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Linear TV Under PressureIn Newly Customized Era| @jlafayette
Contraian analyst Richard Greenfield of BTIG Research seems to be participating lately in major media stories as much as he is evaluating them.

Greenfield was asked to act as a questioner on Netflix's unique earnings video conference last month, getting a somewhat unprecedented chance to elicit unscripted answers to unscreened questions. Last month, Greenfield suggested ways that Time Warner Cable could increase its leverage in retrans negotiations with CBS--by promoting Aereo as a way to get CBS' signal and by threatening to sell the net's channel position to the highest bidder--and the MSO appeared to adopt his ideas.

Even during earnings season, Greenfield tends to look big picture, focusing less on changes in quarterly profits and more on how tech shifts will affect the media business. "We're trying to understand where things are going technologically and how that could disrupt a tide that has basically lifted all boats," he says. "You could have invested in any company in the sector in the last couple of years and made a lot of money."

Greenfield spoke with B&C business editor Jon Lafayette about changes in the business. An edited transcript follows.

On the Discovery earnings call, you asked about how consolidation in the cable distribution business might affect programmers' sub fees. What are your thoughts on how that will play out if distributors start combining?

I honestly agree with David [Zaslav, Discovery CEO]: There are going to be some near-term issues related to [fee] resets. On the flip side, it seems like with Google Fiber and Intel we're going to have more distributors, and greater competition is going to be great for sub fees.

Consolidation is also playing out in the advertising agency space. What do you think is the likelihood for consolidation occurring in the programming space?

It's already pretty consolidated, other than Discovery and Scripps. We certainly believe that Discovery should be acquired over the next couple of years. Discovery and AMC, there's no reason for those assets to remain stand-alone.

Should CBS remain stand-alone?

I don't know who would want to own a broadcast business.

The ways technology is changing the television business and the television experience is a big point for you. In the short term, whom does technology help, and whom does technology hurt from an investor's point of view?

I think that's an incredibly broad statement that there's no answer to. There's different levels depending on who you're talking about.

Start with streaming; start with Netflix. There were statistics last week from TiVo saying streaming isn't taking away from traditional TV viewing. Do you buy that, or is Netflix disruptive?

It's not enough to look at Netflix. The world of on-demand activities"”whether it's video, meaning Netflix or YouTube or whether its entertainment meaning Angry Birds--I just think there is increasing competition for consumers' time, which is going to put live linear television under pressure. But I don't think of it from the standpoint of Netflix itself as the be-all and end-all in the crushing of television. It's just emblematic of a much larger change, what we call the personalization of entertainment.

So if you're in the entertainment business now, what's your defensive strategy to protect your consumption?

Make better content. The middle is going to get hurt. The fat middle is under pressure.

But isn't every company going to have above average, average and below average on its schedule?

You can't assume we're going to be in a linear TV world.

Are we?

I think we're in this real interesting point in time where technology and media are colliding and we're moving from a time when a lot of entertainment was a shared experience-everyone sat around the television and watched TV together. Now, everything is becoming so personalized. When you think about Time Warner Cable or Cablevision video apps, the TV's just an app next to everything else in the app store. That's a level of competition that the media companies have never had to face. It's not everywhere today, but you can see the clear signs of this activity growing by the day and presenting real challenges. It's great for companies that make great content. I think that's why companies like Disney have gone out and done deals [with] Marvel and more recently LucasFilms to try to own some of the world's most iconic intellectual property. But you have to wonder for companies that are not as well positioned, what happens.

Speaking of Netflix, you were a participant in their earnings call. I assume they approached you?

They invited me.

What was your initial reaction to that?

The idea of increasing the independence of their earnings process seemed great. In the prior process, they were able to screen the questions and know what was coming and prepare and choose which questions to take and decide whether or not to take follow up. So the ability to have me and [CNBC reporter] Julia [Boorstin] determining what questions got asked-they didn't see any of them-and the ability to keep hammering them on questions that we didn't feel like we got adequate answers to with natural follow ups was something you never got the opportunity to do before.

How do you think it played out?

I wish it was longer but I think the reality of not reading from scripts, not reading from talking points, no one whispering in their ears and being able to see their facial expressions was a meaningful step up for investors. The biggest criticism I received back is that I would have loved 20 more minutes of the conversation. But that's not my decision.