Outlook For '08 Predictions: TV, Tom Cruise, Hollywood Money


At this time of year, it's predictions, predictions, predictions. So as part of CNBC's Outlook for '08, here are mine for the media world and all that's in it--with a personal look as well! (see number 7). Here I go!!

1. I predict 2008 will have both very high upside and very low downside for the TV industry. I think the strike has a good chance of transforming the television business. If the strike lasts into 2008, as it appears it will, it could revolutionize the way TV is created, put on air, and the way we see it. I'd expect the archaic and inneficient upfront system, in which all the studios compete for talent and for advertising dollars at the exact same time, to begin to break down. 2008 will probably be a bad year for the traditional TV business--this year overall viewership is down 1 pecent, more in the key 18-49 year old demographic, putting pressure on the TV ad market.

The upside will eventually be a more efficient TV ad sales system--more ads will probably be sold with Google Adsense-type models. And there will be upside online. More content will be offered online where viewership can be more fragmented and better measured. And I predict that more networks will team up the way NBC Universal and News Corp have with Hulu. And if there's a go-to destination for professionally created content online, it'll be easier for the networks to keep control of how viewers spend their time.

2. Sumner Redstone is going to be making headlines in 2008 just as he did in 2006 and 2007- firing Tom Freston, making a big deal out of dumping Tom Cruise's production company, and this year getting into a huge public fight with his daughter, suing Viacom . Sumner Redstone can't let a year go by without making big headlines. This year I predict he'll get involved with the scuffle over whether the DreamWorks team will stay at the studio when their contract expires at the end of 2008. I also think he'll probably more publicly reconcile with his daughter (he started to this year). I also think Redstone will be pushed on the succession issue, it's about time he figured out what'll happen to his controlling-shareholder/chairman role at Viacom and CBS when he passes. He is 84.

3. I predict that a number of the big name production shingles will be acquired by a conglomerate or will go out of business. Weinstein Co, Overture, Picturehouse and United Artists (now run by Tom Cruise and producing partner Paula Wagner) are likely to get bought up. I think New Line, which is owned by Time Warner , could disappear if some of it's big movies, like "Golden Compass" disappoint, and if top management leaves the company.

4. I think the model created by Modi Wiczyk at Media Rights Capital, will take off. It's basically a partnership between talent representation and equity investment, and "talent" own a piece of the revenues generated by their content online. I can see CAA and other Hollywood talent agencies creating this type of business to leverage their clients and their data far beyond just getting fees from getting talent jobs. The longer the strike lasts, the more likely agencies are going to want to get a new revenue stream from making content deals themselves.

5. I think we're likely to see some spin-offs. There's been talk that GE could spin off NBC Universal or Time Warner could spin off its entertainment business, or there's even talk that Sony could consider it. If that's to happen, I think next year would be a natural time. The longer a strike lasts, the more it'll become clear to shareholders how inefficient and low-margin the traditional filmed entertainment business is. And not only will that turn off shareholders, that'll also turn off private equity investors, so they'll no longer throw in so many hundreds of millions to minimize the studios struggles. The 90s were an era of consolidation with an eye to synergy. Now I think synergy is like a bad word. If the individual divisions aren't profitable on their own, I think they'll be spun off. And I think that's exactly what Jeff Bewkes is going to be thinking about when he determines whether or not to keep AOL as part of Time Warner.

6. There will be two main categories for innovation--the mobile device you carry in your pocket and the entertainment hub in your living room. The flash and grace of the iPhone will become more accessible as other players enter the market. And with the big(ger) screen and the fancy navigation it'll be easier and more fun for people to really consume entertainment on their mobile device. Which of course means that advertisers and content creators will tailor more content to it.

Then there's the battle for your living room. I expect a company, perhaps Apple , to invent a piece of hardware to elegantly and easily bring content from your broadband internet connection to your TV. Like anApple TV, but better. It'll bridge the divide between all the content on your computer and the beautiful big screen of your TV. Maybe it'll be one of cable companies, maybe it'll be one of the video game console makers--Sony or Microsoft . But I'm guessing it'll be an innovator like Apple, which will provide a solution so cool, that the telcos, cable companies, and studios/networks, won't be able to say no, just like AT&T couldn't say no to the iPhone.

7. I think this will be a busy year, more exciting stories to chase than ever. I predict I'll use more systems, like Google Reader, to streamline my own media process, allowing me to skim headlines from hundreds of publications. I'll certainly consume more content than ever. With a new iPod touch I can watch video on the go, and I bet I'll start watching made-for-the-web content. I can't stand not having my favorite TV shows ("The Office" is number one) to watch, so I'm sure to go hunting around online. My soon-to-be husband and I will hook up our Slingbox so I can watch my favorite shows from the road. And since we just got a high definition TV we'll be carefully watching to see which high def DVD player we should get. My faince is leaning towards buying a PlayStation 3 for its Blu-ray capabilities, but I think we should wait until this high def format war is officially won.

Which leads me to a personal note: I'm getting married just before the new year, so this will be my first year as a married woman! I don't think it'll slow down my travel schedule at all, but I very much look forward to wedded bliss!

8. I think private equity and hedge fund money will withdraw from Hollywood. Unless I'm surprised by some huge returns, I'd expect the flood of hundreds of millions of private equity dollars into the movie industry to be drawing to an end. That doesn't mean that there won't be another group to fall in love with the glitz and the glamour (though not the shaky returns) of Hollywood, but I think this group may be exhausted. The credit crunch, of course, also pushing this group out.

I also predict that presidential candidates will use new media in a whole new way. Politicians can't really introduce themselves to voters online, but once their personalities are established, voters can get to know them better. I expect the political campaigns to be transformed by the Internet more this campaign than ever before.

Questions? Comments? MediaMoney@cnbc.com