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Milken Institute Global Conference Highlights Through the Eyes of Todd Harrison

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Lessons learned from America's left coast.

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We're no strangers to events in the 'Ville; human capital is the heartbeat of our community and we pride ourselves on being a reflection of the company we keep. What began as a Crested Butte Mountain Mingle in 2004 evolved into legendary summer soirées in Ojai and Vail. The Critter's Choice Awards arrived soon thereafter, followed by Festivus Benefits in 2007, 2008, and 2009 to benefit The Ruby Peck Foundation for Children's Education.

There have been additional gatherings -- regional Minyanfests, which will soon begin anew -- as well as other conferences, confabs, and off-sites. I've spoken at many events and attended others, all with an eye towards absorbing the atmosphere, soaking in the energy, and fingering social mood. I've long believed good things happen when you get smart people in the same space. That theory was put to the test this week.

I've heard incredible stories about the Milken Institute Global Conference over the course of my career -- the panels, discussions, the incredible networking -- and gladly accepted an invitation when it was offered a few weeks back. My partner Kevin encourages me to "get out of the office and work the room" but I've traditionally preferred my conditioned position behind eight screens of flickering ticks.

I took a slew of notes, mental and otherwise, with hopes of sharing some wisdom upon my return. What follows are random perceptions that left a lasting impression; the scribbles that made their way across the country. While my intention is verbatim accuracy, we must allow for a margin of human error. An A.D.D. person in a sensory overload environment is akin to a moth in a light bulb factory and there were a lot of bright lights in that big city.

There were many worthy panels featuring thought-leaders from around the world. I could only attend one at a time -- these were often tough decisions -- but the fine folks from the conference did a remarkable job of covering it all. For the full experience, I will point you to the video archives of the Milken Institute, which are chock full of wisdom and foresight.



Minyan Musings, April 26th, 2010

I've been known to share some Random Thoughts. As I furiously absorbed the spirited discussions, I did my best to note of some standout comments, as well as my internal observations. Below, please find them, in no particular order:
  • During the opening panel, From Recession to Recovery, the audience was polled and 66% of all attendees opined that the $12 trillion of American net worth (lost since the beginning of the crisis) won't return until 2013 or later.

  • Mohamed El-Erian seems particularly Minyanesque, not because we share similar points of view on the state of the world and the attendant, necessary, and eventual culpability, but the manner in which he expresses his opinions. He sees "cyclical tailwinds into structural headwinds," and believes the next three years will be a very interesting period. Emerging markets now have credit risk as opposed to the traditional interest rate risk. We must collectively adapt to that secular shift.

  • Throughout societal spectrum, stateside and abroad, upwards taxation and austerity measures are ultimately inevitable. This theme was touched on in a recent Minyanville column, Ten Reasons Why This is Not in a Bull Market.

  • "People hold on to the old paradigm until the new paradigm is self-evident." That quote resonated, particularly as it pertains to the denial, migration, panic continuum we often reference in the 'Ville.

  • Banks are sitting on $1.5 trillion in excess capital, yet lending down 7.5% in 2009. And we wonder why there is such a chasm between the have's and have not's?

  • Mark Lasry, Chairman and CEO of Avenue Capital Group, was very bullish -- and very right -- at last year's conference and remains constructive for the next year or two. That time horizon was interesting to me, as it happens to jibe with the corporate credit cycle).

  • Ken Griffin, Founder and CEO of Citadel, agrees -- something must be very wrong for the economy not to continue to perform.

  • Steve Forbes, Chairman and CEO, Forbes Media, believes Israel won't let Iran get nuclear capability. That potentially may be the "big event." (This is consistent with the conversation Steve and I had last year.)

  • Employment was the single biggest theme of the conference, in regards to the structural and political ramifications. The panel predicted unemployment, one year out, will range from 8% to 9%. El Erian offered that the real measure -- underemployment -- will dip from current levels of 17% to around 14%.

  • On the "Global Risk" panel, Shaukat Aziz, the former Prime Minister of Pakistan, noted that terrorism evolves from hopelessness and exploitation. The lack of income, a desire for a voice and the freedom to choose are drivers of that daunting dynamic. He spoke to the need for global leadership.


  • Other items discussed included the potential for "cumulative and inter-related" cross-border friction, a decline in the standard of living for future generation on a global basis, and the world pushing risk further out on the time continuum (another mainstay theme in the 'Ville).

  • The optimism stemmed from our ability, one and all, to learn from our past which -- as Minyans know -- is the only difference between a lesson and a mistake.

  • Greece is a symptom, not a cause. Look for Portugal, Spain, and potentially the UK to follow suit. The US, it was noted, is not far from Greece in terms of our debt ratio (although we have a currency lever that others don't). This, too, should be old hat for Minyans.

  • This panel featured a spirited discussion between Ted Turner and T. Boone Pickens on America's Energy Future.

  • "Immigration has leapfrogged energy reform due to Harry Reid's electoral needs in Nevada". T Boone Pickens.

  • The next panel I attended was What's next for Wall Street? (Please note the question at the 69-minute mark).

  • Regulatory reform will lead to the removal of outliers; less risk, but more confined reward.

  • Look for "regulatory arbitrage," stateside and abroad, as players identify loopholes in the system; this introduces "tail risk" for future generations.

  • Greed wasn't just the prevalent in the end-users of the risk equation; it was supplied and fostered by financial institutions.

  • Global hedge funds are beginning to get back to their high-water marks.

  • Is an unforeseen risk the correlation of hedge fund strategies, an event perhaps triggered by regulatory reform? Other risks include counter-party (derivative) risk, pricing power risk (deflation) and populism (social) risk.

  • Positives include mergers & acquisitions coming back, corporate America is de-leveraged (for the time being), headcounts are already reduced and productivity on the rise.

  • An excellent lunch panel on the first day: Global Overview.

  • The assets under management by the attendees at the conference equal roughly 18% of global GDP. Think about that for a moment.

  • Per capita income disparities. Mexico $10k/per, China $1-2k/per, India $1K/per.

  • We're seeing the highest foreclosure rates since the Great Depression and unemployment at the highest level since 1983.

  • Vicente Fox, former President of Mexico, offered that drugs and crime is a global problem and human capital is a global solution.

  • We risk a leadership void for the next generation, particularly given the complexities of global governance (G20).

  • 10 necessary solutions for next 50 years: democracy, disease, education, energy, the environment, food, population, poverty, terrorism/war and water. Most of these, it was noted, can be solved by energy solutions and education.


Minyan Musings, April 27, 2010

With a full day under my belt, I was jazzed to dig in for a second stretch of intellectual agility and seasoned acumen. As a firm believer that true education resides in the residual grist of variant views, I found myself racing to panels and fostering relationships in the hallways. Minyans should know we were well-represented; many took the time to proudly proclaim they were part of the Minyanville community. It was humbling and heartfelt in one fell swoop.

As I continue to channel these vibes -- I feel like a cross between a UHF antennae and Andy Dufresne after he crawled out of that river -- please remember that I've done my best to honor the accuracy of the speakers. For the full-on Milken experience, and the quote-unquote, I highly recommend chewing through the hours of video content on their online platform.

To that end, I would be remiss if I didn't offer serious snaps to the staffers at the conference. As someone who has thrown his fair share of shindigs, I know how much work these types of events entail. The fact that it sailed as smoothly as it did speaks to the elbow grease behind the scenes. It was very impressive, soup to nuts, and that effort needs to be recognized.

On the content front:

  • The Breakfast Panel theme was the US Overview: Main Street Waits for its Rally.

  • Ron Bloom, Sr. Advisor of the US Treasury, offered that the odds of another Great Depression are not zero but "way, way reduced."

  • Michael McCallister, CEO of Humana, Inc. (HUM) shared that healthcare is a driver of inflation and, more importantly, obesity trends are alarming and will be a major issue for healthcare costs going forward.

  • John Engler, CEO, National Assoc. of Manufacturers, offered that productivity is soaring, efficiency is on this rise. This speaks to one of our 2009 Themes, The Employment Conundrum, when we offered:

    While it's no stretch to assume a further uptick in unemployment -- remember, it was 25% during The Great Depression -- the ironic twist is that those with jobs will also feel the pinch. Expect relative pay cuts, rather than salary bumps, to be a central theme this year despite folks working twice as hard to absorb the productivity chasm.

  • David Simon, CEO of Simon Property Group (SPG) was surprised the recovery is as robust as it is and wonders how long it will last. We need to see job growth to sustain the consumer, it will take "quite some time" and commercial real estate is still not out of the woods. Higher rates will negatively impact that sector. If and when we see another leg lower, the losses will impact the economy. It's too early to declare victory for the consumer or commercial real estate and we need to be careful setting consumer agendas. We need to tax internet purchases the way mom & pop shops are taxed.


  • The government support of financial institutions helps commercial real estate with residual benefit; the hope is to avoid direct government support of that sector.

  • Donald Marron, President of Marron Economics LLC, believes that jobs are the fly in the recovery ointment and opined that "the labor market is not commensurate with the recovery." He's less concerned with the tail risk of another Great Depression but wonders if we're Japan or on our way to a robust recovery. The "hope" is for the second scenario. Stimuli slack needs to be soaked up by job growth and we need to slow down the anti-corporate rhetoric.

  • There are four potential solutions to debt problem: inflation, growth, spending, revenues. Each is inherently flawed in isolation; we must identify a workable mix.

  • We are not prepared for the pension mess; we can't pay our promises. We need to rethink policy, such as Medicare. This, too, is consistent with our 2010 themes (and, for that matter, our 2009 Themes as well).

  • I stepped into the next panel, which was awesome and for purposes of the 'Ville, particularly relevant: Developing your brand for online and mobile audiences.

  • Pre-existing behavior is the key to furthering a social trend; spirit is a necessary tailwind.

  • "Friend casting" will overtake Google (GOOG) for personal search in the years ahead.

  • The "message" matters; context is key, reach is critical and you must leverage the masses.

  • There is a massive migration to apps; mobile and tablet. The convergence is here: video traffic, both online and mobile, is a game-changer -- the trend is still emerging. Future franchises must build a video ecosystem and leverage across brand categories.

  • Roughly $70 billion spend on video advertising last year.

  • A click is a digital footprint; data is recycled back to individual behavior recognition patterns. This can be outsourced -- that technology is open-source. Why hire an agency when you can ask the world for creative solutions?


  • Advertising buys are being targeted to a segmented, desired audience rather than the traditional "home page" buy; entirely more efficient.

  • Viral, word-of-mouth platforms have organic and powerful bases. The "input-output" model is here; device agnostic content will flourish.

  • David Liu, Head of Digital Media and Internet at Jefferies & Co (JEF) offered that properties that tap "the value proposition vs. the value gap" with social utility and a segmented market approach are desirable.

  • There is an emergence of category brands "focused on helping people" with a loyal following (this struck a chord for obvious reasons).

  • Online video advertising market is $1 billion w 15-20% growth.

  • There is a huge opportunity to create a "defining brand," particularly with 80M-90M millennials coming, who will eventually rule the earth.

  • Michael Steib, director of emerging platforms and TV ads at Google, "If you make good content, people will enjoy it and you'll make money; it's the same as in the last 70 years."

  • "Don't underestimate the value of talent."

  • Advertising and marketing brands can be the content. There is an opportunity to immerse the message. If it adds value to your life, the origination doesn't matter.

  • Brand trust is the single biggest determinant of sticky and successful websites and platforms.

  • How do you build trust? Be human, it's a rarity in media for a brand to speak back to their audience. This is a huge point; brands need to have conversations with their community in real-time. Listen intently to your audience feedback. If there is a visceral reaction, hear it.

  • What do you think about that?

  • Just as you can build an online brand quickly, so too can you destroy it. Small businesses that don't pay attention to emerging technology -- Yelp, Google Local, etc -- are "nuts."

  • The next panel I attended? The View from Venture Capitalists.

  • IPO markets typically follow the stock market by one to two quarters; the current IPO market is less than half of the pre-2000 boom. Structural change or reversion to the mean?

  • Brook Byers, Partner at Kleiner Perkins Caufield & Byers, offered that this recession is different; it's not a normal business cycle. 2008 and 2009 were expected to be great IPO years in Silicon Valley.

  • Normal response is to protect existing investments vs. search for new opportunities on roughly a 50/50 ratio; that shifted to 90/10 (existing to new).

  • Kate Mitchell, MD, Scale Venture Partners and Chairman-Elect, National Venture Capital Association, offered that the key theme continues to be jobs. (Are you noting a trend here? This issue was not only prevalent throughout the conference, it was consistent across a multiple of topics and industries).

  • 21% of GDP is from venture backed companies; growth rates twice that of traditional organizations.

  • Industry is being right-sized after the 100-year flood. At the peak of the bubble, there were roughly 600 VC funds; that dropped down to around 75.

  • Reduced capital will drive target venture returns. It's a great time to build, although it doesn't feel that way.

  • John Albright, MD JLA Ventures and BlackBerry Partners Fund, sees a handheld boom sequel that will be bigger than the first. Mobile growing three times as fast as desktop and content providers are scrambling. We need to feed the ecosystem of mobile computing, "Address the congestion," decrease cost per bit, monetize mobile cloud solutions, note the gaming, and travel secular tailwinds and huge opportunities in BRIC countries.

  • Management teams trade at a premium. There are opportunities to be shrews. 4X returns are elusive.

  • Lisa Lambert, MD, Software and Services, Intel Capital: Three goals for its investments: a strategic fit, financial return and macro profile. Little known fact: Intel (INTC) is eighth globally in software.

  • Entrepreneurs are "external R&D."


Minyan Musings: April 28th, 2010

I walked into the breakfast panel on the final day of the conference as the Grateful Dead's Hell in a Bucket played over the loudspeaker. That immediately put some pep in my step -- and scored some major "coolness" points -- but I couldn't decide if it was telling or cutesy.

The theme for the opening panel, after all, was Reading the Tea Leaves: Investing for 2010 and Beyond.

  • Nick Calamos, President of Calamos Investments, is optimistic that we'll see a productivity led, earnings driven growth cycle. Later in the panel, however, his remarks were more tempered. He wasn't sure if the Euro was going to survive and "nobody in this room under 50 will get social security" as we're rationing health care--the promises of dead politicians will not be delivered." We've seen the socialization of risk and a historical collapse in velocity of money. Expanding government, he explained, results in lower wealth creation.

  • Meredith Whitney, CEO of Meredith Whitney Advisory Group, offered that credit is tight -- if not absent -- for small business and has opened only for corporate America (which effectively rolled out obligations). $1.4 trillion in credit lines have been cut from the system and record numbers of small businesses are closing. How long can the recovery sustain itself? Nothing is more important than the trending direction of the credit markets, she observed. "Liquidity is looking for a home and the greatest risk between loans and default is distance".

  • Thomas Joyce, Chairman and CEO of Knight Capital Group, noted that the complacency was pierced the last few days (this was as the sovereign sequel spread) and expects the market to trend sideways down the rest of the year. Debt service levels are 1-2% of GDP and we can afford that "for now". The dollar will continue to benefit from the flight of the Euro and may not be disaster many are expecting.

  • Patrik Edsparr, Global CEO of Citadel Securities, noted that cost cuts are driving results, fiscal stimulus will turn into a drag, joblessness will drain spending, geopolitics are a real risk, and the markets may be ahead of themselves. Fannie Mae (FNM) and Freddie Mac (FRE), he opined, are the "black holes of bailouts."

  • There's been $20 trillion in global market cap added since the low; that's real money.

  • Corporate America is looking outside our borders for growth/consumption; global companies will out-perform.

  • Risks? Too much debt will lead to trade wars (protectionism) and monetary events (higher interest rates).

  • Stimulus 3.0 and 4.0, as well as more quantitative easing, is sitting in Uncle Sam's back pocket.

  • Employment trends huge for housing and spending. 20 million state and local jobs are being cut and 44 states are under-funded. "Every state looks like Greece."

  • We need proactive solutions coming out of Washington and clarity on regulation and tax policies. Until then, there will be reticence on the part of consumer. How can investors trust market? Where is the job creation? It may not be on the radar yet, but there is a structural deficiency in our job market. For instance, many home builders won't return to work and they won't change jobs.


I was particularly interested in the next panel, Online News: The Frontier of Financial Journalism. I didn't take many notes as I was active in the discussion and wanted to cut to the chase. With the proliferation of online content and a perceived "hierarchy" of journalists, bloggers and message board posters, I wanted to know if credibility, accountability and responsibility devolve as we scale that curve.

Minyans know we don't "do" acrimony in the 'Ville. It's not how we roll and it doesn't move the needle towards a positive place. Still, the stage for healthy debate was set as Felix Salmon, a well-known blogger for Reuters, was on the panel. As some of you may know, he offered an unflattering assessment of the 'Ville last month while referencing another topic. And I quote:

"…the beating heart of Clusterstock is the dynamic duo of Carney and Joe Weisenthal; now that he's fired Carney, Blodget must know that he risks losing Weisenthal as well. If he loses them both, he'll rapidly become something like 24/7 Wall Street or Minyanville: a site with lots of low-quality traffic and generally uninspiring editorial content."


It's no secret we pride ourselves on truth and trust in these parts -- as my grandfather taught me, all you have is your name and your word -- so suffice to say, I wasn't thrilled when someone sent me his assessment. I've always believed that if nothing else, the Minyanville editorial content was inspired by our mission to effect positive change through financial understanding. I thought we earned those stripes proactively preparing people for the financial crisis, but I respect other people's views and vibes.



The beauty of an interactive digital sphere is that constructive criticism and critical feedback arrive in real-time. In that regard, in an effort to better serve our community, I was curious to find out what Felix disliked about the 'Ville; he's a seasoned guy and there was utility in hearing him out.

When one of our staffers emailed Felix, he politely shared his views about "why" Minyanville wasn't part of his online financial process. There were some constructive comments, a few top-line suggestions, which were very much appreciated, and an astonishing admission -- Felix had never actually read Minyanville!

That discussion was recorded live
-- beginning at the 47:20 mark -- although you'll have to turn your volume to the highest level if you wanna hear my comments as I didn't have a microphone. It must be said that my intention then, as it is now, isn't to feast on smoked Salmon -- I like to build bridges, not burn them -- I was simply speaking to the issue of accountability and responsibility of online financial media "voices".

I do believe its incumbent on us all to know what we're speaking about before we put it out there for public consumption, particularly if you're going to skewer a platform you've never experienced first-hand. That's not only a matter of journalistic integrity or professional courtesy -- or, in extreme cases, potential legal liability -- it's a social courtesy, particularly when you've got a platform that affects public opinion.

I had to leave the last 15 minutes of that panel as I had an important meeting across town. Felix and I never had a chance to "follow up," although that may take place in the future. Upon my return to the Beverly Hilton, I attended the lunch discussion -- Global Financial Markets: Nouriel Roubini and Mike Milken Debate Where We've Been and Where We're Going -- before stepping to the next panel, one I was very much looking forward to.

  • Ariana Huffington: Huffington Post had 13mm unique visitors in March, which was a 94% increase year over year, according to Neilsen. She offered that there are different media models -- it's not online or print, nor does it need to be free (purely ad-supported) vs. paid. There is room for longer-form, foundational content, as well as open-source content. Huffington Post advertising revenue is growing "phenomenally" and they're adding reporters with that revenue (read: profits are being plowed back into the business). They have 6000 password protected bloggers ("people we trust") and a thriving community, which fosters pre-moderated comments. The addition of "soft shell media' (Twitter, etc) has been a boon; they're the #2 internet newspaper behind the New York Times (NYT).

  • Bill Keller, Executive Editor at the NY Times, mused that the last few years for newspapers has been akin to coming out of rehab or messy divorce, but that mindset is now receding; advertising is coming back (print has leveled, online growing quite well). They're doing roughly 20mm uniques per month in the U.S alone (there was some debate on the actual number as sources vary).


  • Andy Lack, CEO, Multimedia, Bloomberg, offered that their business model was focused on the professional segment (300K terminals equates to roughly $6 billion in annual revenue), but they aspire to have a larger role in the future of journalism. They currently have 2,300 journalists worldwide; so it's said and for what it's worth, I currently view them as best in breed in terms of credible financial content. In the last year and a half, they've expanded their focus to consumer audience (BusinessWeek) and will look to take further steps in that direction as they build a portfolio of media assets.

  • Vivian Schiller, President and CEO of NPR, spoke of their diversified business model and revenue sources (they are a not-for-profit). They received (an astounding) $300 million in donations last year and, despite public perception, the government assistance is close to, if not, nil. The recession hasn't affected their reach. In fact, they're seeing all-time record audiences -- 34 million listeners per week, who listen, on average, for eight hours (wow). NPR will always be free. "We won't penalize those who can't afford our content, it's anathema to our belief-system."

  • Gordan Crovitz, Co-Founder of Journalism Online and the former Publisher of The Wall Street Journal, noted that consumers, readers and listeners support the other properties (mentioned above). Bloomberg has the "ultimate" model (terminal revenue). His company was founded in an effort to help media companies monetize video content. NPR pioneered the "loyalist" business model: if you love and trust a brand, a percentage will be willing to pay a reasonable amount per year. Media has been supported by advertising for 50 years. This will no longer be the sole driver -- companies need a diversified revenue stream and the ability to monetize access to loyalists through devices.

  • The "metered model" was discussed. The New York Times tried "Times Select," which failed and was ultimately dropped. Major media is now using all forms of online media tools (Twitter, curration, video) and are "asking" for content from their community (example: people on the ground in Russia).

  • The New York Times looked at all "models". It's a matter of principal -- there is a huge cost to getting journalism "right" and it's worth putting a price on that while getting away from an advertising dependent model. The New York Times is about "half and half" (advertising revenue and subscription). One will be able to adjust the "meter" based on their absorption of content and volume of digestion. "It won't be a 'game-changer' for years but we don't need it to be."

  • Andy Lack made a salient point. The notion of "free" is misleading. It's all about scale and the attendant advertising revenues, it's about "back scratching." You can't support quality journalism for "free." There isn't yet a set digital model. Everyone is experimenting -- but "free" isn't the right connotation.

  • Ariana responded that there will never be one answer. "You cannot enter into the same river twice." Consumer habits have changed forever. Millenials have, and will continue to change the game. Media companies must use apps to their advantage and get their content everywhere. Quote of the session: "We need less autopsies and more biopsies" on what will matter, rather than what hasn't worked.

  • Fair use legal issues were discussed. Mutually agreeable "shares" must be set in advance. For instance, if HuffPo curates NYT content to the point that people no longer go to the NYT, it is a major potential issue, both in terms of brand dilution and advertising revenue. That balance is still being sought.

  • Vivian shared that an audience will determine how they want to define their content experience, whether they want to pay or how they want to get it (Facebook, customized home pages, etc.). If you cut the supply of people from other sources, you, by definition, cut your audience.


Question: Who will report the news?
  • Andy: It's still unclear. It's a function of the ownership of networks and their support of news divisions. What was once an oligopoly is now a wide-open playing field. There will be winners, but it will be tougher given influx of competition.

  • Vivian: There are massive opportunities in "local accountability journalism." That's one space NPR wants to "double down" because so many are abandoning. Technology for news media is just scratching the surface of where we're going. The power of collaborative reporting is "thrilling". It makes all public media content, data and archives available on open APIs -- it's a flowering of new ways to tell stories!

  • Ariana: We need new media to practice better journalism. Why was the balloon boy story considered "news" for so long? Self-expression is the new entertainment. We're seeing that on Facebook, Twitter, and Blogs. The ability to tell stories, stay with stories, and engage the audience persistently and consistently will define the winners.

  • Gordan Crovitz asked, "How many institutions will be left to stand up to government, which is getting bigger and bigger, on every level?" Investigative journalism is "gone". It's been replaced by new and smaller independent operations. Bloggers must find revenues outside of advertising. News organizations must rethink sources of revenue and value of brands: "Is this journalism worth the money?" That is the responsibility of editors and they will dictate the landscape. Millenials, who are well-versed in media and gaming, will shape the winners.

  • Bill Keller: Newspapers can't blame Craig's List for their demise, the publishers have been killing newspapers for decades. Why? There is big money in monopolies. In the future, he sees a combination of survivors and start-ups. He's seeing convergence; big media is adapting to cultural and psychological shifts of the new world and start-ups assuming more responsibility and are increasingly credible.


The last panel I attended before sneaking a drink with some colleagues and heading to LAX for the dreaded red-eye, was The Business Behind the Show: An Outlook for the Entertainment Industry. While tired and fried after a long stretch of sessions, I was particularly interested to hear what these thought-leaders had to say. The session was moderated by Terry Semel, Chairman and CEO of Windsor Media and an industry veteran who spent 24 years at Warner Brothers, where he was Chairman and co-CEO, and CEO of Yahoo (YHOO).

  • Irving Azoff, Executive Chairman, Live Nation (LYV): The impact of digital technology is helping business (in areas such as paperless tickets) and killing business (piracy and theft on the music side). He sees Live Nation as the eventual "Amazon (AMZN) of the music business." He's a fierce protector of intellectual property rights, as well as the rights of the owner/creator, and is focused on licensing rights and rewarding the proper components of the food chain.


  • Richard Beckman, CEO e5 global media: print media monetization is key, as is platform agnostic content. The democratization of content is a necessary checks & balance process, it requires engaging content and the injection of that content across channels and platforms. Data services are their fastest growing segment.

  • Chase Carey, COO, News Corp (NWS): Content, particularly sports, is drifting to the cable side. Broadcast needs dual revenue streams. Retransmission was "given away," but broadcast is still 10% of media absorption. He views the NBC-Comcast merger as "more diversification than synergy on both sides of the retransmission fence." There are real opportunities to grow and expand the digital side of the business. He views the iPad (AAPL) as transformative. The WSJ will be interactive and real-time on the iPad, opening a new dimension to business news. The challenge is for the new business line to not cannibalize existing revenue streams. People will pay for quality experience and content-providers simply have to produce a worthy experience. Millenials will change media consumption trends for everyone.

  • Robert Kotick, CEO Activision Blizzard (ATVI): They sell digital products -- and plastic guitars! We have a very tech-centric future; the challenge is "analog" over the next ten years. "Animation must add story-telling from linear media to the mix; from character-based to story-telling based experience." (No, he didn't get a chance to meet the Critters!). He also noted that the millenials only exposure to "old music," such as The Eagles, is through gaming experiences such as Guitar Hero, where there are billions of hours of impressions to date. The "input/output" media model growing and the importance of search once convergence arrives is massive.

  • Les Moonves CEO of CBS Corp (CBS): Networks are finally getting paid by cable owners for retransmission. Reruns of CSI on TBS were making more than the originals, which were produced and paid for by the networks. Those lines are "finally blurring." The Comcast-NBC merger? "NBC is in 4th place so I hope nothing changes," he said with a smile, "I prefer the status quo." He then said it will be a powerful company with strong management coming over from Comcast (CMCSA). Media is becoming more technology-centric; it's not just content and distribution anymore. The internet and television will share the same screen in next 2 years. As it stands, online advertising revenue from shows like CSI are "nickels and dimes" but that will eventually change -- to a point. People will still want to watch the Super Bowl on television while checking stats online.

  • Terry noted that HBO was originally told that people wouldn't pay up for content. They proved to the world that they would. Tiered content models can -- and do -- exist.

  • Robert added that models will diversify: Subcription content, pay per view, advertising supported platforms and virtual economies will be next-generation evolutions that follow the "traditional" diversification model.

  • Irving: The averaged Ticketmaster transaction $160; people will pay for experience.

  • Terry asks: Will people eventually pay networks on a per show basis? Apple introduced the "flat rate" model at the same time as discussions about revenue sharing in the music industry. Apple obviously won. Will that translate to television?

  • Richard added that many business leaders are weighing "heritage and gravitas and a natural resistance to change."

  • When the discussion turned to 3-D -- and only a handful of minutes remained -- the views were quick and to the point. Robert offered there is great benefit to the interactive experience and the audience will pay a premium for better engagement in the gaming space. Chase said it's "not a fad and will continue to improve. Not for news, per se, but for events." Les offered it was great for sports but questioned whether the economics made sense. Irv said they're experimenting with 3-D in the music space, citing Kenny Chesney as an example. Chase opined that News Corp is experimenting in the 3-D space and will continue to explore opportunities; he sees a huge opportunity in the future.


As I sat on the redeye, making my way back to the big city, I found myself unable to sleep. At first I thought it was because I was squeezed between two rather large men who didn't subscribe to the "armrest boarder" airplane rule but I then realized it was so much more.

I was excited and enthused for the future. Dare I say I felt blessed to be "in the game" and enjoying the journey, one step at a time as difficult as those steps sometimes are. The last ten years have been brutal on a number of fronts and the next ten will require equally difficult decisions. What was evident, however, is that there is a ton of human capital motivated to make this world a better place and effect positive change through their words, actions and efforts.

I firmly believe that Minyanville is part of that solution and our community is a sum of those parts. My sincere gratitude for the latitude during my venture west; I hope that some of the vibes shared upon my return provide utility as we together find our way.

Good luck today.

R.P.

No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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