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Technological tipping point

Nets' haul could drop $3 bil annually by end of decade

This fall’s exodus of young men away from network television is yet another harbinger of just how bad things could soon get for programmers and producers.

That’s the bottom line from a quartet of TV and ad execs who gathered here for a NATPE panel on audience erosion and its impact on execs and suppliers.

Technology is “taking us further and further away from the world we knew,” said moderator Rich Frank, the former Disney topper who now serves as managing partner for Integrated Entertainment Partners.

“This business is about to experience the tipping point,” Frank said, noting that the convergence of technological advances such as TiVo and digital cable will force programmers to find new ways to pay for content.

WB co-chair Jordan Levin, while continuing to dispute Nielsen’s methodology, said execs need to get ready for a world where viewers choose when and how to watch programs.

“We have to accept it and move on,” he said. “Younger audiences…are changing their habits.”

Levin said the Big Six stand to lose up to $1 billion in ad revenue because of this year’s audience declines, and predicted that if TiVo-like devices reach 30-40% of U.S. homes by the end of the decade, the nets’ upfront haul could be reduced by up to $3 billion.

“That’s a huge gap. And how that money’s going to get made up is the question everyone is asking themselves,” he added.

Geoffrey Frost, an SVP at Motorola, said cell phones are rapidly morphing into “personal command centers,” and that younger consumers in other countries already have no problem accepting the idea of video content on relatively tiny screens. In one country, cell users regularly download 1-minutes sudsers, which are updated several times per day.

“What if TV becomes something that’s with you 24/7?” he asked.

Mindshare prexy Marc Goldstein said advertisers are open to new ways of reaching viewers, and are already making plans to shift coin away from broadcast TV. “We need to find ways for our brands to break through the clutter,” he said.

Panelists also agreed that broadcasters need to learn from the mistakes of the music biz and figure out a way to address piracy head on.

“The potential impact of piracy is much closer than we think,” Levin said. “It’s easy to see how (viewers) could download a sitcom to their cell phone very quickly.”

Levin and others said the industry needs to come up with a legal way for consumers to download TV shows, a la Apple’s iTunes, so that a Napster- like system doesn’t stake out such territory first.

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