(TIME) -- Michael Lynton doesn't fear challenges - he embraces them. That's a good thing, because he is leading Sony Pictures Entertainment through a period of tectonic shifts in the movie industry. At Sony, the former Disney executive who then headed Penguin Group and later AOL Europe will have to slash costs, find new opportunities in video-on-demand and combat file-sharing piracy. But Lynton believes there's a future for DVDs; he helped bring in a major financing partner for Sony's purchase of MGM and its valuable library of movies. "With new technologies," Lynton says, "the DVD becomes even better." --By Jeffrey Ressner/Los Angeles