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
Worldwide Marketing InitiativesInternational Structure
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
Worldwide Marketing InitiativesInternational Structure
Joint Venture Offices• Sony has the most JVs in this market mix (with BVI)
Territory SPRI BVI Warner Fox Universal Paramount
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
Worldwide Marketing InitiativesInternational Structure
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
Territory SPRI BVI Warner Fox Universal Paramount
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
Worldwide Marketing InitiativesInternational Structure
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
Territory SPRI BVI Warner Fox Universal Paramount
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
Worldwide Marketing InitiativesInternational Structure
No office: Sub-Distributed by a Local (red are owned offices/JVs of competitors)
Territory SPRI BVI Warner Fox Universal Paramount
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