Pre-show keynote: Content Roundtable
Pre-show events are generally underwhelming and under-attended, which leads event planners to set-up a smaller room for the venue to make it look like a full-house. Yesterday's pre-show keynote here at TelcoTV in Dallas, Texas was held in a smaller room within the Gaylord Resort and Convention Center, as expected, but it was so crowded that calling it "standing room only" would be a falsity. There wasn't even anywhere to stand. The opening keynote was a panel of content providers moderated by the president and CEO of Federal Hill, Bethany Gorfine. Jon Cody, VP of Digital Media at Twentieth Century Fox and Gene Pao, the executive director, business strategy and development at Disney & ESPN media networks were the scheduled panelists joined at the last minute by Doug Hurst, SVP, On Demand and Affiliate Marketing, Scripps Networks. Here's a sampling of the the discussion broken down by the key topics: If you build it, content will come Disney: We are slaves to the technology, if you build it we will make the content for itÃ¢â‚¬Â¦ Why content costs so much Federal Hill: The movie business is considered by many to be a poor investment, Fox: At the end of the day we have an 80-20 set-up, 80 percent of them are misses and 20 percent are wins (profitable). Borat looks to be the studioÃ¢â‚¬â„¢s big winner this year. On place-shifting content Fox: Right now we do have theoretical problems with technologies like Sling, but we may soon have some legal ones too. Porting our content to markets where it is against regulations to do so, for instance, we donÃ¢â‚¬â„¢t have the license to broadcast certain sports games in market A, because a different network, a local channel might. That said, at the end of the day, we are all about giving the consumer what he wants, when he wants and where he wants it. A La Carte Fox: Our internal studies have found that once a user has more than nine channels on an a la carte basis, it will begin to cost more than the standard bundle. So while this notion of a la carte is serving as a rallying cry in Congress, as a call for Ã¢â‚¬Å“more consumer choiceÃ¢â‚¬Â often does, it really will end up costing the subscribers more money. We estimate that a la carte would skim off about 20 percent of revenues, which is just about all of the profit marginÃ¢â‚¬Â¦ But if a specific service provider comes to us and asks for a specific bundle, the short answer is yes, because for us nothing is off the tableÃ¢â‚¬Â¦ I think there is a 1 percent chance Congress would pass any law requiring a la carte offerings and only a 5 percent of anyone suing us over itÃ¢â‚¬â€I mean, who would sue, the Department of Justice? I donÃ¢â‚¬â„¢t think thatÃ¢â‚¬â„¢s likely. Again, itÃ¢â‚¬â„¢s a great rallying cry, Ã¢â‚¬Å“consumer choice,Ã¢â‚¬Â but itÃ¢â‚¬â„¢s a very divided issue in D.C. right nowÃ¢â‚¬â€I donÃ¢â‚¬â„¢t think the debate is going to go away for a long time. Disney: We donÃ¢â‚¬â„¢t think you should nickel and dime a customer for each additional channel. Scripps: None of our networks could have launched in a market dominated by an a la carte business model. Online video Disney: Online ad revenue for video services is a $1 billion or $2 billion market, which sounds like a lot to a new media company, but an existing company with a stake in the $65 billion traditional network is not going to be too eager to cannibalize that for a slice of that $1 to $2 billion market. Collapsing Windows Fox: I donÃ¢â‚¬â„¢t know if youÃ¢â‚¬â„¢ve noticed it but we have shaved a week off our windows (the time between launching a movie in theaters and launching it in VOD) in the past three months. I think the windows are collapsing and I think they will continue to but IÃ¢â‚¬â„¢m not sure weÃ¢â‚¬â„¢ll ever get to Ã¢â‚¬Å“day and dateÃ¢â‚¬Â (releasing movie both in theaters and through VOD simultaneously). WeÃ¢â‚¬â„¢re looking at launching the HD version of the movie before the standard version on VOD, to make that HD experience an event in the family room. On exclusive content Disney: Rarely is there enough money on the table to convince a content provider to enter into an exclusive agreement with a service provider. Just think of all the other ad revenue from other providers that will be lost on this deal, it gets too expensive for most. That aside, even in the rare case where there is enough money, content providers want to create a large footprint because most of them are looking to brand that content, too. On the future of Nielsen ratings Disney: TV is still a better measured media than many others, in my opinion, with the exception of the regular internet. Although there may be more metrics in that case, I would still argue that Nielsen is still a better way of measuring. Scripps: The business of reporting on nonlinear VOD is still in its infancy. We have experienced issues with such reporting whether due to technical glitches or human error. One problem is the STB guys can give us our data but not our competitorsÃ¢â‚¬â„¢ data, while Nielsen provides both, you can see how everyone did.