VON - Hollywood, Silicon Valley wrestle with content

VON - Hollywood, Silicon Valley wrestle with content

Executives say online distribution is opening up new cooperation between Hollywood and Silicon Valley

Digital content is bringing Hollywood and Silicon Valley together for the common goal of creating a better online experience for consumers -- and a more attractive opportunity for advertisers, representatives of the two industries say.

The IT industry is shifting away from its wide-open philosophy on content use, while old-line media companies want to embrace new technologies, speakers said on a panel discussion this week at the Spring VON conference in San Jose, California.

"For a long time, we, in our hubris, would occasionally come and lecture people about how they should and shouldn't charge for certain things, and I think we're going to come to a more mature relationship out of this," said Dan Scheinman, senior vice president and general manager of Cisco Systems's Media Solutions Group.

Meanwhile, News Corp., parent of the Fox media empire as well as MySpace, is quickly trying to figure out how to make money off its content online while protecting it from piracy. There's a sense of urgency from Chairman and Chief Executive Rupert Murdoch on down, according to Sarah Harden, senior vice president of business development at Fox Cable Networks. And starting in a few weeks, video makers will be able to submit samples of their work to United Talent Agency through a special channel on Veoh Networks's video site. The agency, founded in 1991, has never accepted submissions before, said Brent Weinstein, head of digital media.

The key is to come up with "rules of engagement" that let content creators control their own products while taking advantage of online technology through sites such as Google's YouTube, said Jim Wuthrich, a senior vice president at Time Warner's Warner Bros. Digital Distribution.

Online distribution is dramatically changing the picture for advertisers used to 30-second spots on broadcast TV, but it has its own advantages: With the right technologies, distributors can know more about their consumers and target ads more directly. Both the lower cost and greater targeting of online distribution could help Warner Bros. get more of its film library out to consumers, Wuthrich said. The studio has only put out about 1,300 of its roughly 6,600 movies on DVD because in many cases the potential market isn't big enough to justify creating the discs and putting them on retail shelves, he said.

Cisco wants to play matchmaker between content and consumers for companies such as Warner, according to Scheinman. Today, users have to find content themselves and may not even know what they're looking for until they see it, he said. Cisco wants to put technology on networks and in homes to solve that problem.

"We believe we need to live in a world where content finds you," Scheinman said.

The sticking point on the new outlets often comes down to owners' rights to content, according to Harden, whose company has to pay artists for the right to distribute their works online. Negotiations are hard now because it isn't clear yet how much those rights are worth, she said.

"You have content owners, sometimes realistically and sometimes not realistically, trying to put a value to those digital rights," Fox's Harden said. "There's a huge disconnect ... the market is very frothy right now."

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