Sony Pictures on the digital distribution landscape
Hayley Bull Director
In this episode I speak with Pete Woods, Senior Vice President of New Digital Distribution at Sony Pictures Entertainment. Wood currently is part of the Global Distribution Group within Sony Pictures Television and is responsible for New Formats & Technology, One Sony Collaboration, B2B partnerships and New OTT Distribution.
The landscape for content consumption is becoming increasingly complex and Pete explains that the definition of ‘new digital distribution’ has changed over the years. Historically this would have been physical retailers getting into the digital space. Whereas now, new distribution channels are “one of the ways that technology allows us to interact with consumers, and how do we actually connect with them that we couldn't do before”. Their focus going forward is to look at partners that they are not working with today but that might be important in digital distribution tomorrow - those that have an understanding and need to get closer to the consumer and create more engagement.
Sony Pictures remains one of the largest and vibrant independent studios and have been very public about working with all stakeholders across the industry. “We partner with pretty much every OTT service there is around the globe”. When discussing the recent shift of studios to a direct to consumer distribution model, Pete explain that “we quickly made a decision that we would go in the opposite direction, we would continue to supply everyone with great content”. He discusses how this ‘arms dealer’ approach has been a proven winning strategy and has made them more relevant and deepened relationships with other stakeholders across the industry. He adds that their continued commitment to the theatrical space is still strong, it is a really important window and partners in that space are really important to them. Their vision is to work “ with creators to find the best home for our content, to reach the consumers in a way that those creators intended”. As a creative industry, he believes that as soon as you take the approach to drive subscribers you begin to lose sight of the essence of the industry.
During the episode we also discussed Sony Pictures D2C activity, including their recent acquisition of Crunchyroll and Pure Flix. Pete explains that it is about creating content and services for specific communities of interest, Those who are not necessarily serviced fully by global services with a one size fits all approach. Anime for example, is a really exciting space with a highly engaged audience who are very clear about the type of content they want. Pete adds that blending all of that content into other services wouldn’t be right for everyone and Sony Pictures’ focus is work on building services for specific communities.
One of the highlights of the episode was discussing in-car entertainment, which is an exciting new distribution opportunity. Pete discusses that one of the ways they see in-car entertainment is as an “expansion of the existing ecosystems that they see OTT today”. This access model is about providing consumers access to content and services in the vehicle that they have elsewhere. However, there are unique challenges such as driver safety control functionality and how to get content across all of the screens.
Whilst Pete explains that this area of the market will continue to grow, the key challenge is the lack of standardisation across the industry - with every car, model and operating system being different. As the electrification of cars becomes more important and there are more developments with autonomous driving, Pete believes there will be opportunities to create elevated experiences that are unique to the car experience and are only available in the vehicle.
The OEM’s and car industry is going through a whole host of challenges with lots of new competition, disruption and growth. Recently the car industry was moving towards some sort of standard operating system that was controlled by third parties, which would in turn provide an easier pathway for a lot of companies to look at in-car entertainment. Pete explains that recently there has been some realisation that by adopting someone else’s operating system, they no longer own that consumer and it is almost impossible to create any form of differentiation. So whilst an access model may be the path of least resistance, it may not be a long term strategy. Car manufacturers will want to create new revenues, services and opportunities to monetise and own the consumer.
Pete believes that one of the next biggest trends in digital distribution will be utilising technology in the techniques for producing content, as well as the ways in which content is distributed through different screens and different mediums. He adds that three years ago they announced the launch of the ‘innovation studio’ on their lot which specialises in volumetric capture for virtual set production. This simply means that talent is not standing on a real set, everything is a virtualised. A key benefit, is that it will help reduce cost, as they will be able to reproduce locations digitally and won’t need to fly talent all over the world. Over time, this technology will lend itself to more immersive content production and delivery, Pete adds. When “you start to look at the way that we create our assets, whether that be in say an Unreal Engine or Unity engine or game based engine, you're seeing a convergence of the sort of way you produce games and the way you produce films”. As the metaverse becomes a reality, we will start to be able to realise different forms of content that are talking to those new technologies.
Covid has accelerated the adoption of video chat and people’s comfort levels with always being on camera. Pete discusses how you are starting to see certain TV companies release smart TV’s with integrated cameras and mics again. This means for the first time you have got consumers comfort levels and devices that can create bi-directional discussions. This lends itself to having interactive formats, creating new ways to produce content with consumers at home, where they are part of the production. Pete believes that there will be more immersion, more scalability due to it now being far cheaper to do this kind of development.
Here is a breakdown of the topics discussed in this episode:
[1:23] How do you define ‘new’ media distribution
[4:00] How do Sony Pictures Entertainment view in-car entertainment as a distribution opportunity?
[5:24] What are the challenges faced by car manufacturers in the in-car entertainment sector?
[8:45] The in-car entertainment access model versus creating unique elevated experiences
[19:11] The ‘arms dealer’ approach of Sony Pictures Entertainment
[21:39] Sony Pictures commitment to theatrical distribution
[25:26] The importance of specific communities of interest and their D2C services, Crunchyroll and Pure Flix
[28:36] What are the predictions for next big trends in digital distribution
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