Sony Pictures Technologies FY13 Three Year Plan … Tech FY13 Three...Sony Pictures Technologies –...
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Sony Pictures Technologies – FY13 Three Year Plan Review
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I. Group Overview
Group Mission & Prime Objectives ……..…………………………………………………………………
SP Tech Showcases: Distribution Backbone, WPF Supply Chain, DECE, Colorworks .……………….…
SP Tech Genesis and Functional Organizational Chart ……………….……………………………………
Departmental Overviews – Core Functions, Financials & Key Facts/Achievements:
Colorworks …………………………………………………………………………………………
Digital Media Group ……………………………………………………………………………….
Technology Development ………………………………………………………………………….
WPF – Asset Management …………………………………………………………………………
WPF – Global Logistics ……………………………………………………………………………
WPF – Client Operations …………………………………………………………………………..
Digital Policy Group ……………………………………………………………………………….
Corporate Alliances ………………………………………………………………………………..
3D Tech Center …………………………………………………………………………………….
II. Three Year Plan
SP Tech EBIT Improvement (Revenue Enhancement & Cost Reduction) Actions .……………………….
Proposed New Functional Org Chart ………………………………………………………………………
Three Year Plan Headcount Roll …………………………………………………………………………..
Other Strategic Opportunities & Considerations …..……………………………………………………….
V. Appendix
FY13 Budget Data …………………………………………………………………………………………..
SP Technologies Organization Charts ………………………………………………………………………
DMG Usage Chart ………………………………………………………………………………………….
Territory Account Growth …………………………………………………………………………………..
Agenda Page
SPE Confidential
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SP Tech Group Overview
Sony Pictures Technologies – FY13 Three Year Plan Review
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Mission
SPE Confidential
Mission Statement:
Where is the mission statement from previous years?
We’ve realized these core objectives for the benefit of SPE in many ways – some of the higher impact initiatives that showcase SP Technologies contributions include the Distribution Backbone, WFP manufacturing savings, DECE and Colorworks Production Support ……
Sony Pictures Technologies – FY13 Three Year Plan Review
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Recurring Themes
SPE Confidential
Protect long term asset value
Technology should be transparent
Faster, Better, Cheaper
These themes will be active across the division
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SP Tech Showcase: Distribution Backbone
SPE Confidential
The Challenge:
The costs of physical duplication and distribution labor, materials and transportation are increasing • The work is repetitive and mechanical
The market has changed from a few large customers to hundreds of customers in a wide range of sizes• Unit distribution volumes are increasing while individual unit transaction values decrease• Physical distribution systems do not scale economically• The costs of supplying the increased volume through traditional methods would be cost prohibitive
The Solution:
Digital technologies have transformed the creation, distribution and consumption of entertainment media. A change to file-based media deliveries allows the opportunity for an automated workflow In partnership with Sony DADC, the Distribution Backbone was developed to automate the repetitive tasks,
eliminate physical media and transportation costs. • SPE businesses will deliver approximately 80K file-based media assets to our customers this year• Expected to grow to 180K by FY15 (60K related to Ultraviolet)• To deliver these 180K files would cost approximately $35M existing 3rd-party offerings, even taking
into consideration the downward pressure on rates, vs. $11M with DBB• After FY16, the cost of using the DBB will drop by an additional $2.6M as the build costs will have
been completely amortized
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SP Tech Showcase: Distribution Backbone
SPE Confidential
The Results:
80% of WPF deliveries are currently file-based SPE is on track to utilize the DBB for 35% of deliveries this year and that will grow to near 100% within 2 years The DBB’s ability to meet the shrinking timelines and increased volumes has helped SPT and SPHE fulfill the ever-increasing
demand for SPE product around the world Using the DBB, the cost for delivering 180K files in FY15 will be approximately $11M, saving the company $43M in costs
over the next two years!
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SP Tech Showcase: WPF Supply Chain Savings
SPE Confidential
The Challenge:
Beyond distribution to clients, WPF purchases outsource services: Dubbing Subtitling Editing for airlines, broadcasting, etc. Ingesting new assets for distribution – audio, video, metadata, rights management data Etc.
Volume and types of requests serviced by WPF are increasing Technological advances in the industry have created opportunities to dictate workflows and drive cost
savings WPF manages a consolidated supply chain and workflows across divisions, allowing maximum leverage
in defining workflows and, with SPE Procurement, leveraging purchasing power to identify potential time and cost saving opportunities
The Solution:
Since FY10, WPF and Procurement have undertaken over 20 RFPs RFPs are regularly renegotiated on a 1, 2 or 3 year cycle. On average, each RFP takes 2 to 5 months and
are conducted on a global basis
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SP Tech Showcase: WPF Supply Chain Savings
SPE Confidential
The Results:
Of the 20 RFPS, 16 have resulted in annual savings of at least $1M Based on actual volumes, the cumulative savings to the title owner since FY10 has been $57M
$57.0
FY10 FY11 FY12 FY13$0.0M
$25.0M
$50.0M
$75.0M
$100.0M
$125.0M
$150.0M
7%
9%
11%
13%
15%
17%
19%
Manufacturing Spend
Actual Spend Total w/o RFP Savings
Percent SavingsAnnual Savings Cumulative Savings
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SP Tech Showcase: Digital Entertainment Content Ecosystem
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
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Conception Development Operation
SP Tech Showcase: Shooting 3D on a 2D schedule and budget
The Problem“The bottom line is, if you want to do good 3D, it’s very expensive. The camera equipment is expensive because it comes with a lot of techs, the labor. […] And there’s a lot of tech fixes -- it’s not easy shooting 3D.”
-- Michael Bay
The PropositionWith the right plan and the right equipment you can shoot 3D on the same schedule as 2D, with at most 3 additional crew and 3D post is primarily for adjusting depth to meet creative intent.
The Skills• Knowing what makes good 3D. • Experience with rigs. • Workflows for productions from TV to
major motion pictures
3D Systems Testing• Speed of initial set up• Ability to not need repeated
adjustments• Time to change lens• Resilience to real-world handling
Trial RunsSuccessfully shot episodes of “Happy Endings” and “Days of Our Lives” in 3D on the same schedule as normal. 2D version taken from one camera on each rig and aired as part of normal run.
Screen Gems“Planet B Boys” feature shoots in 3D on Screen Gems normal 2D schedule of 35 days. Average 40 set ups a day, three rigs in simultaneous use. Only incremental cost of 3D is rig and three crew members. Never waited for 3D. No 3D correction or conversion needed for rig footage.
SPT’s Left Bank ProductionsEpisode of BSkyB’s “Little Crackers” shoots in 3D in 4 days after one day training for crew. Incremental cost of 3D is rig and two crew members. Producers want to shoot more Sky shows in 3D.
WorkflowColorworks designs near-set dailies system for “Planet B Boys”, footage stored and managed on Production Backbone.
Sony Pictures Technologies – FY13 Three Year Plan Review
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Conception Development Operation
SP Tech Showcase: Shooting with the F65
The GoalSony’s new F65 camera produces stunning imagery with 45% more pixels than its nearest competitor and a dynamic range of 14 stops
The Skills• Practical experience with shooting
and post for F35, Red Epic, Arri Alexa.
• Workflows for productions from TV to major motion pictures.
• Knowing how directors and DPs use cameras.
Camera Testing• Initial tests with Sony including two
shorts developed Colorworks capability
• Lens tests – spherical and anamorphic
• Comparison tests for SPETechnology Partners
• Work with Sony to improve camera operation.
• Work with FilmLight to produce tools for dailies and DI.
• Work with Otto Nemez (rental co.) on camera accessories and operation
“After Earth”• The Colorworks designed near-set
dailies system deployed in Costa Rica and Philadelphia
• Worked closely with production and Sony on F65 issues (e.g. data loss, fan noise)
• Footage managed and stored on PBB
“Smurfs 2”• Respond to production when
Technicolor near-set dailies had problems
• Footage managed and stored on PBB
The Challenge• New camera.• Large amount of data.• Needs image processing tools.• Develop the skills to assist
filmmakers
Workflow DevelopmentColorworks adds F65 support to near-set dailies systems, establishes workflow on Production Backbone.
EducationPartner with Production to train directors and DPs on the F65..
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Conception Development Operation
SP Tech Showcase: Better workflows for F65 productions
The Skills• Extensive practical experience F65. • Workflows for productions from TV to
major motion pictures. • Knowing what a director and DP need
to view on set.
Partner with Screen GemsScreen Gems wanted to shoot with F65 because of camera characteristics and creating a 4k asset.
“No Good Deed”• xxx
“About Last Night”• Shoots in Los Angeles without a DIT• Production is more agile, camera
moves are quicker• DP reports it’s the best footage he’s
ever shot.
Workflow DevelopmentDetermine workflow without a DIT, for example design solution for simple “look” management.
The PropositionThe F65 has more latitude than film so you can shoot with the camera just like you would with film.• No need for a Digital Imaging
Technician (DIT) or a video village• Saves cost, less to move, less
reviewing on set• Reduce lighting costs using available
light.
Camera TestingWork with DP to characterize the camera for the lighting and locations.
Sony Pictures Technologies – FY13 Three Year Plan Review
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Conception Development Operation
SP Tech Showcase: 4k TV Production
The Skills• Extensive practical experience
production and post production for TV.
TV Production BackboneProduction Backbone already providing services for TV production. Add a 4k capability.
“xxx”• xxx
“yyy”• yyy
Workflow DevelopmentCreate a workflow that maintains characteristics of current HD production while adding 4k archiving.
The PropositionShooting TV shows in 4k makes the assets more valuable in the future.
The ChallengeHi-def finishing has to cost the same and be done on the same schedule.
4k FinishingCreate a workflow that creates 4k assets for consumer 4k markets (e.g. Sony’s 4k project).
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SP Tech Showcase: Colorworks – Production Support
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
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SP Technologies Genesis
Sony Pictures Technologies was formed in 2009 and was primarily created from existing operations / assets around SPE
As a consolidated entity, SPTech is able to provide improved vision, strategy and service to all areas of SPE while optimizing resources and reducing costs
From the original organization, SPTech Operations and WPF have eliminated 11 senior management positions and added only 4, resulting in a annual net savings of $3.3M (salary, fringe & bonus).
Department Former Alignment Original Dept. Head Current Dept. HeadNew Media &Technical Strategy Legal Mitch Singer Mitch SingerCorporate Alliances Corporate Operations Toshino Yuhaku Toshino YuhakuBusiness Affairs SPT Don Loughery Don LougheryAdvanced Technology Imageworks George Joblove Spencer StephensDigital Cinema Motion Picture Group Al Barton EliminatedBlu-Print SPHE Don Eklund EliminatedDigital Media Group IT Ben Masek Ben MasekWPF Corporate Operations Jeff Hargleroad Eliminated
SPTech Operations Staffing Changes (VP and above)Eliminations AdditionsGeorge Joblove Spencer StephensDon Eklund Scot BarbourRichard Berger Tim Wright (promo to VP)
Al Barton
WPF Staffing Changes (VP and above)Eliminations AdditionsJeff Hargleroad Ryan Kido
Peter Ward
Rich DeRosa
Tony Beswick
Nina Louie
Kerri Wilson
Ken Bartlett
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Chris Cookson,President SP TechnologiesExecutive Oversight
• Production & Post Production Technology Vision and Strategy• Administration of SP Technologies Division• Content Preservation and Distribution• Digital Strategy and Policy Development• Application Development• Sony Product Technology Strategy Alignment• Technology Partnerships / Business Affairs
Charlie FalcettiExecutive Vice PresidentProduction Services (Studio Ops, Sound, Colorworks)
• Digital Intermediate Services• Trailer Finishing• TV Finishing• Creative Editorial Services• Asset Restoration Services• VFX / Cosmetic Fixes• Theatrical & HE Deliverables
Toshino YuhakuSenior Vice PresidentCorporate Alliances
• Inter-Company Coordination and Communications• Sony Corp Strategy Alignment• Project Management
Ben MasekSenior Vice PresidentDigital Media Group
• Digital Asset Management • Digital Workflow Automation• Video Streaming & Transcoding• Forensic Watermarking & Content Fingerprinting• Digital Media Research & Development
Spencer StevensExecutive Vice PresidentTechnology Development
• Digital Media Technology Evaluation and Development• Media format, content protection and digital cinema
standards• Studio-wide Technology Initiatives
Mitch SingerExecutive Vice PresidentDigital Policy Group
• Digital Licensing Policy and Strategy• Digital Entertainment Content Ecosystem (DECE)• Worldwide Anti-Piracy / Content Protection• Content Protection Technology Evaluation
Terri Davies,Executive Vice PresidentWPF Client Operations
• Manage Content Preparation and Fulfillment• Supply Chain Management• Metadata Procurement, Creation & Maintenance• Content Protection• Quality Control
Current Functional Org Chart
SPE Confidential
Grover CrispExecutive Vice PresidentAsset Management
• Asset Restoration & Preservation• Supply Chain Management• New Release & Catalog Mastering• Asset Storage and Global Logistics
Studio Services
( Gary Martin)
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Core Functions Key Facts & Achievements
Financial Summary
FY13 Budget: Revenue – $28.9M ● EBIT –
$5.9M FY13 Budget Headcount: 53
Colorworks
SPE Confidential
Digital Intermediate/Color Grading Services
TV Finishing Services
Creative Editorial Services
VFX/ Cosmetic Fixes Services
Trailer Finishing Services
Restoration Services
Theatrical DCP Creation
Home Entertainment Versioning
Final color correction of high resolution data with 46 feature titles completed and 6 underway, including: The Amazing Spiderman, Total Recall, Hotel T, Cloudy with a Chance of Meatballs, SALT, and Smurfs 1 & 2. Examples of integrated Studio services: The Amazing Spiderman utilized simultaneous 2-D and 3-D color correction theaters while Sound mixing next door. Total Recall Sound mixed during the day and color corrected at night in the facility for 27 straight days to meet the release date.
Working closely with SPT to streamline workflows for color finishing for network, cable and MOWs. 2011: 2 series, 2012: 6 series and MOWs, 2013: 10 series and MOWs.
Integrated Editorial into Colorworks and continued to broaden and provide quality theatrical and television versioning to multiple users throughout SPE.
VFX/Cosmetic Fixes - 150% growth in the last 2 years, offering a cost effective solution for cosmetic and VFX manipulation in place of traditional Digital Effects. Colorworks is working with the feature post department to begin End Credits creation to streamline the process and lower costs.
Worked closely with marketing to move Trailer Finishing from a third party vendor. Originally projected savings were in excess of $500,000. The volume of services have increased annually and will exceed $1,000,000 savings to SPE this year. Expanding into TV Spots that will drive further savings to SPE
Colorworks is the industry leader in 4K restoration, delivering the 50th anniversary of Lawrence of Arabia and the 35th anniversary of Taxi Driver. Notable third party projects included The Leopard for Fox/Film Foundation, The Spy who Loved Me for MGM, Tora Tora Tora for Fox, and Rosemary’s Baby for Criterion Collection.
Colorworks creates the digital cinema masters and all film elements for worldwide release along with text-less materials for the foreign language release.
Colorworks creates all Home Entertainment deliverables, with separate image and color manipulation as necessary for differing display technology.
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Core Functions Key Facts & Achievements
Colorworks – Technology
SPE Confidential
Develops and maintains Colorworks technical infrastructure
Consults with film makers, Theatrical Production and TV Production to
Develop content creation Workflows Evaluate and select camera systems Plan and choose post-production
technologies Advises WPF on streamlining methods for
handling, processing and delivering content Represents SPE in standards organizations to
improve technologies that benefit SPE Develops specifications for Asset Management
and SPE standards for post-production processes.
Works with PMC and Sound to develop efficient workflows for collaborative sharing of production content.
Collaborates with other Sony organizations as needed
ISO27001 cert
4k at less than outside cost for HD/2K
ACES workflow
Delivered 10 4K movies to SEL
Seamless 4K workflow for AE, etc.
Fixed Technicolor issues for Smurfs2
Positioned SPE to gain advantages of higher resolution cameras
Colorworks , and more specifically the Colorworks technology team, establish standards of post-production methods for maintaining the highest level of quality
throughout the post-production process.
Working closely with Columbia, Screen Gems, SPA, SPI, SPTech, PPF, WPF, Asset Management, DMG, DMC and other groups, the Colorworks engineers help to establish technical workflows at the studio for the benefit of all involved.
Colorworks has, by utilizing the expertise of a technical staff that has over 100 years of combined post-production and production experience, partnered with the other post-production companies at the studio to establish technologies that benefit the studio at large; namely 4k and higher resolution post-production, Digital Cinema, the Production Backbone, high-quality YCM archives, the ACES colorspace, digital master archives and the Interoperable Master Format (IMF).
The Colorworks engineers also work with industry organizations like the American Society of Cinematographers (ASC), Society of Motion Picture and Television Engineers (SMPTE), the Academy of Motion Picture Arts and Sciences (AMPAS), Digital Cinema Initiatives (DCI), as well as Sony electronics and other technology vendors to help implement standards on behalf of the studio and the industry at large.
Working closely with Sony Pictures Technologies, the Colorworks engineering staff helps to develop and test various emerging technologies, such as Digital Cinema, 3D, high frame-rate 3D, 4K to the home, that eventually help the studio to create more compelling content.
Colorworks’ engineers are collaborating with many of the groups on the lot to help create the digital studio of the future, so that SPE can maintain a leadership position, while helping to lower costs through the application of technology.
This includes new 4k workflows for theatrical and HE distribution, as well as establishing new methods of mastering within the organization to help pave the way to the future.
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Core Functions Key Facts & Achievements
Financial Summary
FY13 Budget: $1.1M * FY13 Budget Headcount: 17 * $4.2M in operating costs offset by service charge-backs to
SPE LOBs and other Sony Entities
Digital Media Group
SPE Confidential
Digital Asset Management Digital Archive Content Management System High Speed Digital Transfers Digital Workflow Automation Video Streaming Video Transcoding Forensic Watermarking Content Fingerprinting Digital Rights Management Studio Screeners – Digital & Physical Digital Media Research and Development
The estimated cost avoidance for SPE due to implemented DMG solutions for FY13 is $10.5M
Generated nearly $400K in revenue by licensing EAGL (Entertainment Assets Global Library) to Sony Computer Entertainment and Sony DADC
The volume of digital assets managed by DMG continues to double year-over-year (see transfer volume slide in Appendix)
Implemented an integrated tape library storage solution to significantly reduce DMG operating costs
Actively pursuing ISO 27001 certification
New 4K watermarking of content which will be provided with the new Sony 4K 84” flat screen televisions
Implemented automated digital workflow solution for international digital distribution of Theatrical and Home Entertainment spots eliminating the creation and distribution of physical elements – annual savings over $4M
Rolled out new secure Digital Screeners applications with support for tablets
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Core Functions Key Facts & Achievements
Technology Development
SPE Confidential
Content protection Provide and review content protection and usage rule
schedules for licensing deals. Technical expertise for anti-piracy, government affairs
and litigation. Further the development of systems and standards for
content protection, delivery and consumer offerings.
Participate in the development of formats. Improve the consumer experience and Maximize value of SPE content Ultraviolet technical group, Common File Format
completed
Provide business units with technology to improve processes from camera to screen.
Provide hands-on expertise in new technology to feature and TV productions.
Develop new production workflows.
Developing new workflows for feature production using digital cameras, provided on-set expertise on this workflow to About Last Night allowing Screen Gems to shoot faster and without D.I.T.
Developing and deploying Content Finishing Platform for better title version management in collaboration with PMC, WPF, SPTI.
Content protection and usage rules for over 200 Home Entertainment and television deals in partnership with Digipol.
Content protection and usage rules schedules for over 40 IFE non-theatrical and FilmBank deals, instituted contractual protection requirements in non-theatrical deals, and driving industry standards for IFE content protection as industry expands from in-seat to passenger owned devices.
Specifying and promoting next generation enhanced content protection appropriate for high value 4k and early window offerings. (Our 4k activities reach well beyond Sony’s F1 project).
On-going contribution to the SPTI EMEA Media Center project.
Developed very cost-effective workflow for 3D production allowing productions to shoot on 2D schedules and with small increment in budget in conjunction with 3DTC.
Provided on-set expertise in 3D workflow for productions including Screen Gems’ Battle of the Year and SPT’s newly acquired Left Bank’s production Little Crackers to great success. Done in conjunction with 3DTC.
Contributed to industry discussions to make 4k more attractive to consumers enhancement of color and dynamic range (e.g. definition in dark areas of the picture)
Ongoing participation in Ultraviolet and other industry Interactivity WGs.
Participation in BDA next generation Blu-ray working group.
Conducted in-house, and participated in production, camera and lens tests (After Earth, No Good Deed, White House Down, etc).
Trained over 300 DPs, directors and crew on the new F65 digital camera used on Columbia’s After Earth, and Screen Gems’ No Good Deed and About Last Night.
French regulatory investigation that could make content protection on Blu-ray discs meaningless.
Technical consultation for Government Affairs in a variety of EU Commission actions that could, for example, remove our ability to enter into licenses for a particular territory within Europe
Working with anti-piracy and litigation to drive our agenda with search engines such as Google.
Negotiated with Fox to ensure consistency between Crackle’s and channels’ content protection and Fox’s contractual requirements.
Project managed the technical component of the Sony F1 project, working to resolve differences between Sony’s approach and our expectations of industry requirements for 4k.
Financial Summary
FY13 Budget: $1.7M* FY13 Budget Headcount: 11* $700K in operating costs offset by service charge-backs to Sony
Corp. Center-of-excellence for a broad range of technology relevant to SPE’s business.
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Core Functions
Financial Summary
Asset Management
SPE Confidential
Key Facts & Achievements
Mastering Create new feature video masters Create foreign language masters for 19
Languages/Territories Create new assets as required to service library titles
Restoration Research, identify and create elements as necessary to
preserve and restore titles where materials have deteriorated
Identify titles or assets needing upgrade (e.g. High Definition) to meet current market standards
Manage preservation policies and procedures Create back up elements to insure survival of assets There are more than 3 Million videotape, audio, film,
and file elements and records in “GOLD” database inventory system
Increased restoration/preservation/mastering of titles to a full 4k Workflow from 2-4 titles per year to more than 80 in the next 12 months
The volume of data archived this year is 80% increase over 2011-2012. This is the result of more comprehensive data acquisition, the transition of production from 2K to 4K and increase in elements (i.e., multiple versions, 3D data) to be archived.
Reduction in costs in data archive expenditures through cost analysis and asset retention review
15 – 20 Studio new release features each year, for which Asset Management creates the servicing masters for all lines of business- including formatting and Quality Assurance of HD masters, home theater and extended version audio mixes, and localized versions for territories; as well as archiving the component pieces for these versions.
Data Integrity - Create and update records for servicing elements in “Gold” data base – more than 5,000 updates per year
Support Home Entertainment diversification via MOD (120 titles a year, since 2010) and sublicensing (300 titles in 2011-2012) , with additional 1,000 titles over next 3 years
Reduced number of audio M+E conforms due to revamp of the dubbing workflow for a 60% cost savings (24K).
Manage the digital archive ? titles produced digitally since 2004, establish and institute long-term data preservation policies FY13 Overhead Budget: $2.0M
FY13 Manufacturing Budget: $27.1M FY13 Budget Headcount: 17** Includes Management
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Core Functions Key Facts & Achievements
Financial Summary
Global Logistics (Inwood)
SPE Confidential
Asset Management Protection and Preservation Oversee maintenance of 3M+ assets across
multiple storage locations, Inwood primary Iron mountain Protec
Supply Chain Logistics, Distribution and Inventory Management
Advertising and Publicity materials Film and TV elements
Quality control Creation and distribution of physical screeners Application of Corporate and Government
Standards and Regulations TSA Certified
Responsible for Protection and Preservation of $662M of Corporate Assets Manage in excess of 3M physical media assets, 250K Blu-ray and 320K Digital text assets Distributed 1M advertising and publicity materials supporting SPE Marketing efforts across all
BU’s Support SPT EU & APAC digital on-boarding efforts by managing product reverse logistics,
degaussing and client Cineshare screener delivery Collaborated with SPT and PMC to internalize SPT Marketing Library Digitization Project Internalized SPC DCP trailer duplication and distribution to achieve $260K annual savings Saved SPE $129K by internalized editing of syndicated TV series masters Initiated proactive vinegar assessment of 60K primary elements and collaborative plan with
Asset Management to triage affected units to increase their preservation Implemented import procedure across BU’s to adhere to US Customs ISF filing and protect
against Government penalties Manage $10M of Global Transportation and TSA Certified Cargo Screening Facilities
FY13 Overhead Budget: $4.6M* FY13 Manufacturing Budget: $11.7M** FY13 Budget Headcount: 52* Excludes storage costs of $1.8M
** Includes freight
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Core Functions Key Facts & Achievements
Financial Summary
WPF – Client Operations
SPE Confidential
Supports all SPE Divisions Supply chain & fulfillment including research, cost
analysis, ordering, delivery & tracking of all materials On-boarding of file-based clients, preparation of core
media assets including picture, audio, subtitles & CC for digital distribution
Cost management, aggressively leveraging overall SPE volume & spend to procure best service & rates
Manages metadata procurement, creation & maintenance in GPMS & GOLD including development of new metadata schemas
Manages Feature & TV editorial for Airlines & TV including talent, legal & client approvals
Manages centralized evaluation & acceptance of Theatrical & HE trailers & new TV Episodes & MOWs for downstream distribution
Manages non-theatrical language dubbing & subtitling, repurposes existing language assets for downstream distribution
File Volume increase since FY10: SPHE Digital +286%, SPT +93%
Trailers: due to One Sony release events, increased regional demands & EST/VOD requirements, WPF has supported a 443% volume increase since FY10
Airline/TV Editorial: since FY10, Editorial has experienced +76% growth due to increased cuts required by multiple clients
Digital Supply Chain: supported SPHE & SPT growth in EST & VOD by deployment of a 3 year strategy to implement & manage organizational & process change to transition from physical to file based distribution
Distribution Backbone: To support transition from physical to file, WPF successfully launched DBB in 2012. DBB is currently deployed for all SPHE Digital fulfillment & SPT Digital is in transition with expected completion by FY14. By end of FY13, 79% of all WPF file volume to be through DBB
Cumulative RFP strategy since FY10 resulted in overall $57M savings based on budgeted volumes eg: reduced Barter Syndication costs by 79% over 3 years; reduced Encoding costs by 80% over the last 12 months, reduced Tape Duplication by 25%
Non-theatrical language dubbing: reduced timelines by average 33% and costs by average 8%
Accelerated Next Day TV – successfully implemented secure, timely delivery of new TV product for next day exhibition to various worldwide clients
Ultraviolet: supporting SPHE Ultraviolet initiative by managing EIDR registration (23k titles),design & implementation of the digital supply chain for CFF rollout
SPHE Joint Ventures: supported SPHE JVs by managing creation of 25k 3rd party titles in GPMS in less than 9 months
FCC Closed Caption regulation – successfully implemented process to support new regulation for Internet exhibition
Support of annual SPE events: eg: SPT May Screenings, Regional Sales meetings & Academy & Guild award screener distribution
Organisation:70% of WPF CO Management have been promoted from within. WPF CO utilizes DISC, MBTI & Emergenetics & are fully invested in staff development & growth
FY13 Overhead Budget: $9.8M FY13 Manufacturing Budget: $101.0M FY13 Budget Headcount: 88** Includes WPF Management
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Core Functions Key Facts & Achievements
Digital Policy Group (1 of 2)
SPE Confidential
Establish digital policy across all SPE Business Units on a worldwide basis
Approve all SPE distribution deals on a worldwide basis
Maintain legal, regulatory, technical and contractual foundation to assure support of the Digital Millennium Copyright Act
Key lobbyist and SPE representative for copy protection initiatives in both government , the entertainment industry and across industry
Ultraviolet Develop copy protection standards for new digital
formats Review and analyze disruptive trends 3 to 5 years
out and develop new business models Review new technologies to protect Sony Pictures
Intellectual Property Content Protection & Anti-Piracy
Negotiated and closed over 200 complex SPHE and SPT distribution deals covering different usage rules and content protection for early window, VOD, SVOD, EST, pay TV, free and basic TV, AVOD, and Internet streaming, in coordination with the Technology Development Group.
Modified digital policy as required based on new technologies and user experiences. Implemented procedures and policies across all SPE business units to protect SPE’s intellectual property in all SPE distribution deals
Closed the royalty deal with HDBaseT that begins generating royalties paid to SPE in 2013. Anticipated royalty of $30K in 2013 increasing to $100K in 2014. Has potential for over $1M in royalties in 4-5 years.
Serves on the Board of Directors on HDBT, Verance, MovieLabs, DVD CCA, Entertainment Technology Center, and HQME, all focused on protecting Sony Pictures intellectual property and driving SPE’s digital strategy.
Conducted primary research in Kansas City designed to establish a baseline of media consumption and piracy levels prior to the launch of Google Fiber. This research will form the basis of Copyright policy around broadband deployment in the US.
National Academics: Appointed to a Committee on the Board of Science Technology And Economic Policy to draft and publish a report on the Impact of Copyright Policy on Innovation in the Digital Era.
Raised over $8M in outside financing and, after 4 years in development, launched Ultraviolet, the new industry cloud service for digital distribution.
Collaborating with the National Venture Capitalist Association (NVCA) to find common ground in connection with supporting legislation to protect intellectual property.
Working with the Information Technology Industry Council (ITIC), an advocacy and policy organization for IT companies, to bridge the gap between content and technology and effectively advocate policy to protect intellectual property.
Identifying new business opportunities for Sony pictures including:
Digital first sale model for Ultraviolet
Theatrical Serial project with SPT and SP Distribution
“On Location” film clip application
Managed legal and information security groups in drafting and implementing SPE’s Content Protection Manual, securing SPE’s intellectual property from point of capture through distribution.
Oversee Verance WM embedding in SPE motion pictures.
Prepared and testified before the U.S. Copyright Office to limit further exceptions to the Digital Millennium Copyright Act, resulting in a successful outcome for the motion picture industry.
Financial Summary
FY13 Budget: $1.4M FY13 Budget Headcount: 4
Sony Pictures Technologies – FY13 Three Year Plan Review
25
Review and analyze disruptive trends 3 to 5 years out and develop new business models
Review new technologies to protect Sony Pictures Intellectual Property
Content Protection & Anti-Piracy Represent SPE in Industry initiates and
consortiums Ultraviolet Identify New Revenue Generating Royalty
Opportunities
Core Functions Key Facts & Achievements
Digital Policy Group (2 of 2)
SPE Confidential
Raised over $8M in outside financing and, after 4 years in development, launched Ultraviolet, the new industry cloud service for digital distribution.
Collaborating with the National Venture Capitalist Association (NVCA) to find common ground in connection with supporting legislation to protect intellectual property.
Working with the Information Technology Industry Council (ITIC), an advocacy and policy organization for IT companies, to bridge the gap between content and technology and effectively advocate policy to protect intellectual property.
Identifying new business opportunities for Sony pictures including:
Digital first sale model for Ultraviolet
Theatrical Serial project with SPT and SP Distribution
“On Location” film clip application
Managed legal and information security groups in drafting and implementing SPE’s Content Protection Manual, securing SPE’s intellectual property from point of capture through distribution.
Oversee Verance WM embedding in SPE motion pictures.
Prepared and testified before the U.S. Copyright Office to limit further exceptions to the Digital Millennium Copyright Act, resulting in a successful outcome for the motion picture industry.
Sony Pictures Technologies – FY13 Three Year Plan Review
26
Core Functions Key Facts & Achievements
Financial Summary
FY13 Budget: $1.3M FY13 Budget Headcount: 5
Corporate Alliance
SPE Confidential
New Technology & Format Incubation New Technology Education Film / TV Production Workflow Creation Co-development of Sony’s Professional and
Consumer Products Promotion and facilitation of SPE Content for
Sony’s Global Sales and Marketing Activities Utilization of Sony products for SPE’s digital
content distribution & advertisement Distribution of Consumer Electronics Industry
News
Technology development and business model creation for new formats (3D, UltraViolet, 4K, etc.) w/ Sony Group and industry partners
Facilitated development of new Digital Production / Distribution Workflows Launched Media Cloud Services to build secure, flexible, cost effective cloud-
based production tools and services. Initiated F65 seminar. Trained over 300 industry professionals. Helped create and
successfully transfer workshop to Sony’s Digital Motion Picture Center. Led collaboration between Sony and SPE to create Sony’s new Professional
Products (F65, F55, etc.) and Consumer Products (3DTV, 3D Handycam, etc.) Collaborated w/ Sony to enhance home cinema experience: “Cinema Mode” for
Sony TVs (8 mil units), “Digital Cinema Sound” for amplifiers (440K units), “Movie Mode” for Headphones (50K units)
Pre-installed SPE promotional content in Sony products. (17M units) Facilitated the promotion of SPE trailers/clips for Trade Shows (CES, NAB, IFA,
CEATEC, Tokyo Game Show, etc.) Supported all SPE initiatives that require coordination with other Sony group
companies. (Advanced product placement for Battle of The Year, About Last Night, Spiderman 3 Tokyo Premiere, etc.)
Support all SPE initiatives that require coordination with Japan such as Metal Gear Solid- Konami negotiations, Jeopardy! Japan shoot, Rights acquisition for Ultraman, Monkey Magic, Location negotiations for The International, etc.
Installed DMT/SIGNAL at Sony Tokyo HQ for more efficient, lower cost screening management
Create and distribute weekly “Eye-Openers” news summarizing key technology trends both internal and external to Sony Corp
Sony Pictures Technologies – FY13 Three Year Plan Review
27
Core Functions Key Facts & Achievements
Financial Summary
3D Tech Center
SPE Confidential
Industry education teaching best practices in shooting and converting 3D
Evangelizing high-quality 3D across films, television, and gaming.
3D consultation on various film & television projects
Support of SPE (Columbia/Screen Gems) internal 3D films and projects
Support Home Entertainment in 3D Blu-ray Disc releases and convergence
Pipeline and workflow for converting library titles into 3D
Supervised accelerated & acclaimed conversions of Green Hornet and 2012 for Columbia Pictures.
Consulted on and assisted with the 3D workflow on Columbia Picture’s The Amazing Spider-man.
Our industry leading seminar has taught the principals of high quality 3D to over 4,000 cinematographers as well as hundreds of directors, producers, visual effects supervisors, and art directors.
Won the 2012 International 3D Society’s Sir Charles Wheatstone Award for our efforts in industry education.
Provided consulting and cost effective on-set supervision for Screen Gem’s Battle of the Year in 3D.
Published a widely distributed white paper demonstrating our workflow for shooting 3D on a 2D budget showcasing Battle of the Year and 3D episodes of Days of our Lives and Happy Endings.
Worked with UK production companies, including Sony Pictures Television’s Left Bank, to produce three 3D episodes of Christmas Crackers for the Sky network as part of an outreach program getting international production companies on board with 3D.
3DTC now members of the International 3D Society’s Board of Governors helping influence & create policy while expanding adoption of 3D.
Showcased Sony technology and workflows in numerous filmed promos including Road to the Oscars, Forbes, and an upcoming 3net special.
FY13 Budget: N/A (Covered by Sony Corp) FY13 Headcount: 2
28
SP Tech Three Year Plan
Sony Pictures Technologies – FY13 Three Year Plan Review
29
SP Tech EBIT Improvement Plan - Summary
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
30
SP Tech EBIT Improvement Plan – SP Tech Operations
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
31
SP Tech EBIT Improvement Plan – Colorworks
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
32
SP Tech EBIT Improvement Plan – WPF Manufacturing
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
33
Chris Cookson,President SP TechnologiesExecutive Dept
• Production & Post Production Technology Vision and Strategy• Administration of SP Technologies Division• Content Preservation and Distribution• Digital Strategy and Policy Development• Application Development• Sony Product Technology Strategy Alignment• Sony Corp Strategy Alignment
Charlie FalcettiExecutive Vice PresidentProduction Services (Studio Ops, Sound, Colorworks)
• Digital Intermediate Services• Trailer Finishing• TV Finishing• Creative Editorial Services• Asset Restoration Services• VFX / Cosmetic Fixes• Theatrical & HE Deliverables
Spencer StevensExecutive Vice PresidentTechnology Development
• Digital Media Technology Reserarch and Development• Format Standards Leadership• Studio-wide Technology Initiatives• Digital Asset Management • Digital Workflow Automation• Forensic Watermarking & Content Fingerprinting
Mitch SingerExecutive Vice PresidentDigital Policy Group
• Digital Licensing Policy and Strategy• Digital Entertainment Content Ecosystem (DECE)• Worldwide Anti-Piracy / Content Protection• Content Protection Technology Evaluation
Terri Davies,Executive Vice PresidentWPF Client Operations
• Manage Content Preparation and Fulfillment• Supply Chain Management• Metadata Procurement, Creation & Maintenance• Content Protection• Quality Control
Proposed Functional Org Chart
SPE Confidential
Grover CrispExecutive Vice PresidentWPF Asset Management
• Asset Restoration & Preservation• Supply Chain Management• New Release & Catalog Mastering• Asset Storage and Global Logistics
Studio Services
( Gary Martin)
Sony Pictures Technologies – FY13 Three Year Plan Review
34
Headcount
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
35
Strategic EBIT Opportunities & Considerations
SPE Confidential
In addition to the aforementioned cost reduction opportunities, the following are other strategic opportunities
for management consideration that may provide additional cost reduction / profit improvement for SPE
These ideas are conceptual and will require further analysis and collaboration to determine their viability
The common foundation for these opportunities is the leveraging of SP Tech infrastructure and competencies
across on-going SPE business activities
Opportunity: Dubbing Spend Leveraging
Opportunity: Projector Room Networking
Chris to provide details if needed
Sony Pictures Technologies – FY13 Three Year Plan Review
36
Strategic EBIT Opportunities & Considerations
SPE Confidential
Opportunity: On-set File Based Workflow
Opportunity: DCP Versioning
Opportunity:
Appendix
Sony Pictures Technologies – FY13 Three Year Plan Review
38
FY13 Overhead Budget: SP Tech Operations
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
39
FY13 Budget: Colorworks
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
40
FY13 Overhead Budget: WPF Consolidated
SPE Confidential
Sony Pictures Technologies – FY13 Three Year Plan Review
41SPE Confidential
Overall DMG System Usage
3908
3
3923
4
3938
7
3953
9
3969
2
3984
5
4000
3
4014
8
4029
9
4045
2
4060
3
4075
6
4090
9
4106
10
20000
40000
60000
80000
100000
120000
140000
DMG Systems (monthly transfers in GB)
EAGL Downloads
EAGL Uploads
cSHARE Downloads
cSHARE Uploads
ACORN Downloads
ACORN Uploads
Sony Pictures Technologies – FY13 Three Year Plan Review
42
SPE Confidential
Territory Growth
Jan-11 Jan-12 Jul-12 Nov-12 Q1 - 20130
20
40
60
80
100
120
140
160
180
Active Territories
Active Territories
January
2011January
2012July2012
November2012
Q1 2013
Active Territories 14 44 73 132 163
Percent Growth -- 175% 66% 81% 270%
Sony Pictures Technologies – FY13 Three Year Plan Review
43
SPE Confidential
39% increase across Q3 & Q4
CURRENT
TotalRegion EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW)
Product Features Features Features Features Features (BZ) Features Features Features Features Features TV TV # of Territories 27 10 1 15 1 2 0 0 15 2 2 6
# of Partners 24 1 22 3 2 5 0 0 6 8 2 11 Acct-Territories (by Territory) 116 10 22 18 2 8 0 0 19 16 4 29 Acct-Territories (by Manager) 116 22 18 10 0 0 19 20 29 234
NEW
TotalRegion EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW)
Product Features Features* Features Features Features (BZ)* Features Features Features Features* Features TV TV # of Territories 7 12 3 16 5 11 32 6
# of Partners 1 1 1 1 1 1 1 Acct-Territories (by Territory) 7 12 3 16 5 11 32 6 Acct-Territories (by Manager) 7 12 3 21 11 32 6 0 92
* includes YouTube/Google BZ, IN, RU
TOTAL
TotalRegion EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW)
Acct-Territories (by Manager) 123 34 21 31 11 32 25 20 29 326
Account-Territory Growth