Keynote: Jon Feltheimer, Lionsgate - EDIT | MIPCOM 2010 Personality of the Year

I'm delighted to be here at MIPCOM this year, and I would like to thank you, Paul, and the entire Reed Midem organization for honoring me later tonight with the Personality of the Year award. A few weeks ago, I had the pleasure of taking my oldest daughter, Jillian, for her first day of college. But as we prepared to say goodbye, Jillian seemed very nervous. She held on to us and didn't want to let us go. You know, just a few months before, she was that confident high school graduate. She seemed to have all the answers, but now she was starting over. She was facing new challenges, and she would need to come up with new relationships, new friends, and new answers. And I thought, you know, that's just like me. Every time I think I've got this down, something happens and I have to start all over. Every time I think I have all of the answers, it's time to go back to the drawing board. And every time I'm comfortable that things won't change, they do, because the only constant in our business is change. But also, let's remember what hasn't changed, and that's the demand for content. People are watching more television than ever. The number of viewers is growing, the number of hours is increasing, and the number of ways they're watching is expanding exponentially. Around the world, more people are getting the opportunity to see more content than ever before on their cell phones, their iPads, and hundreds of other devices. They want their content when, where, and how they want it, and the good news is they're willing to pay more for it if it's premium, if it's faster, sooner, more mobile, or more transportable. But in a world where the old advertiser-supported models of big audiences are migrating towards hundreds of affinity niches, where the traditional linear progression of windows is increasingly challenged, and the emergence of digital online video is threatening the traditional ways we monetize our content, we have plenty of questions that are keeping us all awake at night. What should we charge for our content over these new distribution systems? What about terms? What about exclusivity? There are no precedents, there are no models, there are no defined terms and conditions. So we have to take a chance, we have to take risks, and we have to be willing to make mistakes. Perhaps the best show on television today, Mad Men, was a show for which AMC had a tough time finding a studio partner—a hard-to-finance period piece. But we cobbled together a new business model built on a patchwork quilt of basic cable, DVD sales, iTunes downloads, international sales, and a half a dozen other digital delivery platforms, and we came up with a formula that will ultimately deliver millions of dollars an episode. Some of the ways we finance these new models will cause strain. Our traditional partners may feel encroached upon, their real estate threatened by new players. But throughout the history of our business, change has inspired existing companies to adapt, open the door for new companies to innovate, and at each step of the way, our industry has become bigger and better. The Epix-Netflix deal tells us several things about our business. It tells us that new windows carry a lot of promise and potential for content creators, distributors, and consumers alike. It tells us that the digital rights to our content carry tremendous value. And it tells us that every time we face a market in which traditional buyers are offering less for our content, the financial equilibrium of our business creates new buyers who are willing to pay more. The fragmentation of audiences may be difficult news for old-world business models, but it's good news for companies like ours because it signals the continued expansion of potentially profitable niches for which our branded content and targeted approach are a better fit. Some of the markets that we're targeting are further from home. We're generating only one percent of our nearly two billion dollars a year in revenue from the vast consumer populations of China, India, and the other Asian territories who make up 50 percent of the world population. As our business changes, so too all the indices of success. Shows will be prized for the loyalty of their viewers and their ability to migrate to multiple platforms that generate extended revenue streams, not just their ability to reach tens of millions of eyeballs at a single sitting. All of this focus on niche audience isn't to say that the network business isn't still relevant, and the strong upfront performances this year reinforced that. Shows like Modern Family and Glee prove that the networks haven't lost their touch in creating quality, enduring programming, even if the ratings that define a hit today are much smaller than they were 10 years ago. And if we've learned one lesson already from this year's network season, it's that content and the internet continue to intersect in new and interesting ways. In the brave new world of television, whether it's a big star vehicle for 20 million viewers or a niche cable show for 20,000 fans, the defining constant of content, wherever it appears and whoever the audience is, is that it needs to be good. There are certain rules about content that don't change. The first of these rules: get it right the first time. If you create the right content, the buyers, sponsors, partners, and audience will follow. When you're making a show, don't let the results you want to achieve shape the content; let the content shape the results. Don't make a deal, make a show. When you create a show to fit the structure of a deal or to satisfy the needs of several different markets or a variety of audiences, the something-for-everyone approach usually leads to nothing for anyone. If you make good content in a world marketplace that is hungry for it, you'll find plenty of buyers as long as you don't limit yourself to old models. Least common denominator television just doesn't work. The shows with the least longevity and the most limited appeal are ironically the ones that set out to pander to the widest and most diverse audiences. But a successful show in any territory will almost inevitably lead to success in other territories, that will live on in sequels, be sold as a format, and will have an afterlife in syndication. Sometimes we lose sight of the fact that as executives, we're only the facilitators of the creative process. We're not the story, we're not the audience, just the connection between the two. Our job is just to bring the storyteller and his or her audience together in the most efficient, effective, and entertaining ways possible. For all the new formats in the world, all the new technologies delivering them, and all the new markets for consuming them, our business is still built on stories and the best ways to tell them. Even the state of the art and technology cannot make ordinary content extraordinary, and the greatest magic in our creative arsenal remains our storytellers' gifts for capturing our imaginations. No matter how much our business changes, that simple truth won't change. It seems a little scary to all of us, just as it did to my daughter Jillian, and change is hard. But there's no going back, and the status quo isn't an option for success in a world evolving as rapidly and a business changing as profoundly as ours. Like the blind men measuring the elephant, we're still trying to figure out the most basic elements of the digital content equation. But over time, I am confident that we will get it right, and we're going to find that the new era of our television business is more promising for our companies, more exciting for our consumers, and more rewarding for all of us than anything that has preceded it. Thank you all very much.