Peter Levinsohn. (News Corp. )
Twentieth Century Fox's head of digital distribution readily acknowledged the headline-grabbing trends buffeting the film industry — declines in DVD sales, the rise of low-cost movie rental and subscription services and the threat of Internet piracy.
But Peter Levinsohn praised technology in a keynote speech Monday at Variety's Entertainment & Technology Summit in Marina del Rey.
"All of these issues — fragmentation, a maturing DVD market, low-cost alternatives for entertainment, and theft — they’re real. I won’t minimize them," Levinsohn said. "But we have to put this into perspective."
Whenever the industry has faced disruptive technologies in the past, be it the invention of television or the advent of home video, Levinsohn said the film industry has not only adapted but thrived. The accelerated pace of technological change presents new challenges and opportunities, he said.
"Very powerful tools give us the ability to create, entertain and inform in ways never before possible and to reach more consumers than ever," Levinsohn said. "And it’s up to the studios to use this technology to its fullest potential — to drive innovation and unlock new possibilities."
Levinsohn said advances in computer-generated images allowed director James Cameron to realize his vision for "Avatar" — a script he originally wrote in 1995. Technological innovation also merited an Academy Award nomination for "Rise of the Planet of the Apes," a prequel to the 1968 original "Planet of the Apes" film that for its time was considered groundbreaking in its use of prosthetic makeup techniques.
"So we are now able to amaze and entertain audiences with bigger and more spectacular films," Levinsohn said. "And as this technology continues to evolve, we will also see cost savings even in the boldest and most original productions"
Technology also gives movie fans the ability to share movie trailers and become grass-roots evangelists. Last summer's trailer for Ridley Scott's science-fiction thriller "Prometheus" was viewed 38 million times (and generated more than 1.3 billion social media impressions), Levinsohn said, helping to drive the film's $400-million worldwide box office take.
As people consume more content on more screens, Levinsohn said the studios must understand what's motivating these choices. The same consumer who buys movies on DVD or Blu-ray disc also likely pays a monthly cable bill and subscribes to a streaming service like Netflix.
"The notion that consumers are moving en masse from hard media to virtual offerings, or that they’ve stopped purchasing in favor of renting, is a gross oversimplification," Levinsohn said. "In fact, the great majority of consumers don’t act in only one mode — broader choice has actually made them more multi-dimensional. "
Decisions about when to watch a movie are influenced by factors such as immediacy (think a teenage girl standing in line for hours to see "The Hunger Games"), choice (the seemingly endless options include a range of on-demand services such as Amazon.com, Vudu or Xbox Live) and time (a parent's desire to watch a movie after the kids go to bed).
"As long as we understand the attributes that consumers value, we can use technology to create the most compelling offerings," Levinsohn said.
Contrary to the perceptions of some analysts, Levinsohn said ubiquity doesn't destroy content value — it's creating more demand.
One issue the studios struggle with is the so-called dark zone — the four-month period from the time a movie leaves theaters to the time when it's available in the home, said Levinsohn. This lack of a legitimate outlet could serve to fan piracy, he said.
Levinsohn said the solution is not "to completely collapse" release windows, noting that movie theater exhibition is important to the long-term viability of the industry.
"The trick is to find the right balance between window and pricing for films no longer in theaters, which protects the value of the theatrical experience, while also recognizing that there are other options that are much cheaper," Levinsohn said. "We’re still in search of the right model, but what we do know is that the dark zone isn’t good for anyone — not the studios, exhibition or consumers."