The Question at the UBS Media Conference: Is Content Still King?

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As he enters the Comcast merger, Jeff Zucker voices confidence.
As he enters the Comcast merger, Jeff Zucker voices confidence. Photo: Patrick McMullan

This week, Time Warner completed its much-anticipated spinoff of ailing AOL. The divorce officially ends a dysfunctional marriage that was supposed to transform the media world as we knew it, but instead vaporized $164 billion. News of the divorce came as the people running the world's largest media conglomerates gathered at the Grand Hyatt above Grand Central for the 37th Annual UBS Media Conference on Tuesday. During their presentations to investors, the CEOs made the case that the great media panic of '09 was, if not over, at least subdued. Much of their newfound confidence is a result of the lifting economic climate. CBS chief Les Moonves talked about a 25 percent improvement in advertising sales since the dismal upfronts this spring. "Life is so much better today for us than it was a year ago," he said. Times CEO Janet Robinson and her team projected online ad revenue to increase by 10 percent in the fourth quarter.

Old media is once again eager to get engaged to the dynamic new forces that increasingly look like the future. Throughout the presentations, there were repeated invocations of its most treasured dowry item: content. "Content is king," is the once and future old-media mantra. The Comcast deal, as Moonves explained in his address, "underlines how valuable content is." I counted no fewer than a half dozen references to "content" in his speech.

But if content is king, there is a higher power in the new media world. On Monday morning, attendees of the conference, investors who hoped to make money in media, crowded the ballroom to hear a panel of twentysomethings discuss their media habits. It was an unscientific sampling — NYU and Fordham students, young finance, real-estate, and marketing types, and a 29-year-old pro golfer from Long Island — but the panel offered a sobering antidote to the moguls' bullish claims. When asked what content they'd be willing to pay for, the panelists chose Gmail and Search (News finished a distant fourth). Joe Horowitz, the pro golfer, was the only panelist in the group who said his favorite website is nytimes.com (other panelists' favorites included, predictably, Twitter, ESPN, PerezHilton.com, and ToryBurch.com). When one panelist was asked why she didn't prefer Pandora, the online music service, she replied, "You could pay. Or, you can go to slacker.com. Slacker is free."

The old-media crowd certainly knows this is the space they need to play in. "The digital evolution, or revolution, or whatever it is, we're in the middle of it right now," NBC Universal's Jeff Zucker said during his keynote. "Everyone wants to know where it ends up. But It's hard to know where it ends up when you're in the middle of it." In one way, the traditional media guys can take solace this week. The Comcast-NBC deal, despite cries that Comcast paid too much, was a validation that there's still serious money being made in what they produce.

But as AOL showed, marriage may not be forever. As one investor attending the conference told me, "some problems don't have answers. That is the flaw in the 'they will find a business model' logic. As if business models grow on trees. Don't assume there is always an answer. When the car came out, what should the saddle makers do? Make better saddles? Focus on making luggage? Breed more horses?"