Walt Disney Company CEO Bob Iger said Wednesday that he is confident consumers will pay for content online, but that he and others are still seeking the right model for maximizing profits and giving consumers the best possible experience.
“We’re at the beginning of the beginning,” he said during his opening speech at the Fortune Brainstorm Tech Conference in Pasadena, where the topic of the digital transformation of the media landscape continued to dominate the discussion.
Iger even hinted that Disney may eventually offer a single Web site that requires a subscription to view content.
“If you’re trying to lead anybody, you’d better not be a pessimist,” he added.
In a year that has seen the instantaneous rise of free content sites like Hulu and social media sites like Twitter, Iger reiterated that old media of television and movies were still the core of Hollywood corporations and that the newer media would help in maximizing the user experience.
Iger first discussed the field of video content, where Hulu and YouTube have raised challenges to cable television and film.
Even as a partner in Hulu, Iger pointed out that the majority of people still use traditional subscription cable services.
"There was a fear that a cord cutting was going on,” Iger said. The fear was that people would end subscriptions to multichannel providers “because they are getting everything online and didn’t need it anymore.”
He said that, in fact, that’s not happening. “We don’t see any evidence of that occurring nor have we heard from cable operators that that is happening.”
A later panel took a similar stance, reaching the conclusion that new mediums will not replace but converge with old ones.
By screening shows wireless onto a TV or through a computer to a TV, “entertainment is going to move from the PC back to the living room where it belongs,” said Robert Wiesenthal, Executive Vice President-CFO of Sony Corporation.
The question raised by such a convergence would be monetizing it, and Iger was firm in his belief that people are accustomed to and will always be willing to pay for content.
Citing research that says the average person will pay $5 an hour to see a movie in theaters or even 25 cents an hour to use the Internet, Iger added that “it’s wrong to assume that because there is a lot on the internet that is free that it’s impossible to monetize it.”
With several media available, from micropayments to subscription, the question is not can content be monetized…but how.
Again Wiesenthal’s panel picked up where Iger left off. “How do you sit lying on a bed with the whole world on your fingertips in terms of video and find what you want?” Wiesenthal asked.
In planning for the future, the record industry proved to be a cautionary tale for members of both panels, demonstrating what consumers will do if their experience is not put first.
“Consumers knew they could access music in more convenient ways online and got angry that retailers or the record industry wasn’t providing that experience,” Iger said. “The result was rampant piracy which I’m not sure the record industry has truly recovered from.”
Yet in spite of the challenge it presents, Iger felt new media would also pave a new path for success. Thanks to endless mediums for interaction with users, companies can now learn more about their consumers than ever before — even family members.
“I learned more about my daughters on their Facebook pages than when I was raising them,” Iger said. “I talk to them about privacy and they cant figure out what I’m talking about.”
In a world of increased conversation with the consumer, chairman of Marvel Studios Dave Maisel said that interactive marketing is becoming an increasingly large part of the business.
This marketing has already told Maisel and others that people are drawn to franchises and brands, as evidenced by the DVD sales of comic book movies or animated movies in an otherwise slumping market.
Yet, the success of brands may be bad news for star talent, as centering a project or marketing campaign around an actor appears to be less reliable.
“Brands and franchises drive a lot of the value, Maisel said. “It takes the pressure off of getting superstar talent at a certain fee for that project.”