Meet the Chairman: Jon Feltheimer

I think taking on financial partners is only one way that companies, and we frankly, mitigate risk. There are a lot of other ways. It's keeping your production costs down. It's keeping a discipline throughout all of your businesses. It's keeping your overhead low—ours is less than nine percent of revenue. It's taking partners when it's right to take a partner, but not always. Frankly, it's picking projects that you think really have a specific audience that you know how to reach, and to reach them efficiently through marketing that's very focused. So I think there's going to always be money out there and always be willing partners to co-invest in our movies and television shows. But again, that's not the only way that we'll do it, and I don't think this current environment will change that much.

Not really. People are always looking for labels, and I guess in some ways that helps them to be able to identify us, and frankly for us to be able to identify what we are and what we do differently. I think from the beginning, it was our conceit that people are watching entertainment differently. We're slicing the audience up into smaller and smaller slices, but into groups that love their brands and love their branded channels, they love the programming brands that they look at, and they'll want to get them wherever and whenever they can get them. They want to get them in the movie theaters, they want to get them on demand, they want to get them on their mobile devices. And so we structured our company in order to accommodate that changing social environment and to monetize that changing environment. So we've aimed much more at branded cable networks in terms of supplying television shows, and we've looked at various large niche audiences who go to see horror movies or go to see young male comedies—specific, again, large niches that love their entertainment and again like getting it over multiple platforms. So I think that we structured our company a little bit differently in terms of how we're going to operate, how we're going to produce content, how we're going to distribute that content. And what we've created, I guess at the end of the day, is when people use that term—whether it's mini major, next gen major—I think what we've created is major studio market share. We've got an eight percent market share in our home entertainment business, we've got a five percent box office market share. We're doing between all of our various television entities—Lionsgate Television, Debmar-Mercury—we'll have this year about 20 television shows on the air. So in terms of our motion picture business, in terms of our product pipeline, in terms of our worldwide scalable production and distribution business, in terms of most of our operating divisions, we have major studio capability. But what I don't want to lose is that entrepreneurial spirit, that innovative, edgy quality that we have both as executives, I think, in terms of the content that we're producing and distributing as well. So I guess in that sense, some of those names—next gen, major—actually might be appropriate. We handle a library of more than 12,000 titles, which really puts us in major studio territory. We've got this large, scalable worldwide distribution infrastructure that handles not only our own product but Mandate, Gold Circle, Relativity, StudioCanal. We are partnered with StudioCanal in an adventure in the UK. We're partnered with Sony in FearNet along with Comcast. We've just created a pay television channel together with Paramount and MGM. So we have, again, major studio partners.

It's always hard to know what's going to work for an audience. As I've looked back historically at some other recessionary periods, it turns out horror films have always done well for some strange reason. I do think that our industry has got to acknowledge, again, something I said earlier, which is people are watching entertainment differently, and I think again we have to serve them the kind of entertainment they want, we've got to serve it to them whenever and however that they want to get it, and priced in an affordable way, particularly in this environment. So I think clearly there's always going to be the Harry Potters, there's going to always be the big blockbusters, James Bond, but I think that you've seen that smaller, you know, niche movies can be huge profitable home runs. Look at last weekend, Twilight—I mean, everybody didn't go to see Twilight, it was mostly younger girls aged 8 to 14 and maybe their mothers in some cases, but that was a huge home run, that picture will do almost $175 million just at the American box office. Saw—not everybody goes to see Saw—but it's the greatest horror franchise in history. So I think that all of the studios are going to figure out a way to look at these slices, as I said, these thinner slices, but actually monetize them across multiple platforms and do extremely well with them. Clearly there have been a lot of movies over the last number of years, and that has made it harder for companies to get traction. I think what the current economic environment certainly will do is to shake out some of the weak competitors, probably leave some space open during the weekends for pictures to do a little bit better. I think given our balance sheet, given our capital position, I think that ultimately will be good for us and for the stronger players that are left in the business.

I think my advice would be: don't strive to be anything other than what you really are and what you really believe in. Don't try to take somebody else's brand. Don't try to figure out somebody else's system. Come up with your own brand, come up with your own vision of what you can do best and how you can satisfy the demand that's changing in the world for content. And that would be my best advice. If you have to tell somebody how to be entrepreneurial, then obviously they're not entrepreneurial. If you have to tell them how to be innovative, clearly they're not particularly innovative. So I think people have to figure out their own brand, their own system, their own thing that they're going to do better than anybody else.