Media Industry Struggles as Power Shifts to Consumers
Great leaders work out what the roadblocks and opportunities will be for their businesses and design fresh strategies for their teams well in advance.
CNBC's new series, "Executive Vision," gives you a front-row seat to watch that process in action—to take away winning solutions from the front line of capitalism.
In each episode, CNBC gathers together leaders from around the world who are succeeding now in the same industry.
We start tonight with media, which is facing the ultimate challenge as technology puts power in the hands of the consumer.
"Media’s leaders have lost control!" the introduction begins.
"We’re on our way to a major revolution in our industry," predicts Viacom's Sumner Redstone.
"The Internet is moving too fast, too far. And it may be difficult to get the consumer back," adds Libety Media chief John Malone.
But as soon as the strategy session gets underway it becomes clear that our leaders allow themselves little time to focus on the fear.
"For film distributors there's fear because you're trading dollars for pennies," says Jane Rosenthal, whose movies like "Meet the Fockers" have grossed over $2 billion. "But from a filmmaker’s point of view, it's actually very exciting because you can provide your content in so many different ways," she adds.
This is the cutting edge of the power shift: Who will win the fight between Apple TV and Google in developing platforms that find and distribute content straight into people’s homes?
"My vote goes to Google!," declares Rajiv Lulla from India’s Tata Consultancy.
"Despite the advertisers asking for more accountability over the last decade, the incumbents have not moved," he said. "I think there's room for a nimble player to come in and start collecting that and telling people about who's watching this show, who would want to capitalize on that audience. I think Google's proven time and again that they're really good at building the database of intention."
"I wouldn't count Apple out," counters Tom Glocer, CEO of Thomson Reuters . "I think what they've been able to show over the last several years is that if you really understand the consumer and if you really package and productize an entire experience, there's still a significant demand for an all-inclusive product."
"Everybody doesn't get destroyed, it's not win or lose," says Michael Eisner, who transformed Disney . "I think this is a fantastic period, an enlightened period."
The Facebook Phenomenon
Then, there's social media—who can ignore Facebook when it’s used by one in 14 people on the planet?
"There’s a big opportunity here," declares Michael Wolfe, who ran MTV. "The average Facebook user has about 140 friends. The ability to take any media product—whether it's a film or it's a TV show—and to optimize it for social (media) means it can become a phenomenon very quickly in a way that we didn't have as a communication vehicle before."
Glocer says he thinks the more interesting phenomenon is the export of the tools to every other form of media. "The central concept is collaboration. How do I share information? How do I share a workspace? We're building that into all of our professional products."
Glocer congratulates Wolfe for taking Gourmet Magazine online with the creation of what he calls a "really beautiful" iPad App that engages users in new ways and has allowed Condé Nast to drop the paper edition. That’s praise indeed from a tech junkie whose foresight has transformed the once stagnant Reuters and whose latest "Eikon" app is no slouch.
"You’ve got to find new ways of getting the consumer to pay," Wolfe said. "A good example of this is what's happened with social games—like Farmville and Superpoke Pets—there are literally hundreds of millions of people paying for them. They’re buying little bits, little virtual goods, whether it's a hat, or it's a toy and at a dollar a piece. And that's ending up to be hundreds of millions of dollars, an entirely new model that nobody in the media business would've ever expected five years ago."
"I think advertising is here to stay, he said. "Advertising will be the supportive underpinning of the consumer entertainment and information. I totally believe in advertising, I totally do not believe in the pay wall."
With the release of her latest film "Little Fockers," scheduled for December, a revealing point comes when Jane Rosenthal asks where’s the best place to advertise, given that even her child is buying virtual goods. "That's the holy grail of our business," declares Michael Roth, CEO of advertising giant Interpublic . He adds, tellingly: "We still don't have the exact measurements that are going to answer all those questions. If we did, then — then everyone would be flocking to the door saying, you know, 'Here's money, give it to me.'"
Digitization may be rocking radio, television and press in the West. But all three are still king in developing countries. As billions of people get richer, the potential profits are vast.
Saad Mohseni, who's building a media empire in Afghanistan that has seen revenues up 20 to 25 percent for each of the last six years, also joins the program.
Mohseni produces the wildly popular "Afghan Star," Kabul’s answer to "American Idol." It’s great to see footage of Afghanis enjoying the simple pleasures denied to them by the Taliban. But here the contestants aren’t just risking rejection, they're risking their lives. One girl dared to dance on stage and had to be taken into hiding.
From Egypt, comes Abu Haida, who has started an Islamic version of MTV but carefully avoids the scantily clad women and fast cars that characterize other music-video networks.
"It's still my dream, to use the media to let people find their way to God," he says. "I am speaking about people bonding their relationship with God in their life, when they go to work and what they see in the movies."
For many, the highlight of the show will be director James Cameron, the man who created the blockbuster movies "Titanic" and "Avatar," who speaks openly about his leadership style on the set.
"I just always believe in leading by example," Cameron said. "When asking my crew to be underwater all day long, I'm going to be the first one in and the last one out. I believe that that gives people heart — even when the work is very difficult."
"Every film I've worked on has felt like a sinking ship at one point or another," he said. "I'd love to challenge myself and be so good at it that we don't have that moment, that sinking sensation of doom," he added. "But it's also good to have the resources available — emotionally, in terms of one's capacity as a filmmaker and a team leader — to get yourself out of that situation once you're it. "
"The respect that you have for your team, and the respect that they have for you is the most important thing that emerges at the end of the project," Cameron said.
"I define success as, what did I set out to do, did I accomplish that? It's that simple," he said.
Cameron directly addresses the other leaders of the media industry: "I challenge you to think about the riskiest dream you've ever had, and not acted on yet — and try to make it a reality."
For their answers to that, watch tonight’s new season of "Executive Vision."
Executive Vision: Media
US: Premieres Monday, Oct. 4 8p | 12a ET
EMEA: Premieres Tuesday, Oct. 5 2300 CET
Asia: Premieres Tuesday, Oct. 5 1800 HK/SIN