Warnings of trouble ahead for the television industry mixed with high-tech optimism as Disney CEO Robert Iger, “Law & Order” producer Dick Wolf, Time Warner Cable prexy Glenn Britt and telecom moguls kicked off the inaugural TelecomNEXT trade show in Las Vegas.
In front of the confab of entertainment and telecom execs, Wolf predicted labor strife in Hollywood and warned that TV, as it’s seen today, could vanish entirely.
In a conversation with Variety publisher Charlie Koones, Wolf said he’s convinced a strike over video and downloading revenues is inevitable.
“It’s the perfect storm,” Wolf said. “We’re buying the plywood and getting the water in.
“Nobody in this room called the strike in 1987. The writers were out six months, it was over similar issues, and they didn’t get anything.”
His advice for everyone involvedis to put off the discussion for five years, noting that after the 1987 strike, network TV began a long decline that still continues.
“There’s a potential that in 5 or 10 years, the only real revenue streams may be downloading. You may have gutted the off-network industry to an extent that it won’t make sense for them to pay for what is no longer secondary programming, but is tertiary programming.”
Download fees, he noted, don’t seem to have the potential to match the revenues of the current ad-supported TV model.
In 1987, Wolf said, auds discovered they could live very well without new television episodes and they could easily decide to make that change permanent. “Once it’s gone, it’s just like it was 50 years ago,” said Wolf. “People spent many millennia without the box.”
He noted that his own 12-year-old son watches no television and says his classmates don’t, either.
“All over America, 6th graders are no longer consuming network television,” said Wolf. “They’re playing videogames. They’ll play videogames anywhere. It’s the ultimate video-on-demand.”
Iger was more optimistic, but warned, “We’ve clearly entered a brave new world where many of the rules of yesterday no longer exist.” He added, “We believe it’s necessary for us to diversify when and how we distribute our content,”
Iger said new technologies are shifting power from the entertainment industry to its consumers, and that companies face great danger if they fail to adapt.
“You’ve heard the arguments back and forth about whether content or distribution is king,” Iger said. “We’ve concluded the consumer is king.” Iger said media content would become less linear as consumers get more power to decide when to view content, and on what device to view it. “Remaining a slave to fixed consumption would be a huge mistake and at Disney we’re refusing to do that,” he said.
The Mouse CEO said there have been 4 million downloads of Disney shows via Apple’s iTunes Music Store, saying the deal “introduced a new distribution platform and of equal importance, a new revenue stream. It was the right deal for Disney.”
Iger did not address the sensitive issue of theatrical film windows, making only an oblique remark that existing partnerships must be respected. But he said “It’s essential that we continue to evaluate our existing business models. Maintaining the status quo will prevent us from taking advantage of opportunities. I told the shareholders meeting a few weeks ago that probably the riskiest thing we could do is maintain the status quo. We’d run the risk the world would pass us by.”
Iger pointed to the array of choices now facing consumers, including video, games, blogs, chat and more. “This proliferation we feel is going to place a greater value on brands and on quality experiences. We feel there will be a greater difference in this new world between what is good and what is inferior.”
He predicted this will open up opportunities for content companies, and said Disney is working across all its businesses to deepen its relationships with consumers.
The most upbeat notes were sounded by telco toppers Ivan Seidenberg of Verizon and Norio Wada of Japan’s NTT, while TW’s Britt was generally positive about the convergence of entertainment and communications networks.
Seidenberg proclaimed “The next wave of the Internet revolution is being created as we speak,” looking ahead to a world of broadband-everywhere, two-way communications that will “drive the next generation of consumer electronics and provide new creative outlets for content and applications.”
But Seidenberg, Iger and Britt all decried efforts to re-regulate the communications industry.
Iger told the confab that “Government regulations over the long run will be bad for your business, bad for our business and bad for the consumer, as they’ll pay more for less choice. There’s simply no economic or policy justification for the federal government to dictate how television offerings are structured or television offerings are priced.”