Cheng told attendees that Disney is embracing the challenge of navigating a media and entertainment space that is changing almost daily, and where the consumer is in control and providing feedback that is both instantaneous and direct. "Distributors [of content] are still somewhat important, but their leverage is challenged by the Internet, consumer electronics, broadband, and technology."
ABC Television, according to Cheng, is focused on investing in superior content--something that its telecom, cable, and even Web portal rivals and some-time partners like Yahoo, are hungry for--and beyond that, in new types of content that will offer deep interactive experiences. He cited Disney's partnership with Apple's iTunes for downloads of popular ABC shows like "Desperate Housewives" and "Lost" as examples of new kinds of content, in addition to content packages made specifically for mobile environments, and broadband shows.
In a time of volatile change, Cheng said ABC needs to redefine what it means to be a broadcast network, and its cable properties like the Disney Channel, need to redefine what it means to be a cable network. "We must build assets and a marketing platform to reach audiences wherever they are. We have to build franchises--we can't limit ourselves as broadcast or cable. We have to define ourselves as an entertainment network regardless of technology, and based on individual consumer preferences."
Cheng told attendees that ABC needs to have a branded programming presence everywhere--online, on cable, on cell phones, on TV, on a Nintendo GameBoy Advanced. "We plan to be everywhere our consumers are. But we must understand that the Internet gives us a direct two-way connection to consumers to deliver a personal, customized experience," he said, continuing: "We should be asking, 'How should we look at broadband as a VOD [video-on-demand] service? Are there community aspects around someone's favorite program? Will streaming [video] or IM [instant messaging] change the experience, or games with video clips? How do you create a more engaging experience and not a distraction?'"
Cheng argued that ABC wants to cultivate direct relationships between its brands and consumers. "People use brands to navigate their options; we must sharpen our brands." He said that partnerships with Web content aggregators and syndicators like Yahoo and Google don't always work to the best advantage for ABC because they don't highlight its content brands powerfully enough. In addition, ABC seeks partners that will bring their considerable marketing and promotional heft to the table, and not leave marketing to ABC alone.
Later, in a panel discussion with executives from America Online, FoxSports.com, Yahoo, and MSNBC.com, Scott Moore, Yahoo's vice president of content operations, noted ABC News' content partnership with Yahoo--a relationship the portal pays good money for. "We have a great relationship with Yahoo at this point," Cheng responded. "They're a great way to customize and aggregate information, but when it comes to reaching people at an emotional level, video is the best way to do that. How we distribute that video is debatable...do we do a deal with Yahoo? What does that mean for our brand?" Cheng underscored that it might be easier for consumers to find ABC content via its own branded platforms than on a portal.
"From Yahoo's perspective, we're totally focused on relationships," Moore said, citing the company's recent deal with CBS' "60 Minutes" which saw traffic jump some 17 percent after an exclusive video interview with Tiger Woods and other content went live on Sunday. "It's good for CBS because the '60 Minutes' demo is older, and it's good for us."
Charlie Tillinghast, president and publisher of MSNBC.com, said: "I agree with Albert...you want to build a brand experience and have a deep rich connection. But you can put out pieces of content to introduce people to your brand. You really need both [portal/syndication deals and self-branded content]. It's difficult to have people come [directly] to your experience all the time."
Cheng said online video that offers meaningful and relevant interactivity for consumers is key for ABC. "There's nothing better than video--it strikes an emotional chord, and has a halo effect." He noted that ABC is trying to introduce interactivity into advertising to make it more valuable, and targeting advertising and sponsorships such as those offered by "Extreme Makeover: Home Edition," which features an interactive application for Sears' products.
In addition, Cheng argued for flexible business models--downloads for 99 cents apiece, $1.99, and free ad-supported content. Also, agencies and advertisers "need to think through the rights they are acquiring. The majority of [TV] ads can't be played online. We can't take a 'Lost' spot and play it on the 'Lost' Web site," he said. "Advertisers need to be more creative to meet these challenges. Standard rights agreements aren't sufficient."