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Wednesday, March 21, 2007

Disney tech exec Kevin Mayer on iTunes, YouTube, Joost, and animation

Down in LA for the Future of Film conference today.

Kevin Mayer is the first “keynote interview” of the day, after the opening panel that I moderated. He is the EVP of corporate strategy and business development for Disney’s technology group. Some rough notes:

Some people believe that content is king; others say distribution is king. At Disney, Mayer says, the reigning philosophy is that the consumer is king. (Sounds like the right philosophy for changing times.)

Disney has three strategic pillars under CEO Bob Iger, Mayer says: creative excellence, using technology to produce better product and distribute it to consumers, and globalization.

Phil Schuman of HighView Media, who is interviewing Mayer, asks about the company’s animation activity since the Pixar acquisition. Is Walt Disney Feature Animation, the traditional core of animation activity at the company, going to focus on hand-drawn 2-D animation, while Pixar handles 3-D computer-generated work? “That isn’t the case,” Mayer says. “We’re going to assign our picture development as [John] Lasseter and [Ed] Catmull see fit. I’m sure you’ll see a different array of projects at both.”

Next up, the film studio. “In looking at our slate, we were doing too many projects,” Mayer says. “We felt like we were diffusing our creative talent over too many things.” Now, Disney is focused on making 11 to 13 features a year, spending the same amount of money as it spent in the past, but trying to make each release a little better, he continues. The hope is that “the outcome would be a notch higher in creative execution” than before.

DVDs: The growth of the DVD business has slowed, Mayer acknowledges, no longer growing at a double-digit pace. “But great product will still find a huge audience.” They don’t worry about physical media formats going away, at Disney. Blu-ray high-definition discs “will help sustain physical media. But you’ve got to have great product.”

Digital downloads at places like iTunes: Mayer says they haven’t yet been cannibalistic to DVD sales. “But if in the future, it is [cannibalistic], that’s OK. We just want people to buy our product.”

Schuman asks about Joost, the new Internet video service (still in beta-testing): Mayer says it is “a really great service. It brings a TV-like quality to the PC. I’ve been very impressed with it. They seem to be able to get higher video quality than one would envision at the bit rates they’re using.” Mayer says that if Joost gains traction in the future, and becomes an environment appropriate for Disney’s content, “we’d consider it” as a channel for Disney’s content. But “is forcing a TV-like interface on the PC going to resonate with consumers? I think that’s to be determined.”

Schuman asks whether the studios are developing their own site or jointly-run service to compete with YouTube: “I’m sworn to secrecy on that. Yes, there is one. I think.”

Next, the Viacom/YouTube lawsuit: “Someone was going to sue YouTube at some point. I don’t think we were completely taken by surprise.” But “we’d like to see these things resolved in a market-friendly way, rather than in a court of law.”

Schuman asks whether Mayer thinks Disney might ever distribute movies online for free, supported by advertising. Mayer says yes. “We really do want to honor the consumer…Ad-supported models are part of our arsenal, and we’ve had ad-supported movie viewing for decades, on free TV and basic cable.”

They talk a bit about the theatrical window. Mayer thinks the current 45-day theatrical window (on average) will probably shrink, but won’t go away entirely.

Someone from the audience asks what the movie business can learn from the music busienss’ experience with the Internet. Mayer says, “The consumer always wins. You should not do battle with your customers. The corollary to that is, the best defense is a good offense. We use that phrase a lot around Disney.”

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