Parsons Weighs in on New Media, International Prospects

CANNES, October 11: In a briefing with reporters at MIPCOM
today, Richard Parsons, the chairman and CEO of Time Warner and this year’s
MIPCOM Personality of the Year, weighed in on this week’s “stunning” YouTube
deal, Time Warner’s international strategy and new media business models.

Commenting on Google’s $1.6-billion deal to acquire the
user-generated-content phenomenon YouTube, Parsons noted, “it’s a stunning
price, it’s a stunning story. It’s all the rage now that they were able to
extract a knockout price for the asset. Whether that will be a value added-acquisition
by Google remains to be seen.”

The YouTube deal demonstrates the power of user-generated
content today. “The question is,” Parsons said, “where is it going and how do
you make a business out of it? Is it going to take over edited or professional
content? No. I don’t think its going to overrun TV or movies.”

Parsons went on to note that for a “traditional” media
company, like Time Warner, “This would be a tough acquisition to justify at
this price, But for Google, it’s in their sweet spot. They are our partner on
AOL Video, we know their vision. They’re trying to acquire anything that
generates traffic—they monetize Internet traffic. None of the other media
companies could have been in that ballpark.”

When asked about the company’s intentions towards ITV in the
U.K., Parsons commented, “We look at everything that’s in the marketplace. We
think it’s our obligation to have an informed point of view. ITV is a good and
exciting asset. However, [the U.K. is a] very competitive market. With the
onset of digital terrestrial television it’s becoming more competitive, and
management is still not interested in talking to someone about selling. Our
focus is elsewhere right now.”

The international market is a key priority for the company,
Parsons said. “Time Warner in the U.S. is such a large player. Where are we
going to get growth from? The first place we’re going to look at is Europe.
They are developed economies, established platforms, and there’s an orientation
towards Western content. We’re focused on Europe and the emerging markets of
India and China, in that order.”

Parsons also commented on the improvements in Time Warner’s
share price, “Which is fortuitous and gratifying,” he said. The reasons, he
noted, include the improved prospects for the cable business, AOL’s transition
from a subscription-based business model to an advertising-based model, the
sale of assets and the company’s stock buy-back strategy.