Lionsgate Co-Chairman and CEO Jon Feltheimer Urges Media Companies to Embrace New Economic Models

The demand for content is growing worldwide but the entertainment industry should consider new economic models and accommodate new business partners to deliver content to consumers in a changing marketplace, Lionsgate LGF Co-Chairman and Chief Executive Officer Jon Feltheimer told executives gathered for the annual MIPCOM industry conference at the Palais des Festivals in Cannes, France, in his keynote address this afternoon. "The demand is there, at record levels. The consumers are there, in record numbers. The content is available, in record supply. But what has changed... is the way people consume content," Mr. Feltheimer said in keynote remarks delivered as part of MIPCOM's Media Mastermind series of presentations. Mr. Feltheimer noted that the demand for premium content continues to increase, saying that consumers "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 he cautioned that "we need to create new relationships...with people who install telephone lines and build mobile networks, with people like billionaire Mark Zuckerberg, 26 years old, who connects millions of people through bits and bytes. And, when we speak to them, we need to monetize these relationships... and the problem is we don't know how." Mr. Feltheimer cited the recent groundbreaking carriage agreement between Epix, the multiplatform channel partnership of Lionsgate, Viacom VIA and MGM, and Netflix NFLX as an example of capitalizing on "our opportunity to layer our traditional partners with new partners to build new platforms, define new windows, establish more flexible pricing and ultimately create a win/win scenario for all." "The Epix/Netflix deal reflects the premium value of our content in a digital world where content companies will have numerous alternatives to get their product to the consumer and to monetize it," he noted. Mr. Feltheimer cited Lionsgate's recent partnership with media giant Televisa to launch Pantelion Films, targeting the 26 million Latino moviegoers in the U.S., and the Company's highly successful Tyler Perry films, TV shows and DVD's as examples of targeting the large niche audiences created by fragmentation within the digital marketplace. "Consumers view content in large affinity groups or as part of large demographic niche audiences, and they now have multiple viewing choices under the same roof," he said. "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." But his remarks stressed the continued importance of creating strong content to drive advances in technology, windows and platforms. "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 way to tell them," he concluded. "Even the state of the art in technology cannot make ordinary content extraordinary."