Steve Marcopoto

April 2007

By Mansha Daswani

As the president and
managing director of Turner Broadcasting System Asia Pacific, Steve Marcopoto
is in charge of overseeing the kids’ brands Cartoon Network and Pogo, the news
network CNN, the movie channel TCM and the Chinese entertainment network CETV,
which it owns with Hong Kong’s TOM Group. As he tells TV Asia Pacific, the company is using a mix of innovation and
invention to negotiate the diverse needs of growth markets like India and China
and more mature arenas like Japan; maintain the competitiveness of its
services; and tap into rapidly developing technologies across the region.

TV ASIA PACIFIC: What is your broad strategy for building on, and
expanding, Turner’s business in Asia?

MARCOPOTO: Given the dynamics of the industry in this part of
the world, there still is a lot of room to run with our core business, linear
television, and we intend to broaden beyond news, kids and movies. But given
how technology is rapidly changing our industry, we have to put equal efforts
on new-media development, taking our brands and content beyond TV into every
possible branded environment, some of which exist, others of which require
innovation, if not down-right invention. It’s fun.

TV ASIA PACIFIC:
What would you identify as your strongest markets currently? And what are the
biggest areas for growth?

MARCOPOTO: Our two strongest individual markets are
interestingly on opposite sides of the economic spectrum. Japan, on the one
hand, an extremely mature, developed market, and India on the ­other, an
emerging market. Others, like Australia and Southeast Asia—in particular
Malaysia—are ­actually not far behind.

Given
its explosive rate of growth, extremely young population, penchant for media
consumption and improving distribution model, India, where we have a great
partnership with Zee, is our biggest single potential growth opportunity. Based
on economic growth and demographics, one should be able to say the same about
Asia’s ­other emerging giant, China, but we’re largely regulated out of
participating there—at least for now. We’ll maintain a long-term view,
though—by 2050 ­China and India will be the number-one and
number-three economies in the world, so anyone in a global company like ours
needs to look past quarterly results to get in position here.

TV ASIA PACIFIC: Can you tell me more about your operations in
India?

MARCOPOTO:
India is a market of immense excitement and we’re happy we entered the market
early, back in the ’90s, when CNN became the first satellite channel to land
there and Cartoon Network was the first kids’ channel in the market. CNN
International today remains the leading global news channel serving a
relatively small but extraordinarily influential slice of the market, while our
local partnership with TV18, CNN-IBN, has expanded our reach dramatically and
is now the number one English-language news service in an incredibly
competitive genre. In kids, we expanded our scope in recent years, launching
Pogo, [Turner Broadcasting’s] first non-animated kids’ channel anywhere in the
world, which together with Cartoon Network gives us the number-one and
number-two kids’ channels in the market today. We’ve had some exceptional
competitors arrive and are proud we maintained our lead. It’s a busy category
now, but underdeveloped when compared to the rest of the world, so there should
be lots of room to run for everyone. We don’t intend to stop in kids, news and
movies, and are working on initiatives in other genres.

TV ASIA PACIFIC:
What are the prospects for China?

MARCOPOTO: The Chinese market, driven by fast-rising
consumption, should remain on a tier, even without the Olympic effect, which
will turbo-charge things through the 2008 games. The challenge for
international media companies is how to participate there when the accessible
field of play is so limited.

We’re
happy to have the opportunity to operate locally through our partnership in
[the Mandarin-language entertainment channel] CETV. Since it became the first
international channel to gain official landing rights in the country, we’ve
learned a lot, and we’ve got a lot of wind in our sails at the moment under the
management of our partners at the TOM Group. Since moving the channel’s main
production facility to China, we’ve been able to make better connections with
Chinese talent and have enjoyed some meaningful successes in original
programming ranging from talk to entertainment news. It’s now more than 30
percent of our prime-time lineup. New-media, event marketing and syndication
revenues grew over 100 percent in 2006, and we’re expecting a 30-percent
increase in advertising in 2007. The channel was voted number seven among the
Top 10 Most Influential TV Brands in a 2006 survey by the China Association of
Ad Agencies. We were in some pretty good company and believe that’s evidence
that CETV’s unique international brand of general entertainment is succeeding.

TV ASIA PACIFIC:
What new opportunities have IPTV and mobile platforms presented?

MARCOPOTO: These new platforms are providing us the
opportunity not only to increase subscriber numbers but also to create new
content. In mobile, the technology finally appears to be catching up with the
promise, and we’re developing multiple models of content around our various
brands. CNN, for instance, today streams live on services in markets such as
Australia, Hong Kong and Korea. We’ve also developed a “Now in the News”
bespoke service for mobile that provides subscribers with a regularly updated,
concise news package from CNN. We’re exploiting consumer affinity for Cartoon
Network and its characters with the usual array of wallpapers and ring tones
and have also developed mobile games. IPTV in the form of TV over DSL has had
explosive growth, particularly in Hong Kong, where we now have five networks on
the Now [Broadband TV] platform. We have launched games on FOXTEL’s digital
service in Australia, and will do so on Now this year as well. We’re also
exploring a variety of ways in which we can take our channels into broadband
video.

Given
that nearly everything today has gone or is going digital, you could say our
entire business is one big digital initiative. It’s a world where we have
opportunities to develop more products in more specific genres than ever
before. Whether that’s CNN’s broadband service Pipeline, our GameTap gaming
service, launched last year in the U.S., or mobile initiatives like the ones I
just mentioned, we are using a mind-set of innovation to drive new product
development. It may be extending our existing brands or creating entirely new
ones. The one thing about the broadband world is that shelf space is not an
issue, so you can be pretty imaginative. Korea, Singapore, Hong Kong and China
are some of the most broadband-penetrated markets on earth, and India will go
from two million to 17 million broadband homes in the next five years. There is
a great canvas to paint on.

TV ASIA PACIFIC: How important is original content creation for your
various services?

MARCOPOTO: As I mentioned when talking about CETV, it’s a key
personality trait and a key driver. As you know, virtually all of CNN is
original content, with each feed tailored precisely for its region. Our
production center in Hong Kong is airing over six hours a day of original
programming, which we feel is pivotal to the channel’s relevance and
leadership. Original content differentiates us in the kids’ space, too, where
we enjoy a base of Cartoon Network Originals (CNOs), but are going into
development on international CNOs and driving an Asian shorts development
program calls SnapToons. Some of Pogo’s top-rated programs are original
creations, including M.A.D. (Music,
Art and Dance) and the Pogo
Amazing Kids Awards. We’re also extremely proud of the work we’ve done with
Sesame Workshop to produce a local version of Sesame Street in India.

TV ASIA PACIFIC:
How do you maintain the competitiveness of each of your services?

MARCOPOTO: None of the things I’ve been talking about is
totally revolutionary. Everybody today has pretty much the same technological
tools at their disposal and can scour the world for ideas and content with
equal ease, so I think it comes down to finding and retaining the best talent,
facilitating creativity and maintaining a passion for our work together. Turner
is a place where great individual talents, from creatives to salespeople, merge
as a team, and I truly believe our teamwork is what keeps us out front. I also
believe that collaboration with our sister companies like Warner Bros., Time
Inc. and AOL will create pathways to new products and services that will be
important contributors to our competitive stance. There are formidable local as
well as ­international players on the field now. We have to leverage every
available advantage. Timing is everything and we must be nimble.

TV ASIA PACIFIC:
What role is Turner playing in the battle against signal piracy? How much of a
problem is it?

MARCOPOTO:
Turner has been at the forefront of the industry’s battle against piracy for
many years now. We work in close concert with CASBAA and our industry colleagues
to make a difference. We fund specific initiatives to bust pirate operators,
invest time lobbying lawmakers and try to educate the public as well. Over a
billion dollars a year is lost to ­piracy of various types, so we of course take the
problem seriously and address it accordingly.

TV ASIA PACIFIC: What are the major challenges facing the Asian
cable and satellite industry today?

MARCOPOTO: Certainly piracy, as I just mentioned, is a
challenge for all of us, as are restrictive regulatory frameworks that limit
our participation in markets like China and others. When people read top line
numbers about the size of Asia Pacific’s cable and satellite market they might
not realize that a large portion of that market is actually inaccessible by
international media companies today. Meanwhile, in a hot market, the battle for
top talent is no small matter. We’re working with CASBAA to attract more young
people to our industry and develop them once they’re here. Hopefully we can
prove that there are other ways to succeed as a young executive in the region
than going into investment banking! Beyond that, we face the same challenges of
people in our industry everywhere. That is developing profitable new businesses
in digital spaces that will keep us in front of the new generation of digital
natives whose consumption patterns will be a far different mix of media than
that enjoyed by the first generation of pay-TV viewers. They expect what they
want, where they want it, when they want it. While our core linear television
properties will drive our growth for years to come, especially in markets not
yet fully penetrated, we would disregard alternative forms at our peril.