Q&A With Time Warner Executive: A CEO’s-Eye View on Changing Media Landscape
By Mike Rogoway, The Oregonian, Portland, Ore.
Feb. 8–Richard Parsons runs one of the world’s biggest entertainment conglomerates in New York City, but when his old college basketball coach asked him to speak in Corvallis, Time Warner Inc.’s chief executive couldn’t say no.
“If you ever played sports, you know that when somebody who you called ‘Coach’ calls, you answer,” said Parsons, 58, who played basketball at the University of Hawaii for former Oregon State standout Ephraim “Red” Rocha.
Born in Brooklyn, raised in Queens, Parsons rose to prominence in the 1970s as a top aide to Vice President Nelson Rockefeller. He became Time Warner’s president in 1994, and is in his fifth year as the company’s chief executive. Parsons is frequently mentioned as a likely candidate to succeed New York Mayor Michael Bloomberg in two years.
At Rocha’s request, Parsons will give a free talk at OSU tonight on the changing media landscape. He spoke in advance with The Oregonian about how technology transforms the world of entertainment and ideas, and how he keeps up with the torrid pace of change. (Comments have been edited for brevity and clarity.)
QUESTION: I wanted to start by asking about your trip to Oregon. I understand it’ll be a reunion with your college basketball coach.
ANSWER: Red, he was the coach of the University of Hawaii basketball team when I was out there in the mid-’60s, so I played for him. I haven’t talked to him in years, but I talked about him, you see, and I think somebody somehow brought that to his attention and he figured turnabout was fair play, and so he snagged me.
Q: Your talk will be on the future of media. How do you think the movie-going experience, and maybe the entertainment experience, will evolve over the next five to 10 years?
A: I have a son who’s 35, and he does things differently than I do. I go to the movies. I don’t watch movies on a computer screen, and I try not to even watch them on a big-TV screen.
My kids are different. My kids are all in their 30s. One of them flies around a lot and he downloads (movies) onto a computer, watches them on a computer screen. I’ve got one that basically doesn’t even watch movies anymore. If it doesn’t come on an iPod, she doesn’t deal with it.
So what’s going to happen is a proliferation of ways in which people access media. I don’t think anything is going away. I don’t think any of the new media is going to obsolete, necessarily, the old. Television will be big, in my opinion, for a long time, just because it fills its function so well. The in-theater movie experience will persist for a long time. But it’s going to be, I think, a diminishing number of people who access the content that way.
Q: For a company that plays in every possible space, from magazines to the movie theater, from cable to the Internet, how do you coordinate your strategies?
A: What we try to do is the opposite of the old baseball adage, ‘Hit ‘em where they ain’t.’ We try to be everywhere you are. It all starts with quality content. People still need to be informed in a way that is accurate and informative, and they want to be entertained with good storytelling. What we try to do with all of our businesses . . . is to create quality content and then make sure that there’s a way to move that content to consumers on every conceivable platform.
Q: Are you concerned with digital rights, and as you move across platforms, digital rights being compromised? What’s the worst-case scenario for you with illegal file sharing?
A: I think China’s a worst-case scenario right now, where estimates are 95-plus percent of the intellectual property is pirated. That trails down to this country, where maybe somewhere between 10 and 15 percent of content is consumed contrary to the rights of the intellectual property holder.
Piracy has always been with us. It takes a while for the marketplace to organize itself around effective enforcement policies and techniques, but it’ll happen in the digital world, too. I don’t believe this time is different, that digital technology is so untamable that we won’t be able to get our arms around protecting property rights in the digital world. At the end of the day, in the history of the world, the pirates never win. Anarchists never win, over the long haul. People seek and need order in order to organize themselves and their communities.
Q: What do you think the time frame is?
A: It’s going to be several more years still, three to five years, before there are well-accepted digital rights management systems across all these platforms. And even then, it’s not like there’ll be no problems. If you look at the cable world, probably somewhere between 10 and 12 percent of cable is still pirated. It’s like bank robbery. You wrestle it down to a manageable level where you can still have a business.
Q: Your company was built on entertaining and informing people and distributing information from the top down. Look around the Internet now: More and more stuff is user generated. Are YouTube, and technologies like it, an adversary or an ally?
A: Clearly the phenomenon of user-generated content is here. I think it’s here to stay. We’ve seen that the user-generated content, that’s the big news in the future of media. Our challenge is to get with that wave, and we’re doing that. We actually solicit on CNN.com and in other areas of our company, we solicit user input. People will come to our site to give us on-site reviews, to make this thing more interactive in a way that they’re participating in creating the content as well as consuming.
I don’t believe we’re entering an age where nobody’s going to want to see scripted television anymore. People are still addicted to storytelling and quality storytelling, and they want to be informed, and they want to be informed in a way that has authority and authenticity and reliability. So CNN-branded news is going to still be here, but there’s a third player in the game now, which is user-generated content, and it’s going to take its slice of the pie. If we’re going to hit them where they are, as opposed to where they ain’t, we’ve got to be in that game.
Now, back to YouTube: We’re trying to work with Google, which now owns YouTube, to figure out ways that we can do something that’s good for both them and for us. It’s a terrific medium for promoting a lot of our content. What we don’t want is people just using content and benefiting monetarily without respecting the rights of the owner. So we’re trying to work cooperatively with them, to find models in which they can use content on a permission-basis, which we would grant because it helps promote the longer-form content back at our branded sites.
Q: You talked about being everywhere people are. The challenge, of course, is making the technology happen. In Oregon, the largest private employer is Intel, and one of its chief strategies is digital entertainment. I’m curious how much time you spend working with hardware companies, trying to come up with technologies to deliver content the way you think consumers want to see it.
A: If the question is directed to me, personally, the answer is not much, because I’m not a technologist by background. Every time I have an idea, our marketing guys say, ‘Dick, you’re not our demo.’ But obviously we have tons and tons of technology folks in our company, many of them in our cable company, quite a few in our content companies, particularly in Warner Bros.
I get together with the Intel guys from time to time, but that’s always at (the CEO) level. It would be Andy (Grove) in the old days and then Craig (Barrett) and now Paul (Otellini). None of us really know what the hell we’re talking about (laughs).
Q: You have your hand on many different things. How do you, personally, keep up to speed on all of them, both technologically and in terms of the business strategies of each?
A: First of all, I’m a consumer of much, if not all, of what we do. What you use, more than anything, is the way you stay current. I do spend time talking to the heads of the technology companies, whether it’s Intel or Microsoft or Apple or Sun or Google. You see these guys, we’re all birds on the same branch. They come and tell you what they’re doing, you tell what you’re doing, you try and find ways to do things together to make good business.
Last but not least, I have, as I mentioned, three children, all of whom are in their early 30s, who are huge consumers of both new technologies and new media. So they come and beat me up and say, ‘Dad, how come you don’t do this?’
Q: You have a long history in politics. Are there things about technology and new media you think the government, and politicians, don’t yet understand.
A: Here’s what I worry about: By the time the political establishment gets geared up, you tend to be always fighting the last war. And technology is moving so rapidly and in such unpredictable or unforeseeable directions, that I just have a constant concern that in trying to right past grievances, that the government doesn’t overreact . . . and try and lay out a path for the future. Because none of us knows where it’s going.
Q: Any legislation you’re thinking of in particular?
A: There’s this whole business with so-called ‘net neutrality’ (legislation, backed by U.S. Sen. Ron Wyden, to block Internet companies from charging for networks access), where nobody really knows enough to regulate or to establish firm regulatory principles, as to how people should be allowed to exploit the Internet going forward, and whether the paradigm where everybody rides free is the right one.
There’s still a lot of investment to be done out here in the real world, the wired world, in order to get our country up to speed. And that investment is only going to be made if investors see a path to return. So let the marketplace try to figure this out, as opposed to the government. It’s trial-and-error, experimentation, innovation.
Q: Isn’t a lot of what makes the Internet great its openness? If net neutrality, or whatever term you want to pick, isn’t preserved, aren’t we at risk of losing some of that openness?
A: I don’t know, and I would submit that nobody knows. I will make a poor, but I actually think apt, analogy. Think of the roadway systems in the United States. If I want to go from New York to Albany, I can take a toll road and get up there in less than 21/2 hours. Or I have the option of taking the non-toll-road, and maybe it takes me 31/2 hours.
Q: The potential that you have with the Internet, particularly if you don’t have the kind of investment you have in some other places, is that the whole thing slows down simply because it is open and accessible to everyone. It’s the equivalent of local roads. Should there be some interstate-highway type roads on the Internet, and, indeed, some toll roads?
A: Well, I don’t know, but it’s certainly something that I think deserves some exploration as opposed to being legislated off the board Day One because someone has a concern that may or may not be legitimate. Let’s find out.
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