Summit Notebook

Discovery CEO talks about Oprah, her show, and OWN

Now that Oprah Winfrey has set a date for when the sun will set on her syndicated talk show — Sept 2011 — everybody wants to know if she will recreate the show on OWN. OWN, the Oprah Winfrey Network, is the cable channel set to flicker on in some 80 million homes in January 2011 with Discovery Communications.

At the Reuters Media Summit in New York, Reuters Paul Thomasch put the question directly to David Zaslav, the chief executive of Discovery Communications:

REUTERS: Do you expected Oprah will dedicate a lot of time to the OWN network? DISCOVERY: When we announced OWN, Oprah talked about it as being ‘her’ media company. Its a 50-50 venture. We think it’s going to be very significant asset. But Oprah is the chairman, she’s the chief creative officer. Shes spends a lot of time on it with me and the staff, she’s involved in all the creative decisions she has a ton of energy and great creativity. We always expected that she was going to be spending a lot of time in front of the screen and behind the screen.  Its a big win for us and the cable industry that (she) will be available primarily on OWN. OWN will really feel the strength and creativity of her presence.

REUTERS: Have you talked to her about bringing her current show, or something resembling her show, to OWN? DISCOVERY: We have talked about a lot of creative ways that Oprah can have a presence on OWN (such as Master Class). Oprah has a ton of great ideas. But ultimately, what Oprah does on OWN is Oprah’s decision.

REUTERS: But could we see her show show up on OWN? DISCOVERY: “The Oprah Winfrey Show” will probably go down as the greatest show on television in terms of inspiring people, connecting with people and the overall success of it for everyone involved. But (that) chapter will be ending. You will see her, she will be on in a meaningful way. But it will be different from her show and it will be what she wants to do.

A Barry Diller sampler from the Reuters Global Media Summit

Interviewing IAC chief and media mogul Barry Diller nearly always means that you’ll get more quotable quotes than you can stuff into one article. He didn’t disappoint at this year’s Reuters Global Media Summit on Wednesday. Here are thoughts from Diller on a range of subjects from mergers and acquisitions and Comcast to AOL, MGM and marriage.

Q: What are you going to do with the cash on the balance sheet? What’s the focus? Are you still being cautious?

A: “I’d say we still are. It’s definitely a looming problem. The only thing worse than spending cash stupidly is essentially not to put it down at all, not to do anything.”

Q: What would be the right opportunity to buy something?

A: “There’s no road map here. Anything of size, let’s call it $1 billion plus, is known. … Of the potential availables, nothing seems smart right now.”

Q: What about AOL?

A: “Steve Case came to me … and offered us AOL. In 1992 or 1993, Paul Allen was selling his stake, which was about 25 percent of the company. We were very fresh into buying QVC and overly cautious and missed the opportunity; opportunity since then I’m kind of glad I missed.”

Recession’s perfect storm speeds up change in ad industry

Why is it that the United States’ advertising as a proportion of marketing services is at its lowest point since 1977, maybe even lower than since the Second World War?

You may have guessed it it’s the recession.

But it will get better, Martin Sorrell, CEO of advertising giant WPP, said.

“The recession is less worse,” Sorrell said, repeating a favourite phrase of late, and while it’s the biggest recession since 1929 it is also “a perfect storm” that has brought forward change. 

“The recession has accelerated structural changes that were already happening,” Sorrell said at the Reuters Global Media Summit.

Will advertising ever go back to where it was? Yes, if you are looking at new media advertising on Kindles and mobile.

Will the United States rebound? Western Europe? Yes, to both.

NHL commish: Bigger not always better

If you want a new National Hockey League team, you’ll definitely need a spanking new arena, or at least one that’s been gussied up in a significant way. But that doesn’t mean it need be a super-sized arena,  Commissioner Gary Bettman said at the Reuters Global Media Summit.

“While we play to 93 to 94 percent capacity, we’d like to play to 100 percent capacity,” Bettman said. “A 15,000-16,000 seat arena might work better in some markets than a 19,000 seat arena.”

That’s promising news for Quebec City  and Winnipeg, who were  once homes to the NHL’s Nordiques and Jets respectively, and are said to be on the league’s potential expansion shortlist. Bettman told Reuters that both cities, and “even Southern Ontario” would be given a serious look if the league were to expand.

Smaller venues are becoming common in pro sports: Major League Baseball’s New York Mets and New York Yankees moved into smaller stadiums this year, and the Canadian Football League’s Montreal Alouettes have thrived since moving in 1998 to a stadium a third the size of its original home.

But though smaller, cosier arenas would be appropriate for cities of Quebec and Winnipeg’s size  (both cities have metro-area populations of about 700,000) any new NHL venue would need to seat at the very least 15,000 fans, if not more, Bettman said.

That tidbit will surely help guide the mayor of Quebec, as he looks into building a new arena to draw an NHL franchise. But Winnipeg’s MTS Center, home of the American Hockey League’s Manitoba Moose, fits 15,015 and may be cutting it close for the NHL’s tastes unless it gets an upgrade.

Electronic Arts CEO straightens mom out at Thanksgiving

Restructuring: You shouldn’t be afraid to do it, even more than once if you have to, and even if your own family doesn’t understand it. Just ask John Riccitiello, chief executive of videogame publisher Electronic Arts. Here’s what he said at the Reuters Global Media Summit on Tuesday:

A company that doesn’t restructure in the face of that dramatic transformation, I don’t know what they’re doing. GM had a great decade in the ’70s building large cars… They didn’t restructure in the face of what was obvious. The music industry kept telling us they wanted to buy albums, and then they tried to sue us. It didn’t serve them well. … We look at the future and we are aggressively embracing it… .

That means taking the big net loss at times, even though as Riccitiello stressed, that was on a “GAAP” basis. That means the bottom line. Still, media businesses tend to look at profit before various charges (often expressed as operating profit or other terms that are comparable to Wall Street analysts’ expectations and are said to offer a true picture of a media business’s health), and executives sometimes get irritated when you insist on reporting their bottom line performance. Why? Because a massive loss from a writedown or a restructuring shows up in the bottom line, but it is not always a sign of the business’s fundamental health.

Yet, people often take it that way if they don’t know better — including people close to home. “My mom took it that way,” Riccitiello said. “I straightened her out over Thanksgiving.”

(Photo: Boxing champion Sugar Ray Leonard know what Electronic Arts games are all about. Reuters)

200MB? It’s only human nature to want more

Broadband subscribers want as much speed as they can get their hands on, even if it’s way beyond what’s needed by the most avid downloader of music, keen watcher of video or biggest Facebook addict, reckons cable operator Liberty Global’s CEO.

Maybe he would say that, but Mike Fries says today’s subscribers are signing up for speeds of 100-200 MB to be safe in the knowledge they won’t be left behind whatever the next stage of the Internet — a bit like owning a car with a top speed way beyond the limit.

“Intuitively, you would say: ‘What the heck does somebody need this for?’,” Fries told the Reuters Global Media Summit.

“But in the end we find that increasingly when you say to somebody for the price of a Volkwagen you can have a Porsche, generally they take the Porsche. It’s just human nature.

“Is it fully utilised today? No. Will it be? Absolutely.”

(Posted by Paul Sandle)

Sirius CEO Karmazin limbers up for the Howard Stern dance

It’s been five years since Sirius lured shock jock Howard Stern to satellite radio with a $500 million contract. Whether Stern can re-up with a similar deal when his contract expires at the end of next year is anyone’s guess, but it ought to be entertaining. Sirius XM CEO Mel Karmazin is preparing himself for negotiations with the self-proclaimed King of All Media.

In a meeting with reporters at the Reuters Media Summit on Monday, Karmazin gave us a thumbnail sketch of his version of “The Art of the Deal.”

“I could tell you, it will start with Howard feeling that he is working too hard and doing too many shows and not making enough money. Our side would say, ‘We want you to do more, and get less money,’” Karmazin said.

“That would be how we would go into the room once the time came to go into the room. And the hope would be that we would come out with Howard staying with our service,” he said.

Karmazin praised Stern as “a talent like no other in radio,” but would not say whether such a talent was still worth a half billion dollars.

“You have to now assume that the negotiations are at a stage where everything is in print, so if I were to say, yes, we got every penny’s worth, Howard would come in with that piece of paper and say ‘See? I sold myself too cheap,’” he said.

Stern is one of the biggest draws of Sirius XM’s satellite radio service, which counts 18.5 million subscribers. His decision to exit FM radio for Sirius in 2004 is credited with establishing satellite radio as an established form of media, though some analysts have also noted that high-priced contracts like Stern’s contributed to financial woes that pushed Sirius to the brink of bankruptcy earlier this year.

Watch out school kids, big brother will soon be watching you

By Paul Sandle

Sit back a minute and think back to your school days — doing homework on the bus, skipping double physics on a Friday afternoon…nice, huh? Well, no more if Pearson prevails.

The reluctant student skulking at the back of the class, copying homework at the last minute or taking a day off, like Ferris Bueller, could find school a lot tougher if his college starts using the publisher’s latest education products.  

Pearson, number one among educational publishers, which already complements its textbooks with online learning and testing tools, has developed applications to monitor attendance, punctuality and every other aspect of a student’s school record.

“There’s quite scary technology that we’ve got: scary for the student but great for the parent,”  Chief Financial Officer Robin Freestone said at Reuters Media Summit in London. 

“We’ll send you by the hour how late Johnny was for his first lesson this morning and how he’s done in his test in French. It’s scary to be a student these days.”

 No carefree days for students but an early introduction to the rat race.

Is Rupert Murdoch toast?

Rupert Murdoch may have a sprawling empire and may be one the media industry’s last moguls but sometimes a small trust-owned outfit can show the big guys how it’s done. And what does that say about the future? Read for yourself. “The Guardian has been a fanastic innovator online, absolutely amazing innovator,” said David Levin, Chief Executive of United Business Media UBM at the Reuters Media Summit.”The big debate is how does Rupert Murdoch’s approach, saying I’m going to try and come off the search engines play, contrast with what the Guardian may or may not do. The Guardian is at the other end of the spectrum. So, you got people who are webcentric and those who say well, ooh, I don’t like that web thing, I will somehow go off line…they’re toast.” Rupert Murdoch take heed.

ABC: Don’t you know that I’m still in love with news?

I asked ABC TV chief Anne Sweeney at our Global Media Summit on Monday whether the nightly news broadcast will go away someday soon. Everyone who follows the broadcast TV business has wondered this at some time or another, particularly as fewer people tune in.

Here’s a bit of that conversation, where I got Sweeney to firmly say… not much. If you’re in a rush, the general message appears to be:

• News is changing along with the changing times
• We believe in our news operation
• Budgets may change (likely for the worse), but news is worth paying for
• We’re more than our evening news broadcast (where Charles Gibson is ceding the anchor slot to Diane Sawyer), but we’re not going to say one way or the other whether we’ll keep it going.
• Me: News operation is often a big cost. Some say that evening news is losing its relevance as people get their news elsewhere. Is it possible that ABC would get rid of its evening newscast?

Sweeney: I think world news is not just about 6:30. I think World News is about being ready to provide the news whenever it happens. It’s not just limited to that half hour. It’s actually on all day. The ABC broadcast day opens, the network day opens with Good Morning America. …  So we always have the ability to come in with breaking news. … And then shows like 20/20 provide us with an opportunity to go a bit broader. And then of course there’s This Week with George Stephanopoulos, which gives us the Washington beat, which again can appear in the other shows throughout the week. So it’s really a manner of managing the assets rather than focusing on (the 6:30 news)

Me: How much will you preserve ABC’s news budget when the returns in this fragmenting news media landscape are lesser than ever?

Sweeney: The budgets are always going to change, just as they have in the other parts and certainly in our other businesses.

Me: I take it the budgets are going to keep shrinking.