2010 predictions: Another turbulent year ahead for media
If there was still any debate in the media world over which is king -- content or distribution -- it was settled in 2009.
Between cable giant Comcast Corp.'s $30-billion deal to take control of NBC Universal and Walt Disney Co.'s surprise $4-billion purchase of comic book publisher and Spider-Man home Marvel Entertainment Inc., it became abundantly clear that it’s more valuable to own what goes on the screen than the screen itself. Even a back-of-the-pack cable network like the Travel Channel sold for almost $1 billion, and Nickelodeon shelled out more than $50 million for rights to four old Ninja Turtles characters.
Content owners may be king, but it won’t be worth much if these media titans can’t figure out how to make money from all the new platforms overwhelming the landscape. There is a general consensus that putting content on the Internet for free -- d’oh! -- may not have been the brightest idea. Much of next year will be spent experimenting with business models to get people to pay for what they are used to getting for free.
No one suffered more from that fatal miscalculation than the news business. The presses literally stopped at almost 150 newspapers in 2009, including the Rocky Mountain News in Denver, the Seattle Post-Intelligencer and even the Christian Science Monitor. Some, including the latter two, live on in Internet-only distribution. It’s probably safe to say 2010 will be even more brutal. At this time next year, odds are most of you will read our 2011 predictions on a computer, smart phone, e-reader or tablet. How we’ll get you to pay for it is another question.
The next year also promises more consolidation as old media tries to bulk up to compete in the new-media world. Alas, after years of bigger companies gobbling up smaller ones, there’s not a whole lot left to consolidate.
On the movie front, the vultures are starting to circle Metro-Goldwyn-Mayer Inc. And Lions Gate Entertainment and Summit Entertainment could be next. And, after years of old-media giants eyeballing video game publishers, 2010 might be the year they snap up a few.
Here are some predictions for next year. Some are likely, others bold, and a few contradictory -- that’s the prognostication game for you.
* Jay Leno will be gone from prime time.
This one’s obvious. Leno is averaging fewer than 6 million viewers a night. His 10 p.m. show is doing so poorly that it’s spilling over and pummeling the 11 p.m. newscasts of many local NBC affiliates. As a face saver, NBC will cite future owner Comcast’s “commitment to quality programming” in declaring its return to one-hour drama shows in the hour.
Less obvious is what Leno or NBC will do next. Conan O’Brien has yet to show that he can fill Leno’s seat. But bumping O’Brien off to bring Leno back to late night would cost NBC $40 million in penalties. That might actually be a small price to pay in the long run; otherwise, don’t be surprised if Jay bolts to ABC.
* MGM will be sold.
Sure, this is a boy-who-cried-wolf prediction, but in 2010 it’ll really happen. Really. It’s too easy to say it’ll be bought by either Time Warner Inc. or News Corp., so we’ll venture out on a limb and predict: Time Warner.
Perpetually acquisitive News Corp. Chief Executive Rupert Murdoch has shown some financial restraint lately, passing on the Travel Channel. Furthermore, the company’s newspaper holdings are still depressing the bottom line. Murdoch will spend much of the new year focusing on his battle against Google and campaign to get paid for news content.
Time Warner, meanwhile, is sitting on a pile of cash. Its CEO, Jeff Bewkes, will probably ease the company out of the print business and shut down some Time Inc. publications or make some of them, such as Entertainment Weekly, Web-only. Another motivating factor: If Time Warner grabs MGM, Warner Bros. gets all the rights to “The Hobbit,” a potential franchise to succeed Harry Potter.
* Disney will buy Electronic Arts Inc.
Having bolstered its ranks of cartoon characters with its acquisition of Marvel Entertainment, Disney will finally make a run at video game publisher Electronic Arts, whose games include the lucrative Madden Football franchise. The deal will again trigger speculation that Disney will unload ABC. But Disney CEO Bob Iger, while hardly sentimental, was groomed at ABC and doesn’t want to be known as the leader who turned his back on the acquisition.
Disney’s deal will put other video game publishers, such as Grand Theft Auto creator Take-Two Interactive, into play. Viacom Inc. would like to acquire it, but Chairman Sumner Redstone’s debt situation will make it hard for him to do any deals.
* Washington will get tough with the media industry.
Besides forcing some major concessions from Comcast in exchange for approving the NBC deal, the Federal Communications Commission and Congress will start to crack down on longtime cable industry practices.
Don’t be surprised if 2010 is finally the year that Washington forces cable operators to offer subscribers the option to choose the networks they want rather than pay for a bundle of channels they don’t. The “a la carte” issue will upend the industry, especially for the owners of sports channels.
* DirecTV Inc. will be sold.
Satellite broadcaster DirecTV will be sold to AT&T. The deal will face intense scrutiny, and to get it through Washington, DirecTV will agree to end its exclusive deal with the National Football League. Worried about being left behind, Verizon will start kicking the tires of Dish Network, but Dish CEO Charlie Ergen will lose the deal after attempting to extract too steep a price.
* Hulu will start charging viewers.
Hulu, the free video site owned by News Corp., NBC Universal and Disney, will require people to pay to watch its programming. This will cause a rift internally as Hulu CEO Jason Kilar resists switching to a pay model, leading to his exit.
* Executive shuffles.
The jockeying to succeed Warner Bros. CEO Barry Meyer and President Alan Horn in 2011 will begin.
On the Burbank lot, look for Warner Bros. Home Entertainment Group President Kevin Tsujihara to duke it out with TV chief Bruce Rosenblum for Meyer’s office.
But don’t be surprised if a dark horse from Atlanta -- Turner Broadcasting CEO and Bewkes favorite Phil Kent -- suddenly emerges as a contender. Movie studio executive Jeff Robinov will get bumped up to Horn’s post.
If the Comcast-NBC deal closes, expect a lot of churn in the executive suites. A joke making the rounds asks whether, among NBC Universal’s Jeff Zucker and Jeff Gaspin and Comcast programming chief Jeff Shell, there aren’t too many Jeffs in the kitchen. In the meantime, expect turf wars between division heads including NBC Universal cable programming executives Bonnie Hammer and Lauren Zalaznick and Comcast’s Ted Harbert.
Former media company bigwigs Tom Freston and Peter Chernin, always rumored to be offered the next CEO gig, will remain free agents. Freston will become more involved with Oprah Winfrey’s new cable network and maybe even join Discovery Communications’ board of directors. Chernin will crank out a few movies and TV shows at his production company while mulling over a run for political office or weighing a deal for MGM, Lions Gate or Summit Entertainment.
CBS Chief Executive Leslie Moonves will resist calls to install a No. 2. Ultimately he’ll relent, however, and recruit an outsider because none of his current underlings have broad enough experience to be billed as a potential successor.