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Old media growing more comfortable with new media

July 23, 2008 |  3:51 pm
Jon Stewart and iPhone

Are big media companies getting comfortable distributing and marketing their content to the Web and devices such as the iPhone, as Jon Stewart (pictured above) demonstrated at the Academy Awards this year?

Yes, said a panel of industry leaders at the AlwaysOn Summit at Stanford University on Tuesday night. But there are still issues about how to make money from the Web and avoid cannibalizing their very lucrative existing business models.

The television industry is figuring out how ads can be hyper-targeted online and even presented inside videos without the viewer revolting. But the film industry isn't going the advertising route, said Tom Lesinski, president of Paramount Digital Entertainment. He predicted that the download-to-own model would be the way the movie industry makes money.

Currently, the average household buys six movies a year, Lesinski said. But that number jumps as high as 24 a year when people use technology and services such as Apple's AppleTV, Microsoft's Xbox Live and Vudu, he said. Earlier this week, announced it was introducing a new streaming-on-demand service for buying and renting movies and TV shows.

Bill Gurley, the general partner of venture firm Benchmark Capital and the night's interviewer, asked, How will we watch TV, movie and videos in the next five years, and what should change? He threw out an interesting business suggestion: A good video discovery site that includes the social networking tools and recommendations that can be found on music sites.

Lesinski projected that within five years all movies would be consumed through a digital locker of sorts, stored on the servers of a distribution company and streamed when someone wants to watch them.

In five years, real convergence will happen, said Albert Cheng, executive vice president digital media of the Disney-ABC Television Group. Video will appear wherever there's a screen. "It doesn't matter if it's TV or a phone," he said.

-- Michelle Quinn

Photo: Jon Stewart at the Academy Awards showing how to watch movies on his iPhone. Credit: Wally Skalij / Los Angeles Times