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Foreign Box Office to Save Movie Studios in 2011

4:07 PM PST 11/10/2011 by Pamela McClintock, Frank Segers

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Weta Digital Ltd./Paramount Pictures

“The Adventures of Tintin: The Secret of the Unicorn”

With Steven Spielberg’s “The Adventures of Tintin” doing well overseas and several holiday tentpoles waiting to be released, the six majors are on track to score record revenue despite a slow domestic marketplace.

This story first appeared in the Nov. 18 issue of The Hollywood Reporter magazine.

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With Steven Spielberg‘s The Adventures of Tintin igniting the foreign box office during an otherwise quiet pre-holiday period, Hollywood’s six major studios are on track to score record revenue for 2011.

PHOTOS: ‘Adventures of Tintin’ U.K. Premiere

That’s good news considering the sluggish domestic marketplace, where grosses year-to-date are $8.5 billion, down more than 4 percent from the same period a year ago. (The domestic figure is for all films, including nonstudio titles.) Through Oct. 31, the six majors, buoyed by 3D and exploding markets including Russia and Brazil, have amassed combined international grosses of $11.7 billion — just $1 billion shy of 2010′s record $12.7 billion benchmark.

PHOTOS: Stills From ‘Adventures of Tintin’

With a number of holiday tentpoles waiting to bow, there’s little doubt that the majors will soar past last year’s milestone. Thanksgiving pics include Warner Bros.’ Happy Feet Two and Summit’s The Twilight Saga: Breaking Dawn — Part 1, while Christmas brings Fox’s Alvin and the Chipmunks: Chip-Wrecked, Warner Bros.’ sequel Sherlock Holmes: A Game of Shadows and Paramount’s Mission: Impossible — Ghost Protocol.

“The international market continues to grow, and I think it’s going to be a very big Christmas,” says Paramount International president Andrew Cripps.

Paramount leads the pack for 2011 with an overseas take of $2.626 billion to date, followed by Warner Bros. ($2.5 billion), Disney ($2.054 billion), Fox ($1.925 billion), Sony ($1.493 billion) and Universal ($1.095 billion). Sony and Paramount’s 3D Tintin, as well as DreamWorks Animation and Paramount’s 3D Puss in Boots, are significant in proving that Hollywood can open its year-end holiday films earlier overseas, where there are midterm school breaks in a number of countries. Tintin doesn’t open in the U.S. until Christmas, but it grossed another $40.8 million during the Nov. 4-6 weekend to hit $125.3 million in a dozen days.

“[Tintin] proves that you can release a big movie in this time period,” says Cripps. “We should all be trained to rely on a 12-month trading period so that the big holiday titles aren’t all jammed into the same slots.”

Illustration: Ross MacDonald
Even high-flying big names are being treated badly as studio economics mean cutbacks; says one producer, “I feel like Willy Loman.”
This article originally appeared in the Nov. 4 issue of The Hollywood Reporter.
You aren’t going to get me to talk about how awful the studios are!” says one veteran producer before launching into a tirade on the subject. “The studios just don’t respect what producers do. They’d rather not have them around. … Studios have way too many executives and waste way too much money on that.”
Says another producer who ranks among the Hollywood elite: “The bigger the movies get, the more executives feel they’re producing them. I believe there are more executives being dispatched to locations than ever before. … When the executive says ‘my’ movie, it drives you crazy, and it’s happening more and more.”
With the movie business undergoing a historic realignment as DVD revenue has shriveled and new technology has not yet generated cash to take its place, the issues facing the business are squeezing the top rank of producers, including those who still have generous deals with studios — on paper. It’s trickle-up economics, and those who have long been used to having their voices respected are finding that sometimes — ouch — their calls aren’t even returned.
Some believe that life has changed forever in the movie business, while others — noting that studios are making increasingly homogeneous movies — are hoping that eventually it will become clear that audiences crave something different and that producers are the ones with the experience and skill to develop and execute original, sometimes even great, material.
Evidence of the pressure studios are imposing on big-name producers is everywhere. Jerry Bruckheimer just underwent what he described to THR as the most difficult negotiation of his career with Disney to launch The Lone Ranger with Johnny Depp. Ron Howard and Brian Grazer of Imagine have seen their rich deal at Universal cut back and the studio pull the plug on their ambitious fantasy Western The Dark Tower, based on a series of books by Stephen King. A-list producers Frank Marshall and Kathleen Kennedy just departed from Sony after two years without a green light. Even the industry’s ultimate 800-pound gorilla, Steven Spielberg, has had struggles raising money.
Some of the industry’s most successful producers say the studios are making them feel, as one puts it, increasingly “irrelevant.” And a top executive at one studio acknowledges that in many cases, they have a point. “I wish I could tell you they’re wrong or they’re being babies,” he says. “But [their complaints] are legitimate. And it doesn’t feel like it’s to the benefit of the movie business. But studios are more involved in movies because the stakes are so high. You get pressure from the bosses to be sure you’re managing the projects well — but that used to be the producer’s job.”
And that’s from an executive at a studio that is considered relatively respectful. Not all are. There seems to be broad agreement among high-level producers that Fox has long been the most contentious with producers, even before the economics became so challenging, largely due to a strong-arm culture created by studio chief Tom Rothman. Disney, with suppliers such as Marvel and Pixar and its focus on branded entertainment, now makes few movies of its own and scarcely seems to need producers. Paramount and Universal also seem largely indifferent, except for a clutch of stars like J.J. Abrams (who, notably, is a filmmaker himself). Sony and Warner Bros. — in that order — get the highest marks.
“Even when they’re f–ing you, they’re apologetic,” says one prominent producer. “Fox, Paramount, Universal — it’s simply: ‘This is what we’re doing. Sorry we forgot to tell you.’ ”
Says producer Laurence Mark (Julie & Julia): “Sony’s the only studio that sort of harks back to the old studio days. Amy [Pascal] deals with the big picture. She’s happy to make bold moves. They have great relationships that pay off.” Notably, Sony has made The Social Network and Moneyball with powerhouse producer Scott Rudin — films that other studios would have been unlikely to make. (In fact, one producer says he has heard executives at other studios make snide comments about Sony’s decision to take a chance on Moneyball.) But some with ties to the studio say even Pascal has had to trim her sails in the current environment.
“The studios trust a smaller and smaller number of producers,” says Marshall Herskovitz, president emeritus of the Producers Guild of America. But he adds that he got that memo long ago. “I don’t have a deal anymore,” says Herskovitz. “Am I upset? Yes. But there’s no point in crying about it.” Instead, he says, he and many others have adapted: “Every producer I know has had to learn about independent financing. It may be that these tectonic shifts are finally hitting people who thought they were invulnerable, but most people have adapted. Producers have moved into television and new media and looked for other ways to finance features because that’s what producers do. They’re coping.” (One producer says he has, like many others, sought opportunities in television, but even that is a struggle. “Suddenly you’re going from office to office, peddling TV,” he says. “There’s a little bit of a Willy Loman aspect to it.”)
“We can yell our heads off, but we collectively need to adapt to changes in the business,” says current guild co-president Mark Gordon. “The world is changing, and we have to change with it.”
Perhaps nothing illustrates more vividly the difference between then and now for producers than the Imagine experience. Last decade, Universal was giving Howard and Grazer a hefty $17 million a year in overhead as well as fees of $2 million up front against at least 5 percent of gross (more if Howard was directing). The partners even had two “put” pictures — meaning they could force projects into Universal’s pipeline — though they never exercised that option. Their deal has since been trimmed to $8 million-plus a year, according to a knowledgeable source, but when the time comes for renegotiation (it runs through 2013), they are sure to face further pressure.
“Even Imagine is going to get cut back severely, and Imagine is at the top of the heap,” says a source familiar with the production company’s dealings. “Universal used to do everything Imagine wanted. Now they don’t.”
On paper, producers like Grazer and Howard still have enviable deals. But such pacts are now hollow shells. Even top producers are told that if they want a green light, they will have to accept reduced terms. “[The studios] behave like it’s a gentleman’s sport, and if you were really classy, you’d refuse to be paid,” says one. “They feel more comfortable than ever saying, ‘We’re going to make the movie, but we’re withholding 60 percent of your fee, and if you go over budget, we have the right to use [that money].’ ” Compare that to the good old days of first-dollar gross, adds this producer, when “you’d get unexpected checks for a couple hundred grand for a movie that bombed.”
“By the time you get a movie made, they’ve beaten you back on your deal [and] taken control of the script,” says another well-known producer. As for managing the film while it’s in production, he adds: “They don’t care if you show up or you don’t show up — until they get into trouble. Then the executive turns to the producer and says, ‘Solve it.’ ”
One studio chief says that picture seems exaggerated to him, but he understands that life certainly has changed. “There are few things harder than having something and watching any piece of it taken away,” he says. “But it’s happening because the reality of the business is extraordinarily complicated and difficult right now. Regardless of what it was like 10 years ago, you have to adjust your expectations to reflect the current reality.”
A-list producers have lost more than clout: They have lost those delectable perks that are the stuff of industry legend. There are no more lavish budgets for decorating offices. “Once upon a time, they insisted you travel first class because you were, in some way, representing the studio,” says one veteran. “Now, fine, you can go on a pogo stick. You can go JetBlue. I’m not saying it’s a horrible hardship, but 10 years ago, it wasn’t happening.”
Marshall, who is producing The Bourne Legacy for Universal, says many producers are getting squeezed in ways that affect more than their lifestyle. Without backing from the studio, acquiring and developing material is far more difficult. “That is completely different from four or five years ago,” he says. “The studios are trying to develop stuff inside and not involve the producers. And that may be a mistake because we’re the ones who have to make it work.”
But many producers feel that the studios don’t care if it is a mistake because they are so averse to risk. One well-known producer says he has a top screenwriter working on spec because if studio money were involved, there would be too much pressure to turn the material into something that is “middle-of-the-road and as marketable as possible.” In the past, the producer might have been able to shield the writer, but now the studio gets heavily involved.
In many cases, he adds, the producers enjoying the most success with studios are those who don’t challenge the system. “They have no talent in the making of movies,” he says bitterly. “They go out with executives; they woo executives; they party with executives. They can be counted on not to cause any problems. They’ll do the dirty work.”
But Michael Shamberg, who produced Contagion with his partner, Stacey Sher, for Warners, says he finds those comments “offensive.” Producers are making a mistake, he argues, if they take an antagonistic approach to executives. “You’ve got to be very sensitive to their needs,” he says. “They’re risking their jobs. The idea that studios are adversaries is bullshit. Producers who don’t think the studio is their partner have the wrong equation.”
Shamberg continues: “The gravy days are over, and if you can’t do the heavy lifting, you shouldn’t be a producer. You can still get your stuff made ­– you simply have to solve the problem of finding money to make your films. It’s just a more complicated formula. But in success, you will be well rewarded.”
A studio executive echoes Shamberg’s point. “If we have a hit movie, I’ll get a nice bonus, and I’m grateful,” he says, “but the producer can make $30 million.” A producer counters, however, that rewards of that type are rare to nonexistent these days, and he often has to lay out money to acquire and develop material but doesn’t get paid unless a movie gets made. And that might take years, if it happens at all.
Some producers hold out hope that the pendulum might be swinging back a little — if not in terms of money and perks, then at least in terms of respect. They say the studios’ desire to minimize risk has led to a string of increasingly safe — and uninteresting — films. Studios have noticed with alarm that young people under 25, who are critical drivers of box office, seem to be rejecting Hollywood movies — with some exceptions, such as the Transformers films. Without them, grosses are diminishing. Some in the industry are joking grimly that a $20 million opening is the new $60 million opening.
“We could be at this point where the movies are so terrible that it’s almost like the centralization is now strangling creativity,” acknowledges one executive. “Either it’s going to get to the point where things improve, or we’ll just get a reality-TV version of the movie business, aiming for the lowest common denominator.”
To Herskovitz, passion is the key to getting a response from the audience, and producers have that passion. They should use it to their advantage without necessarily expecting that the studios will help achieve their vision. “Most producers are on their own and have to be pragmatic about how they get their movies made,” he says. “For the last 10 years, there’s been a lot of bad news for producers. The profession has taken great steps to turn that around, and I actually see things getting better. The real story is this amazing adaptation and growth and perseverance. That’s what I see going on.”
But another producer admits it’s hard not to look back. “We try not to talk about the good old days because that’s not serving us,” he says. “The good old days are gone.”

This article originally appeared with The State of the Studio Deals: Who’s Doing What Where.

2011

04:47 PM ET

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Cinemark threatens to boycott ‘Tower Heist’ over VOD experiment
by Mandi Bierly
Categories: Movie Biz, Movies, Video On Demand
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Image Credit: David Lee
The Cinemark movie chain is threatening not to show the Ben Stiller-Eddie Murphy comedy Tower Heist in any of its theaters if Universal goes through with its plan to make the movie available on-demand in homes — for $59.99 — just 21 days after it hits theaters to roughly 500,000 Comcast subscribers in two cities. In a lengthy statement, Cinemark explains its position:
It has recently been announced that Universal Pictures plans to offer the Eddie Murphy comedy Tower Heist to digital cable subscribers in the Atlanta, Georgia and Portland, Oregon markets three weeks after the film opens in theatres. Over the past year Cinemark has continually voiced its concern to Universal and other studios regarding any early-to-the-home “premium video-on-demand” during the theatrical release period, which averages just over four months. Movies are designed to be exhibited in today’s state of the art digital theatres which enhances awareness of the film and maximizes downstream distribution. Many artists and business professionals in our industry have expressed similar concerns about early-to-the-home premium video-on-demand offerings as evidenced by the Open Letter From The Creative Community On Protecting The Movie-Going Experience released earlier this year.

Cinemark recognizes and acknowledges the changing technological landscape and related challenges that Universal and the other studios are facing in the in-home window. Keeping in mind the best interests of the creative community, the studios, exhibition and the consumer, we have welcomed direct discussions between Cinemark and each of the major and independent studios, including Universal, regarding distribution concerns. Cinemark has urged Universal Pictures to reconsider its market test of this product. If Universal Pictures moves forward with its Tower Heist premium video-on-demand offering, as announced, Cinemark has determined, in its best business interests, that it will decline to exhibit this film in its theatres.

Universal had no comment.

The suit, filed Thursday in Los Angeles Superior Court, alleges a years-long scheme among Miramax, then run by Harvey Weinstein, and its former owner Disney to hide revenue, improperly allocate and deduct expenses and fees and engage in self-dealing with respect to the film.

English Patient grossed more than $300 million worldwide, in addition to sweeping the Academy Awards in 1996.

“To this day, despite the great success of the film, [Zaentz] has not even received from Miramax payment sufficient to recoup [Zaentz's] costs of producing The English Patient,” the suit alleges. It says Miramax has kept tens of millions of dollars that was supposed to go to Zaentz.

This isn’t the first time Zaentz has sued over the film. The dispute has been going on for a decade, and Zaentz sued in 2006, making similar arguments based on an audit of the film’s books and records. But that case was dismissed in 2008 and the new lawsuit says the parties have had a tolling agreement (to prevent statute of limitations issues) in place.

The suit alleges a conspiracy “to keep the picture in a paper loss position so that no matter how much money The Engligh Patient earned, Miramax and Disney would reap all of the profits while” Zaentz would never share in the success. Zaentz says his company ponied up $15.75 million in its own money and deferred compensation to get the film made and got assurances from Miramax that it would get a better profits definition than a standard deal. The deal allegedly gave Zaentz 10% of adjusted gross receipts, which rose to 15% after break-even, plus 60% of net profits. However, Zaentz says Miramax later tried to hold his company to a much less favorable profits definition and has been unwilling to make concessions.

Disney sold Miramax in 2010 to a group of investors that include businessman Ron Tutor and Colony Capital. Weinstein had left the company years before to start the Weinstein Co.

The suit, filed by Marty Singer at Lavely & Singer, alleges causes of action including breach of contract, breach of fiduciary duty and seeks an accounting and declaratory relief.

We’ve reached out to Disney for comment.

Email: Matthew.Belloni@thr.com

His running-mate, Amy Aquino, was re-elected secretary-treasurer. Aquino was unopposed.

Mike Hodge, president of the New York division, also was re-elected.

The Guild announced the winners Thursday.

The election was a referendum on merging SAG with AFTRA — a cause Howard has spent the past two years championing.

And it was a big win. Howard got 17,492 votes. Anti-merger candidate David Hillberg received 3,047. Sharon Rubin received 1,681 votes and Asmar Muhammad got 855.

Only 23.23 percent of SAG’s 100,994 eligible voters cast ballots.

SAG’s Hollywood Division elected 12 National Board members. Its New York Division elected five and its branches in Boston, Dallas/Fort Worth, Detroit, Houston, Nashville, Nevada and Washington-Baltimore elected seven.

In a written statement, Howard said, “With so many pro-merger candidates elected again this year, there’s no doubt what members want, and I look forward to presenting a comprehensive plan to the SAG and AFTRA boards in January.”

Aquino also issued a written statement saying, “Two years ago, SAG members definitively set the Guild on the road to merger, and this election confirms they want it more than ever.”

Ballots were mailed to SAG members on Aug. 23 and had to be returned by Thursday. The guild picked up the ballots on Thursday morning and spent much of the day tabulating the votes.

National Board members elected from the Hollywood Division are: Tony Shalhoub, Ken Howard, Adam Arkin, Amy Aquino, Stephen Collins, D.W. Moffett, Scott Bakula, Ned Vaughn, Mimi Cozzens, Arye Gross, L. Scott Caldwell (three-year terms) and Kate Flannery (one-year term).

National Board members elected from the New York Division are: Rebecca Damon, Lewis Black, Sam Robards, Ezra Knight and Jay Potter.

And National Board members from the regions are: Bill Mootos (Boston), Suzanne Burkhead (Dallas/Ft. Worth), Ed Kelly (Detroit), Robert Nelson (Houston), Cece DuBois (Nashville), Art Lynch (Nevada) and Steven F. Schmidt (Washington-Baltimore).

Howard is an Emmy and Tony Award winner who starred in “The White Shadow” from 1978 to 1982. He has had recurring roles on “30 Rock,” “Dynasty,” “Melrose Place” and “Crossing Jordan.” He appears in the upcoming J. Edgar Hoover biopic “J. Edgar,” directed by Clint Eastwood.

Aquino has appeared in “Moonstruck,” “Law & Order,” “Castle,” “Monk,” “ER,” “CSI” and “Everybody Loves Rayond,” among others. She holds a master’s degree from the Yale School of Drama.

Michael O’Leary has been promoted to senior executive VP, global policy and external affairs and Laura Nichols has been named executive VP, global communications. Dodd also tapped an old staffer from his U.S. Senate days, Lori McGrogan, to be senior advisor to the chairman.

“I am proud to announce this team of tremendously accomplished individuals, Dodd said. “The creative community’s voice in Washington will be critical in the months and years ahead as our leaders debate what will be the best, most cost-effective ways to produce new jobs and protect the ones we have. We’ve assembled a senior team, who, together with our dedicated MPAA global staff, will set our sights on delivering a clear and simple message: when it comes to growing our economy, creating jobs, promoting trade and American innovation, movies matter.”

Dodd took over the helm at the MPAA last spring. He has made opening foreign markets in countries such as China a key priority of his tenure — an effort that his new appointments will presumably play key roles in advancing.

O’Leary will supervise all international, federal and state affairs operations around the world for Hollywood’s top lobbying arm. In addition, he will oversee the association’s technology and research efforts.

Previously, O’Leary had been the MPAA’s executive VP, government affairs. Before coming to work for the MPAA, O’Leary served as deputy chief for intellectual property in the Computer Crime and Intellectual Property Section of the Department of Justice.

Nichols will oversee all international and domestic communications, media relations, new media development and special events. She previously served as senior fellow and SVP for communications and strategies at the Center for American Progress (CAP), a Washington, DC think tank.

McGrogan is an ex-Dodd staffer, having served as the former senator’s acting chief of staff. In her new capacity, she will serve as senior advisor to the chairman and will assist Dodd in strategic and long-term planning, as well as day-to-day operations of the organization.

Sony, Disney, News Corp., labor group IATSE and the Motion Picture Assn. of America are among the top donors whose funds have been lost, along with several million dollars in the campaign war chest of California Democratic Senator Dianne Feinstein (left), according to Opensecrets.org.

Feinstein says her campaign treasury has been “wiped out” by Kinde Durkee, a treasurer and political operative who apparently also misused funds from an unknown number of other politicians’ accounts in the state.

Congresswoman Susan Davis, a Democrat from San Diego area, suggested that Durkee might be “the Bernie Madoff of campaign finance treasurers.”

Also read: Obama’s Got a Friend at Sony: Studio Leaders Big Donors in Past

As the full extent of the damages emerges, the Democratic Party is faced with the unenviable task of going back to donors for more money. L.A. County Democratic Party chair Eric Bauman, who’s also vice chair of the state Democratic Party, told TheWrap that process is already underway.

“I can’t say for sure [who will contribute], but we’ve started to reach out to our friends at Warner Bros., Universal and Sony, and donors like that,” he said.

TheWrap’s investigation of federal election records determined that the major studios, showbiz law firms, guilds like the International Alliance of Theatrical Stage Employees all contributed to Feinstein’s war chest.

Feinstein’s top donors from 2007-12 include IATSE at $30,000, Manatt Phelps and Phillips law firm at $18,750, Sony Corp. at $17,200, Walt Disney Corp. at $16,600, News Corp. at $15,625 and the Motion Picture Assn. of America at $14,700, according to OpenSecrets.org. (Sitting atop the roster was the utility PG&E at $69,100.)

Among the individual Hollywood donors who may feel their lost dollars like a missing limb are Sony’s Michael Lynton, who gave Feinstein $2,050 this year and Universal’s Ron Meyer, who contributed $2,500 to Loretta Sanchez in May. Meyer didn’t repeat his 2009 gift to Feinstein (Disney’s Robert Iger and Warner Bros.’ Alan Horn gave then as well, but not since), but Meyer’s colleague, chairman Adam Fogelson, gave the senator $625 in February.

Also read: CNN-Tea Party Debate Wins Night, Falls Short of Earlier Debate Coverage by Rivals

Much of the money the L.A. County Democratic Party raises from wealthy Hollywood patron goes to support their monthly operations. Bauman admitted that he’s not looking forward to “having to raise that money all over again.”

A significant part of LACDP funding, doled out to select candidates and causes, came from last October’s Hollywood fundraiser, which featured Robin Williams, Eddie Izzard and Sarah Silverman. Bauman said the event, which was kept slightly under the radar but quickly sold out with tickets going for as much as $500, might see another iteration if he can organize it.

Originally titled “Gotti: Three Generations” and now referred to as “Gotti: In the Shadow of My Father,” the film has been playing dangerous games of actor and director musical chairs for months now. Just as they’ve set a shooting date of January 3rd, 2012, with pre-production starting in September, the story of “The Teflon Don” has hit another snag: Joe Pesci is suing them.
Hollywood Wiretap reports that initially Pesci was offered the role of Gotti’s right hand man/enforcer Angelo Ruggiero at a fee of $3 million dollars. Then original director Nick Cassavetes (“The Notebook”) quit the project. Once Academy Award-winning director Barry Levinson of “Rain Man” fame came onboard, producers at Fiore Films allegedly took that part off the table and offered Pesci the smaller role of Anthony “Gaspipe” Casso at only $1 million. That’s after Mr. Pesci gained 30-pounds specifically to play the stocky Ruggiero.

If you remember some of the stuff Pesci pulled in “Goodfellas” and “Casino,” you know not to mess around with this guy, for serious.

Levinson brough his “Bugsy” screenwriter James Toback on board to rewrite Leo Rossi’s script, and did away with originally-cast Lindsay Lohan. The director brought in his “You Don’t Know Jack” pal Al Pacino, and kept John Travolta on as the elder Gotti, along with Travolta’s real-life wife Kelly Preston. Rumor has it that “Captain America” co-star Dominic Cooper may be getting tapped to play John Gotti Jr., who the movie is based around and also serves as a consultant.

According to the press release, “‘GOTTI: In The Shadow Of My Father’ reveals the relationship of a father who lived and died by the mob code and a son who chose to leave that world behind and redeem himself. Never before has there been such an inside look at the life of the Gotti family and their world of danger, betrayal and redemption.”

Studios have not been allowed to own theaters since they were forced to divest themselves of their theater chains in the late ’40s.

“People who own studios should go and start buying theaters,” Roth said at the Bloomberg-sponsored Business of Entertainment program, part of the Tribeca Film Festival. “I mean I’m spending $2 billion a year on making and marketing movies, and 100 percent of the value is created in that first window of opportunity in theaters, and I’m letting it go to a landlord who decides after 30 days he can sell more popcorn” with another film, he said, explaining his rationale.

Interviewer Charlie Rose also asked Roth about the current debate over premium VOD.

“The reason you’re seeing this premium VOD business — 95 percent of the gross of an American movie is achieved in the first 30 days,” Roth said. “There is no flexibility on the thing that determines the value of the product. So, it’s wacky.”

Asked if he is supporting premium VOD, Roth said: “I don’t know. I think this is all transitional stuff.”

He predicted a positive move toward letting consumers choose what to see, when and how. “Five, seven years from now, we will look back and go ‘what was that turf war about?’” Roth suggested.