By Georg Szalai
NEW YORK -- News Corp. is betting that people will pay $25-$30 to watch Fox films at home in high-definition quality via cable and satellite TV 60 days after their theatrical release.
Speaking during the second day of the annual Bear Stearns Media Conference in Palm Beach, Fla., in a session available via webcast, News Corp. president and chief operating officer Peter Chernin said Tuesday the conglomerate has been "talking to the cable operators and satellite operators about the idea of a 60-day, high-priced high-def rental" offer costing $25-$30.
He later repeated the $25 price range as a possible model in a hint that this could be closer to the final price point but didn't specify what kind of revenue split was likely for the HD-to-home product.
At this year's Consumer Electronics Show, Chernin first mentioned that Fox was working on a plan for HD-to-home video on-demand offers 60 days after theatrical releases to establish a new HD window between theatrical and DVD runs amid a recent trend of shrinking distribution windows. However, pricing and other details of the planned HD service had not been clear.
Chernin on Tuesday indirectly admitted that $25-plus might sound like a high price point, but he argued that more than 1 million Americans spent more than $25,000 last year on a home cinema setup, and they would be "desperate consumers" of such offers.
Sources also said Tuesday that the HD window would target consumption by families and groups. For example, consumers could get some friends together, have food and drinks and enjoy a home premiere, one source suggested. With movie tickets in New York costing well above $10, the pricing actually could be attractive to high-end users, another industry observer suggested.
Asked about the new-technology revolution in the industry, Chernin told investors that it will allow News Corp. and others to also monetize content in the broadband, wireless, set-top box storage and other fields beyond HD-to-home.
Saying he was "happy" News Corp. doesn't own a music company, Chernin argued that the film business is in a stronger position to benefit from the current digital tidal wave partly thanks to its different distribution windows and price points.
Discussing DVD market trends, the executive said pessimists sometimes overdo their concern for the home entertainment business. "The DVD business is not declining, but the rate of growth is slowing," Chernin said.
Asked about News Corp.'s TV operations, he said he is "probably more bullish on our overall TV business than any other assets" in terms of future growth outlook, predicting that it will remain the fastest-growing part of the conglomerate.
The distribution opportunities for TV product was much more limited in the past, but the digital age is proving to be "a real liberation," Chernin said.
The executive shot down suggestions that all major media conglomerates must be broken up, arguing that News Corp. has been more active and successful than any of its peers during the past decade in launching new businesses based on core assets.
He again touted continued growth opportunities for the online social network MySpace, arguing that after News Corp. took it over, advertisements on its homepage began moving into the $500,000-$700,000 range, closing the gap with Yahoo! Inc., which has a price of about $1 million.
Simultaneous with the Bear Stearns event, shares of Internet giant Google Inc. were falling as much as 14% on Tuesday after chief financial officer George Reyes told a Merrill Lynch investor conference that growth in its core Web search business will slow.
The stock fell more than $50 to $338.51 in intraday trading before closing down 7.1% at $362.62 as some analysts came out in support of the stock.
Taking questions Tuesday at the Bear Stearns conference, Yahoo! chief financial officer Sue Decker said, "Please don't ask about Google stock."
Yahoo! chairman and CEO Terry Semel had a message similar to Google's, that being that the company he runs "is quite large," so it must "go deeper" to look for the huge growth to which investors have been accustomed.
On the international front, Semel said: "We're holding our own in Europe. I'd like to say we're growing dramatically. We're not."
Yahoo! shares declined 2.1% on Tuesday to $32.06.
Semel said one of Yahoo!'s priorities is to make rich-media advertising easier to do at Yahoo! while Decker praised automakers for their creative use of online advertising. Case in point: While Ford ran a Super Bowl ad that featured Kermit the Frog, it was General Motors that initially bought the various search ads featuring the keyword "Kermit."
Netflix CEO Reed Hastings, also speaking at the conference, dismissed video-on-demand and Internet download services as worthy competitors, in part because of the limited selection of movies they offer.
He said Netflix, which pioneered the DVD-by-mail subscription model, will enjoy growth of 50% year-over-year for the next five years, beginning this year with projected earnings of $30 million-$35 million.
Sales and rentals of DVDs in the U.S. will grow from a $24 billion industry to $30 billion by decade's end, spurred by high-definition technologies, Hastings said.
Warner Music Group chairman and CEO Edgar Bronfman Jr., meanwhile, again shrugged off suggestions that his firm has to merge with fellow music firm EMI Group. "We want to run our own race," he told the conference.
Asked where his team might have gone wrong so far, he said he feels good about WMG's recent momentum but wished he had started focusing earlier on a turnaround of its music publishing unit, to which he remains committed.
In a late session with CBS Corp. president and CEO Leslie Moonves, the executive said his company was close to announcing its first deal with an unspecified cable operator to get retransmission-consent dollars for CBS.
"We are going to begin to get paid for our signal in a very short period of time," said Moonves, who later elaborated that a deal would be announced in the next six weeks.
Since CBS' split from the rest of the Viacom cable networks, which leveraged CBS and other brands to get carriage for newer channels, Moonves has been pledging to get new revenue on retransmission consent as a stand-alone property. He would not offer details but hinted that its value would be comparative with license fees paid to cable services that eventually could "amount to hundreds of millions in revenues to the CBS network."
Paul Bond and Andrew Wallenstein in Los Angeles contributed to this report.
http://www.hollywoodreporter.com/thr/article_display.jsp?vnu_content_id=1002076585
NEW YORK -- News Corp. is betting that people will pay $25-$30 to watch Fox films at home in high-definition quality via cable and satellite TV 60 days after their theatrical release.
Speaking during the second day of the annual Bear Stearns Media Conference in Palm Beach, Fla., in a session available via webcast, News Corp. president and chief operating officer Peter Chernin said Tuesday the conglomerate has been "talking to the cable operators and satellite operators about the idea of a 60-day, high-priced high-def rental" offer costing $25-$30.
He later repeated the $25 price range as a possible model in a hint that this could be closer to the final price point but didn't specify what kind of revenue split was likely for the HD-to-home product.
At this year's Consumer Electronics Show, Chernin first mentioned that Fox was working on a plan for HD-to-home video on-demand offers 60 days after theatrical releases to establish a new HD window between theatrical and DVD runs amid a recent trend of shrinking distribution windows. However, pricing and other details of the planned HD service had not been clear.
Chernin on Tuesday indirectly admitted that $25-plus might sound like a high price point, but he argued that more than 1 million Americans spent more than $25,000 last year on a home cinema setup, and they would be "desperate consumers" of such offers.
Sources also said Tuesday that the HD window would target consumption by families and groups. For example, consumers could get some friends together, have food and drinks and enjoy a home premiere, one source suggested. With movie tickets in New York costing well above $10, the pricing actually could be attractive to high-end users, another industry observer suggested.
Asked about the new-technology revolution in the industry, Chernin told investors that it will allow News Corp. and others to also monetize content in the broadband, wireless, set-top box storage and other fields beyond HD-to-home.
Saying he was "happy" News Corp. doesn't own a music company, Chernin argued that the film business is in a stronger position to benefit from the current digital tidal wave partly thanks to its different distribution windows and price points.
Discussing DVD market trends, the executive said pessimists sometimes overdo their concern for the home entertainment business. "The DVD business is not declining, but the rate of growth is slowing," Chernin said.
Asked about News Corp.'s TV operations, he said he is "probably more bullish on our overall TV business than any other assets" in terms of future growth outlook, predicting that it will remain the fastest-growing part of the conglomerate.
The distribution opportunities for TV product was much more limited in the past, but the digital age is proving to be "a real liberation," Chernin said.
The executive shot down suggestions that all major media conglomerates must be broken up, arguing that News Corp. has been more active and successful than any of its peers during the past decade in launching new businesses based on core assets.
He again touted continued growth opportunities for the online social network MySpace, arguing that after News Corp. took it over, advertisements on its homepage began moving into the $500,000-$700,000 range, closing the gap with Yahoo! Inc., which has a price of about $1 million.
Simultaneous with the Bear Stearns event, shares of Internet giant Google Inc. were falling as much as 14% on Tuesday after chief financial officer George Reyes told a Merrill Lynch investor conference that growth in its core Web search business will slow.
The stock fell more than $50 to $338.51 in intraday trading before closing down 7.1% at $362.62 as some analysts came out in support of the stock.
Taking questions Tuesday at the Bear Stearns conference, Yahoo! chief financial officer Sue Decker said, "Please don't ask about Google stock."
Yahoo! chairman and CEO Terry Semel had a message similar to Google's, that being that the company he runs "is quite large," so it must "go deeper" to look for the huge growth to which investors have been accustomed.
On the international front, Semel said: "We're holding our own in Europe. I'd like to say we're growing dramatically. We're not."
Yahoo! shares declined 2.1% on Tuesday to $32.06.
Semel said one of Yahoo!'s priorities is to make rich-media advertising easier to do at Yahoo! while Decker praised automakers for their creative use of online advertising. Case in point: While Ford ran a Super Bowl ad that featured Kermit the Frog, it was General Motors that initially bought the various search ads featuring the keyword "Kermit."
Netflix CEO Reed Hastings, also speaking at the conference, dismissed video-on-demand and Internet download services as worthy competitors, in part because of the limited selection of movies they offer.
He said Netflix, which pioneered the DVD-by-mail subscription model, will enjoy growth of 50% year-over-year for the next five years, beginning this year with projected earnings of $30 million-$35 million.
Sales and rentals of DVDs in the U.S. will grow from a $24 billion industry to $30 billion by decade's end, spurred by high-definition technologies, Hastings said.
Warner Music Group chairman and CEO Edgar Bronfman Jr., meanwhile, again shrugged off suggestions that his firm has to merge with fellow music firm EMI Group. "We want to run our own race," he told the conference.
Asked where his team might have gone wrong so far, he said he feels good about WMG's recent momentum but wished he had started focusing earlier on a turnaround of its music publishing unit, to which he remains committed.
In a late session with CBS Corp. president and CEO Leslie Moonves, the executive said his company was close to announcing its first deal with an unspecified cable operator to get retransmission-consent dollars for CBS.
"We are going to begin to get paid for our signal in a very short period of time," said Moonves, who later elaborated that a deal would be announced in the next six weeks.
Since CBS' split from the rest of the Viacom cable networks, which leveraged CBS and other brands to get carriage for newer channels, Moonves has been pledging to get new revenue on retransmission consent as a stand-alone property. He would not offer details but hinted that its value would be comparative with license fees paid to cable services that eventually could "amount to hundreds of millions in revenues to the CBS network."
Paul Bond and Andrew Wallenstein in Los Angeles contributed to this report.
http://www.hollywoodreporter.com/thr/article_display.jsp?vnu_content_id=1002076585
