• by Joe Mandese , September 30, 2010

On the eve of its merger with cable and broadband giant Comcast Corp., a top executive of NBC Universal Wednesday likened the company's emerging media content model to that of a drug dealer pushing addictive drugs to children. "I think the phrase for the future is that these kids are addicted to choice. And if you can capture an addiction in society, you're the pusher man," Lauren Zalaznick, president of NBC Universal Women & Lifestyle Entertainment Networks said during a candid and freewheeling "town hall" discussion on the future of the media industry at Media magazine's Future of Media Forum in New York.

"The old adage of the schoolyard is you give them a little taste for free and then you've got them," Zalaznick, explained during a portion of the debate centering on the addictive nature with which children consume media, and increasingly, pay for it via premium online distribution platforms.

"We are testing giving them a little taste for free, but they are addicted to 'The Office,' so they've got to buy it on Hulu," Zalaznick continued, "There's an argument: is it $1.99 or 99 cents on iTunes. Whatever the argument is, the fact is that this addiction to choice is the new market, and everyone will get in line as a content creator."

Fellow forum discussant Fred Wilson, the co-founder of Union Square Ventures, and one of the most influential venture capitalists in the new media industry concurred, noting, "They are addicted. They want that show on their laptop so that it's with them wherever they are when they want to watch it. They are addicted to the show, I can assure you."

Wilson, Zalaznick, and several other participants in the forum, one of MediaPost's flagship events during Advertising Week, cited the behavior of their own children as examples for how the next generation of media consumer are helping to change media business models.

"What I see my kids doing is buying a lot on television," Wilson observed. "I'm not suggesting that television is going to become a totally paid product. I don't think that's true. I think, as many people have said, that television advertising is fantastic. You can tell a message in television that you cannot tell in any other medium. But I also see my kids buying shows on iTunes, or watching movies on Netflix, and they are paying for that experience. I really believe we are going to see more and more of that kind of behavior. I think subscription models are going to work. Maybe not in newspapers. Don't know about magazines. But I definitely think in video content, expensive, highly produced, high quality content, even inexpensive high quality content, people will pay for it."

Of course, the progeny of Fred Wilson, one of the most successful VCs ever, likely have more discretionary buying power than the average American kid, but the media honchos all seemed to agree that Millennials do differ from previous generations in that they expect to get their media content on-demand, when and where they want it, and that in many cases, they would pay for it.

Digitas chief Laura Lang said it wasn't just about the underlying value of the content, but the increasing value media consumers are putting on the value of their time, and their ability to consume media when and where it fits into their lifestyle needs.

In one of the many light-hearted moments between the forum speakers, Twitter Co-Founder and CEO Evan Williams caught Yahoo Executive Vice President Americas Region Hilary Schneider sharing some questionable behavior while giving an anecdote about how she used her smart phone to find and navigate a hockey stick for her son while driving in her car.

"You shouldn't be using your phone when you drive," Williams quipped in much less than 140 characters.

All of the panelists agreed that the media industry is undergoing a seminal "industrial" transformation that was likened in scale to other epic shifts such as the impact the automobile industry had on transportation, and they concurred that it would have a considerable impact on the current models used to pay for media content, especially advertising.

Trevor Kaufman, CEO of WPP's Schematic, noted that some new media platforms such as social network Facebook might not easily adapt to classic advertising models, and he described Facebook as not being a "particularly effective advertising medium," because it wasn't designed to be one.

Union Square's Wilson suggested the opposite, going so far as to call the old advertising model "dumb," and predicting that the new marketing communications model would more likely be on that leverages social media on behalf of brands. He said the "new way to advertise" might be a celebrity like basketball superstar LeBron James tweeting why he likes Nike sneakers, for example.

Digitas' Lang countered that argument, suggesting that many of the media industry visionaries don't understand the change that has taken place on Madison Avenue in terms of understanding how consumers "journey" and how they are using digital media to connect with brands.

"We have the wrong definition of advertising. We actually live in a post advertising world. And it's a world in which we have to go to market in different way," Lang says. "We have to build active brands... It's a world in the way in which I consume my content is going to give me a path for how I feel about a brand."