"We're on the right path in terms of a strategy to make sustainable growth, and move away from the subscription model and toward an increasing reliance on the advertising model."
'Good old-fashioned skills'
"What you need is someone who can bring focus and discipline and business metrics and good old-fashioned skills," he said. "The only knock I've heard is that [Mr. Falco] is a TV guy ... but it's not as if he lived in a bubble. He's been exposed to the space and has his own views and an understanding of it."
Perhaps indicating a new era at Time Warner, Mr. Parsons spent almost all of his Q&A session detailing changes at AOL and the outlook for Warner Bros. movie studio -- there was no mention at all of Time Inc.
Mr. Parsons tantalized the room by saying the company is still debating whether it will spin off AOL as it did with Time Warner Cable. He also said the company would be looking to make acquisitions. "We're looking at horizontal opportunities that will play to our strength in the advertising space." Time Warner owns Advertising.com, a company which buys inventory from websites and sells it in bulk to advertisers.
When asked if there were any size limitations on the mergers and acquisition front, Mr. Parson's responded, "No, almost anything that you can think of, other than the big established portals, is within striking distance for us."
With the movie business rapidly heading toward new-media distribution channels, Mr. Parsons explained that the "download to burn" model pursued by Time Warner would be executed largely through partnerships with current retailers such as Wal-Mart and Best Buy, which have helped Time Warner build its traditional businesses. He suggested users might see in-store kiosks where they'll be able to download selected movies. That system, which could be in place by 2007, will still require consumers to wait until traditional DVDs have been released before titles can be downloaded.
Responding to questions after the event, Mr. Parsons said the sale of a select number of Time Inc. titles was proceeding. The number of potential buyers has been narrowed from 30 to 10, and the company is in the process of due diligence. He declined to name bidders, and he wouldn't be more specific about what kind of acquisitions Time Warner might be eyeing.