Shift in Video Viewing Offers Good, Bad News, CEOs Say

LOS ANGELES -- The shift to viewing video on a variety of devices, with content now often distributed online, offers good and bad news for the entertainment industry, said CEOs from Hollywood studios, cable and broadcasting. Content producers in those industries must be careful to still get paid for their programming to avoid the mistakes made by the music industry, panelists at the NCTA show said Wednesday. Those industries may need to make changes to continue to profit as content moves to more and more devices, they said.

"How do you embrace this technology but not throw away old business models?” asked CEO Brian Roberts of Comcast. “I think it can help if we speed up our pace of innovation.” He said, “Obviously, someday we want the TV to go to the iPad,” a prospect he discussed Tuesday (CED May 12 p1) as some of his company’s services are working with the device. “The more people consume the content lawfully, the better it is for the business,” and “there’s a lot of promise this will be more friend than foe,” Roberts said of video being watched on many different devices. “The technology keeps enabling, and we can pretend [that it’s] otherwise, but the creative community continues to adapt,” he said. “It’s reality, so you've got to turn it into an opportunity."

Time Warner CEO Jeff Bewkes said he was making a “call to action” to “get your VOD robust, put it out there on your TV screens, get your interfaces to be stronger and better, use the advances you can see on the Internet.” A goal is for “all these devices we're talking about,” whether Apple or Android wireless, to “simply become user-friendly,” he said. The windows for films to be released first to theaters and then on DVD or Blu-ray and elsewhere are important, “but we all agree we've got to shorten them,” Bewkes said.

Fox Filmed Entertainment CEO Tom Rothman described “a tension between our models” and what consumers demand, “because we've got to be paid.” If content is “properly windowed and properly monetized, that can be a very helpful thing,” he said. “It’s pretty simple: Content providers have got to be paid for that ubiquity.” Rothman and CEO Les Moonves of CBS said content must be tailored to the device it will be viewed on. Watching Avatar in 3D on a cellphone “is going to be hard,” said Moonves. He quoted an executive as having said that wireless distribution “is useless if you're hitless.” Rothman said he would sell Avatar “in the right window for someone to watch it on their cellphone, but ultimately that’s not how it’s meant to be consumed,” he said. “The Family Guy is meant to be seen on a cellphone."

There are about a dozen revenue sources for CBS compared with one previously, advertising, and that’s mixed news, Moonves said. “The problem is I'm only getting pennies online compared to the dollar that I get at the network,” he said. If that continues, “I'm not going to be able to produce that premium content” and that’s a reason the company isn’t involved in Hulu, he continued. “If we can figure this out, we will be able to get premium content and people will have more access to it."

Ex-FCC Chairman Michael Powell said, “Nobody wants to get iTunized, with their content driven down to a level” that makes it hard to pay for production costs. Powell, who moderated the panel, said he worries about a “mismatch” between those costs and what consumers will pay. “You may have to find incremental and novel new sources of revenue” or “find other ways to monetize their interactive experience,” Powell said. “Where does the money come from?” With the iPhone and iPad becoming primary gaming platforms, there has been a “seismic shift” away from consumers buying games as a cartridge or a separate piece of software, said venture capitalist Marc Andreessen, a founder of Netscape. With online gaming companies including Zynga, he said, “network connectivity” has “opened up all these options.”