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VARIETY.COM • THE INTERNATIONAL ENTERTAINMENT WEEKLY • MARCH 15-21, 2010 BRINGING ANY TO THE MANY By MARC GRÄSER goal, says a Netflix spokesman: and SUSANNE AULT "being ubiquitous on whatever l"s hai'cly two years since device you want to watch movies mu-i-ay claimed victory over and TV episodes on." HI)-DV1) in the battte over Netflix's Watch Instantly ser- next-generation disc formats, vice, for instance, is offered on 100 | but Hollywood and its jjart- different devices. During the com- ners are already dijiginfi trenches pany's fourth quarter, 48% of its for the next skirmish. 12 million subscribers streamed a A new generation of movie con- movie, double the numbei- that did sumers — reared on the Internet, so during tho same year-ago ]H'i'iod. iPods, iPhones and PlayStations And that's only expected to — is far less interested in building grow as Netflix and its competitors ])hysical libraries of movies than find homes on new TV sets in the digital ones they can access any- form of onsci'een widgets or api)s where, anytime. Anct as traditional CINErs/IRNOLU (like those found on an iPhone) that disc sales continue to decline, the can instantly oi-di-r up a movie and major studios are working over- have it start playing within seconds time to turn that shift in buying using a remote control. behavior into a luci'ative new rev- Homevid executives say in- enue stream. creased ease of use will help at- As a i-esult, Hollywood is broker- tract more users to the act of ing as many deals as possible with digitally renting or buying movies, com])anies that can digitally sell but so will innovative marketing, or rent its releases, and in the brand awareness and the avail- last month alone studios have ability of more content. been winding down ugly studios have always distribution disputes with to maximize the value services like Netflix, a r product by distribut- shift that will i-esult in it as broadly as possi- more movies being le," says John ('alkins, streamed online exec VI' of global digi- nearly a month tal and commercial after they bow innovation at Sony on DVD and SONY PLAYSTATION NETWORK VUDU Pictures Home En- Non-subscription tertainment, which Registered users: 40 million has made 1,200 of The major Catalog size: Catalog size: 100,000 titles, Catalog size: 3.500 titles to date its films availabk' for studios have al- 16,000 titles ready embraced 20,000 of them streamable digital download. The other online movie studio has roughly 3,500 services like Apple's films on DVD. iTunes, Amazon's Video on Demand, The use of such services is also ex- soon add streaming to its kiosk biz. "As an industry, Hollywood has gen- (MnemaNow, Sony's PlayStation Net- pected to increase now that retail giants The digital streaming push should erally benefited from new technologies woi'k, Vudu, Hulu and You'ñibe, whose are backing various ventures. Walmart, get a significant boost now that movie and the introduction of new ¡¡latforms, online rental or (iownload-to-own ser- already the world's biggest seller of services are also embedded within and we firmly believe engaging early vices have caught on with consumers. DVDs, plans to buy Vudu (Walmart's major videogame consoles like Ninten- with new opportunities is preferable to Just last week, PlayStation said it first attempt to launch an online video do's Wii, Microsoft's Xbox 360, Sony's waiting," Calkins adds. will now offer HD movies from the six service in 2007 was a flop, shutting PlayStation H, Blu-ray players, TiVos Of course, that's true only as long major studios to buy for around $20 and down after less than a year), and Best and other set-top boxes, as well as new as the films being distributed on the l'ent for $5. It offers standard-definition Buy is already paired with CinemaNow. HD TV sets. IPhones and iPads could service are protected from piracy and movie rentals starting at $8 and pur- Blockbuster also is expected to expand be next. illegal downloads, significant hurdles chases for $10. into digital rentals, while Redbox will The companies all have the same See PORTABILITY page 29

Newspaper USPS 659-960 02731 BART At News Corp., it's still a Rupert Murdoch-centric universe. Page 2 1 1> FILM Scribes do a delicate dance to tread the line between PG and R. Page 6 MUSIC SXSW fest changes its tune to meet shifting demands. Page 12 TV Why don't dramas draw from reality playbook with post-show add-ons? Page 13

0 7U86 02371 V PLUS Middle East money flows to films. Begins after page 16 $6.95/C$11 .00/Í:5.00/E8.50/A$1 5.00 LEGIT Race is centerstage in a wave of topical productions. Page 25 29 MARCH 15-21, 2010

ness, and people need to be next several years. PORTABILITY pragmatic on their expecta- Homevideo evolution "(Early on) most people said ('(iiitiinird train ¡mijc I tions," says Steve Nickerson, that we wouldn't be able to get that kept studios from initially prexy of home entertainment at Since the introduction of the vidéocassette in the late 1970s, new any content because these (pay embracing the vidéocassette Summit Entertainment, adding formats have arisen more quickly but might have shorter lifespans. TV) content deals are locked and Napster, for example. that digital won't do away with in forever," says Ted Sarandos, Netfiix's chief content officer. While the amount of money packaged media anytime soon. "But we can work with these being collected from digi- "This will be a shiu-ed world." deals. We are growing by hun- tal still doesn't come close to Even Nettlix, whose stream- dreds of titles a week." what DVDs and Hlu-rays earn ing biz grew 127% in 2009, still for studios — $]Starz to offer all video-on-demand revenue col- cesses and formats cuts costs. of that channel's content that lected from cable and satellite, With digital, studios in- is being shown through cable- digital distribution of movies stantly eliminate production something that's proved an issue system have agreed on a "Buy satellite systems. earneti $2.1 billion last year, ac- costs required to stamp out when it comes to digital music Once, Play Anywhere" strategy And in January, Wamer- Bros, cording to the Digital Enter- each disc and its packaging. sales on services like iTimes. that will utilize "cloud comput- granted Netflix streaming ac- tainment Group. And whereas multiple formats Execs doubt that unifoiTO pric- ing" to store movies in a digital cess to the studio's more recent films. Sarandos says Netflix is "p]veryone thinks this is sup- had to be created in the past, a ing can be agr-eed upon, though, locker and let them be accessed in discussions with evei-y studio posed to happen overnight," single digital file can be distrib- as that's one aspect that will help using any device. Disney has its to expand its digital terms and says one studio exec. "But that's uted to multiple platforms. digital rental and sales services own similar system in develop- land pacts similar to the one it not the way it works. There Because of that ñexibility, distinguish themselves from one ment, called Keychest. brokei'ed with Warner Bros. is always build-up. We have a studios aren't lining up behind another and build their brands. • And services still have to title right now, and over 5% of any one particular service. Netflix charges a subscrip- figure out how to get more stu- "You could chai-acterize its pui'chases ai'e digital down- They're looking, instead, to tion fee for its users to rent dio films they can stream. digital delivery as approaching loads. Is that a big number? No, stay away from exclusive deals movies through the mail or Because Netfiix operates as mainstream," Sarandos says. but everything is relative." and to collect as much coin as stream movies using various a subscription model — if you "There are enough people with bi'oadband, you have the de- Indeed, the evolution of they can per film ñ'om as many devices. On the other hand, subscribe to the DVD rental vices and there are people who technological advances that services as possible — the same other services like Vudu cur- service, you can instantly are Net-savvy. l'eshape fílm delivery is ever- as they do with DVDs at tradi- rently sell movies for download stream films — it must abide more comjiressed. While the tional retail stores. at $20 per title the same day by pay-TV rights deals. HBO, "People have one or more of experience of watching a movie "Our catalog on digital has they become available in brick- Showtime and others have al- these parts. If we can get all at the multiplex hasn't changed grown dramatically in the past and-mortar stores. That's often ready locked up many films for three, then this can be a power- much in years, apart from the two years with over 500 films more than a physical DVD subscription viewing for the ful thing." reinvention and resurgence available on several digital costs. And if you want to rent of 'AD, the shifts in homevideo platforms," says Jamie Mc- them, you pay $4 each day; liave been dramatic. The in- Cabe, senior VP of worldwide Redbox charges $1 for a day. dustry took off .SO years ago, pay per view and video-on- • There's the issue of just BART and VHS dominated for two demand at 20th Century Fox. how cluttered all of those Coiifiiniedfro77i page 2 decades. DVD took over in the "This is triple where we were screens filled with movie list- tenure as CEO of BSkyB and recently maneuvered his own '90s and lasted 10 years. And two years ago." ings will become. As more stu- communications chief into the job once skillfully handled by Hlu-ray looks as if it's going to To be sure, there are still dios offer their films digitally, Gaiy Ginsberg. Lachlan, 88, has proven himself moi'e tem- have an even shorter shelf life. hurdles and unknowns along it's only a matter of time before peramental and more personable. Elisabeth, 41, has gained The digital landscape is too the {)ath to a digital future for they have to increase each film's industry respect by building a successful TV em]5Íre on her volatile for even execs in the homevideo: marketing budget to help distin- own. biz to comfortably predict ulti- • Just how much the form guish those films fi-om the pack. Murdoch can play the rules of succession any way he mate winners an(Í losers. will grow depends on how • Just how and where con- wants, but he still has to sustain an aui'a of fiscal respect- How big a digital player many people, currently reeling sumers will store their digital ability to placate his bankers. The accounting results of Walmart will become is still to amid the recession, can afford movies is also still being worked the company have proven startlingly volatile. Last year's be determined. And it's still too to pay for monthly subscrip- out. Hard drives will fill up second-quarter loss of $6.4 billion magically turned into a early to tell whether or not Ap- tions or buy new hardware that quickly with HD films, so a $254 million profit for the same period this year. The Mur- ple's iPad will take off and sig- boasts digital video services. consortium of studios, retailers doch family trust owns 38% of voting shares, so the family nificantly expand the consump- • An industrywide price for and electronics manufacturers infiuence is pervasive but not all-encompassing. tion of digital entertainment. digital movie rentals and down- that are members of the Digital Exactly 20 years ago Murdoch found himself in trouble "It's a good, growing busi- loads is still being pursued. Entertainment Content Eco- with his bankers to such a degree that his control of his empire seemed in jeopardy. I called him at the time and asked him bluntly whether he could pull things out of the fire. B.O. l-evs in 2009 were up a "I've gotten myself in trouble," Murdoch told me on the MPAA whoi)ping 35.1% over 2005. phone. "It's so damned complicated. Why don't you come ( 'iiiiliII 111(1 from paye k p]urope, the Middle East over to my office and I'll take you through it." smiles in the cavernous ball- and Africa raked in $9.9 billion An hour later I was seated across from Murdoch, a room at the Paris Hotel where in B.O. l-evs; Asia-Pacific, $7.7 dizzying array of data confronting us. He detailed his the rei)ort will be dissected billion; and Latin America, $1.7 strategy for his financial recovery. He seemed taut but by Ml'AA prexy and interim billion. The Asia-Pacific rim determined. And indeed he was downright friendly about CFJO Bob Pisano and Na- saw the biggest gain over 2008, explaining it. tional Assn. of Theater Own- with 12.8%. Rupert's world has become vastly more complex since ers top|)er John Fithian. And foreign markets have I that time and his mood less hospitable. I don't think I'd In North America, B.O. revs the upper hand when it comes call him today for another sitdown. For one thing, we clocked in at $10.() billion in to the number of Î5D screens. would get into a Roger Ailes argument and neither of us 200i), ahefty 10.1% hike. There are 8,548 8D screens in would like that. The international B.O. also North America; 5,441 inter- In his final years, William Randolph Hearst, the last continued to flex its muscles, nationally. The largest por- big baron, became as hard-right politically as Murdoch. He taking in $19.;^ million, or ()4% tion, 3,495, are in Europe, the never succeeded in Hollywood, however, and he never had of the total kitty. That was a Middle East and Africa. This his own Roger Ailes. gain of ().8%> over 200X. Every helps explain why 20th Cen- Hearst met financial ruin in the end. Murdoch is too year, moviegoers overseas be- tury Fox's "Ice Age: Dawn the top showing ever wily for that. come more important to Hol- of the Dinosaurs" grossed toon. lywood — indeed, international $688.2 million internationally. Here's looking at you, Scrat. © 2010, Variety, Reed Business Information, a division of Reed Elsevier, Inc. All Rights Reserved. Copyright of Variety is the property of Reed Business Information and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.