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Martin: Digital Good For Business

9/23/2010 12:36 PM Eastern

Time Warner Inc. chief financial officer John Martin said at an industry conference Thursday that online distribution could prove to be a money-maker for content providers, but warned that using technology to circumvent traditional distributors is not necessarily the path to take.
Speaking at the Goldman Sachs Communacopia conference in New York, Martin said that being one of the largest owners of copyrighted content in the world puts Time Warner in a unique position to capture online revenue.
"I can't remember a time when our content had more demand around it. There are more and more players that want to help us try to monetize our content," Martin said. "We have a very strong view that digital is going to be good for our business. When you think about improving the overall consumer experience, providing us with more and more retailers and distributors with which to do business to gain incremental economics and all with the promise of lower distribution costs, that should all be good for us."
At the same time, Martin said that replacing traditional distribution outlets like cable and satellite with free online content, so-called over-the-top video, is not a viable alternative.
Martin said that in order for over-the-top to work, it has to meet two criteria: it has to be better than what exists and the economics have to be additive for the consumer. He added that neither is the case today.
Martin added that for consumers, traditional TV offers entertainment in an elegant format and provides an easy and economical way to pay for content. He added that the TV Everywhere concept that has been pioneered by Time Warner  and Comcast is an equally elegant way to get content on demand and on multiple devices while still providing distributors and content providers a means to get paid. Over the top video as it now stands does not.
"We're not about to undermine our own economics, we're not going to undermine our brands, we're not about to undermine or under price our content and we're not going to undermine what's a healthy ecosystem," Martin said, adding that if the model shifts to over-the-top in the future, Time Warner will be poised to take advantage.
"If over-the-top proves to be better and if it ultimately takes over the traditional TV way, companies like ours should benefit from that because ultimately we're economic animals and we're going to move to where the money is," Martin said.

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