By Kenneth Li
Leading media executives took a combative tone against Internet
companies on Tuesday, suggesting that Big Media increasingly considers
new content distributors like Google Inc. to be more foe than friend.
At a panel discussion on the second day of the 56th annual National
Cable & Telecommunications Association conference, top executives said
talk of the demise of traditional media in the digital age was
overblown.
While new distribution technologies like the Internet and mobile
phones are siphoning television audiences, media companies argued that
the Web also brings new revenue streams.
But the discussion quickly moved to criticism of the perception that
traditional media businesses are dead, and to the rampant copyright
offenses enabled by new digital technologies.
"The Googles of the world, they are the Custer of the modern world. We
are the Sioux nation," Time Warner Inc. Chief Executive Richard
Parsons said, referring to the Civil War American general George
Custer who was defeated by Native Americans in a battle dubbed
"Custer's Last Stand."
"They will lose this war if they go to war," Parsons added, "The
notion that the new kids on the block have taken over is a false
notion."
Time Warner defended its discussions on copyright protection with
Internet search leader Google Inc., which another panel member, Viacom
Inc., has sued.
Viacom, owner of the MTV and Comedy Central networks, is seeking more
than $1 billion from Google and its online video site YouTube,
accusing them in a lawsuit of "massive intentional copyright
infringement."
Viacom CEO Philippe Dauman said on the panel his company had discussed
working with Google and YouTube earlier than other major media
companies, by virtue of the popularity of its programs on the Web and
their resonance with young viewers.
Dauman said Viacom had little choice after failing to reach an
agreement, as video clips of its shows were uploaded by YouTube users
without its permission.
"So, it was only reluctantly after trying for a long period of time,
to reach a deal that we found that we could not tolerate having our
content taken, when we've got Brian and Dick and others compensating
us for it," Dauman said, referring to Comcast Corp. Chief Executive
Brian Roberts and Time Warner CEO Richard Parsons.
"We were forced into it," he added.
Google, whose advances in applying its Internet paid search technology
to the television industry, radio and print has spooked traditional
media companies, owns a 5 percent stake in Time Warner's AOL Internet
unit.
"We're in a world where we're a partner with everybody and we're
fighting everybody," News Corp. Chief Operating Officer Peter Chernin
said on the panel.
Despite the attention from Wall Street, the media industry and the
press, executives said the percentage of overall sales contributed by
digital businesses remained small and they should be mindful of
destroying existing lucrative businesses.
"The amount of money we get from those (Internet companies) are a
fraction of those we get from the cable industry," Chernin said. "We
have to be careful not to disaggregate."
News Corp. is likely in a position to know how enemies today could
turn into friends tomorrow.
A source familiar with the matter said News Corp.'s Fox Interactive
Media, which oversees its popular Internet social network MySpace, had
reached a preliminary deal to buy photo sharing site Photobucket for
an estimated $250 million.
MySpace last month blocked traffic coming from Photobucket after the
photo service began running ads on photos displayed on MySpace sites.
MySpace said it had violated its service terms.
"You'll see more acquisitions," Chernin said. "This is a world where
the big get bigger. You'll see increased consolidation."
Copyright 2007 Reuters Limited.
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[TELECOM Digest Editor's Note: Many of us could have (and did) tell
you many years ago that the print media has no use at all for internet
media. Oh yes, of course the newspapers have 'web sites' and e-news
features; they have to stay in the loop, after all, but they are not
really happy about this intrusion into 'their territory'. My heart
bleeds for them. PAT]
Kenneth Li (reuters@telecom-digest.org)