Todd Wagner Warns Film Industry Times Are Changing
"New Distribution Rules Are Being Written"
Billionaire trustee of the American Film Institute, Todd Wagner, delivered a wake-up call to the movie industry at the AFI Digital Content Festival where he delivered the keynote address. Describing Hollywod as "one of the oldest closed clubs in the world," he warned the industry, times are changing and they had to get used to seeing new players on the field. His wake-up speech has been distributed globally by podcast.
CEO of 2929 Entertainment and founder of the Todd Wagner Foundation, Todd Wagner began his ascent in the business world in 1995 as co-founder and CEO of Broadcast.com, the leading destination for audio and video programming on the Web.
He took the company public making the largest opening-day gains at the time, and then sold it to Yahoo! for $5.7 billion in 1999. Wagner initially led the division as Yahoo! Broadcast, before venturing into the entertainment world, where he has coupled entrepreneurial skills and digital technology expertise, with a passion for the movie business.
TODD WAGNER'S KEYNOTE SPEECH
"technology does not go backwards"
"When the dot com boom bubble burst in 2000, most people in the media industry probably thought "thank God that's all over". Technology never goes as far as you would like in two years, but it goes further in ten - and technology does not go backwards.
"Now, Google and Yahoo are forces to reckon with. They combine media, commerce and communications in one stock. They have one-on-one relationships with real consumers with real credit cards, but the movie industry does not. The average consumer could not care less whether a movie was made by Universal, Disney or Paramount.
"Today the latest phenomenon is social networking. So is there another changing of the guard, with YouTube, and MySpace, and all the others? Social networking sites existed before, but they have recently enjoyed explosive growth. Is this really dramatic change after all, or just the integration into our daily lives?
"So what has changed?
"The trend is being driven by the internet generation"
"The trend is being driven by the internet generation. The 15 to 18 year olds who have been driving the bus have known nothing but the internet. It is this generation's shopping mall.
"When I was a kid, we all played baseball. It didn't mean that we'd all make it to the major league, but if we were really good, someone would find us.
A CLOSED CLUB
"Hollywood is one of the oldest closed clubs in the world, but that is changing through digital technology. When the new rule book is completed you will definitely see some new players on the field.
"The movie industry fights changes at every turn, but technology is like a freight train. You can slow it down with obstacles like litigation, but eventually, it will hit you. Microsoft loses more money than the movie industry to piracy, but that is a cost of doing business.
"Now, it seems, the movie industry is beginning to take notice"
"I prefer to try and think of things proactively, about what we can add, about products and features that have never existed before. Now, it seems, the movie industry is beginning to take notice. The fear of piracy has been supplanted by fear of inactivity.
"As an effectively vertically integrated business, with access to its own distribution and exhibition network - albeit on a smaller scale than the majors - we do not need the studios to bless what we are doing.
"We have signed Oscar winning director Steven Soderbergh to make a series of movies that will be released simultaneously - "day-and-date" - theatrically, on television and video. The effect will be additive, and will actually save money in marketing.
People will still want the social experience of going to a movie. I simply want to offer them a choice
"If I hear a song on the radio I don't hear them say ‘in about five months you can buy that CD'. I believe that it is a dangerous assumption to believe that a customer is still interested in your product in five months. The television networks have begun to experiment with online distribution and there is no evidence that it has eroded the broadcast audience.
"People will still want the social experience of going to a movie. I simply want to offer them a choice, saying: "I have food at home, but I also go to a restaurant".
"Five years ago former Intel CEO Andy Grove said: "You have to wonder how the movie industry weighs the value of maintaining the status quo for a few more years, against the value of being the first to exploit a technology that gives them frictionless transmission of their product with the appropriate fidelity."
"Guess what? Five years have now passed. Telling a story will never go out of style, but how you tell it, and how you distribute it, might very well change."
MORE ON TODD WAGNER
Through the production division of 2929 Entertainment, Wagner has led the charge to bring meaningful and inspirational stories to audiences. He executive produced the critically acclaimed drama Akeelah and the Bee, starring Laurence Fishburne, Angela Bassett and Keke Palmer, and Good Night, and Good Luck, the period drama directed by and co-starring George Clooney which earned a half-dozen Academy Award nominations including Best Picture.
The consummate serial entrepreneur, Wagner, alongside partner Mark Cuban, owns and manages an array of other entertainment properties including HDNet Films, which produced the Oscar-nominated documentary Enron: The Smartest Guys in the Room; distributor Magnolia Pictures, which has released Enron and The World's Fastest Indian starring Anthony Hopkins; home video division Magnolia Home Entertainment; the Landmark Theatres art-house chain; and high-definition cable channels HDNet and HDNet Movies. On behalf of HDNet Films, Wagner negotiated a deal with Oscar-winning director Steven Soderbergh to make six movies that are being released "day-and-date" across theatrical, television and home video platforms, an innovative distribution strategy allowing consumers to choose how, when and where they wish to see a film. The first was Bubble, a murder mystery set in Ohio that cast non-actors in its key roles.
Wagner also owns minority stakes in Lions Gate Entertainment and The Weinstein Company, and most recently invested in Canadian film and television company Peace Arch Entertainment. Additionally, he is a founder and co-chairman of Content Partners LLC, a company that invests in the back-end profit participations of Hollywood talent. Wagner also serves on the board of trustees of the American Film Institute and the Tribeca Film Institute.