CME's Garin: In Ten Years You Won't Have a Job

BUDAPEST, June 21: At a dinner celebrating DISCOP's 15th
anniversary, the guest of honor, Central European Media Enterprises’ (CME) CEO,
Michael Garin, offered the sobering prediction that in ten years' time,
ad-supported networks will disappear and TV executives had better start planning
for a very different business.

"In ten years you won't have a job," said Garin.
"You should devote the kind of energy you gave to getting to where you are
today to deciding what to do in the next ten years."

Citing the proliferation of channels, the fragmentation of
the audience, the increasing penetration of DVRs and competition from the
Internet, Garin explained that "networks in the U.S. and Western Europe
will no longer be large enough to be subsidized by advertising."

He says the three fundamental elements that have served as
the underpinning of ad-supported networks will slowly fall apart. "I call
them the 3 Ps: the first P is production—the ability to create
programming that can entertain and attract an audience," said Garin. "The
second is program scheduling—delivering the audience and a demographic
from one program to the next. And the third P is promotion."

As the cost of producing programs continues to increase, and
as more and more viewers prefer to record shows, watch them at a later time and
skip through the commercials, that content will be less valuable to advertisers
as vehicles that reach mass audiences. In the traditional ad-supported TV
model, the value of a program only exists in the moment it airs, Garin
explained. The idea of scheduling disappears as more and more people watch what
they want when they want to watch it. As a result, the economics of promoting
shows doesn't work in this new fragmented environment.

"In ten years we will not see networks in the U.S. or
Western Europe," said Garin. "In Central and Eastern Europe, where
CME has 16 stations in six countries, this will also happen, but it will happen
much later."

Garin pointed out that neither he nor other TV executives
know what will happen to replace traditional TV. "They don't have a clue
where the world is going," he says, adding that because the TV markets in
Central and Eastern Europe are less developed than those in the West, "the
advantage our stations have is that we can learn from the mistakes made in the
U.S. and Western Europe and avoid them."

Garin was honored at DISCOP's 15th anniversary dinner
because CME has been a loyal and constant participant since the market's first
year.

This year DISCOP saw its highest attendance ever with some
1,500 participants.