@ Discovery Upfront: CEO Zaslav: Free Doesn't Work
This story was written by David Kaplan.
Following Discovery (NSDQ: DISAB) Communications' upfront presentation at the Time Warner (NYSE: TWX) Center in New York, I caught up with Discovery Communications (NSDQ: DISCA), David Zaslav, the cable programmer's president and CEO, to talk about his views on online video. Over at the Cable Show conference in Washington DC this week, there appeared to be a lot of debate about what to do about putting programming online. On one end of the spectrum, there's Time Warner's Jeff Bewkes (see our Staci D. Kramer's interview with the Time Warner CEO here and here) discussing the "TV Everywhere" plan, which seeks to offer content on a variety of platforms to subscribers. At the other end is Disney (NYSE: DIS) head Bob Iger, who appears to be in favor of a slightly more open approach that sees value in free offerings, as they can serve as a promotional device for cable channels like ESPN.
On the fence: For the most part, Discovery has emphasized short-term video distribution for online. I asked Zaslav about Bewkes' and Iger's direction on the question of how to approach online video. Since it sounds like others are still trying to discern the best way to go, Zaslav doesn't feel he needs to step into the breach and offer a solution, opting for a wait-and-see attitude for now. Zaslav: "[Bewkes and Iger] are just recognizing the fact that we all have to get practical. People are consuming content on the web. We have to figure out what kind of content people really want: long-form or short-form? And then, once we've established that, we have to figure out the best way to distribute that content." More after the jump.
Free doesn't work: "We know we're not going to stop the world from changing, but we have to figure out the right business model that works for the networks, the cable operators and the new media distributors. We've been very prudent about not putting our long-form content on the web. We don't want to lose marketshare, but at the same time, we don't want to encourage free content. Free didn't work for newspapers. Free didn't work for the magazines. And it doesn't work for the broadcast companies. We have to see how it develops. But ultimately, we all have to follow the behavior of the consumer."
By David Kaplan