Digital Supply Chain: Warner Bros.' Next Big Release

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The entertainment industry is rushing to replace an outdated film production and distribution system with a nimble digital supply chain.

When Warner Bros. Entertainment established an umbrella division, the Warner Home Entertainment Group, last October for all business units involved in the digital delivery of entertainment to consumers, it was fast-forwarding the most important technical transaction the studio has made in decades. "The great promise of digital technology … is that consumers will be able to choose how they want to consume content," Kevin Tsujihara, president of the new division, said in making the announcement. "We're entering an exciting time in the entertainment business when the consumer, empowered by new technologies, has an active role in the process instead of being a passive participant."

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Warner Bros. Entertainment, a subsidiary of the Time Warner conglomerate, is in the process of transforming itself into a digital end-to-end business. This change has been largely driven by a fanning-out of how consumers want to consume content, says Charles L. "Chuck" Dages, senior vice president of emerging technology at Warner. "As we watched the consumer go digital, the production systems within Warner have followed suit," he says. "At the front end we're seeing the increasing use of digital cameras by filmmakers, and at other end we're seeing digital distribution through broadband, DVD and HDTV. Then there are pockets in between that have digitized early because of the production advantages of using digital effects and editing digitally."

Warner's digital transformation, which will enable the studio to deliver product electronically worldwide over existing and new digital platforms, comes at the time when the entertainment industry as a whole is moving toward technology-driven transformational change. And none too soon, according to some of the vendors who are trying to move the studios further along the adaptation curve.

"You'd be hard pressed to find another industry that has a more outdated application of I.T. technology," says Thomas Kuehle, vice president of digital vault services, digital photography and entertainment at Hewlett-Packard. "They've spent an enormous amount of money in applying technology to create movies and are very advanced in special effects, rendering, animation, etc. They spend the rest of their money on making content, but when it comes to production-oriented technology that helps create movies and, more importantly, house them, capture them, refurbish them and create the end-to-end workflows for movies or episodic TV—it's a disaster."

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This article was originally published on 2006-10-02
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