Is the Web the future of entertainment?

Rather than digital entertainment replacing Hollywood, the two are likely to learn to work together in coming years.

So predicted old-line and next-generation media moguls speaking at the New York City Media Summit on Wednesday. Speakers painted a picture of a world where online chat and instant messaging emerge as content on a par -- at least in terms of consumer mind share -- with big-budget, Hollywood-produced TV shows like the current HBO series "The Sopranos."

The Summit, a one-day conference held at the New York Museum of Modern Art, was sponsored by The Industry Standard and New York magazines. On hand to pontificate were top executives from companies ranging from The New York Times to Oxygen Media Entertainment Group.

The conference took place two days after cable TV viewers in New York and 10 other ABC markets awoke to find themselves with no programming, following a dispute between ABC's parent, Disney, and cable provider Time Warner. A temporary agreement between the two parties restored programming to the affected markets on Tuesday, but some conference panelists said they feared the skirmish might attract the unwanted attention of federal regulators.

While the AOL-Time Warner merger was on the minds of some conference speakers, others preferred to look ahead at the future of entertainment, as broadband and wireless technologies become ubiquitous.

"For the last decade Hollywood's been in charge of entertainment," said Geraldine Laybourne, founder, chairwoman and CEO of Oxygen Media. Going forward, "we will always have the best content, like 'The Sopranos,' but we also will have Internet tools available for people to become their own creatives."

Current entertainment content has been devised and controlled largely by people in their 40s and older, several members of an entertainment panel noted. But the emerging group of entertainment consumers are more comfortable with a mouse, than a TV remote, they said.

Maxine Lapiduss, executive vice president and cofounder of Voxxy, a new interactive network for teen-age girls, said her company is working on a variety of new content custom-made for the platforms to which these girls are accustomed: mall kiosks, Internet chat sites, wireless networks and the like.

Is Hollywood nervous about the potential threats posed by content providers such as Oxygen and Voxxy? Hardly, said Brad Grey, chairman and CEO of Brillstein-Grey Entertainment and producer of "The Sopranos."

"The economic model on the Internet today doesn't permit us to produce what we do in traditional media," Grey said. "We are closely watching the new distribution system being built, but all of our traditional entertainment worlds will still exist because we are used to them."

Even some executives affiliated with new-media companies, such as Rob Glaser, founder and CEO of RealNetworks, did not advise Summit attendees to expect the centre of entertainment power to shift overnight.

Glaser contrasted the "lean-forward" PC environment with the "lean-back" TV environment. While the two markets require different entertainment forms in the long run, "it might take five to ten years to get there," he predicted.

In the interim, repackaging and repurposing of existing audio and video content will be the most likely solution, he said.

But Laybourne warned that new media companies cannot afford to sit idly by and wait for new technologies to take hold.

"Viacom and Disney are in the process of parking their Internet businesses on the side," she said. "But this won't allow them to create a strong future interactive brand."

The entertainment panel was not the sole source of entertainment at the Summit. An afternoon funding panel brought together a number of leading financial analysts who offered their views on the prospects for new media companies seeking funding in the turbulent current market.

Merrill Lynch Internet analyst Henry Blodget said he wouldn't invest in any kind of pure-content company. But if a company had a business plan that called for one-third communications/content, one-third interactive (shopping, games) and one-third information search -- in other words, another Yahoo! -- he'd fund it in an instant, he said.

The financial analysts agreed that the recent Internet market shakeout marks a return to business as usual, which is a healthy turn of events. "Now there are a finite number of winners and losers to chose from," quipped Jim Cramer, director of TheStreet.com.

Harvard professor Henry Louis Gates Jr. provided a pre-lunch speech in which he took conference attendees on a guided tour of Microsoft's Encarta Africana product, which he helped develop. (Gates is no relation to Microsoft chairman Bill Gates, who gave $1m (£0.64m) for the project.) Looking for ways to bridge the "digital divide" between Internet haves and have-nots, Gates said he is working to create a set of interactive after-school black-history courses to be distributed free to schools and churches.

"The digital divide is about isolation," Gates said. "We need role models and maps. We want to use the Net to show anybody -- especially poor black kids -- that it is statistically possible to be something other than a black basketball player."

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