 Live from Las Vegas, it's theCUBE, covering NAB 2017, brought to you by HGST. Hey, welcome back, everybody. Jeff Frick here with theCUBE. We're at NAB 2017 in Las Vegas, California, 100,000 people all talking about broadcast industry, media industry, and tech. Met is the theme because the technology is completely interwoven in with media and entertainment. And we're excited to have a great representative from the Hollywood section manager, society, motion picture, and television engineers. That's a mouthful. Steve Wong, Steve, welcome. Welcome, or Semti. That's the easiest. Semti, I'll go with Semti. He's from Semti. All right, so you had an interesting talk earlier about blockchain, that's interesting. We've been here for a couple of three days and a lot of conversations of kind of similarities with trends we're seeing at other shows that we cover with democratization of data and access to the data and the abilities of cloud and integrated security, but we haven't really talked about blockchain, but I think that's kind of funny that now we're hearing the blockchain conversation come in as we hear in many places. Where does blockchain fit? You know, it's really interesting because, you know, originally I heard of blockchain for folks in the financial industry, and that's where the real big push is. And a lot of VCs were talking about blockchain. So I started to look at blockchain and media and entertainment, and I said, you know, could this fit? You know, what would be an interesting fit for this? And when you look at, you know, making a movie or a television program, it's just a lot of transactions. And that's where blockchain is absolutely perfect. You know, blockchain is basically a general ledger entry. So when you think of, you know, why is that important? You know, I look back to the origination of content, you know, for moving images, and that's a feature film script or a television script. So imagine when you write that, the first thing you do is you go and you register it with the copyright office. So my thought is that's your first chain in that link of ownership. And so the next thing you do is you want to option that script off. So you're going to send out a document, you're a PDF to your agent, he's going to send it out to a bunch of other agents. And then you'll have a track record of that next transaction, whoever received that. So as you go down through that production, you know, I envision being able to tie back to that original ownership of that script, whoever options this script to go out into the production, they actually take that all the way down to the storage, to the camera and be able to pull even all that metadata together, link it to the ownership into that chain, all the way to the distribution to the actual viewer at the end of it. So. The greatest descriptive term I've heard of blockchain is trust as a service. Which is really an interesting way to point it. And what's interesting about this industry is the transient nature of the way, you know, kind of groups of people and resources are assembled around a particular project, the script in which you describe. They create this asset and then they, you know, they go poof, they go back from whence they came. So it really begs for better trust solutions. So imagine you're, you get a deal with a show and they say, you know what? We're going to pay you a rate, but we're going to give you a percentage of the back end. You say fantastic, then you go on to your next project. How do you find that out? Right now it's really difficult to track that all the way back residuals or whatever. This would be an easy way to basically see who's seen it, who gets paid, what your road and everything else. Now it's pretty crazy now you said before we turned on the cameras that it's all very, very still old school paper based at this point in time. That's the crazy thing about, you know, you look at other industries, you know, and I touch a lot of industries and you think, wow, you know, we've got basic things such as, you know, when I start with employer, I can go online and download all my stuff and I never touch paper. But even today, the television industry in the motion picture, you know, for 99% of it, it's all paper. So basically all my stuff, I have to physically give them and fill out, you know, documents at the end of the day. You know, a PA checks me in when I show up. A PA signs when I send out on a piece of paper. They send it into football back to the financial office at the show and they do all this thing manually. You know, it's coming to where it's, you know, they're doing digital onboarding. All this stuff is still paper because really it's like we've been making movies for the last 100 years. Right. And yet we're surrounded at this conference with hundreds of thousands of square feet of new technology and new innovation and computer-based stuff and IP-based stuff and crazy cameras and 360 cameras and 4K and 8K and HDTV. So clearly there's no holding back the technology edge that this industry leverages, but then they're going to check in with the PS. But if you make billions of dollars, right? If you make billions of dollars the same wave that you did 100 years ago. Right. You know, who's going to be the guy that's going to change that or a girl, right? That's the challenge. If it's, you know, not broke, don't fix it. That's why I love Clayton Christensen's book. It's still my all-time favorite book, right? It's hard to change when you've been making money. That same old way. So what are some of your other impressions of the show? You've been coming here for a number of years. The vibe's different, I keep hearing. It's our first time, but I'm curious to get your kind of general impression. The interesting thing is, again, following the trends in other industries, you know, it's moved to a true digital IP workflow. So I'm seeing that really starting to materialize around here. You know, I think of the challenges. You know, when I started off 100 years ago on television, I was a de facto MIS manager and director of research at ABC. And back in those days in the 90s, you know, I connected our sales team to the internet and they can actually send emails to the buyers. And that was like a big jump. That was a bad day, though, in hindsight. Yeah, so you see folks at, you know, understand video and BNC cables and things like that. Right, right. You have another group that understand Ethernet, you know, NIP. And they have always been in two different worlds. You know, at every TV station, you have your IT guy that would never touch the broadcast equipment. He was forbidden there a long time ago. But now you see that merger, you know, where you really have, you know, a manager or a VP that understands video and understands IP and says, this is a better way to do that. And it's secure nowadays. And, you know, if you take the right precautions. So that's the trend that I've seen change around here. Because the cameras are all digital, right? Right. Everything is digital along that path. Why would you have to go back to video? Right. You know, we have things like Periscope. We can do live video to millions of people. Right. So the technology is clearly here. It's just so amazing, you know, again, the themes are consistent wherever we go. There's just democratization of access and ability that I can go sit in the front row of a Dodger Giants game and, you know, hold up my Periscope and I can be pretending I've been Scully, you know, for a minute, which clearly I'm not. And people probably, I'm not going to watch me like they love Vince Gully. But it's just so interesting that at the low end, you know, there's so many tools available for people, for creators that they just have access that they didn't have before. At the high end, I mean, the amount of stuff in this conference, again, with the 360 and the VR and the IR and the 4K and the 8K, it's fascinating. But it just sometimes wonders, is it too much? Are we still managing, you know, the storytelling? And is it? That's what it comes down to. You have to tell a story. And it's so competitive for the audience, right? Because the alternate is just a quick swipe away. So it seems like the pressure to perform and to get to ROI, especially on these bigger projects, it's got to be higher than it's ever been. This is an interesting thing because what we've seen in Hollywood is an increase of production. You know, it used to be, you know, you'd wait, you know, for a TV season and they'd pitch the shows to the advertising agencies in New York. But now, with the increase of Netflix and Amazon, there's always a season because they're always buying things or whatever, you know, YouTube channels. You see YouTube stars that are making money and that's a valuable audience now where people are saying, I'll just watch YouTube tonight and see what's going on there from the people I like to follow. So that drives production, you know, goals and costs down because you can't do a $100 million YouTube production or you can't, I guess, but probably won't make any money with it. I'm sure they are. But the other thing, it strikes me, just is the compression for feature movies around the opening weekend because there's only 52 weekends a year and some of those are probably not so great and from the marketing point of view and just compression to make that number because the next weekend or two weekends from now, it's another movie or it's another movie or it's another movie. And so it seems just crazy. On the other hand, the long tail opportunities with BOD and multi forms of distribution, multi language, multi format, multi channel are bigger than they've ever been before. So it's just interesting dichotomy in terms of the way the market's evolving. The interesting thing, because of that pressure, we see a huge growth in analytics. You know, it was a great article from about Netflix and talking about this genres, you know, in Hollywood, we've got like 13 genres or something like that. But Netflix has like 73 genres. So they've broken down their audience because they have the device, you know, they know exactly what they're watching. So they use those analytics to their benefits when they buy, you know, the studios are disadvantaged unless they have the same things. So you see guys like legendary investing in analytics teams and, you know, all these other folks out there that are investing in these analytics teams to make that, you know, a smarter investment for this movie. It is interesting, again, it gets consistent, right? Is that now, if you can track to the consumption of the material, you're not just shipping the product anymore and it's going to a theater and, you know, hopefully people are watching or not watching it, but now if they're watching on their phone, you know, where they're watching it, you know, who's watching it, you know, with time, how often, how deep they go, it's pretty interesting. If you have that application and you have the ability, you know, not like Netflix does, that's awesome. But remember, most of the studios and networks, they're creating it and licensing it off. So they may not get that information, but that's where you see the other trend where folks like HBO, they create the content, but they also want to have that application device so they can get that information. So I think that's another trend you'll start to see. So will the ones that are still independent that don't have the channel, you know, start to get back as part of their channel deals, some of that data? It's challenging, right? Because cable companies typically don't want to release that data. You know, a secondary OTT app may not want to release that data. So it really forces a creator to own that distribution chain so they can get that valuable data. So. Interesting time. Somebody said earlier, I think in the week, that Netflix is now the largest producer. I don't know what genre of category, but they're like one of the largest studios now of all, which is pretty fascinating when they were simply, you know, DVD rental service not that long ago for people that remember where the DVD was. Right. And they had a difficulty getting contracts with studios. Right, exactly. So make your own, I guess that's the ticket. There you go. All right, Steve. So I give you the last word, as you look forward to 2017, if we meet again here next year, what do you think's the topic's going to be? Again, I think what you're going to see is more folks moving to a public cloud, trusting that and really working with it, using analytics. And the most important thing that we touched on is managing that security, making sure they don't get hacked. Right. All right, Steve. Well, Steve from SNPTE, that was a shorter way. There you go. Steve Long, I'm Jeff Frick. Love and bye. Thanks so much. All right, you're watching The Cube from NAB 2017. We'll be right back after this short break.