Time Warner CEO: Time Inc. Spin-off Pushed Back to Early 2014
Time Warner chairman and CEO Jeffrey Bewkes said Wednesday that the entertainment conglomerate now expects to complete the planned spin-off of its Time Inc. publishing unit in early 2014 instead of late this year.
He said this will give new Time Inc. CEO Joe Ripp, who takes on the role next month, a little more time to "refine" the company's strategy. "Having someone of Joe’s caliber in place is a key element" of making the spin a success, he said.
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During an earnings conference call Wednesday, Bewkes also said that TW's entertainment networks brought in upfront market advertising price increases in the high-single digit percentage range. He said that was at the high end of all TV networks in the upfront this year.
And CFO John Martin reiterated that Warner Bros. full-year profits will come in at least as good this year as last if not better. That was in line with management's previous comments.
Last month, TW struck a new TV networks carriage deal with a top-five pay TV distributor with the fees for TW hitting its targets, Bewkes also said Wednesday. That puts the company on track to reach its goal of double-digit percentage gains in affiliate fees over the coming years. Martin added that more big renewals are coming up, with the financial benefits to first become visible next year.
Asked about continued moves from pay TV operators to push for a la carte offers of TV networks to consumers amid continuing programming cost increases, Bewkes said that was unlikely to happen. Instead, more pay TV operators could start to offer smaller bundles of channels. "We would be really well positioned in that scenario" given that more money would be spent on big networks and that this kind of offer could also make HBO more affordable to consumers, he said.
Weaker networks and network groups would face challenges though, the Time Warner CEO said. He cautioned though that smaller packages could lead to a reduction in diversity of voices.
Discussing recent programming changes at CNN, Bewkes said "we are seeing real progress." He lauded CNN for surpassing MSNBC in the second quarter in the 25-54 year-old key news demo and all adults for the fist time in four years. Gains have come "even away from breaking news coverage," he said.
Asked about the rampant piracy of HBO hit show Game of Thrones, which has made it by some reports the most pirated show in the world, Bewkes said its TV and online availability is strengthening subscriber engagement and its popularity is giving HBO the benefit of "tremendous" word of mouth. But he said HBO is not seeing many people cancel their HBO subscriptions, because of the show's availability in pirated form. If Game of Thrones is indeed the or one of the most pirated show in the world, "that's better than an Emmy," Bewkes quipped in conclusion.
Bewkes also expressed optimism that TW's Turner networks unit would have a deal with the NBA for years to come as some industry observers expect 21st Century Fox's Fox Sports 1 to go after basketball TV rights as well.
Asked about a recent slew of executive changes at TW, such as the upcoming move of CFO Martin to the top post at Turner and the previous appointment of Kevin Tsujihara as head of Warner Bros., Bewkes said the shuffles follow a similar trend. "It's just a new generation that has been here, which is reaching the point in their careers where they can take the next step," he explained.
Asked about the decision of 21st Century Fox and Walt Disney to continue owning Hulu, Bewkes called it a smart one. He then touted the move to on-demand television online and on TV sets.
Discussing Warner Bros., Bewkes said Man of Steel has made almost $700 million at the global box office. "That's obviously a great start to the franchise," which will get a sequel that will include Batman in 2015, he said, adding: "We have a lot more plans for DC." He didn't immediately share them.
He also lauded the early success of The Conjuring, saying it was on its way to $130 million in the U.S., which would put it among the top five horror films of all time. He also called We're the Millers, which opens this week, a possible sleeper hit.