Jeff Bewkes Isn't Worried About Cord-Cutters
Consumers shunning cable and satellite TV for Netflix is "more of a notion than a reality," says the Time Warner CEO.
Time Warner CEO Jeff Bewkes looks forward to a day when all television can be viewed on demand, and he doesn't yet fear the phenomenon known as cord-cutting, whereby consumers shun cable and satellite TV and simply rely on broadband services like Netflix.
"We think as we turn all television channels into full, on-demand, watch-the-whole-season things, that you can basically reinvigorate -- the way HBO has," Bewkes said at the Thirteenth Annual Strategic Decisions Conference 2014 on Thursday.
From 30 to 50 percent of viewing at HBO is of past episodes, he noted.
"We think all of television needs to be revolutionized to that -- that's what we've done at the Turner Networks," Bewkes said.
He said cord-cutting is "more of a notion than a reality," even though Netflix, Hulu and Amazon.com are "really good" at streaming shows on demand at an affordable price. He also isn't worried about what some experts are calling "cord-nevers," a reference to young people who move out on their own and don't bother with a cable or satellite TV subscription. Just because they don't immediately sign up, it doesn't mean they won't eventually, he argued.
"Once they take the mattress and get it off the floor, that's when they subscribe to TV," he quipped.
Bewkes also said he isn't too worried about consolidation among distributors -- AT&T buying DirecTV and Comcast purchasing Time Warner Cable, for example -- even though some analysts say those mergers are happening in part to give those entities more bargaining power when negotiating rights deals.
"In some ways, it could help, because they will be more effective distributors," he said of potential mergers. "There are some issues, not in terms of pricing with us. We have plenty of power to handle that in our present size. It's really the question of what happens to innovation. ... We have the must-carry networks.
He also defended CNN, which he acknowledges has some ratings problems with its regular lineup, but it also makes about $500 million annually and has a very strong presence globally and digitally.
The CEO said 90 percent of Time Warner's revenue comes from TV and 10 percent comes from film, which ends up on television anyway.
He said there is "a lot of momentum in the studio business," but primarily because of the company's production of TV shows, some of which can be cash cows for many years, like Seinfeld, The Big Bang Theory and Two and a Half Men.
On film, he said the perception is that the business is "touchy-feely," but in fact it is more "systematic" at Time Warner than some people realize. He said Time Warner's movie business is more stable than that of the other large studios, with the exception of Disney's family films, and he gave a shout-out to Godzilla, a $160 million movie that has earned $327 million worldwide since opening May 16, and to Batman vs. Superman: Dawn of Justice, scheduled for 2016.