Q&A With Tom Rogers, the Mediapreneur
After a 12-year tenure at NBC, including a stint as president of nbc Cable, surely Rogers' most challenging job was helming Primedia where, after a series of Internet investments, Rogers fell out with the company's controlling stakeholders. Now, sitting atop his own patch-worked empire, he consults with a variety of clients that are trying to make sense of the era of consumer control. TiVo, which has been under relentless scrutiny, is aiming toward fourth quarter profitability and free cash flow. At press time, TiVo announced a deal to supply its digital video recording system to Comcast Corp., a major coup after years of trying to nail deals with cable operators. As of January 31, TiVo reported more than 3 million subscribers, including 251,000 TiVo-owned subscriptions and 447,000 DirecTV with TiVo subscriptions.
Media Editor Tobi Elkin spoke to Rogers recently on a variety of topics including two that are of high interest TiVo and the sale of About.com to The New York Times Co. Rogers is vastly familiar with About.com and has always been bullish on Internet media's potential. media gives props to contributor Christopher Schroeder, who assisted formulating the questions.
MEDIA: Let's get right to it. What's up with TiVo? In the last few months there's been quite a bit of management turmoil and confusion over the direction of the company.
ROGERS: There really hasn't been management turmoil. There were management changes. Mike [Ramsey] was chairman and ceo for a long time, much longer time than people stay on as ceos. As the company transitions from a technology company to more and more, a media force, it was obvious to Mike that his skill set was not one that could best take the company to the next level. Marty [Yudkovitz was president of TiVo until his resignation in February] was really a very personal situation. He attempted to do the job from the East Coast. He made a lot of contributions, but he needed to be on the West Coast. [TiVo is based in Alviso, Calif.]. The media involvement is something I've been able to pick up and steer and oversee. It's all portrayed as a lot of disruption in the ranks, but I really don't think that was the case.
MEDIA: What do you make of the fact that consumers are increasingly in control of their media consumption, favor an on-demand environment, and are aggregators, distributors, and publishers of media?
ROGERS: It's what TiVo is doing today, which is being able to allow you to port video that comes onto your pc and get it to TV. Today, you can wirelessly port from your pc to your TV set to your TiVo box video that comes in on the Internet, and capture it on the TiVo hard drive, and play it back on your TV set. That connection will open up a ton of video [options] so you won't have to watch video on your [tiny] pc screen. It opens up a whole new world of video options to people. You'll be able to have a menu and grab video, and categorize it.
MEDIA: One of the upshots of the Internet is that it has put choice in the hands of consumers. Business has given lip service to putting customers first, but consumers have the tools to make their own choices about content, when they want it, and how they want to interact with it and each other. The impact on traditional media business models is clear and seems to be causing paralysis in many organizations. Who, out there, do you think is embracing this most creatively?
ROGERS: Many did play with new media. espn. Viacom has done some decent things. But I don't think anybody has really shown that they've cracked the code on new media. They're testing things. There's some real revenue coming back on some of it. But nobody has figured out how to integrate those elements with their core business so it's come to the very fore of their growth plans.
MEDIA: TiVo is as good an example as any of the power of the individual. What is the outlook for TiVo and digital video recording functions more broadly? Won't cable and satellite operators end up owning this capability?
ROGERS: I think there are other consumer devices that will highlight TiVo's value. TiVo To Go and portable media players provide a whole new angle about why people should have TiVo. We are out there with a major part of the satellite market today. Having an integrated experience with satellite and cable should be part of that mix, certainly. The company has been viewed as not as successful on that front as some have suggested it should be.
On the other hand, those are complicated deals to put into place. Cable operators do deals with brands and advertising, and licensing. This is really a hybrid, and it doesn't fit any exact mode. It's much more complicated if you're a cable programming service and espn. You have to do a deal with cable, you don't go directly into the home.
In the case of TiVo, you do have a standalone business, or you're being offered [it] by someone else. You have to have a balance. There is a balancing act on both sides; it's fairly unique. There has been a fair amount of scrutiny on that issue among people who say, 'where is the cable deal?' What they're not recognizing is just how many other routes there are to get in front of the consumer. TiVo has an incredible brand name that has resonated beyond the number of subscribers it has, well beyond. It's phenomenal. It's a lifestyle choice [brand].
MEDIA: But Time Warner Cable and others now offer DVR functions. What's the case for TiVo?
ROGERS: Yes, there are cable operators that have generic DVRs. I have not talked to a cable operator who does not think that the TiVo experience does not have a potential future with that part of the market. Is TiVo precluded from having arrangements with cable operators because they have generic DVRs? Absolutely not. There are intellectual property issues, to be sure. [Eds. Note: TiVo sued EchoStar and is considering its options against other providers that have incorporated DVR functions into their set-top boxes.]
MEDIA: The industry talks about innovative and new advertising scenarios that will come in a DVR context. What does advertising look like in a DVR world?
ROGERS: TiVo is the only DVR out there that has come out with an advertising solution. Advertising is a combination of letting people access longer-form showcase types of material, something [TiVo] pioneered and [that is] an ongoing business for TiVo.
Some of it is when people skip through commercials, there's a way for the advertisers to have a clear presence on the screen. So you're not getting in the way of the skipping, but at least making it clear to people what the underlying product is. TiVo could become the way to do paid search in the TV environment when you want to find certain kinds of products, and you want to be able to get at information where you are making the choice about what you want, when you want it by category, versus randomness. TiVo has the ability to move TV more toward the incredibly successful Internet advertising model.
MEDIA: Do you think the network television business is a good one to be in at the moment?
ROGERS: One of my jobs used to be head of strategy and development for a network, and I used to think about expanding consumer choice in network television. The networks have been able to raise price and inventory. I will say that the real value of a network in the midst of not only more choice, but now consumer control over that choice in terms of how and when it's viewed, is that there are so many ways to slice and dice the reception of that choice into the home. Invariably we're moving away from a world that you watch [and access programming via] a network, to a world where TV viewing is a function of individual program choice devoid of any channel. It's separating the channel from the choice. Networks will have a hard time promoting in that environment.
As people record programming, if the lion's share of viewing is via broadcast networks, the lion's share of recording is via broadcast networks. The great use of a TiVo or DVR is watching material that has come from there. That's another way of saying networks could benefit by having [a relationship with TiVo, because right now they have] the most costly programming that many people don't watch because of the way it's scheduled on the network! The DVR can create a level of convenience and access to that programming. TiVo at least has a way to create advertising relationships. [Network advertising dollars] can be re-expressed.
[Obviously], networks don't love these developments. But they've more than survived the cable onslaught. It's about making networks a promotional machine and figuring out ways to work with the technology that they find so menacing. Broadcast networks will also get much more involved in ultimately driving people to e-commerce. The Internet has created enormous amounts of accountability in the broadcast world. Tying an ad to an actual decision or purchase is incredibly difficult.
MEDIA: Talk a little about LifeMed's dLife venture. It's an example of niche programming on cable targeting a specific population affected by diabetes.
ROGERS: Well, there are niche audiences that are still pretty big. There are 18 million people who are affected by a disease like diabetes. It's a massive audience that's not represented in the TV world. Print and the Internet, to some extent. In an on-demand [environment] you would have to define our package of product across multiple delivery modes of which cable TV can be one. But people get too focused on 'I want a digital cable channel, I need it to be 24/7.' For almost all forms of programming, that's a tough model and not the best way of bringing forward a new programming idea.
MEDIA: The New York Times Co. paid just under a half billion dollars for About.com. What do you think drove this deal? Would you have made that deal?
ROGERS: I think they have a ton of content. We saw this coming. About really is a collection of expert blog sites. Individuals with expertise that are human filters are much better than any search engine. The Times has the ability to promote in ways that I think could be quite effective in terms of the guides, and to drive the whole notion of the personalities behind the personalization. This could be extremely effective. However, I can tell you we [Primedia] would never have paid $410 million in cash!
MEDIA: What are the most significant, but perhaps least understood trends out there on your horizon?
ROGERS: How the cell phone becomes the device that interacts with live television. I think the issue that always got in the way of people playing along with live TV in any number of ways, is that you had to get a terminal into the home. Now that the cell phone is a media device, this could be one of the great things television does well in a DVR and TiVo world. The cell phone could turn televisions into something that is integrated well beyond what the set-top box converters do in the cable world. It's the interaction of the cell phone and television that is a great new chapter that will be written.
MEDIA: Where would you like to see TiVo in a year?
ROGERS: I'd like TiVo to continue to roll out and move to a market that is not single millions but tens of millions, and for TiVo to remain the leading choice of consumers. And two key things that TiVo will not only be recognized for being the leading DVR, but within the industry be considered 'the' solution for advertising. Consumers have voted that this is a choice and a behavior that they like. It's here to stay and it will only continue to grow.
I'd like to see it have a robust business across a diverse means of distribution. Built into a combined dvd player and recorder, built into consumer electronics devices, and going beyond the standalone TiVo. Clearly, cable cards in the next 18 months or so will be a critical way to enable boxes not provided by the cable operator to [carry TiVo].
MEDIA: If you had any advice to give friends still trying to figure things out in traditional media, what would it be?
ROGERS: I would say to think brand. Don't think about individual programs or individual content. Think about the unique ways that that brand can live across multiple media. And whatever you do, make sure you integrate [it all] well. Silos create cost and you don't get promotional shoulder.
MEDIA: Are you a tech nut, and what's on your digital video recorder?
ROGERS: My 12-year-old is who I rely on for tech geek know-how. I have news programming, primarily the Sunday morning news shows, on my DVR. I've got everything from the "McLaughlin Group" to "Meet the Press." It used to be a real time commitment to watch them. I still watch cnbc live all day in the office. The Blackberry is an incredible device. You could take my cell phone away, before my TiVo and Blackberry.