T he Journal on Sports and Entertainment Law recently sat down with Professor Ken Basin to discuss current issues in entertainment law. Ken Basin holds adjunct faculty appointments at Harvard Law School, UCLA School of Law, and Southwestern Law School. He also serves as Vice President, U.S. Business Affairs for Sony Pictures Television.
The interview was conducted by Loren Shokes, an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2017). The interview is the second in JSEL’s new interview series with lawyers in the sports and entertainment field that will be featured on JSEL’s website. It has been edited for clarity.
**Please note that, throughout this interview, Mr. Basin was speaking in his capacity as an individual and a scholar, and not as a representative of Sony or any of Sony’s affiliates.**
1. Loren Shokes, Journal on Sports & Entertainment Law (JSEL): In regards to last year’s now infamous hacking scandal, how do you see Sony and other major corporations changing and responding to prevent another cyber attack of this level?
Ken Basin (KB): The Sony hack showed everyone that they’re vulnerable. Sony was fortunate to have business partners who were understanding and accommodating during a period when Sony was severely hamstrung in its business for a while — in part of out of an attitude of, “there but for the grace of God go I.”
In the world of cybersecurity, one of the big lessons we’ve learned is that if someone wants to target you, there’s very little you can ultimately do. For example, you can make yourself less appealing to a car thief, by using a Club or a car alarm, but if they decide they want your car and they’re skillful, there’s not a lot you can do about it.
2. JSEL: In the wake of the successful special release of The Interview via various streaming platforms such as Netflix, do you think an increasing number of studios will premiere films this way? Secondly, do you think we will start to see a decrease in the number of movie complexes as a result?
KB: The Interview was an interesting test case, but one that was very affected by unusual external factors. Independent of anything that happened with The Interview, there is a broad shift and trend toward innovation in distribution models. But it’s difficult because there are a lot of established and entrenched interests. Making money in entertainment has always been about effectively dividing up territory, media, and time. Technology creates opportunities to do that in new and ever-finer ways, but the people who have relied on historical windows and processes are still trying to protect their corner of the industry. If you look at what Amazon and Netflix are doing with their original movies programs, you can see that there are people who are going to try to mess with the old model, but you can also see in the reactions of the exhibitors, who have threatened not to screen these movies, what the backlash looks like too.
But there are a few companies that are well positioned to try this kind of experimentation. Mark Cuban owns Magnolia Pictures (the distributor) and 2929 Productions (the producer), as well as HD Net (the TV network), and Landmark (the exhibition chain). By being involved in all of these different phases in the process, and with his general maverick (no pun intended) attitude, he’s shown a lot more willingness and ability to play around with things. He’ll go day-and-date with theatrical and digital releases. Sometimes, after you go and see a Magnolia movie at a Landmark theatre, you can buy the DVD of the film you just watched on the way out.
I think that after the late 1990s and file-sharing, Napster, Grokster, there was a big question raised as to whether customers are willing to pay for content anymore. And I think they still are willing to pay for content — they just want to pay for it where they want it, when they want it, on the device they want it, in the format they want it, and they only want to pay for it once. It’s inevitable that there’s going to be movement towards meeting that imperative, because that’s way that people will retain the loyalty and interest of consumers going forward.
3. JSEL: Record companies and networks are always trying to come up with new and innovative ways to prevent piracy. For example, Beyoncé released a surprise album and Rolling Stone said that the fact that the album did not leak in advance of it being released is nearly unprecedented in today’s music market. Additionally, Game of Thrones, the most pirated TV show in the world, is combating pirating by simultaneously streaming each episode of the new season throughout the globe. My question for you is what mechanism do you feel is most effective at preventing pirating or is pirating now inevitable?
KB: I think a certain amount of piracy is inevitable, but ultimately, the best way to combat piracy is to try to meet customers’ demand for the content where they want it, when they want it, on the device they want it, in the format they want it, without having to pay for it multiple times. I think that piracy, for many years, has in some way been a superior product. Independent of price — obviously, it’s cheaper — it has been easier to find content illegally than legally, or to find illegally it in an HD format, or in a format that is compatible with the devices customers want to use. But the industry is making moves toward making legal content consumption a good, desirable product. Websites like Can I Stream It?, and other similar sites, are making it easier for customers to identify where they can get content legally.
Studios, networks, distributors, and other buyers are constantly negotiating with one another about windows and holdbacks, often trying to make content available to customers more quickly. I think that the competition for customer attention among different media and devices has actually been really great for the theatrical movie going experience. Movie theatres have to compete and create a value proposition for why customers are going to leave the comfort of their home, where they have a really big High-Definition TV and probably a decent sound system, and go out, hire a babysitter, and pay money. So the screens are getting better, the sound systems are getting better, the food and drink situation is getting better. Food is becoming more premium, you can get drinks. Theatre chains are trying to create a complete night-out experience, built around the movie, in a way that really restores the experience from what it had sunk to in the 1990s, when there was complacency among the exhibitors because they still were the first, last, and best way for people to access movies.
Ultimately, customers are willing to pay for content, but you have to make the paid, legal option a good customer experience and a good product experience, and then they will find it.
4. JSEL: With so many people cutting the cord and turning to YouTube and other online viewing services such as Netflix and HBO Go, how do you see television companies responding, and how can they stay relevant and continue to turn a profit?
KB: I think that, first of all, it’s important to take a broad definition of what TV is. You can certainly talk about traditional television companies, but I think of “TV” as “audiovisual content delivered to customers in their home or wherever they are.” Essentially, content that comes to the customer, rather than forcing the customer to physically come to it. By that definition, all of these digital distribution streams, and even all of the original short-form content on YouTube and Vimeo and platforms like that, are a form of TV. You have to think about that broadly, especially once you consider how creative preferences and consumption habits of people between ages 13 and 18 dramatically differ from the preferences and the consumption habits of people in older age groups.
Traditional media companies still have a place in the ecosystem. They’re still an incredibly important source of a certain type of content that’s difficult for others to create. High-value, premium, long-form content requires big investment, big bets, and the financing model requires carrying significant deficits. It’s not content that just anyone has the expertise, physical resources, or the finances to make, and there’s still desire for that kind of content. The success of HBO and Netflix, in their original content programs, demonstrates a hunger among customers for very high quality, high production value material. There will always be a place in the marketplace for companies who can deliver that.
But I think that we have to get away from thinking of TV as any one type of content or any one type of distribution stream. TV used to be a technological term; not a creative term and not a business model term. TV meant content broadcast over the airways via UHF or VHF signals. That kind of definition is insufficient now. If that’s the only place you look for your business model, you’ll run into trouble. But if you take a wide view, opportunities abound.
5. JSEL: Can you tell me more about your career path and what drew you to entertainment law?
KB: I went into entertainment for the same reason I think most people go into entertainment. I wanted to work in an area I found personally interesting. I’m not good enough as a writer or actor to actually do that in any professional or semi- professional sense, so I had to get in on the support service side.
I find it to be an incredibly interesting business. I think that the business side is really fascinating and dynamic. Entertainment is more responsive to changes in technology, and to changes in the overall thrust of the economy, than a lot of other industries. It requires a certain nimbleness, adaptability, and creativity.
It is not boring. I can make a deal and work on it for months and months and months, and six months later, it’s time to make a deal with that same party, and we can’t copy the one from six months before, because the business models have changed, or we now know more about how things are working than we did six months before, and we have to adjust things. For me, it’s just a dynamic area, and by time I was halfway through law school, I never really looked at working or practicing in any other field
6. JSEL: What advice would you give law students interested in pursuing careers in entertainment law?
KB: First and foremost, you have to be proactive. The entertainment job market is like any other job market — it replies to supply and demand, and there’s a far greater demand for these jobs than there is a supply. So you can’t be passive; you can’t rely on the conveyor belt career paths and assume that an opportunity will present itself. It’s a very relationship-driven business. It’s a very geographically-focused business, between LA and New York, so you’ve got to put yourself out there. Meet lots of people and find an opportunity to demonstrate talent and expertise in front of the people who are already doing it.
You have to be targeted. If you’re not going straight into an entertainment company, know the types of companies or firms that work with those sets of companies, and will provide those gateways to those relationships to create those access points. Once you are within the industry, it’s a very dynamic place and there are a lot of professional opportunities and a lot of mobility. But that first job in the industry is absolutely the hardest one to get. Doing the easiest, most obvious thing, and not putting yourself out there in a specific way, is really unlikely to get you there.
At the same time, you need to recognize that there’s an element of luck. Everybody who is successful in the industry, I think, has a story about how they got that first opportunity that was hard to find. There’s always some element of, they met somebody at a random event and really hit it off, or they were at the gym and the person using the locker next to them happened to be in a senior role at a company, and they got to talking and the person invited them to come to an interview. That kind of serendipity is very important, but you have to do all of the groundwork to create the circumstances for happy accidents to happen.
7. JSEL: [In 2009, Ken Basin appeared as a contestant on Who Wants to Be a Millionaire and missed the million dollar question. We re-asked him that question.]
For ordering his favorite beverages on demand, LBJ had four buttons installed in the Oval Office labeled ‘coffee,’ ‘tea,’ ‘Coke’ and what? A. Fresca B. V8 C. Yoo-hoo D. A&W.
KB: The answer’s definitely Fresca.