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Entertainment Industry's Future Anyone's Guess
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Entertainment Industry's Future Anyone's Guess

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Entertainment Industry's Future Anyone's Guess

Entertainment Industry's Future Anyone's Guess
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This week writers approved a tentative contract with studios, ending a 14-week strike. Michael Lynton, chairman and CEO of Sony Pictures Entertainment, talks about what the end of the strike means for the entertainment business.

RENEE MONTAGNE, host:

When striking writers and studios struck a deal earlier this week we talked to a TV writer about what it means now that the 14-week-old strike is over.

This morning, we hear from the other side, one of the eight CEO's in charge of Hollywood's major studios. We drove the five long blocks - this is L.A. - from our studios in Culver City to the headquarters of Sony Pictures. There, inside a tastefully appointed, rather large study, we sat down with Michael Lynton, who is the CEO of Sony Pictures Entertainment. He managed to squeeze us in during a hectic day of meetings.

Mr. MICHAEL LYNTON (CEO, Sony Pictures Entertainment): It already feels busier, very much so. Everybody's schedules are all at once filled and everybody's, you know, dusted off the cobwebs and gone back at it.

MONTAGNE: Sony was forced to put on hold one of next year's big movies, "Angels and Demons," with Tom Hanks, the prequel to "The Da Vinci Code."

Mr. LYNTON: It got delayed.

MONTAGNE: Right.

Mr. LYNTON: That's absolutely right.

MONTAGNE: As an example of what a studio might do, how soon can that now go into production and get going?

Mr. LYNTON: Hopefully it will go into production quite quickly now over the next few months. So to the extent to which the picture was delayed, that's one effect of the strike. Yes.

MONTAGNE: You know, a lot of mornings I would drive by the studio and see picketers out front.

Mr. LYNTON: Yeah, me, too.

MONTAGNE: Dozens of them. What's it like now that they're back? I mean, there was a fair amount of bitterness.

Mr. LYNTON: In many respects, what you were describing in terms of a picket line you would see when you went out to one my kid's soccer games or, for that matter, when you went to a restaurant. You saw the same people potentially who were picketing and many of them are friends. And so I don't think I ever saw a real degree of acrimony. I - you know, they - and not even really tension. I think there was a general lack of comfort on both sides with how the situation could get itself resolved, because there didn't seem to be a clear path to get there for the longest time.

MONTAGNE: The key to making a deal, if I may so…

Mr. LYNTON: Yeah, sure.

MONTAGNE: Correct me if I'm wrong - was the decision to give the writers a cut of Internet earnings. This was a big sticking point. It was a demand of the writers. And how did the Alliance of Motion Pictures and Television Producers come around to a formula that worked for them?

Mr. LYNTON: There was a lot at stake, not least of which it's a very dynamic area, very fluid and nobody quite knows where it is going. So I think on the one hand they built into it a lot of flexibility, including this idea that the whole agreement sort of sunsets after three years so we can revisit the situation.

MONTAGNE: What do you see online or new media revenues how - how big do you expect them to be in like three years?

Mr. LYNTON: You know, the crystal ball of the Internet is a very, very difficult one to discern. People who for one moment seem to be winners, next moment aren't. I mean, nobody expected Google to be where it is today as compared to Yahoo, for example. And nobody expected AOL to be where it is today.

Everybody misjudged, for example, how quickly broadband would hit the market. For the longest time everybody was sitting on a dialup connection. And for however long that was the case, video going through the Internet was not a viable thing.

All of a sudden, broadband really started getting traction in U.S. homes. And the next thing you know, video actually does become a viable thing and we see that in something like YouTube. Whether that stays on the PC or that eventually goes to the television in the room and how people start viewing video that's not just 10 minute clips or less - meaning full-length movies or television shows - is anyone's guess. So we don't know yet is the answer.

MONTAGNE: Is it not part of your job description, in a way, to be able to look into that crystal ball and see what's ahead.

Mr. LYNTON: Absolutely. And the way that we try and plan for that is we tend to put down a lot of markers. Meaning, you will try and distribute a movie over the Internet, make sure that it can be seen on a cell phone, if that actually turns into a viable platform. We try subscription services. You know, Netflix now has a digital piece. We've done things with AOL.

And at the end of the day you see what works. And whatever works you drill down and you do more of it. That's not to say it's a complete shotgun. I mean, there are lots of things we say no to. But by the same token, it's not a rifle shot, because you don't actually know what is going to work. The trick is always to make sure that when you see that something isn't working to stop it and when something is working to accelerate that.

MONTAGNE: Thank you very much for talking with us.

Mr. LYNTON: It's a pleasure.

MONTAGNE: Michael Lynton is Chairman and CEO of Sony Pictures Entertainment.

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