October 2009

For all the rumblings in Hollywood that Dan Glickman was miscast as the industry's top Washington lobbyist, the next head of the Motion Picture Assn. of America could well be closer to his technocrat mold than to the suave celebrity of the man who made the job famous: Jack Valenti. That's because, with Glickman disclosing Monday that he'll step down next September, the movie industry knows it has evolved since he took over in 2004 as MPAA's chairman and chief executive. Preventing piracy of movies and TV shows dominates the trade association's lobbying agenda, and the desire for a glitzy face in the nation's capital has lessened as the major movie studios have become divisions in larger media conglomerates with sometimes competing agendas. Glickman's departure was expected at some point, given Hollywood's behind-the-scenes discontent with him as a politician who struggled to understand the industry's insular world. It opens up one of Washington's most high-profile and coveted lobbying posts. His salary was $1.2 million in 2007. The MPAA represents the six major movie studios -- Paramount, Sony, 20th Century Fox, Universal, Disney and Warner Bros. Its board is expected to meet in the next few weeks to officially begin looking for a replacement. The ideal candidate will understand the political climate and have access to key leaders in Washington, according to several top industry executives, who declined to be named. The person also must understand Hollywood's changing business models and the evolving digital technologies, as well as have relationships with media company heads. According to insiders, candidates include Bob Pisano, a former head of the Screen Actors Guild who has been the MPAA's Los Angeles president and chief operating officer since 2005, and Harold Ford Jr., a former Tennessee congressman who chairs the moderate Democratic Leadership Council.

The Yankee group, a technology research firm, estimates that the $7.2 billion in broadband stimulus funds is woefully inadequate for extending broadband's reach to all Americans. Currently, about 12 percent of U.S. households, including those in some major metropolitan areas, have no access to broadband service. Yankee Group examines four possible approaches to addressing the problem: an ultra-cost-conscious "Discount" option, a leverage-what's-in-place "Duct Tape" method, a "Pragmatic" middle-of-the-road approach and an all-fiber-to-the-home "Gold-Plated" scenario. While all reach the Anywhere goal of at least one broadband connection per home, none are perfect. And at a minimum, they all require unprecedented vendor cooperation and regulatory foresight. "Achieving ubiquitous broadband in the U.S. will hasten economic recovery and put the nation back where it belongs in terms of technology leadership, but it will take a concerted effort on the part of all stakeholders," says Vince Vittore, principal analyst at Yankee Group and author of the report. "A minimum of $24 billion is required, and that`s only if networks are deployed in the most efficient manner and much of the middle-mile infrastructure already is in place. While the stimulus is a good start, it's just that: a start."

[Commentary] Remember how we all cheered at the start of the year when the feds announced that the Smart Grid would be part of the stimulus package? What a tremendous boost to the sector, we all said. Then reality set in. Far from accelerating 2009 Smart Grid spending, the stimulus bill slowed it down. Projects may have been delayed 9 to 12 months as utilities wait to hear whether the government will pay part of the price tag. Some are blaming stimulus-related delays for missing sales forecasts. And all of that leads to important questions: What's going to happen with utilities that do get money? Will it prime the pump and lead to more projects by those same utilities? Or will it be a one-time bubble, with those utilities waiting a few years before they tackle something big again? Will the utilities - and their PUCs - get addicted to the 50% government match and reject future initiatives as too expensive? What's going to happen with utilities that get their applications rejected? Will they regroup and push ahead with their projects on a smaller scale, since they'd already committed to a 50% share of the cost? Or will it be an excuse to throw up their hands, say oh well, we tried - and go back to business as usual? What about the effects on Smart Grid technology companies? Many of them have spent the last six months frantically assisting with stimulus applications. Clearly, they are hoping utilities will do the right thing and move forward with or without a check from Uncle Sam. But what about the vendors who don't win any awards? Will they continue to have the confidence of their customers and their investors? What effect will all this have on regulators?

Traditional television viewing patterns are collapsing and the industry needs to quickly figure out how to profit in a world where people can watch TV shows anytime, anywhere, NBC Universal's TV chief said. The challenge now was drawing viewers to network shows at designated times when people can either record those shows or turn to online outlets to watch at their convenience, said Marc Graboff, Chairman of NBC Entertainment and Universal Media Studios. Networks need to figure out how to make their content more immediately available in a lucrative way, such as by charging viewers to stream episodes shortly after airing -- narrowing viewing "windows" -- or providing them to multiple outlets, he told an industry conference. Meanwhile, Comcast, the largest US cable operator, will look at all opportunities in the content business Chief Executive Brian Roberts said. Roberts said if there was an opportunity to acquire more content his company's philosophy was that is "prudent" to think about it and look at it.