Benjamin's buttons. Disneys global boss hit the right keys.
Considering Pyne's varied responsibilities, one might picture him sitting behind a console, pushing a multitude of buttons. Another apt metaphor is that of him playing the divisions of his group like the strings of his guitar (of which he's an accomplished player) in order to produce harmonious results.
But, before touching on any 'subject with Pyne, one first has to understand the complex structure of his group (which internally is referred to as the "matrix." You can navigate it only if you're an insider).
Having gotten past that hurdle, VideoAge was able to proceed with topics as varied as Pyne's long list of responsibilities (including domestic (U.S.) distribution, U.S. TV networks affiliate relations, local international productions and channels, and international distribution), as well as other subjects like broadband markets, whether one or more U.S. broadcast network will eventually become cable nets, and the future of TV trade shows such as MIP and NATPE.
Now, let's attempt to describe the "matrix." According to various reports, this operational structure was originally a creation of former head of Miami, Florida-based Disney Latin America, Diego Lerner (now London-based president of Disney Europe, Middle East and Africa under the Walt Disney International group), created in order to facilitate intercommunications across various Latin American divisions which were initially vertically structured and therefore rather insulated from one another. Lerner's "matrix" proved to be successful in Latin America and was thus implemented at a company-wide level.
Disney ABC-ESPN Television (DAET) falls under Pyne's auspices, who reports to Sean Bratches, executive vp ESPN and ABC Sports, for domestic responsibilities concerning ESPN. Pyne's international TV distribution falls under the DAET moniker, for which the world has been divided into four areas: EMEA-Canada-Russia (Europe-Middle East-Africa), Latin America, Asia-Pacific and Japan.
For distribution, Pyne reports to Anne Sweeney, co-chair, Disney Media Networks and president, Disney-ABC Television Group, and Alan Bergman, president, The Walt Disney Studios.
Being in charge of both Domestic Distribution (overseen by Janice Marinelli) and Disney's broadcast TV network's (ABC) affiliate relations (under John Rouse), Pyne is in the best position to evaluate the opportunities offered by the extra digital channels that came with the switch over from analog (see "My2[cents]" on pg. 66). However, Pyne would not be specific on the subject, simply saying that the network is looking at all options and that for the moment, ABC and its own 10 stations are focusing on a new health and lifestyle channel launched last April called "Live Well," which is on SD on broadcast TV and HD on cable.
In effect, ABC is using multiplex 7.1 and 7.4 in NYC and LA for its flagship station (in HD), mux 7.2 (or DT2) for "Live Well," and 7.3 for a weather channel.
Because of Pyne's success with local format production through Disney's Media Network Latin America division, Disney has amassed a large amount of original Spanish-language content, which, together with its Spanish-dubbed programs, could surely be used to fill a second-language digital channel. ABC competitor NBC, for example, owns Telemundo, the U.S.'s second largest Spanish-language broadcast TV network. To Pyne, this added opportunity is another of the many options available to them, but the company is for now focusing on licensing original Spanish-language shows to U.S. Spanish networks such as Univision, for series like Amy de Casa Desesperadas (Desperate Housewives), which Disney later sold to Mexico's TV Azteca.
In Pyne's view, "the format business really took off in Latin America." This is true for two main reasons: the availability of the right kind of product and strong business relationships. The model has been so successful for Disney that it is now "looking to broaden into other territories, like Europe and India."
Pyne explained that India represents a significant challenge because of the four languages spoken in the country, but the experience acquired with the Latin American local productions will serve the company well (Disney has licensed local versions in four different countries: Argentina, Brazil, Colombia and U.S. Hispanic). Just recently, Disney Media Network Latin America announced the launch of a local version of ABC Studios' Cry) Anatomy (A Corazon Abierto) in Colombia. The international distribution of all local Spanish and other language versions of Disney's shows rests with the company.
Considering the World Trade Organization's (WTO) demand that China open up its market to foreign-made content, Disney's Asia-Pacific area is expected to grow. Recently, WTO called on China to stop requiring foreign media suppliers to go through the costly process of distributing content through Chinese state-owned entities.
Currently, the Chinese government has a monopoly on the distribution of media content. Foreign movies, for example, have to go through the China Film Group, which takes a large cut of the box office, charges content owners high fees for prints and other distribution costs and limits the number of foreign films in theaters to 20 per year. The WTO rule, however, leaves the Chinese government with the right to exclude movies that are objectionable for political or social reasons. This is something that, considering the family nature of Disney's films, could further benefit Pyne's company in China. For example, Warner Bros.' blockbuster The Dark Knight wasn't allowed to be shown in China, basically shattering all WB's ancillary opportunities. While in China retail is the country's main audiovisual market, in India television offers the key outlet.
In terms of revenues per geographical area, Pyne would not divulge their allocation for competitive reasons, saying only that Europe is their largest market outside the U.S. Former and current executives with other studios reported that, in general, including pay and excluding the U.S., EMEA could generate anything from 50 to 65 percent for studios, while in Latin America it could vary from seven to 12 percent (with the higher figures being generated by Warner Bros. and Disney). Canada could represent anything from five to 10 percent and Asia Pacific 15 to 20 percent, with Japan generating the lions share.
Recently, DAET scored another big win with the sale of ABC Studios' drama FlashForward to U.K.'s Five network (while ABC Studios produces for television, Disney Studios is for theatrical releases). Perhaps because of the series' British stars Joseph Fiennes and Jack Davenport, Five reportedly outbid BSkyB by paying 16.5 million [pounds sterling] (U.S.$27.3 million) for 13-episodes, which comes to $2.1 million per episode, much more than the $1.5 million per episode reportedly paid by Channel 4 for Disney's Desperate Housewives in 2006. Five's license fee was estimated based on its 165 million [pounds sterling] (U.S.$273 million) annual program budget and Five's CEO Dawn Airey's comment to C21 Media that the network spent 10 percent of its budget on the acquisition of FlashForward Reportedly, the Five deal for exclusive U.K. terrestrial (Five) and digital rights for Fiver and Five USA also includes a new run of Grey's Anatomy and some movies.
Pyne attributes this success with international distribution to the "Disney difference," something that "we work hard at," and that can be summarized in four points for programming distribution: Content, managing windows, new media and support.
In regard to the statements by other networks officials that suggest at least one U.S. TV terrestrial network will eventually migrate exclusively to cable/satellite, Pyne said that up to 90 percent of American viewers still watch broadcast networks regularly, and that even though 82 percent of the U.S. TVHH watch television through some form of subscription, the remaining 18 percent that receive broadcast TV through aerials still represents a large portion of viewers that need to be served.
Pyne also touched on the subject of the Disney channels, which, with the advent of digital terrestrial television, are multiplying like rabbits ... sorry, mice.
Pyne and his international team works closely with Disney Channels Worldwide, led by Burbank-based Rich Ross, on the company's owned portfolio of 98 channels/feed available on terrestrial digital, cable and satellite in 163 countries and 32 languages. Pyne handles the distribution for the channels, while Ross oversees their operations and content. The platform brands are: Disney Channel, Disney XD, Playhouse Disney, Disney Cinemagic, Hungama, Radio Disney and Jetix.
This latter brand was comprised of a group of channels that had its own set of complexities. Formerly Fox Kids Europe, Jetix was acquired by Disney, which operated other Jetix channels in Latin America. Jetix's programming blocks also aired in the U.S., India and Japan on Toon Disney channels. Furthermore, there is ABC Kids, a four-hour block broadcast on Saturdays on the ABC TV network. Last February, the Jetix block was rebranded as Disney XD in the U.S.. By last September, Disney had retired the Jetix and Toon Disney brands and replaced them with Disney XD or the Disney Channel. However, in some markets, such as the Arab world, the company is not eliminating the Toon Disney brand.
In terms of broadband, Pyne mentioned the success of ABC.com, which managed to not only gain eyeballs without cannibalizing Disney's broadcasts, but lower the demographics for its shows to the 20s on average (down from the ABC primetime broadcast's median age of 49).
In regard to IPTV serving as a broadband-based (Wi-Fi, Wi-Max, cable, DSL and satellite) TV-viewing experience, Pyne had this to say: "Delivering TV content using IPTV opens up another alternative and very interesting distribution outlet to reach consumers, and we have always taken a position of remaining platform agnostic when it comes to how we license and distribute our content, provided that the quality of the experience is always at a high caliber and that we reach agreement on business terms. Here in the U.S., we not only support traditional cable, but also were early supporters of the satellite companies, DirecTV and Echostar, when they first launched and more recently the telcos, Verizon and AT&T, and with each new entrant, the overall multichannel universe has increased. And indeed they all offer some form of triple play or in some cases quadruple play. Quality of the consumer experience remains a critical component, I can't stress that enough. The distribution partners [highlighted above] have invested heavily to make sure their consumer offering is the best it can be. For any new entrant into the video distribution space, it will be critical for them to think this through and make sure that their value proposition is equal to or better than the current distributors."
Finally, Pyne broached the touchy subject of TV trade shows, prefacing that for Disney, MIPCOM "is the key selling opportunity for the international TV market, where a lot of business is done. However, as we do with our business, markets such as MIP need to be continually re-evaluated by the organizations."
Pyne concurred that by simply changing hotels in Las Vegas and making cosmetic changes, NATPE will not solve its problems. He then proceeded to give the example of Cable Connection, which coordinates a market that revived the cable TV market sector by combining some 11 dying events (including CTAM, CAB, Kaitz Foundation dinner and NCTA itself) into one big spring and one big fall market (the latter, will be held October 25-30, 2009 in Denver, Colorado).
Ben Pyne, who joined Disney in 1992, is president, Global Distribution, Disney Media Networks. Promote/to this role in 2007, he is responsible fir the international distribution of content produced by The Walt Disney Company to all platforms, including VoD an/ broadband markets. He ago oversees U.S. distribution of the company's television content (handled by Disney-ABC Domestic Television), international content distribution (through: Disney-ABC-ESPN Television) and Disney-ABC International Television, and is responsible for the ABC Television Network's Affiliate Relations department as well as the Disney & ESPN Media Networks Affiliate Sales and Marketing team.
Pyne reports to Anne Sweeney, co-chair, Disney Media Networks and president, Disney-ABC Television Group, and Alan Bergman, president, The Walt Disney Studios. For domestic responsibilities concerning ESPN, Pyne reports to Sean Bratches, executive vice president, Sales and Marketing, ESPN and ABC Sports. He also works closely with Burbank-based Andy Bird president, Walt Disney International, because the latter is responsible fir targeting new businesses internationally (outside the U.S.).
Prior to this role, Pyne serve/as president, Disney & ESPN Networks Affiliate Sales and Marketing, a role he was promoted to in 200.
Pyne has an MBA from Harvard Business School. He was ago Orchestra Manager of the New Jersey Symphony flow 1985-90 (he plays classical guitar). lie currently resides in New York City with his wife and two sons.
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|Comment:||Benjamin's buttons. Disneys global boss hit the right keys.|
|Publication:||Video Age International|
|Date:||Oct 1, 2009|
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