Two major former U.S. network and studio executives opened the B&C and Multichannel News Next TV Summit in San Francisco Wednesday by arguing the biggest investment opportunities are in international markets and that the U.S. cable and broadcast business face serious challenges to their business models.

“We are at an inflection point [where cable and TV companies] are valued higher than they have ever been but if you look at the underlying dynamics, it is really not a pretty picture,” Jeff Sagansky, the former president of CBS Entertainment and Sony Pictures Entertainment who is now the co-founder of Global Eagle Entertainment and Silver Eagle Acquisition, said.

Sagansky and Harry Sloan, formerly chairman and CEO of MGM and founder of SBS Broadcasting, and now co-founder of Global Eagle Entertainment and Silver Eagle Acquisition, shared their views on the landscape during the Summit’s opening keynote Q&A, conducted by Multichannel News editor-in-chief Mark Robichaux. The summit, at the Santa Clara Marriott, continues Thursday (Sept. 11).

Sagansky noted that both sides of the dual revenue stream are under threat. This year’s upfront was down, he said, the first time he remembered that happening during a growing economy, and it is increasingly difficult to increase subscriber fees given the high prices many people already pay.

Sloan also argued that “major media companies are terrible at digital investment." He said, "in general their investments in new media have been a total wipeout,” a record that might limit their growth in new media.

Worse, major media companies find it difficult to make the hefty ongoing investments needed in new media companies, Sagansky added. “A $100-million investment can take $1.2 billion off their market cap and they can’t take that short term hit,” he contended.

Given the limited opportunities in traditional U.S. TV and media, Sagansky and Sloan invested in the airline entertainment industry, launching Global Eagle Entertainment, which provides entertainment over WiFi during flights.

“You have 3.5 billion passengers,” Sloan said, who added that the company now has a $1 billion market cap and said investors are up 70%. Looking forward Sagansky and Sloan said they see major opportunities for investments in international markets.

Sloan, who built up a major European broadcaster SBS in the 1980s and 1990s, also cautioned that international markets can be risky. Currently, they are paying particular attention to opportunities in international over-the-top providers, which are beginning to proliferate in a number of markets. Sloan also noted that he was particularly impressed with opportunities in Latin America and India.

The two disagreed about a question from Robichaux about the speed by which programming might be unbundled from traditional pay TV offerings. Sloan felt this would occur fairly quickly. As traditional TV companies come under increased pressure to boost their stock prices and growth rates, he felt they would launch OTT services outside pay TV packages. Sagansky, though, said programmers and operators “have circled the wagons” and that any move to over-the-top distribution would occur slowly “in the margins.”