Worldwide Theatrical Marketing and Distribution 2014 MRP - Strategy July 17, 2014.

Worldwide TheatricalMarketing and Distribution

2014 MRP - StrategyJuly 17, 2014

Agenda• Marketing Initiatives

• Media• Basics• Research

• International Structure• Overhead

2014 MRP StrategyMarketing Initiatives

Worldwide Marketing InitiativesMedia

• Initiated aggressive media budget management to curtail budget inflation• Leveraging “earned media” opportunities by adding hashtag to all TV spots/clips – digital integration

• Utilize YouTube premium ad offering in light of its consistent top digital source of awareness

• Leverage Facebook’s “timeline” to drive video views and increased engagement rates for our films

• We lead the industry in leveraging our talents’ social media following, such as Channing Tatum and Kevin Hart on Twitter

• Sony now ranks the lowest in per film average in total media points utilizing the cheapest mix of television (i.e. lowest prime and highest cable) and aggressive digital

• Conducted first media cost and quality audit with Ebiquity to evaluate UM’s buying performance

• Used audit results to challenge UM to further cut media budgets 5% without affecting points/delivery

• $18 million savings goal for FY15 based on the above• Cut commissions/bonuses with UM by over $2 million per year by initiating overhead cuts and renegotiating new 3-year deal

Worldwide Marketing InitiativesBasics

Implemented several cost saving initiatives to cut Basics spending:

• Digital Marketing• Eliminated spend with Sony Pictures Interactive (SPI), saving over $10 million per year

• Creative Advertising• Torch Creative – Established in-house creative editing facility, primarily for versioning, minor

revisions and event/corporate reels. Estimated savings are $3.5-4.0 million per year• Reviewing entire Creative Process from campaign start through production to optimize favorable

impact on costs, including outside creative agency spend, reduction of revisions and rush charges, and other workflow pain-points

• Reviewing TV spot creation and finishing process to ensure that only spots that will air are finished

• Creative Production• Renegotiation of several vendor deals, including TV spot finishing, TV Spot distribution, trailer

elements and finishing, and adaptive print creative generates savings of almost $5 million

• Publicity• Pursuing premiere sponsors• Formalized vendor agreements and rate cards in several areas of Publicity, including promotional

items, regional agencies, PA tours, grooming, junkets and screening e-tickets to save over $4 million

• Summer of Sony – Reviewed the costs and related media value of the annual Summer of Sony event in Cancun, compared to that of holding separate junkets/tours per film across multiple international territories. The Cost savings/cost avoidance associated with holding just the one event is estimated at almost $4 million

Worldwide Marketing InitiativesBasics

Various Basics initiatives have driven average Basics down significantly in the last few years

Examples of current versus prior Basics’ spending:Recent Title

Basics (in millions)

Basics (in millions) Prior Comp Title

22 Jump Street $9,100 $9,800 21 Jump StreetSex Tape $8,600 $8,700 Bad TeacherThis is the End $8,000 $10,700 Pineapple ExpressWedding Ringer $5,000 $5,900 About Last NightGrown Ups 2 $10,300 $11,200 Grown UpsChappie $10,000 $11,100 Elysium

Average $8,500 $9,567

* All recent titles also have a higher DBO than the prior comp film

Worldwide Marketing InitiativesResearch

•Utilizing research more than ever in order to:• Ensure the right film mix• Consider sequel potential/pit-falls• Optimize release dates• Test trailers against competition in release window

•Conducted worldwide “Mind of the Movie-goer” research study to better understand the movie-going consumer, what they respond to and what motivates them to attend our films.

2014 MRP StrategyInternational Structure

Worldwide Marketing InitiativesInternational Structure

Office Type SPRI BVI Warner Fox Universal Paramount

Solo Offices 12 22 20 19 14 11

JV Offices 7 7 2 5 16 16

Total Offices 19 29 22 24 30 27

• Sony has aggressively closed offices and/or pursued joint ventures and sub-distribution deals to maximize international overhead

• We have almost the fewest owned/solo offices at 12, compared to Paramount’s 11 on the low end and BVI’s 22 on the high end

• Our JV arrangements with BVI continue to be advantageous and enable us to keep costs lower than Fox or Warner Bros, who have only 2-5 JVs to our 7

• Sony’s 19 solo/JV office count is the lowest of any studio. Warner Bros is next with 22 and Universal the most at 30.

Office Structure by Studio


Territory SPRI BVI Warner Fox Universal Paramount

Australia SPRI BVI Village Roadshow Fox Universal Paramount

Austria SPRI BVI Warner Bros. Fox Universal Universal

China SPRI BVIWarner Bros. (Rep

Ofc)Fox Universal Paramount

France SPRI BVI Warner Bros. Fox Universal Paramount

Germany SPRI BVI Warner Bros. Fox Universal Paramount

India SPRI BVI Warner Bros. Fox Universal Viacom Aff

Japan SPRI BVI Warner Bros. Fox Toho Paramount

Spain SPRI BVI Warner Bros. Fox Universal Paramount

U.K. SPRI BVI Warner Bros. Fox Universal Paramount

Owned Offices• Most studios still independent in these major markets, except as noted in blue


Joint Venture Offices• Sony has the most JVs in this market mix (with BVI)


Korea JV w ith BVI JV w ith SPRI Warner Bros. Fox Universal CJ Entertainment

Malaysia JV w ith BVI JV w ith SPRI Fox Fox UIP UIP

Mexico JV w ith BVI JV w ith SPRI Universal Fox Universal Paramount

Philippines JV w ith BVI JV w ith SPRI Warner Bros. Warner Bros. TBD TBD

Russia JV w ith BVI JV w ith SPRI Karo Premiere Fox Universal Central Partnership

Singapore JV w ith BVI JV w ith SPRI Warner Bros. Warner Bros. UIP UIP

Thailand JV w ith BVI JV w ith SPRI Warner Bros. Warner Bros. UIP UIP


Owned Office & Sub-Distribute for a Major (see Green)• Sony generates revenue from these sub-distribution deals that covers at least

50%, and potentially over 100%, of our overhead costs


Belgium SPRI BVI Fox Fox SPRI SPRI

Brazil SPRI BVI JV w ith Fox JV w ith Warner Bros. SPRI Paramount

New Zealand SPRI SPRI Village Roadshow Mark Croft Paramount Paramount


No office: Sub-Distributed by a major (red are owned offices/JVs of competitors)• Sony has closed several offices (see *) and shifted to a sub-distribution deal

with a major• All other studios have several owned offices or JVs here


Finland BVI BVI FS Films (Svensk/Fox JV)

FS Films (Svensk/Fox JV)

Finnkino Finnkino

Switzerland BVI BVI Warner Bros. Warner Bros. Universal Universal

Taiwan BVI BVI Warner Bros Fox UIP UIP

Panama & C.A. Fox Vista UIP Fox UIP UIP

Kenya Fox Film Distributors Ltd (3)

Crimson Multimedia Crimson Multimedia Crimson Multimedia Fox Film Distributors (3)

Fox Film Distributors (3)

Argentina* UIP BVI JV w ith Fox JV w ith Warner Bros. UIP UIP

Colombia* UIP Cinecolor Cine Colombia Cine Colombia UIP UIP

Denmark UIP BVISF Film AS (SF/Fox

JV)Filmcompagniet

(SF/Fox JV)UIP UIP

Norway UIP BVI SF Norge (SF/Fox JV)

SF Norge (SF/Fox JV)

UIP UIP

Poland UIP BVI (WDI) Warner Bros. Imperial UIP UIP

Sweden* UIP BVI Fox Fox UIP UIP

Holland* Universal BVI Warner Bros. Warner Bros. Universal Universal

Italy* Warner Bros. BVI Warner Bros Fox Universal Universal

Turkey Warner Bros. UIP Warner Bros. Tiglon UIP UIP


No office: Sub-Distributed by a Local (red are owned offices/JVs of competitors)


Bolivia Manfer Films Manfer Films Manfer Films Manfer Films Cine Center Cine Center

Bulgaria Alexandra Film Forum (Mooky) Alexandra Film Alexandra Film Forum (Mooky) Blitz

Chile Andes Films S.A. Andes Films S.A. Fox Fox Andes Andes

Croatia Continental Film 2film Blitz Blitz Blitz Blitz

Czech Rep. Falcon a.s. Falcon a.s. Warner Bros Cinemart Cinemart Cinemart

Ecuador Zocalo Films Importadora El Rosado

Importadora El Rosado

Zocalo Films Consorcio Filmico Consorcio Filmico

Estonia Acme Film OU Forum (Finnkino) Acme Film OU New Independent TBA

Forum (Finnkino) Forum (Finnkino)

Greece Feelgood Entertainment S.A.

Feelgood Entertainment S.A.

Village Films Odeon UIP UIP

Hong Kong Fine Art Film (H.K.) Ltd. (Bill Kong)

Solo (& Regional Office)

Warner Bros. Fine Art Film (H.K.) Ltd. (Bill Kong)

Fine Art Film (H.K.) Ltd. (Bill Kong)

InterContinental

Hungary Intercom Forum (Mooki) Intercom Intercom UIP UIP

Iceland Sena EHF Samfilm Samfilm Sena EHF Myndfrorm Samfilm

Indonesia Pt Omega Film Pt Omega Film Pt Omega Film Pt Omega Film Pt Omega Film Pt Omega Film

Israel Forum (Mooki) Forum (Mooki) Globus Forum Film / A.D. Matalon & Co. Ltd.

Noah Noah

Latvia Lacme Baltic Cinemas (Finnkino)

Acme New Independent TBA

Baltic Cinemas (Finnkino)

Baltic Cinemas (Finnkino)

Lebanon Les Fils de Georges Haddad & Co.

Italia Film Joe Chacra and Sons Les Fils de Georges Haddad & Co.

Antypas Antypas

Lithuania Acme UAB Forum (Finnkino) Acme UAB New Independent TBA

Forum (Finnkino) Forum (Finnkino)

Peru Andes Films S.A. Cinecolor New Century Films New Century UIP UIP

Portugal Big Picture Lusomundo Lusomundo Big Picture Lusomundo Lusomundo

Serbia Tuck Vision Taramount Blitz (Serbia) Megacom Taramount Taramount

Slovakia ITA Agentura s.r.o. Saturn Continental Cinemart Cinemart Cinemart

Slovenia Continental Film Cenex Blitz Blitz Karantanija Cinema Karantanija Cin

South Africa Ster-Kinekor Films (Pty) Ltd.

Ster-Kinekor Films (Pty) Ltd.

Nu Metro Nu Metro UIP UIP

U.A.E. Empire International (Gulf) L.L.C.

Italia Film Joe Chacra Shooting Stars

Empire International (Gulf) L.L.C.

Antypas Antypas

Ukraine B&H Film Distribution B&H Film Distribution Kinomania Gemini/UFD B&H Film Distribution B&H Film Distribution

Uruguay Jelsi, S.A. RBS Dispel Horacio Hermida

Life RBS RBS

Venezuela

Blanco Y Travieso C.A. / C.A.

Cinematografica Blancica

BVI

Blanco Y Travieso C.A. / C.A.

Cinematografica Blancica

CineUnidos BVI BVI

Vietnam

Cong Ty Co Phan Phim Thien Ngan (aka Galaxy Studio JSC.,

Vietnam)

MegaStar Galaxy Studio MegaStar MegaStar MegaStar

• Most studios use local distributors in these markets

• Sony is only major without at least one owned or JV office on this list

2014 MRP StrategyOverhead

From FY09-FY15, Worldwide Theatrical Marketing and Distribution has eliminated over 121 headcount and reduced overhead costs over $45M (24%), as follows:

2014 MRP StrategyOverhead

Headcount

Cost Comments

FY09 51 $5.9 Closed Sweden office; various territory cuts, SPR & Marketing cuts

FY11 10 8.4 Closed Russia supervisory office; Garel, Foley,

FY12 6 6.2 Closed Italy office; Russell, Goldstein, Zucker

FY13/14 23 13.6 Closed Dallas, Holland and Argentina offices; new sub deals in Brazil, Scandi, and Benelux; restructure H.O. uplift and A/R depts; Amos, Loper, Mannheim, Lightbourn

FY15 31.5 11.25 Closed Portugal and Dallas offices; restructured A/R dept; reduced Consumer Products dept; eliminated Research, Special Events and Int’l Media senior executive positions, among others

Total 121.5 $45.4 24% cost reduction versus FY09

Worldwide Theatrical Marketing and Distribution 2014 MRP - Strategy July 17, 2014.

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Transcript of Worldwide Theatrical Marketing and Distribution 2014 MRP - Strategy July 17, 2014.