Jeff Bewkes: If Premium VOD Hurts Theatrical Business, 'We All Have to Rethink' It
NEW YORK - Time Warner chairman and CEO Jeff Bewkes said Wednesday that his company will evaluate the success of premium VOD tests over time to make sure the new early-release film window doesn't undermine theatrical ticket sales.
"If it does that, it will be something that we all have to rethink," he said on TW's quarterly earnings call. "What nobody wants to do is to really cannibalize the theatrical window," which is key to studios and, of course, exhibitors, he added. "That is a legitimate concern the exhibitors have, and it is a concern that we share."
His comments came at about the same time as the National Association of Theatre Owners asked that studios participating in premium VOD trials to release sales figures for the films offered in the early window.
Meanwhile, BTIG analyst Richard Greenfield asked Bewkes about the analyst's suggestion in a blog post on Tuesday that TW spin off HBO. "It doesn't make any sense to us," Bewkes replied. "HBO is in a really strong position...We love having HBO."
He argued that HBO may among investors not be appreciated to the extent it benefits TW, it is a strong financial performer, and it wouldn't be valued higher separately. Bewkes also said HBO currently has the strongest programming slate ever, adding that 8 million viewers have by now seen the premiere episode of new show Game of Thrones.
CFO John Martin said TW had predicted HBO's U.S. subscriber count would stabilize this year, and so far, the company has seen that. The company didn't provide a subscriber update for HBO though. It typically does so only when it reports its full-year results.
Asked once again about Netflix, Bewkes said only about 4 million homes have broadband, but no pay TV subscriptions. And Netflix doesn't seem to have had a negative impact. It hasn't "led to very many Netflix subscribers cutting the cord," he said, adding that he feels that fears of cord cutting, or consumers' decision to give up pay TV services for broadband video content, has been "overblown."
Bewkes reiterated his view that Netflix is great for library content and serialized shows that don't play as well in syndication, while new, higher-value programming is better monetized on other distribution platforms. As a result, Netflix is "not a suitable multi-channel TV substitute for most viewers," and the two are likely to remain complementary services, Bewkes concluded.
He reiterated his view that Netflix is great for library content and serialized shows that don't play as well in syndication, while newer and higher-value programming is better monetizes elsewhere. As a result, it is "not a suitable multi-channel TV substitute for most viewers," Bewkes concluded.
Asked about possible merger and acquisition activity, Bewkes said he feels that TW doesn't need to buy or sell anything. Its Time Inc. publishing unit, which has in the past sometimes been seen as a possible business that could be sold, is a strong performer compared to peers and has upside from tablet computers, he argued.
Asked about the outlook for the upfront advertising market, Bewkes said he expects TW's Turner networks to once again bring in pricing "near the top of the industry range" across cable and broadcast networks.