July 13, 2011 7:32pm PT by Alex Ben Block
Jeff Berg Advises Colleagues to Take Advantage of Market Shifts at THR Power Lawyers Event
The global entertainment industry is going through tremendous changes right now in technology, distribution, marketing and finance that create both threats and opportunities, ICM Chairman and CEO Jeffrey Berg said Wednesday morning during the keynote discussion at the fifth annual Hollywood Reporter Power Lawyers event.
"This is the most fluid market I've ever seen," said Berg, who has been in representing top show business talent for more than three decades.
Addressing the packed room full of top Hollywood lawyers, Berg said that there is a great deal of opportunity for both lawyers and talent agents. "Whenever you have changes in the market," said Berg, "it's a time for thoughtful, smart people to move in, not to retreat."
In his business, explained Berg, that has meant taking the actors, directors, writers, musicians and others they represent and finding ways to monetize their work and extend their "brand" into even more areas: "What we have found is if we have a successful (client) in one area, we encourage them to work in other areas because it broadens out what they can do."
In other words musicians become actors, writers become showrunners, directors build production companies and more. To do this, he explained, their representatives must also work together in new ways.
"The notion of silos and departmentalization in this changing business is a 19th or 20th century model," said Berg. "We expect people to take advantage of all the new markets."
Berg was introduced and interviewed by Matthew Belloni, News Director of The Hollywood Reporter, a former attorney and founder of the Power Lawyers franchise.
Belloni asked Berg whether he thought the growth of digital platforms would ever replace the revenue that is diminishing as traditional business models like DVDs decline?
The digital businesses are growing, answered Berg, although not fast enough to replace the decline of physical media like DVD yet. However, that time will come, Berg predicted. "You look at it as the loss of one business," said Berg, "and the gain in another."
On the day after Netflix announced it was hiking prices, especially for digital streaming content, Berg wasn't surprised by the increases. He said as Netflix goes for better intellectual property products, and does deals to produce original movies and programming, costs are inevitably going up. "They have to raise prices," said Berg, "if they want to go after that level of programming and talent."
Part of this, added Berg, comes out of the reality that what we think of as TV has changed. It is no longer a box that sits in a room in your home. Content is now "virtualized" and available on a whole range of "display devices."
He guessed that it will take until at least 2014, however, before the revenues catch up with the changes in distribution platforms.
The fear is that the programming will become a commodity. "We have to ask if writers and directors will still make the same money as things change," said Berg.
He was optimistic, however, primarily because of the growth in international markets, citing the movie Avatar as an example of something that worked worldwide. "As you can get revenue from these markets," said Berg, "it will help."
Berg said 3D has shown it can boost revenue, but it has become clear there are also limits. He said it is successful as long as it is special, and applied to the right kind of movies and TV shows. He isn't sure it would be successful, for instance, for a drama.
Asked about the concept of a premium VOD window for movies, where they beam movies into the home very close to the theatrical release, Berg said it has not become a big factor yet but "clearly it is going to be about consumer choice."
"We know there is a generational shift in the market," added Berg, which opens the door to all kinds of changes in how people consumer movies, TV, music and more.
He predicted his company will remain focused on the entertainment business but will continue to diversify how it operates. For instance, he sees a continuing "out-sourcing of capital" by the major studios, who want to find new ways to finance ever more expensive content.
"Half of what we do all day is really about raising money," said Berg, from a range of sources that include institutions and high net worth individuals, as well as new money coming from Europe, Asia and Latin America.
"A tremendous amount of new capital is coming into the business," said Berg, adding: "As more studios have cut back" there has been a lot more "looking for third party options" for financing.
What Berg doesn't think is going away is the need for representatives like agents and lawyers, despite a lot of discussion about how content suppliers can now go directly to consumers. He used as an example a mountain climber who needs a guide as they face all kinds of hazards. "If you go at it alone you are going to freeze to death or fall," said Berg. "That's where the role of the trusted advisor comes in."
Earlier in the program, CBS Corp. President and CEO Leslie Moonves was on hand to praise an executive he says he frequently looks to for guidance, Jonathan Anschell, executive VP and general counsel at CBS. Anschell is this year's recipient of the "Raising the Bar Studio Lawyer Award."
In presenting the award, Moonves recalled when he hired Anschell. He asked a mutual acquaintance about him. He knew from having dealt with him that Anschell was "smart, perceptive and a real gentleman," said Moonves, "but (he asked) is he a 'killer?" because he will have to face outside counsels, negotiators and others who are killers.
Convinced Anschell could do the job, he hired him and almost immediately, recalls Moonves, the network was facing everything from Dan Rather "Memogate" to the split of CBS from Viacom to the flap after Janet Jackson's Super Bowl flash.
"He is a killer," said Moonves, "but more importantly, he is a first class human being."
The Hollywood Reporter's new publisher Lynne Segall opened the program by welcoming the 2011 power lawyers and praising Belloni for his work in growing the franchise into something that is very important and worthwhile for the community.
Looking out at the powerful attorneys packed into a room at the Peninsula Hotel in Beverly Hills, Segall said, "Nothing gets done in this town without all of you."