NEW ADVERTISING DEMANDS OF ON-DEMAND

AOL Chief Touts New Opportunities

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CHICAGO (AdAge.com) -- AOL Time Warner CEO Gerald Levin believes video- and music-based content will increasingly be made available to consumers on an on-demand basis, altering but not eliminating advertising opportunities.

Earlier this month, the media giant said it would launch an on-demand version of its HBO cable network, and Mr. Levin hinted Wednesday at the National Cable & Telecommunications Association convention in Chicago that the move would only be the first step in making parts of the company's vast portfolio of TV shows, movies and music available whenever a consumer wants it via broadband transmission.

Mr. Levin's comments came in response to a question about what video on-demand would do to the ad market from CNN talk-show host Larry King, who interviewed the CEO. AOL Time Warner operates local cable providers and a slew of cable networks, including CNN.

DSL ad flap
Mr. Levin dismissed criticism of AOL Time Warner's decision not to run advertising from phone companies for their DSL Internet services on its Time Warner cable systems, which offer competing high-speed access.

"There is no issue here," he said, adding that the issue was as simple as TV programmers refusing to run ads from competitors, as well as from other marketers whose ads are deemed inappropriate. "We can't put HBO ads on network TV," he said. "This has been going on for years."

Mr. Levin's vision of the media marketplace with video and music on-demand dovetails with his belief that content should be distributed largely using subscription-based revenue models.

Little need for :30 spot
He conceded that traditional 30-second spots would have little place in an on-demand universe where consumers would be able to fast-forward and rewind at will, but he said sponsorship and promotional opportunities would continue to be available around the programming.

And he said broadband-enabled interactive TV would provide marketers with something perhaps one step better than advertising: the chance to find more information or even make purchases instantly.

Advertisers will be able "to get a brand ID out there, give a lot more information [about a product] and then have somebody buy it," Mr. Levin said. He also suggested video on-demand would bring "an even greater opportunity to target advertising."

CNN not for sale
Mr. Levin spoke two days after Viacom President-COO Mel Karmazin said he would be interested in buying CNN from AOL Time Warner.

"He hasn't called me," Mr. Levin said before making it clear that the company has no intention of selling the all-news network.

But he left open the possibility of a partnership with the news operations of Viacom's CBS or Walt Disney Co.'s ABC -- the two major broadcast networks without sister all-news cable outlets. Both have trimmed costs in their news divisions.

"[Both] would be interested in the newsgathering infrastructure of CNN," Mr. Levin said of the network, which has 42 worldwide bureaus.

Mr. Levin also said that Turner Field, the stadium in Atlanta owned by AOL Time Warner and named after Vice Chairman Ted Turner, would not switch names if purchased by a corporation such as Atlanta-based Coca Cola Co.

"This was my way of doing for Ted what I thought needed to be done," he said.

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