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The Web and Media Distribution: What's Changed?

NEW YORK -- New media folks are fond of crowing about how the Web has cracked open new channels of media distribution, and promising that the top-down entertainment model will be sacrificed on the altar of the digital revolution.

Not so fast, warns the mass media elite.

Here at Time Warner's (NYSE: TWX) headquarters for the second of the media conglomerate's New York Internet Week panels, a group of entertainment executives discussed the digital landscape with excitement, anxiety and what could be fairly called a sneering indifference.

"I personally think that for companies here who are in the business of top-notch programming, that the 'Long Tail' is crap," said Brett Bouttier, senior vice president of the digital division at Warner Bros. Television Group, in reference to the theory that aggregating niche-oriented content and products can bring in big bucks.

"It actually doesn't matter to us," he said. "It's for the guy who never got his book on the front table at Barnes and Noble. For us, we're in the hit business and the brand business."

Advertisers still want to place their bets on bankable content, and consumers, the panelists argued, are still happier with high-gloss entertainment acts.

Challenged later by an audience member, Bouttier defended his comment about the Long Tail by reiterating that he was only talking about big-league media companies.

Indie acts can angle for the viral distribution that social networks have made possible and promote themselves on niche sites, but the presenters made it clear that their principal concern is scale, suggesting that the Web's great promise of democratizing media might be something of a myth.

"I think people like to be told what's cool -- I still think it's about hits," said Charlie Walk, president of Epic Records. "It's not about being hip -- it's about having hits in everything we do," he said. "It's about playing really wide to a mass audience."

When considering whether or not to sign an act, Walk looks for some sign of "traction" to indicate that the artist has a following.

In that sense, the viral effect of the Web can help a garage band bubble up to Epic's radar, but Walk isn't going to give them the megaphone until he's sure the artist will become a blockbuster success.

Asked about international acts or offbeat artists who might be great but decidedly outside the mainstream, Walk said that their marginalization was a cold fact of the business model.

"You can't sell a million records to a hundred thousand people," he said. "Our business is hit-driven."

So the onslaught of the Web might have left that important part of the entertainment industry unchanged, but the panelists were by no means dismissing its impact on their respective business's operations.

From a distribution perspective, the music industry has taken an often self-destructive stance toward the Web by clinging to the CD format long after individual song downloads took off.

That mistake, Walk admitted, has come at a severe price. Television companies are now trying to craft new partnerships and business models to avoid a similar fate.

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Internet Week