The head of one of the world's largest media empires says creative content, not technology, will determine which companies dominate the field.
Peter Chernin, who is president and chief operating officer of News Corporation, notes that three years ago there were extravagant predictions of "synergy" in the digital world, with music to be channeled through cellular phones, movies viewed by computer and people abandoning neighborhood stores to engage in e-commerce.
Today, he notes, most people shop and get their entertainment in traditional ways and some new media giants, created through mega-mergers, are coping with lower stock prices and angry investors.
Mr. Chernin, who spoke Wednesday to a civic group called Town Hall Los Angeles, said the new digital media may still live up to their promise, but the expected revolution has not yet happened. Instead, media companies are competing more intensely as technology gives consumers added choices.
For example, a few years ago Americans could watch three television networks. Today they can choose from six commercial networks, hundreds of cable channels and thousands of movie titles on cassette and videodisk. He adds that there are million of sites on the Internet. "It leads to more fragmentation in our industry, and the only way to fight it is to be more original and more daring because you'd better be pretty amazing to break through that clutter."
The executive says his company's Fox network has tried to be creative in series like "24," a television drama that takes viewers through a 24-hour day in real time, hour by hour.
Mr. Chernin sees another trend throughout the media world: Creation of local content for specific audiences. The executive says his company learned a lesson in India. News Corp's satellite system in Asia, known as Star Television, was initially planned as an Asian provider of largely American programs. He says that approach was a failure. Three years ago, Star India switched to Hindi programming. "We got out of pushing English-language stuff there," he says. "We are creating original Hindi product, and we have a staff that I would say is 95 percent local native-speaking people. And we've learned in all of our international businesses, in Great Britain, in Italy, in China, etc., that you'd better be local." Mr. Chernin says his company is producing local content for each of those markets.
There has been a trend toward consolidation in the media industry, lamented by many observers as a curb on competition. But the News Corp executive says the conglomerates are here to stay.
His company grew from a single Australian newspaper from which founder Rupert Murdoch built a $16 billion empire. News Corp now owns many newspapers, including the New York Post and The Times of London, the Twentieth Century Fox movie studio, HarperCollins Publishers, as well as television, satellite and cable outlets.
Mr. Chernin says large companies like his must be attuned to local audiences, while providing a product good enough to compete in a world of expanding choices.