"Satellite To Mobile Devices (STMD)"

I look at the transformation of the "delivery of pictures systems" as something that started when the first television set was delivered in the United States shortly before the onset of the Second World War. Prior to that, if you were desirous of viewing "moving pictures" you had no choice but to go to a movie theater in order to have that experience. Pictures have, for over 60 years, been delivered to people who no longer were required to get up "and go to see them in movie theaters." Content was delivered into your living room.

There was considerable conflict in studio organizations as to the delivery of their features to television. They were afraid that this availability would hurt the box office for their new films, and in my opinion, they were right about that one.

Since the late thirties, the delivery systems have expanded and will continue to expand. Had anyone ever asked Harry Cohen, the founder of Columbia Pictures, about the transformation of the "motion picture" industry, he and his peers would have taken the position "why in heavens name will anyone watch a movie at home when they can go to Radio City Music Hall to see a movie on a great big screen." Today the discussion is "will people watch movies on their portable devices?"

This is the good news: In the early sixties to the late eighties there was an explosion of opportunities for the creators of content to independently deliver their content to the spectrum constrained broadcast networks and local stations. They could also create content for the emerging delivery systems of cable and satellite.

And now for the bad news: The American government allowed the Motion Picture Studios and the Broadcast networks to merge, and for an extra bonus, they eliminated the financial interest and syndication rules. This was not great for the "creative community" Nevertheless, the future is bright for the independent content provider with the dramatic expansion of delivery through cable, and all of that good incipient delivery stuff for the future. There is a caveat to all of the good news. The American Government must NOT allow the big guys to control in any way the emerging delivery systems. Can you imagine News Corp. standing by and watch any part of their business erode if they can prevent it?

While I can discuss with reasonableness what the past has brought to consumers, primarily in their homes, in a variety of formats, I can only speculate as to where we are headed as it pertains to future delivery systems.

Now having said that, I do have a basic premise for the future. It has been a long time since I made a correct prediction, but nevertheless here we go!

"All recorded content from all over the world will be available all over the world to almost EVERYONE." Exactly how will that work? I think I know, but I'm not sure. What effect will all of this have on the "process of windows and exclusivity"? I think I know, but I'm not sure. A bigger question that I have is how will this delivery be paid for, and exactly what will it mean to the content owners? How large a share of proceeds will they be able to obtain? I similarly think I know, but I'm not sure. This, to a certain extent will depend on competition in the delivery systems.

I have been a "content" person for almost 50 years. About 25 years ago, I had a meeting in New York with Rupert Murdoch. When we had about finished he asked me if I thought that "movie" libraries were overvalued or too old. I suggested that there were no old or new movies, no color or black and white movies, and no pre 48 or post 48 movies, but only good and bad movies, and the studios, for the most part own all of those. I suggested that the values of these libraries would "explode" in the future for a variety of reasons.

The last 10 years has brought the greatest aggregation of "quality" content, (whatever that means) by the North American studio, and broadcast companies. The revenue that accrues to these companies for their existing content provides them with the opportunity to finance whatever they wish as newer delivery systems develop. The "haves" of content will continue, "to have", and the "have nots" will continue to struggle.

Harry Cohen had to worry about making movies that people wanted to pay to see. He also worried about finding new banks from whom to borrow money if his movies were to fail. He owned a film library, but it had no value to speak of at that time.

Today's "really big companies" need to worry about so many more things. Will the America government re-assume their fervor as it pertains to obscenity? Will they decide to break up the media giants? What will happen to copyright protection in the future? They also need to worry about: advertising, advertisers, cable, MSO's, DBS, Telco's, DVRs, DVD's, On Demand, Premium, Syndication, broadcast networks, cable networks, broadcast television, merchandising, IPTV, Internet delivery, broadband, encryption, wireless, PPV, pod cast, cel phone delivery, mobile devices, HDTV, P2P downloads, streaming, release windows, and a lot more. But looming large is STMD, (Satellite To Mobile Devices) which will delivery phone, text and unlimited real time video.

Is all of this sophistry? Possibly, but it is not intended.

They also need to fear those wonderful people all over the world who wish to regulate all of the above. Let's hold hearings, let's get the FCC involved, how about new laws to protect whomever. It will not be an easy time for a media conglomerate. What will become of content regulations?

While I hate the expression, "content is king" yet that will continue to be so. Will new content creators prosper? Yes they will. In my opinion, if you own 5000 feature film, tens of thousands of episodic television programs, the ability to deliver all of that stuff, you can prosper if you don't screw up. You also have the ability to create and finance more of the same, WOW. Income generated from previously existent content can cover a multitude of other mistakes.

Here is the bad news. Can the General Electric Company and all of the industry giants properly manage all of this stuff in the future? I doubt it. Do I have a suggestion for them? Not really. There is however one thing I could comment on, that is the prevailing notion of synergy. That word reads and sounds just great. However, having said that, I wonder how many of the managers who use the word synergy realizes that there is another expression that trumps it. That is the "what's in it for me" syndrome. A tough one to deal with!

And now I suggest a bit of un-needed philosophy.

The past is history

The present is reality

The future is mystery

The uncertainty of future delivery options will provide ample opportunities for content owners to make mistakes. The smarter ones like Rupert Murdoch will not make them.

By the way, there is no such thing as STMD; I just made that up, but then again, why should there not be delivery of content to mobile devices by satellite? Perhaps I will try and raise money to do just that!

Norman Horowitz

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