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Media revolutionaries team with old guard

reporter's notebook Hollywood is at a turning point, as record labels were five years ago. But much has changed in entertainment companies' favor.

reporter's notebook CENTURY CITY, Calif.--Anne Sweeney, president of Disney-ABC Television Group, opened her speech with a line probably more optimistically befitting the times than literally true.

"The beauty of our company is that we love chaos," she tells techies, movie and music executives sipping their morning coffee in a posh Century City hotel ballroom. "We embrace change as a part of life."

As the Disney executive associated with bringing small versions of "Lost" and "Desperate Housewives" to Apple Computer's video iPod, she speaks of change with some authority. With a recent series of small but consistent steps, the TV and film world has put itself squarely on the often-painful digitalization path traveled by the music industry over the last five years.

Yet at the Digital Entertainment and Media Expo conference, held in the shadow of MGM's tall office tower here this week, it's utterly clear how much has changed. A similar event five years ago would have been peopled primarily by technologists promising to overturn the hegemony of old-media dinosaurs, with record label executives looking like the hunted, if they were in attendance at all.

Today, old-guard media feels far more in control of this particular technological cycle, even if it is one of chaos and change. Sweeney is joined at this conference by executives from other studios, record labels and TV stations. Few claim to have a definite picture of tomorrow's market. But it is clear that the start-ups and technology companies here see their futures as dependent on amicable relationships with those media titans.

Ask Conrad Teran, president of iSeeTV, a start-up that?-like an increasing number of companies in the past six months?-has allowed anyone to distribute video content online. Teran says this kind of alternative channel allows experimentation, amateur programmers into the business, and professionals to test commercial pilots and other shows without network support.

He's also quick to ask clients if they have advertising, sponsors or money. One of his first clients is a Clear Channel radio station that's turning its audio station into video.

The old giants "are still a big part of the game," Teran said. "They will never be irrelevant."

In many ways, the TV and video industries face the same challenges that record labels faced in 2000 and 2001. Consumers have begun experimenting with digitally downloaded versions of industry content, and early adopters' expectations already far outstrip what the content companies are willing to provide.

File swapping of movies and TV shows is widespread. Just as in the early days of the digital music business, the reluctance of TV and movie studios to provide a wide variety of online content has led to less-than-satisfactory official download services such as Movielink and CinemaNow.

Apple's iTunes store has provided a taste of one possible future for authorized downloads, but its available content has been scant and of poor quality compared to a DVD.

In 2000, that was recipe for consumer rebellion, as peer-to-peer shortcuts like Napster allowed pent-up demand for digital content to explode onto the Net, devastating any illusions the music industry had about its own future.

This time around, content companies have accumulated a half-decade of court support. Record labels and movie studios have filed thousands of lawsuits against individual file-swappers. Even if they've failed to stop file-swappers wholly in their tracks, it is now clear to parents and would-be swappers that copyrighted content isn't legal to download without permission.

A U.S. Supreme Court ruling has put peer-to-peer networks on the defensive; most are now seeking to make peace with content companies. And technology entrepreneurs remember the scores of now-defunct dot-com companies whose plans to revolutionize media distribution foundered on a lack of support from record labels, movie studios and TV networks.

Not that this makes life easy today for old media.

Just as transformations in the music business have made life difficult for retail music stores such as Tower Records or Sam Goody, the prospect of changes in TV and movie distribution is causing indigestion all the way down Hollywood's food chain.

Advertisers have been worried that Disney's relationship with Apple might lead to a further erosion of their ability to reach viewers. Theater owners, represented at this week's conference by the National Association of Theater Owners (NATO), have been fighting bitterly against the prospect of moving DVD releases and on-demand Internet viewing to more closely match theatrical release dates, an idea championed by Disney Chairman Robert Iger.

"At some point, that shrinking (release) window would dramatically affect cinema admissions," said NATO executive director John Fithian. "If the industry were to convert to simultaneous release on DVD, or with downloads, that would have devastating impact on the cinema industry."

There's plenty of chaos and change to go around. But the digitalization of Hollywood and its TV siblings is underway, and already taking a very different path than its musical predecessors.