Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

How to win friends and influence people: On stage with top media execs at NAB 2005 in Las Vegas

Posted by Tom Foremski - April 29, 2005

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By Tom Foremski for SiliconValleyWatcher


recipe_a.jpgLast week I was in Las Vegas at NAB2005, the world’s largest electronic media show, on stage with top media and technology industry executives.

Dan Scheinman, Cisco’s head of mergers and acquisitions, was moderating a panel on "Networking and Distribution of Digital Media." He asked me to join the panel as a “disruptor,” or rather, as a representative of the disruptive effects of new media technologies on the established media sector.

Also with me as a co-disruptor was Curt Mavis, CEO of CinemaNow, the download-to-a-computer online movie site. The rest of the panel consisted of: Steve Banfield, head of Sony Connect, the online music site; Larry Shapiro, Executive Vice President of the Walt Disney Internet Group; and Lars Buttler, Vice President of Global Online at Electronic Arts.

What’s a blogger journalist doing up on stage, squinting into the lights, and telling these senior media execs what their business models should be?

I have no idea; but I did it anyhow, and told them how to make money; and Curt Mavis told them that there is no money in the Long Tail business model (nobody wants to be in that market.)

When Dan asked us about new business models, Steve from Sony said that they had learned a lot from their online projects, and were still deciding. Lars from Electronic Arts said online gaming was a great business, because it can’t be pirated, so there is a very easy and obvious business model there.

Give it away

I said that I am increasingly of the opinion that you give away the content, and charge for the packaging. For example, $10 for a DVD movie is not bad; you get nice packaging and it saves the hassle of burning a copy and marking it with a sharpie (that’s what the music industry doesn’t understand.)

With online content, I think news stories, interviews, etc, have to be open to all distribution channels, and allowed to be freely distributed. The money will be made on the packaging of the content: all the places where extra value is added such as PDFs, RSS feeds, collections of essays, e-books, and ancillary products and services.

[For example, it used to be said that movie theater owners made their profits on the popcorn and soda, not the movies.]

Steve from Sony slammed that idea as not applicable to movies, saying if the movie studio has sunk $120m into Spiderman, it isn’t going to be giving it away.

What about a lower-quality format version of it, I asked? He shook his head.

Curt, from CinemaNow, had pointed out that Hollywood gives movies away for free all the time —on TV. He also said that he had to be patient, and see what the online business models would be. [He later also said that he would like to see a good community platform of some kind focused on movies.]

I want to be disruptive

We were asked if it was better to be on the side of the disrupting forces, or be on the disrupted side. I can’t remember what the others said; but that was an easy one for me to answer.

It’s certainly less painful to be on the disrupting end of things, especially when we look at the disruptive impact of online on print media. It’s only going to get better from where I sit. New online business models are being created; and a gold rush is beginning, as online advertising soars, which will drive a need for content. This time, content will be king (BTW, I bought ContentWillBeKing.com about a year ago ;-) ).

Print media won’t go away, I said, but it is a crumbling business model, and it is unpleasant for the people inside it. And things are continuing to worsen, as tech and financial-services advertising drops.

Future looks bright

Things continue to get better in the online world: there is demand for quality online content. But that online content can’t be competitively generated from within a print media cost structure. You have to start from the lowest cost structure, which is an experienced journalist and a computer and cell phone, as part of a small, highly efficient editorial/online production team.

[That’s what Google did, BTW. It created the lowest cost business model for publishing content. Google uses clusters of standard PCs and open source software, and publishes machine-harvested content (pages of links to other sites.)]

The panel session was fun; and it went by too quickly. Afterwards, I lingered for quite a while, chatting with people who wanted to talk about blogging and various online projects they had in the works. The feedback on the panel was good; and I came home with a pocketful of new contacts.

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