Agony at the top for a Brit in Hollywood

Over breakfast at Claridge's, Michael Lynton was in pain. The chairman and chief executive of Sony Pictures Entertainment woke up at the Mayfair hotel with a wrenched back, an unlikely side-effect of attending a film premiere with Hugh Grant and Sarah Jessica Parker the night before.

Lynton, 49, has become used to ailments — at least those that arise from running a media company. One of the top Britons in Hollywood, he has loudly bemoaned the headache of tackling movie piracy.

"We need to change the business model and we need a little bit of cover to do so," he said.

In a world where DVD income, the lifeblood of the studios for more than a decade, is on the wane, it is no surprise that Lynton joined Lucian Grainge from Universal Music and Richard Scudamore of the Premier League to lobby Britain's Lord Mandelson, the business secretary, over online piracy.

They are claiming success. A law to be introduced next year will force internet companies to track people who illegally download files and even cut their connections.

"If this legislation goes through, it will serve as a real example to the rest of the world," said Lynton.

He has become something of a hate figure for the digirati. At a New York event in May he declared: "I am a guy who hasn't seen any good come out of the internet."

Bad mood

Two things had put him in a bad mood that day: news that 20th Century Fox's latest X-Men film had fallen victim to mass piracy, and a call home that revealed his son was using Wikipedia as a trusted source for his schoolwork.

In fact, Lynton owes his career to the net, joining Sony from AOL Europe six years ago. He is keen to use it to develop revenue streams but wants ground rules.

"It is just like when the motorways were built — you need rules and regulations," he said. "At first, some people even opposed the white line down the middle."

Sony is a prime mover in the Digital Entertainment Content Ecosystem, a consortium that includes Warner Brothers and Fox — part of News Corporation, parent of The Sunday Times — which will let consumers store movies in "the cloud" to access them from a range of devices. The hope is that viewers will be happy to pay for the convenience.

Lynton hopes the collaboration will help the studios strike back at Apple. Analysts at Screen Digest predict its iTunes store will account for 60 per cent of all US online movie transactions this year, even though it is only compatible with Apple's own gadgets.

The studios' historic markets are disappearing fast. Although cinema admissions are thriving in Britain, the value of DVD sales fell 7 per cent in the first 11 months of the year, according to the British Video Association. Annual volumes are flat at about 250 million units, even with the explosive growth of Blu-ray discs.

In better health

Sony is in better health than many rivals, after hits this year including Angels & Demons, Terminator Salvation and Michael Jackson's This Is It.

But Sony Pictures' profit in the year to last March slipped 43 per cent to $305 million (Dh1,120 million), in part because of DVD weakness. Sales of $7.3 billion underline that margins remain low in the movie industry.

"We make money but we don't make obscene amounts," said Lynton. "It wouldn't take much to push us into the red."

The recession means fewer movies are being made and studios are being more selective about blockbusters. Sony's next is the latest Spider-Man, due in 2011. It is also trying to find its footing in animation, where it has signed up Aardman Animations, creator of Wallace & Gromit, to produce two films in 2011 and 2012.

Sony has also made strides in television, acquiring the quiz format Who Wants To Be A Millionaire? last year. But Lynton confirmed he was likely to sell its 20 per cent stake in Shine, producer of Spooks and MasterChef.

"We probably will go down different paths," he said, rising to leave with a wince.