Time Warner CEO Jeff Bewkes Addresses Netflix Competition

9:58 AM PST 02/06/2013 by Eriq Gardner
Time Warner headquarters in New York City.

Speaking on an earnings call, Bewkes plays down the company rival as a threat to HBO and dismisses suggestions of a Turner Sports Network and "contentiousness" with Legendary Pictures.

On a conference call after the announcement of fourth-quarter earnings, Time Warner CEO Jeff Bewkes focused on the emergence of digital as an important platform for the company.

Last month, Warner Bros. Television Group signed a new licensing pact with Netflix, giving U.S. subscribers access to previous seasons of eight serialized dramas including Revolution and The Following.

Bewkes said it was a sign of things to come.

"We have been saying that subscription VOD is the right place for serialized series," he said. "We are seeing a positive impact of ratings for serialized shows by having old seasons of series available. I think as (CFO) John (Martin) reported, we generated over 300 million dollars from SVOD deals last year. We have since signed new deals with Netflix and Amazon. We feel good about the trajectory of the business and think it is fitting into the network ecosystem well."

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The relationship with Netflix is a complicated one given that in some respects, the pay video-on-demand provider competes with Time Warner's HBO and has recently moved into original programming with series such as House of Cards. On the earnings call, the company revealed that HBO now has 114 million subscribers globally, which is about four times Netflix's subscriber base. On the other hand, it was also reported that HBO had picked up 1.9 million subscribers in 2012, which was slightly behind Netflix's growth.

Bewkes was asked about the competition.

He said that he felt great about how HBO was doing, that it had "the best original programming slate ever," and that HBO Go is leading the way on TV Everywhere, "showing everyone how much of a pot of gold is at the end of the rainbow."

As for Netflix, "Let's give credit," he says, giving praise for the functionality of Netflix's service and the consumer-friendliness of its search capabilities. He's paying attention to House of Cards, but says it is premature to make a comparison. "HBO has done this for 25 years. It takes a while to get it up to scale."

On the earnings call, Bewkes addressed the health of the company's TV division at large. He says that investing in original content is a core directive, promising that TNT and TBS will increase the number of original episodes in the following year by 40 percent. As for CNN, he says that while overall ratings fell short of expectations, he was "optimistic that with new leadership, CNN will once again fill the promise of its iconic brand."

Bewkes also pointed out that Turner now has more sports than any other cable network other than ESPN -- a less-than-subtle jab towards Fox, which has recently prompted rumors of launching new national sports networks. Asked whether Time Warner might do the same, Bewkes ruled it out.

"We continue to evaluate potential opportunities in the future, but we will do that on the existing networks, not as a standalone sports network," he said.

Among the other topics addressed was the plan for the relationship going forward with Legendary Pictures, which has collaborated with Warner Bros. on a number of films from The Dark Knight Rises to the upcoming Man of Steel.

Asked about whether the relationship has grown contentious, Bewkes responded, "There is no contentiousness. There's problem-solving going on... Don't worry about that."

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