Industry toppers dig digital at confab
The answer to digital piracy isn’t simply fighting it — find new business models or prepare to die.
Such was the refrain of News Corp. prexy Peter Chernin in remarks made during the opening-panel discussion at National Cable and Telecommunications Assn.’s annual confab, which opened Sunday.
Viacom prexy-chief Philippe Dauman said branding was likely the best way to survive challenges posed by digital distribution.
Addressing the question of whether their companies were skeptical or hopeful about new wireless platforms, both execs expressed conditional optimism.
“I’m not a skeptic,” Chernin said. “We look at this as an opportunity, hopefully profitable. The challenge is how do we protect our margins, especially our margins of existing distribution. We’ve got to look at new forms of distribution as an opportunity for content providers.”
The biggest challenge is that of digital piracy.
“We all have a vested interest in protecting copyright,” Chernin said. “But we all need to find the best ways to deliver our content to customers where and when they want it and at an affordable price. If we do not find a legal way to do that, people will find illegal ways.”
Fighting piracy alone, Chernin elaborated, would not be enough.
“To the degree we’re only trying to protect existing business, we’re toast,” he said. “All we’re doing there is staving off the inevitable. We’ll be dinosaurs sentencing ourselves to extinction.”
Chernin emphasized that more time needs to be spent developing new business models than protecting old ones.
Dauman said branding was the way to go. He noted the success of “The Hills,” now in its third season and popular on many platforms. “The more we put it out there, the more we find it profitable to our brand,” Dauman said. As audiences continue to fragment, “Brands and hits become more important than ever,” he said.
Earlier, in his keynote speech, NCTA topper Kyle McSlarrow said cable is prevailing uniquely in a weak economy and the market needs no regulatory intervention, thank you very much.
The theme of this year’s convention is “Think Big!,” and McSlarrow emphasized all the reasons cable should be doing precisely that.
“The most interesting thing to me right now,” McSlarrow said, “is that in the face of an uncertain economy and the most intense competition we have ever experienced, we are growing… and growing in a way that sets us apart.”
“Our investments in innovation and quality are working,” he continued. “We have become technology leaders in the communications industry, not simply a platform for television. And we are playing offense. Cable networks continue to grow market share, continue to invest in more quality programming and garner an increasing share of awards of critical acclaim.”
McSlarrow touted, in particular, cablers’ recent successes in entering the digital phone service biz.
But he cautioned that certain governmental officials were either not aware or not seeing these positive trends.
“Against the reality I’ve just outlined, we often hear policy proposals that assume that the marketplace doesn’t work,” McSlarrow said. “But the evidence is to the contrary. To put it in election year terms, consumers are voting overwhelmingly for our services and products.”
Two such proposals involve federal regulation of Internet access — the so-called Net neutrality debate and the ongoing pressure cablers feel from Federal Communications Commission chairman Kevin J. Martin to offer a la carte subscription models, which the industry says are not economically viable.