Summary:

A day after another “one of the worst days on Wall St.,” it would be hard to blame media executives talking about surviving as opposed to fi…

imageA day after another “one of the worst days on Wall St.,” it would be hard to blame media executives talking about surviving as opposed to figuring out ways to expand. But Peter Chernin, president and COO of News Corp (NYSE: NWS). insisted that despite the hard times, his company’s plan is avoid “hunkering down” and look for ways to create new businesses. Chernin spoke in a Q&A with TVWeek editor Chuck Ross at the magazine’s Innovation 360: The Game Changers morning conference.

Ask Joe: So how do companies drive innovation during an economic downturn? Chernin, channeling John McCain from last night’s political debate with Barack Obama, answered: “Well, as my friend Joe the Plumber might say… The danger is that we try to protect our existing franchises, and that’s a natural tendency in tough times. These are valuable businesses and you have to maintain them. But the there’s a temptation to focus on that to the detriment of But that’s death in any time. You have a responsibility to maximize your existing franchises. We are in for tough times. But you have nothing to lose in trying to go out there and create new businesses. You have to come in the morning and look to have fun. And that’s the inspiration for innovation.” More on the talks with the Screen Actors Guild, MySpace and Hulu after the jump.

On SAG talks: We created the precedent that writers deserve to be paid for digital content. That was big hurdle. What we got was the go ahead to experiment with digital, without a lot of undue restrictions. We eventually sat down and sorted out the fears and began to understand each other. So how’s it going with Screen Actors Guild? Horribly. Our position is very straightforward: we have made successful deals with the Hollywood community. It’s fair. SAG is saying the same deals you made with everyone else — the writers the directors, the other actors guild — isn’t good enough for us. We have worked hard to find middle ground and we are not going to throw that out to do a deal with SAG. This is a bad time to go out on strike. Obviously, I have a bias here, but a strike would be devastating to the creative community.

A MySpace education: I need to get like McCain and make awkward notes. MySpace genuinely changed the mindset of our company. We would not have been able to do Hulu without doing MySpace first. We got a great education. When we did the deal, it had 15 million uniques. Now it’s 125 million. People asked, how are you going to Fox-ify it. The best thing we did was not screw it up. We did not tell users, as we do in our traditional businesses, here’s the programming, sit back. Our job was to create new features, but not to force them on the consumers. That is the key to understanding this digital revolution. It used to be our job to anticipate what consumers wanted and to control it. That world is gone. Our job now is to make things available and not to control how they consume it.

On MySpace Music: We launched it 10 days ago after working on it for a year. MySpace was already a dominant place for music on the web. It took us 8 or 9 months to get the rights to music. We have now created a 360 degree space for music, it will be a ticketing venue, a music store. It will be the greatest music recommendation engine. We are in the process of doing that.

On Facebook: I have infinite respect for Facebook, but it does tend to be utilitarian. People use to communicate with people they know well. MySpace is different. In addition to keeping up with their friends, it’s more media-like, where people can go to expose themselves to what’s going on in movies, music, videos and participate in the media world around them.

Hulu: Not replacing TV, just reruns: Ross asked about Hulu’s ad goals. Will it replace TV? Chernin: Jeff Zucker and the NBC team have been great partners. What we constantly said was let’s not think about what we want. Let’s create a great consumer experience. Then we asked what are advertisers missing from other sites. We felt if what we created was appealing to those constituencies, especially consumers, it would be a success. We had an incredibly stupid proposition when we first got involved. Consumers want ease of use and aggregation. We have 60 different content partners. As for the monetization model, the idea is build a great site. Let the consumer piece lead it and we can figure out the monetization part after. We don’t look at Hulu as a replacement for TV. We look at it as a replacement for reruns. We don’t rerun most of our reality shows. I believe its an ad platform for higher CPMs. And if there are less spots, that will allow for that. One of the great challenges is that the ad business is under great pressure from changes in technology. And we have to figure out those challenges together.

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