Van Toffler, president of MTV Networks Music and Logo Group, sat for a keynote interview at the Billboard Music & Money Symposium March 4. During the session, Toffler touched on everything from MySpace and Rhapsody, to the Beatles and Green Day, to the company's programming strategies. Below is the full transcript of the discussion. Toffler’s answers appear almost verbatim, edited only for length and clarity.

Is MTV a music network or is it a reality TV network?
It’s really both. I think that when you look at MTV in the early day, I think that music videos were the soundtrack of popular culture. There was great innovation, young filmmakers, great music, and some pretty bad hair metal music too. It was innovative just having music videos all the time, but the audience demanded more genre shows and demanded us to evolve.

So, we created “Yo! MTV Raps,” “Alternative Nation,” “Headbangers Ball,” and over time created reality shows, animation - "Beavis and Butthead," things like that - and really integrated music in different ways. We also had the music awards, movie awards, “Unplugged,” and over time we asked artists to connect MTV and our audience in different ways - by performing, by using their music throughout shows, by doing theme songs. We also felt it was our duty to do some pro-social campaigns and talk to our audience about STDs, about voting and forms of that.

We really evolved in youth and pop culture and music, and we just speak to purely the 12-34 audience. Over time, the older part of the audience moved out. So from Xers to Ys and now the millennials, who are different.

You say “moved out,” but I read a quote from you late last month saying “We’re pushing out Generation X,” and I thought, “Well I’m Gen. X. Why do you hate me?”
Because you’re cynical. What’s new about millennials is that they’re much less rebellious. They’re traditional. They stay at home with their parents much more. They actually watch, believe it or not, “Jersey Shore” with their moms and dads. And it required us to be less about reality competition, less cynical and snarky, and more inspirational and aspirational. In music you see people like Taylor Swift be America’s sweetheart, and when Kanye comes on one of our shows and surprises her, clearly we get a lot of hate mail for that.

Tell us a little about this offsite retreat that you guys had mentioned.
Basically at MTV and VH1 and CMT, we looked at how much time, effort and money we’ve invested in music. We’ve invested billions of dollars in these brands and, believe it or not, we play over 600 hours of music videos a week across MTV, VH1, MTVU, MTV2, Hits, Jams, VH1 Classic and Soul. We have over 200 music queues a day on MTV and VH1 and we invested over $100 million a year towards music with all our online promotion, events, series and show integration. We’ve really asked artists, the ones who have the chops, to do Unplugged. We asked Linkin Park and Jay-Z to do a mashup. We’ve asked several artists to do opening songs for our shows. We’ve asked artists to do Unplugged down and dirty, in a room much smaller than this, for online. So we’ve really evolved the way we present music out to our audience, because they want it differently.

How does that help drive the growth of new music business? Do music videos not serve that purpose? Do you need to have a different interaction with the music fans? If I’m watching “Jersey Shore,” is there a channel where I can get more access to the band I’m listening to online?
I think generally, videos still have value. They’re beautiful pieces of art or something really simple - straight-forward performances. There is value in repetition of music videos, just the way there’s value in repetition on the radio. When labels sign artists, they need them to be multi-dimensional. An artist like Ke$ha may need to live online a year before you bring her video out or song out. It’s the same thing for us with artists. When they come into MTV, new artists, we say to them, “Can we try to help build a narrative around you? Not just a music video, not just a song. Where did you come from? What kind of music do you love? Who are you influenced by?” Sometimes we ask them to make their songs available for interactive gaming - we just launched Rock Band Network today - and then there’s our television.

How do you view those properties like MySpace and other vehicles for new music discovery? Is that a tool for you or is that a competitor?
Yes, I’ll get into that in a second. I would say we want to use our superpowers for good, not evil. When there are not superstars in music, it’s bad for MTV, VH1 and CMT. We want to give our audience reason to come back, see their video and see them perform on the show. And part of this offsite that we had was “How do we promote music discovery?” We announced OurStage, which is a repository for emerging bands, today, Rock Band Network. We’re about to announce something that will hopefully live on all the networks called “Push,” which we’re calling, “Play until someone hears.” Imagine you have a band featuring their music each week in front of tens of millions of people and it’s integrating shows - there’s clips, there’s videos. We believe that we have to get in early on and invest our audience in its future stars. Justin Bieber was someone we chased early on. In terms of social networks - Facebook and Myspace - we believe they’re the telephone and hopefully we’re the conversation. And when you merge content with technology, you create this great experience. For us, it’s kind of like a megaphone. We want to use social networks. We’re not a technology company, we create content. So we create that Kanye-Taylor Swift moment and spread it around.

You mentioned Justin Bieber. What is your relationship with him?
What we’re finding is a lot of new artists are coming to us kind of as a media partner. Unlike a lot of the digital sites that just live online, we can marry multiple screens. From Rock Band Network to MTV.com to TV screens and create tens of millions of impressions. So artists are coming to us to say, “How do I create a story with you? How can you be my partner and get the word out."

What’s in it for you?
What’s in it for us is the ability to help break a song, help break an artist, and then get that artist to come back to us and do theme songs and integrate their music throughout our shows. So we have a relationship with them at the outset and we get to incorporate their music throughout multiple screens.

So you’re getting that music cheaper.
Definitely. Yes.

Was the Beatles Rock Band a good deal?
I love the game. I think it’s beautiful. It was created by people who love music who are engineers and musicians, and we worked with the four shareholders - Paul and Ringo and Yoko and Olivia - to go over the creative. I believe it will sell forever and it will be a great deal. I think we’ve had a couple of million units, a couple of million downloads, and we’re really happy with the game. So, yes, it was a good deal.

Financially, you’d do that deal again?
I would but there’s only one band like the Beatles.

What lesson would you say you learned? What are we going to see from a Beatles Rock Band to a Green Day Rock Band, not necessarily from a game playing point of view, but more on the licensing side? How these kinds of deals made and what future deals we might be able to expect from the Rockand platform.
The issue for us, and Guitar Hero as well, is we have to create an industry from scratch. So you had to get a $200 bundle out and sell the $50 game. We’re kind of getting past that point as the penetration of the hardware reaches a good number. So, we can primarily focus on software, which we will do with Green Day. Creatively, we’re going to take our cues from the band. The Beatles was chronologically going through their career from the Cavern Club to the rooftop. We’ll probably do less of that with Green Day. We’ll track their history a little bit but follow some of their iconic performances.

We’re not going to see Green Day-branded guitars to go along with this. This is a software kind of thing?
That’s probably right.

What advice do you have for Vevo?
We want them to be successful. As I said, we need stars, we need the industry to work. We’re symbiotic with the industry, across all of our different channels, so we’d love for them to work. The only advice I would give is, history has kind of told us what has worked on the Internet is primarily a compelling consumer proposition. As opposed to a business proposition morphing into a compelling consumer one. I think if they continue to integrate and get the product great, and get the content great, it’s got a real shot.

There’s going to be an obvious impact on how MTV plays music videos online now, because if you want to license videos, you’re going to have to do so via the Vevo aggregation hub. Is that something you plan to do?
We’ve had no problem getting videos. We expose more videos to people than Yahoo, AOL, and Vevo. And our traffic's growing, so I don’t really anticipate we’re goingt to have a problem getting the videos. We’re also going to create great content around the artist and the narrative around the artist and also we haven’t really unlocked the great visual history we have in music across our channels around the globe, which we’re slowly going to do.

How much of your video strategy is going to be [focused] on the ability to watch and air traditional music videos online vs. leveraging your best content to watch on MTV as well?
Music videos are a piece of it, but in addition to that, you saw Katy Perry Unplugged, that was online. We have tons of B-roll. We have lots of interview from Michael Jackson, Bob Dylan. I think music videos will always be a part of our offering online.

What’s the future of your partnership with Rhapsody? Is that going to continue to be more of an on-demand player through Rhapsody? Is that going to be a way to watch a music video instead, or both?
It’s both. We’re a partner with Rhapsody. We’ve just spun it off in order to give it a chance to integrate and iterate the product. I love Rhapsody as a product. It’s a subscription business primarily, the issue is getting across to the consumer the value of a subscription. But, we feel really good about some of the mobile applications for Rhapsody.

What are your thoughts on the subscription music business? You’re right, it has been a very difficult product to explain to consumers, but it seems like MTV would be the place that could help make that message.
We’ve tried, but stealing is pretty easy too. I’m really hopefully about it. I think it’s a great offering. The question probably for all of us is the price point and the ability to take it mobile.

I haven’t seen a lot of MTV-branded apps and things like that. What is your thought process there? What are pros and cons there?
We’re definitely building apps. We’re building one now for the iPad centered around music. MTV is the biggest music content provider for mobile around the world. We did something called “Five Dollar Cover” a couple years ago. We did the movie “Hustle & Flow,” with Craig Bueller and with Lynn Shelton, who did “Hump Day.” So “Five Dollar Cover” is really a 90-minute movie broken down into seven minute episodes, and in each episode there is a musician performing a song in Craig Brewer’s basement in Seattle, and you can watch it on your mobile handset episodically, so it exposes new music and new artists and also tells a story if you watch it through.

And you’re able to access that from certain mobile phones? Can anyone get that [regardless of wireless carrier]?
I think we’ve syndicated it. I don’t recall specific carriers for the first one, and the second one hasn’t been released yet.

What about putting your own app out there? “The Jersey Shore Nickname” app, for example? I want a cut of that.
Too late.

[Audience questions begin]

How do you see the movie strategy, what with all the movies MTV wants to create?
Music has always been integral to our movies. In fact, there’s a documentary [idea] that I love and I hope we can make it, about the music industry in the last 30 years, from Elvis Presley to the iPod. I’d love to tell that story if I can get anyone to talk. Right now, we’re shooting “Jackass 3D.” Music will be all over that as well. We’re also creating original movie for MTV, the channel. We just did a disco movie, “Turn The Beat Around,” which was a period piece, and then some horror movies. But we’re always exposing new music in our movies.

Billboard: What would you say is [characteristic of] the MTV movie?
I’d say it is a bit amorphous, like MTV. We reinvent ourselves every couple of years, and that’s sort of what we do. It’s really about speaking to young people and we’ve done everything from “Election” to “Napoleon Dynamite” to “Save The Last Dance.” If it speaks to our audience, then we want to connect to it. If it feels a little different, with a twist, then it usually is attractive to a bunch of us.

Audience: A lot of the ex-MTV people have gone to Myspace and tried to rescue it. Do you think there’s any hope there?
I do. I love Jason Hirschhorn and Courtney Holt, and I think they can do wonders. Obviously, they’ve had some turmoil with their staff. I’m hopeful. We’ve worked together with them on some stuff, but I’m just going to wait and see. But, I believe in those guys.

If it was part of MTV at this point, if you guys paid the $50 million and bought it, what do you think it would look like now?
I think we’ve come to the realization that we are not going to build technology as much as we’re going to find innovative ways to integrate them into our content. I’m not sure how it would look today but I’m sure it would look a lot more integrated with the content we create.

Billboard: Would MTV be in the position to acquire any of these digital music services that are out there?
I love some of the offerings. These guys are talking about Pandora, which I love and use. But it’s hard to beat free when you can get these technologies for free and apply them to what you’re doing. It doesn’t make that much sense to spend a lot of money to acquire them. For us it’s kind of cats marrying dogs: How does technology meet content and the end product is a great experience?

Questions? Comments? Let us know: @billboardbiz

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