Webcast transcript
Willy Walker: Thank you, Susan, and good afternoon to those of you on the East Coast and good morning to those of you on the Mountain and Western Time Zones where my guest today, Ambassador Charles Rivkin, and I both happened to be in the Mountain Time Zone. Charlie, it's wonderful to have you here. And I'm going to jump into a quick bio on you before I get to our discussion.
Charles H. Rivkin is Chairman and CEO of the Motion Picture Association (MPA). He leads the MPA’s global mission to advance and support the film, television, and streaming content industry. Drawing on almost 30 years of experience as a media executive and a leading U.S. diplomat, Rivkin advocates for policies that drive investment in film and television production, protect creative content, and open markets.
As chief executive, Rivkin is also responsible for the MPA’s iconic movie ratings system, which has served parents and moviegoers for more than 50 years. Prior to joining the MPA, Rivkin was the U.S. Assistant Secretary of State for Economic and Business Affairs.
And prior to that, he was the United States Ambassador to France and Monaco. During his posting, Rivkin was personally awarded the Légion d’honneur with the rank of Commander by the President of France. He also received the city of Paris’ highest honor, la Grande Médaille de Vermeil de la Ville de Paris, and was presented with the U.S. Navy’s Distinguished Public Service Award. Before his government service, Rivkin worked in the media and entertainment sector for more than 20 years. During that period, he served as President and CEO of Jim Henson Company, home to The Muppets and other award-winning film and television franchises and beloved characters. Ambassador Rivkin received his bachelor’s degree from Yale University and an MBA from Harvard.
So, Charlie, first of all, thank you again for joining me. Your career is expansive, wildly successful and crosses three distinct industries, but sort of professions is, I think, better because when I think about industries, I think about you went from the media industry over to the natural gas industry or something of that nature, but to have been in business and then foreign policy and politics and then on to advocacy in your current role, I want to come back to how you've led successfully across those distinct industry or professional groups. But you had a wonderful role model leadership from your dad, who was U.S. Ambassador to Luxembourg. What was it like growing up as the son of an ambassador?
Charles Rivkin: Well, Willy, first of all, it's great seeing you. I do apologize for my background here, but I'm in Sun Valley, as you pointed out. It's an honor to be part of the Walker Webcast. And I really appreciate you, even including me. You mentioned my dad. My father was John Kennedy's Ambassador to Luxembourg, and then he was Lyndon Johnson's Ambassador to Senegal. Sadly, he died while serving as Ambassador in Dakar when I was only about five years old. So, I didn't know him as well as I'd like, but I was inspired by him. I wanted maybe one day to be an ambassador the way a kid that loves baseball would love to play for the Yankees, that was never going to happen. But I wish he could have seen me in that role. But something tells me he was with me. But I wanted to point out that when he died, Hubert Humphrey was the Vice President. He was my godfather. And so, he helped us create an award at the State Department called the William Rivkin Award that Honors Intellectual Courage and Constructive Dissent, meaning that the only award named in the U.S. government for people who respectfully disagree with the U.S. government bears my family's name. And it's been going on since 1968, so I'm very proud of that.
Willy Walker: So, Charlie, for a moment there, Godfather Hubert Humphrey, Vice President, United States, a father who was an ambassador. I mean, you were all around politics growing up. Did that say, I got to get to that someday in my life? Or was there actually a sort of the reverse of that sort of saying that may have been what my dad did, but I'm going to chart a new path.
Charles Rivkin: I have a picture on the wall of my office in Washington of me at around seven years old or so at the 1968 Democratic National Convention in Chicago with my godfather, Humphrey. That is still on my wall because he was an inspirational figure. From my standpoint, although I wish I had known my dad better, as I mentioned, I think public service is the highest calling. And I was a little bit afraid of jumping in and becoming a full time Foreign Service officer when I was younger. But I had the chance now to serve at State for eight years. It was very fulfilling.
Willy Walker: So, you mentioned growing up maybe thinking about being a baseball player, but you're actually a singer and you were a member of the Whiffenpoofs when you were at Yale. Do you ever think about actually trying to become a professional singer or was it more of a hobby?
Charles Rivkin: Well, I guess I'm aware of my own limitations. But being with the Whiffenpoofs, which is the oldest a cappella singing group in the country, I was 22 years old, and I had a chance to travel all around the world, from Beijing, Cairo, Bangkok, Tokyo, and really see things that I never thought I'd see. So, it was an incredible experience. And it was for me, it wasn't so much that I wanted to be a professional singer because I didn't have those chops. But I love being surrounded by creative people, and that's one of the reasons that I pursued a career in the entertainment industry, because I'm inspired by creativity and creative people, even though I wouldn't hire myself to write that incredible script or produce that amazing film.
Willy Walker: So, you went to HBS. Why HBS versus the Kennedy School? Given the long-standing sort of connectivity to politics, and potentially going into it at some point in your career.
Charles Rivkin: One of the reasons I went to HBS, and I know you did as well, is its proximity to the Kennedy School. So, I actually intended, when I went there to take courses at Kennedy and to really take advantage of all the resources that Harvard University had to offer. Sadly, I didn't do that. I really just focused on the MBA. But why an MBA? My grandfather ran a children's clothing company, and I always was fascinated by his career because when you give somebody employment, when you give them a job, you change their lives. In many ways you change the community and change society. And I love the idea of being a CEO of my own business and helping to grow and be part of the local community, but also make a difference on the international stage. I didn't know what kind of business I wanted to go in at the time, but I knew I wanted to be in business.
Willy Walker: You've said before, Charlie, that economic development is such an important component of foreign policy and your comment there as it relates to getting an MBA versus going to the Kennedy School. I mean, in your current role at the Motion Picture Association, one of the great parts about it and your background is just the amount of exporting that the Motion Picture Association does as it relates to selling films abroad. Talk for just a moment about how that focus on economic development played into your overall career, both in the public world as well as in the private sector.
Charles Rivkin: Well, economics is one thing in my business, but we also are an enormous source of soft power and cultural exchange. Jim Henson believes that media, if used properly, could be an enormous source for good in the world. I was attracted to his company, the Jim Henson Company, where I first started working out of business school because he had almost a double bottom line. He wanted to make the world a better place, and he also wanted to make money for his shareholders and grow his business in the entertainment business at large. What I represent now, the Motion Picture Association is 100 years old this year, and we represent the six largest entertainment companies in the world. Our industry is pretty extraordinary because we are one of America's greatest exporters, both of our cultural diplomacy, cultural assets, as well as our economics. We export about four times what we import in the entertainment industry, and we sell to about 131 countries around the world with a positive trade surplus with every nation on earth where we do business. Because what we make here in America, the industry was largely created in America. The French may disagree with that, but I would argue that it was created in America, and it's something we do better than anybody else, in my humble opinion.
Willy Walker: You mentioned that you were at the Jim Henson Company. You rose to be CEO of the Jim Henson Company and then actually successfully sold the company, there are not too many CEOs who work to sort of sell themselves out of a job. What was it that you and Jim saw at that time as it relates to the opportunity to sell that company at that time? I think you sold it to Fox.
Charles Rivkin: We sold it well. It's interesting, Jim Henson was an amazing human being, and he was one of the most creative people I've ever met in my life. He was one of a kind, and he wanted to do creative things. He didn't want to run a business. He wanted to just play in a creative world. And so, he was intrigued by Michael Eisner at the time at Disney. Michael said, “Let me take the assets you built: the Muppets, Sesame Street, Fraggle Rock. And I don't know how many people in your audience know the Henson properties, he said, “Let me take those and preserve them forever. Let me make sure they live on well past you.” Unfortunately, Jim didn't know at the time that he was going to die at 53 years old, but he felt two years earlier that this was the right thing to do. And then Michael Eisner took him to this theme park, and he goes, “Jim, if you dream it, we will make it. If anything, you want to do, we will make it happen. We need a new Walt Disney at the company.” That was the pitch they made to him, and he was intrigued by it. So, he was able to monetize his assets, preserve them, and then live in a purely creative world afterwards. He never got there because he died tragically. And it was very, very sad for people in our company, of course, but I think for people around the world. He was an amazing person.
Willy Walker: So, you were named U.S. Ambassador to France by President Obama. I guess two things, Charlie, which I've never asked you, which I probably should have previously. When did you first meet Obama and what was it about President Obama that was so compelling?
Charles Rivkin: So, I started to get involved in politics back in 2003 because I met John Kerry's chief of staff while doing a biking trip in Wyoming. He goes, “We could sure use your help in the ‘04 election because in California, he's not doing really well. So, I jumped in and became the head of Kerry's Southern California team and in Southern California, he ended up getting the nomination. Didn't win the presidency, of course. But when Obama was running back in ‘06-’07, he started calling all the people in the Democratic Party who had helped the last candidate. And so, I got calls from almost everybody. I have them my tape, actually, just for historical record calls from Hillary Clinton and you name it. But I only returned one call to Obama. And I said, “Why you, Mr. Senator? And why now? You know, you're a young man. You have a future ahead of you. Why do you want to run for President right now?” A guy named Barack Hussein Obama, whose name was not familiar to most Americans, and it sounded very strange and foreign to them at the time. He goes, “When I am President of the United States, the world's going to look at us differently, and we're going to look at ourselves a little bit differently as well.” And I thought about it and thought, you know, wouldn’t it be nice even if he doesn't win, to support somebody who is as decent and smart and in my mind, an incredibly charismatic as he is. So, I said I'm on board. And he put me with a woman named Nicole Avant who was married to Ted Sarandos, who runs Netflix. Nicole and I were the Southern California co-chairs of his campaign. So, I had a chance to get to know him because I would travel the state with him in small planes and I would introduce him at rallies. And before the bubble, you know, Willy when people run for president, eventually that bubble sets in because there's too much security. There are too many people that want a piece of him. And back when he was a candidate and didn't think he was going to win, I had the chance to get to know him. Did I think I'd be named ambassador? Of course not. I did it for other reasons. Did I even dare to dream I'd be named ambassador to France? No. That was beyond my wildest dreams.
Willy Walker: So, when you were U.S. ambassador to France, you had movie nights on a pretty consistent basis. As far as my understanding, Charlie you used film as a convener, the ability to pull French and Americans in France together to sort of discuss issues and kind of dive a little bit beyond the surface. How did you come up with that? When I listened to that and also, given your current role, I thought it was fantastic that you use this great convening power of film and put people around a table to discuss what you saw on the film and to some degree, a reflection of American society.
Charles Rivkin: Willy, I'm impressed by your research. We did do that. My wife and I installed a screening room in the American Ambassador's residence, and we use film as a way of bringing society closer. A couple stories about that if you don't mind. I don't know what the time is, but you're right. We did movie night. And our movies, American movies, in my opinion, are a reflection of American society, good and bad. We hold up a mirror to ourselves unlike anybody else in the world, and we admit that we're not perfect through our films, but we're telling stories about who we are as a nation. And so, I remember doing a film about the financial crisis. I don't know if it was Too Big to Fail or Margin Call, one of these films. And the French, because of their windowing, don't see movies until about six months after they're released and so American releases back at the time. The highest level of the French government watching movies that none of their friends had seen. And so, they were going to talk about it in society. And remember, I did this one screening and a top minister was in the room. After he watched the film, he said, “You see, Mr. Ambassador, you have destroyed the world, the Americans have destroyed the world with your greed and your arrogance. You've destroyed the world.” I said, “Mr. Minister, we're not afraid to admit our role one way or the other, or at least to shine a bright spotlight on it so we can see whether these things will be repeated. But let me ask you a question, sir. When was the last time that you did a movie in France about the French-Algerian war?” A very sensitive topic for the French, and they've never done that. We did wars about Vietnam when it was still an open wound in our nation. We do these things and other nations, even France's history in film don't.
But two of the quick stories. I'm about to go to France and I know I have to present my credentials to President Sarkozy. He has a reputation for gathering all the ambassadors that he had given credentials, ripping them out of their hands and saying, okay, now you're an ambassador. Whereas Obama would invite each ambassador, his family, into the Oval Office individually. But that was Sarkozy's thing. So, before I went there, Willy, I got a friend of mine at work. My cousin, actually Michael Lytton was my cousin in law, was running Sony and he gave me an unreleased photo of Rita Hayworth, and we put it in an art deco frame. Why? Because a couple of years earlier, Sarkozy gave a speech to Congress, and he said that what he loves about America are Rita Hayworth, John Wayne, Marilyn Monroe, all the great American movie stars of the 50s and 60s. And so, when I got to the Élysée, to get my credentials, he'd already received this gift. And he walked around grabbing credentials out of people's hands. He stops with me, and he goes, “j'adore cette photo! I love that picture. It's in my house.” To think about how every day the President of France wakes up and sees what he loves about America is again the power of our cultural diplomacy and assets.
In a final quick story, Willy, at the risk of boring your audience. So, Sam Jackson came to Paris. And before that, just two days earlier, I had been in what's called the banlieues, a troubled outskirts of Paris, where there's a lot of crime and violence and quite frankly, that's where the terrorist strikes of late were hatched. And I went there because I believe that it's important for people to understand who we are as a nation and not just look at stereotypes. So, I went out there and I said when they were complaining, “What do you like about America?” and these kids in the banlieues said, we love Sam Jackson. We love Will.i.am. We love Jodie Foster, Woody Allen, and Will Smith. And by coincidence, Jackson came two days later, and I brought him out to the banlieues. And even though they didn't think I would, he gave them a tough love speech and he said, “You know what, the American dream or the French dream are the same. You just have to believe in yourself and fight for it.” And he had been a two-dimensional movie star that wasn't even American. He was just a movie star. And when he spoke to those kids, he was an American. So, it's amazing the diplomatic power of Hollywood and the cultural reach of the industry. I witnessed it firsthand. Anyway, there are many other stories like that. But it was a pretty powerful scene.
Willy Walker: So, I have two other stories about when you were ambassador, and then we'll shift to the movie industry. One of them is, I believe you jumped out of an airplane over Normandy and parachuted down on the anniversary of D-Day.
Charles Rivkin: I didn't ask permission before that, by the way.
Willy Walker: Yeah, well, I was going to ask you. It's my understanding, Charlie, from conversations we've had, that you're actually afraid of heights. And so, I was just a little curious how it was a guy who's afraid of heights or who jumped out of an airplane? Because I've never done it before.
Charles Rivkin: Well, and I'll never do it again, Willy. But here's a story on that one. There are 11 military cemeteries in France run by the American Battles Monument Commission (ABMC) that works for the embassy. And there are more American military buried in France than in any nation on Earth except America, and we had a very strong contingent of defense attachés and representation in the embassy. So, my defense attaché said that he wanted me to be the first ambassador to jump out of an airplane with the U.S. Army's Golden Knights on the 68th anniversary of D-Day. I said yes. I was terrified to say yes. I said yes because I wanted to support our men in uniform and women in uniform, and it meant everything to him for me to do that, because nobody else would be so stupid. So, I did it and we went to 14,000 feet. We jumped out with the Golden Knights. I landed in front of, I was told anyway, 25,000 people in the audience for the D-Day Memorial right at summer eglise where our parachutes came down that the night before, 68 years earlier, I was flying and looking down at the same fields that they landed. And of course, I wasn't being shot at. When I landed, I did a live interview in French-on-French television. So, with hindsight, it was pretty risky because I could have had like a 20 mile an hour wind going on. I could have ended up in a tree. I couldn't hurt myself; it would have been embarrassing, but it wasn't. And it was interesting because in the audience was the secretary of the Navy, Ray Mabus, and he had a challenge for me as well as the F-18s.
Willy Walker: I was just going to say so on that, the other one I want to talk to you about, because both you and I have been fortunate (you many more times than I) but I've done it once to fly out on a cod and land on an aircraft carrier and which is really quite an experience and getting launched off on the cod, it was something that I will never, ever forget. But then you went up in an F-16 or an F-18?
Charles Rivkin: F-18 Super Hornet, the ones that are in Top Gun Maverick.
Willy Walker: And did you get launched off an aircraft carrier or did you just take off from an air base?
Charles Rivkin: I'm the only civilian I know of that’s done that. Because I got very lucky because they don't let civilians go on the F-18 teams without the carriers. But Ray Mabus made it happen because he had seen the jump. But you know what was really cool about it and I agree, Willy, landing on a cod, the onboard delivery carrier is pretty cool, but it's windowless.
Willy Walker: Right? If you don't like heights, I don't really particularly like flying in to be in that thing with no windows. That’s the scariest thing that's ever happened to me.
Charles Rivkin: What's fun about that is that these what they call rep events as an ambassador is there were only at the time there were a limit of 11 Nimitz class carriers as the largest nuclear aircraft carrier in the US Navy, at the time. The only nuclear-powered carriers in the world are America and France. We had 11 and the French had one, the Charles de Gaulle. It was about 50%-40% as big as a Nimitz class. So, when I talk French generals, French politicians, French leaders onto this floating city, this magnificent city, and the U.S. Navy is incredible. When you watched from the tower, as you saw Willy, the ballet of the planes leaving and landing and coordinating, it was just unlike anything else. But what I did was I went up there and my pilot's name was Bert (like in the Sesame Street), and I was in the back seat. (I mistook Bert as Bob from the Top Gun Maverick in the movie, there's a guy named Bob who sits in the backseat seat I was in). So, I sit down, have these compression pads on and they say, “Mr. Ambassador, whatever you do, don't touch this button, because that'll blow off the canopy. You don't want that to happen. Don't push this button because that will take all the fuel out of the plane. You won't make it back to the carrier. And whatever you do, don't push this button because that will be the ejector seat and you'll pass out as you hit velocity.” You don't want to touch anything back there, but it takes off. And we went about 6 to 8 G's and the captain, Bert, said, “How are you doing, Mr. Ambassador?” “I gotta ask you a question, Bert. If you love flying so much, how come you weren't in the Air Force?” Bert doesn't answer, and I'm thinking, damn, I hope that the ejector seat button isn't in his canopy as well, and I'm in trouble. But there is silence and all of a sudden the plane just turns like this and goes straight up into the sky, and you realize that these aren't planes, these are controlled rockets and it does something call for anybody who's an aviator in your audience, an “Immelmann loop”. He does two backwards Immelmann loops, and he lands upside down. We're on the clouds, so you're basically when you look at the canopy, you're looking at the clouds and then the earth, you're upside down, flips back to normal. And he says, “Ambassador, did that answer your question?” I said, “Well, Bert, it actually did not answer my question. What you just did over land and would have been illegal. As we cross 17 states, we would have been in violation of almost every airspace you can think of. Out here over the ocean. We can do what we want.” He says, “Mr. Ambassador, if you like to fly, you're a naval aviator.” And I never forgot him saying that. And then when I watched Top Gun Maverick, I mean, those are real scenes. Those guys are in the cockpit, very little CG used. They wanted to have the reality of what the G's on your face look like. And it really shows the power of the American military and our collaboration historically with the U.S. military. The industry has been very strong. You want that projection of what Top Gun Maverick looks like to the world being sent around the world, and that film has done about $1.3 billion so far.
Willy Walker: I want to talk about that in a second, I want to ask you whether you think that it may end up going down in history as not having saved the movie industry, but really revitalized, particularly the in-theater part. But let's jump to the MPA. You're celebrating 100 years at the Motion Picture Association. You said at the top, Charlie, that there are only six members of the Motion Picture Association. I was kind of scratching my head thinking about whether there's another industry association with so few members, and I'm pretty sure there isn't.
Charles Rivkin: The recording industry already has three.
Willy Walker: Oh, is that it? There you go. It’s amazing, though, the influence that just a very few companies have. I guess Netflix has just become a member. But when I read that and then saw the other members, I sort of said to myself, why isn't Amazon a member of the Motion Picture Association?
Charles Rivkin: Well, first of all, it's a great observation. And Netflix, one of the things I'm proud of, I've been at the MPA almost five years now. One of the first things that I did was I brought Netflix on board. I mentioned earlier that I had been running the Obama's Southern California campaign with Nicole Avant, an incredible person who's also married to Ted Sarandos, the CEO of Netflix, and so I've known them for a while. Netflix made a lot of sense because they were making extraordinary movies and television shows and the MPA is film, TV, and streaming. It’s not just film. And so, when Ted was bold and agreed to join, Netflix has been a real core member of the MPA ever since.
But you ask about Amazon and Apple, and you know, Netflix is a pure play content creator, right? So, Apple and Amazon are multi trillion-dollar companies who have other businesses, much bigger businesses than just creation of content. But I would say that if you're going to spend the kind of money that Apple TV Plus and Amazon Prime are spending making incredible programming, I don't see why they wouldn't want to be part of the Motion Picture Association. Apple won the Academy Award for CODA last year, as you guys saw – the first streaming company winning an Academy Award. So, I don't see why they wouldn't want to be it, but I don't have anything to announce today. And I just think in time, if you're going to be making an Academy Award winning product and spending tens of billions of dollars on content, you want to be part of the group that's leading the industry and making decisions on behalf of the industry. So more to come, we'll see what happens there.
Willy Walker: So, you talk Charlie about streaming and how important Netflix is to it. The Motion Picture Association actually put out a research report last year talking about, if you will, the breadth of your industry, because there's a lot of talk about the fact that, for instance, the gaming industry, if you look at just in theater sales and record sales, the gaming industry is bigger than movies and music together. And yet the MPA is very straightforward in pointing out that if you take physical theaters, digital streaming, theatrical and pay television, you put all those together and it's a $328 billion a year industry. And then you add on top of that free television or all the advertising around it, it's actually a half a trillion-dollar industry on an annual basis. I thought it was so interesting.
I guess the question it's sort of a little bit back to Apple and Amazon, it used to be the big five studios before you brought Netflix in and now all of a sudden you have just so many different content providers, creators and kind of new media is something that's very difficult for people to get their arms around. How do you, given that most people think about the MPA, as I go to see Maverick, how do you manage all the breadth of the touchpoints that your constituents have and then all of the changing channels at which they're touching consumers?
Charles Rivkin: That makes the job fun, Willy, honestly. I mentioned that we are film, TV, and streaming. People think of us as the Motion Picture Association of America, but we're a Motion Picture Association that's meant to cover film, TV and streaming for the world. America is only 5% of the world's population. Our product sells to every country abroad. And that's what drives our economics. But you're right, the ground is shifting underneath us. Your statistics are spot on target. Not everybody knows those numbers that you just quoted a second ago. And yet where's it all headed? You know, is streaming going to be the dominant force or theater is going to be the dominant force? And also, how to involve the technology companies like Apple and Amazon that you mentioned. So, to answer your question slightly in a different way, we have brought in Apple TV Plus and Amazon Prime into our Coalition Against Piracy called ACE, The Alliance for Creativity Entertainment, which has about 40 members. It's the Motion Picture Association six plus Apple and Amazon, plus companies like the BBC and Canal+ in France and others around the world. We created it from scratch, and it's the single greatest piracy anti-piracy force has ever been established, and we're in partnership with Apple and Amazon.
I mentioned ACE and can have you talk about that later if you want. I mention it because the key to managing all these diverse interests is finding commonality, finding things that we can all agree on, which, by the way, is the essence of diplomacy at the end of the day. So, one thing we can agree on is that we don't want our stuff stolen by illegal pirates and piracy. By the way, these aren't just the guys on the street corner selling DVDs, these are criminal enterprises. Pirates are mobs, organized prostitution, crime, sex trafficking. This is the kind of people that are stealing movies right now. So, we put a global coalition together to fight it. We're doing really well. But other issues are market access. That's why we get involved with trade deals, copyright protection, IP protection, so we can find even where we disagree, there's always areas where we do agree.
Willy, you mention video games. We both have a good friend who runs a large video game company and follows the industry closely. I talked to the head of the industry association for video games ESA Stanley Pierre-Louis, quite frequently and there are overlapping interests already with video games. A lot of our member studios have video game companies inside their tents. Others are going to be buying video game companies. So, the walls are blurring. The lines are blurring. Entertainment as a force won't be as distinct as it used to be. We're keeping our eye open on that and partnering with the video game industry, partnering with sports teams, which are entertainment for other things. So anyway, the long-winded answer to your question Willy is it's complex because there are regulations for all these things that differ throughout Europe and Asia and around the world. And our member studios don't always agree with priorities because they have different economic interests, but that's what makes the job fun.
Willy Walker: As it relates to trade policy. I was very interested to hear you point out the fact that the replacement to NAFTA, back when NAFTA was put together during the Clinton administration, intellectual property and piracy were not big issues, and so it wasn't a part of the original NAFTA free trade agreement, whereas the new replacement has significant guardrails, if you will, as it relates to intellectual property. And I just thought it was so interesting that some of these trade deals have actually gotten antiquated as it relates to protecting sort of, one of the if not the most important export from the United States today, which is intellectual property through software, through media, through everything else that we're producing.
Charles Rivkin: Well, Willy, as you mentioned, early on in our conversation, I used to be the Assistant Secretary of State for Economic and Business Affairs and in my portfolio, was trade as well as intellectual property protection. So as far as trade goes, we did the Transatlantic Partnership (T-TIP), and we also did the Trans-Pacific Partnership (TPP). When I say we did, we tried to advance these deals. Neither of them got passed. But when you think about it NAFTA was so outdated that the idea of TPP made a ton of sense because you're uniting the two fastest growing regions on earth. The Asia-Pacific and America and the North American contingent were America, Canada, and Mexico. What a coincidence. USMCA is Canada, America, and Mexico. And in spite of all the political rhetoric, the USMCA deal is very, very similar to what would have been signed on TPP just with three nations as opposed to 12. What's fascinating about it is that it does help us protect copyright. What it does is it strengthens copyright protection. USMCA does it in a major way. It also helps with online enforcement, which helps us make sure that people aren't stealing, that our properties that are safe. It helps with market access, getting access to certain areas, the Mexican Canadian markets that we didn't have before. So, we're very supportive of USMCA. We're very supportive of trade deals in general. On a personal level, I wish that we would use USMCA as a way to get back into the TPP 11, which has now changed and unfortunately weakened since we left. But it would be amazing if we could unite the world with that. That's just my personal opinion. I know that a lot of industries, including mine, would benefit from that.
Willy Walker: So, it feels a little bit like movies are back. It's been a great summer. Sales are, I believe, 2X what they were last summer in the summer of 2021 of over $3 billion, just during the summer months. But that's still $600 million below the run rate in 2018 and 2019, I believe. Charlie, what's your sense as it relates to sort of the domestic theater market being back and people actually going back to the big screen?
Charles Rivkin: Willy, we think about that all the time. I would tell you, there's a guy that runs my new NATO, the National Association of Theater Owners, as opposed to the NATO I dealt with.
Willy Walker: (Laughs) That's quite a shift there. I was going to say that it's a little change in lexicon. But nonetheless, just as important, I'm sure.
Charles Rivkin: Just as important. And this guy John Fithian, excellent person, we talk all the time. He'll tell you because he lives the exhibition business 24/7. When you look at movies, I mentioned Top Gun that has done about $1.4 billion right now. Doctor Strange, about $950 million. Jurassic World - $975 million, Minions -$800 million. Love and Thunder - $720 million. Not only are these things back in a major way, but it's not just the action hero movies that I would mention. There's also films like I don't know if you've seen Everything Everywhere All at Once, but this is what they call a platform release, meaning it started very small and grew with word of mouth that's made over $100 million. So, you have kid’s films like Minions platform films. You have Elvis, but I think globally, about $250 - 260 million. But it's a fantastic movie. And what you're seeing is that it's very healthy.
What's more, moviegoing begets moviegoing. For people in the audience, when you go to a film and you see all the trailers you’re like, “I want to come back and see that movie.” And we didn't have that during the pandemic, right? Because people weren't going to theaters, so they couldn't get excited about the next one. And your point about not being quite at the levels of pre-pandemic? Well, I'm not sure our nation as a whole is at the level of pre-pandemic. I keep an eye on the space because the theatrical space remains very, very vibrant. People want to get out of their house. They want to experience what you can see in a big theater. You know, it's been proven that if you want to see a horror film, it's scarier when people to your left and right that you don’t know are screaming at the movie because they're terrified. Or a comedy where people you don't know are laughing their heads off. There's a communal aspect to going to the movies that won't be replaced, and it isn't being cannibalized by streaming, which I know was part of your question, because our theme report that you quoted to me shows that we went from 1.2 billion to 1.3 billion streamers increased 14%. In spite of all the news about the competition, Netflix. At one point it reported a loss drivers got over a thousand, but the overall streaming market is growing. At the same time, the theater market is growing. And our statistics show that the more technologically sophisticated you are, the more electronic devices you have, the more likely you're going to go on to go to the movies in addition to watching it at home. But I will say Willy, one final thing, which is, again, for film, TV and streaming, the theatrical market took a hit during the pandemic. We all know that. But the streaming market went crazy during the pandemic. The large American studios did very well. And thank goodness, because of our incredible safety protocols, we were able to make movies and television shows that entertained people during a very difficult time in their lives.
Willy Walker: So, a quick plug for my friend Jamie Lee Curtis, who was on the webcast two weeks ago. She has Halloween coming out this fall, so to Charlie's point about go watch it in the theater with somebody next to you screaming, I will not be going to see it because I don't really like scary movies. But I also actually saw the finale to it. Jamie showed it to me on her phone and swore me in secrecy about what ends up happening at the end of the film. But it's worth watching.
So, Charlie, one of the things that surprised me in doing some research was that the number of theaters in the United States, I would have thought had shrunk dramatically since pre-pandemic levels, and the number of theaters has gone from 41,200 down to 40,700. So, there have only been 500 screens closed during the pandemic. I was shocked by that, and I guess a little bit maybe because AMC was like one of these meme stocks that everyone sort of said, you know, there's nothing there other than meme investors. And I kind of sat there and said AMC is up 68% in the month of August alone. Is that due to Maverick or is that due to actually, you know, people just playing on this meme theme? And it seems to be on Maverick, it's that people are actually going back to the theaters and that ticket sales are up.
Charles Rivkin: Maverick was one of those movies that was meant to be seen on the big screen. And if you're going to see Maverick, people in the audience that haven't seen it yet, go see it on an IMAX screen with full sound. It's just incredible. Those experiences are really not available to everyone, less than 1% of Americans can have that kind of theater at home. Willy, your point about the movie theater decreases, which is thanks to a lot of things, including the U.S. government stepping in to help theaters with a number of different acts that really made sure to protect it because the film TV streaming industry, you know, has to support two and a half million. This includes the exhibition business. Americans of all walks of life. And these aren’t the stars that walk the carpets. These are electricians and plumbers and makeup artists and hairdressers. They're blue-collar workers that our business is one of the most unionized industries in America. And these guys were at risk of losing their jobs and their livelihood. The American government stepped in to keep it alive and to help with the theater owners as well. And now that we have movies back again, it's going to really pay off for them. So, you're right in pointing it out. But I think, thank goodness we didn't have all these theaters closed during the pandemic. That would have been an absolute tragedy for a lot of workers, but also for America.
Willy Walker: I've heard you talk about when a film crew goes to a city to film in the United States, that that injects about $250,000 a day into the local economy. You just talked about everyone from riggers to painters to all the people who actually support the movie industry. I believe that all six Best Picture films this past year in the Academy Award were all made in the United States. Is that a structural shift, Charlie, or is that a pandemic shift where all that production came back to the U.S. in 2020 and 2021, which made those films that were up this year, but that the film industry will go back to making films in foreign markets just because of the price competitiveness?
Charles Rivkin: It's a complex question. And so let me answer it this way, starting with why some movies were made here. It's because we put together the industry, with all the various unions and guilds put together a set of safety protocols that literally were second to none. And to give you a sense for that, on set contagion positivity rates for our industry were 0.5% compared to 8.6% in other industries in America at large. We have an amazing system of different rings of safety that allowed these movies to get made. The movies that you're seeing today were made during the pandemic, and I think we do that better than a lot of other nations in the world. So, it made a lot of sense to make the movies here.
But the second part of your question is we're a very portable industry. It's very fluid. We can make our movies anywhere. And we're going to make our movies, our television shows and streaming properties in places that offer us proper incentives to film or shoot there, and also places that have the facilities, places that have the talent. And so, I don't believe that it's to answer your question directly that it's because so many movies were made during a pandemic in America. That's the way the future is going to be. We're going to be going wherever in the world it makes sense to make the movies. Sometimes a television show needs to be set in a foreign country because of its content, you know, etc. So, I think you're going to see more productions made in America, but also more productions made or made around the world.
Willy Walker: Just talking about foreign markets. China is the second largest film market in the world. And I'm just curious, are we exporting U.S. films to China, Charlie, or are studios out making films that are specifically for the Chinese market that we never see?
Charles Rivkin: It's a great question Willy. China is an interesting market, it has over 80,000 screens and movie theaters. In America by contrast, this is just north of 40,000 screens. But they're trying to fill those screens as much as they can with domestic products. There's a film called Wolf Warrior 2, for example, out a few years ago that did over $1,000,000,000 inside China alone. You won't find very many films, if ever, that are going to do a billion inside America alone because their domestic audience is enormous. But the other thing about the Chinese film industry is that it reports into the propaganda ministry of the Chinese Communist Party. And so, as a result, in my opinion, their films are not as exportable as ours because the jingoistic movie about Wolf Warrior is really playing just to the Chinese domestic audience. No one wants to see it. The difference is that if they want it, if people want to see it, they could here in America because we don't block people's films from coming in. So that's the problem we've been having with China is then Vice President Biden and then Vice Premier Xi did a deal back in 2012 that was a WTO resolution of a dispute that allowed our movies to get into the Chinese market where they're being stopped from entering. And we had a floor of 34 films that were talked about. But this deal was meant to have been completed in 2017, five years later, and it never did because of geopolitical promises to America and China. And as a result, you put us in any market in the world. If we're in a level playing field, our film television streaming industry is going to win. But in China, we get paid 25% of theatrical versus 50 to 60% everywhere else in the world. Movies are stacked up against each other. We aren't given any time for marketing, if any at all. It's not fair and those needs to be completed. And we're hopeful that the government will be able to do that. But the other problem is censorship. An interesting example is when one of our studios, in this case, Disney, when it sold Black Panther into the GCC, the Gulf States, I think that they had to insert, you know, digital clothing on shoulders because of cultural sensitivities. There are small edits and changes that are made to films as we send around the world for cultural sensitivity reasons.
But in China, I don't know if you saw in Spider-Man: No Way Home, but Spider-Man did $1.9 billion worldwide without China. And so how does a film that could have probably left $300 or $400 million on the table by not being in China? Why weren't they in China? Well, according to Forbes magazine quoting what they said, the Chinese said that effectively, if you want to show this movie in China, then you need to get rid of all the scenes of the Statue of Liberty. For those of you who have seen Spider-Man: No Way Home, the entire third act is on top of the Statue of Liberty. And so, then they reduced it to the scenes where the American superheroes are looking heroic and need to be eliminated, and Sony said no. So, we don't listen to those changes. And there's a lot of stuff in the press saying that we kowtowed China, which we really don't. You know, an industry doesn't think of itself as a monolith. Each company makes their own decisions, but there's plenty of examples of that. So, the Chinese market is complicated. We think that we don't have the access we deserve. We're not getting paid what we think we should get paid. And of course, there's the matter of editing. So, we're hopeful. We're working with the Secretary of Commerce, working with USTR, we're working with the U.S. government. We're hopeful to get that negotiation back on track and we're hopeful to resolve the issue with China. And I hope in the year to come.
Willy Walker: To see that you bring up the point about the Statue of Liberty, because when you were U.S. Ambassador France, you would often remind people that the Statue of Liberty is a gift from the French government to the United States of America. Many people think that we put it out there, but they actually gave it to us. So maybe the French took more offense to Spider-Man, not being able to be shown in China than the United States did.
Charlie, as you think about Hollywood as this history of the big studios and the big names, stars, what have you – given the changing landscape? And I know I think I’m going to challenge you on this one. Who's the most important person in Hollywood today? Is it the CEO of one of the big studios? Is it an actor like Tom Cruise or is it the big media companies that are starting to dip their toe into new media and using their global reach to be able to change what the entertainment industry is doing?
Charles Rivkin: I don't think actually Willy, there's really an answer to that question. And of course, if I did give the answer, I'd be in a lot of trouble.
Willy Walker: And I realize that. (Laughs) But I think you know where I'm going. In what direction? I mean, do the stars still have the power that they used to have? I mean, Tom Cruise took a revenue share on this movie. I mean, my understanding was when they projected it to be $300-$400 million at the box office, that Tom was going to make close to $100 million. So, the fact that it's gone to a $1.3-1.4 billion, Tom Cruise is making a ton of money off this film.
Charles Rivkin: Backing up from the stars for a second, there's only been six chairmen and CEOs of the Motion Picture Association in 100 years. And the most famous one was Jack Valenti. And Valenti did the job for 40 years. In fact, he has on his tombstone in Arlington Cemetery the MPA logo on his tombstone, and that's who he was.
Willy Walker: You know, his son, John and I went to St Albans together. I've known Jack and his family forever. But anyway, go ahead. Sorry to interrupt.
Charles Rivkin: Then you know that Jack was extraordinary. He was larger than life and he pioneered a number of things, including speaking at the Oscars and introducing movies to a billion people and raising the profile of the MPA. I met him as well several times. I have a letter for him hanging on my wall at work, and I have a whole room at the MPA devoted to Valenti because of his outsized role. But Valenti, I have six studios and 18 board members. Valenti really only had to call one guy, Lew Wasserman, because it was at a time when Hollywood was run by one guy, and everyone acknowledged it. When Lew got involved, everything fell into place. So, in some ways, Jack would have been amazing in today's world as well, but he had a different landscape and his landscape was really not film, TV and streaming, it was just the movies. It was a different animal. But there isn't that Wasserman guy anymore. There's not one guy that's controlling Hollywood and yet all the elements matter, the powerful agencies matter and the CEOs, dynamic leaders of my six studios matter tremendously. And, of course, the writers, the producers, directors, the creative community, all of them matter. The stars still matter, too.
On your point about Tom Cruise, I was in Cannes, and I saw the premiere of Top Gun Maverick in Cannes. Look, I spent a lot of time in France, as you know, and sometimes that Cannes audience can be a little bit jaded, you know, as long films there are more art films and commercial films. The French believe that that's what film should be in some ways. And nonetheless, I counted six separate times when that crowd broke into spontaneous applause during that film. Tom Cruise was in the audience, and he went to the stage after receiving an award from the head of Cannes, and the entire place stopped. You could just see the power of his celebrity on display unforgettably so. The answer is that it all matters. It's the entire creative community, big and small. A lot of Netflix. I mean, look at Squid Game, right? If Netflix has put the trades report or $1,000,000,000 franchise in a series that was made in Korea, filmed in Korea using Korean actors that nobody's ever heard of. So, you don't need a star to generate that kind of asset. On the other hand, Top Gun is a counterweight to that. It's the entire, unique and extraordinary creative community that our nation has and many of it is in Hollywood.
Willy Walker: I think it's really interesting as you talk about the breadth of not just what movies can do for the movie industry, or the entertainment industry, but more broadly I think about F1 and what the Netflix Drive to Survive series has done for the value of the F1 franchise, which Liberty Media owns. And I think they bought it for $4 billion and lots of talk about it being worth at least double that today, if not more. And how much of that value accretion to owning the F1 franchise has come from the Netflix series and the halo effect of opening up F1 to the U.S. audience in a way that never ABC, NBC or CBS was able to do in the past. And it's just amazing how entertainment has transformed the actual industry underlying a sport.
Charles Rivkin: Hey, Netflix helped the chess market with Queen's Gambit, too.
Willy Walker: Yeah, exactly right. I mean, we got to have that now. Not quite to the degree of F1, I'm sure.
Charles Rivkin: You're right. And it's a perfect example. Storytelling is as old as humankind. And if you tell the right stories, then you're going to capture the imagination and it has an enormous impact. That's why our industry is so special. But yes, you're exactly right. F1 is a great example.
Willy Walker: So, I want to close on your leadership and just a question, Charlie, as it relates to having gone from business to foreign policy, politics to now running the Motion Picture Association, all very different roles and yet you have applied your leadership to be very successful in all of them. I met with Jim Collins up in Boulder probably three or four years ago. Jim and I were talking about how difficult it is for leaders to transcend industries to move from business to politics or from politics to business or vice versa. You've been able to do it through all three. What's been the trick from a leadership standpoint?
Charles Rivkin: I'm a big fan of Collins and their work, and it must have been a great conversation you had with them. Love to meet him one day. It's a great question, Willy. Everybody approaches leadership differently. And in my case, if I were trying to think about commonality, I ran media companies involved in many cases healthy egos and I'm currently running an association filled with some of the biggest companies in media in the world, and it comes with strong-willed board members. And I was an ambassador where I was dealing with the head of state, like Sarkozy, and I described it. I think the common element is diplomacy, believe it or not. I really do believe this to be true because diplomacy at its core is about finding common ground. I mentioned it earlier in our conversation with the issues that matter to everybody and finding a way to get to that place. But I learned different things from different people. Jim Henson, who was extraordinary. I learned something from him, and I never forgot. I was just out of business school Willy; you went there as well that you were going to banking and consulting. I joined a little puppet company, and I was working in the basement of a building because I was so taken by Jim. And anyway, I'm working late at night on spreadsheets, and no one was around. I saw this figure walk past my desk, and I didn't see who it was. It was in the dark. And the next day it happened again. And so, I followed this shadowy figure and I saw that he went into the boiler room. I didn't want to pry, so I went home. But the next day I went to that boiler room, opened the door, and it was fascinating because the boiler and the pipes in the boiler room all have Muppet googly eyes, and they look like puppets. And he kind of decorated the room. But there was Matthew Cairns, the janitor. And I said, “Matthew, I swear I saw someone come in here.” He was “That was Jim Henson.” I said, “So Jim comes to the boiler room to say hi to you?” He goes, “No, he came by to bounce ideas off me.” and I said, “Oh, Jim Henson, bounce ideas off. That's great to know.” So, the next day I was in Jim's office, and I had a little bit of a smirk on my face inappropriately, and I said, “I hear that you're Matthew Cairns is a source of your ideas and you're bouncing ideas off him.” And he looked really hurt and he kind of sounded like Kermit, “Oh Charlie, good ideas can come from anywhere.” And he's right, good ideas can come from anywhere. And just because somebody has a high title that says they are these senior executives of muckety muck, doesn't mean that they have the best ideas. It's always important in my mind to reach below into the organization, to get an understanding of the guts of an organization and to stand behind your people, to always stand behind your people and to lead by example. But I've done that with Jim and, you know, people know the buck stops here. If people know that you're fighting for them, the way that I was trying to help our defense attaché through foolishly risking my life is an extreme example. But the point is, I tell you that the military was pretty happy with everything I did from that moment forward. I think it's leading by example. I think it's finding common ground. At the end of the day, it's about character. And I think that all three of those fronts and I'm very lucky, Willy. I started off in the entertainment industry. I then went into diplomacy and then I found the only job that I can think of on Earth that marries those two worlds. So, in some ways, it all comes together at the Motion Picture Association, and that's what makes it easy to lead, I think.
Willy Walker: Well, given your public service and your dedication of your time and efforts to that, thank you very much. Because our country benefited greatly from that time and service that you gave to us. Thank you for taking the time to spend an hour with me and talk about all that you've done and all that you are doing today with the Motion Picture Association. It's just great to see you. And I deeply appreciate you spending time with me.
To everyone who tuned in today, thank you so much. I'm back next week with Gonzaga Basketball coach Mark Few to talk about how Mark is taking what used to be a mid-major university basketball program and turn it into arguably the best basketball program in the United States in tiny Spokane, Washington. And so, it'll be a great conversation next week with Mark.
Charlie, thank you again and enjoy your time up in Sun Valley. My best to your family and we'll talk soon.
Charles Rivkin: Willy, thanks so much, honored to be here. Really appreciate it.
Willy Walker: Take care.
