Entertainment Tonight, and Tomorrow: The Media Industry's New Channels, New Content, New CEOs

KNOWLEDGE@WHARTON: Media giants are diversifying their digital holdings. Last year, MTV, a division of Viacom, bought iFilm, an online video seller, and News Corp scooped up Intermix Media, owner of MySpace.com, a popular social-networking site, as well as about 30 other sites.

The increasing centrality of the web as a way to deliver entertainment leads Berg to predict that "the new major networks are going to be Google and Yahoo." Google already has shown its willingness to battle with traditional publishers in its decision to digitize library books and make them available for online searching. Publishers are calling that copyright infringement. Google claims its aim is educational and thus protected by the fair-use doctrine. Both sides seem willing to fight in court, although Berg predicts that they will resolve their differences short of that. "My hunch is that Google's brand is so powerful that the publishers and authors will have to get with them and figure it out."

Another challenge for the entertainment industry comes from online retailer Amazon, which plans to sell music downloads. At one level, music distributors might welcome Amazon because it may be the only retailer that can compete online with Apple, Fader says. "At the same time, people in the industry have to be thinking, 'Amazon's not one of us, either.'"