Big Media Seek 21st Century Business Models

Media moguls at this week's Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy.

With difficult credit markets and an unclear future, talk of dealmaking has been at a minimum this year. Yet there has never been a more important time for media conglomerates and their financiers to act and adapt to the Internet age. The mood at the conference was described as "somber" and "very bearish" by executives. While the recession was a key reason, the other was the uncertainty over how future profits can be made from distributing news and entertainment online and across devices like smartphones.

"We're not using long-form content on the Web because it's not clear to us that's the way people want to consume content, said David Zaslav, chief executive of Discovery Communications Inc, which owns the Discovery Channel. "But also the business model isn't there yet, so we're taking it slow," he said in an interview on the sidelines of the event organized by boutique investment bank Allen & Co.

In the late-night bar at the Sun Valley Lodge, from which the press was banned, most of the discussions were around the issue of free versus paid content, said one senior executive who asked not to be named as his conversations with other executives were private. The challenge is how media companies can keep alive the lucrative cable business model at a time when consumers are increasingly used to getting content for free online. Cable operators pay affiliate fees to cable networks for their programming, and both share advertising revenue.

Plans such as Time Warner Inc's "TV Everywhere" and Comcast Corp's "On Demand Online" seek to preserve that business model by offering cable shows on the Web to authenticated, paying cable TV subscribers.

"Authentication is an interesting intermediate step and is something that we're looking at," said Zaslav. The conversations about TV Everywhere are heating up. Google Inc CEO Eric Schmidt confirmed to reporters that he has had early talks with Time Warner about the possibility of getting paid cable shows up on YouTube. But he did not elaborate.

TV VS PRINT AND MUSIC

Television studio executives do not want to repeat the experience of their colleagues in the hard-hit newspaper and music businesses, and are worried that consumers will expect TV shows, movies and all professional programing to be free. Hulu.com, owned by News Corp, NBC Universal and Walt Disney Co, offers broadcast TV shows and movies for free on the Web, but there has been talk at Sun Valley among executives of introducing a paid content model.

Wired editor Chris Anderson argues in his book 'Free' that many companies, with media at the forefront, could build bigger and better businesses around the notion of giving away their content for free. Many executives in Sun Valley would not agree. 'Free' -- supported by advertising -- is not a new concept. After all, broadcast TV is free but its dominance has been eroded by cable channels and its future as an advertising outlet is bleak.

Newspapers owned by News Corp and others are fervently examining news-bundling pricing models to seek ways to get users to pay to read news online. One consideration may be to bundle different properties along vertical lines, such as business and sports news, for a monthly fee.

Far from free, what media moguls would want to preserve on the Web and mobile platforms is the dual-revenue stream from subscriptions and advertising. "The big thing for these guys is how do you come up with that dual revenue streams online," said Jeremy Alliare, chief executive of Brightcove, an online video company that partners with many major media companies. "Cable TV is a part of that but I think it's a broader industry discussion."

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Source: http://tech.yahoo.com/news/nm/20090711/wr_nm/us_sunvalley_media_5

Tags: Hulu, News Corp, NBC Universal, Walt Disney Co, YouTube, Brightcove, Cable TV, Comcast, Chris Anderson, Wired, Global Blog Network, Paid content Model, Media moguls, Sun Valley conference,

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Why VeVo Could Become The Hulu Of Music

Universal Music has apparently seduced a cortortium of indie labels, A2IM, to join its video site Vevo. That follows last week’s news that Sony (NYSE: SNE) Music Entertainment has also signed up for VeVo, which Universal is launching with help from YouTube, the Google (NSDQ: GOOG) video site.

Assuming it doesn’t run into some unforeseen obstacle, VeVo could easily become a mainstream digital platform for the struggling music industry, much like Hulu has become for the TV industry.

—The labels will probably work together better this time, providing consumers with a robust, complete content offering. The labels likely learned their lesson from the failure of digital music download services launched in the early 2000s, including pressplay (Sony and Universal) and a venture powered by MusicNet (EMI and BMG).

Consumers rejected those services for their complicated licensing procedures and lack of choice in the acts offered for sale. This time around, it looks like the labels are ready to be more collaborative—a release announcing Sony’s participation said it would include a broad array of its artists on the site.

—Demand for digital music videos is strong, and different types of programming could increase users’ appetites. Four of the top-five professional channels on YouTube are music related—Universal Music, Sony Music, Britney TV and Hollywood Records.

So there is no question that people are watching and listening to a lot of music online. Most of the videos on these channels are fairly basic; Universal has said it plans to complement its usual offerings with exclusive interviews, reality programming and exclusive performances.

—Advertisers will likely embrace the service. Many video sites are evolving to try to meet advertiser interest in professional content. YouTube recently started streaming professional TV and movies, while competitor Metacafe, responding to advertiser feedback, added more professional content and organized it in hubs. Music reaches an elusive, young demographic, which, of course, is attractive to advertisers. One caveat:

As of now, it appears that Universal Music Group will be selling the ads for VeVo, and it remains whether people steeped in promoting records can also sell premium ad packages.

Source: http://www.paidcontent.org/entry/419-why-vevo-may-be-the-hulu-of-music/

Tags: Vevo, hulu, digital music, universal music group, youtube, google, yahoo, sony music entertainment, metacafe, Hollywood records, A2IM, musicnet, EMI, BMG, Global IT News Blogspot,

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