Friday, February 12, 2010

What’s Up, Doc? Terry Semel on the Future of Media

"The gatekeepers have lost their keys," former Yahoo! and Warner Brothers head Terry Semel told a Stanford Graduate School of Business audience. Microsoft, Sony, Comcast, Time Warner, and other giants have all expanded into multiple business areas, while shifting and sorting their priorities.

STANFORD GRADUATE SCHOOL OF BUSINESS —With a career that has spanned Hollywood and Silicon Valley, Terry Semel is still "the man" when it comes to knowing what's hot and not in the global media industry. Speaking at Stanford Graduate School of Business, he said that with the continued blurring of boundaries between media content and distribution, plus new possibilities on the internet, it's never been a more stimulating time to be in the business, no matter what the angle.

The once oligopolistic landscape of formidable movie and TV production companies and distributors has shifted entirely, the former chairman and CEO of Yahoo! and Warner Brothers told an audience of eager listeners in a keynote address at the 2010 Future of Media Conference. "The gatekeepers have lost their keys," he said, noting that more and more technology and production outfits are vying for seats at one another's table. The likes of Microsoft, Sony, Comcast, Time Warner, and other giants have all expanded into multiple business areas, while shifting and sorting their priorities.

As an executive who started his career in sales and marketing, Semel said there were huge opportunities to garner ad revenue on the internet –– if only companies that offer free media programming, like Hulu, would have some chutzpah. "If I watch the same show on TV, there are ads," he said. "So why does internet media have to be ad-free? Giving things away for free is a terrible business and won't last." Requiring viewer subscriptions is one way to monetize content, he offered. Another is to charge fees to those who garner new audiences and benefit in other ways by putting applications on your network. "This could be the answer for Twitter and other social media companies," he said.

As to how to break into the dynamic and multifaceted media business, Semel advised: Accept any job that will get you in the door, and then put your head down and work hard. "Media companies tend to promote people from within," he said. "Have the attitude that you're willing to do any task as long as you’ll learn more." He also warned that a career in movies or TV is not for the feint of heart. "It's not a 9-to-5 job," he said. "People spend their whole weekends reading scripts." And, he laughed, be sure you like working with "bright, highly hysterical people."

Following such proscriptions is, Semel said, how he himself rose to the pinnacles of media mogulhood. Starting off as an accountant, he jumped at the opportunity to enter a sales training program offered by Warner Brothers. He initially spent his days on the road as a movie salesman, talking theater owners into buying what hopefully would be the next box-office hit. His sales prowess caught the attention of other entertainment companies, including CBS-Cinema Center and Buena Vista, a division of Walt Disney, where he took on sales management positions. In 1975, Warner Brothers lured him back, putting him in charge of national distribution, and grooming him to take over the company. Within five years, he was named the company's president and COO, and 12 years later he became co-chair and co-CEO of Warner, sharing the duties with Robert Daly. The duo turned Warner Brothers from a successful movie studio into an entertainment giant and brand name.

After a 20-plus-year tenure with Warner, Semel decided it was time for a change. Yahoo! approached him to help turn the then-flailing company around. Seeing in Yahoo! the early challenges he had faced at Warner Brothers, Semel took the offer, becoming CEO in 2001. By 2004 the firm's annual revenues had doubled from $717 million to $1.4 billion while stock prices rose to more than $40 per share.

Having stepped down from Yahoo! in 2007, Semel still keeps his finger on the pulse of new developments in the online, film, TV, game, music, and other markets. "It's a more exciting industry than ever before," he said. "The opportunities are massive because the audience is massive."

The conference, including panel discussions and networking programs, was organized by the business school’s MBA Arts, Media, and Entertainment Club.