Media Moguls Weigh In on New-Media Monetization

LOS ANGELES: Comcast’s Brian Roberts, Time Warner’s Jeff Bewkes and CBS Corporation’s Les Moonves were among the panelists discussing new-media business models and content creation for devices such as the iPad in a Cable Show session yesterday afternoon.

Roberts, chairman and CEO of Comcast, responding to a question about the impact of the iPad on content companies, noted: “There’s a lot of promise that it will be more friend than foe.” Indeed Roberts used the session, called Media Everywhere: Implications of the Always-On Network, to preview Comcast’s new iPad Xfinity TV app, which allows users to control their DVR from a mobile device.

Making content available on multiple devices is important, noted Tom Rothman, chairman and co-CEO of Fox Filmed Entertainment, but “content creators have got to get paid for that ubiquity.” Whatever the platform, Rothman continued, it’s still at the end of the day all about good storytelling. “It’s about engaging the audience, and finding exciting, vibrant, thrilling ways to interest and involve an audience emotionally. Those are the fundamentals of storytelling and those fundamentals, they’re the same whether you’re looking at Avatar on the biggest Imax 3-D presentation or you’re consuming an episode of Family Guy on a mobile phone. We’re glad to sell Avatar in the right window for someone to watch it on their cell phone, but ultimately that’s not how that movie is made to be consumed. An episode of Family Guy is hilarious on the cell phone. So the fundamentals of storytelling remain the same but the synchronicity of what types of programming are best in the space changes.”

Leslie Moonves, president and CEO of CBS Corporation, added: “Content is everything. Wireless is useless if you’re hitless.” Moonves stated that for CBS as a content provider this “brave new world” is perceived with both “great fear and great excitement." He went on to say: “The dialogue has changed. A few years ago there was a lot more wariness between technology and content. Now there is a mutual respect for each other, and the realization we need each other.”

With new devices and new ways to enjoy content, overall media usage is up, noted Jeffrey Bewkes, chairman and CEO of Time Warner. “I would put out a call of action here,” he said to Cable Show attendees: “Get your VOD robust. Put it out there on your TV screen, get it your interfaces to be stronger and better, use the advances you see on the Internet and bring them to your television system, and then take the whole thing and put it on broadband.”

Fox’s Rothman, meanwhile, stressed the need for proper windowing strategies: “I actually don’t believe it’s ultimately good for content creators or distributors for everything to be everywhere all at once. I believe that windowing—which is, in the popular consciousness, unpopular, in the post-Internet era, where we get everything we want for free—I think windowing is required from all sides of the equation. It’s going to be harder to do, but it’s vital.”

“Windowing is important,” Bewkes concurred, “but we have to shorten them and we have to make what all these devices can do work in a way that serves the consumer.”

“There have to be monetizing models,” Rothman continued. “Otherwise, it will ultimately erode syndication values down that road… There’s going to be tension between our models and the immediacy, the ubiquity of consumer demand, because we’ve got to get paid.”

Rothman noted the decline of the worldwide DVD market, which he said has lost between $6 billion or $7 billion since its peak, as a result of several factors—online, piracy, the recession and the Blu-ray/HD DVD format war. “We’re going to have to make up in a number of transactions the revenue we used to gain from one DVD transaction,” he said.

Moonves went on to say that at CBS Corporation, where it used to have one primary revenue source—advertising—it now has 12, among them transmission fees, home-entertainment, syndication, “and there’s an awful lot of online activity that is beginning to give us revenue.” He continued: “You take a show like CSI, which costs north of $3 million an episode to produce. Now it’s fine, we sell advertising on the network, and a certain amount of people watch it online. The problem is, I’m only getting pennies online, compared to the dollars I’m getting at the network. If too much of my audience shifts, and there’s still pennies watching online, I’m not going to be able to produce that premium content. We are not a member of Hulu and one of the reasons was…we didn’t want to put our content out to that extent online because that is the fear.”

Bewkes noted that with all the shifts in the media business, “I think there’s more good than bad in this. … In the big sweep of history, it’s becoming more efficient and cheaper to get product to people and it’s more flexible how you can offer it. We ought to be able to figure out how to do this in a profitable way.”

In a discussion on the major challenges faced by the panelists, Roberts said: "The pace of innovation is speeding up, competition is speeding up, and you can’t pretend otherwise…. One of our problems has been, [accessing programming] can be more fun and cooler on some of these other [competing content] platforms. We’ve got to get on that bus, we can’t stay on our own bus. How do we embrace all this technology but not throw away all the business models?”

Moonves had the final word of the session: “A friend of mine said, whenever they say it’s not about the money, it’s about the money. It’s about the economics. How do we get paid in all this? That’s what keeps you up at night.”