Big Media Seek 21st Century Business Models

Media moguls at this week's Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy.

With difficult credit markets and an unclear future, talk of dealmaking has been at a minimum this year. Yet there has never been a more important time for media conglomerates and their financiers to act and adapt to the Internet age. The mood at the conference was described as "somber" and "very bearish" by executives. While the recession was a key reason, the other was the uncertainty over how future profits can be made from distributing news and entertainment online and across devices like smartphones.

"We're not using long-form content on the Web because it's not clear to us that's the way people want to consume content, said David Zaslav, chief executive of Discovery Communications Inc, which owns the Discovery Channel. "But also the business model isn't there yet, so we're taking it slow," he said in an interview on the sidelines of the event organized by boutique investment bank Allen & Co.

In the late-night bar at the Sun Valley Lodge, from which the press was banned, most of the discussions were around the issue of free versus paid content, said one senior executive who asked not to be named as his conversations with other executives were private. The challenge is how media companies can keep alive the lucrative cable business model at a time when consumers are increasingly used to getting content for free online. Cable operators pay affiliate fees to cable networks for their programming, and both share advertising revenue.

Plans such as Time Warner Inc's "TV Everywhere" and Comcast Corp's "On Demand Online" seek to preserve that business model by offering cable shows on the Web to authenticated, paying cable TV subscribers.

"Authentication is an interesting intermediate step and is something that we're looking at," said Zaslav. The conversations about TV Everywhere are heating up. Google Inc CEO Eric Schmidt confirmed to reporters that he has had early talks with Time Warner about the possibility of getting paid cable shows up on YouTube. But he did not elaborate.

TV VS PRINT AND MUSIC

Television studio executives do not want to repeat the experience of their colleagues in the hard-hit newspaper and music businesses, and are worried that consumers will expect TV shows, movies and all professional programing to be free. Hulu.com, owned by News Corp, NBC Universal and Walt Disney Co, offers broadcast TV shows and movies for free on the Web, but there has been talk at Sun Valley among executives of introducing a paid content model.

Wired editor Chris Anderson argues in his book 'Free' that many companies, with media at the forefront, could build bigger and better businesses around the notion of giving away their content for free. Many executives in Sun Valley would not agree. 'Free' -- supported by advertising -- is not a new concept. After all, broadcast TV is free but its dominance has been eroded by cable channels and its future as an advertising outlet is bleak.

Newspapers owned by News Corp and others are fervently examining news-bundling pricing models to seek ways to get users to pay to read news online. One consideration may be to bundle different properties along vertical lines, such as business and sports news, for a monthly fee.

Far from free, what media moguls would want to preserve on the Web and mobile platforms is the dual-revenue stream from subscriptions and advertising. "The big thing for these guys is how do you come up with that dual revenue streams online," said Jeremy Alliare, chief executive of Brightcove, an online video company that partners with many major media companies. "Cable TV is a part of that but I think it's a broader industry discussion."

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Source: http://tech.yahoo.com/news/nm/20090711/wr_nm/us_sunvalley_media_5

Tags: Hulu, News Corp, NBC Universal, Walt Disney Co, YouTube, Brightcove, Cable TV, Comcast, Chris Anderson, Wired, Global Blog Network, Paid content Model, Media moguls, Sun Valley conference,

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Clean Coal Gets New Backing

The Department of Energy’s flagship “clean coal” power plant has a new lease on life, thanks to a billion dollars from last year’s stimulus package. The plan to build the plant, which will be the first large plant to capture and bury its carbon dioxide emissions in the ground, was scrapped by the Bush Administration in early 2008.

Rekindling the FutureGen project is a signal that the Obama Administration and Energy Secretary Steve Chu won’t just be supporting wind and solar power, but some new fossil fuel technologies, too.

“This important step forward for FutureGen reflects this Administration’s commitment to rapidly developing carbon capture and sequestration technology as part of a comprehensive plan to create jobs, develop clean energy and reduce climate change pollution,” said Steve Chu, Secretary of Energy, in a DOE statement. “The FutureGen project holds great promise as a flagship facility to demonstrate carbon capture and storage at commercial scale. Developing this technology is critically important for reducing greenhouse gas emissions in the US, and around the world.”

Carbon capture and sequestration is a hotly debated technology among energy and climate experts. Some environmental groups argue that burying CO2 isn’t feasible in the near-term and merely acts as a rhetorical front for the fossil fuel industries. On the other hand, the Intergovernmental Panel on Climate Change, the U.N.-backed body of climate researchers, see it as a major part of the long-term energy future. If it works and it’s cheap — two huge ifs — it would provide low-carbon power 24 hours a day, seven days a week.

The Department of Energy, under Chu, had already announced a separate chunk of $2.4 billion for carbon burial, bringing its total support for the tech to $3.4 billion. Politically, it’s a popular “green” technology in the coal states, particularly in the South, where renewable energy resources are more limited than in other areas of the country. And if it works really well, it’s possible that biomass could be burned, which would actually pull carbon out of the atmosphere.

The carbon burial process is geologically complex. You need just the right combination of layers of rock: one porous rock layer, such as sandstone, that can contain the CO2, and then a layer (or layers) of impermeable caprock, such as shale, on top of that to prevent the gas from escaping back to the surface. Just capturing the CO2 out of a mix of other molecules is difficult, too. It takes highly engineered materials that selectively capture CO2 and release it on command. The high-tech nature of both of components of a carbon capture and sequestration plant have soured some utility executives on the technology.

One major problem is that no one has actually tried to bury CO2 in huge quantities, or as industry folks would say, at scale. Without real-world testing, it’s hard to know whether it will be possible to scrub the CO2 from our coal plants at a reasonable cost.

The 275-megawatt FutureGen project has long been intended to be that real world laboratory. First announced by President Bush as a $1 billion project in 2003, it was supposed to prove that coal power plants could effectively capture and store their greenhouse gas emissions underground. The project advanced slowly, though, and its total cost is now estimated at $1.8 billion.

While Chu’s words were a strong indication that the project has his backing, the future of FutureGen is not entirely assured. The DOE and the collection of corporations known as the FutureGen Alliance will take another look at the feasibility of the project in early 2010 before truly moving forward.

Source: http://www.wired.com/wiredscience/2009/06/futuregen/

Tags: Clean coal, geologically complex, FutureGen Alliance, DOE, US Department of Energy, CO2, Wired, Obama Administration, Energy Secretary Steve Chu, Bush Administration, Global Best Practices,

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