AOL Time Warner exec: Content still driving force

Tuesday, April 9, 2002 | 11:11 a.m.

While thousands of broadcast executives this week get close-up views of digital equipment that will change television in the years ahead, the National Association of Broadcasters' keynote speaker reminded conventioneers it's content that will continue to drive the industry.

"No matter how digitized content becomes or how earth-shattering convergence turns out to be," said AOL Time Warner chief executive-designate Richard Parsons, "the power and glory of the entertainment industry will always depend on product, on content, on the unique, idiosyncratic magic of storytelling."

Parsons was the first major speaker at NAB's Las Vegas convention, which is drawing about 90,000 people to the Las Vegas Convention Center, the Las Vegas Hilton and the Sands Expo Center through Thursday.

Attendance is off by about 20 percent from last year's show as the industry struggles to recover from ad revenues bitten by the weak economy and the uncertainty that followed the Sept. 11 terrorist attacks.

The television industry is in the midst of an expensive transition from analog to digital signals and there are signs all around the show that managers and regulators want to spur the technological advances that will give viewers clearer pictures, more programming options and interactive sets.

While Parsons did not ignore the transition to digital, he added some perspective -- and gave an indication of why he thinks AOL Time Warner would be an industry leader.

"In case I am not stating the point with sufficient clarity, this is all the way of saying that, going forward, people -- not technology -- will continue to be what counts most," Parsons said. "The ability to imagine, create and report stories that entertain and inform will remain at the heart of what we do."

Parsons said his company's ownership of Warner Bros., New Line Entertainment, Warner Music Group, HBO and the Turner broadcasting networks give it a content edge. That's important, he said, because even industry experts are unsure exactly how the technology will be used to deliver the content.

"What exactly is convergence?" he said. "Does it mean that the TV and the computer are morphing into one and the same thing? Is it meant to suggest that the media and entertainment industry and the computer industry and the consumer electronics industry are merging into a single, interrelated industry? Does it mean in the future, all news and entertainment, as well as voice and data, will be delivered to consumers over the Internet?

"Well, the answer to all is yes ... and no ... and maybe. You see, no one really knows at this point in time. It's too early to predict with certainty exactly what's going to happen in the future.

"But one thing is clear, and that is that the emergence of digital technologies and the Internet will have a profound effect on our business and will change the existing paradigm."

While Parsons posed philosophical questions to his NAB audience, Edward Fritts, chief executive officer of the NAB, was more definitive about how the industry must get behind new initiatives to advance the digital transition.

Fritts said Federal Communications Commission Chairman Michael Powell -- a speaker at today's NAB program -- last week introduced a plan to spur the digital transition.

"We embrace the principles of the Powell plan," Fritts said. "We encourage our friends in allied industries to do likewise. This transition is far too important to consumers to risk further delay."

The satellite television industry separately endorsed the Powell plan late last week.

While Fritts praised the move to digital technology, he chided campaign reforms that would require broadcasters to give politicians air time to respond to political advertising. He also was critical of EchoStar's proposed acquisition of DirecTV, which would produce one giant satellite television company.

"As you know, EchoStar recently went to Congress and promised that if its merger goes through, it will begin carrying all local TV stations within two years," Fritts said. "And yet, two days later EchoStar went to court challenging its own pledge. Just last week EchoStar went to the Supreme Court challenging the territorial exclusivity of local broadcasters, which is the fundamental bedrock of our local television system.

"NAB strongly endorses carriage of all stations in all markets on satellite, and we won't stop until we've achieved that goal. Given the track record of EchoStar, however, we have to believe that our best hope of achieving total carriage is through competition in satellite and not through an EchoStar monopoly."

In their addresses, Fritts and Parsons also paid tribute to the news media and the job they did in the coverage of the Sept. 11 terrorist attacks.

"I have never been prouder to be head of the NAB than in the days since Sept. 11," Fritts said. "The country did not panic because the American people were kept informed, united and inspired."

Fritts also said that 33 percent more people are listening to radio broadcasts today than they did prior to the attacks.

"During those days of terrorism and trauma, you didn't hear the notion that broadcasting was no longer relevant," Fritts said. "Our relevancy was obvious."

Coverage of the attacks "reaffirmed that broadcasting remains competitively relevant, technologically vibrant and constant in its civic purpose. Indeed, this was our finest hour," he said.