Michael Eisner: Web Video to Surpass TV

Michael Eisner, the former Walt Disney Co. CEO and current investor in Veoh, said content creators shouldn’t wait for advertisers to jump into Web video.

At a small but packed Helen Mills Theatre in Manhattan, Mr. Eisner said that sites like Hulu that repurpose TV fare for the Web are the middle game, not the end game. Mr. Eisner believes that the maturing industry will be led by distributors who can navigate the unfamiliar online territory for audiences, letting viewers know when they can find new programming. In time, that programming will also bring in bigger numbers than anything on TV today, he said.

Veoh Founder and Chief Innovative Officer Dmitry Shapiro said he’s surprised by the amount of original programming available online. When he first launched a beta version of his video-sharing site in 2005, he knew this type of content would come—just not this fast.

Mr. Shapiro and Mr. Eisner, founder of the Tornante Company and new media studio Vuguru, were at an Oct. 7 event moderated by Ad Age Television Editor Brian Steinberg. Mr. Steinberg asked Mr. Eisner what works online best so far.

"Sex seems to work. Sports works, news works, politics works. Sarah Palin's working pretty well," Mr. Eisner said.

Mr. Eisner said he sees online video developing like any other broadcast medium.

"You start out with nickelodeons and pornography that everyone pays to go see, and you eventually end up with Ben-Hur. It's the same thing that's happening, and I think people with the foresight are the people that are going to say, 'Even though there's no market, let's jumpstart and encourage original product to be made.'"

Considering the benefits of instant syndication and worldwide distribution, Mr. Eisner thinks an online original with sufficient star power and a limited viewing window will garner more viewers than anything on a major television network.

Once an online original airs that gets 200 million people a week, there will be such an exodus from NBC, CBS, and TBS that advertisers will be lining up at Veoh, and Break and YouTube, Mr. Eisner said.

Mr. Eisner also lauded the benefits of targeted, interactive advertising, maligned the 30-second pre-roll, and declared that television is over—but that doesn't mean it's dead.

"The movie business didn't end when TV came in. ... Broadcast television isn't going to be watched by 300 million people, it's going to be watched by 50 million, which is okay. It's still a big business, and it could be the biggest business for the next three decades."

When asked how much he'd wager on his predictions, Eisner didn't put up any hard figures.

"You can be too early, or too late, but somebody is going to be the big winner. And it's not going to be just one person. It's going to be content people, it's going to be a distribution platform with staying power. ... It's about discovery, it's about community, it's about interactivity."

— Josh Cohen, Tilzy.tv

(Editor: Baumann)