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He Passed Up Titanic and Survived

March 2005

STANFORD GRADUATE SCHOOL OF BUSINESS—In his starring role as president and chief operating officer of Universal Studios, Ron Meyer has overseen a string of hit movies, including Best Picture winners Gladiator and A Beautiful Mind. He's credited with boosting the performance of Universal Theme Parks and Resorts in a tough post-9/11 environment and with fostering creativity at Universal Pictures and its small-budget counterpart, Focus Features, and at Universal Television, USA Network, and the SCI FI Channel.

Yet there were bloopers along the way, particularly during his early years at Universal, he told students attending the sixth annual Future of Entertainment Conference, sponsored by the student Arts, Media, and Entertainment Club at the Graduate School of Business.

His biggest regret was passing up an opportunity buy the domestic half of Titanic for just $50 million, Meyer told the March 2 conference. The 1997 tearjerker went on to gross more than $600 million for Paramount, making it the top box office moneymaker of all time. "Every morning for a year, I had to see these grosses, and you can't imagine what it was like—it was like having morning sickness every day," he said to sympathetic laughter. "It's great to be able to laugh about it nine years later, but I felt like such a schmuck."

In an onstage conversation with Stanford Business School lecturer and documentary film producer Bill Guttentag, Meyer reflected on his unusual career path and the challenges of managing creative people in a fiercely competitive business. The son of German immigrants, Meyer dropped out of school at 15 and served in the Marine Corps before landing a job as a messenger at the Paul Kohner Agency in Los Angeles. Later he worked as a television agent with the William Morris Agency before leaving with four other Morris agents to found what eventually became Hollywood's preeminent talent agency, Creative Artists Agency Inc.

During Meyer's 10 years at Universal Studios, the company has had a string of different owners, including the Seagram Company Ltd., Vivendi Universal, and General Electric subsidiary NBC. These days he spends a lot of time in New York lobbying for Universal's interests.

Meyer said the entertainment industry's biggest challenges are "making hits" and combating piracy. He said his own biggest contribution to Universal has been to enhance the company's culture by creating an environment that enables "amazing people" to do their jobs. Sometimes that means Universal puts out products that are not "politically correct"—a new documentary on the 1970s porno flick Deep Throat, for example, recently earned the first NC-17 rating in the studio's history.

Generally, though, "I think we're careful about too much gratuitous nudity, too much gratuitous sex, violence, smoking and drug abuse," Meyer said. "Life is too short to have [a director] who comes in and says, 'Gimme the money and I'll give you the film and tough s-t if you don't like it.'" For studio executives, he said, "our responsibility is to put out the very best product at the best price—and maintain our integrity and our jobs so we can come back to fight another day."

Earlier that day, students heard a spotlight lecture by Charles Hirschhorn, founder and chief executive officer of G4, the only 24/7 television network dedicated to video gaming. Founded in the spring of 2002, the Comcast-owned channel reaches 50 million cable and satellite homes nationwide with an all-original menu of industry news, celebrity interviews, and reviews of the hottest game gear and technology. Nearly all of its viewers are males in the coveted 18- to 24-year-old demographic group.

Before launching G4, Hirschhorn served as president of Walt Disney Television and Television Animation, where he resurrected The Wonderful World of Disney, and as vice president of development for Fox Broadcasting. Now, with his new video game network, "it's all about awareness, marketing, and building an audience," Hirschhorn told the audience. "The channel exists but very few people know about it."

Hirschhorn's talk was preceded by several lively panel discussions, including a discussion of the challenges of creating and maintaining a "cool" brand. One of the speakers was consultant and strategic planner Robert Thorne, who spent 15 years guiding the careers of twin television child stars Mary-Kate and Ashley Olsen. Through his company, Dualstar Entertainment Group, Thorne grew the mary-kateandashley brand into a $1 billion international fashion, lifestyle, media and entertainment empire-the largest girls' brand in the world.

Thorne and his fellow panelists, sports and entertainment consultant Casey Wasserman and brand advisor Alycia de Mesa, agreed that identifying coming trends is tricky—one well-known firm has even been known to organize slumber parties across the country to tap into what young girls are thinking and buying. "But, really, it comes down to street-smarts," said de Mesa, whose clients include McDonald's, Pacific Bell, Xerox, and Charles Schwab. "You have to start by being a sociologist and listening to what's going on."

Thorne countered that when he was working with Mary-Kate and Ashley, he relied more on his gut instincts than market research. "Real leaders in brand-building create the demand," not the other way around, he said. Casey, whose Wasserman Media Group specializes in endorsements and sponsorship strategies for sports superstars, agreed. "Trends are not artificially created. They come from the bottom up."

For example, Casey said, if surfing videos don't appeal to their core audience—dudes who frequent surf shops—they'll never sell in larger stores like Best Buy. Likewise, putting a popular rap artist's latest CD in Wal-Mart "could be the kiss of death," Thorne said. The trickiest part of expansion, he said, "is to do it and have people still think it's cool." Agreed de Mesa, "It you extend brands into inappropriate places, you going to run [the business] into the ground."

Other panel discussions at the day-long conference focused on recent and emerging trends in digital media, investment opportunities for entertainment and media startups, trends in the gaming industry, the future of motion pictures, the effects of changes in the music industry, and trends in TV programming.

The conference was organized by the student Arts, Media, and Entertainment Club and Stanford Graduate School of Business, with sponsorship by JP Morgan and McKinsey & Co.

—Theresa Johnston

Stanford GSB News

He Passed Up Titanic and Survived

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