Jonathan Miller predicts online pay models

News Corp's Digital Media Group CEO gives MIPTV keynote

CANNES -- The glory days of freeville are over and even online champions of gratis contents such as Google and Hulu will be forced to charge for top-end content. That, in a nutshell, was the message from Jonathan Miller, chief digital officer, chairman and CEO of News Corp.'s Digital Media Group in his wide ranging keynote at MIPTV Tuesday.

"More pay models will have to happen because content is expanding faster than the advertising needed to support it," Miller said. "2010 will be the year the terms of trade get set between the content creators and the distributors."

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Global digital distributors such as Google, Apple and Yahoo have transformed the content business, Miller said. In the digital world, all forms of content, be they newspapers, books, TV series or feature films, go through the same distribution portals and can be all be consumed on the same device, such as an iPad.

"Content now is just ones and zeros (ie. digital code) with brands in front of it," Miller said.

That shift means traditional distribution windows are "a relic from an old world," he added, saying producers and distributors will spend the next 24 months "resorting the traditional windows model and pricing around it."

But Miller argued that the real battle in the digital space will be for the right distribution model. Echoing News Corp. boss Rupert Murdoch, he said pay models are essential for expensive top-tier content and predicted even Google will have to begin charging for certain services.

"Google has been a very homogenous place where you can get anything you want but it's the same experience for everyone," Miller said. "I think you will see that break down and see different classes of experience."

Among pay offerings, Miller said News Corp. favored iTunes agency model -- Apple takes a cut of whatever film, show or song it sells through its store -- to Amazon's more traditional retail approach.

Asked about the next big thing, Miller named two: casual games such as "Mafia Wars" and "Farm Town" were transforming consumer behavior -- "they spread like wildfire and there is real money being made there" and mobile applications or apps.

"2010 will be the first year ever where, globally, more people will access their broadband connections via a mobile device," Miller said. "Once that happens, it won't go back. And mobile is not arranged around websites, its arranged around Apps. So mobile is not going to be an extension of the web, it's going to be something very different."
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