Schwarzenegger backs digital moves

Broadband rollout will help create 1.8 mil jobs

Just as striking scribes are demanding a higher percentage of the new media dollars Hollywood takes in, California Gov. Arnold Schwarzenegger said the state needs more digital infrastructure.

Rollout of broadband throughout California will help create 1.8 million jobs and $132 billion in payroll over the next decade, Schwarzenegger said Tuesday before a panel discussion sponsored by the USC Annenberg School for Communication’s Center for the Digital Future at the W Hotel in Westwood.

The governor will present his digital plans next month in a report compiled by a broadband task force.

Schwarzenegger’s goal to have the state’s residents connect to the Internet via high-speed lines were part of an overall view of California’s need to spend more on infrastructure — from improving roads to water distribution.

“There’s a huge lack of infrastructure in this state,” Schwarzenegger said. “We’ve got 37 million people and infrastructure built for half.”

Improved technology will create a demand from consumers for more content and give distributors more opportunities to generate revenue from putting programming on the Web.

“If people have no incentive to create, we have no content business,” said James Cicconi, senior exec VP of external and legislative affairs for AT&T’s public policy org.

The caveat is, the technology has to work.

“A lot of revenue streams will lose people who are not willing to pay if the service is bad,” said Ted Cohen, managing partner of consultancy TAG Strategic and chairman of the Mobile Entertainment Forum. “They’ll say, ‘just make it work or I’ll go find it for free.’ ”

Having more people online also doesn’t deal with the issues studios have in distributing their content, panelists said, referring to the need to balance an effective price to sell online fare with costs to digitize programming for multiple platforms.

“As bandwidth starts to proliferate, how we respond will make or break our businesses,” said Mitch Singer, chief technology officer for Sony Pictures Entertainment and exec VP of new media and technology for the studio, reflecting on how the Web affected the music industry.

Singer said what’s important is finding a way to “create a better product consumers can get digitally” across multiple platforms than what’s already offered in stores. Until that happens, “retail is still the most effective way to sell our content.”

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