Vivendi CEO stresses integration, digital devices

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NEW YORK — Vivendi Universal CEO Jean-Marie Messier expounded on the strategies driving his fast-growing transatlantic media company in a freewheeling interview with Credit Suisse First Boston managing director Laura Martin to kick off the Front Row conference Tuesday.

While stressing that integration of the U.S. and European sides of his business has been rapid and all but seamless, Messier revealed how the shifting technologies reshaping the global economy will provide new revenue streams for his company.

“We have made the choice to focus on music, movies, games, education and sports. We want worldwide leadership” in those five categories, he said.

In her questions, Martin was quick to emphasize Vivendi Universal’s leading role in the distribution of content to portable devices.

But Messier called himself “technology-agnostic.” Vivendi Universal, he said, will seek out the simplest interface for customers, whether on mobile devices, PCs or TVs. Company’s pay TV service Canal Plus, the largest in Europe, has more than 50 million subscribers. And the market penetration of mobile devices in Europe, he said, now stands at 60%.

“There’s only a few areas in which Europe is ahead of the U.S., and this is one of them,” he said.

The revenues Messier hopes to realize from mobile portals, he said, will be driven by subscription services based on micro-payments. By 2003 or 2004, such services will generate 50%-60% of revenues, he said, as opposed to advertising, which will provide one-third or less.

Messier sees a profitable future in music subscription services. Vivendi Universal’s primary interest in Seagram, he said, was the music division. “With kids, music is driving the business,” he noted.

Messier also was quick to praise Barry Diller’s experiments with localized content on his TV stations. “I fully share Barry Diller’s vision that localized services are key to reaching customers (and) developing a customer base and new revenue streams.”

Vivendi Universal quickly is becoming a fully balanced transatlantic company, he said. “Today, Vivendi Universal is one-third inside the U.S. and two-thirds outside the U.S.” He called Vivendi a small company: The top management team is only about 200 strong, he said.

In three years, he said, through deals with various distribution platforms as yet unnamed, the company will become 50% American.

“We have tried to rely on existing (managerial) talents,” he said, noting that nearly all of the top Universal executives had decided to stay with the merged company.

As for the advantages of having scale and scope, Messier stressed that being big was of huge value in attracting and retaining creative talent. By controlling distribution platforms in both the U.S. and Europe, the newly combined Vivendi Universal offers creative people “their biggest chance to have worldwide success.” He added that “decentralization” of creative teams working for the company also was crucial to their success.

“You have to have few centralized rules. Creative teams have to remain small and independent.”

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