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Peter Guber: The Films Are All Right Despite Drop in U.S. Ticket Sale

Daniel Gross
Fin - Daily Ticker - US

Fresh from the Oscars, where one of his films, The Kids Are All Right, was nominated for Best Picture, producer Peter Guber, swept into the NASDAQ Marketsite to discuss movies, sports, and his new book, Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story.

Guber has had a long and storied career as a producer (Rain Man, Batman, Bugsy, etc.). Sunday night was the 26th time he attended the ceremony, and the fifth time one of his films was nominated for Best Picture. And what did he wear? A tuxedo made in China.

Ratings for the show were off, down 10 percent from 2010, with 37.6 million viewers. And reviewers generally gave the show, co-hosted by younger actors James Franco and Anne Hathaway, poor reviews.

"It's a very long show, and we're in a world where everything is being compressed into 140 characters," Guber says. And the attempts to engage younger audiences via social media didn't really work: "There was a lot of celebrity tweeting and wardrobe and costume tweeting," he notes, but the story of the Oscars didn't really come through.

Of course, the sheer size of the U.S. audience no longer matters — for the Oscars or any other show. "The reality is that the new language [surrounding media] is how deep, how resonant, and how actionable is that audience," he said. Advertisers want to know how engaged an audience is in the content they sponsor and how effective the medium is at converting viewership to sales.

To Bollywood & Beyond

What's more, the Oscars and Hollywood at large shouldn't focus exclusively on domestic market share. While box-office receipts in the U.S. and Canada were stagnant in 2010, international box office sales rose 13 percent, according to this report from the Motion Picture Association of America.

Between 2007 to 2010, the foreign (non-U.S. and Canada) share of the global movie ticket market rose from 63 percent to 67 percent. This year, that share is likely to be much higher. U.S. ticket sales are down sharply so far in 2011.

As Guber notes, there are about 300 potential moviegoers in the U.S. and 7 billion in the world. "What would you want five percent of?" he asks. "These big global companies -- whether its Rupert Murdoch's Fox or Time Warner, or Sony -- want to serve a global market. That's where the return is." That's why the big studios are investing so much in huge, franchise movies that they hope will appeal to a global audience.

Guber has lived through tumultuous periods in the industry, including a stormy period at the helm of Sony Pictures in the 1980s. Is the basic business of making movies and having people pay to watch them intact and functional? "It's not intact per se, and it's a little bit functional," he says.

These constants remain: artists want to tell stories and audiences want to hear them. "Those two ends of the food chain are permanent," he says. "It's the model in between that lets the artist get paid" that has to be reworked. Guber foresees a future in which movies are released in a range of formats simultaneously: "Everything all the time, at once, with different price points, with different benefits, for different audiences."

The Business of Sports

Guber is involved in another media/entertainment industry whose business models have come under scrutiny: professional sports. He's a co-owner of the Golden State Warriors and of several minor league baseball teams, including the New York Yankees Single A (Staten Island) and AA (Scranton) affiliates. (Which explains why a guy with a Boston accent sports a large Yankees ring.)

The commonality between Hollywood and big-time sports — aside from large egos, superstars with massive salaries — is the potential for live spectacle. "Live events have a unique element. They compete favorably against the Internet."

Guber, who once tried to purchase the Oakland As, says he's not interested in bidding in the minority stake of the New York Mets that is now up for sale — for two reasons.

First, "you want a team that's close to you," he says. "You want to be at the games, see how the concessions are bought, how merchandise is moving, how the media is treating you. If you don't do that, you're an absentee owner."

Second, unlike in the movies, there's little joy associated with being a minority owner in sports. "The idea of who controls the enterprise matters," he said. " You want that ball in your hand in the last couple of seconds of the game, wherever it is."

Interested in entering a drawing for a free copy of Tell To Win, send an email to talkyourbook@yahoo.com.

Daniel Gross is economic editor at Yahoo! Finance

Email him at: grossdanielll@yahoo.com; follow him on Twitter @grossdm

See his columns here.