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Transcript of 1 Divisional Details Digital Productions. 2 Manage visual effects business on a break-even basis,...
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Divisional DetailsDigital ProductionsDigital Productions
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• Manage visual effects business on a break-even basis, charging internal productions at “net cost” (no profit)
• Increase SPE’s participation and success in family features market through re-envisioned pipeline of high-end, live action/animation hybrids, mid-tier, and direct-to-DVD (DTV) productions
Digital ProductionsKey Strategies
Pursue Growth Opportunities
Pursue Sony United
Collaboration
Improve Economics of Existing Businesses
• Prioritize Imageworks around needs of SPA & Columbia, becoming VFX resource for Columbia and using excess capacity to service third parties
• Continue to reduce facility size and execute on cost reduction initiatives at Imageworks
• Lower cost of SPA films through higher facility utilization at Imageworks created through third party VFX business
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Implementing new business plan to diversify portfolio and lower risk profile
• Fully integrated studio (SPA + Imageworks)
• Shepard Aardman relationship
• Explore outsourcing model for DTV
• Secured highly successful theatrical release of Open Season 2 in select international markets
• Seeking opportunities for third party financing
• Aggressively work with Worldwide Marketing to secure optimal promotional partners and develop ancillary revenue opportunities
• High-end CG animated films ($100mm+ negative costs – e.g., Cloudy, Hotel Transylvania) released every 12-18 months
• Mid-tier CG animated films ($25-50mm), released every 18-24 months
• Live action/animation hybrids (Smurfs), released annually
• Direct to video sequels (Open Season 2), release following successful high-end films and prior DTV sequels
Key Initiatives
Sony Pictures AnimationStrengthen Animation Pipeline
Diversity development & production slate
Diversity development & production slate
Utilize multiple business modelsUtilize multiple
business models
Mitigate risks of titles in
production
Mitigate risks of titles in
production
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Sony Pictures AnimationDeveloping World Class Animated Product
• Under new leadership, streamlined and recalibrated talent mix to execute a first class, diversified and more efficient pipeline of high end, hybrid, mid-tier, and DTV releases
• Leadership applied new vision to markedly improve Cloudy with a Chance of Meatballs (scheduled for September 2009 release), including innovative production on 3-D version. Team is also focused on projects including Smurfs (hybrid) and Hotel Transylvania (high end)
• Forged development relationships with Platinum Studios (comics/graphic novel library) and the Gotham Group (representing major publishers for children) to supply re-envisioned pipeline with appealing content
• After successful release of the first DTV sequel, Open Season 2, continuing to exploit theatrically-released properties as DTV titles, providing bundling opportunities for home entertainment
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Sony Pictures AnimationSheparding the Aardman relationship
• Maximizing the relationship through close collaboration between two top creative teams to produce world class animation
• Integrating key personnel from each studio to facilitate both development and production
• The first product of the relationship, Arthur Christmas, is tentatively scheduled for release on November 11, 2011 and Pirates is planned for TBD 2012
• Currently discussing other promising future projects with Nick Park, creator of Wallace and Gromit
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Sony Pictures ImageworksExecuting on Cost Efficiency Strategy
• Using excess VFX capacity to serve third parties lowers costs for SPA and Columbia shows, which are charged at “net cost” (no profit)
• Secured larger budget third-party work (Alice in Wonderland, G-Force) reducing gap costs between shows and aligning with new focus on animation
• Hiring artists on a production/show basis (vs. staff hire), similar to successful live action production model, further reducing holding costs between shows
• Reducing compensation levels to prevailing market rates and balancing the senior/junior mix through hiring efforts, such as IPAX program
• Implementing innovative headcount tracking tools to enhance transparency and improve artist utilization
• Increasing use of lower cost labor in New Mexico and India, while exploring similar opportunities in Canada