Randall Rothenberg: February 2008 Archives

Perhaps the signal moment at Hubert Burda Media's wonderful DLD Conference in Munich, Germany last week occurred on the morning of the second day. DLD -- it stands for "Digital, Life, Design," and the conclave is modeled in part on the venerable TED Conference, albeit with a distinctly European flair -- has grown in only three short years into the premier event for all-things-interactive in Europe. It sports an eclectic mix of speakers and attendees (members of the European Parliament, fashion models who blog, famous architects, unknown Israeli physicists, et al) and is, truth be told, kind of wacky. Its diversity and centerlessness fits the culture of DLD's sponsoring company: Burda is an extremely successful German periodicals publisher, among whose 260 properties are some of the largest news, womens', and lifestyle magazines in Europe, yet whose attitude is less businesslike than familial. One of Burda's core competencies is networking, and the annual DLD meeting networks together a curious and intriguing group, one absolutely devoted to touting the digital future. Needless to say, all speakers project that future to be quite rosy.

Which leads me to the moment in question. It occurred immediately after a swarm of speakers had completed their presentations to a packed house on, as the session titled it, "TV Reloaded." The presenters were a gallery of latter-day interactive video stars: Dina Kaplan, co-founder and COO of Blip.tv; Suranga Chandratillake, CEO of Blinkx; Niklas Zennstrom, co-founder of Joost; and Patrick Walker, head of content strategy and partnerships for YouTube in Europe, the Middle East, and Africa.

The panelists were fulsome about the imminence of traditional television's defeat. "What we're doing is very threatening to traditional TV networks," declared Ms. Kaplan, whose company specializes in episodic online video programming. "Too much is exploding," said Mr. Zennstrom (who, having helped to launch Skype, knows from explosive technologies). All this revolution needs to ignite it, Mr. Chandratillake suggested, is a way of navigating the new televisual cornucopia, and his company, a search engine with 18 million hours of video spidered and index, is that "next- generation remote control."

At which point the moderator handed the microphone to a gentleman in the front row. His name is Martin Sorrell, and he is the chief executive of the WPP Group, one of the world's largest marketing communications companies, and an engineer of the megamerger phenomenon that transformed and globalized the advertising industry in the 1980's.

"If there's a phrase I loathe, it's 'business model,'" Sir Martin said. "In my company, we have 102,000 people working in 106 countries. Our world is made up of revenues, costs, profits, and cash flow. I've heard a lot from this panel on what will be. But we do an enormous amount of business, much of it growing, with broadcast and cable television networks around the world. Can each panelist precisely say what their revenues, profits, and cash flows are today, and what they will be in a few years?

"Please," Sir Martin added, "be precise."

Unfortunately, almost no one was.

To be fair, Mr. Chandratillake, whose Blinkx is publicly traded on the London Stock Exchange, did say that he expected the company to achieve revenues of some $4 million in its current fiscal year, with costs running at twice that -- although, with IPO costs factored out, it would be close to break-even. But each of the others ducked. "In our first year, we came close to breaking even, mostly on software licensing," Ms. Kaplan said. "We will be profitable this year." Mr. Walker would say only that YouTube was rising "from low CPM's to $10, $20 CPM's," but would not go further.