Big Media: We’re Not Going Anywhere

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Las Vegas -- Cable operators and programmers are embracing new technologies to bolster their product offerings, but top executives from four of the largest industry players -- Time Warner, Comcast, News Corp. and Viacom -- said at The Cable Show ’07 general session here Tuesday that any notion that media giants will be usurped by their Internet counterparts is wrong.

“The idea that the new kids on the block will take over is a false notion,” Time Warner chairman and CEO Richard Parsons said.

He added that cable’s dominance in broadband distribution also has helped it to outpace satellite and telco competition, and that should prevail at least for the foreseeable future.

“People forget both the importance of incumbency and the importance of having the first-mover advantage,” Parsons said. “The cable platform is the one platform that can take advantage of all of this digital technology -- Internet and broadband capacity -- to deliver voice, compelling video and data, and it’s all just going to get better going forward. We are making sure that our platform is enhanced and that our technology is capable and it’s robust to take advantage of this platform.”

And although content players like Viacom have been aggressive in making their content available on other platforms like the Internet and wireless, CEO Philippe Dauman said the broadband pipe is a means to deepen the relationship with viewers.

Dauman added that mobile and broadband content delivery won’t replace cable distribution, and instead, it has actually improved relationships between programmers and distributors.

“We’re having much deeper conversations,” he said. “We used to fight with Time Warner Cable and Comcast over rates for our networks. We are now engaged more in conversations that relate more to how can we serve our mutual customers better.”

News Corp. chief operating officer Peter Chernin said that while his company has been a big proponent of broadband-content delivery -- it also is working on distributing user-generated video on its MySpace social-networking site to rival YouTube -- it also knows where the vast majority of its revenue is coming from.

“The amount of money we get from Google, Yahoo and AOL is a fraction of the amount of money we get from the cable industry,” he added. “We’re not unmindful of that.

And as content delivery on the Internet grows, so will consolidation among players.”

“I do think you will see more acquisitions,” Chernin said. “This is a world in which the big get bigger. If you go back 10 years ago and look at the hot Internet brands, the ones that are left as independent companies are Yahoo, eBay and Amazon.com. Everything else has been consolidated. I don’t see any reason why that trend won’t continue.”

Wireless could also become a huge delivery platform for content, if just for the sheer numbers of wireless users around the world. Chernin said there are about 1 billion Internet users around the world, 1 billion television households and 2.5 billion mobile customers.

“So anyone who doesn’t take this seriously as a content company is missing what is arguably the largest distribution platform on the earth already,” he added.

Chernin added that the successful players in the mobile space will be those that experiment with different forms of content and pricing structures.

“It’s an area where there are such unbelievable distribution opportunities that we better experiment, we better innovate, we better try different things,” Chernin said. “Those people who do a good job flourish, and those people who don’t won’t. That’s the way life is supposed to work.”

The executives also tackled the thorny topic of violence on television, with Chernin arguing that the industry has supplied parents with the tools to keep adult content from their children and it is up to parents to use those tools.

“I think this is an example of government intrusiveness at nearly its worst,” he added. “There are a lot of things we can do to regulate content in this world. I’m not sure there are many Americans who really believe the government is the right place to be doing that.”

Parsons agreed that parents need to police their children’s viewing habits, but he added that the current debate is more grounded in politics than a concern for the welfare of children.

Parsons said most of the roar over violence on TV is being voice by small special-interest groups that pack considerable political clout.

“Somehow, we’ve got to put this thing in perspective for politicians so that they not only see the pluses of running toward this group of vocal but minority interest, they also see the minuses of trying to go for the sort of pop by doing something that appeases these folks but violates the fundamental principals that underlie a democracy,” he added. “I don’t think we’ve done as good a job as an industry as we need to.”

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