In recent years, Israel has become an exporter of television formats and series, but is not yet considered significant in the US television industry, and certainly not in the Hollywood film industry. Nevertheless, this little Middle Eastern democracy this week attracted a great deal of attention from a senior executive at Warner Brothers, one of the world's largest companies.
Alex Maghen immigrated to Israel in 2004 and lived here until 2009, then moved to the US. During his career, he has been CTO at prominent companies, such as MTV, Yahoo!, and MySpace, and he is currently visiting Israel, looking for business opportunities among the local start-ups.
Maghen, now senior VP technology at Warner Brothers' entertainment division, met this week with 20 media, television, and digital startups, including companies like video calls applications developer Rounds, second screen television applications developer Applicaster, and WakingApp, which operates in the augmented reality segment.
Maghen, 47, was one of the keynote speakers at the first Foreign Trade Conference held yesterday by the Ministry of the Economy Foreign Trade Administration. He spoke there about how Israeli startups should promote themselves with the large media companies.
As someone who works in a company responsible for blockbusters like Transformers, Batman, and Harry Potter, he knows firsthand how the world's leading entertainment industry works, and what elevator pitch Israeli entrepreneurs need to make in order to succeed. Maghen attempts to explain why media companies need startups around them.
"There was a long period, maybe even a decade, in which technology advanced, but media companies didn't keep pace," Maghen said. "They apparently didn't exactly realize how important it was. Warner Brothers was among the first to understand, and to realize that technology and media are actually the same thing, and that you can't lag behind and say, 'Someone else will do it already. We'll concentrate just on content.'"
Specializing in games
"The distinction between technology and media companies is being blurred. We're a media company; that's what motivates us every day, and that's our desire, but we understand that technological innovation and initiative will take place constantly at every moment, and has no boundaries. The two can therefore not be separated. We certainly won't make the mistake of separating the two spheres.
"This is the reason why there are so many outside opportunities and so many possibilities for cooperation between us and technology companies and startups. We'll probably never be in the first row of technology companies, just as the technology companies won't be in the first row of media companies. Therefore, only a combination of the two worlds can reach the top and achieve major breakthrough success."
As a former Israeli, Maghen knows that the local market can also provide a good solution to a media giant like Warner Brothers. "In order to shorten processes and promote technology, we don't want to stop on the home television screen or on the movie screen. We want to move to mobile devices and consoles and video, and we're looking for any innovative technology that can help us. The Israeli market has an excellent reputation. There are a lot of startups in the early stages. Companies like Warner Brothers are always interested in giving innovative technologies a chance, especially those based on White Label, when they can replace existing and possibly outdated technologies. Otherwise, we'd have to develop them inside the company, which would cost a lot of money."
Maghen says, "The most significant subject for us is the field of games, in which we specialize. Various types of interactive experiences are very important to us in order to provide added value for the consumer and succeed in all these fields."
Maghen adds that another sphere that speaks to Warner Brothers is digital security and content protection. What is the connection between security and content? "At Warner Brothers, we care very much about this, and it's important to find ways to understand the consumers' perspective, and how they consume content. All this requires digital technologies, among other things in matters pertaining to security and privacy," he explains.
The cooperation that he wants to initiate with startups raises the question of what he is looking for in his meetings with startups, and what pitch they need to prepare for him. "A business model is very important for a startup, but the product is much more important," he admits. "I think that in perception of a giant communications and entertainment company working with a small company, it is very important for the startup to have a business model, but we'll almost certainly change this business model. We're big enough for a small company to want us to do that, so that we can move ahead together," he says.
"Some things are more important for us: whether the startup has something we want, whether it excites us, and whether it's suitable for what we're trying to achieve at Warner Brothers. All of these are much more interesting to us.
"We want a startup to think about how it will help us get the most out of Warner Brothers, our needs, and how to make money from the product that the entrepreneur is offering us," he adds.
The sky's the limit
Asked whether Warner Brothers is searching for strategic cooperation or an investment in companies, Maghen tries to avoid a direct answer.
"I don't think there's a lot of difference between cooperation and investment. If it’s' a small company opposite a large one like ours, we'll probably pay the company on a monthly or annual basis, and we'll probably want a part of it. We have plans to invest in companies, and we are definitely moving in this direction.
"It's important to realize first, though, what value we're giving each other, and what value we want to invest in the startup. If we make it through the initial stages and the contracts stage, the sky's the limit."
All that is left now is to see which startups that Maghen met with this week manage to pass through the glass ceiling and hook up with Warner Brothers on their way to working on the next television smash or 2015 summer box office hit.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2015
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