The digital transition was a key focus for entertainment companies at the Merrill Lynch (ML) Media Conference taking place this week.
Merrill Lynch said that the US advertising market appears to be relatively healthy, with political dollars being spent on the forthcoming senate elections at TV level, whilst News Corp suggested that the advertising market was relatively robust overall and highlighted that the cable network market was particularly strong.
Les Moonves, chief executive officer of CBS, concurred that political dollars are starting to have a significant impact and that CBS had already booked over $100 million in political revenue this year.
All of the entertainment companies presenting at the ML Media Conference noted that, as the digital transition gathers pace, increased distribution should increase the value of their content.
News Corp, speaking about making further progression into online, said that it is focused on driving growth in e-commerce on MySpace.
It was also revealed that the next step for News Corp could be an auction system that would attempt to rival e-Bay, although on a smaller scale.
Triple play and VOD were also big on the agenda at the conference, with Comcast and Time Warner continuing to expand their VOD offerings, increasing both the amount and type of programming.
Merrill Lynch says that both companies believe that VOD is a key differentiator between direct broadcast satellite and telco video offerings.
Comcast said that 60%-70% of its digital customers that use VOD view 30 or more shows per month, whilst Time Warner stated that it has experienced an increase in monthly views from approximately 70 million views per month to 80 million per month in July 2006. Time Warner stated that subscription VOD continues to drive the majority of VOD views.
On the second day of the conference, Disney and NBC both announced deals to stream content produced by non-affiliated studios, which came soon after the movie distribution announcement made by Apple.
In addition, broadcaster ABC announced an agreement with its affiliates whereby they can participate in digital streaming revenue by selling local advertisements with video streams. The affiliates are then entitled to keep the local ad dollars.
Merrill Lynch said that the indications from ABC were that its early streaming tests suggest media consumers are willing to watch an advertisement in order to get streamed content at no cost.
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