Keynote Conversation with Sanford Panitch | Power of Law
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00:00It's an interesting time.
00:01You are just coming off CinemaCon and on the cusp of summer box office,
00:06or maybe it's already started.
00:07I know that date's often the date of when the start of summer often changes.
00:12But, you know, as you've been hearing in the crowd,
00:15we've had some really frank discussion,
00:17some frank talk about some of the challenges
00:19and some of the things going on in our industry.
00:21And as we talked about doing this, I know you have a lot on your mind
00:25and you have a captive audience here of dealmakers.
00:28You can really influence the course of the business by what is said here.
00:33We have absolutely seen that in the past.
00:36But I would like to talk to you about, you know, in your capacity,
00:39leading Sony Pictures Entertainment, leading Sony Pictures Motion Picture Group,
00:43which, you know, by any definition,
00:45Sony has been very vocal about its commitment to the theatrical box office,
00:51its commitment to kind of the time-honored systems of launching movies.
00:55But, you know, there are some challenges in that area,
00:59and I know that you really wanted to get into, in front of this crowd,
01:03some of the challenges that a studio like Sony is facing in the deal-making environment,
01:08and let's just be real, talent expectations for compensation.
01:12For a studio like Sony,
01:14in a time when you are competing with companies like Amazon and Apple and Netflix
01:19that are, you know, have very different business models and very different goals,
01:24what would you like to,
01:25I'd love to hear you sort of talk about the challenges that you're facing
01:29and what you see as what needs to happen for the greater good of the business.
01:36Well, I'm just excited Bruce Raymer is here,
01:38so that's just already good.
01:40We have royalty, absolute royalty in the house.
01:43We are fortunate.
01:44No, I think we're, you know,
01:46when you asked me to, you know, do this and I don't do this very often,
01:50I thought that it's an interesting moment
01:52because for Sony in particular, we're only in the theatrical business.
01:56So unlike, you know, Will, who's doing so much diverse stuff,
01:59and that was so interesting to hear Will talk about, you know,
02:01all the things he's doing,
02:02and that passion is just, is really kind of electric
02:05and the challenges that the producers have right now.
02:10For Sony, let's just, we are only in the theatrical business.
02:14So it is, it is, makes us kind of unique,
02:18and also it is both a weakness and an opportunity.
02:23And I think the way I look at, you know,
02:26the lawyers is a little different than I do with the agents.
02:30Whenever we have a big challenge as an agent,
02:32I often say, who's the lawyer?
02:33Can we just get somebody who actually can think about this
02:36in a bigger picture?
02:38And I think what that's about is that the,
02:43what's happened is a homogeny of deal-making
02:46that is the way that deals are now done because of the streamers.
02:52And that's a quite dangerous thing,
02:54and part of the, that is one of the dangers
02:56of the survival of the theatrical film business.
02:58So, you know, is the film business in crisis?
03:00It's in, the theatrical film business in crisis?
03:03It's, it's, you've got, you know, less people going to the movies,
03:07more choices.
03:09Theatrical moviegoing is, is, is so antithetical
03:13to how we actually operate now.
03:16Where else do you go in the world
03:17where you actually can't use your phone?
03:19It's, it's, you know, in church, you use your phone, right?
03:23But you can't go to a theater and, and, and do that.
03:25You have to leave your house.
03:27It's the same price as a month of Netflix.
03:29In fact, it's actually, Netflix is less than a movie ticket.
03:33So you've got all these challenges.
03:34You've got to give them something.
03:36Right.
03:36Gets them out of the house.
03:36So the theatrical bar is very high.
03:40And, but it's also the only place you make movie stars.
03:44And it's a very interesting phenomenon
03:45where all the streaming movies,
03:48and I don't mean to denigrate streaming movies
03:49because some of them are, are, are excellent,
03:51but they don't really prove an example to create movie stars.
03:55And it's a, kind of an odd thing.
03:57And I think when, how is it possible
03:59that hundreds of, hundreds of streaming movies get made?
04:02And there are so few movie stars, really,
04:04that we can kind of bank up.
04:06Breakout talent that comes straight out of that,
04:08out of that movie.
04:08Correct.
04:09Correct.
04:10I, I mean, I'd be curious.
04:12I can't think of one, right?
04:14And that's a really odd thing in a way.
04:16And there is something about the 40 foot size person
04:20that is, that is quite,
04:22and we all grew up with that.
04:25So, but I think where the risk is,
04:26is that the deal making that you would do for a streamer,
04:29that you would do for a theatrical movie company,
04:31are so vastly different.
04:33The economics have nothing to do with each other.
04:35So, and the dangerous part for us
04:37is that when deals come in,
04:39it's oftentimes quoting a streaming price.
04:41And this didn't happen in the old days,
04:43in the old days, and I say five years ago,
04:45where there was a real clarity of, of, of the difference.
04:48And now what's happened is,
04:49they say, well, that's our streaming price.
04:51It, it, it is, it's apples and wheelbarrows,
04:53what the streaming paid when there's no back end,
04:56no participation that has to have value.
04:58And I think that's the, that's the, that's the part of the,
05:01one of the reasons I thought it would be great to talk today
05:03was, was to kind of recognize the, the, the vast difference of that
05:07and how we have to kind of protect that.
05:09But, but let me push you on the, so you are, you know,
05:13you're not in the business of e-commerce as Amazon.
05:16You're not in the business of selling phones like Apple.
05:18You're not really focused on subscriber acquisition and retention
05:21like a Netflix.
05:22So, you know, those are, those are different economics,
05:26different amortization programs.
05:28So for you, Sony, you're essentially, you know,
05:32you are doing business the way you did.
05:34Lo, those many five, six years ago,
05:36where you come in and everybody has their incentives aligned.
05:40If it's a star, director has a couple of points,
05:43like that, that whole system is still in place in Sony.
05:46But the economics, the overall economics of the film business
05:50are challenging that.
05:51Because since you are not in those other businesses,
05:54how, how are you looking to sort of restructure
05:58that whole back-end business?
06:00And again, just to be clear, what you're fundamentally saying
06:03is that people are just coming in and expecting
06:05way too much upfront fees, upfront, upfront payments,
06:10because that is how streaming is structured.
06:13There is no back-end.
06:14It's all the upfront money.
06:16And you're saying that the upfront requests for Sony
06:18are becoming debilitating to making movies.
06:20Well, I would say just there's a pervasive dynamic
06:24in the, in, in talent negotiation,
06:26where the streaming price often becomes the kind of the floor
06:30rather than just simply economically, you know,
06:33kind of realistic for a film.
06:34But I would say, of course, you have to be versatile, right?
06:37And, and, you know, like, you know, Will just said,
06:41you got to be malleable, right?
06:42So you can't, I think for, for us and most of the theatrical,
06:46you know, kind of legacy companies,
06:47you can't pretend that the business hasn't changed, right?
06:50Because we've got to stay competitive.
06:52So I, I think we have done, and we're open-minded
06:54to doing all kinds of different things
06:55in terms of, you know, participation and so on.
06:58You know, we had that little, and, and, and the,
06:59the good news is, I mean, it's two interesting things.
07:01You know, it's like the, you know, the, the,
07:04the last year in 2024, first time ever in movie history,
07:08all top 10 movies were sequels.
07:12That's actually never happened, right,
07:14in the film business.
07:16There was always a few in there that were originals, right?
07:19And I'm, and I'm including Wicked
07:20because it's a sequel to Wizard of Oz.
07:22So, but, but that's, what does that say
07:25about the theatrical bar
07:26and for the audience's willingness
07:28to go to the theater, right?
07:30So that's a, that's a, that's a daunting thing.
07:33On the other hand, there's been sort of amazing breakouts
07:35at the same time too, right?
07:37And they all were sequels to something.
07:39And, you know, when we had the, the, the little rom-com,
07:44you know, for example, Anyone But You,
07:46and rom-com's dead, that's for streaming.
07:50You can't do that anymore.
07:52And then, you know, you have, you know,
07:54a producing group and an acting group
07:57are open-minded to, hey, let's play The Upside.
07:59And you have Glenn Powell.
08:01Yeah, although he was, you know,
08:02just the guy in Top Gun at that point, right?
08:04So I think now he's in an exciting place, but.
08:08But that goes to your point.
08:09Yeah.
08:09That, that movie really boosted his star in a way
08:12that it probably, with all due respect
08:14to our favorite streamers,
08:16Yeah.
08:16It would not have happened in a, in a,
08:18in a traditional streaming platform.
08:20I really agree with that.
08:21Yeah.
08:22And, and two stars really in a way, right?
08:24I mean, she, you know,
08:25Sidney had only really, you know, been on, on Euphoria.
08:28But it was an open-mindedness to,
08:30we were in a competitive situation with Amazon.
08:32It was us appealing to them
08:34that theatrical would ultimately be worth it, right?
08:39Which you didn't have a lot of evidence to believe, actually, right?
08:42There's not a lot of, it wasn't a lot,
08:43in the last few years,
08:44there's no evidence that that genre at all
08:46would work theatrically.
08:48And, and kind of was an amazing phenomenon
08:50where an entire generation of young women are like,
08:53oh, I never had one of those.
08:55I, that's my, my, my sister had one,
08:56my mother had one, I, but I, I didn't.
08:58The movie you want to go see three times.
09:00Yeah, right, yeah.
09:01Let me ask you this.
09:02So compared to 10 years ago, 15 years ago,
09:04on a similar type of movie,
09:06how was your margin on anything but you?
09:09The Sony, so at the end of the day,
09:10Sony Pictures profit margin.
09:13The movie worked all over the world.
09:15So, you know, we got the benefit
09:17of the global box office, right?
09:19So it wasn't just a domestic film,
09:21which is also kind of harder to do
09:24on things that aren't, you know, big, big titles.
09:27So that was a really also invigorating thing
09:30that, wow, she could have a movie
09:31that didn't have, you know, giant robots
09:33and it still was a, you know,
09:35significant box office globally.
09:37I think it has to do a lot
09:38with just the female audience.
09:40I mean, the female audience
09:41is the most amazing thing.
09:43They, they will go in groups.
09:45No men go in groups, right?
09:48To, to a movie.
09:50The, the mom decides the movie for the family.
09:53When the dad is going to the movies with the kids,
09:55the mom still decides even if she's not attending the movie.
09:58The, the woman decides the, the movie for the,
10:00for the, for the boyfriend and,
10:02and, or for the husband.
10:03And, and so that's a really,
10:05that's an extraordinary thing.
10:07And for us, when I think back about,
10:09you know, where the crawdads sing,
10:11woman king, little women, anyone but you,
10:15it ends with us.
10:17It's been in a, the, the movies that have been,
10:19you know, non sequels,
10:21not, you know, massive IP,
10:24although significant books in there,
10:26have been big breakout potential
10:29driven by, driven by the female audience.
10:30So I think the female audience
10:31and theatricality, there is some,
10:34there's some link there.
10:35And you're saying that,
10:35that you feel like more people,
10:37more studios should invest in that.
10:39And, you know, one of the,
10:40It's an audience for sure.
10:41I mean, Will did it with Girls Trip.
10:43I mean, you know, so.
10:44Anyone but you was somewhat of an island
10:46at the time that it, there was no,
10:47there weren't, you know, tonally similar movies.
10:51And that's, but that's been important.
10:52I've heard you and others talk about that,
10:53that there is really in the film business,
10:55a rising tide does help lift all boats.
10:59I mean, I think this weekend,
11:00you know, you'll,
11:01the whole business will benefit from Minecraft.
11:04You know, being, you know,
11:06it is a lift all boats mentality.
11:07You get, you're reminded why
11:08you love going to the movies.
11:09I think that's a, that has to,
11:11that's been a little worrisome
11:12in the last, you know, couple months.
11:13So did Minecraft surprise you?
11:15The tracking was so off.
11:18The tracking was significant still, right?
11:21I wouldn't say not that number, right?
11:23But tracking doesn't account for momentum.
11:28And when a movie works and people have fun
11:30and you have this, you know,
11:32I mean, if you've only gone to see it,
11:34you're talking back to the screen.
11:35It's a, it's a, it's a really fun experience.
11:38That is something that tracking doesn't account for.
11:41Also tracking only,
11:42we only track frequent moviegoers.
11:45So the only people that are in tracking
11:47are actually people that are already
11:49self-identified as frequent moviegoers.
11:52And what mine's a problem at this time,
11:54in a way for that's why tracking oftentimes is,
11:56how can you account for people that don't,
11:58but they went to this, right?
11:59And we've seen that happen, you know,
12:01in other breakout films as well.
12:04I want to go back to,
12:05you talked about the importance of balancing
12:07the sort of IP-driven existing properties,
12:10sequels, as you mentioned, it was quite,
12:12I might argue with you on Wicked though,
12:14being a sequel,
12:15because as much as I love Wizard of Oz,
12:17I think, I think they're two different animals.
12:18Culturally, it's thought of as a follow-up.
12:21The content, certainly.
12:22Yeah, absolutely.
12:23But you talk about how you, you know,
12:25what is it, given the risk,
12:27we've been talking about risk and mitigation,
12:29given the high bar and the cost and everything,
12:32what is, what are some of the elements
12:34that make you say yes to a wholly original property?
12:38You know, I had a meeting called a
12:41what there isn't meeting, right?
12:44And it was, let's just look at the marketplace
12:46of what isn't being made, right?
12:48Because you can get caught up in,
12:50oh, horror movies are working,
12:51let's make another one, right?
12:52That's a very, you know,
12:54that's what killed the Western, right?
12:56Or whatever, it's just there,
12:57you get caught up in the wave
13:00of what seemingly people are interested
13:02in wanting to see the consumer.
13:04And so, but there's always been a mentality
13:07that where you, you know, the zigzag mentality,
13:10which is that sometimes you go the other way.
13:12It might not work.
13:13You know, so there has to be real risk mitigation.
13:17And I think that's where the partnership
13:18has to come with the talent,
13:20which is if you're going to zig
13:21where everyone else is zagging,
13:22there's got to be some mutual risk in that, right?
13:26And we've got to both take the,
13:28both the upside and the,
13:29but also the protection, you know?
13:31And I think that's where the partnership
13:33needs to happen with the talent.
13:35Let's win together, you know?
13:37But if it doesn't work,
13:38let's not kill the golden goose
13:41so we can't take chances anymore.
13:43And I think that's the shift now
13:45in the post-streamer world.
13:47You know, and like,
13:48when I started out in the movie business,
13:49if we wanted to buy a script
13:51and a studio wanted to buy a script,
13:52you always won the bidding war.
13:54It was like, at the end of the day,
13:55if the studio's willing to do it,
13:56so now we rarely win in a package, let's say,
14:02because it, the streamers are,
14:06and it's more power to them that they can do it,
14:09but they can afford to pay for a package
14:12that doesn't really have a recoupment mentality.
14:16So, you know, you're driven by something else,
14:19a metric of subscribers and so on.
14:21So it's, we're in different businesses.
14:23My dear friend John Landgraf calls it
14:25getting shot in the face with money cannons
14:27when trying to compete with some of them
14:30or well-heeled singers.
14:32That's hard to compete against.
14:33It sounds like what you're saying.
14:34Yeah, absolutely.
14:35Let me ask you this.
14:35I saw Donna Langley speak yesterday,
14:39and she was quite optimistic
14:42about the future of the film business.
14:44She said she compared film to an ocean liner.
14:47She said it's a little, you know,
14:48there's an engine that's a little bit sputtering,
14:50but she said it's basically stabilized now
14:53for the foreseeable future, which is five minutes,
14:56but for the foreseeable future,
14:58it's basically stabilized at around,
15:00where domestic box office is down around 20% from 2019.
15:05And she said, you know,
15:07it's basically stabilized,
15:08the paths forward are becoming clear.
15:10Would you agree with that?
15:12Yes, I would.
15:13I think that the 20% that you reference
15:19is also a little bit filtered by the kind of COVID gap.
15:24And so I don't know yet if that's the case.
15:27We got to wait till next year
15:28when all the big movies come back
15:30and all the big titles to really look at it.
15:32And there's also a different kind of challenge,
15:35which is the geopolitical one, obviously,
15:37you know, by not having...
15:38I heard there's a lot going on right now.
15:40By not having, you know,
15:41Russia in the last number of years, right?
15:44And China shifted to not having as many Hollywood films.
15:48And the other interesting thing that's happened
15:49is that Asia has become deeply weighted on local,
15:53like in an extraordinary way,
15:54where it used to be, you know,
15:56like 80-20 Hollywood to local, let's say, in Japan.
16:01Japan was always like the territory you went to,
16:03that's where you...
16:04Tom Cruise went and he was, you know,
16:05and I was there for Titanic.
16:08It was, you know, Little Leo.
16:09They had a name for him in Japanese.
16:11It was...
16:12And now it's 80-20 local.
16:15And it's not going back.
16:16We wrote about...
16:17We've written a lot about the Chinese.
16:19I cannot think of the title right now,
16:20but there's an animated film from China
16:22that has just blown away records.
16:23And that's got to be very humbling
16:25for people in a position
16:27that have been used to be very much on the pedestal
16:29where the studio people come to us.
16:32I think it's not so much humbling
16:34as like kind of how do we participate in that?
16:37That's kind of the way I look at it, right?
16:39So, you know, for me, in particular,
16:41for my career, you know,
16:43we went and made local films for exactly that reason
16:45because you were seeing that happening.
16:47But I think it's...
16:49You know, there's also...
16:50Just like, you know,
16:51both people who've spoken here today
16:53talked about partnership.
16:54And that's kind of how we look at it
16:56with international partners, too,
16:57where we could be part of those films also.
17:01They're not opposed to having a global distributor
17:03or, you know, being part of local titles.
17:07Does being part of Sony,
17:08given the boom in Asia right now,
17:10does being part of Sony, does that help you?
17:12Do you have a competitive advantage there
17:14in terms of just understanding of that market?
17:16I think with the growth of anime,
17:20it's been helpful for Sony in particular,
17:23having a, you know, owning Crunchyroll
17:25and Aniplex, which is one of the big anime producing companies
17:29that made Demon Slayer,
17:30which was the highest grossing anime film.
17:33That's been an area we're really interested in.
17:36We're seeing the growth of that.
17:39Our friends at Netflix are seeing the growth of that.
17:42Disney Plus has anime.
17:44Anime is kind of an extraordinary new area of focus for us
17:49because of the incredible storytelling
17:52and a lack of barrier anymore about subtitling.
17:57The new technology lets you actually even change
18:00the animation mouth to have it be speaking in your language
18:05so it doesn't have the kind of, you know,
18:07subtitle challenge anymore.
18:10And so that's a unique to Sony opportunity.
18:16And also the fact that, you know,
18:18being a technology company has been really interesting,
18:24some unique advantages on that.
18:26Well, we have, our time is running out here
18:29and we haven't even had a chance
18:30to talk about the Beatles movies,
18:32but I'm, as a gigantic Beatles fan,
18:34I'm super excited.
18:35And it's, I think, a really good example
18:37of what you are trying,
18:39what you've been talking about,
18:40eventizing, eventizing movies.
18:42Any little tidbit, anything you can leave us with,
18:45I commend you, Barry Cogan,
18:47genius casting as Ringo.
18:49You think so?
18:49I really do, I really do.
18:51That's good to hear that.
18:51Any little tidbits you can give us
18:53about your foray into the Fab Four with Sam Mendes?
18:56I think it's, taking big swings still has to happen.
19:01I'm really proud to be at a company
19:02that would be willing to do those kind of big swings.
19:05And you do it with a director
19:07that is one of the greatest storytellers, you know.
19:10And doing it in the way that he's doing it
19:14and taking some unique approach
19:16to the distribution of the film,
19:18all the ways that we're approaching it,
19:19I think, makes it instantly something
19:21to kind of look forward to in a big way.
19:24Well, I certainly am.
19:26And thank you so much, Sanford,
19:27for your time and your thoughts.
19:28Thank you all.
19:29Thank you all.