Digital Hollywood Media Summit
The Digital Hollywood Media Summit started today with opening remarks from Terry McGraw followed by a keynote interview with Barry Diller of Interactive Corp.
An international audience of media executives listened in the standing-room only auditorium as the two executives both discussed the convergence of technology and content and the impending shakeout as growing amounts of money are chasing markets and opportunity that are not limitless.
Terry gave his views on the differing roles and values of content & producers vs. audiences and consumers. With the explosion of media on the Internet and the tearing down of walls, consumers can grab what they want. Consumers increasingly are wanting open doors and open content, but with accuracy and easy ways to find and sift through the mountains of information.
The discussion with Barry Diller was moderated by John Burn of Business Week. Here are my notes from the keynote.
On Ask.Com
Ask is the glue between all of our businesses. They had a market cap of $1.6B. A unique way of searching - content and community over popularity. We liked the technology, but could we movie it up in position relative to other search engines? Search is a media market, not a winner-take-all market. We’re all in trouble if Google captures the monopoly. Media models have multiple players, and that’s a good thing. It may not be us, but the market shares will balance out over the next 5-10 years.
On Viacom - YouTube
Viacom just tole YouTube to take down their content. Are they being shortsighted? In contrast to the music business, availability is not an issue. Viacom has every right to say that YouTube can’t have it, but we’ll make it available through the right medium. The issue is availability, and Viacom has said that they won’t go into the Google/YouTube market where they will get too strong and be the only avenue for online distribution.
Smart for Viacom, but how do you get paid? Subscription? Advertising? Micro-transaction? Don’t know if I would do it, but you are not going to take my content and control it for other people. I don’t know what we’ll do, but you won’t do it.
On Social Networking // Match.com
We’re not in social networking, other than Match.com, but that has a paid subscription. Social networks are an upgrade to the Mall or the phone for people to gather and talk to each other, but is it easy to sell advertising in that medium? Maybe for promotions, but not sure about traditional advertising. They are definitely an advertising business model, just not completely evident how successful it will be.
Match.com got into trouble because it added too many social networking bells & whistles and confused our audience. We went from 1+ million subscribers down to 880K subscribers before we stopped it. We got back to our core and back to 1.3+ million subscribers. They leave us after a while, but as life goes, they tend to come back.
On User Generated Content
We should not get all crazy about this. Is there a limit to UGC? Anything interactive is UGC. What isn’t? The user posts things online and is part of an active process. But after you’ve seen the cats or the people tripping around, what else is there. There are only so many talented people who can create things that lots of people want to see. It’s not 100, but it’s also not 1 million, I can assure you. Stuff for your family isn’t anything — just scrapbooking. That’s not business.
The professional talent will create the content that will make you laugh, cry, etc. it’s not the long tail. A very short tail will create the content that massive audiences will watch. Professional content will retain its value.
On Collegehumor // Acquisitions
We liked what they did (along with their 5+ million uniques), but also the team. They created Vimeo on "spit". We want to invent product, starting with 23/7, a comedy news site. We’ll invest a few hundred million in capital in these kinds of services over the next few years. It’s the perfect time now that there’s a pipe large enough for video, data, etc.
We prefer starting things to buying things, but we’ll buy anything that walks if we thing it’s good. Valuations right now are not rational, and I prefer trusting people in your own house vs. people that are trying to sell something. Most of the time buying things for more than they are worth doesn’t work out.
You judge valuations based on how much you can lose, not how much you can make. The height of craziness is to read forward projections and put money into it. The only thing I can do is look at how much capital I’m putting out, and how much will I lose if it doesn’t work out vs. how much I love the opportunity.
On MySpace
I don’t care what we don’t do. We passed on MySpace. We didn’t get it, and don’t care that it worked. If we don’t think it’s of value, then it’s someone else’s good or bad fortune, and not ours.
On Television
I don’t thing the TV business is lousy to be in right now, but it will be tremendously challenged by creative destruction in the next few years. Some of these things will evolve. I can’t tell you the tight distribution models will exist in 10 years. I don’t think they will. This is a radical revolution, and there will absolutely be both destruction and creation.
That’s it for now. Off to the first round of sessions.