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Dave Ferrara: Good afternoon. Thank you all and on behalf of all of us at HRTS, welcome
back to the Beverly Hilton Hotel for the kickoff event of our 2013-2014 Newsmaker Luncheon
Season -- the State of the Industry. It kind of feels like back to school day, I know it
took everybody a long time to get down to the tables and everything. It's nice seeing
everybody again. I hope everybody had a great summer. I know I did and while lounging by
the pool, does have a lot to be said for it. I, for one, am excited to be back amongst
the HRTS membership for the launch of another great season. I want to talk about on the
membership front. I'm pleased to announce that HRTS is growing. Let's extend a warm
welcome to our newest corporate members, Entertainment One, Kaplan Stahler Agency
and Fox Rothschild LLP.
[Applause]
Dave Ferrara: This brings our corporate membership to over 53 companies that support HRTS at
this level. Thank you HRTS members, both individual and corporate for your tremendous support.
Additionally, I want to thank our season sponsor, the Lippin Group and our live streaming partners,
Limelight Networks and Digital Rapids for their generous support throughout the season
for HRTS events. I'd also like to acknowledge our contributing sponsor today, Cadillac who
is generously making available multiday test drives of their latest vehicles for HRTS members.
For those who want to experience firsthand the new Cadillac, just stop by the display
out front and Kristen will hook you up and they'll put you in the car. How about a big
hand for all of them? Their support is greatly appreciated.
[Applause]
On the events front, since our kickoff event is early on the calendar of this year, I don't
have a lot of specifics for you yet on the rest of our schedule. The board is busily
working on what has shaped up to be a great season of HRTS luncheons and we'll be releasing
details and dates shortly. So keep an eye on your e-mails for our announcements. And
now, it's my honor to introduce the person I've had the privilege to work closely with
the past couple of years in his role as HRTS President. I truly appreciate his energy and
commitment to the organization and I can honestly say it's been a pleasure. Please welcome the
soon to be Immediate Past President of HRTS and partner and Co-Department Head of Non-Scripted
for WME, Mr. Sean Perry.
Sean Perry: This is the part Dave hates because he spends days working on a beautifully well-crafted
speech that tells you how great I've been for two years and I refuse to read it. So
thank you, Dave. Truly, it's been an honor and like the past presidents of HRTS looking
as organizations grow and I am humbled. I'm truly humbled and appreciate all of your support.
None of this possible without the board and with all your participation, everybody has
been active, supportive and I really, really thank you. It's been an honor. So moving on
to the important stuff, okay. My wife is there. Go ahead. Go ahead just a little bit. No.
So off to the facts, the HRTS board is a volunteer group behind the scenes force that makes this
all possible. So it's my pleasure to announce our newest board members for 2013. Beth Roberts,
Executive Vice-President Business Operations at NBCU Cable Entertainment, COO of Universal
Cable Productions, Mr. Michael Lombardo, President of HBO Programming, Carmi Zlotnik, Managing
Director of Stars, Philip Segal, CEO and Executive Producer of Original Productions, Scott Hervey
partner with Law Firm of Weintraub Tobin et al. Welcome aboard.
[Applause]
Sean Perry: Now, it is my honor to announce the new officers elected for the board for
the coming term. Reelected as Treasurer is Martha Henderson, Executive Vice President
of Entertainment, City National Bank. HRTS Secretary will be Mr. Ian Moffitt, Head of
Premium Content for Machinima. Serving you as Vice President is my friend, Adam Berkowitz,
Co-Head of TV Packaging at CAA. There you go. And to serve as Board President, it is
my true pleasure to welcome to the podium the Executive Vice President creative Affairs
for Universal Television and new HRTS President, Bela Bajaria
[Applause]
Sean Perry: Who I now work for. I believe that there is something I'm supposed to give
to her. Is it there?
Bela Bajaria: There's a gavel. I'm so excited. I want that.
Sean Perry: A gavel. So as my final act as President, I present this to you as new president.
Congratulations. We're honored to have you.
Bela Bejaria: Thank you. Thank you, Sean. I'm really excited to have this and I can
see my team somewhere who is like, "Oh, God. She is coming back with a gavel to the office."
As my first official act as President, I like to thank you so much, Sean, for all of your
hard work and tremendous effort for HRTS and on behalf of all of us at HRTS, I'd like to
present this lovely plaque to you.
Sean Perry: Thank you. Thank you. I'll be off of the stage.
Bela Bajaria: Don't go far, Sean. I'm going to call on you often, actually. Good afternoon.
I'm happy and honored to be here, to be part of HRTS' 67 year history in a significant
way. I'd like to thank the board for this honor. You know, HRTS is the organization
of our own industry. Many people who have made a significant impact on our business,
who shaped our industry and have blazed trails for many of us have been or are currently
members of the HRTS. I know you have a lot of lunches to go to. I get it. It's really
busy but this is our organization. This is your organization. The board and I are very
committed to bringing panels to you that are significant and relevant. And I promise we're
going to aspire for them to be insightful, informative, fun, productive, and yes, sometimes
even provocative. If you have ideas, suggestions, topics you'd like us to explore, please let
us know. We look at this as a collaborative relationship. Adam, Martha, Ian, Dave and
I are looking forward to really fun productive year at HRTS and I hope that you're going
to join us. And now, on to the panel. I'd like to invite our panelist first to come
up here and get comfortable. Hold on, they're coming. Hold your applause. As our business
changes, the HRTS State of the Industry Luncheon has become an important touchstone. To talk
about where we've been and where they think we're going, we've assembled a group of very
smart people here. I'd like to thank Adam Berkowitz, Kevin Beggs and Sean Perry for
co-chairing this lunch. And I'd like to introduce and welcome our moderator, Mike Schneider.
I, really, am excited that Mike is here 'cause what is so great about Mike?
Male Speaker: Yeah.
Bela Bajaria: Yes.
Mike Schneider: Give it up.
Bela Bajaria: What is so great about Mike is when you talk to him about television,
you can see that he loves it, he watches it, he is a fan of it and I think that's partly
a reason that he is so great at his job. So Mike Schneider who is the Los Angeles Bureau
Chief of TV Guide Magazine. So, welcome Mike.
Mike Schneider: Thank you, Bela and Brooklyn 99. You scare me with that gavel so I'm just
going to ...
Ms.Bela Bejaria: I know.
Mike Schneider: Nothing ... nothing but great stuff coming from Universal TV. So thanks
Bela. So thanks for everyone for being here. This is the kickoff of the new season and
I remember it like as a young pup covering this business going to one of these things
and the folks on the dais back in the day, including this guy right here. So I'm really
excited now.
Ted Harbert: I was ... I was here with Marconi in 1938.
Mike Schneider: Exactly. I was in grade school.
Ted Harbert: Good times.
Mike Schneider: Back when it was the radio of HRTS.
Ted Harbert: Exactly.
Mike Schneider: So we're going to keep the introduction short and sweet because you know
who all these guys are. You even have their executive trading cards; I'm sure, at home.
So let's start off, Ted Harbert, of course, the Chairman of NBC Broadcasting at NBC Universal.
And by the way, in an alt universe, I think it's like ... you know, it's entering its
14th Season. So next up, John Landgraf, the CEO of FX Networks and FX Productions and
he's also heard all your jokes about FXXX. So don't worry, there's no *** coming to
the channels anytime soon. Michael Lombardo, the President of HBO Programming and he also
know which one of you have been sharing HBO Go passwords. So this is actually a big sting
operation. I just want to let you guys know that. Tim Spengler is the Worldwide CEO of
Magna Global and we'll be talking about C365 ratings later. We'll see if we could pull
that off and finally Andy Forssell, the acting CEO and SVP of Content at Hulu.
So give it up for your panelist.
[Applause]
Mike Schneider: I love the note from HRTS, said loud applause. So they are ... they are
expecting big things for you. So we were talking about binge viewing earlier and first off,
I want to get a sense from you guys. Do you guys binge view? Do you have time to stack
or binge view? Who wants to answer right now?
John Landgraf: Yes.
Mike Schneider: What have you watched, John?
John Landgraf: Actually, right now, I'm watching The Wire and I watched Game of Thrones before
that. So I'm a binge viewer of Michael's programming right now.
Mike Schneider: Yeah.
Ted Harbert: House of Cards, Orange is the New Black and I have several things still
on queue ready to go.
Mike Schneider: Well, and that's one of the things. It's now that everyone is sort of
watching, you know, little more, they are stacking their viewing, they are binging.
What does this mean to just viewer habits? Are you guys now sort of training viewers
to sample shows differently and what's this going to mean to the business down the line
and live viewing? Ted?
Ted Harbert: Well, that's something I spend a lot of time studying because we are training
them to do it but we don't know if it's a good idea or not because at least in broadcast,
we still get paid for those first three days. So I monitor that very closely so you can
watch the C3 Viewing on the network and then you can watch the VODC3 Viewing. And so we've
been thinking for the last couple of years and as I ... the only point I want to make
today is I think we are really entering an ... we have entered an age of disruption where
all of the practices, the traditions we've had for the last 50 years are now just flying
out windows. And so, we were ... someone said to me a year ago, yeah, it will stay the vast
majority of viewing and 97% will be in the first three days. Well, one point every six
months, I see it more past three days. So that's where we really have to change our
measurement systems and our monetization system so we get paid for all of the viewing. The
amount of viewing is fantastic and I want people to watch how they want to watch it,
when they want to watch it but we have to find a way to get it measured and monetized.
Michael Lombardo: But I am just going ... I don't think that's goes to binge viewing as
much as delayed viewing.
Mike Schneider: Right.
Michael Lombardo: I mean, like ... look, we have obviously both linear feed and a HBO
Go, digital feed and a video-on-demand feed. At this point, we only see about 6% of our
popular shows being seen for the first time on HBO Go. Absolutely, there's a lot of on-demand.
People come the day after. You know, the day you're going to get every viewer at an appointed
time and place is not going to happen anymore. I'm not sure just from our data that binge
viewing if you're talking about watching multiple episodes at one time is really a phenomenon
yet as much as a possibility to do in the digital universe, you know, but I think and
I guess what I would say and I've noticed before, I think there is still going to be
a place, my estimation for what I'll call the real time television experience for the
right shows. I think I'm going to guess that John I am sure he tracks it. We track it.
When you have a show like Sons of Anarchy that premieres, look at social network the
next morning and there's a phenomenon that happens. There is a shared experience that
... it's one of the few shared experiences that we have anymore, movies and television.
What did you see last night? What did you see? People react at real time. I don't think
it replicate that when it's just a digital binge viewing experience. Not all shows are
that kind of appointment but I think it's still ... I think there's always going to
be a place for that viewing for the right shows.
John Landgraf: I agree with that. I don't see us going away from a linear live broadcast
and a day and date marketing strategy anytime soon 'cause I think ideally you do want to
create a cultural effect. I will say this anecdotally, if you look a year ago when Sons
of Anarchy premiered, there was about a 75% DVR lift from Live to Live Plus 7 in adults
18 to 49. The Americans premiered later in the year and it was a 95% lift. And The Bridge
is on the air right now. It's a 125% lift. So what is difficult and I think this speaks
to some of what I am sure Tim and his clients are facing, is there's a lot less commercial
viewing going on if you're a commercial-supported network. People have been trained to watch
what I would call "premium content." I mean what ... what Michael is making and other
channels are making is extremely cinematic. It's been a remark that there's not that much
difference now between A level films and some of the work being done on television. And
not surprisingly, there's a chunk of the audience that doesn't want to watch that with commercials
and now that they have a non-commercial alternative, they're taking it. So for those of us who
want to sell commercial time, it's becoming more and more difficult to do so.
Mike Schneider: And Tim, do you want to jump in and talk about sort of these delayed viewers.
You know, they're obviously not so valuable to you especially after the third day. So
...
Tim Spengler: Right. There's a combination of sort of ad attentiveness and ad avoidance.
The younger you are, the more you're likely to avoid the ads. So we're trying to make
... we're going to place bets with big experiences. You know, sports is an experience and big
events and now, I think then, on the other hand, we're going to use data and get way
more granular and specific about what we buy. So we're going to try to play money ball.
And you know, just a typical ad in the middle of the third pod in the B position, no one
is watching basically. It's so much less powerful than it's been. So we're spending a lot of
time kind of going in both directions and yeah, because that's what the consumers are
doing.
Mike Schneider: Ted, you kind of disagree with that?
Ted Harbert: No. I just want to add that ...
Tim Spengler: You disagree?
Ted Harbert: No, I don't,
Tim Spengler: That'd be fantastic.
Ted Harbert: I got no one actually ... listen very carefully. The ... what these guys said
about ... and I agree, live linear is the key and if it's not, I get sent home with
no paycheck which would be bad but the ... what I'm noticing is just as you talk to people
and when it starts a little, it can grow into a lot. When people are saying, are you watching
Breaking Bad? Not necessarily, did you watch Breaking Bad last night or Walking Dead or
your favorite network show. And so it's becoming ... you can then discuss the show and how
much you love it but not necessarily last night's episode.
Michael Lombardo: I agree time shifting is happening.
Ted Harbert: ... that small shift ... and then you look at a fantastic broadcast show,
take Modern Family where 49% of its audiences watching it when it's on Wednesday at 9 o'clock.
I think that's a big change from just a few years ago.
Mike Schneider: Well, I think, you know, these panels tend to sort of go down that negative
path because I think we all love to sort of, you know, moan and bemoaning of where the
industry is going at times but on the flip side, there has never been a better time for
... for television creatively.
Ted Harbert: That's fantastic.
Mike Schneider: And ...
Ted Harbert: I want my money.
Mike Schneider: The question is how do you monetize it? But also in a weird way, is there
so much great TV and Michael, you and I were talking about this the other day. Is there
so much of this sort of high quality stuff and more networks than ever doing original
scripted content that at some point, you know, something's going to give. And what's going
to happen is there are tipping point in terms of when viewers just start to delay all this
stuff and someone loses out. And Michael, do you want to elaborate on that?
Michael Lombardo: Yeah, I mean, look, I ... I was just looking for a cheat sheet on WGN
which I've heard, you know and now, I hear that as a place that people are pitching...
and it's an ... the latest entrant I think into a network that's embracing the idea of
branded content. And look, I think, for viewers, it's fantastic. There's a plethora of high
quality shows out there. I think as ... as a programmer, as a seller of content, you
scratch your head and go how long is this sustainable? How do you differentiate and
how do you not get into the business of over rotating to different ... it creates ... it's
a great time and it presents its challenges. You look into the future. How long ... how
big is that audience?
John Landgraf: Well, I tell you. When Bob Greenblatt was running Showtime and so there
was Michael at HBO and we were ... and Showtime were the three primary channels making that
particular kind of premium content, I don't remember bidding against you ever.
Michael Lombardo: Right.
John Landgraf: And I never bided against Bob. We had different taste. Now, many, many shows,
Netflix, AMC, FX, Showtime, HBO, minimal.
Ted Harbert: WGN.
John Landgraf: Are all going after them at the same time. So I think what Michael and
I are struggling with is, okay, so then how does one define a distinctive brand if essentially
there's a big scrum and it's just a matter of who gets to the ball first.
Ted Harbert: But let's also talk about the macro-eco system for us all, not just premium
...
Mike Schneider: Yes.
Ted Harbert: and Groovy cable which I call you guys but
Mike Schneider: Groovy cable.
Ted Harbert: Groovy cable... but everybody. I mean, again, there are now, not counting
news and sports on cable, well over a thousand original shows last year that are on now.
Then you had all the networks and so just a ton. And the question is, how many rating
points can those shows get and get paid for? How many rating points does Tim need to buy
and can he buy enough rating points and listen, plain and simple, there are a lot of shows
on a lot of networks losing money. So at some point, someone is going to say to their ... the
manager is going to say to the programmers, "Yeah, I know you're a great programmer. I
know you got great ideas but there is just not enough rating points, not enough people
to watch and have this making ...
Mike Schneider: Right especially because everyone is watching Duck Dynasty. So ...
Ted Harbert: Which by the way ... they should, it's a lot of fun but it's just ... wow.
Tim Spengler: I would buble that up. I would buble that up one level higher which is we're
talking about television but to the consumer it's really just a video experience.
Mike Schneider: Right.
Tim Spengler: And they are spending more and more time watching shorter length videos in
smaller ... on smaller devices and that is just inevitably where it's going. So television
has its place but it has to play in something way larger and more complex than just on 140
channels in the home. It is just video ubiquity.
Mike Schneider: Andy, jump into the conversation because obviously, you know, given what happened
this summer now, your owners are reinvesting in Hulu and pouring, you know, about $750
million. A lot of that is going to go into programming so you're definitely at the table
too in creating a lot of new shows and what's the strategy there and are you now
competing with these guys? What ... what's sort of the Hulu game plan?
Andy Forssell: Yeah, the competition question is an interesting one for us 'cause in the
end, you know, we're working with content from a couple of you guys, obviously not yours,
Michael, but in the end, I think of it as there is an amount of screen time that users
have and it's getting larger. And our mission at Hulu is how can we help our traditional
storytelling, 22 to 44-minute TV win out in that battle for screen time? And a lot of
that I think is if you make it easier for people to watch, they'll watch more. And so
I go back to where the conversation started. One thing I think that we try to do, we talked
about delayed viewing. We tried to build a world where we don't care if people are watching
on day 1 or day 365. Like let's help them find something they love. We do versus Netflix
and Amazon run it week by week because I think there's a lot to be said for having that initial
period where it's something in the moment and if people want to wait, they can binge
later. So we try and give them the best of both worlds but we're trying to divorce that
from the ad side and say, "Look, let's not sell shows on advertising." In advertising,
that audience should be just valuable a year later as it is on day one. How do we build
a system where that advertising can be just as valuable to the buyer and not put pressure
to have it all happen upfront? So I think we come at it a little bit different when
you talk about the glut of content that's ultimately a good thing but it's an opportunity
for us 'cause we can think about who is that user? What have they missed? They watched
three shows of ... you know, the Americans but then they let it go and it's been four
weeks. How do we go back and show a promo for episode 4 and say, "Hey, you forgot. This
is a great show." And not have to broadcast that to everybody but broadcast it to that
one small set of folks who are in that situation. So I think if we look at everything people
are saying there is lot of opportunities where with great user experience, I don't think
these are problems. I think they're opportunities.
Ted Harbert: Let me offer one solution so you don't think I am bemoaning anything. The
... we do ... you know, not the mistake. What we do as an industry is we have technology
that allows us to distribute so much content to so many people in different ways. Yet we
don't always think about, "Okay. What do we need to do to support it?" So what we are
doing ... what we're starting now is dynamic ad insertion so that after those three days,
we can repitch, it's called, a show on VOD or on Hulu and put it on new set of ads and
then get credit for it. And then the next step beyond that is something called ODC3
where if you decide to watch ... if you're watching Revolution on Hulu or on VOD, and
... but you're watching the fourth episode, we'll then ... we'll put in the same commercials
in those shows so that you can then tune the rating and get a higher rating because you
put the same commercials. What Nielsen cares about is they'll give a show one rating if
it's the same ad load and so the boys downstairs in the basement are working on that. When
we get that done, that will be a big solution.
Mike Schneider: Yeah. Well I mean, one of the things ... and actually, David Poltrack
at CBS brought up an interesting point hat you know, ... that these days, it is more
valuable to migrate viewers to online, that that's just ... that's where you can monetize
more and, you know, the direction that we seem to be heading. So what does that mean
to the networks? At one point is a network redefined? Is a show less a network show and
more studio show?
John Landgraf: Just one thing 'cause I do want to ... I don't want to lose the thread
of what Michael said 'cause I also agree with what Ted said. Look, part of what we need
from an advertising standpoint is just better targeting, much better targeting so that we
can serve less advertising that is more relevant to the consumer and there's less breakage
from the advertiser standpoint, so they don't have to just buy a million undifferentiated
GRPs but what Michael is saying is that linear channels are still potent and I think it is
important to put in perspective that still 95% of consumption is still in linear channels.
I'll just give you one anecdotal. We ... you know, we launched a new channel last Monday
in the Universe where there are actually about 240 channels. There's 110 odd channels that
are measured but there is 240. And I looked after three days. You know, an average human
being if they live 75 years and they are awake 16 hours a day. They live 450,000 hours, okay?
Five whole human lives were consumed on FXX in its first three days, right?
Mike Schneider: Wow.
John Landgraf: Five times 450,000 hours.
Mike Schneider: Like you just blew everyone's mind.
John Landgraf: So people are watching and that's a tiny little channel in a universe
of 247 channels. The amount of time Americans are spending watching linear television is
enormous and what people forget is for all the sexy end of the TV experience is the make
a TV shows good as a movie and have people turn out the lights and watch it on their
big screen and focus on it the vast majority of television consumption is wallpaper. It's
TV on. People want a TV on in their house and there is an enormous amount of it that's
just that kind of viewing and that's not going to change no matter how much content Andy
and Hulu have or no matter how much content Netflix has the linear television system is
not going away any time soon.
Ted Harbert: Not at all but again, maybe a slight tweak on that is that it's just a Keynesian
curve if you got demand at this high level for television which I don't think can go
any higher when it borders just around eight hours. You got to go to work and sleep and
go to the bathroom and eat a little bit. And so if it stays around eight hours, yeah, we
keep on having more supply.
John Landgraf: It will get divided over more...
Ted Harbert: It will get divided in channels. So I am not sure. I think we just have a lot
of us throwing a lot up there and definitely, it's a competition and we all go through ... and
people decide they want the Duck Dynasty and Walking Dead and Broadcast Network shows,
fine, but I do think that there at some point is ... as we all know, there's something on
those 240 channels that really very few people are watching.
Mike Schneider: Well, the good news is you can bring the iPad into the toilet. So that
solves one of your problems.
Ted Harbert: Found my secret.
Mike Schneider: But John, I am going to come back to you. I mean, you've done something
interesting deal making and now, you're holding on to SVOD rights. You're doing these movie
deals that no one else is doing now and so to holding on to that SVOD rights there too.
So you're really looking to have this value added sort of FX app available to, you know,
MSOs and then to...
John Landgraf: Look, I'll go you one better as much as we are primarily a linear channel
today. I think that what we will be five to ten years from now is a multiplatform brand
and I think this goes to what Ted is saying. If all of the money you're spending on programming
doesn't ultimately contribute to the sense of a brand and some emotional connection to
that brand and a belief that since I found the programming, I like that brand in the
past I will in the future. I think it's money that's squandered and I don't think a brand
is going to be able to exist purely on a linear television channel. You know, for one thing,
right now the windowing ... we make serialized dramas just like HBO does. They are also ... they
are individual episodes. They are also movies, right? So 13 episodes of Sons of Anarchy,
is a 13-episode film. We have some downstream SVOD licensers right now they are trying to
block us form the ability to stack those shows and actually allow the consumer to consume
them. To me, it's illogical that we would be spending 80% of the money between marketing
and licensing to create the show taking all of the risks and be the front end user and
never be able to offer a full experience of actually watching the program to our consumers.
That is not sustainable in the long run. It's not a problem that Michael has. It's a problem
we have as a channel that often licenses and I don't know how we can license for content
creators unless we have certain non-linear rights that allow us to do some version with
ads of replicating the experience that HBO is able to provide not only through their
linear channel but through the HBO go app to their consumer.
Mike Schneider: Well, Michael, you actually started to license a little more in programming.
You ... I mean you've always been in-house but you're starting to go a little outside.
Michael Lombardo: Yeah. I mean, I think the decision we made was not to lean into studio
programming but not to shy away from it. Look, as John mentioned, it's a competitive world.
There are some writers that we love and are excited to work with, that have long deals
at studios. We're in the content business at the end of the day. For us not to do business
with Ryan Murphy because he has a deal at Fox would be ... or Damon Lindelof because
he has a deal at Warner Brothers just did not feel like the right business for us. At
the same time, let me be clear, we make enormous amount of money owning our content but at
the end of the day, I'm not going to turn away a project that we don't have those backend
rights on. You know, because on ... let's be clear, it's nice to have someone betting
with me. Not all shows ... Treme does not equal Game of Thrones in terms of international
value. It's nice to have people betting with us on certain shows and spread the risk. And
we, again, have been successful with those studios and figuring out how to retain the
rights we need to make sure we still have multiple platforms available for our consumers
domestically.
Mike Schneider: You guys touched a little bit on the competition and the fact that everyone
is pitching to everyone now. And so, that's sort of changing some of the deals. We're
seeing more of these, yeah, you have 13 episodes on the air kind of deals that, you know, everyone
is seeing and pushing now. Talk about that and, you know, Michael, you made a face just
now.
Michael Lombardo: Yeah, look. It's the bane of my ... not the bane. I'm looking over at
the agent tables over there. The ... you know, there is not ...
Mike Schneider: He loves you guys.
Michael Lombardo: I mean, it started off with, you know, and I think the phenomenon probably
started with Netflix's two season buy into House of Cards but in that case, you have
a star and you had a director and you had ... you have scripts, I think, for the first
two and you had at least a show that you're basing it on a format to go, I understand,
but now a pitch will come in, literally, no script. A pitch on a ... something that needs
a lot of work and people are looking and getting series commitments. The competitive landscape
has, you know, worked to the advantage of agencies deal making. It's that competitiveness
has obviously created a kind of disharmony in the eco system. And disharmony, I mean,
not ... to be ... look, I think ... I am going to go ... I'm going go to be ... this may
sound full of bravado. I do think there is a benefit from network studio/studios working
creatively with a writer. I don't ... I think there's value added and to just commit initially
to a series creates a very different dynamic than when you're doing the hard work of trying
to find the tone of a show. I understand why it makes sense from the artist's point of
view why they don't want to audition with a pilot but I think my fear is what's getting
lost in that is good shows are prevented from being great shows.
Mike Schneider: And Ted, NBC is doing a lot of more these kind of deals
Ted Harbert: So to your point to name names, it's fantastic when you don't ... when you
say you don't care about ratings, so Netflix can go in and say, this is what we're doing
and then it worked great.
Mike Schneider: Yeah.
Ted Harbert: And yet, you don't have to just say how it did. Bob and I are on that business
but I think it's a testament to we have somebody as smart as Bob Greenblatt who is seating
right there who knows that he wants to pilot on some things but then will say, "You know
what? If I get a fantastic deal on Dracula or Cross Bones, it's a financially advantageous
deal and it's going to this time period, I'll make the bet that I can go right to 13." Frankly,
it takes the experience he has to know when to say yes and when to say no. And frankly,
that's not a new talent. It's the only thing that's worked in this business for 50 years.
It's when you're right just a little bit more than you're wrong. And so, it is the agent's
job, it's a writer's job to run up to come and say, I want to go right on air. It's our
job to say, okay, this one deserves it and this one doesn't.
Mike Schneider: Yeah. And ... and ...
Ted Harbert: And don't forget we have a lot of alternative shows on our network and the
vast majority must be almost of them go right to series.
Mike Schneider: Andy, talk about sort of, you know, we brought up Netflix and the ratings.
What's your take on Netflix? Should they be reporting ratings and do you guys report ratings?
What's your plan?
Andy Forssell: No, we don't. I don't think they should be. And this is what I alluded
to earlier. I think that's ... it's a natural question that you and we should get asked
every week for the next five years but I hope ...
Mike Schneider: Andy where are the ratings ... where are the ratings?
Andy Forssell: I hope the answer is the same. I think as soon as ... we greatly value the
sort of patience we can have. Say, look at a year or two years, and judge success over
that period. Now, sometimes you got to make a green light decision on season 2 early but
I think down that path lies a ton of pre- awareness marketing and a ton of spending
that in the end doesn't pay off.
Michael Lombardo: Andy, we would love the same opportunity. I mean, I didn't know there
was an option of not reporting ratings. That's all ... no one ... Michael, I agree with you.
I mean, it makes me crazy that the press still talks about premiere viewing overnight numbers
and I'm like, "That's not the business we're in." But it doesn't seem ... they still want
to know the numbers and ...
Ted Harbert: But you don't make your decisions based on ratings.
Michael Lombardo: We don't make our decisions but it impacts the press.
Ted Harbert: Right.
Michael Lombardo: It impacts the perception out there, part of what you're working against
and you know ... I just didn't there was a ... Well, you check your box I guess and ratings
disclose.
Mike Schneider: Well, Michael, correct me if I am wrong though 'cause I've asked this
question. HBO, you guys do subscribe to the Nielsens.
Michael Lombardo: We do.
Mike Schneider: You could opt out if you wanted to unsubscribe and ...
Michael Lombardo: That's true.
Mike Schneider: So why not?
Michael Lombardo: We don't have our own data. We're not able as I assume you are to mine
your own data. So it's our only way of knowing a little bit. We don't have the ...
Ted Harbert: Set-top box data would be key.
Michael Lombardo: Yeah. If we had that, trust me, we wouldn't be at ... So I understand
it's really ... let me use the word "curious" you know. This is the business we're in. People
are curious how shows are doing. But I understand the preference to keep it close to the vest.
John Landgraf: I'll tell you this though, you know, Game of Thrones, because of the
size of the audience that's passionately attached to it deserves every magazine covered it gets.
That's one of the ways the press evaluates whether their consumers are interested in
something, not do they like the show but are there a significant number of people. So I
think it's valuable because I can tell by looking at it the difference between Walking
Dead or Game of Thrones and some other show that's ... it might be very good but isn't
that kind of big and there's other ... another important distinction which Andy has a partner
portal in which we can go gain access. He doesn't report publicly the consumption of
the shows but we can gain access ...
Mike Schneider: We know it, sure.
John Landgraf: ... to what shows are gaining. So we have a relationship with him in which
we have some understanding of the value of our shows to him. Part of Netflix's strategy
is not only not to release that information to the public but not to tell the content
producers and providers what the value of their content is on Netflix's system and that's
a huge disadvantage to sellers.
Mike Schneider: And what was the e-mail address for that Hulu portal?
Ted Harbert: And don't forget, we sell all of our products on Hulu. It's just not in
Nielsen currency. So the advertising agencies are going with us with our numbers. They believe
us but that's the problem, we're not on the same currency.
Mike Schneider: Tim, are you feeling a little better about the information now from Nielsen
or where do you think standard turn?
Tim Spengler: Yeah, Ted used the word "currency." I think the currency is going to change if
you're talking about where the ad spend is going. We're going to be less interested in
people as a proxy for their behavior or their likeliness to buy a car because I'm a male
of 35 to 54 and I live in A county address and I have X amount of years of college. We're
going to be more interested in what was your online behavior and then what television shows
are you watching. And so if you're in the toilet and I want to serve you a Charmin ad
immediately while you're on the john. And that's where ... and trust me when I say,
that is where a lot of the money is going and Nielsen is just a proxy for all of that
and there's too much data that's too powerful and the technology is coming, so it's a little
like the New York Stock Exchange has sat in the legacy model for all of those years and
NASDAQ came in and said, through data and technology, we can change the whole way you
buy and sell securities. I think in television, in traditional media, it's already happening
in digital media. You're going to see that start to happen.
Ted Harbert: Right but we do need ...
Tim Spengler: I've been dying to say that for like the last 10 minutes.
Ted Harbert: And you're right. You are a 100% right and I could always see the cartoon of
me and my iPad in the toilet and getting a Charmin ad. The key though is we have to get
Nielsen to measure the tablet, the VOD, the phone. They just have to and because there
is so much viewing going there and it's within three days and they say they're on it but
everyone in this room knows that they're a monopoly and they'll get to it when they get
to it.
Andy Forssell: But if the answer there ... if the answer there is they're going make you
as an interim first step, do a full broadcast ad load, I think that's hopefully a very short
interim step cause I think it's going to be hard to make that work online. You're living
within their limitations rather than ... rather than trying to move beyond it.
Ted Harbert: Well, it is always coming next year and actually, I am hoping it comes next
year.
Mike Schneider: They have been saying that for years.
Andy Forssell: We did serve a Charmin ad to Ted the other day.
Ted Harbert: All right.
Mike Schneider: While watching Game of Thrones.
Ted Harbert: Hey.
Mike Schneider: Hey.
Ted Harbert: There you go, Mike.
Mike Schneider: Come on. I am here all week. I just sold that joke actually to WGN. They
picked it up, success. You got series on that.
Ted Harbert: That's good.
Mike Schneider: We've come full circle. Let's talk about programming for a bit. First off,
let's talk about the summer. Under the Dome, this was ... was, you know, Moonves and you
know, all the subtleties, said this is the show that's going to completely change the
game.
Ted Harbert: You call him Moonves? Okay, go ahead.
Mike Schneider: Mr. Moonves?
Ted Harbert: Yes, that's correct.
Mike Schneider: Mr. Moonves. But how is the success of that show changing the game? I
mean, we already were seeing everyone rise to do more ... more of summer shows. You know,
there's more limited series coming.
Ted Harbert: If I could add one comment 'cause I don't ... there has been a lot of summer
shows for a long time and NBC had more summer shows than anyone but ... and original scripted
shows and non-scripted shows but yes, Under the Dome is ... to me, a different. It's a
very good show. I've watched every single one of them. And I learned how to use my Amazon
prime when it was off the air in New York at Time Warner. However, here is the real
change.
Mike Schneider: We'll get to that by the way.
Ted Harbert: Here's the real change in what they did. When they announced that they were
going to put it on in summer and then do four days later on Amazon Prime or Instant Video
which frankly took us aback because we strongly believe and our policy is that and continues
to be that we are the place for current season and other services, other platforms are for
prior seasons.
Mike Schneider: Yeah.
Ted Harbert: And so to put it on Amazon in the season, this is a change in policy. Now,
Nina got a terrific show at a terrific price because she had a partner that put up a lot
of the money. I get it and they did a good thing for their summer. It is a real change
and then I tried to ... I got my head around it by saying, you know what? It's just a one
off. It's just a miniseries and it will be gone in a number of episodes and then they
picked it up for next season. So now, that's really an adjustment but real change in what
we think is the difference between what we do as a live linear service and then what
we do with our SVOD or other non-linear rights.
John Landgraf: I think the windowing strategy was abject failure in the sense that I think
if they had owned the rights Under the Dome outright, they very well would ... might have
been off Time Warner for as long as they were. So they gave up an enormous amount of leverage
with the number one scripted show of the summer by making that deal. So I think it was a bad
deal. And I think ultimately if you want people to pay 80 to 90 bucks a month for an MVPD
subscription, (a), you got to make great content, (b), it's got to be ubiquitously available
whenever they want it on all their devices and (c), you got to deny it to people that
don't pay that subscription. So I'm with Ted. I think that's ...
Mike Schneider: Yeah.
John Landgraf: I think that's a bad change in policy for the larger ecosystem.
Mike Schneider: Well, let's talk about re-trans real quick. I mean what was your sense? I
mean the general consensus is CBS won but at what cost and do you disagree? Do you ... do
you think CBS won ...
Ted Harbert: You know what? You know, that is ... I do that for the company. I make the
deals for ... with our affiliates for retransmission consent or reverse comp which I couldn't spell
two years ago when I got to New York. The ... it's fascinating. I don't think it's worth
getting into who won and who lost? Our friend ... and Les doesn't even say it that way but
I do ... Listen, from ... it's good for me the more he gets from Time Warner, the better
I'm going to be able to do in our deals. So if you ... if you go look at the huge ecosystem
and you look at ESPN, love it, fantastic, best sports service but at five bucks and
the number of viewers they have versus number of viewers that a CBS affiliate or an NBC
affiliate or ABC affiliate has, dwarfs ESPN. So where is the balance? Where does that make
sense? So I think Les who is a good driving negotiator went and said, "sorry, this just
isn't right." Now, I don't think this serves the viewer. I don't think any of us want that
to happen. It shouldn't happen in the future and I hope everybody gets a hold of themselves.
I don't want government interventions. This is not the right thing for the FCC to try
to manage it and in fact they really can't. They can't come tell you "You must go solve
this tomorrow." At least, I don't believe they can.
Mike Schneider: Right. Even if ... they'll try. I mean, there are their ...
Ted Harbert: They can try. They can make and try to get to the table but they can't order
anybody to take this deal or that deal but I do believe there is ... we've spent so much
money on this product but there really needs to be a fair payment from the MVPDs use to
the networks for their signals.
Mike Schneider: But at what point do we reach that tipping point where every time something
like this happens, everyone brings up a la carte. They start to bring out that cord cutting
and then all of that kind of stuff. At what point does it sort of reach that level?
Ted Harbert: Not yet.
Mike Schneider: But when?
Ted Harbert: I don't know. I don't think it ... listen, I think it's ... this is a ... this
... as someone who I trust very ... the man who knows a lot about these things said, probably
only those two companies with those two CEOs at that point in time would end up in that
situation. so I don't think you're going to see this and the reason I said not yet is
I just don't think we're in that situation. We're going to have stations off the air all
over the country all the time.
Mike Schneider: Yeah. Do you guys believe in cord cutting by the way? Do you think that's
... that's a real phenomenon or will that be a real phenomenon?
John Landgraf: I don't think it's anywhere. Look, I think there are a lot of people trying
to disrupt the current TV ecosystem that have a very strong business motive for proclaiming
cord cutting as a mass phenomenon. For one thing, there's a lot of people who are trying
to ... there are mediators who are doing it. There are now about 5 million homes that are
Broadcast broadband only. So there are a meaningful number, small but meaningful number of homes
outside the MVPD system. So I think you have to take that seriously but for example, there
was ... there were a lot of big screaming proclamations that cord cutting was finally
here the last quarter and then when you really got in to the numbers, actually the system
grew by about 100,000 subs.
Mike Schneider: Right.
John Landgraf: What happened was there was some basic tiers, really basic cheap tiers
and so, ultimately some big channels like even FX and other channels got thrown off
those really basic tiers. And so it looked like there was this ... a decline but there
wasn't. So it's a small ... very small but measurable phenomenon.
Mike Schneider: So concerned for the future.
Michael Lombardo: And I think apropos, what we were saying earlier about the content available,
the downside of that. The upside is it's a great value proposition right now. I agree,
we all have to be mindful of the cost for a cable package and particularly in an economy
that's depressed but obviously, families are finding real value in the fact that the level
of programming, not on all networks but I mean I agree, not every channel is but there
are a lot of options on that dial now as opposed to just three.
John Landgraf: 33 cents month ... 33 cents per hour. So you have to buy a lot in bulk,
right, So you have to buy ... it's like a pre-buying a very large bulk package of entertainment
but think about any entertainment you could buy, movies, sports, concert, video game,
all of it is much more than 33 cents an hour which is the average price that the average
consumer is paying for. An hour actually consumed within the MVPD system. So that is the reason
why most people are still opting to pay it is 'cause it's still a good value. It's straining
their pockets a little bit and I think that's of concern but it is good value.
Michael Lombardo: And I mean ...
John Landgraf: And people want it ... I'm sorry.
Michael Lombardo: I'm sorry. Go ahead.
John Landgraf: Go ahead, sir.
Michael Lombardo: I was just saying, you know, when people ask why are you still in the movie
business, we're in the movie business because people watch movie on HBO, because it is a
much more financially attractive proposition than taking a family of four to the theaters
and buying popcorn and paying for parking. They'd much rather wait a few months and see
it at HBO. It makes sense to them. So which I think when you look at the options a family
is confronted in terms of how to buy entertainment, it's not a bad value proposition.
Mike Schneider: Yeah. Yeah.
Ted Harbert: It's a bit of an 18 to 24 issue. We have a lot of college kids and it's kind
of cool not to go in with their TV and they can find other ways to watch things.
Mike Schneider: Yeah.
Ted Harbert: But I ...
Mike Schneider: Steal their parent's HBO Go Live passwords.
Ted Harbert: Exactly but people love especially live events, sports and there's more and more
and we're really understanding now the importance of big events and frankly, big television
networks are the ones that can do that the best along with premium cable. And so, I think
that's ... as people go and, you know, get out of college, get a job, join society a
little bit, I think there's ... cord trimming and some bending of ...
Mike Schneider: Move out of their parents; I think. Yeah. Well, we guys did a Million
Second Quiz last night which the idea was let's try to do this big event.
Ted Harbert: Right.
Mike Schneider: What was your ...
Ted Harbert: Listen, I am just so proud. I think Bob and Paul Telegdy and the team did
such an amazing job and not only ... you know, a lot of people are using social now but the
app ... I mean, the servers were burning up. They couldn't ... people couldn't get enough
of the app. We were on against Monday Night Football last night but we had the number
was right exactly on our targeted number and it's going to be bigger tonight and I thought
it was a terrific fun show and no matter what, it is a better promo base for our fall launch
on September 23rd than the underlying programming would have been. So to me, it's just fantastic.
They did a great job.
Mike Schneider: Andy, you got to jump in to the whole cord cutting argument. Obviously,
you're sort of at the crossroads of that and that ... you know, you and your partners or
obviously the networks but the same time, some people now are using Hulu Plus and Hulu
as ... you know, as substitute. So ...
Andy Forssell: Yeah, I think we look at it as if there's ... and you guys have touched
on it. Part of the danger for the cable ecosystem is a cost problem and part of it is user experience
problem. And the cost one would never go away. That's always going to be an issue and I think
the industry will dial that to the right place. I think rationality sort of... it's an efficient
market over time and ... but we always think of the user experience problem as the more
serious one right now and I think if you look at Netflix and Hulu and others, like we don't
have quite enough content. I always thought we don't have quite enough content to be really
dangerous versus cable. It's a pretty amazing deal. If you look at what you get for 60-70-80
bucks but I think it's wrapped in the user experience that is not what Millennials and
frankly, probably the rest of us want. It is getting better. Some of the distributors
are investing more heavily than others but I think there's an opportunity there to make
the cord cutting picture not nearly as diresome like, I think it may be, just by improving
that user experience. We're talking a few distributors saying can we help? Could we
wrap some of the Hulu stuff we've done around some of your content and help you lure some
millennials in to the system 'cause I think ... again, I think at heart, cable is a good
deal if you can make it feel like the way people want to view entertainment. I mean,
Michael had to roll his own. They've gone off and built their own ... you know, they've
gone off and built their own apps and said we can't wait. We've got to be out there in
a different way and I think that's ... they've obviously got the brand to make that successful
and done amazing things. I think that's a harbinger of where things go but I think aggregation
still matters. I don't think everybody can go out there with their own app.
Mike Schneider: Let's talk programming real quick. John, you said something really interesting
this summer at the TCA actually. Someone asked you about, you know, all the shows about the
anti-heroes and it seems like every other show now is about the anti-hero but you said
no one is going to top Walter White? Like that could be the end of the trend? Do you
still ... do you guys agree with that? Do you think we've had ... you know, if anything.
Michael, will you talk about this too? The Sopranos effect may be is sort of ending its
lifespan now or do you think there's room for more of this sort of, you know, dark edgy
shows with characters that you kind of love to hate, to love to hate?
John Landgraf: I don't think it's going away. I mean, I think the Sopranos essentially dated
in HBO, changed HBO and invented a new form of narrative television storytelling but I
think it seems like it's almost all cable was doing for a period of time and I ... and
I ... it's not enough of a genre to sustain HBO and FX and Showtime and AMC and whoever
else enters into it. So I think ... you know, the Game of Thrones I think is an example
of a show that's ... it's a dark show and it's got maybe what you would call anti-heroes
but it's not a Sopranos as anti-hero. It's a unique thing. It's a mythological show that's
also adult. It's a different exploration of genre than I've ever seen before. I think
we just have to stretch out and be more bold in what we embrace from the creative community.
I don't think we can just keep doing white male, anti-hero shows over and over and over
again.
Ted Harbert: It's not new. It's ... antagonist as protagonist has been around for a billion
years along with JR and Joan Collins and Dynasty. And so, you know, these guys have done it
because they have the ability to as Bob did at Showtime in a much bolder and edgier way
but again, if you go look at James Spader on Blacklist or Blair Underwood on Ironside,
you'll see antagonist is protagonist and I think the audience loves it and I think, yes,
they do want at least a mix from the standard good guy procedural. They want a lot of everything.
You can't give them one thing and they will reject you.
Michael Lombardo: I do think it's leveling off. I think you can't just lead ... a show
can't just rest on the anti-hero premise anymore. That's not enough. I think the good news is
... and I think you see it in networks, as well; people are expecting dimensionality
in their characters. The day where a good guy is always a good guy just is not going
to work anymore. So I think, you know, the picture still come in where the hook is. Look
at, you know, these heroes the most *** up guy, excuse my language, you've ever seen
and that's not enough. It's not enough. And it's not enough for ... to have ... it's not
enough for a show and it's not enough for a network.
Mike Schneider: Well, it does seem like a pendulum has swung the other way again and
that the comedy space right now is so much more vibrant in terms of what's been sold
so far for next season but also just even looking at the fall schedules, John, you just
launched an entire network on the back of some big comedy hits. Is ... is this is just
the usual cycle of the business that suddenly we're all talking about comedy again and then
maybe dramas a bit out the window.
John Landgraf: I heard somebody that there are 168 dramas currently in production in
the US. So I think what you're seeing is anybody who knows how to run a show is employed. There
is nobody left to develop anything, you know. Yeah. That's why there is more people ...
Mike Schneider: That is correct.
John Landgraf: ... in comedy that are available to develop a new show right now. I mean, we
have a lot of dramas and so I am sure Michael does too but it's fully cooked, you know.
Mike Schneider: But Ted, I want to ask you a quick question. So you know, let's do the
analogy. So McDonalds, Big Mac, the most, you know, popular sandwich. That is kind of
older skewing. You know, the kids, they kind of like this new chicken McWrap that they
got going. So, you know, Big Mac is still the biggest seller but it's getting older.
So, what would you say McDonald's decided, you know what, we're going to pull the Big
Mac and make the Chicken McWrap our new, sort of, our prime product but they will bring
the Big Mac every once in a while or maybe quarterly and maybe a series of specials but
we're now ... we're putting our money behind the Chicken McWrap. So ...
Ted Harbert: I am totally done. I would stay ... I would keep the Big Mac on the thing.
Is that the right answer? What analogy are you making? What am I missing.
Mike Schneider: You guys get my analogy and maybe it was a little too cryptic.
Ted Harbert: It was too obtuse.
Mike Schneider: Okay.
Ted Harbert: On what time zone?
Mike Schneider: We're talking late night.
Ted Harbert: Oh? Sorry I was going to ...
Mike Schneider: Who got that? Was I too obscure, I'm sorry.
Ted Harbert: We can go to the airport, I can get a ...
Mike Schneider: I was trying to be cute.
Ted Harbert: A Big Mac.
Mike Schneider: So let's talk Late Night real quick. So ... Mr. Leno is about to depart.
Yeah, he is still doing very well.
Ted Harbert: Yes, he is.
Mike Schneider: So what are you going to do? What's the plan? Is the hope that Mr. Leno
sticks around and is there ... what?
Ted Harbert: We have a plan and we've announced our plan. And Jay is ... Jay is number one
and we ... Bob and Steve and I and Paul have talked a lot and it is not new to NBC even
though it was handled a little differently in the past to make a change when someone
is number one. Jay is going out on top and we think that's the right to do. So on February
17th, Jimmy Fallon will start the Tonight Show on the Monday of the second week of the
Olympics and then on February 24th, Seth Meyers will start in Late Night with Seth Meyers
on at 12:37 on that Monday night, the 24th.
Mike Schneider: Is there any hope that Jay sticks around? Are you talking about it?
Ted Harbert: You have to ... I mean, you have to talk to Bob about that. I mean, Jay is
not going to stick around in Late Night. We love Jay and if there's something for Jay
to do in other ... either doing specials or something like that, that would be great.
We're all huge fans and I just have to say Jay has been just amazing through this experience.
Just ... he's just been great and he's ... and frankly, I think it's because even though
the press might disagree to some point, we handled the way we want to handle it on our
time table and he was talked to in an honest upfront way and he got it and it's all good.
Mike Schneider: Cool. Sorry, I was so cute.
Ted Harbert: It's okay. You were incredibly cute. I just didn't understand.
Mike Schneider: Right.
Ted Harbert: Not very bright.
Mike Schneider: John, let's ... we're going down the road sort of the lightning round
now. The 10/90 model is something that still fascinates me and I think you guys have committed
once again to it. You've got a couple of things coming up including this ... this new Kelsey
Grammar, ah Martin Lawrence Show. How's that sort of model been working for you? And actually
I know NBC is about to try it too with Roseanne. So maybe some advice you have for Mr. Harbert
on that? How to make that work and the lessons learned from the Anger Management experience?
John Landgraf: Make sure you fasten your seatbelts and make sure your hands are inside the car
with the windows closed.
Ted Harbert: You're friends from Lionsgate are right out there too.
John Landgraf: Yeah. No, I mean, Lionsgate is good at this.
and it actually has been very helpful to us to have him as a partner 'cause
they really ... they really know what they're doing and for us, it comes back to what Michael
was saying about why they ... HBO still licenses films. It's because films create a lot of
circulation for your channel, acquired programming create a lot of circulation. You know, we're
known as an original programming channel but 70% of the time spent viewing our channels
still spent viewing acquired programming and there just hasn't been an enormous bounty
of really, really dynamic off net syndicated shows. There have been a few great ones and
there's been an incredible scrum to try to get them and the price is paid for them has
been in records. If you look at the amount of money we can get both the front and back
end rights to a 10/90 relative to what somebody paid for Big *** Theory, it's a good value
and it's ... it just creates more acquired programming and you know, it's obviously a
hybrid because an original ... the originals come on our channel but we're buying both
of the original back-end rights. So it's ... you know, we sort of look at it as a way to bring
a different audience to our channel that's probably not watching our original programming.
Ted Harbert: Utterly fascinating. I think Morton Ira of Lionsgate has just done some
really smart work, it's so hard and I think it's ... and maybe we're a little bit more
on tiptoes than you guys jumping in but Bob's into it. I think it's really fascinating.
I think it's really hard to do it really well given if you're going to go do two a week.
I think that's a tough thing to get that done but it's ... I love people thinking of new
ways to do things.
Mike Schneider: Michael, speaking of a new way to do things. I mean, we talked about
HBO Go for a while. Is there ever a day where you offer that a la carte or is that ... does
that not make sense to the business and the second you do that, is that sort of the genie
out of the bottle?
Michael Lombardo: It doesn't make sense now for us. I mean, we ... we have an economic
model that generates a lot of revenue for Time Warner. The subscribers have gone up
this year. But you know, what happens in the future, who knows? But right now, it doesn't
make any sense. I think there's not ... by looking at the news, the number of people
who opt for the digital experience as opposed to watching it on a traditional television
in linear, it doesn't make sense for us in terms of value proposition or the lost business.
So I don't see it happening any time in the near future.
Mike Schneider: Tim, C3 versus C7, you know, obviously the broadcasters would love to see
C7. Do you think that will happen?
Tim Spengler: Well, I think there's a couple of issues. I mean, we have certain categories
that really the messaging is so time sensitive that they buy in a specific window to drive
specific sort of business result and seven days is too far and Ted was talking about
kind of reinserting a new ad and in the middle of that seven days which is great. I think
the ... the data is there to actually sell us the commercial rating, not of the full,
you know, 8 minutes of the 22 minutes but the commercial rating for the exact commercial.
So as soon as there ... as soon as the networks are ready to have that conversation, we're
ready to have the other conversation.
Mike Schneider: Andy, lightning round time. So you guys have already announced quite a
few new series. What's the plan? What's the long term or how many series do you have to
roll out in the coming years? What is the long term goal?
Andy Forssell: Well, we think the programming is three areas, we got last night's TV from
five out of six top broadcast networks, as well as some stuff from Viacom on a slight
delay. That is one important piece and we'll continue to invest in that. Second piece is
originals and exclusive stuff whether we license it or get involved at script stage that where
we sort of look like the network as a first drawn on Hulu and then there's lots of library
whether it would be sort of high value stuff or stuff from the '70s or wherever it might
be that we sort of curated and hand selected. I think we'll continue to invest in all three
of those areas but there is a focus on how do we be a compliment to cable. I mean, we
understand, you know, we've always been a lightning rod for the sort of cord cutting
and we need that ecosystem to stay healthy. And so I think, in the end you'll see us lean
on more towards originals and exclusives and how do we be something that looks like another
channel. So you'll see a lot more from that ... from us there in the next year or two.
Mike Schneider: Okay. I want to hear guilty pleasures. The thing that's on your DVR that
you're embarrassed to admit right now in front of an audience of industry execs, that is
on your DVR. Andy, do you want to start? We'll come back down this way.
Andy Forssell: Yeah. Well, this is legitimate. I do not want to say this on the stage but
it's the honest answer. Actually I've been a fan of the Bachelorette. It's a well done
show.
Mike Schneider: Yeah.
Andy Forssell: But it is ... I indeed wish I had not said that.
Mike Schneider: Did that come to your liking this summer or ...
Andy Forssell: I wish ... I ... I think the past cycles have done a little better but
... but let's not get into ... I mean there could be debates so ...
Mike Schneider: We'll do at separate piece.
Andy Forssell: These guys won't admit ...
Mike Schneider: Tim, your guilty pleasure?
Tim Spengler: Nothing. Nothing really that I am embarrassed to say actually, just normal
stuff that you predict.
Mike Schneider: Yeah? Yeah?
Tim Spengler: Honestly.
Mike Schneider: What's ... well then ... what's your favorite then?
Tim Spengler: It's Mad Men, my parents met at YNR in 1962 so that's sort of like right
there and sort of part of my life. My number one.
Mike Schneider: Very cool. Mr. Lombardo, guilty pleasure?
Michael Lombardo: The title is the worst part of it. Naked and Afraid. You know, I was ... you
know, yes, I was just lying in bed one night and ...
Tim Spengler: Is that your life story sort of like ...
Michael Lombardo: There it is, you just discovered.
Tim Spengler: Okay. That makes more sense now.
Michael Lombardo: Yeah. I stacked them up.
Mike Schneider: Yes?
Michael Lombardo: Not binge viewing yet but ...
Mike Schneider: But it's there. It's waiting.
John Landgraf: I feel embarrassed for not having a guilty pleasure but I...
Michael Lombardo: Check out Naked and Afraid.
John Landgraf: I should. Tonight. I'll be naked and afraid so I might as well just watch
the show called the same thing so.
Mike Schneider: What about you Ted?
Ted Harbert: Sparta Spartacus. Is Spartacus still on? No, what I love? I love what Mark
Pedowitz sells it, I love Nikita on the CW. I've watched every single Nikita. I think
it's fantastic. Really good spy storytelling and she is just wonderful.
Mike Schneider: She is fantastic. So take that away from today, Maggie Q.
Ted Harbert: Maggie Q.
Mike Schneider: Well, guys, I thank you very much. This has been fun. Thank you for coming.
[Applause]