industry. and so if there's not going to be advertising, then there needs to be a lot higher subscriber fees. one thing is pretty clear. people do love consuming content on television. but with all of the discussion of all the other devices, people are spending more time watching tv than ever. so there's tremendous pull there. it's incumbent upon us in the content business to preserve the models so that we can reach people and we can invest and, you know, we don't always win. you know, sometimes you can invest and your market share goes down. but if you're doing a good creativity, creating good brands, good stories, and good characters, then you can really win in this business. so i think, you know, it's the faufd td of the moment, it's getting a lot of headlines, but in the end i don't think it's sustainable. in order to get the content we have to work together. i think as an industry we have shown a great ability to work together. you know, glenn and i over the years, you know, we now have 13 channels on glen's systems. we can invest in the channels. so four years ago, we had a

channel called id, it was called discovery times. we said we want to invest a lot of money and ftry to build a ne brand, and reach glen's subscribers around the world. and four years later, it's the top ten network in america and it's the number four network during the day. we are only able to do that because we work together. i think in the end we need subscriber fees and we need ad revenue. it's -- we need to be disciplined as an industry. if you even look at apple, apple came out -- and you talk about, tim, the apple store. it does look sexy and it does feel, you know, dynamic. when you go in there you feel like, wow. but it's still just a device. it's just a device. in order to be compelling, you need content. you need brands that people care about. you need stories that people want to hear. you need characters that people want to -- that people can identify with. and we have to remember that as an industry. the deals that we did with apple

for a la carte, it didn't make sense us for. didn't make sense for us at discovery. i think if you look at the economics, it doesn't make sense for us as an industry. and so when we take our content that we spend a lot of money on, whether it's charlie, whether it's apple, whether it's the cell phones or the web, there's a lot of power in that content. because it's stories that people want to hear and characters that people want to spend time with. we as an industry have to remember that. you know, we worked out a great industry model with the cable distributors and if we work together i think we can continue to grow. but we need to make sure that we put our content on platforms that are sustainably economic. >> if i can jump in. if you think about what we sell on tv, it's a pretty simple idea. and that is that you subscribe to a package of linear networks, subscribing means you know what

it costs ahead of time. you paid for it at the beginning of the month. it's there -- no matter how much you watch you have it. and when you sit down to watch tv, you have maximized the choice. it seems a little quaint and old fashioned but that's fundamentally what we have been selling for the last 40 years now. very powerful. i think that the new technology helps us to make it better, but it doesn't change that fundamental idea of choice and subscription. so we can have a better user interface. we talked about that a couple of minutes ago. we can allow people to watch programming when they want as opposed to when it was scheduled. and whether that's in the cloud, which is where i think it should be or dvr which was the fall back or vod which is a version of the cloud, that's fundamentally an extension of this idea of letting people when they sit down to have the maximum choice and i think it's very powerful.

the dual screen with advertising and subscription has been great for the content creators. we have more tv than when i was growing up. so it's good for both. i don't think we want to destroy one of the revenue streams. >> how would it affect your business though if it does become something popular? the ability to skip the ads? david is talking about, just the way the levers work, you would have to jack the subscription fees. >> i think if you reduce revenue into the entertainment business, if i can generalize that -- either subscription prices are going to go up, or there's less content made. it's not magic. david needs money to invest in content. so destroying the revenue is not going to have the result people think it may have. >> when you are talking about the channels you are rolling out, how does ad revenue play

into it for you? >> online, they won't grow this year. they might go down a bit. so the internet itself has a mini version of some of the issues facing the cable business. i'll give you an example. something we have done but a lot of other people out there work on it, we have created the project devil. our average pages had 7 to 14 ads on them. it was the equivalent of sitting through a long block of commercials and we decided to basically strip the ads off the pages and put one ad on a page. the same amount of space, a third of the page, but force advertisers to do heavy design, heavy video. those things that advertising rates are increased by seven to 50 times the reaction rates. consumers like them. when i listened to the ad skipping for cable this is something we're concerned about, we're investing a lot in

video -- this seems like something that's important, one of the controversial piece that i would throw out is there need to be a project devil for video on television and cable where i think things are thought about much differently. in my house we have a dvr, it gets used on some programming, not others. but the reality is you have a super engaged consumer who you know probably a lot about. and the question is what would you put either around the program or in the programming that doesn't look like the traditional hopper, you know, type area. and i'm not as familiar on the cable side with what people are working on the advertising side, but i know there's a lot of thinking going on on the internet side on this, which is how do you make more engaging advertising that is more tied to how people are starting to use the media. and then the second thing just shifting back to your mobile question is so i think that's stake number one, how do you create engaging ads? the second one, i think you have to think from a mobile first design principle which is

probably every one of your cable customers and every one of the aol customers has a smartphone with them, 18 inches away from them, regardless of what they're doing even sleeping at night. i think if you don't design your experiences from mobile first, we are just starting to do this at aol, if you take advertising into account for that, i think over the next three or four years the companies that think about advertising content from a mobile design first and kind of goes backwards towards the bigger screens, you know, are going to have an advantage. i don't know what will end up disruptionwise with the hopper and all these other things -- it seems pretty clear there's a massive opportunity for people to come up with different types of formats, better formats, and mix mobile in as a new for mat from a standpoint. >> in terms of mobile, one of the problems that people have -- obviously people using cell phone networks as opposed to cable, there it's a 3-g problem. they want the video, and then it has got to load and then it staggers and then you have to wait. how big of an issue is that?

how much more investment do you think the industry has to do in bandwidth so i can watch any one of david's videos with no delay, no problem, no loading, weight time? >> i think that goes back to my wi-fi comments. so we're not in the cellular business, if i can distinguish that. and everybody i talk to in that business says there's never going to be enough band width to do -- in terms of consumption and content and through put what you can do with a big wire. that's just physics. so i think a big wire plus wi-fi will meet a lot of your needs. but if you're on the network driving your car, that is always going to be somewhat limited. particularly with video which is a big user of band width. >> that's pretty amazing. if it's physics. i always assumed it was a matter of time until all these things become available. but maybe it really doesn't.

which would change the business. this is how you're planning. >> hopefully you're not watching your tv while driving your car anyway. >> i have noticed sometimes they do have the little movies. so maybe we should turn that off while we're driving. but david, in terms of your planning for the future, you talked a little bit at the beginning about sort of the chunks that you would do more shorter form stuff that you put on mobile. but do you anticipate that changing in terms of what you're offering as the bandwidth changes, if it gets bigger would that change it? or do you think you're providing what customers want? >> well, the truth is we don't know what the customer wants. we acquired this company, rev 3, two weeks ago. they had 100 million streams in a month, and they were between 3 and 7 minutes. very different from what we do professionally, we are very professional content, highly produced. this is much more raw, authentic

storytelling. but 100 million views across all of the discovery, we had about 60% of that. we had about 60 million. so here's a small company that had 100 million. what that is saying is that there are people out there that don't want to necessarily just see professional content. there's other content that they want to see. so we acquired this company because we're about satisfying curiosity on all devices, on anybody that wants to consume. and it's important for us to stay flexible. and look in the marketplace and see what's working. you know, we have always been aggressive about not using our long form content on any platform except for a dual revenue stream platform like glen. so we didn't put our long form content on the web. so we didn't put it on the web. we felt like the business model wasn't there. but we did spend a lot of time digitizing our entire library and working with short form. we found that what may be logical which is that people want to watch a show on a phone,

they'd much prefer watching clips from man verse wild or a little piece of a tease on what's coming up on cake boss. so i don't think we should presume that every device has a similar type of consumption. and i think what's going on on youtube and on some of these small ground-up silicon valley companies are important. for us, we expect to learn a lot. and it may be that years from now, we'll continue to have huge market share, hopefully with glenn, because i think it's not going to change that people love to sit and watch stories on their tv in the living room. but we may be satisfying curiosity in a much different way with different kind of people, with much shorter form and different stories than we do in our traditional business. so i think the answer is we don't know. and we have to really hear from the consumer as to how they want to consume content on a phone,

on a web, on every device. >> so i think david's raising the challenge of business models, so the technology is ultimately all ip, all digits. video is made professionally by everybody -- everybody wants access to everything. and i think if you think about the traditional linear network, that comes from the broadcasting business. so you have one tv station, out to multiple people and you had to schedule -- 8:00 tuesday night, and you put ads in between. so we arrived at the length of shows that we have, whatever it is now, 22 minutes for the so-called half-hour show. this technology lets you have shows of any length. it can be five minutes or three hours. it's creatively a very different model. i think the question is how do you pay for all that? and how do you sell it to people?

that's what you're struggling with. >> and what's interesting is that some of -- if you look at what's going on at rev 3 they're generating all the streams and their cost of content is much lower. now, most of that stuff -- you wouldn't expect to see on the traditional set. it doesn't tell the type of story that people want to hear when they turn on discovery or tlc. but there's an interest in consuming content and learning and satisfying the new platforms. for us, our key priority is growing our channels around the world. but we don't want to wake up one day and find out that these video streams become an important way that people are satisfying a different type of curiosity and we're not there. and so i think it's really apples and oranges. >> when you talk about -- you just said something sort of so sacrosanct, it's the length of the show. you are coming in and launching something -- are your shows going to be different in length?

a seven-minute show, ten-minute show? >> yeah, we're experimenting with this right now. we have some appointment-based viewing stuff we're doing. michael eisner with his company. we're testing a lot of this right now. we basically service 30,000 other publishers with our video network. we have 300,000 high quality clips that we send out to other publishers. i think the average length of time people are watching videos is fairly short, but growing. number two, i think when you think about what is going to get attraction as you start to layer on these products, platforms, brands are really important. consumers recognize brands. they want to watch them. and then we started to really test out, like we launched a program two weeks ago. the first week, it got, probably, 10,000 or 20,000 people watched it and then the next week 50,000 people. how do you test out appointment viewing for the web or mobile and then how do you do it across the huge spectrum of content? and one of the other things i would say over the longer period

of time, probably not shorter period of time, when you listen both to what glenn and david are talking about, it may be likely the web and mobile start to head in this directs, where you have a kind of closed network effect and that people are kind of -- they know what kind of bundles they'll get and what places and what times. it's really not happening yet online. but even from the small testing, i think people will start to habituate around those type of programs over time. >> are you seeing demand yet? for packages? how would you describe demand for packages that include mobile? we talked -- since more people have smartphones than dvrs? are you seeing people demand things? in a content way? >> we have not seen that. we have messed around with mobile quite a bit, and i'm not sure what the future will bring, but at the moment people see the purchase of mobile services and devices as quite different than

what they buy in their home. and i'm not sure i completely understand it, but i think part of it is that individuals choose a mobile device and households by the wire line service. that may sound like words, but it seems to make it not naturally put into a package. and we have tried all sorts of different things so far. that's why we're selling our spectrum. >> right. that's pretty fascinating. you know, i hadn't thought about it that way. but it makes a lot of sense. individual decision, versus a family one. i want to throw out a question about apple. i'm not a tech savvy person at all, but so i apologize if my phrasing is awkward. how does it work with apple? we look at apple of being so dominant, svelte, sexy. the kids all want it. then we hear about the systems being sometimes difficult to work with. from the perspective of an operator in cable, how is it

working with apple and apple devices as opposed to samsung devices or whatever? >> from my viewpoint we want to be on every device in the home. so apple is a wonderful company and they have a brand that's terrific. i have lots of apple devices personally, but we want to be on every device. so whether it's the xbox or sony playstation or samsung smart tv, we want to be on everything. and we work with everybody. >> can you tell, david, where people are watching? i mean when you look at -- i guess this is part of your partnership. not just whether they're watching on mobile versus watching at home, but also what type of device they're watching on? i mean, you sort of a lot -- >> glenn can tell. but he doesn't always tell me. >> can you tell, i mean, what kinds of users? i would imagine that tells you about the demographics and who is watching what and the big debate over whether people are going to use the ipads as a

regular device or in addition to a smaller screen in the form of the smartphone. what do you see? >> we theoretically know what you're watching in your house if you're watching in digital format. or what channel you are tuned to. we don't know if you're actually watching or not. but our ability to do anything with that information is very much controlled by the privacy laws. and so we do have some ability to homogenize the data and make sure no individual can be identified and things like that. because the industry is fragmented and advertisers would like the data across the country, it's been difficult to actually do anything with that in terms of monetizing it. but, yes, theoretically we have that information. >> what we could see anecdotally is, you know, i think there's probably never been a better time to be in the content business. people are watching more tv than they ever have before and

despite the fact that we're not measured on the ipad, our market share grew double digit last year on our channels. people spending more time with our channels and over time the ipads will be measured and will pick that up. every one of the new devices because we're platform agnostic and i think almost all content players are. it's another person who wants to pay for our content. all we have to decide is which window, do we give them or long form or short form and how much do we charge for it? the fact that there's this development of all of these different devices and opportunities, i think presents opportunities for us. but we shouldn't get lost in the fact that the business itself is enormously healthy. the cable business is very, very healthy. and we're investing $100 million more in content this year than we did last year. and last year we invested $100 million more than the year before. we're doing that because we believe if we invest in our channels people will spend more time, we'll be able to grow market share with our brands.

that will be good for glenn, because he sells, the cable guys sell within our shows. as much as the the business is changing, the traditional bizness of great brand, quality content, great storytelling, that's what gets us the majority of value and then all of a sudden now there's a lot of line of other people who want our contend and we have to make sure we get good value. if we do, this could be the best time to be in the content business. >> so i saw a statistic last week, a little different than the one michael pell used, this is that the average, household, not the average person, the average household watches tv 400 hours a month. that's a whole lot of tv and it's been going up, not down. and this -- they do all this for about -- i think on average $75 -- actually, quite an economic deal. and i think as we think about the tv space which is mostly what we have talked about, we need to keep that in mind.

most of these other things don't offer that kind of value to consumers and that's why it remains a good business. >> thanks very much to all three of you. we appreciate it. thanks to all of you. on our road to the white house coverage, first lady michelle obama and ann romney, wife of presidential candidate mitt romney were on the campaign frail this week. tonight at 8:00 eastern, campaign stops by both. michelle obama in dale city, virginia on women's health, and am romney in miami on cuban americans. the 68th annual radio and television koementcorrespondent dinner. john boehner and wayne brady. live coverage begins at 9:00 p.m. eastern. more now from the annual

national cable and telecommunications association meeting. the next portion a discussion of digital distribution. the discussion is 30 minutes. >> i understand that verizon is

making an exciting announcement. >> we waited until today. we thought this was the right atmosphere and right audience to announce viewdini, i get asked what it is, a mobile video video portal for delivery of mobile content. so there is a very unique thing going on right now, and that is, that consumers to be able to absorb any video on any device that they have, any time that they want and that aligned with verizon's lte high speed network and then with what has occurred in terms of the tablet and the smart phone industry, this all came together. we have been working on this for a couple of years. this is a verizon wireless product. we're very proud to announce that comcast xfinity is our first partner in this. we'll be showing it. we have it over in the comcast booth.

i'm going to be going over there after we're done here and hope that many of you will come by and see us over there. we're very excited about this. it will be in the market in next three or four weeks. >> this is a new app to allow consumers to search for content. they could say search ed burn, i want to see all the movies he's directed or acted in, and this will come up with a list of places they could view it. it might direct them to netflix or comcast? >> search, discovery, it will take all of the partners and the sources into play. then you can do the search. it's very simple. then you can do the research. so after you do the search, if you wanted to check on ed's other movies and co-stars and background -- you would be able to do that as well and navigate through it. it's a very simple consumer experience. >> comcast is a partner on this. tell us about the relationship and what this means for comcast. >> well, we have a partnership with verizon wireless. it has been a terrific partnership for us.

we felt as the content becomes more mobile and people want to consume it in different places, different content, wherever, whenever they want to, verizon wireless would be a great partner to help our consumers and customers discover the content. it is really all about diss covery and getting the content to people where they want to consume it. >> what does this mean for a company like vivu. you live on youtube. how will you interact and how will vivo's services interact with this? >> i think it would work really well. you know, our philosophy is we want to put music wherever the audience wants it to. so if an an artist -- if justin bieber wants to work with youtube we'll put the video there. if lady gaga wants to premier a video on her facebook page, we support that. we distribute the videos to thousands of peoples on the web including our own site and apps. so in this model, we'd be very

happy to make our videos available and our metadata available. so if you search for beyonce, and you want to watch austin powers through xfinity, you can do that. or if you want to do it through vivo, you can do that as well. >> and i know you distributed it through your the other vod systems. also apple. what does a mobile distribution platform mean for you? >> i think it's just sort of indicative of the change in the landscape. in '08 i released a film directly on to itunes. and it was the first film to be sort of -- to go exclusively on a digital platform. when i did the press for that film, 75% of all the journalists said to me, you're absolutely crazy, no one is ever going to watch a movie on their computer. let alone their phone. and here we are four years later, this is being introduced and clearly what you said

before, the when, where and how. the audience has changed. they aren't nostalgic for the way that we consumed entertainment. they don't long for the theater. and, you know, they don't long for their primetime programming where the family is going to sit down at 8:00 and watch "happy days." they want it when they want it and this gives them that. >> one of the things we found through distributing the content is we ended up forming an indie film club because we saw the popularity of your films that you launched digitally. >> i mean, for independent film make it's changed dramatically. across the country a lot of indy theaters have closed, and we found out that they're home, in front of their flat screens, with their surround sound. and they still want this content. they're not willing to get into the car to drive to the theater. >> it's important to give it them to on their terms? when where how they want it? >> that's exactly what we're focused on and what has really

enabled this and what caused the development on this a couple of years ago was we saw the capabilities of the lte network. so verizon wireless is the global leader in terms of lte. we handle about 60% of the global traffic. so we're an early adopter. we saw the possibilities and we saw the hunger of consumers to be able to get this information whenever they want, on whatever device that they have. and, you know, very excited that we have the right tool to deliver that. >> i know you think about the importance of making content ubiquitous. tell us about that. >> i just think that that's the way that the physics of the web operate. that it's no longer about how do i create value through scarcity. it's about how do i create value

through giving my audience what they want. so when we started vivo three years ago, our challenge wasn't how to put music videos on the internet. that was not a problem that needed solving. that's not a particularly innovative approach anyway. our strategy was how do you make the audience that loves music as valuable as the audience that loves the super bowl or that loves the world cup or the olympics. there's billions of people on the planet who love music. it's a pipeline to the soul, it's a way to elicit an emotional response. and how do you make that audience valuable, because it's not about selling music to people who don't want to buy it. it a about figuring out how do you generate value through billions that love something. but how do you give it to them in an easy way. so we said let's not create a site and tell people they have to go there. let's put videos in the highest quality possible and let's create events and new programming and concerts and put that on youtube because everybody loves youtube. and let's put it on facebook because everybody is spending a lot of time there and let's build