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Google CEO Schmidt: Hollywood will do fine on the Net; newspapers not so much

UPDATED: After Schmidt's speech, Lionsgate weighed in with a little more detail on what it's planning to do with YouTube. Read the full story for more about why the studio partnered with YouTube and what they've got in the works.

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Google Chief Executive Eric Schmidt told an audience of entertainment executives and advertisers today that traditional, professional producers of video content would adapt to the Internet and find ways to replace any money lost as consumer habits shift.

Eric_schmidt_sun_valley_k40bqhnc If someone were developing a series like "The Sopranos" today, Schmidt said, the producer would keep the basic weekly format but add hourly instant messages with hints of action to come, a daily teaser at 8 a.m. and at 5 p.m. and a three-minute clip with an advertisement for a show sponsor.

"You will put all your information everywhere," Schmidt said at a Beverly Hills Hotel conference put on by trade publication Advertising Age. "This stuff works."

Schmidt also announced a deal with Lionsgate, which is allowing people to upload scenes from movies such as "Dirty Dancing" to Google's YouTube. Google will share the advertising revenue with the movie studio. "You open that concept to the entire Lionsgate library, and it becomes a true Internet revenue stream," Schmidt said. "There are many such ideas coming."

Schmidt's remarks came in response to a question about whether his recent comment that Google had a "moral imperative" to help publishers find a way to make Web advertising work included Hollywood companies. His answer was essentially no, since, he said, "Entertainment will be the first to get through this gate."

The outlook for newspapers, on the other hand, is "bleak," and Schmidt said that's "a tragedy," in part because "investigative reporting is so important for democracy."

"The optimism is that there are more people online than ever, older businesses will discover how to monetize and we will all get through this," said Schmidt, explaining that Google's impact on the world of classified ads had been part of the problem for print journalism. "I would love that to be true. The evidence does not support that view."

Schmidt spoke two days after the Los Angeles Times began notifying 150 newsroom employees, about 17% of the total, that their services would no longer be needed.

-- Joseph Menn

Photo: Eric Schmidt at the Allen & Co. conference last week. Credit: Matthew Staver / Bloomberg News

 
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