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@ Media & Money: Keynote: Michael Eisner: Strike is 'Insanity,' No Profit Online — Yet

“Insanity.” That’s how former Disney (NYSE: DIS) CEO Michael Eisner described the writers’ strike during an interview with Neil Cavuto at the Media & Money Conference. Eisner’s current role is internet entrepreneur and investor through his investment firm The Tornante Company. Eisner, seldom at a loss for words, explained his business strategy and provided opinions on a variety of topics:

Writer’s strike: “Insanity.” “There’s all of this rhetoric by the media companies about this ‘great new digital business’, which is a small, growing business that will one day be dominant (but it isn’t, yet there’s no money there yet.” Because all of the entertainment folks are talking up digital, the writers assume there’s a lot of money there. Take Prom Queen: “We made history, but we didn’t make money. … I’m doing it because I think it’s fun; I think it’s the future. … For a writer to give up today’s money for a piece in three years is stupid.” The studios can’t give in because there’s nothing to give. “The studios deserve what they’re getting, because they’ve been announcing how great it is.” But it’s only great in theory. “They made deals with Steve Jobs, who takes them to the cleaners. Who’s making money? Apple.” Entertainment executives can’t admit that they’re not making money. Writers should be striking in Cupertino. (Hard not to see this as a slam on Disney successor Bob Iger, who cut the first video deal with iTunes.)

Broader economy: “There are some horrible signs, everyone knows what they are. Leverage. The pain is only beginning.”

Tornante’s Topps acquisition: Goal is to take the Topps brand, which produces a Pavlovian response in the American male, into the digital age. “Topps is about hero worship for males.”

Distribution: Eventually broadband will be the major mode of distribution, but that does not mean that other modes of distribution forms will disappear. “One plus one equals 2.5 or 3″. The business expands” The previous forms of distribution may get smaller and will realign. Research says that young people won’t read a newspaper, but the same research indicates that they don’t care about the source. “Right now, the internet is a democracy turning into an oligarchy… it is out of control, where the computer is the king and the human brain is discounted, … Any single brand in this room is more interesting and more complex than all of the computers in this room.” Gave an example of the Golden Girls translated into French. “Estelle *Getty*’s ‘I have to take a pee’ is cute” Translated into French, it’s ‘I have to take a piss.’ Not cute.” Humans are needed to appreciate that subtlety.

Professional content vs. user gen:“The fact of the matter is that it’s not easy to write, direct and cast. … How many times can you watch a kid get hit in the groin? YouTube can be indiscriminate about how bad it can be.” There’s still a need for big-pocketed people to find and fund talent. Big companies aren’t going away. Rupert et al aren’t stupid troglodytes. “You’re going to need someone to bring it together. Everybody can’t do it, it is about talent.”

10 Responses to “@ Media & Money: Keynote: Michael Eisner: Strike is 'Insanity,' No Profit Online — Yet”

  1. 5% of nothing is nothing. What do the studios lose if Internet entertainment never proves a gold mine? Nothing.

    If Internet-based entertainment makes money, share. Share with the people who help you make the magic happen.

    How many Bentleys does one man need anyway?

  2. shamanicat

    Let's see; first he underwrites a legal team to deliver a 75 year extension of copyright law on behalf of producer/owners, at the expense of four generations of creators and audiences.

    Then he uses the DMCA to build yet another producer/owner business on the backs of creators, using online longform copyright infringement to drive traffic.

    And now he calls the writers idiots, for having the foresight not to get screwed yet again by producer/owners?

    It's just business. Just a back room player, looking for every edge. And screw the creatives, they should be grateful for the scraps the owners scatter under the table.

    So back to work, writers. Your families need you to bring home 1an ever-shrinking paycheck.

  3. Striking WGA Member

    There’s still a need for big-pocketed people to find and fund talent.
    Eventually broadband will be the major mode of distribution.
    For a writer to give up today’s money for a piece in three years is stupid.

    Thanks for the discombubulated, two-faced, self-interested and blatantly dishonest financial advice, Michael, but as a Guild member, I think we're going to just keep doing what we're doing. If giving up money now for a piece of the future is such "insanity," why did you invest in Veoh? In fact, why ever invest in anything? Oh, that's right – because it pays!

  4. That "there's no money in it" today is one of the best reasons to include residual revenue rights to the content creators into contracts now. Doing so doesn't raise production costs, and may help to keep upfront expense from growing faster than it would otherwise.

  5. Jamie Poitra

    Funny how he can go on about how media needs people with big pockets. And then turns around and says its about talent. Talent can be had without deep pockets. I think he's right that money is going to matter for a long time to come.

    But people like Ze Frank are showing that you can create a buzz and be a minor success without as much of that money as was necessary before. And that is only going to increase as the technology continually catches up. Some of the minor successes such as Ze Frank, RocketBoom, and LonlyGirl15 would have been unthinkable really just a few years ago.

    And to say the writers are stupid for wanting to negotiate their cut of a burgeoning market right now is stupid in its own right. They waited for DVD's and look where that got them.