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Digital Is theFuture—and That'sThanks to TV

Arsenio Hall had it made last week, being one of the few celebs hanging out poolside at this year’s NATPE conference in Miami Beach, Fla. The effusive host is set: Hall was promoting his first-run talk show for CBS Television Distribution, which premieres in the fall. Meanwhile, the majority of NATPE attendees, exhibitors, buyers and sellers spent most of their time trying to figure out where the rapidly changing TV business is headed.

They found something of an old story being told. Much of this year’s focus at NATPE was on digital content providers and platforms, but the big money is still in traditional TV, as emphasized by Mark Cuban, new media investor and president, CEO and founder of live-event cable network AXS TV.

“Television has a huge advantage in the social media world,” Cuban said. “[With TV], everyone experiences the same thing at the same time. Now, viewers are sitting with devices on couches—tweeting, posting on social media and using television as instigator for all of that,” he said, speaking to CNN correspondent Poppy Harlow during NATPE’s opening session at the Fontainebleau Hotel and Resort.

“TV is the starting point for conversations. When you watch TV, you are getting a unique experience that you can’t get online,” added Cuban, who also owns the NBA’s Dallas Mavericks and Magnolia Pictures.

Cuban rebranded his HD Net to AXS TV last July and changed the channel’s focus to live events, which is how Cuban believes television will best engage viewers as digital media becomes more pervasive.

“Not even 30% of the U.S. population is on Twitter, and an even smaller percentage is actively using it,” he said. “Those numbers will only grow. By going in the direction that we did at AXS TV, we’ve found a unique solution to start the social-media conversation.”

And that growth, said Cuban, will help both TV and digital to share the wealth.

“If you want to be a part of the social-media conversation that all of your friends are having, you have to have cable or satellite TV to see live events—like those on AXS—sports, awards shows and popular reality shows,” he said.

Deciphering the Digital Space

Many NATPE attendees—including contingents from Shine Group and Alloy Digital/Generate to IAC Corp.’s Electus and Red Bull Media House—are developing content for digital platforms, but what the best routes are to creating true financial hits in digital remains an open question. During NATPE, news broke that the biggest subscription video on demand (SVOD) player, Netflix, is seeking an additional $400 million in financing to acquire content, which came as good news to producers.

NATPE itself is working to get more involved in the digital space, announcing last week that it had started a Digital Advisory Board, chaired by new Guggenheim Digital Media CEO Ross Levinsohn. The board will work to expand the organization’s presence in the digital world, said Rod Perth, NATPE president and CEO, who was overseeing his first convention in Miami.

“NATPE is dedicated to acting as a bridge between content creation and monetization across all platforms,” Perth said. “We believe that by bringing scale and efficiency to the content marketplace, we can connect the linear and digital ecosystem of the Hollywood, international, digital and advertising communities.”

Toward that end, NATPE also is partnering with the Consumer Electronics Show to connect technology to content. And the organization is working with the New York-based Interactive Advisory Board to host an event at this year’s NewFronts, the digitally focused version of the annual upfronts.

That most companies have an eye on the digital space was evident, with NATPE’s overall theme of “Beyond Disruption,” and many of its panels focused on emerging platforms. Even broadcasting legend Larry King was on hand to promote his new Web series, Larry King Now, which is produced by Ora TV (owned by world’s wealthiest man, Mexican business magnate Carlos Slim) and distributed on Hulu.

But even if digital production is part of a content company’s business plan, most programmers still first seek distribution on ad- and subscription- supported broadcast and cable nets.

Companies that are actively integrating brands into much of their content before bringing them to networks such as Electus— which is behind Fashion Star, a show that incorporates the brands H&M, Macy’s, Saks Fifth Avenue, Express and Suave—spent much of NATPE meeting with brands and international distribution partners. Electus executive VP of ad sales Laura Caraccioli-Davis in fact says she met with BMW, Pepsi, Subway and Snapple last week in Miami.

Less Glitter, But Still Business as Usual

Sellers said that while this year’s NATPE felt less buzzy than last year—when Charlie Sheen, Steve Harvey, Katie Couric and Ricki Lake all were launching shows—they did about the same amount of business this year as last. Moreover, they said, all of their broadcast clients were on hand, including representatives from Belo, CBS, Cox, Fox, Gannett, Hearst, Meredith, NBC, Scripps, Tribune and so on. Tribune’s new CEO, Peter Liguori, was making the rounds, talking to producers and distributors about developing original series, first-run shows and other projects for Tribune’s stations and cable network, WGN America.

Another factor that made business at NATPE seem a little slow is that many of this fall’s major new syndicated shows—CBS Television Distribution’s The Arsenio Hall Show, Sony Pictures Television’s Queen Latifah, Warner Bros.’ Bethenny—were sold months ago. So while Hall showed up to meet station affiliates and be feted at a party in his honor, neither Queen Latifah nor Bethenny Frankel were on hand.

But Hall did not have a captive audience by the pool, as distributors stayed busy signing deals and shaking hands. Debmar-Mercury’s Mort Marcus and Ira Bernstein said they had done 11 deals on the second morning of the show, clearing their off-FX sitcom, Anger Management, on TV stations. The Charlie Sheen sitcom is cleared in about 70% of the country for a fall 2014 launch in broadcast syndication. Debmar- Mercury now is working on similar sitcom deals—one starring George Lopez, another starring Kelsey Grammer and Martin Lawrence— that still are early in the development process.

Other syndicators did some clean-up at NATPE. Disney/ABC confirmed that Katie, sold to the ABC stations in two-year deals, will return next year, joining NBCUniversal’s Steve Harvey and Trisha Goddard. Neither Twentieth’s Ricki Lake nor CBS Television Distribution’s Jeff Probst are expected to return.

Twentieth announced that its rookie entertainment half-hour, Dish Nation, will return for season two, and CTD noted that its new conflict-talker, The Test, is now cleared in 80% of the country. Smaller shows such as America Now, OK TV and RightThisMinute all signed on with distributors to expand their footprints, with Trifecta handling America Now and OK TV and MGM taking on RightThisMinute.

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