technology and effectively Represent SPE in Industry initiates and advocate policy to protect intellectual property. consortiums Identifying new business opportunities for Sony pictures including: Ultraviolet Digital first sale model for Ultraviolet Identify New Revenue Generating Royalty Opportunities Theatrical Serial project with SPT and SP Distribution “On Location” film clip application Managed legal and information security groups in drafting and implementing SPE’s Content Protection Manual, securing SPE’s intellectual property from point of capture through distribution. Oversee Verance WM embedding in SPE motion pictures. Prepared and testified before the U.S. Copyright Office to limit further exceptions to the Digital Millennium Copyright Act, resulting in a successful outcome for the motion picture industry.
SPE Confidential 25 Sony Pictures Technologies – FY13 Three Year Plan Review
Corporate Alliance
Core Functions Key Facts & Achievements
New Technology & Format Incubation Technology development and business model creation for new formats (3D, New Technology Education UltraViolet, 4K, etc.) w/ Sony Group and industry partners Film / TV Production Workflow Creation Facilitated development of new Digital Production / Distribution Workflows Co-development of Sony’s Professional and Launched Media Cloud Services to build secure, flexible, cost effective cloud- Consumer Products based production tools and services. Promotion and facilitation of SPE Content for Initiated F65 seminar. Trained over 300 industry professionals. Helped create and Sony’s Global Sales and Marketing Activities successfully transfer workshop to Sony’s Digital Motion Picture Center. Utilization of Sony products for SPE’s digital Led collaboration between Sony and SPE to create Sony’s new Professional content distribution & advertisement Products (F65, F55, etc.) and Consumer Products (3DTV, 3D Handycam, etc.) Distribution of Consumer Electronics Industry Collaborated w/ Sony to enhance home cinema experience: “Cinema Mode” for News Sony TVs (8 mil units), “Digital Cinema Sound” for amplifiers (440K units), “Movie Mode” for Headphones (50K units) Pre-installed SPE promotional content in Sony products. (17M units) Facilitated the promotion of SPE trailers/clips for Trade Shows (CES, NAB, IFA, CEATEC, Tokyo Game Show, etc.) Supported all SPE initiatives that require coordination with other Sony group Financial Summary companies. (Advanced product placement for Battle of The Year, About Last Night, Spiderman 3 Tokyo Premiere, etc.) FY13 Budget: $1.3M Support all SPE initiatives that require coordination with Japan such as Metal FY13 Budget Headcount: 5 Gear Solid- Konami negotiations, Jeopardy! Japan shoot, Rights acquisition for Ultraman, Monkey Magic, Location negotiations for The International, etc. Installed DMT/SIGNAL at Sony Tokyo HQ for more efficient, lower cost screening management Create and distribute weekly “Eye-Openers” news summarizing key technology SPE Confidential trends both internal and external to Sony Corp 26 Sony Pictures Technologies – FY13 Three Year Plan Review
3D Tech Center
Core Functions Key Facts & Achievements
Industry education teaching best practices in Supervised accelerated & acclaimed conversions of Green Hornet and 2012 shooting and converting 3D for Columbia Pictures. Evangelizing high-quality 3D across films, Consulted on and assisted with the 3D workflow on Columbia Picture’s The television, and gaming. Amazing Spider-man. 3D consultation on various film & television Our industry leading seminar has taught the principals of high quality 3D to projects over 4,000 cinematographers as well as hundreds of directors, producers, Support of SPE (Columbia/Screen Gems) visual effects supervisors, and art directors. internal 3D films and projects Won the 2012 International 3D Society’s Sir Charles Wheatstone Award for Support Home Entertainment in 3D Blu-ray our efforts in industry education. Disc releases and convergence Pipeline and workflow for converting library Provided consulting and cost effective on-set supervision for Screen Gem’s titles into 3D Battle of the Year in 3D. Published a widely distributed white paper demonstrating our workflow for shooting 3D on a 2D budget showcasing Battle of the Year and 3D episodes of Days of our Lives and Happy Endings. Financial Summary Worked with UK production companies, including Sony Pictures Television’s Left Bank, to produce three 3D episodes of Christmas Crackers for the Sky FY13 Budget: N/A (Covered by Sony Corp) network as part of an outreach program getting international production FY13 Headcount: 2 companies on board with 3D. 3DTC now members of the International 3D Society’s Board of Governors helping influence & create policy while expanding adoption of 3D. Showcased Sony technology and workflows in numerous filmed promos including Road to the Oscars, Forbes, and an upcoming 3net special. SPE Confidential 27 28
SP Tech Three Year Plan Sony Pictures Technologies – FY13 Three Year Plan Review
SP Tech EBIT Improvement Plan - Summary
SPE Confidential 29 Sony Pictures Technologies – FY13 Three Year Plan Review
SP Tech EBIT Improvement Plan – SP Tech Operations
SPE Confidential 30 Sony Pictures Technologies – FY13 Three Year Plan Review
SP Tech EBIT Improvement Plan – Colorworks
SPE Confidential 31 Sony Pictures Technologies – FY13 Three Year Plan Review
SP Tech EBIT Improvement Plan – WPF Manufacturing
SPE Confidential 32 Sony Pictures Technologies – FY13 Three Year Plan Review
Chris Cookson, President SP Technologies Proposed Functional Org Executive Dept • Production & Post Production Technology Vision and Strategy Chart • Administration of SP Technologies Division • Content Preservation and Distribution • Digital Strategy and Policy Development • Application Development Studio • Sony Product Technology Strategy Alignment • Sony Corp Strategy Alignment Services ( Gary Martin)
Mitch Singer Charlie Falcetti Executive Vice President Executive Vice President Digital Policy Group Production Services (Studio Ops, Sound, Colorworks) • Digital Licensing Policy and Strategy • Digital Intermediate Services • Digital Entertainment Content Ecosystem (DECE) • Trailer Finishing • Worldwide Anti-Piracy / Content Protection • TV Finishing • Content Protection Technology Evaluation • Creative Editorial Services • Asset Restoration Services • VFX / Cosmetic Fixes • Theatrical & HE Deliverables Spencer Stevens Executive Vice President Technology Development
Terri Davies, • Digital Media Technology Reserarch and Development Executive Vice President • Format Standards Leadership WPF Client Operations • Studio-wide Technology Initiatives • Digital Asset Management • Digital Workflow Automation • Manage Content Preparation and Fulfillment • • Supply Chain Management Forensic Watermarking & Content Fingerprinting • Metadata Procurement, Creation & Maintenance • Content Protection • Quality Control Grover Crisp Executive Vice President WPF Asset Management
• Asset Restoration & Preservation • Supply Chain Management • New Release & Catalog Mastering • Asset Storage and Global Logistics
SPE Confidential 33 34
Sony Pictures Technologies – FY13 Three Year Plan Review
Headcount
SPE Confidential Sony Pictures Technologies – FY13 Three Year Plan Review
Strategic EBIT Opportunities & Considerations
. In addition to the aforementioned cost reduction opportunities, the following are other strategic opportunities for management consideration that may provide additional cost reduction / profit improvement for SPE
. These ideas are conceptual and will require further analysis and collaboration to determine their viability
. The common foundation for these opportunities is the leveraging of SP Tech infrastructure and competencies across on-going SPE business activities Opportunity: Dubbing Spend Leveraging
Chris to provide details if needed
Opportunity: Projector Room Networking
SPE Confidential 35 Sony Pictures Technologies – FY13 Three Year Plan Review
Strategic EBIT Opportunities & Considerations
Opportunity: On-set File Based Workflow
Opportunity: DCP Versioning
Opportunity:
SPE Confidential 36 Appendix 38
Sony Pictures Technologies – FY13 Three Year Plan Review
FY13 Overhead Budget: SP Tech Operations
SPE Confidential 39
Sony Pictures Technologies – FY13 Three Year Plan Review
FY13 Budget: Colorworks
SPE Confidential 40
Sony Pictures Technologies – FY13 Three Year Plan Review
FY13 Overhead Budget: WPF Consolidated
SPE Confidential Sony Pictures Technologies – FY13 Three Year Plan Review
Overall DMG System Usage
DMG Systems (monthly transfers in GB)
140000
120000
100000
EAGL Downloads
EAGL Uploads 80000 cSHARE Downloads
cSHARE Uploads 60000 ACORN Downloads
ACORN Uploads 40000
20000
0 3 4 7 9 2 5 3 8 9 2 3 6 9 1 8 3 8 3 9 4 0 4 9 5 0 5 0 6 0 2 3 5 6 8 0 1 2 4 6 7 9 0 9 9 9 9 9 9 0 0 0 0 0 0 0 1 3 3 3 3 3 3 4 4 4 4 4 4 4 4
SPE Confidential 41 42
Sony Pictures Technologies – FY13 Three Year Plan Review
Territory Growth
January January July November Q1 2011 2012 2012 2012 2013 Active Territories 14 44 73 132 163 Percent Growth -- 175% 66% 81% 270%
Active Territories
180 160 140 120 100 Active Territories 80 60 40 20 0 Jan-11 Jan-12 Jul-12 Nov-12 Q1 - 2013
SPE Confidential 43
Sony Pictures Technologies – FY13 Three Year Plan Review
Account-Territory Growth
CURRENT
Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Product Features Features Features Features Features (BZ) Features Features Features Features Features TV TV # of Territories 27 10 1 15 1 2 0 0 15 2 2 6 # of Partners 24 1 22 3 2 5 0 0 6 8 2 11 Acct-Territories (by Territory) 116 10 22 18 2 8 0 0 19 16 4 29 Acct-Territories (by Manager) 116 22 18 10 0 0 19 20 29 234
NEW
Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Product Features Features* Features Features Features (BZ)* Features Features Features Features* Features TV TV # of Territories 7 12 3 16 5 11 32 6 # of Partners 1 1 1 1 1 1 1 Acct-Territories (by Territory) 7 12 3 16 5 11 32 6 Acct-Territories (by Manager) 7 12 3 21 11 32 6 0 92
* includes YouTube/Google BZ, IN, RU
TOTAL
Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Acct-Territories (by Manager) 123 34 21 31 11 32 25 20 29 326
39% increase across Q3 & Q4
SPE Confidential