Time Warner, Sony Downplay Premium VOD Fears
Time Warner chairman and CEO Jeff Bewkes, CBS Corp. president and CEO Leslie Moonves and Sony Corp. of America CFO Rob Wiesenthal talk about the business at an investor conference.
NEW YORK -- It was a small gathering of entertainment moguls here Wednesday who discussed hot-button industry issues, such as early-release films in homes in the new premium VOD window.
Speaking on a panel with the title "Is Content Still King?" at the Jefferies 2011 Global Technology, Internet, Media & Telecom Conference, were Time Warner chairman and CEO Jeff Bewkes, CBS Corp. president and CEO Leslie Moonves and Robert Wiesenthal, CFO of Sony Corp. of America. They were joined by Imagination Abu Dhabi CEO Michael Garin.
Early-release movies were among the topics of debate. "There has been too much excitement about this," Bewkes said about premium VOD in highlighting that exhibitors and studios share the same interests. Discussing exhibitors, he emphasized once again that "nobody in the movie business wants them to be at risk," and suggested that studios and theaters have aligned interests in making content accessible in legal and high-quality ways to combat piracy.
People should have the choice whether to watch a film in a movie theater or at home later, Bewkes argued in explaining a consumer benefit of the new window, arguing premium VOD's existence may actually help reinforce interest in legal forms of viewing theatrical releases.
Wiesenthal also chimed in on the debate over premium VOD trials by some studios, including Sony. "Global theatrical distribution is the foundation of the economic value chain of a feature film," he said in a nod to exhibitors. But he also emphasized that studios must look to grow their movie business and take advantage of what he called the "white space" in the current system between theatrical and DVD releases.
"I know theater owners are scared," said Moonves, but suggested they have to "change a bit" as all industry players have had to adjust to technological changes.
Bewkes was once again asked about Netflix and whether TW's HBO may license its content to the company's streaming video service.
It makes no sense for CBS to license its shows to NBC, TW hasn't licensed HBO shows to Showtime, "so, [we] don't understand the question," he said in his response that emphasized that content firms don't typically make available their content to competitors.
But he once again lauded Netflix as a really good service with a great interface that has its proper place in the distribution chain. "If it's done right, it can be additive," Bewkes said about media companies' content deal-making with Netflix.
Asked about the relationship between content and technology companies, Moonves emphasized that technology harnessed correctly is content players' friend.
There has traditionally been a push-pull relationship between Hollywood and Silicon Valley, and in the not-so-distant past, some tech players may have even treated content as secondary, he said.
But now Moonves sees a better balance as everyone has realized that no one will watch "crummy" content even if it's available in all sorts of new platforms. "Wireless is worthless if you're hitless," he summarized. "They need us. They need us in the system," he said about tech companies. Moonves added that Yahoo, for example, can't do movies the way Warner Bros. can or create TV shows the way CBS does.
He emphasized once again though that media companies must get paid sufficiently for content distribution by tech companies.
Wiesenthal pointed out that this has been the case in recent Netflix content deals for Mad Men and the like, which he said were struck "for premium prices."
Bewkes echoed that notion."It is clear that the value of professionally produced content is going up and steadily going up," he said.
And the success of hit content gets magnified by technology, he also reaffirmed a comment he had made before.
After all, technology enables more powerful search and distribution opportunities for content. And social networks amplify the value of any hit show and hit movie, Bewkes said.
The industry top executives also agreed that Comcast's recent acquisition of a majority stake in NBCUniversal was a sign of confidence in the outlook for content companies. "It's a bet on content," said Bewkes. And Moonves lauded Comcast for having "foresight" and managing businesses well.
Wiesenthal reiterated that Sony benefits from owning consumer electronics, a commoditized business, and content. Putting joint venture 3D cable network 3net on Sony TV sets at electronics stores, for example, "gives us a real edge over our competition," he said.
Among the other topics discussed by the mogul panel on Wednesday: piracy, DVRs and their effects on advertisers and media firms, growing retransmission fee payments to broadcasters (Moonves said CBS Corp. is on track to at least hit its retrans revenue target, which may actually turn out to be conservative) and cloud-based content access digital lockers (Wiesenthal said consumers have been moving from a focus on content ownership to access, and "how do you add value to ownership" is a key challenge for music and film companies).
The Jefferies conference was for a business and finance audience. Bewkes and Moonves weren't asked about the future of Two and a Half Men, which airs on CBS and is produced by TW's Warner Bros. TV studio.