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Five Questions for Tracy Dolgin

2/10/2006 7:00 PM Eastern

Last month, an Associated Press story estimated the value of the Yankees Entertainment & Sports Network, a New York City regional outlet that televises New York Yankees and New Jersey Nets games, at $1.1 billion. CEO Tracy Dolgin told Multichannel News editor in chief Tom Steinert-Threlkeld at the company’s headquarters in the Chrysler Building in midtown New York that, if that were true, he might get violent. He didn’t. Instead, Dolgin, the former president of Fox Sports Net who cut his teeth bringing the National Football League to the fourth network, kept talking. In the process, he had a lot to say about how new forms of distributing content would favor those outfits that already had strong products. Not new entrants. Here are excerpts of the conversation.

MCN: What do you mean by the 'haves’ and the 'have-nots’ being the key difference in who will succeed in so-called new media?

Tracy Dolgin: All these changes, whether it’s fragmentation; whether it’s ultimate control of the consumer over content and how it’s viewed. All of these things, people say benefit a wide variety of companies, from the little guys, the startups, that [say, look now] we can get all this distribution. Or we’re going to put product on iPods, so therefore it’s a new channel of distribution so the big distributors won’t be able to hold out the little guys for content.

But it’s all fluff. It’s all transitory. These little guys will disappear. And new channels of distribution, all they do is dilute revenue streams.

MCN: Why will the little guys disappear?

TD: Because there’s no business model for it. Just because you can get on doesn’t make it a business model. Most of these new forms of distribution, by the way, aren’t paying forms of distribution.

Yes, you can possibly be seen by someone. But then you have to have a business model that’s transactional — either transactional from the standpoint of someone’s buying it, or transactional from the standpoint that someone’s watching it.

And there are not going to be [that many]. So all of these things that in the short run level the playing field actually do the opposite. What they do is, they stack the deck.

MCN: How so?

TD: You will find that almost all of these changes that are going on in the business will make the haves be stronger and the have-nots be weaker, in the long run.

Fragmentation, perfect example. Without fragmentation, these little guys couldn’t get on. You couldn’t have the Sewing Network, or whatever.

What it’s going to do in the long run, ultimate choice actually makes people make fewer choices. They make fewer choices about things that are familiar and important to them.

And so you don’t surf 700 channels. You actually just go to the seven or eight channels you really care about.

MCN: And if you happen to sew, the Sewing Network is one of them.

TD: But the Sewing Network is not going to be important to enough, so that it actually makes it in the end.

A 'have’ is a company that has killer content, that is sticky, that people care a lot about, that people are going to spend time with, that they’re going to spend deep time with.

Obviously, a channel like YES, with the Yankees, which is the number one brand in all of sports, is going to be the king of New York.

Fox News Channel, in the news space. Nickelodeon. Those are the ones that are going to be stronger.

MCN: When was the last time George Steinbrenner called?

TD: I don’t know if I’ve spoken to him since the season ended. He might have been on one of the board calls.

I don’t think I’ve spoken to him since the playoffs. And they were losing.

 

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