viacom ceo edward horowitz

7/28/2019 Viacom CEO Edward Horowitz

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t's not often you get inside the office

of someone in charge of television.

Not television programming, not tele-

vision business, not even television

technology-just television. There is,

after all, but a relative handful of people occu-

pying a position to say, "This is what it's gonna

look like," and then steer the programming

people, the business people and the technology

people in that direction

Edward D. Horowitz is one

of that handful. As chairman

and CEO of Viacom Broad-

casting-one of the four divi-

sions of the conglomerate Via-

com International that owns

Paramount Pictures, Show-

time, MTV, Nickelodeon and

much else-Horowitz, 46, is

in charge of making sure the

company keeps up with

changes in society. From who's

watching Rcn €t Stinrpl, 10

how we read CD-ROM man-

uals, to the reasons why we

channel-surf, Horowitz has to

anticipate the curve and react,

or risk his company's obsoles-

cence. As Viacom prepares a living experimentin California's Castro Valley-site of an interac-

tive cable-TV/computer field test-that means

walking a minefield strewn with the bodies of

eight-track tape and Cartrivision-format VCRs.

It also means-despite his Columbia Univer-

sity MBA and a respected, 20-year career in

cable and broadcasting-that Horowitz has to

be both a visionary and a carnival barker. A

salesperson, first and foremost, he unapologet-

ically espouses the gospel of giving customers

what they want, or thlnk they want, or can be

convinced they need. Refreshingly candid, he'll

probably be proved right with his plans and pre-

dictions of upcoming neat gadgets and gosh-

wow capabilities. Of course, for every one of

those gadgets and capabilities, a price is paid,

either on a monthly bill or in terms of civil lib-

erties. Once your private-channel choices are

made public to marketers and others with lists

of what you download from the cable-company

computer, your TV may be transformed into a

ntt'trtitor of your viewing and

shopping activities.

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what are you workirrg orr

teclnologically?

Ed Horowitz: \We clearly

are a programming and entertainment companyfirst. \We develop content. I use the word "con-

tent" versus programming because in the world

we're migrating into, which is the computer

environment, programming means something

different. The same with "software." So we cre-

ate one-hour and 30-minute content for tradi-

tional television distribution, or we stack prod-

uct togethqr along with other people's product

and create a network like MTV or Nickelodeon.

Ve are now looking at changing the

paradigmof programming. The first iteration of

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that is the development of games. Ve're taking

content and characters that have been devel-

oped on our networks and shows, and using that

as the basis to create spinoffs like the Rocko

game fbased on the Nickelodeon animated

series Rorkot Modem Life).

AYI: Acnally, that doesn't sound uery reuolu-

tionary. People have bcen making games out of

pLtp-culture characters since Li'l Orphan Annie.

EH: No, I would say it is probably not

revolutionary. I mean, television isn't revo-lutionary, but then MTV came along and

changed television. So there's an element

of, "Are you doing something radical in tech-

nology" or, "Are you doing something

radical in content?"

AYh Okay, thereCastrtt Valley: Arc yttrtdoirrg sonrctling radical in techrroktgy, ()r are y()tr

doing something radical in content?

EH: Castro Valley is a community south, and

a little bit east of San Francisco. It's a pretty

good reflection of the overall U.S. demo-

graphic, and it has a cable system we've rebuiltfrom scratch over the last two years. Ve've

applied the latest in communication technol-

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EH: No, it's not pay-per-view. You'll pay for

themovies as you view them, but pay-per-view

typically is Imovies starting at] prescheduled

ftimes]. Video-on-demand is at 3 in the morn-

ing, or 2'47 in the morning, or 11'16 at night.

You can pick any title out of a library, and it'llstart at the press of a button. You will have

VCR functionality, so you can start it, fast-for-

ward it, rewind it, until you're done watching

it, and then it goes off.

AVI: I gather consumers don't like the term

"pay-per-uiew"?

EH: It's probably not a great term to use. lt's

not a very consumer-friendly category, and part

of it's in the name.

AVI So you're calling it "uideo-on-demand"?

EH: Ve're going to call it something else.

I don't know what yet. One other issue is,

"Vhat bill does it appear on?" Because ifyou're already paying $:o to $+o for a cable

bill and then see another $25 worth of on-

demand-content bills, how are you going to

feel about that? Probably not too good. So

we're taking a look at allowing consumers to

use their fcredit or charge] cards and have itautomatically go to the card account.

AYlz What else do you haue at Castro Valley?

EH: Ve've built in functionality so that ifyou want to watch shows that are coming up

in the week and you're not going to be home,you just have to push a button fon the set-top

cable boxl, and it will inform your VCR to turn

on and record the event, assuming the VCR is

on and there's a tape in it.lilZe're also testing a "virtual VCR." Let's say

you're home and you want to watch something

that appeared over the last 72 hours. You should

be able to call it up. Vhat we're going to try

to come up with is a list of channels in which

we can get the rights-rights are the big issue-

to let the consumer dip in and watch what he

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missed. Rlghts are going to be our biggest chal-

lenge in all of this. However, there are certainstations that lend themselves to this pretty

well, MTV and Nickelodeon, we own most of

the rights. Showtime is another one.

LYlz This sounds like a take on the "interac-

tiue teleuision" we'ue all heard so much about.

What do you think of the term?

EH: It's like "500 channels"-it doesn't

mean anything anymore. The terms "interac-

tive television" and "new media" have lost all

meaning. "lnformation superhighway" has

lost all meaning. In my view, the act of get-

ting information when you want it is interac-

tive television, that's one level. The second is

being able to order what you want when you

want to watch it-to go to a library of con-

tent. Or perhaps interactive TV is really per-

sonal TV where I generate content as opposed

to viewing content.

AYI; Cenerate content?

EH: Vhere there's a camera in my house and

I generate content and I send it to someone else

and we have a conversation. Just like you being

on a computer forum, where you get on and talk

to people by typing in your messages.

AYL In the recent movie VithHonors, a col-

lege student's thesis is based on the idea of "elea

tronic democracyi' where we'll uote and interact

with lawmakers uia computer and cable. Do you

see this ever happening?

EH: You have to ask, "does it offer the con-

sumer something he wants?" Right now, 900-

line numbers provide the ability to vote finpolls]. Clearly, the environment already sup-

ports that. But it does not offer an environment

where you can speak, nor does it offer an envi-

ronment where your opinion is typed in at

home and recorded that way. It still is very

much a Yes/No environment.

Also, up to now, these kinds of votes have

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been interesting, but didn't have any defini-

tive effect or consequence. lf the consumer

could participate in his local city council

meeting and the council said, "Ve're gonna

vote based on the votes that come in," thenthere's a consequence. But I have a feeling that

won't happen. The council may say, "Look,

we understand what the majority of the pre-

sent viewing audience feels, but we don't

think that represents our constituency, and

we're voting on behalf of them and not the

views of our specific, moment-in-time view-ership." There's room for voter abuse, and for

a kind of immediate, emotional response that

may or may not be well thought-out.

AYlz With uideo-on-demand and uirtual

VCRs, are uideo stores going to be obsolete?

EH: No. First of all, it's going to take 15

years until the distribution networks have

rebuilt themselves to even consider offering

these services. And I think the market willexpand, as opposed to share-shift. There are

people who don't now Jro to video stores. In

fact, only 20 percent of U.S. households go tothe video store. \il/hen HBO was created, we

found that the audience that watched HBO

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throw it away-they'll just use it for watch

ing home movies.

AYlz Recordable u;i deodiscs ?

EH: I think it's near-term, within the next

few years. It may not be a disc. $/hat we're

talking about is a digital storage environ-ment. You may not be pressing a disc, just stor-

ing Ipictures and sound] in RAM

IRandom Access Memory].

The biggest challenge we have is com-

ing up with a navigation system that

allows a consumer to look up what's on

and when it's on, and get to where he

wants to go, right now. The consumer no

longer has patience. The fax machine is

pervasive, there's no longer a day or two

for a letter to get to you. Between e-mailand the fax machine, the world has

become urgent. Cellular phones have

made contact with an individual virtually

ubiquitous. Phones in airplanes-rightnow it's [mostly] one-way, it's going to

evolve to two-way. The sense of

urgency-and the ability to respond to

that sense of urgency-will be the funda-

mental success factor of any business

going into the next century.

AVI: TTris all makes cttnsumers sttwtd

itfantile-"l want it and I waut it rtrtLtt."

Is that troubling?

EH: \7ho am I to judge what the con-

sumer wants? He's my customer. And lf

I'm going to succeed, I'm going to give

him what he wants.

AYI Well, "he" is us.

EH: And I have the same demands.

Vhen I turn on that light switch, I want

the lights to go on right now. Vhen I

pick up that phone, I want a dial tone

right now. And just as we have things

that have become what we term "utili-ties" Isuch as telephones], that's where

we're headed. Cable in the home, it used

to be a luxury, now it's a utility. Com-

puters, still a luxury, will evolve into a

utility. It's just a matter of time. $

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viacom ceo edward horowitz

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