Feltheimer: Changing models good for biz

Lionsgate chief says innovators will thrive

LAS VEGAS -- The entertainment industry isn't dying, it's just changing, and those who survive and thrive will be the ones to find innovative ways to adapt, Lionsgate CEO and co-chairman Jon Feltheimer said during the opening keynote of NATPE's 2009 Market & Conference.

Feltheimer told attendees that old business models are giving way to new business models and said he believes that's a good thing.

"Those ingrained in the old ways of doing business fear transition but miss the potential for overall growth for new markets, new businesses and new revenue," Feltheimer said.

He added that the recession also will allow for the most creative content rise to the top of the pack.

"Consumers are spending but are rationing their dollars more wisely … and exercising their power of choice to target (content that's) the best, most familiar, most recognizable and most appropriate to their lifestyle," he said. "A bad economy is the best critic on the planet. The winners will be the shows that cut through the clutter."

Feltheimer argued that broadcast networks have lost the dominance they once enjoyed but still remain important, citing strong ratings for the 2008 Summer Olympics on NBC and "American Idol" on Fox.

He also said that entertainment remains a "rare, renewable resource." He cited his company's 1987 film "Dirty Dancing," which continues to sell 1 million DVDs a year for a total of 30 million DVDs and 32 million soundtracks and has spawned a stage show that has played around the world.

Citing a famous line from the movie, Feltheimer said: "I think you get my point: Nobody puts Baby in a corner, but Baby has put herself in every area of the marketplace. I'm unpersuaded by those who predict the decline of the industry."

In a Q&A with Mandalay Entertainment chairman and CEO Peter Guber following his remarks, Feltheimer explained Lionsgate's rationale for agreeing to buy TV Guide and TVGuide.com in a deal announced earlier this month.

"We've spent about $420 million-$430 million over the last two or three years trying to buy companies and expand our business. … This is part of the evolution of our company from creating content to being able to own the platform it's on," he said.

Feltheimer address a packed ballroom Tuesday morning at the Mandalay Bay Resort. But in a sign of the economy's impact on NATPE's confab, the size of the space was noticeably downsized from opening keynotes sessions of recent years.