Warner Bros. execs want video part of data package

MARINA DEL REY, Calif. – A pair of Warner Bros. Home Entertainment Group executives didn’t paint such a rosy picture for mobile in a keynote here at the MEFCON conference.
Thomas Gewecke, president of the division, said the digital video market is about a $2 billion market today, a mere 2.4% of the entire movie business, and of that mobile comprises less than 5% of those revenues.
Of the $80 billion spent by consumers each year on movies (48% of that comes from the United States), less than 20% comes from the box office, while nearly half comes from home entertainment, which includes things like DVDs, he said, adding that Warner Bros. has been the top home video distributor for the past seven years.
Very little movie footage is available in digital form and only 25% of the company’s movies are available on DVD, he said. Looking back on his previous eight years spent in the music industry, Gewecke said he’s keen to guide a much less painful transition from a physical to digital business, but doesn’t think it will happen as quickly.
Today the company is focused on leveraging its existing catalog and experimenting with new distribution models and technology or collaborative efforts that could make digital content easier and more appealing to consumers. Right now, it’s too difficult and restrictive, Gewecke said.
“We think it’s important to get out there with new ideas and new business models,” he said, adding that people can always refine and change plans later.
The film and TV industry has an opportunity to anticipate what consumers want and give it to them rather than simply reacting to new technology, like the music business did, he said.
“I think that as an industry, there’s a lot of work to do,” Gewecke said.
And while mobile is but a small piece of that digital slice right now, he believes players such as Warner Bros. will be critical in bringing the promise of the mobile video platform into reality.
“There is, of course, an enormous mobile video opportunity,” he said. Warner Bros. currently distributes some of its full-length feature films on Sprint Nextel Corp.’s movie service.
“The installed base of video-capable phones will continue to be the single largest platform on which a consumer can watch video,” he said.
“We’d like to see operators look much more seriously at putting video offerings together with data plans,” Gewecke added, when asked what he thinks the carriers can do to help.
Maria Seidman, VP of sales development in the same group, said the majority of growth in the mobile space is projected to occur in the mobile TV/video space. Games and personalized content have grown at a slow pace of 5% year-over-year, she said, while wallpapers and the like are expected to decline in revenues over the next five year.
Based on research she’s compiled, Siedman believes the bulk of growth in the mobile video space will come from on-demand-like services with live broadcast services pulling up the rear.
The company has seen what she called “incredible results” on Sprint’s movie service and believes there’s ample room for films to prosper in the medium so long as it’s the right movie.