If anyone at the the CSFB lunch crowd was looking for major revelations from Time Warner Chairman and CEO Dick Parsons — say, the announcement of an AOL deal — they went away hungry. Parsons reiterated the stance in the recent flurry of news stories: talks are underway and AOL, even a piece of it, isn’t for sale. He suggested the idea that a deal including a chunk of the company was possible came from interested parties who realized AOL was “a much cooler thing than people realize” and thought a principal position might be attractive.
AOL’s focus is on “more robust technology for monetizing eyeballs” and “throwing traffic” at AOL.com. he says the company is on the right track: “We’re very pleased with what we’re seeing in that space. … AOL was never as dead as it was proclaimed to be.”
Video Downloads: When I asked about using Warner’s video library on AOL instead of offering it on iTunes at $1.99 a pop, Parsons replied: “How many video iTune (iPod) owners are there? One million maybe? We’ve got 20 million people who subscribe to AOL and 45 million who use it all the time so you’re putting this in front of a hugely larger audience.” Then he went for the long tail — and borrowed my legal pad and pen to illustrate with a graph. Luckily, I had a tape recorder. Most of the stuff starts over here and ends way, way out here. You monetize this piece of it because that’s the 80 percent we can make all the money in. … Out here (the end) there’s 152 people in America who want to see “The Fugutive” again. There not going to go out and buy iPods to see it but if you get it online this enables to monetize the whole thing. There’s currently no business model for that in a profictable way so we’ll see.”
He said that strategy doesn’t preclude charging for downloads.
A La Carte: Parsons says the industry needs a creative solution. “We’re evaluating a lot of different approaches and trying to make sure whatever different approach we’re able to come with is one that would voluntarily be adopted by the industry but would satisfy the concerns of those whoi’ve been expressing concern.”
Hard Media: Asked about the possiible replacement of digital for hard media, Parsons recalled a meeting when TW still owned Warner Music and an exec held a CD and tossed it away as he proclamed that in 18-24 months there would be no business in the CD, it would all be digital downloads. “We’re still, in my opinion, years away from the digital revenue stream beginning to offset the losses on the hard-copy carrier side.”
DVD Window: He described TW’s DVD window stance as “non confrontational.” He sees the windows shrinking to provide more consumer choice but added, “We don’t want to boldly go where no man has gone before and find out there’s no revenues there.”
Time Inc.: Asked by a reporter after the session if he’d consider selling Time Inc., he said, “We’re not considering that right now.” Asked if he would, he replied, “Could a meteor fall on this building and kill us all? We’re not considering it at the moment.”
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