Iger: Disney wants Web to ad up

Also touts Net distribution, next-gen DVD at confab

Because moviegoers are demanding it, distribution windows will do some further shrinking, so movie studios should work closely with the exhibition industry to ensure that consumers get what they want without inflicting pain on theater owners, the Walt Disney Co. CEO Robert Iger said Monday.

In a wide-ranging presentation at the Bear Stearns Media Conference in Palm Beach, Fla., Iger also said that next-generation DVDs "will take over," Internet downloads do not cannibalize other distribution formats, and the newly designed Disney.com is an enormous opportunity for advertisers.

Iger said that in the month since its relaunch, Disney.com has been streaming about 100 million videos per week, and Disney intends to better monetize all that action via online ads.

"The advertising industry is behind where it should be," he said, and Disney intends on educating them as to the opportunities that its new-media initiatives hold.

The CEO reminisced about the debut of TV's "America's Funniest Home Videos" 18 years ago and noted that the show is still a top ratings-getter, and it will be made fresh online. He also said user-generated content will be important for ESPN.com, as well.

Addressing a Wall Street analyst who said Disney was "underpenetrated" in video games, Iger reiterated the company will be spending $130 million in fiscal 2007 on that business.

The company's new video game titles will be 80% Disney branded, and 80% of those will be generated from Disney product that was created for other media.

At the same conference Monday, CBS Corp. chairman and CEO Leslie Moonves argued that new-media firms don't fully respect the importance of content yet.

He also was bullish on the outlook for higher advertising rates for this year's broadcast upfront market and his firm's ability to get retransmission payments but admitted that the strength of private-equity firms has made it tougher for media companies to make acquisitions.

"Because of you damn private-equity guys out there," every potential deal has become so competitive and expensive, he said, drawing laughs from the crowd.

On retransmission money, Moonves again expressed optimism that CBS will get payments from cable operators big and small. He repeated his recent argument that other big media firms also get such payments, even though they are not broken out or clearly visible.

"You can ask Mr. Iger," he said, saying that when Disney receives $3.25 per subscriber for ESPN, in reality it likely gets $2.75 for the sports cable juggernaut and 50 cents for the ABC broadcast network.

Asked about digital media, Moonves expressed optimism that "it will all be additive." However, he said that the Googles and technology firms of this world "don't quite respect the content enough. … They are beginning to." CBS recently failed to agree on a deal with Google's YouTube, arguing that the proposed financial terms weren't right.

He argued that new ratings data tracked by Nielsen Media Research, which like The Hollywood Reporter is a unit of the Nielsen Co., will help broadcasters make their case for increased rates. He said current scatter market prices are up as much as 10% compared with last year's upfront.

Moonves joked about how Fox's "American Idol" remains the biggest obstacle to overcome even though CBS is doing well in the ratings. "We call it the Death Star," he said. "As soon as you beat (Fox), they add two hours of it."

Moonves also declined comment on the proposed merger of Sirius Satellite Radio and XM Satellite Radio, saying he would leave that to the National Association of Broadcasters.

Meanwhile, at the Morgan Stanley Technology Conference in San Francisco, Google Inc. CEO Eric Schmidt, a board member at Apple Inc., said the companies are working on new projects, though he didn't supply specifics.

"We have similar goals, similar competitors," he told attendees. He also praised Apple's yet-to-be released iPhone as the first mobile phone to be designed around Internet browsing.

The CEO also lamented that there's no "good places" to put the company's more than $11 billion in cash, saying that he doesn't plan any large acquisitions.

Schmidt, again without specifics, talked of Google's opportunity in television advertising, where the scatter-shot approach needs refining so that the appropriate consumers are targeted with relevant advertising.

Georg Szalai reported from New York; Paul Bond reported from Los Angeles.
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