Sony Film CEO on Losing ‘Sinners’ and the Endless Big Tech Battle

0:00Matt Belloni:Protein is now at Starbucks, and it's never tasted so good. You can add protein cold foam to your favorite drink or try one of our new protein lattes or matcha. Try it today at Starbucks.

0:20Matt Belloni:This episode of The Town is presented by 20th Century Studios' Avatar Fire and Ash. Don't miss the movie Critics Are Raving is epic and exciting and gorgeous and heartbreaking and stands as one of the greatest films ever made. It's got incredible visuals, jaw-dropping action, and a cinematic achievement. Avatar Fire and Ash now playing in theaters and now nominated for the Academy Awards for Best Visual Effects and Best Costume Design. It is Monday, February 23rd. It's shaping up to be a nice rebound year for the Sony Pictures movie studio. After 2025 with only one movie that grossed more than$100 million worldwide, this year they've got a new Spider-Man, Jumanji, Resident Evil with Zack Greger directing.

1:02Matt Belloni:And last weekend they successfully opened Goat, an original animated movie. Sony's at the center of a bunch of industry trends we talk about a lot on this show. Remember, they're the only major studio that does not own its own general interest streaming platform. That might seem like a big weakness in modern Hollywood. In some ways it is. But it's turned Sony into an attractive partner for the big streamers. They sell a lot of shows to the streamers, and Netflix just re-upped its pay one deal. That's the first pay TV window for Sony's movies. That went for more than$7 billion worldwide. And of course, Sony produced K-pop Demon Hunters, which is now the biggest movie ever on Netflix.

1:37Matt Belloni:Running the film studio for more than a decade now is Tom Rothman. He's got a rich history as a top executive in Hollywood. He was at Fox for 20 years, he founded the Fox Searchlight Specialty Unit, and he ran the Big Fox Studio. And since 2015, he's been the chairman and CEO of Sony Pictures Motion Picture Group, where he's made and released movies like the Spider-Man and Spider-Verse franchise. Once Upon a Time in Hollywood, Anyone But You, and It Ends With Us. Yes, he lived through that one. Sony doesn't have as much IP in its stable as rivals like Disney or Warner Brothers, so it has to be a little bit more creative.

2:07Matt Belloni:They're developing a LeBouBou movie, but they're also betting on more originality, Rothman says. We've wanted to get him on the show for a while. He's always got strong opinions, and he's definitely willing to fight me, which I appreciate. So I'm happy to say he joined us last week at the AFI Conservatory for a live show in front of a crowd of students. The first of our little film school tour we're doing. Lucas Shaw was there as well. We talked the Windows issue, the Netflix Warners ramifications, K-pop, the movie star question, a lot more. This is a two-parter. Second part we'll post tomorrow, but today it's Tom Rothman and how he's making Sony Pictures a lot more than just Spider-Man.

2:40Matt Belloni:From The Ringer and Puck, I'm Matt Bellany and this is The Town.

2:48Matt Belloni:Let's bring them out. Tom Rothman. Wearing a very cool Columbia Pictures bomber jacket. Available for purchase in the Columbia Pictures store. Nope, not vintage. Oh, really? You can't buy that? I don't think so. Unless you're haunting eBay or somewhere. Maybe I just came up with a side business. Do we know what vintage it is? At my age, I don't discuss such things. You can tell by which of the Columbia Pictures women is in the... Well, that's a great thing. If ever you've, one of the cool things that I'm sure you've seen, you both have seen when you come to the lot, the commissary on the building opposite the commissary is a series of the lady with the lamp from the beginning, each iteration.

3:33And it's really cool. Last year, we celebrated our 100th anniversary of Columbia Pictures. and that's a great thing one of the great lucky things about the incredible fortune and good luck that i have with the job that i have but it's the thing that the studios the historic studios which are now seem to be called the legacy studios have that all the apple money in the world cannot buy

4:04Matt Belloni:and that's history yes it costs them what is it seven billion dollars to rent your library Netflix for a few years? Well. Something like that. Okay. It's value. Yes. So I want to start, I'll take the first question. I want to start by talking about this particular moment where we are, where we have one of the historic studios, I won't use the word legacy, is now being fought over by two companies, Netflix and Paramount. I'm not going to ask you who you think is going to win. Everyone asks me that. I don't really know. Me either. But I do want to ask you about the implications of that sale because things are going to change, right?

4:43Yeah, I think this is a major moment, not just because of that, but because what it's symptomatic of. This, I would say, is the fifth, as Churchill would say, climacter in the more than 100 years of the movie business, in the 120 plus, 130 plus years. If you think of it over the course of the history of the movie business, the first obviously being the invention of sound, the second, the end of the studio system. And I have the complete privilege and honor. I sit in Louis V. Mayer's office because where Columbia occupies, it was MGM. How is his desk compared to the Warner's desk?

5:27Matt Belloni:I don't know. I've actually never seen Jack Warner's desk. but I know how. How have you never seen Jack Warner's desk? I mean, David Zaslav will show it to you for free. He shows it to me if I go over there. I didn't get it, but if you come see me, I can show you Louie's office. Uncle Louie's office, one of the two most famous offices. And in those days, I think, you know what they say about the brilliant Irving Thalberg, Louie's office is in the Thalberg building, right? Irving Thalberg was so brilliant that by my age, he'd already been dead for 40 years that everybody worked for him. How hard was it?

5:58everybody worked for him. And if you didn't want to do what Uncle Louie wanted you to do, you had to come into the office that I now occupy. Because they owned all the stars,

6:08Matt Belloni:there was no freedom to move between studios. Correct. So when that ended very abruptly, when Jimmy Stewart came home from the war and had been shot out by the Nazis, he didn't give an F what Uncle Louie wanted him to do. He wanted to do what he wanted to do. So the breakdown of the studio system, then I would say the third claim accurate, invention of television. and all of the home entertainment that followed, which we'll talk about, I assume, today. And that was a similar crisis moment for the movie business. And I ran Fox for a number of years, and the myth was that it was Cleopatra that almost bankrupted Fox.

6:43It wasn't. Actually, Cleopatra was a hit, believe it or not. It was television. The fourth, obviously, the transition from analog to digital. And now we're in the fifth right now as we sit here today. And I would say that is the entry of truly hyperscale technology companies into our business at a level of capitalization beyond anything that could ever have been conceived. These are trillion-dollar companies that have decided, for whatever reasons, to come into our business. And concomitant with that is what I would refer to as the crisis in Windows. And those two things are related. because the trillion-dollar technology companies, the issues of profitability in the movie business is secondary to them.

7:31Matt Belloni:And for the first time, because they're scaled, they don't have to play by Hollywood's rules. Correct. And they actually don't have to make profit. It's such a small portion of what their balance sheets are, and that is very different. Believe it or not, I remain optimistic that if Hollywood writ large, so the entire ecosystem recognizes both the threat and the opportunity, There's a vibrant future if, and I use this not in the royal sense, I use it in the literal sense, if we respond in the right way. When you say opportunity, what opportunity are you talking about? Look, I'm a movie guy, right?

8:07So I can speak separately about movies themselves, which I continue to believe in if we do the right things, but I think we are at a very decisive moment. But with respect to all these bright, young, look at them all, so bright, young, and optimistic out here. I'm not going to disillusion all these young folks. Go out and get them. Whatever the traditional economics that I grew up under, people will always want to be entertained.

8:32Matt Belloni:But to believe there's opportunity for a company like yours, you have to believe there are things that you, Sony Pictures, can do that a hyperscaled company cannot do. And I believe that thoroughly. And what is that besides owning beloved IP? What is it that you can do that Apple, Amazon and Netflix and YouTube cannot do. I can answer that in the immortal words of Beyonce. When somebody asked her, how do you get to be Beyonce? You know what she said? Make dope shit.

9:09So that's as simple as it is. Well, yeah, it just ain't easy to do. But you're going to say that I'd imagine that on a percentage basis, your hit rate is better than those other companies. Those other companies have made dope shit. Occasionally. Look, since the history of art, since Da Vinci fell off his ladder, the two things have always been inconsistent. Quantity and quality. You kind of got to pick, right? More and more for the theatrical business. the theatrical bar has gotten higher and higher and higher, right? You've got to be over the theatrical bar because, and I would like to talk about why that bar has gotten higher, because I think it's part of the larger challenges we face.

9:58Talk about it. Why is that bar higher? But is that bar really a quality bar? I mean, if you go and look at the 10 highest grossing movies each year, you're telling me that those movies are there because they're some of the best movies released? For the audience, they are. So don't be a snob. We're in the audience business. But they're the best movies that are pre-branded for the audience. There's no pre-brand on Sinners. You know, it's just great. And there was no pre-brand. You mentioned something in your intro. There was no pre-brand on anyone but you, hardly. It was just really good and really satisfying.

10:31And the audience loved it. And they told their friends. But the reason the bar has gotten higher is because of the mistake that, again, collectively the business. and we bear our own share of the responsibility for this, I don't shirk it, has made with respect to windows. Windows are a very ill understood aspect of our business right now. What happened was collectively movies went through a near-death experience in COVID. We're an out-of-home entertainment business and nobody could leave their homes. So that put tremendous amount of pressure on the people like us who make movies and on exhibition who exhibit movies when they were literally closed.

11:18It was like, literally, if you go, you're going to die. The movie's got to be really good for that. Let's face it. I really want to see it. Enough to die? Well, maybe I'll let you know. So then we came back out of that and there were, in my judgment, incorrect assumptions made about what the larger ecosystem needed and what was best for the larger ecosystem. Meaning the length of the windows. Yes, the length, but understanding the windows. When people talk about there are multiple windows, the length of the window to what is also the thing.

11:56Matt Belloni:To transactional, where you buy it. To transactional, where you buy it. To PVOD, where you're paying money to watch it on your TV. Correct. You don't own it, but you're renting it. Correct. to subscription, to free, to all of it. Correct. Throughout all of the history of the movie business, from that moment I mentioned in television, entertainment in the home first is seen as a terrible threat to the movie business and then becomes a great boon to the movie business. It has happened every time, and I have lived personally through many of those transitions. That's what happened with television and syndication.

12:33That's what happened when video cassettes at home. Oh, my goodness. You can push it in your thing. Who's going to go to the movie theater? Everybody. And then they buy it again at home if it's good. HBO, home box office, was a boon to us. And guess what? Same thing, 500 channels. Streaming is a great boon to us. Netflix is a fantastic partner for us. We make a great, great deal of money on our pay one window. The key to all of this is to protect the exclusivity, protect an exclusivity period for movies in movie theaters. It's simple, gang. Who's seen Casablanca here in this audience? Good, because if you haven't, you're all expelled.

13:16So he says at the end, says Rick, maybe not today or tomorrow, but soon. We've made the audience think That they don't have to go To the movie for a story based reason We've made them think That they can see it at home Maybe not today or tomorrow But soon They don't know They don't distinguish between people putting it out in 17 days But if enough movies come out In 17 days They know Maybe not today or tomorrow But soon And they're not idiots

13:54Matt Belloni:Yeah, but that's only half the equation. Because as much money as you guys make from Netflix, they're also competing with you and conditioning the audience with their own originals. And going back to the scale comment, for the first time in the history of the movie business, the distributor is able to spend just like you do and compete just like you do for the top-level projects. No. That's the difference. No. HBO, when HBO at the height, HBO is not making$100 million movies. Netflix is. My turn? Yes. Okay. No, because algorithms don't market. We do. That's why our product is so valuable to Netflix.

14:36Because you know about it. If we've made it good enough, you're going to care about it. That's number one. And number two, how many here are in the directing program or the writing program? Okay How many of you in the directing program And the writing program Your real ambition Is to have the movie that you care the most about That you've dreamed of your whole life To go out on streaming How many of you The movie you care about That you've been thinking about making Since you were ever a kid Want to put that movie out in movie theaters With that lady in front of it So it ain't equal It ain't equal In fact, I feel bad that we beat the hell out of him every day.

15:23Okay, two questions off of that. What was your most watched movie released last year? Oh, well, this is a trick question. He knows the answer. Yeah. But we all know the answer. Our most watched movie was K-pop Demon Hunter. Which was released on Netflix. Yep. With the lack of marketing that you described. Yep. And it took about a month for that movie to catch on. And that's why that movie was placed in the very right place for it. The motion picture business that I'm in, you guys will hear this phrase as you go out in the world and you have some of your first studio meetings. It's the parachute business, meaning you open or you die.

16:06So that's the way it works, unfortunately. But it's worked that way for a long time, really, in the post-Jaws era. The advantage with Netflix, and we are extremely happy with K-pop. We're very proud of it. It goes to what you were saying before, the quality of animation. But do you think it would have opened? Do you think K-pop would have opened? No, I don't. You don't? No. I think the evidence is pretty clear that it's a classic, classic. The other thing that you get, it didn't open on Netflix. It did okay, but nobody was jumping up and down for weeks and weeks. what the great advantage there is and why it's in the right place, especially for that particular thing that was a word of mouth, the repeat viewing is free.

16:51Repeat viewing in movie theaters is not free. And the word of mouth phenomenon that that became over a number of weeks, when you look at the Netflix chart, it goes gradually like this and then up and up. I think that was a perfect match. So you do that deal again.

17:07Matt Belloni:I mean, obviously there was a lot of other things. You did a slate deal during COVID to get a lot of Sony movies onto Netflix. One of them was K-pop. Trust me, in my job, hindsight is 20-20 and I regret a lot of decisions. Not that one. That's been great. It's been great for the brand. There are also a tremendous number of intangible benefits that have come to that, which are really rich. We are now. I'm very proud to say This is a credit to Michelle Grady at Imageworks and Christine Belson and Damien at Spa. We're the hottest animation shop in town. And if you're a young, cool animator who wants to break ground and do new stuff and don't want to do the same old, same old stuff, you're beating down Spa's Sony Pictures Animation's doors.

17:54So that's great. And we're attached forever to it. So we're very happy. And we're happy. Here's the other thing I'll just say about that. That was done as part of the direct-to-platform part of our deal. Our job is to deliver them hits. That's what we're supposed to do. And I think they're very happy because they've renewed a very nice deal for us.

18:13Matt Belloni:Speaking of decisions you may regret, what about Sinners? You were in on Sinners, would not do the unique deal that gives Ryan Coogler the copyright after 25 years. Do you regret that one? I don't regret it. I'm sad that we couldn't have it. We actually offered more money for it than it went for. I thought it was fabulous. And I think Ryan is, you know, an exceptionally fabulous director. In fact, I have a story about him, which is that I was on the jury at Sundance when Fruitvale Station was at Sundance. And I went in the jury room and we closed the door in the jury room and I said, okay, gang, we can do this in five minutes or we can stay here all night.

18:54I'm not leaving until we say Fruitvale Station. Who was the dissenter? I can't even remember. There wasn't a lot of dissent. The truth of the matter was, if you know your stuff, you knew it when you saw it. So I had the honor to hand Ryan his jury prize at Sundance. He came up with the same humble, somewhat shy gentleman that he is now. And I handed him the prize. I said, congratulations. This is the first. It is not going to be the last. And this year that prophecy will come true. So, and I thought sinners, I thought the script was great. However, when you do my job, and this is one of the hard things in the job, you can never ruin your business for one movie.

19:40And, uh, I respected his desire to, you know, have a return on the copyright. I respected, you know, the decision that other companies would, would make to be willing to fully finance and just rent a, uh, a movie and not own it for the longterm in their library, but I didn't think that we could institutionalize that at Sony Columbia because every day on my walk to the commissary, I walked by a large poster of Lawrence of Arabia, the movie, by the way, that led me to be in the movie business because I'm just a Jewish kid from Baltimore. How the hell did I get here? Partly because of that. And I stopped, I think about that.

20:24I thought about it hard in this thing that what would Columbia be without Lawrence of Arabia now and all the other, uh, valuable titles in our library, movie studios don't really, the profitability that underline, it goes to what we talked about before history, what makes us different, the profitability that underlines a movie studio is its library. that's the enduring value and i felt in that circumstance that that was one bridge too far that we couldn't compromise but do i wish we had it absolutely even even though you did it for tarantino no that was grandfather so there that wasn't our decision that came from the fact that uh jango versus zorro which was a split with miramax um that that already existed and in fact That's kind of even what made it hard because given that, if we had done it for that, we would have institutionalized it as a part of its business.

21:21What could I say to Steven Spielberg or any of the people I'm dealing with now? Sam Mendes. Have others asked for it since Sinners? Not for me because I think they know the answer. Correct me if I'm wrong. I don't think you've done a movie with Ryan. No. I wish I had. Yeah, where is he on the list of filmmakers you haven't worked with that you'd most want to work with? What's your top three? Well, I guess I'm going to betray my advanced years. I've pretty much worked with almost everybody, which has been a great privilege. But I would say the whales I'm still chasing would probably be the same as everybody else.

21:55I've not had the privilege to work with Chris Nolan, and I would always hope to. Did you bid aggressively on Oppenheimer? I did. I bid very aggressively on Oppenheimer. And Ryan, and I'm sure there are some others that I'm not thinking of right now, but one of the things that I pride myself on, that I pride myself to be a filmmaker's executive and that we support filmmakers. And I have had the privilege to work with many of the people that I grew up admiring. And what I'm mostly proud of is of those folks, I've made multiple movies with them. I'm on my eighth movie right now with Danny Boyle. I'm on my third movie with Sam Mendes.

22:37I'm just thinking to people who I'm working with right now. And I think the mark of a good executive and a strong company is do you do repeat business?

22:46Matt Belloni:We are back with the call sheet. Craig, did you wake up at five in the morning to watch the men's Olympic hockey match against Canada yesterday? No, and I regret it. I saw those pictures of people like lining up outside of bars in Santa Monica at 5 a.m. I was like, oh, I wonder if Craig's there. Perhaps. You know, those are the moments that you remember and I didn't do it. I get up early. I'll go to a bar to watch March Madness. I don't know why I didn't. I mean, 5 a.m. is a little early. That is. You can't even sell beer in California until 6 a.m. but the bars were open at five. I watched about an hour of it.

23:22Matt Belloni:I watched the last hour, hour and a half. I did not wake up at five, but I did wake up at about 6.30 to watch. Pretty amazing. And the ratings for this Olympics in Milano Cortina have been pretty darn good for NBC. They said they were, as of a couple days ago, they were averaging 23.9 million viewers. That's through Wednesday of last week. And that is the highest number since Sochi in 2014. Pretty incredible. Why do you think that is? A few reasons. First of all, the time difference between the East Coast of the U.S. and Italy is only six hours, which is much better than it was in Beijing or the most recent Olympics.