DAVID WILKINS: Well, why
don’t we get started? We have an absolutely
terrific panel here, and we want to give
as much time as we can for all of you
and the audience to participate since we know,
in addition to students who are interested and people who
are interested in these areas generally, we also have
people who are in the business and who have something to
say about these issues. So my goal here is
to simply just get the party started by giving
one-second introduction to the panel and very brief
introductions to our panelists and then begin with
some questions for them, but be thinking about
the issues that you want to discuss with this
terrific group of people. And I promise you we’ll get as
much time for that as possible. So my name is David Wilkins. I’m a professor here. I see some of my former
students in the room, which is always a great joy for me. It may not be a
great joy for them, but it’s a great joy for me. And I’ve been here a
long time, and I actually have almost nothing to do with
the entertainment industry, with the exception of the
fact that my wife, Ann Marie Wilkins, who some of you
heard at an earlier panel, is actually quite
involved in the industry and represents a number
of prominent recording artists including Harry
Connick, Jr. and Branford Marsalis and Joshua Redmond. So she promised to be– I asked her if she would take
my place, and she said no. So– but you might want to
ask her questions as well. Look, the subject
of our panel today is something that everybody
knows is going on, which is the kind of disruption
of the traditional models of the entertainment industry. I suppose we first became aware
of this in the music business and with streaming and
downloads and all of that, that it completely
disrupted that business. That’s something Ann
Marie knows all too well. The way I always
say it when I first started going with her to
Sony music in the early 1990s, it was this giant
building filled with all these cool 20 and
30 somethings blasting music. And they were the king
makers of who got to do what and who got to hear what. And now you go in there,
and it’s like a ghost town, OK, because the model has
just been completely disrupted by consumers being able to get
what they want, when they want, and how they want
it and not having to have the intermediary
of the recording companies and all of their tastemakers
decide what it was you were going to listen to. And I think the movie business
and the television business mostly smirked and
said, well, that’s what those little people get. And then suddenly it was
happening to them, whether it’s streaming or all
the different ways that content is
being delivered, now are posing a
fundamental challenge to every part of that business. Just a couple of things that our
panelists have told me about– so movie revenues were
down 15% last year after– DEBRA MARTIN CHASE: This summer. This summer. DAVID WILKINS:
This summer, which is the most critical
time where you get the big blockbusters, many
of which turned out to fail. You’ve got people cutting
the cord of the cable. You have all the big awards
going to streaming services, which are on a completely
different or very different business model than
the traditional one. So it’s a time of
enormous transition. And we are very lucky to
have three incredible people who’ve been in the business,
who have lived through some of these changes,
and who are going to have a big effect on how the
industry or industries– maybe that will be one of the
things we talk about, is it fair to call it even
one industry anymore– respond to these changes. So to my immediate left is
my old– not my old friend, my dear friend, who I’ve known
for more years than we will admit– Debra Martin Chase, who is a– as we’ll say– an
independent producer, has been involved in some
of the top franchises, both on television and in film,
has a wide range of experiences we’ll come back to in a second. To her left is
Patricia Laucella– am I pronouncing correctly?– who is at Lionsgate, one
of the most important film studios and, again,
has been involved in blockbusters,
like the Hunger Games and Twilight and
other important films. And she’ll tell us a
little bit about what the future of that business is. And then finally, to her
left is Rita Morales, who is an associate general
counsel and vice president for business affairs
at Turner Broadcasting. So again, one of the big
players, maybe the biggest player, the one that really
created the cable business as much as anybody else, but is
now in the midst of thinking, what’s the future of cable. So I’m gonna start with just
a short question to each of them, which will give
them a chance to kind of both say a little bit more
about themselves, but also to talk about their
vantage point in the industry. And we’ll have a little
discussion among the panelists. And then we’ll open
it up for questions. So Debra, I promised I was
going to pick on you first. And it’s because
really, your career has really straddled all of
these different kinds of media. And you really are
in a unique position to kind of think about what’s
happening in each of the places and how you, as an independent
producer, think about choosing, whether you’re developing
a show for a movie, developing it for television,
developing it for a streaming service, network, whatever. So if you could say a
little bit about just how you see the world unfolding
from your point of view. DEBRA MARTIN CHASE: Sure. I call myself a
film and television producer for familiarity, but I
really, for the last two years, have defined myself
as a content producer, because at the
end of the day, it is, for me, it’s about
finding great material, putting together the right
package with the writer or maybe a piece of
talent, and then finding what is the right platform. And back in the day when I– as a successful film
producer, people were– and I started in TV early on,
because I learned this lesson early on– but people would say
to me, you’re a film producer. Why are you doing television? I mean, it was really considered
a stepchild in the industry. That obviously has
changed tremendously. And so the
opportunities are huge, because there are over
450 scripted shows being broadcast over
different platforms now, which is enormous. That’s only going to continue. You have major– but that’s
also meant the disruption of the traditional business. Movies now, you have
the major movie studios, who are doing the big tent pole,
looking at the worldwide box office movies. And then you have the
smaller movie business. Lionsgate kind of straddles
the two between Hunger Games on the one hand and
some more smaller character-driven movies, but– so there are choices there. You figure out, where
do I fit in there? And it’s a different
way to exploit that. And then in television,
you’ve got networks. You’ve got cable. And you’ve got streaming cable. And cable is kind
of being squeezed. I mean, I want to hear
your thoughts about it. But I think Netflix,
five years ago, we were still getting
DVDs in the mail, or six years ago from Netflix. And now, they’re like kill– they’ve changed the
shape of the business. So it’s both an
interesting time. Opportunities are being created,
both for us as professionals and for you as consumers. But I feel like I have to– I just keep saying,
I know a big change is coming every six months. And part of my job,
my success, depends on identifying that
change as soon as possible and adjusting my
business accordingly. DAVID WILKINS: So Patricia,
that’s a great segue to you because you are in the
position and Lionsgate’s in the position of– they have to decide whether
to greenlight a project. It’s a substantial investment. You’ve had these
great franchises, but then you look
at the money which had been this incredibly
successful franchise, and it was a complete and
total flop over the summer. How does that affect
what you do in terms of the films you decide
to go ahead with, but also all the other
relationships that you have as a studio, including
with the exhibitors? How are you thinking about that? PATRICIA LAUCELLA: Well, I
started in the film business. I did not really do a
lot of television work, but I dabbled in it a bit. And I think you’re
100% right that it was a stepchild of feature
films when I started. Just the opposite now. You really have to understand
the TV end of the business, or you’re going to be
obsolete at some point. Not because features
are obsolete, because I actually am less
pessimistic about the future of the movie business. I actually see that the
summer was down 15%, but I do have a lot of contacts
in the feature, in exhibition, and distribution. And what I’m being told
is it’s a crowded fall. It’s going to be a big fall. And for the end
of the year we’re not going to be down at
all in the box office. It’s a little bit of a
prediction at this point, but last weekend,
It, the horror film, came out and blew away all
records for a horror film, for a film released on that
weekend, which was historically one of the worst weekends. And it wasn’t a Lionsgate film. But I think for me,
that was an indication that it is about content. And if you are
giving the content, whether it’s produced as
a feature or a television or a Netflix show, if people
want to see something, they will go to the theaters
to see it, if it’s a feature. And so I think people are very
pessimistic about the future of the movie business. And I was in a meeting
a couple of weeks ago, and CNBC was on
somebody’s television. And I saw “the movie business
is dead,” or whatever. Stocks for Regal and
AMC started plummeting. And I thought, this is so
overblown, in my opinion. I see great opportunities. I see the opportunities of not
only the technology changing and how to get ahead of it,
but using that new technology to advertise and
market films in a way that we couldn’t advertise
and market films before. Now, do I think the
traditional movie theater where you sit, and the
seats look the same, and the service is the same,
and the screen is the same– I see that changing. I think in a matter of
time, at some point, the technology will be
maybe virtual reality, or there will be
something else that, when you go to the theater,
it will be a slightly different experience. But when we are
making movies now, we really develop them, in
my department, as a feature. But there is now more
and more the possibility that it becomes something
else along the way, and then we flip the model. It’s very easy. You have the script. It’s a slightly different
financial model. And then we sit down with
the numbers and decide. It makes sense to do this here
or there for whatever reason. I know that the term
“disruptor” is used a lot, and I see it really as
an exciting opportunity. I know that it happened
in the music business. I think for me, the concern is
piracy more than anything else, or if we put something and we
stream it day and date, that it will somehow be pirated. People will be getting
stuff for free. I think that’s the disruption. I don’t think that
maybe the consumer wants to see something in their
home on Netflix versus going to a movie theater. That seems to be an opportunity
to me for the consumer. I kind of think we’re
aligned with Netflix. I’m not really afraid
of that business. Lionsgate actually has a TV
division and a movie division. And we also do a lot in
virtual reality, theme parks. So we’re kind of
touching upon every area. It’s a little bit
more innovative– DEBRA MARTIN CHASE:
You’re more nimble. DAVID WILKINS: Yeah. PATRICIA LAUCELLA: Mm hm. Yeah. I started at Warner Brothers. It was more of, it’s a tent
pole or you’re in the other– we kind of [INAUDIBLE] all. So I’m sitting in meetings
with the TV people and the virtual reality people. We’re trying to get our hands
in everything so we can easily cross the boundaries. DAVID WILKINS: So
Rita, how do you see where the opportunities are? Because you are in
a business where a lot of what
they’re talking about is kind of being squeezed on
you from both ends, right? RITA MORALES: Well, it is. I work for Turner. I think everybody
knows about Turner. Turner’s one of the Time Warner
divisions along with Warner Brothers and HBO. And we have some
major, major brands. We have CNN and TNT and TBS
and also truTV, TCM, Boomerang, Cartoon Network, and Adult Swim. So the last two networks,
Cartoon Network and Adult Swim, those are my networks. I run business and legal
affairs for both of those. Anyway, so we have
been in the business, on the kids’ side
anyway, of predicting what the kids’
behavior is and looking at the changes in the
viewing habits and the like. And so we’ve been looking
at that for a long time. So it’s affected the
deal making that I do day to day, because
we’re anticipating things that come up. And we end up making deals
for different kinds of things where the key, I think– because people keep
talking about the death of the business–
the key, I think, is to think about
it in this way. There’s the distribution
side of the cable business, and there is a content side. We’re on the content side. And on the content side,
even in a hyper-competitive environment, the
key is to make sure that you make the most
compelling content, that you have a distinctive brand,
that you end up finding ways to deliver to a
specific audience the thing that they’re looking for. For a cartoon, that means
that we have started developing in a different way. We’re really flexible in
our development approach. So we’re not just
making the shorts which are the equivalent
of a pilot in animation. We are now making things
that start out as a game. We set up a virtual reality
lab to develop things a little differently. We have been– as you
say, you’re pretty nimble. So are we, even though
we’re within a division within a major media company. So that’s one thing. The other thing is
that we are looking at a lot of different things. I mean, look– people ask how
are you responding to this? What are you doing to prepare? There’s this thing
called an $84.5 billion merger between AT&T
and Time Warner. And the whole purpose
of that is to merge distribution and content. I was looking, and
if you’ll permit me, I was going to look at
some of the statistics. But AT&T has 150 million
wireless subscribers in the US alone. AT&T has customers
in 200 countries. They are developing the
5G high-speed network for streaming. The reason they were
interested in Time Warner is that we are a pure
content business. And so I don’t really worry
about the death of my business because I think that we
have been doing things, the company has
been doing things to prepare for the
inevitability of the change. We just have to evolve. DEBRA MARTIN CHASE:
So because you’re going to move into streaming–
that’s what the AT&T merger is all about, shifting
from providing your content over
the cable platform to really being
streaming, right? RITA MORALES: That
is a good part of it because one of the
things that we see, and especially with a
kids audience, is they’re platform agnostic. They don’t care where
they watch content. And I, at one time, thought that
the older audience would not be willing to watch stuff
on the small screen, but they do it all
the time, too now. Binge watching has
really changed the way people consume media as well. It’s just that you have
to know that audience. But, yes, there is a move
toward doing more streamings and stacking, which
is allowing people to watch more
episodes at one time, making prior seasons
available so they can catch up with
the new seasons, doing all those kind of things. But yes, most of the
networks and companies are looking at
direct-to-consumer streaming models as sort of the next
iteration of distribution, right? That’s what’s happening. That’s part of what the
AT&T merger is about. But companies like Disney
also announced a new streaming service that they’re
doing, and so that’s going to be the only place that
you can get the Disney, Marvel, and Star Wars content. Once the Netflix deal expires
in 2019, you have to go there. So then, what is Netflix going
to do when its licenses start expiring for the
content they’re getting from other content providers? That is why Netflix
is expanding. DEBRA MARTIN CHASE:
It’s spending big money. RITA MORALES: And it’s basically
driving up trucks of cash and dropping it
at people’s feet. That’s what they’re doing. DAVID WILKINS: Well,
Patricia, you kind of alluded to this a second
ago, but if everything is moving to streaming,
you say, well, it’s not– the big problem with
the record business was people were getting stuff for free. But isn’t that actually
a big challenge of the streaming model, i.e. Game of Thrones, Sony? It’s both a security issue,
and it’s also driving down what people will
pay the more it’s available on a streaming model. PATRICIA LAUCELLA: The
issue really is the– DEBRA MARTIN CHASE: Streaming
as opposed to hacking. PATRICIA LAUCELLA: Right. Exactly. DEBRA MARTIN CHASE:
Streaming is Netflix, Amazon. All the networks have their
own streaming services. And those are subscriber-based. PATRICIA LAUCELLA:
They’re being paid for. It’s not somebody– what
I’m talking about is, you stream something
in another country, and it’s on the internet
while the movie– DEBRA MARTIN CHASE:
Oh, it’s hacked? PATRICIA LAUCELLA: –is
in the theaters here. DAVID WILKINS: I guess
what I’m saying is, the more streaming, the
more security problems. That’s what I’m saying. DEBRA MARTIN CHASE:
Yes, yes, yes. PATRICIA LAUCELLA: But it’s
not a matter of somebody is actually doing something
legitimately paying for a subscription service. But I think the issue
then becomes more of what the model will look like. And I think this is
in the very short term in the next year or two– the relationship between the
studios and the exhibitors. Because I have friends who have
been in the business 50 years, and when I have this
conversation, I hear, oh, when color TV was first
invented, everybody said, nobody’s going to go
to the movies anymore. Then it was DVDs. So there’s always
some technology that makes people say nobody’s
going to the movies anymore. So I think the issue
really is, there are going to be people who want
to have a communal experience. There’s also the issue of what
are you paying for the movie ticket versus how quickly
will it be available to you outside of the theaters? And that’s such a
hot topic right now. So I think the issue really
is, if a month later, you’re going to pay $50 to
watch something on TV, will you go to the theaters now? Probably. If you can see it
the same day, if it’s a day-and-date release, then
maybe it’s a different issue. But then maybe the theaters
won’t play the movie. So there are so many
political issues. And I think, for people
who are in the legal end of the business, it’s really
not about being a lawyer. It’s really about being
a business person. Because we are in a very
relationship-based industry. So we have to make sure
that we all figure out what the consumer
wants, how to get the consumer what they
want, and how to preserve the business for what it is. And I think that
there’s a lot of– it seems like there’s a lot of
fear, not with our panelists, but in the industry,
it’s like there’s a lot of fear-based theories. I really just see it as an
evolution of the business, and I think that we’re
all making changes to– DEBRA MARTIN CHASE:
So here’s my question. My question is– and I
think we’ll figure out. We’re looking at this summer. So summer, prime box
office for the year, down 15% from last year. A lot of big flops. A lot of big titles,
Transformers, The Mummy, Baywatch flopped. And franchises that were older
didn’t perform to expectation. And 15% is a big number. At the same time, HBO shifted
Game of Thrones to summer. Usually airs in the spring. This year it’s in the summer. Broke records every week
from the debut to the finale. HBO’s spending $30 million per
episode on Game of Thrones. They’re shooting 40 to 42 days. That is a feature
film being broadcast every week in your living
room for no more money, right? And you’re sitting back
with your big screen TV. So I guess the question
is, was this summer a blip, or is this summer the beginning
of a trend where people are just saying, look the
quality on television has gotten so
extraordinary that unless– it needs to be Star Wars. It needs to be something
that is really– Hunger Games in
the beginning when it was fresh and exceptional– it has upped the bar
on the content quality. PATRICIA LAUCELLA: I think
there was an issue this summer with content or the
advertising of the content or the timing of releases. So if I’m looking
as a movie person, outside of trying to say
it’s because our business was taken away by Game
of Thrones or something, if I just look at the movies
that were released this summer, including some of
the franchise films– some of my favorite franchises
had movies released, and I went to them,
and I just felt like the content was
maybe not what it had been the last time I saw the movie. I’m trying to be
polite about this. [LAUGHTER] And maybe it was released on the
wrong weekend, or, for example, with a movie like Baywatch,
who are you marketing it to? So I think maybe what it is,
is the bar has been raised. Because our box office
at Lionsgate was up 20% this summer. We’re not making any tent poles. We had a couple films
that I was actually surprised did as well as they
did, because they were just these little, kind of strange,
went for an off audience that wasn’t a tent-pole film, and
the movies over-performed for what I would have hoped. So we were really very
excited about that. I think it really
is that you have to look at the content
and the advertising, and you really have to carefully
plan your release date. And I think if you’re not
giving some alternatives to the consumer, they are going
to stay home and watch whatever they’re watching on TV. But I do think– and again,
this is a crystal ball, but if you look at the fall and
when we get to the end of 2017, I believe that we may be
in the same place this year that we were last year. I don’t think we’re
going to be 15% behind. I personally think
it was a blip. And it’s not that I don’t
want to face the music. I really don’t believe
that it’s as dire as people have thought based
on this summer performance. DAVID WILKINS: So
Rita, I wonder where you see this related to
other parts of the Turner business of news, sports. There’s been a lot of
issues about NFL coverage and whether or not people
are watching NFL games and whether they’re getting
their news off of cable, or they’re getting news
off of the internet. So how does how does that
part of the business fit in? RITA MORALES: I don’t work on
the news or the sports side, but it is a significant
aspect of our business, of Turner’s overall business. And on the news
side is, I think, really dependent on what’s
going on in the world. And CNN has actually
been doing really well because of the
election coverage and then, unfortunately,
because of all of these major disasters, right? It’s sad, but true. Sports is actually something
that Turner invested heavily in. In order to really address
the viewing habits. Sports is one of
the very few things that you have to watch live. You cannot watch it and enjoy it
because everybody knows who won and who lost. And so they have invested quite
a lot in the sports business, but not just in the
live sports broadcasts. Turner has invested in
other sports-related things, including the digital business. Turner runs the
PGA.com and NBA.com, a lot of other websites. Turner acquired the Bleacher
Report for that purpose, and that’s a sports site
for millennials, really. And on top, they also acquired
a company called ELEAGUE, which is people watching
people playing games, which I don’t get, but
apparently it’s a big deal. So yeah, that’s one
of the investments that Turner has made in order
to continue to stay relevant and keep making profits. DAVID WILKINS: I’m going to
open this up in a second. So you guys should be
thinking about questions. There’s a lot of interesting
stuff at the table, but I’m going to
pick up on something Patricia said in
passing because this is Harvard Law School after all. And everybody here is a lawyer. And my guess is
most of the people in this room are lawyers. And so I wonder how you see
being a lawyer as fitting in, either in terms
of opportunities that this new world is
creating, challenges to the kinds of
traditional skills that lawyers bring to
the table, challenges to Harvard Law School as
to the way in which it prepares students who might
be interested in going into this field. So Patricia– PATRICIA LAUCELLA:
It’s a good question. DAVID WILKINS: –why
don’t you start? Then I’d like everybody to
just say something about this, because that is the
common thing that, after all, unites everybody
who’s here at this celebration. PATRICIA LAUCELLA: 20 years
ago, I interviewed at a law firm when I was changing jobs because
I graduated 25 years ago. And I met with a partner
who said, new media, you have to get
to know that area. And she just kept
repeating herself. So I was just like, OK. I really want to do features. You have to look
into the future, and you have to prepare
yourself to learn. Because it’s new
territory for all of us. You have to prepare yourself
to learn what’s next. And there aren’t any answers
to a lot of these questions. I have a team of lawyers, and
sometimes something comes in and we’re like, has
anybody seen this before? Do we know anybody in other
studios who’s seen it before? No, nobody’s seen it before. We have to now be the pioneers
to figure out what’s next. So if you have that
level of curiosity and you’re willing to
learn something new and really almost invent
something, because the way these are being handled from
Guild issues and legal issues and financial issues is new. And it’s evolving. I would say if
you’re practicing law and you want to
learn something new, or if you’re a law
student that wants to get into entertainment, if
you learn the next thing, even by self-study, teaching–
because you may be the person who comes
up with the best way to handle something
from a legal standpoint. It affects contracts
for all of our talent. Every deal that we do now,
we might have a deal where years ago we would just– this is a feature deal. It’s not going to television. And now someone
says, wait a minute, we’re going to make this a TV–
we’re going to do a series. We’re going to do
a Netflix series based on this movie franchise. And years ago it
would be like, well, you’re not going to
get the same actors. They’re not going to do it. Now, the actors want to work. You have major talent
working on television now. It’s no longer seen as
a second-class citizen. DEBRA MARTIN CHASE: At all. PATRICIA LAUCELLA: I just think
you have to be able to then– well, what my group does, we
then look at a contract that may have been something
drafted 10 years ago, and we have to then change
the way we approach it. And so if you can
look into what you think is going to be the
changes in the industry over the next couple
of years and jump into the legal
implications, I think that you will have an
advantage, especially if you’re going for a job. If someone comes in and
says, I’m looking for a job, and I only do features,
I’d be like, that’s great, but that’s what we’re all doing. We need somebody who
knows how to do this and how to bridge
the gap, how to work on what you said–
sometimes you’re not sure if it’s going to be a feature. You have to know how to get it
from A to B. Some of our stuff that changes continuously. Last week it was a feature, now
it’s going into the TV group. So we’re working
with each other. There’s a lot more
of that joint effort. And to understand, that’s a
new area of the law for us, how to figure out how
to deal with all that, because it is new. DAVID WILKINS: Rita, you’ve
got an interesting title because you’re associate general
counsel but also vice president for business affairs,
so you span– RITA MORALES: SVP now, sorry. DAVID WILKINS: Sorry. OK, even better, even better. People are getting
promoted just by the hour. [LAUGHTER] But no, by
definition, you’ve got a role that actually
straddles a boundary that we didn’t used to think about. So how have you thought
about it in your career? RITA MORALES: Well, yeah. My role is both a
business and a legal role. A lot of companies,
they have bifurcated business and legal affairs. And even within Turner,
my group of networks is the only one that has a
joint business and legal affairs group. So I feel pretty
fortunate that I can do both the business
and the legal side of it because frankly, the deal-making
side can be really rewarding short term, but the legal side
is the more intellectually challenging side for me. And when I was in
law school, it never occurred to me that
this is the line of work I’d go into, not at all. I started out as a
corporate lawyer. That didn’t last long. Then I went into a small
entertainment, boutique entertainment firm,
and that didn’t last long before I went in-house. But my first job
was in features. So I did features,
then went to HBO, and then went into basic cable. But law school, I think,
what it did do for me and what did it
helped me with, was develop a way of thinking
and learning that has served me well in my role. Because it taught me to– when I was here– for those of you who
are law students, it may seem crazy
while you’re here, but it really does help
you in the real world. But it taught me to
think more broadly, to think about the issues,
both sides of issues, to think beyond what was
directly in front of me. And I have to do
that in my work. I have to anticipate. So any time there’s a new
kind of deal structure that I have to come
up with, I have to anticipate what the other
side is going to object to. And I have to
anticipate the gives that I will give in
response to what I anticipate they will object to. So it requires this whole way
of thinking that takes you beyond the immediate. And that’s sort of what I
do on the business side. On the legal side, there
was a lot of training that helped me understand contracts. My first two jobs were
transactional, so that also helped me on the legal side. But the intangible is really
the interpersonal skills and communication
skills that you develop. And I hope that people
focus as much on those as they do anything else,
because our business is 100% relationship business. [? Joe ?] knows this. Sitting in the audience, he
was on the panel earlier. And we did deals
against each other. We have done over the years. And he said it
earlier today, you end up doing deals with the
same people over and over. And you have to develop the kind
of reputation in the business that people know that
you’re fair, you’re honest, and you’re a straight
shooter, otherwise you’re not going
to be able to get your deals done effectively. DAVID WILKINS: So
Debra, I think you’ve practiced law even a
shorter amount of time than Rita, as I recall. RITA MORALES: I
probably have, yes. DAVID WILKINS: Yes. [INAUDIBLE] But that put
you in a perfect position. I do these big career studies,
and 20% of our graduates are not practicing law. And some of them have
never practiced law. And so one of the
questions always is what’s the value of a
legal education for the kinds of things that you do? And then you are also
in a great position to think about lawyers
from the perspective of a businessperson, right? You’ve put together
your own company. DEBRA MARTIN CHASE:
Yeah, yeah, OK. Actually, I’m going to tell
you both sides of that. So I haven’t practiced
law in almost 30 years, but I use my legal
skills all the time. And it’s a combination of
what you guys are saying. It’s the analytical skills. It’s the basics. It’s the things that we learn. How to look at something and go
to its essence, how to argue. Because basically,
that’s selling. Formulating your position,
figuring out how could you make it attractive and
persuasive to the people that you’re presenting
it to and then putting a little razzle dazzle
on it and going in there and delivering it. It’s like arguing
in court, basically. The writing skills–
all the skills and the basic legal
skills, inevitably, there comes a time in
some deal where it gets to I’m rolling up
my sleeves, and I’m like, we’re getting this done today. Fill me in. And I get in there and
negotiate it because I care, and I want to get it done. So I think in today’s
entertainment business, which is really a combination
of business and art, which I was talking
about earlier, to have a legal degree or a business
degree as a producer, is really invaluable. On the other side–
and as a client, the things that I look for are
people who can think broadly. I learned this when
I was a young lawyer. You don’t want to tell
people what they can’t do. You want to tell
them how to get done what they want to get done. There may be some pieces
as you’re steering them, it’s like, we can’t do
this, because of XYZ. But if we approach it this
way, we can get it done. And I just don’t have time
anymore for the naysayers. You get somebody and sometimes– I’m not saying this to you– it’ll be a lawyer
who’s in-house, who doesn’t really care. And they’ll be like,
no, you can’t do that. And you’re like, but why? So being a partner those
are the lawyers you want to stay with and keep with
you, because you know they’re going to help you
build your business and accomplish the
vision that you have. RITA MORALES: I think
you make a good point. And a lot of people
think that that’s the way it is in-house, that
we’re just there to tell people “no.” But we have our own
set of clients when we’re doing production work. We have the creative
executives when we’re doing development
work, and we have the production
executives when we’re doing production work. And they are our clients. I always tell the people who
work for me that our job is to give them what they
want as often as we can, that when we say no,
they take it seriously. The goal is to make
content, after all, to get the thing done. And so we take a pretty
pragmatic approach. You can’t, in our business,
get really caught in the clouds in doing your work. You have to actually get
into the weeds sometimes. DAVID WILKINS: So listen,
there’s a lot on the table. The floor is open. I’ll keep looking around
and try to recognize people. Questions, comments, thoughts? Don’t be shy. This is an amazing opportunity. Yes, please, and
then over here, yeah. AUDIENCE: Hi, my
name is [INAUDIBLE] DEBRA MARTIN CHASE: Oh, hey! AUDIENCE: It’s such an honor
to see three powerful women, no offense to you. [LAUGHTER] DAVID WILKINS:
Completely justified. AUDIENCE: My question
would be, first of all, to Debra, how
important of a role does music play to the
success of TV and films? DAVID WILKINS: That’s great. AUDIENCE: I’m a singer,
songwriter, and producer. I’m always trying
to figure out ways into submitting music and
getting involved in that. How much does that play in being
successful on films and TV? DEBRA MARTIN CHASE: Huge. Huge and– [INAUDIBLE] and
I have a mutual friend who– and the thing that I’ve learned
over the last few months is, I had assumed that the
music business was still down in the dumps
post-downloads, and really, my eyes have
been opened to the fact that the music business is
once again profitable, and very profitable. And what they have done
during the interim, because they were
decimated, they streamlined. They restructured themselves. They accepted the reality that
streaming was here to stay. And they cut economically
beneficial deals with streaming companies so
that now they’re making money. What I find is that now that
they’re healthy and stable again, they’re looking for ways
to get their music out there. And film and television are
once again extremely attractive. Look at Guardians of the Galaxy. And, of course I’m going
to forget the song, but the song in the first one,
we activated the entire catalog for– what was the song? Who was the group? I forgot. AUDIENCE: “Hooked on a Feeling?” DEBRA MARTIN CHASE:
Yeah, thank you. Was it Journey? AUDIENCE: That was
one-hit wonder. That wasn’t a big catalog. That was a– I forgot the name. It wasn’t a group that
had a [INAUDIBLE].. DEBRA MARTIN CHASE: OK. But in other cases where– and I’m blanking right now– but they’re using it
both to sell catalogs, to build new artists. I mean, Get Out, the song from
Get Out is still on the radio heavily. It has been part of the
whole Donald Glover, Gambino Childish juggernaut. Childish Gambino, sorry. DAVID WILKINS: I
have a 16-year-old. That one I know. DEBRA MARTIN CHASE: Sorry. Sorry. So anyhow, it’s very
important, and I think it’s going to become
increasingly important for film and television. DAVID WILKINS: Terrific. Thank you. Here, yeah. AUDIENCE: [INAUDIBLE] If you
were graduating this year from Harvard Law School and
you wanted to be doing a version of what you do now– DAVID WILKINS: Great question. AUDIENCE: –where would
you be starting out? DAVID WILKINS: Great question. PATRICIA LAUCELLA:
You want to start? RITA MORALES: Sure. So I always tell
people who say they’re interested in being in
the entertainment business that the best thing
that you can do, if you’re interested in
going in-house anyway, the best thing
that you can do is to get the best possible job you
can at the best possible firm that you can. Because most companies,
most media companies, won’t hire somebody
straight out of law school. They will hire junior
lawyers after a number of years of law firm training. And the reason I
think that we tend to look for people who have law
firm training is that there’s something about that
law firm experience that ends up getting
people accustomed to a corporate
environment, the hierarchy, answering to a lot of bosses,
working under pressure, and all of that kind of
stuff that I think ends up creating a
certain type of lawyer. But I also, though,
have met a lot of people who’ve taken other routes. I didn’t set out trying
to do entertainment work. I just kind of happened upon it. And I just kept
saying yes any time people asked me if I wanted to
do something or meet somebody. But I think that It’s important
to just meet as many people as you can, and you can
use the Harvard Law School connection to connect with
people in the business. And they will refer
you to people. And anybody I know
who has ever asked me to have coffee with them
for an informational interview, I try to refer them
to somebody else. Anybody who has ever
followed every recommendation that somebody made for
them, ended up getting a job in the entertainment business. Everybody I know. DAVID WILKINS: Wonderful. Patricia? PATRICIA LAUCELLA: Are you
geographically Los Angeles, New York, or a city
where entertainment is a little more prevalent? I think that’s the first. Geographically, it helps. RITA MORALES: Yeah,
I assumed that. PATRICIA LAUCELLA: I
started in New York. I thought I wanted
to be a tax lawyer because I had been a CPA. Without going through
my whole story, I then moved to Los Angeles,
and I practiced corporate law. And I had the question
that you’re asking now which is, by the way,
one of the questions I’m most frequently asked. How do I get into
entertainment law? Because the answer is
usually you can’t get in unless you have experience. What comes first, the
chicken or the egg? So I always tell people who–
because Lionsgate, again, one of the reasons I do like being
there, it’s a little unusual. You can do things that you can’t
typically do in other studios as far as employment. I have a woman who works for
me who came in as a lawyer. She worked in corporate
as an assistant. So you have to financially
be capable of doing that. That’s one of the
ways she did that, and that’s one of the issues. She worked as an assistant. She did not work for me. She worked for the
general counsel. And any time I went past the
general counsel’s office, she talked to me,
sometimes about her shoes. It could be anything. And she just had a personality. A year or two
later she said, I’d love to take a stab at
being in your group. So I hired her. She probably got
paid a little less than a law firm lawyer
would, but she had been doing it for two years. And I’m training her
along with our group. But you’re right, that’s
the exception to the rule. RITA MORALES: It
is the exception. PATRICIA LAUCELLA: I
started in corporate, and I actually went to
entertainment partners at the firm that I was at. And I said, I will do some
of your work on my own time without billing your client. I want to learn. And I read contracts at
night and on weekends. They couldn’t bill the
clients for my time, but that’s how I learned. And then I moved to
an entertainment firm where I did partially
entertainment and partially corporate. And then I moved again
to Warner Brothers because someone I had met at
the law firm that I started at ended up in Warner Brothers. So that was the
relationship issue. So there’s a lot of
maneuvering, but I feel like if it’s something
you really want to do, you will ultimately get there. And there’s different
paths toward it. And if you want, we can
exchange information. I can give you some tips. RITA MORALES: I
always say you have to be really nice to people. And it’s true, because
every job I ever got after my first law firm
job, I was referred to the job by somebody I knew
or had worked with. Everyone. DAVID WILKINS: By
the way, if you want to do entertainment
or not, that’s the way. There is no placement
office out there. Debra, you said you do
something so different. If you have any
thoughts on people who want to get in, not so
much in the legal roles, but in the production or other
kinds of roles in the business. DEBRA MARTIN CHASE:
Part of it, and I think this is true for any
major transition in life, is figuring out
what you want to do. Because it’s one thing to
approach the industry and say, OK, I want to be a lawyer and
you know what that looks like. I did practice law for a number
of years, not entertainment. And the year before
I hit Hollywood I spent studying the
business, talking to everybody that I knew or who somebody
would introduce me to, reading Variety and
the Hollywood Reporter and going to seminars
and stuff and kind of getting an understanding
of how the business works. So I was able to say, I
want to create content. And so that is either as a
producer or as, at that time, focus on film, a
studio executive. So then, you start
to narrow down. And as I talked to
people, I could say, this is what I want to do. Can you help me? And In my case,
for two years only, what was then Columbia Pictures,
had an executive development program where they
were looking for people from different disciplines
to create a better, more well-rounded studio executive. I made no money. I looked at it like
my graduate school. But it gave me the
keys to the kingdom. DAVID WILKINS: Question? Yeah, please. You don’t have to
stand up, but if you could just say who you are. You know it’s funny how once
one person stands up, every– I could never make my
students stand up in class. Anyway, go ahead. Yes, please stand and recite. AUDIENCE: [INAUDIBLE] about
how a lot of Netflix’s licences are expiring in 2019. And you said something about
how how they weren’t sure how to address that, how they
were just shifting money. I feel like Netflix
is already kind of addressing that issue by
creating their own shows like, for example, the Castlevania
show, [INAUDIBLE] live-action show
[INAUDIBLE] coming out soon. So I just thought, what
are your thoughts on that? Do you think that’ll work as a– do you think that is
currently working [INAUDIBLE]?? RITA MORALES: That was my point. My point is that Netflix
anticipated this, and that’s why they started
creating their own content, content that they owned. DEBRA MARTIN CHASE:
People are pissed off. Now that they’ve become
such a dominant force, Disney and everybody
else is mad that they gave them the licenses. So they knew it was coming. RITA MORALES: Yeah,
the knew it was coming, and that’s how
they addressed it. And they’ve had the money to– my point was that, once the
licenses expire and the film libraries from other
content providers are not available
to them anymore, they can’t rely on things
with preexisting value, with an IP that has
preexisting value. So they’re going to now
have to rely on the content that they create. DAVID WILKINS: Let me ask this
just as a way of getting people a chance to think. My son’s 16 years old. I hate to say this, but the
content provided by all of you, he does not watch. You know he watches? YouTube. All he watches is YouTube. AUDIENCE: I can see him
following that stuff. DAVID WILKINS: And so
what does that mean? How does that affect–
because I assume he’s your– that’s the consumers
of the future. He has his YouTube artists. We went to the Super
Bowl and there were all these stars walking around. He had no, zero,
zero, zero interest. And then he saw some YouTuber,
and then he went over and he stood next to him. And I was like, OK. So anyway, what do you think? What’s up with that? And how does that work? DEBRA MARTIN CHASE:
That is precisely when we talk about disruption. It’s throughout, not
just teens, but kids. My niece and nephew,
they’re six years old. They only watch YouTube. I’ve done a lot of work with the
Disney Channel over the years. They’ve had to completely
change their business model because they’re not
the go-to anymore. So the Disney Channel now has
stepped into, interestingly, where Disney features used to
do mid-range family movies, and now obviously they’re
doing just the tent-pole and the huge title movies. Disney Channel’s moved
into the $15 million movie range with Descendants. They have a new one, it’s like
“Zombies versus something.” I don’t know. They’re trying to compete
because they can’t– the kids are on YouTube. Look, five years ago,
Netflix was returning DVDs– or seven years ago. Now, they are one of
the dominant forces. Amazon, who pocket is
really unlimited because, at the end of the day, they just
want you to sign up for Prime. [LAUGHTER] DAVID WILKINS: That’s it. DEBRA MARTIN CHASE: The movies
and TV are a loss-leader. DAVID WILKINS:
It’s a loss-leader. It’s a loss-leader. DEBRA MARTIN CHASE: They
figure once you’re on Prime, they say that you’re
going to buy, like, 60% of your life on Amazon Prime. How do you compete with that? The real answer is, it’s
constantly shifting. You have to just stay on
top of what the impact is and what it means for you in
your sector of the business. RITA MORALES: So I think that
there’s another aspect to this. They are watching YouTube. And part of it is the short-form
content, and part of it is the kind of
content that it is. And I think a lot
of the networks are responding by creating
short-form content and delivering it over
digital platforms as well. We’ve done that as well. We do stuff called Bite Size. We have CN app
that we do for it. Because really, we’ve done
micro series, 15-second things. We’ve done a lot of different
things to try to address that. But I also think that the AT&T
merger is part about that, too, because a huge thing
that AT&T does really well that we don’t do as well
is data analytics, consumer profiling, that kind of thing. So there is going to be a
greater and greater marriage between content providers
and companies that can– DAVID WILKINS: Mine the data
so that it’s like Facebook. DEBRA MARTIN CHASE: It’s in
response to Netflix and Amazon, because that’s
their whole thing. They do the metrics
on anything they buy. House of Cards, which
was a spectacular debut, they went through their likes
and dislikes and whatever and figured out, OK, David
Fincher, Kevin Spacey. They got the basic
framework that they knew they had a secure
audience that would love. We’re, in that sense,
trying to catch up. You haven’t had the
tools to do that. Now with AT&T, who’s
in everybody’s home, you’re going to
get the information to be able to play that game. PATRICIA LAUCELLA: Exactly. DAVID WILKINS: So we got
started a little late, but maybe just one or two quick questions
if other people have anything. Yes, please. AUDIENCE: How do you guys see
the VR interactive content potentially affecting
your future growth rate and development of your content? DEBRA MARTIN CHASE:
You want to take that? PATRICIA LAUCELLA:
The technology has not developed to the point
where they’re utilizing it, but I actually have looked
at that a fair amount. I actually do believe that
in our foreseeable future, the movie experience could
be entirely different. You could be in a virtual
reality experience, which would be hard to duplicate at home. That may have your son,
who wasn’t interested in going to the movies before,
actually interested in it. I know my 11-year-old just loves
anything with virtual reality. So I do think that’s
the technology. It’s a matter of
time and development, but I do think that
that’s the direction that we’re heading in. And I also think we do a
lot with virtual reality with games. Now when I look at
contracts, I see maybe that I have to draft
something in a way that it’s possible
that a game becomes a movie where you participate
in the movie in some way. I actually believe
that’s the next thing. I don’t know how long it’s
going to take for the technology to develop but– RITA MORALES: We’ve actually
set up a VR lab at the studio where we are developing VR
content that’s more narrative as opposed to game-based. That’s just a different
form of development for us. We recognize that’s
a technology that hasn’t developed quite to the
point where it’s so widespread. There’s some things that they– it makes people sick
still, including me. But that is a technology
that continues to develop so that
people can watch it for longer periods of time. But we are really in full
experimental mode with that. We’re on our second
cohort in our VR lab. DAVID WILKINS:
Brian, last question. AUDIENCE: You touched on data. In the future, who
gets to own the data? The collective [INAUDIBLE]
content, creator’s content, owners and distributors, i.e. Streaming companies [INAUDIBLE] RITA MORALES: In
our case, the merger is a vertical
integration so it’s going to be all one company. AUDIENCE: But in
terms of studios and actors and script writers– DAVID WILKINS: Who profits from
the collection of the data? AUDIENCE: Yeah, that’s
where a lot of the big money will be made. DAVID WILKINS: Right. AUDIENCE: So have those sorts
of deals been thought about? PATRICIA LAUCELLA: I’m not
sure what the questions is. You’re talking about
collecting data so you know how to target
certain people for certain– AUDIENCE: So for example, if you
acquire a movie and the content creator says, hey, I know this
is gonna get streamed someday. Can I get some of that data? RITA MORALES: That,
we would never give. No. DAVID WILKINS: We’ll see. AUDIENCE: Debra, you have
a comment about that? Because you’re a
production company. DEBRA MARTIN CHASE: Right. AUDIENCE: And you
would like to know who’s watching your stuff
at some point in the future. DEBRA MARTIN CHASE: Right. I immediately went to Netflix. Netflix or Amazon will ever
tell you how you’re performing. They’re indicia of
how you’re performing as to where it’s
listed in the curation and whether it’s on the hot,
trending now and all that. But they’ll never tell you. It is an interesting
question that we are just beginning to grapple with
because heretofore, it really has just been Netflix
and Amazon, really, who have the broad base
to get the information. Even the premium cable
companies, it’s very selective. People are self-selecting
who subscribes where. I just think it’s one of the up
and coming– it’ll be a future issue for the
company [INAUDIBLE].. DAVID WILKINS: I
will just say, when you combine this with
the Internet of things, that everything will be
talking to everything else, and everything will
be providing billions and trillions and zillions
or whatever parts of data. Where the money is
to be made, not just by identifying your
own audience by selling the data to third
parties, people will figure out that that’s
something that people are going to then fight about. Because if I’m making a
show that you’re collecting a huge amount of data on and
then you’re selling that data and that’s where the
profit is coming from– to be continued. I tell you what, let’s do
this because otherwise, I think other people have other– all right, last question. And then– AUDIENCE: I was just
going to mention the pros of these analytics
and information people are going to have. I’m an entertainment lawyer. One of our clients, we just
closed a deal with Facebook for a half-hour show that’s
going to have a budget, like an NBC-level budget. They’re going to know
exactly who’s watching that. And the young man
or young lady who watches that show
with no ad– it’s going to have very
short advertisements, 10-second things in it. And guess what? They like it. That’s what they’re going to do. They’re going to blast it
out to their 800 friends. And you might see
a worldwide hit show that had to use
almost zero ad dollars because it went viral
the way everything else does, except this is a real 10
episodes of an edgy, cool show. Think of, like, Handmaid’s Tale. And this is terrible
news for you, Rita. [LAUGHTER] RITA MORALES: It
is and it isn’t. It’s just evolving. I know that Facebook
set up a studio, and they’re now
producing programming. I know that so is– DEBRA MARTIN CHASE:
Apple hired their– DAVID WILKINS: Apple– DEBRA MARTIN CHASE: Sony TV– DAVID WILKINS: Facebook. RITA MORALES: Yeah, YouTube is. But at the end of the day,
there is increased competition, absolutely. And that’s always been the case. Netflix just announced a family
and kids programming launch. And so that’s direct
competition for Cartoon. We do understand that,
but what I said before is, you have to create
compelling programming. And I think that at least
on the animation side, I don’t think there’s anybody
who produces higher quality programming than we do. DAVID WILKINS: So
content is king, and I hope you will agree
that content has been king in this amazing panel. Please help and
thank our talent. [APPLAUSE]