Promoting the value of content and developing compelling offerings for consumers is the key to helping the industry from tossing money and premium content down the drain, according to Warner Bros. Chairman and CEO Barry Meyer, speaking at the Broadcasting & Cable/Multichannel News OnScreen Media Summit here Oct. 21.
"Something of value is generally not given away for free," he said during a keynote Q&A with B&C executive editor Melissa Grego. "Just because a consumer is watching on a mobile device or a Website doesn't mean it cost any less to produce the content."
Because of the high cost of creating professionally-produced shows people want to see, the industry can't continue to exist in its current form when the majority of content is available for free on the Internet.
Meyer stressed the urgency of finding a solution to this problem, saying it should be done as quickly as it possibly can.
But, the challenge, Meyer said, is reconciling the need for viable economics with customers growing desire for the freedom and flexibility of such mediums as the Web, mobile devices and on-demand viewing.
He pointed to the authentication model, such as Time Warner's TV Everywhere, as a way to achieve this goal.
"If carefully executed, an authentication type of business model...can benefit everyone and be an ideal complement to the current broadcast and cable television ecosystem," he said.
Meyer believes the customer will be amenable to an authentication system because it is an added value made available to an already-paying customer.
"They pay for cable TV now. Why would they object?" Meyer said. "Convenience is an added plus to someone who is a customer of the product."
He also pointed to the importance of "windowing" content. By not making all programming available at the same time on all platforms, the industry can preserve the value of each unique part.
Meyer's other suggestion for monetizing on-demand platforms is simply to charge for it directly.
"Charge a monthly subscription for the ability to access high quality popular programming on-demand on multiple devices with limited (or no) commercials," he said. "We devalue it when we let our best customers know they can watch without commercials or paying a subscription fee."
He cited the popular computer game World of Warcraft, which customers buy for $60, then spend $15 a month to play online. Nine million people play the game, predominantly millennials, the same demographic that many executives say expect to get their content for free. The success of WoW seems to undermine that argument.
While Meyer believes in an authentication model, he is less-inclined to support an a la carte approach.
"It may not be the best thing to promote the diversity of content," he said. "Smaller niche channels...they will go away. I think it works to everybody's disadvantage."