Ted Leonsis, owner of the Washington Capitals and vice chairman, AOL, took part in an informal one-on-one interview from the dais. Key points from the online veteran, who is leaving operational duties at the end of the year:
– The momentum of ad dollars from the traditional world to the internet will probably continue for the rest of our business lifetimes. Today, a person is consuming media on the internet between 18-22 percent of the day. But we’re only seeing 6 percent of ad dollars going to the internet. That will catch up. It will be a couple of billion dollars, and the incremental revenue is at 50 percent margin.
– The advertising money is moving so fast into the new medium, that literally everything you are doing with a subscription or upsell around it probably has a better business model by letting it free and going for scale and monetizing via advertising.
– We are moving from big portals to verticals and specialization. For example, Leonsis says we’ll see “the YouTube of sports” or “the YouTube of hockey.” The big online players will fight for a smaller pie, with the blogosphere taking a bigger share of attention. The battle field will move to verticals and syndication, and international.
– Leonsis says that infrastructure is at first a competitive advantage, but then you become a slave to the infrastructure. YouTube has only 60 people; they use third-party off-the-shelf solutions. Leonsis says he can’t imagine AOL or Google could have accomplished that.
– Microsoft, Yahoo, AOL are all buying the web 2.0 companies to try to bring this new way of thinking (“light touch on technology, and a syndication approach”) into their businesses.
– On blogging: “I joined the blogosphere because I wanted to join my voice to the choir of 54 million bloggers. They have all become media outfits. I’m encouraging our league to embrace the blogosphere.” Some big city newspapers can’t afford to send their writers on the road. Leonsis reached out and jumpstarted 25 bloggers to blog for the NHL, and the league is getting more interest and hits generated by this user content. “We now have bloggers in their press area. Out of necessity. And we’re starting to build a network.”
– News and sports are the two categories that are fairly TiVo proof. There is the long-tail phenomena for movies, books and content. But live content doesn’t yet have big demand in the tail. Leonsis said that at the same time it is arrogant for us to believe that appointment viewing will always work. “Appointment viewing is a passé’ concept. This new world is about consumer choice and control. Networks were designed to aggregate programming for appointment viewing. That’s old school.” People want it when they want it.
David Eckoff is vice president, new products at Turner Broadcasting. The opinions expressed in his guest blogging are his own and not those of Turner Broadcasting. You can contact David via his blog at Davideckoff.com