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1. Dancing with Elephants:
Navigating Hollywood Studios
Lunch & Learn
April 22, 2016
https://www.linkedin.com/in/albert-chow-584a4a1
Albert Chow

2. Agenda
•Quick Intro to the Hollywood Theatrical Studio
•A Case Study for Basic Business Planning
•Valuing the Importance of Understanding
Market Structures
•Q&A

4. Founders: Sean Parker &
Prem Akkaraju
Concept (March 14, 2016):
• New theatrical releases to
the home for $50 for 48
hour viewing
• Plan to give exhibitors $20
of the $50 fee
• Purchase secure hardware
for $150
Case Study: The Screening Room

5. Movies at the Theater

6. Movies in the Comfort of Home

7. Response from Hollywood So Far…

8. “Have fun storming the castle”

9. Check the Boxes
 Customer
 Competition
 Company
 Product
 Pricing

10. The Studio Landscape
Majors
Mini-
Majors
Independents Over 50+ distributors of independent films releasing one or more
movies a year

11. The Value of Content
High Value
High Demand
Low Value
Low Demand
Theatrical
Release
Hospitality
Digital
& Home
Video
Pay Per
View &
Video on
Demand
Premium
Channels
Networks
& Cable
Syndication

12. At the Heart of Studio Motivation
$11.2 Billion Domestic Box Office (2015)
$39.1 Billion Global Box Office (2015)
Protect, Maintain (and hopefully Grow)

13. … and their Core Fears
• Cannibalization of Existing Business
• Piracy

14. Understanding the Value Chain
Studios
Talent
(Content)
Support
Exhibitors
(Distribution)
Agency
Producers /
Directors
Technology LegalOther
Movie Theaters

15. Enlisting Advocates in the Ecosystem
If you don’t already have (or even if you have) your own
industry relationships:
• Enlist and co-opt key skeptics and opponents
• Advocates amongst leading suppliers of your suppliers
• Previous industry executives and leadership
• Critical gatekeepers

16. Disruptive Technology & Hollywood
“The Rule of 3”

17. End of the Day: Economics need to Work
Price point: $50 for 48 hour
viewing window
Suggested share to Exhibitors
Plus 2 tickets: $20
Remainder: $30 to be shared
between studios and company
Additional 1 time: $150 box
price point
40% to Exhibitors. Healthy
but if free tickets thrown in
not so much
Studios typically take
anywhere from 50 – 90% of
the ticket price. Not
enough revenue to be
interesting
Poll taken and sweet spot
was $35 and no new box

18. Basic Business Planning Takeaways

19. Focus on Core Business Frameworks
Customer
CompetitionCompany
Product Price
Place Promotion

20. Another for the Toolkit: Porter’s Five Forces
• Add to your toolbox if its
not already there
• Key to financing often is
beyond just your
company or tech:
• Market Size
• Market Structure
• Incumbent Strength &
Weakness
• Microeconomics

21. In Closing
Importance of Market Structure in your business
planning
• Assess where the power exists (e.g. Suppliers, Buyers) and
how concentrated or segmented is it?
• What is their respective psychology and motivations?
• Do you or your company have the right credentials? If
not do you have supporters that do?
As an Entrepreneur it’s never a question of if…
but when and can you afford the time & investment
to change the landscape?

22. Select resources for those with Hollywood
Aspirations
• Both Creative Artist Agency (CAA) & William
Morris Endeavor (WME) have venture
investment entities
• Manatt also has a venture investment entity
• Disney has a formal accelerator in
conjunction with TechStars
A small sample set of the various Venture Oriented
initiatives in Hollywood

23. Thank you
https://www.linkedin.com/in/albert-chow-584a4a1
Albert Chow