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In excess of 400 entertainment business executives were present at the Los Angeles Convention Center Friday morning for the opening of the Los Angeles Showbiz Summit, produced by Variety, and sponsored by City National Bank, and Schroder Wertheim & Co, to hear colleagues discuss "The Economics of Entertainment."
After a welcome by Gerry Byrne, Vice President & Publisher of Variety, and introductory remarks by Mayor Richard Riordan affirming "Los Angeles is synonymous with the entertainment industry as well as a place of dreams" and a city with a growing economy because of the industry, Russell Goldsmith, Chairman and CEO of City National Bank, introduced speaker Jeff Berg.
Berg, Chairman and CEO of International Creative Management, focused his remarks on the advent of the information age, and how the entertainment business can successfully continue with business by adapting to the changes brought on by new technology. He reminded the audience that other industries have successfully regrouped and survived - TRW shifted its focus to credit analysis, Hughes from aircraft maufacturing to the creation of Direct Broadcast Satellite delivery systems, and Lockheed from aircraft to information management. Berg cited the Dreamworks commitment to build an office/production complex in Playa del Rey as an example of a well-thought out strategy for the future, "the wave of the future", as it will include schools, training, and cluster groups in the neighboring community in its development and day-to-day activities. (Berg is on the Board of the development committee for Playa del Rey).
Keynote speaker Frank J. Biondi, newly appointed Chairman & CEO of MCA, Inc., focused his remarks on what he sees as the "three elements which drive all the dynamics of our business... 1) Economics (paying attention to the revenue stream) 2) Technology (an area where it's hard to figure out the end game of the complicated applications of telephones, TV and computers coming together) 3) Consumers (understanding what the consumer wants is important, consumers want choice)." Biondi said his mandate for MCA's future is to empower the people who work there, he said the theme of magic in Hollywood is to be a driving force. He said the advantages MCA has are its new ownership, a healthy balance sheet (no debt and strong capital resources), and decentralized management which empowers people. MCA will be focusing its activities on developing City Walks overseas, making deals with talent the company believes in - the Zucker brothers, Imagine Entertainment, Dreamworks, Amblin, the Sheinberg's Bubble Factory, etc. Biondi said he wasn't sure where the future is "all going, but we do need programming."
Biondi's address was followed by a panel of executives who examined the convergence of methods for entertainment and information distribution in a session entitled "The View to 2001: Global Entertainment Ventures.". Russell Goldsmith moderated with Ivan Lustig, Managing Director of Schroder Wertheim & Co. Participants were Richard Frank, Chairman of C3; Jules Haimovitz, President & CEO ITC Entertainment Group, Eddy W. Hartenstein, President of DirecTV; David Londoner Managing Director Schroder Wertheim & Co.; Avram Miller, VP Business Development Intel Corp.; Scott Sassa President Turner Entertainment Group; Russell Schwartz President Gramercy Pictures; and Kenneth Ziffren, Senior Partner Ziffren, Briitenham, Branca & Fischer. The discussion pointed to the explosion in size and scale of the entertainment business, and to one constant factor - uncertainty for the future with regard to technology. Most panelists concluded that content is still key and that audiences have always and will continue to want a passive experience. Several on the panel felt the independent producer would still be able to carve out a future for him or herself, that product created from home offices and garages would breakthrough as a result of new technology. "Creativity doesn't require capital," said Abramovitz. Intel's Miller said he sees that audience participation will decide the medium of the future, that the computer will have social uses, that audiences will become the programmers.
Following a luncheon which acknowledged filmmaker Steven Spielberg's induction into Variety's first Showbiz Expo Hall of Fame (Spielberg was not present), Raymond W. Smith, Chairman & CEO of Bell Atlantic Corp, delivered the afternoon keynote address.
Smith, whose landmark ideas to acquire TCI and Nynex confounded critics who didn't believe telephone companies could be in the entertainment business, is, because of the Nynex merger, head of the second largest telecommunications company in the U.S. He has been the driving force behind the Stargazer (Video-on-Demand) interactive programming experiment, and he created Tele-TV Media (Bell Atlantic/ Nynex/Pacific Telesis) to develop programming for video networks and to license that programming to others.
Smith's address was friendly, amusing and decidedly upbeat. He greeted the audience as "digiterati" and spoke about how his company planned to prosper in the midst of techological change. Smith claimed he is the only person in the business who has not changed his story. "Two years ago I said interactive TV, I'm saying it again" despite the fact that predicting the course of any technology is very tough. We must never underestimate the impact of today's inventions and technology over the long run... Let's try a few facts... 1) We are all in the bits and bytes business - phone, TV, movie or data stream. We're all in this together, all in each others's sandboxes. 2) We all need a rational and thoughful business stragegy for the technological era. 3) We shouldn't believe everything we read in the the papers.
Technology is not the issue, customer want to talk to their machines now and interact, they want to be pleased and dazzled. They want a service which is easy to use, that's what Bell Atlantic intends to provide.
Technology for TV was first developed in the 1920's. In 1947 the first programs were televised. In those days, the audience still got most of its news and entertainment from the radio. TV programmers didn't know how to attract audiences. Then on June 28, 48 years ago today, Milton Berle changed it all on TV's Texaco Star Theater. Berle, a new emcee, realized the intimacy of the small screen was vaudeville in a box, so he adjusted his act to the medium to make it acceptable and wanted by the public. Then came Edward R. Murrow and the nationwide broadcast of SEE IT NOW - the first time Americans all watched the same program and wanted to. It was then that a business model emerged which unleashed a cycle of growth and innovation. And so it is with new digital technolgies, I say it is June 28 all over again.
The world of interactive TV is real. Brand new experiences of interactive are just about to emerge, its just not clear who the Berles and Murrows are right now, but they are out there.
We have proceeded with market trails on purpose because we learned that until you do it and you make mistakes you have no idea what you are doing. All we have researched (to date) has been invaluable. Bell Atlantic knows a lot about the digital video business. 80% of our company work is in the area of video technologies. Video on Demand trial in northern Virginia gave us an understanding of what customers want and how they'll pay for it. Customers love video-on-demand - it will soon displace video rental. And contrary to popular belief, the cost of supplying interactivity hardware is very modest for a telephone expense, it means every telephone compamy we will have these offerings. To obtain programming we created TeleTV Media it is alive and well and will be here a long time. A digital TV package will be available later this year and it will feature what customers want. Interactive digital content will be available in the customers home soon.
Nameless inventors with computers and modems all over the world understand that they have a new great grand stage, they will help us usher in this new era of entertainment.
We will move forward and watch this opportunity explode, it's a wonderful world. END.
This year's edition of Showbiz Expo Los Angeles, the annual conference and entertainment industry trade show, offers two more days of panel discussions, exhibits and other events.
There are over 500 exhibitors at the Los Angeles Convention Center displaying the latest tools, techniques, techologies and services for everything from film development (software for scriptwriters), to post-production (editing equipment).
Festival organizers from The Reed Organization, anticipate this year's event will attract approximately 20,000 attendees from film, TV, cable and commercial production.
The conferences run all day Saturday and Sunday, June 29th to June 30th and focus on the areas of feature films, broadcasting, interactive multimedia/online, and Showbiz University (classes). Last minute registration is possible for the convention hall and for seminars which are not already full.
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