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O'Melveny's Erramouspe Quoted About Impact of Video On Demand Rights Deals On Entertainment Finance

December 30, 2011 In a December 29, 2011 article about the impact of the recent lucrative deals struck between entertainment content providers and video-on-demand companies, the Daily Journal quotes O'Melveny Entertainment and Media Transactions Practice Group partner Matthew Erramouspe.

The story, "Video On Demand Finds Its Legs," states that the higher sums many Hollywood studios are beginning to collect from increasingly competitive sales of their content to video-on-demand (VOD) providers such as Netflix are helping the entertainment companies compensate for lost revenues from piracy and declining home video sales.

Lawyers told the legal trade publication that the VOD outlets' new negotiating power is upsetting the traditional entertainment distribution model and could ultimately usher in revolutionary changes to the industry's financial model. "Really, what you're seeing is the Netflixes of the world competing head-on with premium pay TV operators like HBO, Showtime and Starz," Erramouspe, who focuses on entertainment finance and transactions for a number of leading VOD companies, told the Daily Journal.

Erramouspe, who practices in the Firm's Century City office, also noted that in response to these changes, a number of influential Hollywood directors and producers are lobbying to preserve the key elements of the existing business model in which theatrical release is the linchpin and key financial driver. The group includes "Avatar" director James Cameron, "The Hangover" director Todd Phillips and "Transformers" director Michael Bay, according to the Daily Journal.