Questions loom at Interactive Summit

Modems, advertising, branding addressed at confab

Two questions dominated Variety’s second annual Interactive Marketing Summit March 10-12 in Rancho Mirage: Which high-speed Internet delivery system — telephone-based DSL, satellite or cable modems — will win out among consumers, and why aren’t studios advertising more on the Internet?

Over 300 Internet marketers — including representatives from Internet researcher Cyber Dialog and studio-based Disney Online to Columbia TriStar Interactive and Warner Bros. Online — attended the event, which was sponsored by AOL, the Go Network, FasTV and Digitrends.

While early adopters are currently trying out faster Internet systems, the majority of Internet users will still be using modems slower than 56 baud into the near future, Internet observers said.

Increased growth

According to Jim Banister, of Warner Bros. Online, there will be 17 million broadband accounts and 60 million narrowbrand modem-based accounts online by 2002.

Yet some companies with a strong online presence aren’t taking chances.

E! Entertainment, for example, is blanketing the high-speed systems with its Web sites to keep from getting lost in the cyber shuffle.

“It’s too early to know who will emerge as the ultimate leader,” said Sarah Lesch, E! Online’s veep of marketing. “But we want to make sure we’re not left out when one is chosen.”

But not all agree with that approach.

“I don’t see how that’s possible,” said Lisa Crane, veep of NBC Online. “It’s too expansive to produce that much programming for so few audiences. It’s risky.”

NBC plans to continue programming for the narrowband community, which mostly uses 28.8 baud modems to connect to the Internet.

Rethinking advertising

As for online advertising, attendees agreed that while studios will eventually devote more of their advertising budgets to the Internet, they won’t take that step until the Net attracts more users.

“Studios are just now seeing the Internet as an advertising vehicle,” said Andrew Jarecki, founder and CEO of MovieFone. “Studios want to see reasons why the film opened, and, to date, there’s no reason on the Internet yet.”

“It is so easy to whine that studios don’t get it (the Internet),” Jarecki adds. “But they understand why they’re not doing it. The Internet just hasn’t reached critical mass yet. Movies are $100 million bets. The stakes are too high to risk devoting considerable advertising budgets on the Internet.”

Ira Rubenstein, veep of Columbia TriStar Interactive, agrees. “Until one studio says that there was a Web site that helped push their film, no one’s going to stick their neck out to devote advertising budgets online,” Rubenstein said.

Other event predictions of the future of Internet programming include:

  • Entertainment companies with strong brand recognition in traditional media will become equally strong on the Internet this year.

  • Broadcasters will begin using the Internet not solely as a promotional tool but as a tool to expand their programming.

  • Viewers of a television show will be lured to the show’s Web site after the show airs each week to see additional original programming involving the series’ characters.

  • Studios will use the Internet as a focus group to test movie trailers.

Consumers can also expect more DVDs to feature Internet links that enable viewers to see a pic’s script, engage in live chats and play games online. New Line and MGM have already made use of this technology, for “Lost In Space” and “Ronin,” respectively.

Among the conference highlights were keynote addresses by AOL chairman and prexy Bob Pittman and Warner Bros. Online prexy Jim Moloshok. The former spoke about branding, the latter about studios uniting to save their content from poachers.

The confab ended with an abbreviated 30-minute focus group featuring seven Palm Springs-area locals discussing their impressions of the Internet.

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