Boston -- Taking a hard line, Viacom Inc. president Mel Karmazin told an
audience at the Cable & Telecommunications Association for Marketing's CTAM
Summit here Tuesday that corporate criminals who commit fraud belong in jail.
Karmazin made his remarks when asked about the 'crisis of confidence' in the
stock market at the opening session at the CTAM conference -- a confab that's
been shadowed by reports that federal indictments will soon be handed up against
Adelphia Communications Corp. founder John Rigas and his sons.
Karmazin didn't refer to Adelphia specifically, but his comments hit close to
home regarding CEOs charged with financial wrongdoing.
'I truly believe that these bad people -- the
ones who are legitimately proven to have done something illegal -- they should
go to jail, and they shouldn't go to one of these country-club jails,' Karmazin
'They should go to Sing Sing, if it still exists, so that people will be
discouraged from fraud.'
Regarding the market decline, Karmazin said, 'It's really sad to see what's
happening to people's 401[Ks].'
Karmazin, questioned by CNBC Business Center anchor Sue Herera, said
Viacom is cautiously trying to create a business model for video-on-demand that
makes sense for all of the company's units -- Showtime Networks Inc., Paramount
Pictures and Blockbuster Inc.
Showtime is already testing subscription VOD, according to Karmazin. But
Viacom is taking it slow on the film front regarding VOD offerings.
'Theatricals get 50 percent of their revenue from home-video sales, so you
want to be very careful as you migrate from the traditional Blockbuster model to
where people are getting their films on video-on-demand,' he said.
'We're concerned about piracy,' he added. 'We're concerned about making sure
that we're going to get incremental revenue . We want to make sure we're not
sitting there losing business that we would have gotten at Blockbuster, that
we're now going to get from one of the cable systems.'
Karmazin briefly talked about the upfront ad market,
saying it is about 90 percent done for cable and 'there's a lot of money there.'