BURT HELM: I'm just going to ask my panelists to just come
on up and take a seat.
And I'll introduce you.
We've got a big one today.
So I'll start with--
as they go forward--
this is Russell Simmons, Josh Sapan, Jon Kamen, Brian
France, Marialuisa Francoli, and Bob Greenberg.
So you all probably know a lot about our panelists already,
but I'll give you a little more introduction.
Russell Simmons started Def Jam in 1984.
And since then, he's been on the forefront of pop culture
trends with fashion labels.
Back in the '90s, it was Phat Farm.
And now there's American Classics and Argyleculture.
He's also now taken a step into the web with a news and
entertainment website called globalgrind.com.
Josh Sapan is head of Rainbow Media.
He started as the head of AMC and Bravo, right, Josh?
JOSH SAPAN: Right.
BURT HELM: In 1987, when he was 12 years old.
And since then, he took over all of Rainbow Media, which
includes IFC, Sundance, WE tv, and AMC in 1995.
And AMC, I think, lead in series Emmys this year thanks
to Mad Men.
So congratulations to him.
Sitting next to him is Jon Kamen.
Jon Kamen is the founder of Radical Media.
If you've seen Fog of War, or Metallica, Some Kind of
Monster, some episodes of Mad Men, [? embedded ?] content
from the likes of Honda, or Nike, and many others, you've
seen the work from Jon's production
company Radical Media.
And sitting next to him is Brian France.
He's the CEO of NASCAR.
He wasn't born on a NASCAR track.
That sounds like a country song.
But he certainly grew up there.
His grandfather was the founder.
And since he took the reins in 2003, he has really broadened
NASCAR to a global audience, changing the format of the
Sprint Chase to the Cup, introducing new cars, and
signing major television deals as well.
Next to him is Marialuisa Francoli.
She has a really diverse array of experience, everything from
working in mergers and acquisitions to running MPG's
internet wing in the late '90s, to now running all of
MPG-Havas's media planning and buying group.
And then next to her is Bob Greenberg.
And he is the CEO of R/GA.
And since starting that with his brother, Richard, in 1977,
he's transformed the company from what was a computer
graphics and special effects shop into one of the best
known advertising agencies in the world.
It's won hundreds of awards and most recently won
Advertising Week magazine's Digital Agency of the Decade.
So let's just give one more round of applause for all of
So the first question that I asked myself, I said, why are
all these guys here?
We've got an entrepreneur who's been
in music and fashion.
We have a cable guy.
We've got a production company guy, NASCAR.
We've got a media company executive, and then we've got
the head of an ad agency.
So I was wondering, what am I supposed to
do with these guys?
And the thing that I think this is really what we're
going to explore is they really offer perspectives from
a diverse array of perches in the
advertising and media world.
But it's not just that.
They're also the ones with the most at stake as the
advertising and media world goes through just a tremendous
amount of change.
And they're some of the people who are going to be
responsible for shaping that change.
And then there's one more reason that I think is
impressive is all of these guys have built great
businesses out of figuring out how to
harness consumer attention.
Something that today--
as everybody at Advertising Week knows-- is harder than
ever to harness.
It's in short supply, as the number of choices multiply.
And so to start things off-- and I'm going to take a seat--
Russell, what does it take today to
get consumers' attention?
RUSSELL SIMMONS: Well, for me, I always believe in this, that
people are searching.
And you have to find the space.
For me, there are many people who are brand builders and who
find things that are already developing and big.
And there are some successful brands in the space.
And then they join in, and then they find a way to make
All my successes have been that I've found some giant
And you just have to whisper.
And of course, there are so many platforms, and ways to
market to, and then brand to.
But to do something unique has been my intention always.
Even something as simple as everyone can say, well, you're
building a new clothing company.
I think that there are many, many, many billions of dollars
made in the urban business.
But there's not an urban graduate.
So why build another clothing company?
Because when you sit next to Ralph Lauren and you're the
only person of color and the only person from that
generation, this urban graduate, then you're filling
a big white space.
So I think it's always important for me to find a new
space, to pioneer a space.
And something may be simple and from the outside seem to
be accessible or typical, but in fact, it's something new.
And I always want to have a product that I think is new
and fills up a void.
BURT HELM: So Josh, what is that consumers want right now?
You've got Mad Men.
I was interested in this.
Two of the shows that have the most buzz on cable right now
is Mad Men and then The Jersey Shore.
So what is it about those two that gets everybody watching
and talking about them?
What do people want right now?
JOSH SAPAN: Jersey Shore, I think, and Mad Men do share
And they do share great stories.
They're slightly in their own way
irresistible for many people.
And so I think that there's always some eternal benefit in
a great story whether it sets out to be fictional or it's
fact, and it goes through its course.
I guess I would expand really what Russell said
and just say that--
people like what they feel is true to
them and what resonates.
And nothing is better than truth, not as in false, true.
Just true as in meaningful.
And it does strike me that the pace of change keeps getting
faster because of the nature of technology.
And therefore, people's tastes move more quickly.
And what emerges into popular culture, that's interesting.
If it used to go at 55 miles an hour, it goes at 80.
And therefore, what is interesting is a little bit
the next new thing relative to where we are today.
BURT HELM: Well, you brought up miles per hour, so I've got
to loop Brian France from NASCAR into the conversation.
You're going faster than 80 miles per hour.
From where you stand, running a sport that has become one of
the biggest sports in the United States, if not the
world, how do you see the rate of change in your own
consumers and the ones that you're trying to attract?
BRIAN FRANCE: Yeah, I think a couple things.
I think one is, I think, most sports leagues control so much
intellectual property, so much content, are trying to figure
a way out to keep monetizing that and reaching their
customers in all the traditional ways.
But as things expand--
and we all don't know exactly which device, which platform
you're gonna consume.
It's going to be probably many.
But exactly which ones you're going to distribute, design
sports content in our case--
to do two things.
To be able to reach new people.
The younger audience, for sure, is
always a sports challenge.
And then to grow financially and be a part of these
changing mediums, to be on the forefront.
So it's a double-edged sword for us.
You have to do both.
Because all your stakeholders are counting on the leagues to
navigate this incredible wave of change.
And I'll add one last thing on our part.
In NASCAR, the traditional mediums that cover sports--
the daily papers, and AM radio, et cetera, all that
stuff that's obviously changing--
they didn't cover our sport culturally.
And they have content restrictions.
That's changing today where Yahoo Sports might--
not might-- does surpass by fivefold when you add up The
New York Times, The LA Times, The Seattle Times, et cetera,
et cetera, combined in terms of reaching a sports
consumer every day.
So we're going to take advantage of things.
We're in an interesting, I hope, position, maybe better
BURT HELM: I want to talk about the way that people are
consuming different types of media and forming these kinds
of groups in a second.
But you mentioned platforms and all of the different ways
that consumers can get content.
And Bob, I've been to your offices.
And there's a room in R/GA that has every device I've
ever seen in my life, every phone, every iPad, everything.
So I gotta ask you, how do you see media options shaping up
as we go forward?
What are things that, say, Brian or anyone else for that
matter who's trying to get their content in front of
consumers, which platforms should they be paying
And what's going to happen?
BOB GREENBERG: Well, I think there's two directions.
It would probably be more interesting for me to talk
about where things might be going as opposed to what's in
the trades all the time.
I just came from a meeting at Verizon Wireless's IT.
And that question was asked in the meeting that I came from.
I also thought in terms of what Brian was trying to find.
I never realized that the New Jersey Turnpike-- or whatever
I was on coming here--
had a 65 mile an hour limit.
So it allows you to go really fast in the rain, so cool.
But I do think that what I was talking about with
is the importance of thinking about it as one screen whether
it's a mobile phone, a laptop, desktop, your television, or a
And secondly, I think that a speech that I gave with Anssi
Vanjoki from Nokia, who just resigned when a person came in
from Microsoft to run Nokia.
We had a presentation we did at Cannes about three or four
years ago, where we said that the third screen, which is
cell phones, would become the first screen.
And I think that designers often have difficulty with
such a small space.
And they have a difficulty with also large--
the various screens.
I think video conferencing is a huge thing that's going to
come about soon.
You see it on [? face-to-face ?]
with the iPhone.
You'll see it as--
when applications start picking up around that space,
it'll really take off.
And it's a way to deal with the white space that Russell
is talking about in a very unique and new way.
And then voice activation, which was in the lab for such
a long time, at Bell Labs particularly.
And then I shot a--
when I was in the production business--
a poster with the founder of voice activation of Penn and
Teller at Bell Labs, which became Lucent, et cetera.
Again, I think it never really worked.
But if you tried the Android Google application, convert
everything to Gmail, you're going to wind up having it
work 99% of the time.
BURT HELM: So voice activation.
You've got video conferencing.
There's so many new things going on.
Maria, which of these do your clients--
what are they demanding from you right now that they didn't
used to when it comes to all of these different devices?
And what do you think they're going to start demanding?
MARIALUISA FRANCOLI: OK, what they're demanding basically is
effective and efficient communications, a lot of
return on investment.
And with the explosion of technology and the different
devices, what we see more and more is that we need to
establish meaningful communications.
And I like some of what you said before.
Because in order to be meaningful, you need to appeal
much deeper than the functionality or the
attributes of the product that you are selling.
Meaningful means that you need to connect with me.
We feel more and more that clients are not only buying
products, they're signing in for everything that the
product and the company that
manufactures the company entails.
So we see it more and more as an act of belief, an act of
really wanting to partner and to be associated with this
company, be it a soft drink, be it a shampoo, be it
whatever it is.
And truth is becoming very important.
Most of us in this room, I think, we started in the
business no earlier than the '50s.
And from the '50s until very recently, TV made us believe,
as professionals, that just being credible, just being
able to establish a credible line or a credible proposal
would be enough.
And it was enough.
But now with technology, we are more in a world of
And when you have all this transparency and all this
access, you start building
communities that have opinions.
And to reach those communities, you need to be
meaningful to them.
And one excellent way to be meaningful to communities is
by connecting with their concerns, by connecting with
And I think in this panel, we have passions at the best, at
BURT HELM: So Maria, let me jump in there.
Jon, is it any different then in what you do depending on
where it appears, the screen?
JON KAMEN: Well, yeah, I think it is really different in
that, Burt, what you mentioned is that all of those devices
that you saw in Bob's shop, they actually all used to be
on Bob's belt.
And all of those devices, in some ways, forced us to
reinvent our company.
And we don't really think of ourselves as a production
We think of ourselves as a transmedia company that's
filling the pipeline of all of these various platforms.
And it's kind of fun to actually be sitting here at
Because I was just talking to Brian.
We're just working on a major initiative for a significant
race that they have coming up for the prime
sponsor of that race.
And we're developing something, and it's quite
At the same time, I think of just delivering a fifth season
of a show like ICONOCLASTS, which is single sponsored by a
premium brand, Grey Goose.
And it's on the Sundance Channel for its fifth season.
And I think of all of those platforms. And it just reminds
me that there will be a need for content that's not only
meaningful and ideally will grow in people's lives, but
more importantly, will engage them as an audience and not
just as a consumer.
BURT HELM: Now Josh, you have said--
and I'm talking about as your content moves to these
platforms-- you've compared putting content up for free on
Hulu and sites like it to texting while driving.
Why don't you explain what you mean by that.
JOSH SAPAN: Well, I think the stats are you're 23 more times
likely to have a car accident or die if you're
texting while driving.
So specifically, what I meant is that there's always
cautionary tales in the media--
I guess notably the record business.
It sort of speaks for itself.
You know more about it than I do.
And the newspaper business.
And there were indeed other factors at play.
But if I have my numbers right, the recorded music
business was a $14 billion business, retail,
not too long ago.
And there's a guy who was in the music business, he just
fell over in his chair, and he [UNINTELLIGIBLE].
You can recover.
There are other lives.
I guess these guys can employ you, it's going to be OK.
If anybody else gets hurt, I assume that we
have panelists' insurance.
So it was a $14 billion business.
I think today it's somewhere around $6 and trending south.
And the newspaper business speaks for itself.
So the economic system that's supported through the core of
the music business and the printed word business and the
daily newspaper was messed with.
And it was not only messed with by external forces.
It was actually messed with by the very people
managing their industry.
And I'd stop short of saying that they were operating out
of greed or disorientation.
But they accelerated the rate of decrease.
And so when I said that, what I meant to say was that the
television business and the shows that we do are
supported, in our case, by two revenue streams. For cable TV
channels, that's actually now being replicated by the
broadcast networks who are getting in transmission fees.
And putting all the content from TV channels on the web
for free says to those constituents, you don't need
to go into a community and pay either at a cable system or a
You can get it for free.
So it basically dismantles it.
And it strikes me as impetuous and somewhat
short-sighted and unwise.
BURT HELM: What do you all think of that idea?
For a consumer sitting there watching television, which
soon could be hooked up to his computer, showing just
unbelievable amount of content, much of which is
going to be free, what do we think about Josh's idea here
of protecting it, of not putting content
up online for free?
RUSSELL SIMMONS: Well, I have experience.
When Napster came to me before, and--
this was a long time ago--
I was leaving the record business.
When they came, they had all these ideas of how we could
And I brought them to the heads of a few labels.
It wasn't my business.
I was just selling my company.
I was starting various other companies.
And said, it looks pretty scary to me.
They're like, we don't want to talk to him.
I said, we should at least have a dialogue.
I don't know what their solution could have been.
But I think the idea of being open, and creative, and
allowing for change, and not being rigid.
Lots of people in certain industries, they've done it
for a long time.
And they're very rigid.
And I think those experiences with newspapers and with
records are in part--
there's many ways to monetize music.
There was just never a dialogue amongst themselves of
how they were doing to do something.
And it's incredible how difficult they were with
people who had these innovations and how impossible
they were to talk to.
And I don't know with newspapers, they can sit there
and watch content come every single day, more interesting
than what they were going to publish, every single hour
more interesting than what they were going to publish
that following day, or following week,
or following month.
BURT HELM: Right, so Brian, what's your
perspective on this?
BRIAN FRANCE: Well, look, what you're hearing is there's a
huge thing with a subscription model or advertising model
based on what business-- we're talking
about the record industry.
My own view is that what I think is really interesting
for us, we're spending tens of millions of dollars right now
building out a process for us, a way for us to design and
distribute content sort of no matter where it goes.
And we have a big online partner
relationship with Time Warner.
But my view of it is that one thing that I think you can
count on that no one really did talk about five or ten
years ago, talked about convergence, and what
platform, and all that.
But was the idea that consumers were gonna become de
facto directors, editors of their own content.
And you're really seeing that.
So those who have great content, but allow some
flexibility-- we've heard that word a lot today--
out into the marketplace so that the consumers--
depending on what you're talking about, what content
can design it, can organize it in their life.
That's a big jump.
We're not there yet.
We are in some small way.
But if that unfolds away and consumers
actually want to do that--
don't want to just have it all organized and
provided for them--
that'll be a big deal.
BURT HELM: Now, Brian, what's your opinion on how NASCAR
content should be available online or on phones?
What's the business model?
BRIAN FRANCE: Well, like every sports league, we've got
billions of dollars of rights fees committed in traditional
ways and with traditional partners.
On the other hand, we want to make sure
we're growing our audience.
Start with that.
And then secondly, as these other mediums become more
real-- there's advertising models attached to them or
whatever the business model arrives at--
we have to be there.
And I think the trick for all the big sports leagues is to
do both, to handle the digital age in a way that promotes and
grows their sport, protects these traditional advertising
or subscription revenue streams for
them and their partners.
Now we do have one thing, all of us, in sports.
We have iconic, must-see content that is going to keep
enduring and keep getting better depending on
how we manage it.
It's a challenge.
BURT HELM: So Josh, so what's the right way to do that, do
you think, in terms of what's the model that should work?
BRIAN FRANCE: Let me know, Josh.
RUSSELL SIMMONS: Can I say one thing?
BURT HELM: Yeah, go ahead, Russell.
RUSSELL SIMMONS: Obviously, we all agree we need hot shit.
Our stuff's gotta be hot, right?
BURT HELM: Yeah.
RUSSELL SIMMONS: And then we have to be open.
Like I said about the record business, they're not open.
My real business, the one that's funding all my new
fashion companies, [UNINTELLIGIBLE], my jewelry,
is my financial services business.
And I can't count.
But I have a financial services business that's
I don't say numbers.
It's a lot of money.
And it's building because it's a hole, it's a white space.
The banks don't understand it.
The major banks often--
they all want to buy a piece of it, they all want to
They would not listen to the consumer.
And all the platforms by which we're distributing, through
mobile, and transferred money, and all the other kinds of
services that people need, the financial services that used
to be only [? underserved. ?]
Now it's cheaper to do our shit than Bank of America.
A free Bank of America account costs more than my whole
financial service package.
And it's more efficient.
That's the next America.
But that's because the people who are there are so rigid and
hard-headed that they'd rather throw away half of America and
not operate efficiently for them than figure out a new way
to operate with them.
It's kind of like the record business.
It's kind of like newspapers.
It's kind of like everybody is going to get thrown out of
every business who doesn't recognize new
technology is coming.
BURT HELM: Bob, what do you think about that?
BOB GREENBERG: I think [UNINTELLIGIBLE PHRASE]
in a cab.
I was listening to NPR, and [UNINTELLIGIBLE]
wrote Neuromancer, which came up with the word cyberspace--
said when he understood that things would go to the
internet, he never saw cell phones.
And secondly, the record business.
I proposed to a person who used to work for me--
Marc Shmuger who used to run Universal--
that the same thing that happened to the music business
is gonna happen to the feature film business.
Now we know that all the difference is the amount of
data that you have to store.
So there's not a lot happening there.
And I think it's being disrupted.
The fact is that technology is moving on a
curve that's like that.
And it's been happening over time.
And I think when you add in the global economic downturn
at the same time, there's a formula for incredible
And I meet all the time with people that can't see--
for instance, we have a client in Nokia that
didn't see many things.
And their smartphone business was really disrupted.
And you can be disrupted even if you're viewed as being a
high tech company.
Because there are so many things happening right now.
And I think it comes down to creating things
that are truly useful.
And I was going to bring up one other thing--
and I'll be fast--
and that's the data revolution that's happening, which we
would talk about a lot at the agency business.
And that could be combined with NASCAR in a very
As I just came back from Singapore, and they were
getting ready for the F1 race.
And it's very disruptive to this country.
But nevertheless, data combined with video that would
make the experience of watching a race so much more
interesting when you combine the two.
And that's a thing I've been talking about for 10 years.
RUSSELL SIMMONS: But you're not listening.
It's disruptive because you ain't listening.
In other words, if you have it, and there's all these
synergistic opportunities, and you're not exploiting them, or
that's not the way your company's thinking, it becomes
But it becomes an asset if, of course, you're open minded.
I'm not saying anybody's not smart.
I'm just saying, that's what we have to try
to be is that smart.
MARIALUISA FRANCOLI: Yes.
JON KAMEN: But you know disruptive--
it's interesting because when Russell quotes the scale of
the music business at its height--
RUSSELL SIMMONS: He did that, right?
I got out right about then.
JON KAMEN: But now you look at something
like the app business.
And in 2000, a business that essentially only began in
2008, and to even look at my wife watching a very popular
new show on another cable network--
JOSH SAPAN: Is it Jersey Shore?
JON KAMEN: No, she wasn't watching the Jersey Shore.
I think it was another shore, but I think it was down--
and it was also in New Jersey, I think Atlantic City.
But the fact is at the same time, she's watching the
ballgame on her iPad.
And that MLB app is probably almost a better experience
than just television because of all of the stats and all of
the other information that you can pull up on demand.
But if you look at the app business, it's very analogous
to the music business.
2008 to 2010, it's already a $6.8 billion business.
And they project in three years time the app business
alone, which is a clear indication of consumers'
interest to buy or to purchase something, it's going to be a
$30 billion industry, just the production of jobs.
BURT HELM: Josh, go ahead.
JOSH SAPAN: So I was just struck by something when you
talked about the disparate panelists.
And so I'll see if I can spit this out, which is that a
number of the people represented here have
businesses that are conventionally either a sport,
or an ad agency, or a buying agency, or
a production company.
But in fact, have become many more things over time.
Each somewhat like one another so that they have become in a
certain sense their own little network.
They have become their own application.
They are an app.
They actually are a media buying opportunity even if
they weren't initially.
They're a chance for someone to put money into it.
And so there was this statement of the
medium is the message.
But now as represented here, the brand can be the network,
can be the producer, can be the application, and can be
the direct connection to the consumer all at once.
And there's actually an odd imperative to do so.
Because if you don't, you look negatively at incursions.
BURT HELM: And there's a convergence
taking place in a sense.
JOSH SAPAN: Yeah, and everything's
gotta be all things.
Everything becomes all things to some reasonable degree.
But in that--
if I can sound not defensive-- the manner in which you
organize that, and price it, and relate to clients, and
relate to consumers is of course all important.
You can't just splatter it.
But it is an interesting indication.
Because not just me, but the people here are probably
exquisite evidence of the changing nature of what
production, channels, brands, and media opportunities are.
BURT HELM: Maria, what do you think about that?
And what are the implications for yours business?
MARIALUISA FRANCOLI: The implication for our business
is that we need to find new ways.
It's a big change in paradigm.
It's a big change in what we used to do as agencies, as
advertisers, as media companies.
And to find out what is the next way to not only find the
right solution, but to make it economically viable for the
entire community that is engaged is the big challenge
and is what we need to do.
Sometimes when we see that it is so different from what we
have been doing, it's tough to accept.
But closing and trying to--
I'm from Spain.
In Spanish, we have a saying that it says, it is impossible
to put doors to the countryside.
So it is impossible to put the doors that would control and
make things the way we want.
And what we need to be smart enough is to identify the
opportunities, as you were saying.
Because they are numerous.
BURT HELM: So Jon and then Russell.
JON KAMEN: Well, this is an advertising conference.
And it is ironic that advertising dollars have been
the economic fuel for most media for the
longest period of time.
The platforms may be changing, but the reality is, I think,
that for brands to continue to be meaningful in people's
lives, almost the very old concept of something having
been brought to you by, and the appreciation of a brand
having selected something doesn't mean that you have to
just have a brand message.
But you can very comfortably support something that your
consumers appreciate and are engaged with.
And therefore, build a real appreciation with that
consumer through supporting the programming.
BURT HELM: So Russell, what were you going to add to that?
RUSSELL SIMMONS: I would say, the whole idea about branding
in this next, new America and the lack of understanding
about it by advertisers--
I was on the Walmart advisory board.
And I was lucky enough to sit and listen to all the
different ethnic advertisers, the Latino, and the
Asian, and the black.
The black guy actually told me that there was 12 different
kinds of African-Americans.
There was a lot of people on the board, a lot of very
successful-- they all sat and heard the presentation.
And it described them.
And I kind of knew them all.
All 12 of them.
But the real truth is what I'm trying to do now even in my
Global Grind, there's the next America because of all this
media and because of all these things.
There's a much greater integration.
In the second generation of everybody, they gotta find a
cultural space that speaks to all their parents.
They elect presidents because of it.
They get together, and they create a new America.
And the melting pot thing really,
finally starts to work.
And maybe not amongst adults, but the people you're
So you can't really buy an ad for all 11 African-Americans.
So even in the internet, there was a time when it was all
black and white radio.
And then Churban radio came in.
Churban, whatever the fuck that was.
And Churban destroyed black and white
radio on a lot of markets.
So then I get this site.
They say, well, what is it?
Is it black enough?
It's not black enough.
Well, it's bigger than all the black sites, so it's not black
And it's got a potential to be bigger than everybody.
It's a new site.
But it's bigger than the black sites.
It's not black.
It's about where culture is merging and really spreading
And people are not advertising into not only that space, but
they don't even understand it.
How do you speak to everybody?
And from a cool space?
BURT HELM: So Russell, are you talking about a new mass
culture taking shape?
Or does that mean that it's--
RUSSELL SIMMONS: Yeah, it's a new, next American culture
BURT HELM: --more fragmented, but not necessarily one that
correlates with ethnicity?
RUSSELL SIMMONS: It's not fragmented.
It's very specific.
Like these urban graduates that grew up all on the same
music, all of them were rebellious, the kid in Beverly
Hills, the kid in Compton.
They communicated to each other over this last
They created a new America.
There's a huge advertising-- there's a white space for
people who can't afford to buy every Latino,
and Asian, and black.
Because their kids are at one place.
And that one place is a trendy place.
And so I'm just saying, there's that opportunity.
BURT HELM: I'm curious to hear the perspective of Brian,
who's also got something that was a major cultural force
much like Russell and your role in hip hop and fashion.
Brian, at NASCAR, are you seeing
something similar happening?
What are you seeing?
BRIAN FRANCE: Here's what we're seeing,
and think about it.
Culture in a community, culture in a business, in a
company, even in a family, it's the
hardest thing to change.
It changes slow.
Sometimes it doesn't change at all.
But what we're hearing today and what we know in the
audience is that technology is accelerating things from a
and this is mostly about advertising
information and so on--
in a way that we never thought from a speed standpoint that
it would be so quick.
But it is.
And what you're also hearing throughout all the panelists
is this resistance with old business models, industries,
and sectors that are struggling to
recognize the pace.
And what happens when you get left behind, and you don't
figure it out?
And a lot of them are leaving business models that aren't
And that's hard for them.
That's hard for anybody.
So what we're dealing with is trying to be--
I've had a good time on this panel as a matter of fact
listening to different views, validating things you may
think, you may understand.
And we've got a whole bunch of smart people in our company
working on the space.
But this is a fun time for all of you.
It's a fun time for all of us to cruise through transforming
BURT HELM: This has been just a huge panel.
And there's so many things I want to talk about.
But I want to open it up to questions from the audience
while there's still time.
Who's got a question?
I know there's got to to be a lot out there.
There's one right there.
I've got plenty of questions myself.
AUDIENCE: This is a question for Josh.
So you're, I guess, anti-Hulu.
But given the choice between BitTorrent or Hulu, what do
you see as a viable business model?
Completely free, or partially funded by ads?
JOSH SAPAN: Do I have the privilege of altering the
question and torturing it into an answer that I would like?
JOSH SAPAN: Because I think it's really a central thing.
I think it's actually a pretty important
question and comment.
I really do.
Jon knows how much it costs to make an hour of drama
like we make it.
It costs a whole bunch of dough.
So this is a long--
I don't mean to make it a bullshit, politic answer.
But I really mean it.
They're very unappealing.
Because the whole world's paying for this stuff today in
one form or another.
Advertisers are paying, and the systems that distribute it
And if we disrupt that, you're gonna actually compromise
where the money comes in.
And ultimately, you're probably not going to be able
to make it.
So what's appealing from my point of view is to not be too
timid about price and to actually go out with your
content in every format in the world that is
seductive and appealing.
And mess with price, and try and engage people into
something that they think is fair and valuable.
So I'm sorry to rail about it, but I actually think we're at
sort of a tender moment.
Because if you mess up the system, you really do it at
your own terrible jeopardy.
And I'll just mention an anecdote.
So we started to release little independent films
And we released them on video on demand the same day they
went into movie theatres.
We started four years ago.
And we thought, is anybody going to go home, and actually
click the remote, and pay $8 for one of our little
They're not using VOD that much,
they're not paying money.
So we just recently released two little indie films. You
probably have heard of neither of them.
And almost 1 in 100 people who have access to VOD in America
bought each one.
I'll tell you their names because it's slightly
So one's called Human Centipede.
What the hell is that?
And the other is called The Killer Inside Me, which is
from a Jim Thompson novel.
But literally, there's about 45 million
VOD homes in America.
1 in 100 people paid $8 to get it.
Sorry for the long answer.
I didn't mean to make it a commercial for ourselves.
I meant to say that they're both bad news to my mind in
their current formulation because they actually erode
price and value.
And those who engage, I think, do it out of some notion of
experimentation, embracing the future.
But I think it's precipitous and unwise.
So sorry for the long, tortured answer to your very
BURT HELM: Got a question right there.
At conferences like this one here today, there is often
discussion about [? being accountable. ?]
And I pay about $400 a month for free content [INAUDIBLE]
household across multiple platforms. So my question is
how would you all on the panel explain to a middle class
family how they might justify or how they think they're
getting $400 worth of value out of that [INAUDIBLE].
BURT HELM: Can everybody hear the question?
The question was, given that the average household, by your
estimate, is spending some $400 on getting
all the free content.
And I imagine you mean because of cable bills
and internet bills.
AUDIENCE: Cable, internet, multiple mobile data services.
BURT HELM: Mobile phone subscriptions.
How do you convince consumers that they actually are, one,
getting their money's worth, and two, need to pay more.
MARIALUISA FRANCOLI: You tell us whether
this is value or not.
And the best way to tell is by buying or not buying it.
And with the number of options that we have now, you have the
opportunity to express yourself in a way that you
didn't have a few years ago.
Because there was no alternative to your cable.
BOB GREENBERG: I think that it depends on how young one is
because, I'm on five and soon six school boards.
And to Russell's point of diversity, et cetera, I think
that people are not paying for things.
There was a very interesting Chris Anderson
article about freeing.
And then he changed it a little bit.
But I do want to point out that at university, the kids
aren't paying $400.
BURT HELM: They're paying $40,000.
BOB GREENBERG: Yeah, they're paying $40,000 sometimes.
But I do think that they are paying less by being smart
And I do want to also throw in one thing that I was going to
And that's that the app business, which we were very
involved with, really is developing in New York City.
So I do want to at least throw that out.
There was a New York Magazine article about it and how
Foursquare originally came out of Dodgeball, which then came
out of ITP, where I'm very closely involved with that
part of NYU.
BURT HELM: That's right.
There's a lot of innovation coming out of New York City
right here, right now.
BOB GREENBERG: Right here, right now.
BURT HELM: So I'm curious.
We are almost out of time.
I think we have time for maybe one or two more questions.
Got you in the front, and then you back there.
So you go first.
AUDIENCE: With all the different perspectives of new
markets, breaking old models, disruptive, and different ways
of going about things, there's still limited budgets that
accurately navigate being on the cutting edge and making
the right choices without going down the road
BURT HELM: How do you budget for innovation and new things?
MARIALUISA FRANCOLI: It comes from a deep understanding of
consumers and trying to understand what would be the
best way to go for a particular campaign, for a
particular product, for a particular point of
I wish I had the best truth and one that never fails.
But it's just not the case.
That's not in our [INAUDIBLE].
BOB GREENBERG: We just opened in Buenos Aires and Sao Paulo.
And we're tying it together with video conferencing that I
was bringing up.
Everybody at R/GA has video conferencing.
So the ability for us to tie into a market like Buenos
Aires, where it's far less expensive, we're not looking
to be the least expensive.
We're looking to be less expensive and mix it.
Because we only have three people in Buenos Aires working
with four people in Sao Paulo working with six
people in New York.
And you're then spreading out the cost.
And I think it's critical.
Because we're getting, at R/GA, too expensive.
And I think that's a very important thing that everybody
has to look at.
And how do you really bring the cost down of
everything you do.
BURT HELM: All right.
So last question I can't remember who it was.
There you go.
Right up there.
AUDIENCE: We were talking about the MLB iPad app before
and how that allows them to serve their content and
actually provide a better consumer experience.
And I'm wondering if there is any barrier that's presenting
something like AMC to use the app market to deliver their
content in a similar model.
And then you don't have to worry about battling with
something like Hulu, who gives away too much content for a
lower price point than you're looking for and allows you to
control your own ads.
And I was just wondering.
JOSH SAPAN: I think it's a really, really
timely and ripe question.
I think the broad answer is there are no obstacles in the
There are, however, when you actually get to the
implementation of it, a whole bunch of things you have to
consider including who owns the rights to what we show.
What that is today, what it'll be in the future.
But I think that there is an inevitable
destiny in all that.
But there's a bunch of hurdles along the road that are about
rights, money, who's on first, incumbent position.
But I think that there is some quality of inevitability to
what you're suggesting.
BURT HELM: Jon, do you have some closing remarks.
JON KAMEN: I just think it's an incredible opportunity for
And when I say, our industry, I include
the advertising industry.
Because those are my basic roots.
But I really believe when you talk about the value to a
consumer, when you talk about price dictating what consumers
will buy and what they'll be able to afford, or how will
brands in their investment in media invest in something that
will be appreciated by that audience.
So I think there is an incredible opportunity for us.
I think that, to Russell's point, finding the white
space, finding the places in which you're going to be able
to grow that opportunity is going to be critical to our
industry, and critical to the media industry as well, or
even a franchise like NASCAR.
It's important for us to think creatively and to rethink some
of the models that we might have once supported blindly.
And now start to think of new, alternative ways to invest.
BURT HELM: I'm going to cut you off there.
Guys, let's give a round of applause
for all of our panelists.