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The Honolulu Advertiser
Posted on: Saturday, July 9, 2005

Industry moguls ponder secure delivery of media over Internet

By Seth Sutel
Associated Press

Capital Research Global Investors' Gordy Crawford, left, and InterActiveCorp's Barry Diller attended yesterday's media conference.

Douglas C. Pizac | Associated Press

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SUN VALLEY, Idaho — As they work to come to grips with the Internet, entertainment moguls have a very clear goal: don't let what happened to the music industry happen to the rest of the entertainment industry.

The burgeoning age of digital distribution means movies, video and TV are being delivered to the consumer in new ways, through high-speed networks in the home and even over portable devices like cell phones. It's presenting the same potential for piracy and file-swapping that have severely weakened music copyrights.

Yesterday, top media executives attending an annual Sun Valley retreat did some listening, thinking and talking about the issue. They included incoming Walt Disney Co. CEO Bob Iger, Time Warner Inc. CEO Dick Parsons and Viacom Inc. co-president Les Moonves.

On the day's agenda at the plush mountain resort was a panel talk with several U.S. soldiers and a presentation from Microsoft Corp. Chairman Bill Gates on "Living the Digital Lifestyle at Home and at Work."

In a brief interview with reporters, Gates said that it involved Microsoft's new Xbox 360 and its applications and use in the home.

He declined to describe the reactions of the media executives present, but said, "It's a good crowd to hear about it."

Like all official events at the retreat, it was closed to reporters, who watch from a distance as CEOs mill around, sporting name tags and squinting in the bright sunlight beside placid ponds stocked with large white swans. Microsoft co-founder Paul Allen has been seen this week chatting with Liberty Media Corp. Chairman John Malone over a barbecue lunch, while Washington Post Co. Chairman Don Graham had a long chat with billionaire investor Warren Buffett, who sits on his board, and with Google Inc.'s CEO Eric Schmidt.

Emboldened by a recent Supreme Court decision against Grokster, a file-sharing service that was deemed to be encouraging piracy, media executives are considering ways to deliver movies over the Internet in legal, easy ways that could not only avert piracy but also make extra money for the studios.

Actor Morgan Freeman announced that Intel had agreed to invest in a new company he was starting that would allow consumers to view first-run movies delivered over the Internet.

Several guests at the conference, sponsored by the Allen & Co. investment firm, said that figuring out creative and profitable ways to get media delivered over the Internet was a top priority for media and entertainment companies.

"Our challenge is to come up with hassle-free and reasonable-cost technologies for the consumer," said Dan Glickman, CEO of the Motion Picture Association of America, a Washington-based trade group representing the major movie studios.

"You're beginning to see a lot of relationship-building between the cable, telecom and content industries" on forging deals to deliver media online, Glickman said. "I think the opportunities will explode over the next four to five years."

The recent emergence of Google as a major power has caught the attention of many media honchos as they continue to grapple with strategies to make money online.

Google now has a stock market value of more than $80 billion, even more than that of the largest media company,.