Posted on: 09 September 2013 by Mark Howells
Dean Hallett (pictured), Chief Financial Officer and Executive Vice President of Operations and Strategy, 20th Century Fox, delivered the keynote address at this year's APEX Expo in Anaheim, USA.
Hallett discussed the accelerating pace of technological change, the challenges and opportunities this presents for the filmed entertainment business, and Fox’s approach to leveraging new technologies in its production, marketing, and distribution strategies.
His keynote looked at the film industry as a whole, and didn't really concentrate on IFEC and the issues surrounding early-window content for the inflight market. But he said rapidly-changing technology has made it an exciting, but frightening, time for the film industry. He added that technological change is nothing new – it has been with the film industry for years.
At its inception, he said, the film industry was a theatrical business – there was no technology. And in the 1950s TV nearly killed the film industry off until it embraced it. Right now digital technology has expanded more than we could have imagined, he said.
"More content over more channels means we have to fight to keep our consumers' attention," Hallett said. "But more content means more can be stolen, which is a challenge that we have have to deal with all the time. And consumers are transforming how they consume entertainment and we have to change too.
"It took 50 years for electricity to reach 20% of the population, but computer tablets took just two years to reach the same percentage," he said.
He said the numbers of smartphones and connected devices is set to double by 2017, with 50 billion by 2020. Consumers are using more and more channels, including DVD, video on demand, Internet and live TV. Hallett explained that the price of its content reduces with time, starting with cinemas, then inflight use, right through to video on demand and eventually free TV.
"For the consumer, access to more content, more conveniently, is seeing digital revenues grow. And as that convenience grows, more and more consumers are prepared to pay for their content. Our biggest problem is that they have limited time," he said.
The overseas market is growing and is now twice as big as the US. Growth will come from international audiences, he said. In the past decade China has grown to become the world's biggest box office revenue generator, with 40% plus annual growth. But rampant piracy in developing markets is hitting revenues and the market for making money out of home entertainment still needs to be developed. He said that social media is also an area that the film industry is interested in – a film's reputation can be made or ruined via Facebook and Twitter.
"Technology is leading a global revolution in how we make and distribute our content. The key for us is to manage the content and revenues properly. As new consumers come online in emerging markets it will open up new opportunities for us. But great story telling will always be the key to our success," he concluded.
Steve Nichols, Inflight / Inflight-Online.com
Anaheim, CA, USA