Media honchos sound off on emerging TV tech
The government's deadline for a digital TV transition is unrealistic, execs say, and the verdict is still out on digital video recorders.
The closing session of the National Cable & Telecommunications Association here Tuesday pitted executives from rival media giants--NBC Universal, News Corp., Time Warner and Walt Disney--against one another in a panel on the changing entertainment industry. However, in most cases they agreed on the impact of many new technologies, with the consensus being that older technologies, such as DVDs, are the current money makers, but they expect that to change.
"Our DVD sales make more money than Comcast, which is why they wanted to buy us," said Bob Iger, Disney's chief operating officer, referring to Comcast's failed acquisition attempt of Disney. "Those new technologies (video on demand, digital video recorders and high-definition television) will become good businesses, but they aren't now."
Seasons of television shows on DVD make up the fastest-growing segment in Time Warner's DVD sales, Time Warner's Jeff Bewkes said. News Corp.'s president, Peter Chernin, estimated that his company did $700 million in DVD sales. While there's still a lot of life in tried-and-true products, emerging technologies not only attract gadget-hungry consumers; in some cases they help overcome key concerns in the industry.
For example, high-definition television programs offer sharper picture quality, but their high level of data content--HDTV shows have more image detail and use more storage capacity--make it tougher to copy shows and distribute them over the Internet.
"If consumers like (HDTV), it could help to ease DRM (digital rights management)," Bewkes said.
However, the Federal Communications Commission's current Dec. 31, 2006, deadline to limit analog television broadcasts and promote digital television was deemed unrealistic by NBC Universal's Bob Wright.
"It's realistic if you're comfortable with chaos," Iger chided. "It's a probable disaster."
The reason has to do with cost of equipment needed to shoot shows in digital, which is expensive, according to Iger and Wright. Disney spent more than $100 million to build out its television operations for digital, and NBC Universal has spent more than $200 million.
"We can't strand people," Wright said.
Wright also said the effect of DVRs and giving viewers the ability to skip commercials was still not certain. Bewkes called the concern overblown.
Chernin--whose company owns satellite television company DirecTV, with more than 1 million subscribers using TiVo's DVR service--said that it's hard to say what kind of impact DVRs would have but that the industry has to adjust quickly.
"We may not like (DVRs), but we better learn to live with it and profit from it," Chernin said.