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Wherever, Whenever Video in Spotlight for 2006

November 30, 2005

NEW YORK — It may not be called television much longer.

The business of video programming is shifting rapidly, whether it is viewed in the living room, on the Internet or in the palm of your hand. The most cautious of U.S. media titans have entered the fray, crafting deals to deliver programs according to a consumer’s schedule and not their own.

While the promise, and threat, of video played across different devices has been held out for nearly a decade, 2006 will see its fulfillment, media executives and experts said ahead of the Reuters Media and Advertising Summit this week.

In the last two months, lead broadcast networks CBS, ABC and NBC agreed to sell viewers on-demand versions of their biggest hit shows shortly after they broadcast.

Major advertisers, from automakers to packaged goods companies, are experimenting with longer-form commercials with a bigger entertainment angle to lure consumers on-demand.

Such deals are a limited response to the way rival media outlets, from the Internet to video games, are competing with television and attracting billions more in ad dollars.

Yet television’s chieftains see opportunities for their own growth beyond the set-top box and promise more to come. In the new model, a television program is not just a weekly scheduled event, but a brand of entertainment spun out in many ways.

“There’s no question we’re shifting,” CBS Chairman Les Moonves told Reuters in an interview last week. “The idea of video on demand three years ago was something we didn’t consider as seriously as we do today.”

CBS offers episodes of its popular crime drama franchise CSI on-demand through cable operator Comcast Corp. Moonves estimates CSI will reap over $1 billion in revenue for the network, starting with traditional television commercials and extending to DVDs, licensed games and Internet clips.

“You’ll be able to get that on your cell phones,” Moonves said, referring to tailored short clips of CSI that could be available within a year. “While you’re waiting on line at the grocery store, you’ll be able to get a ‘mobisode’ of CSI.”

CBS, part of Viacom Inc, will become its own publicly traded entity by January. NBC is part of General Electric and ABC is owned by Walt Disney Co.

RADIO FORMAT PLAYS, MOVIE STRATEGIES

The future of video and television will be among the topics discussed at the Reuters Summit in New York from Wednesday through Friday.

Leading media and advertising executives will also weigh in on changes to the radio model, the future of movie distribution and the steady rise of the Internet as an entertainment and advertising medium.

Analysts believe now is the watershed moment for the media industry, reorganizing the TV-dominant programming and advertising model that has held sway for more than 50 years.

“We see the media market having a really impressive ability to reinvent itself and create new revenue streams,” said Peter Winkler, director at the PricewaterhouseCoopers Entertainment and Media practice.

“Media that can be consumed on-demand, that’s a big trend that is going to strengthen,” he said. “But we will see a move toward monetizing that on-demand content through advertising. Think of it as ad-per-view.”

PricewaterhouseCoopers forecasts total U.S. television revenue growth of 7.4 percent next year to nearly $62 billion, including license and access fees, driven by the growth of digital television, high-definition broadcasts and new carriers such as telecommunications providers.

Within the industry, rival cable channels will catch up to their broadcast rivals, securing an estimated $22.3 billion in advertising dollars by 2009 compared with $22.5 billion for the networks. The Internet will be close behind at $17.2 billion.




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