One of the recurring themes that has emerged at this morning’s sessions at the Dow Jones/Nielsen Media and Money Conference in New York, features media execs trying to acknowledge how poor the economic outlook seems, while credibly defending the strength of their own companies and respective sectors (e.g., magazines, ad agencies, digital, etc…). CEO Ivan Seidenberg took up that challenge in a Q&A at the conference, saying he wanted to sound positive but not naive about the troubles facing the economy looking ahead. His pitch: “We’re not going to grow by hunkering down, we’ll do it by investing and creating. If we ever lose our nerve to continue to take risk, then we’re really in trouble. If we do that, I can’t imagine a company like ours, which has great scale, can’t be part of the process of turning the financial climate around.” Some highlights from his appearance:
– Safe for the time being: Since most business is in two-year contract, we won’t see an immediate drop-off in our commercial business, which represents about 30 percent of our company. The 70 percent of our business that’s retail, we won’t see a major drop-off, people will pullback, won’t by as many premium services. Instead of six movie downloads, they’ll do two. We tell investors we have a lot of variable expense and things that we can easily cut back on. While we expect the broader economic environment is rough, but we’re sticking to our story that we will be able to preserve our subscribers and continue to grow. We feel pretty safe. More after the jump.
– More devices: You don’t have one pair of shoes for 10 years. People come in and say, you ought to have one phone. But people don’t want simplicity, they want choice. They want iPods, they want phones, they want TVs. We’re the second largest distributor of music after Apple (NSDQ: AAPL). Out of the next 10 years, build the capacity, open up the platforms. We will end up winning because people will be consuming so much content.
– On FiOS: We’re approaching 40 percent share in some of our earliest markets, places like Texas. The original business case expected a 25 percent share. So we’re exceeding what we originally thought. The only drawback has been the amount of time the rollout has taken.
– Content strategy: Linkage of regional sports, regional news … When are you going to go vertical? We think content gets to the customer on a variety of platforms and screens. There is no single strategy. We don’t need to go vertical, we don;t need to own everything that goes across our screens. We’re bundling it, packaging it — but we’re not interested in creating it. If someone came along and presented a killer opportunity for us to invest in, I might jump at. I would buy the Knicks if I could. But we can’t.
– Competition: If the last 10 years is any indication, companies that create platforms will be the competition. People who invest capital in networks. The unknown in this is government. Go back seven or eight years, government created a number of bad business models. They allowed Worldcom and others expand in the name of promoting competition and they crashed and burned. I worry about government injecting a dose of false competition.