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Investors spooked by consumers opting for smaller cable TV packages, or none at all, got some cheer Tuesday from Turner Broadcasting chairman and CEO John Martin.
“We may be bucking the trend somewhat, because we are now…into a multiple year period of revenue acceleration,” Martin told market watchers Tuesday at the Jefferies Media & Communications Conference in New York City. The Turner exec offered a bullish assessment of his company’s financial picture for the year as the Time Warner division continues to reinvent itself, in part by reaching out to subscription streaming TV services.
Martin argued cord-cutters, -shavers and -nevers were increasing because the market “is being priced out.” Some households can’t afford their current cable bundles, he said, and distributors are paying affiliate fees to networks that have little or no value.
But Martin predicted an industry shakeout as the cable business in part embraces new video aggregators to make content available a la carte to cord-cutters. Martin pointed to recent deals by Turner with Sling TV and Sony’s Playstation Vue that have allowed Turner to reach younger consumers who want a pay TV package at a lower cost.
He also told analysts Turner will secure affiliate revenue growth by landing higher rates from cable and satellite operators for better original shows, especially on TBS and TNT. Here, Martin pointed to the success of original programming like Angie Tribeca and Samantha Bee’s late night TBS show.
Martin said streaming TV packages with Turner shows will help offer “an economically viable portfolio of networks” to consumers that traditional cable distributors have been slow to provide. He added that Turner brands like TNT, TBS, Cartoon Network and CNN will be well-placed to be part of the streaming TV service offerings.
“In almost whatever bundle that will be constructed and offered to consumers, there’s a pretty good chance those networks will be in there and highly represented. That’s our goal,” Martin told analysts. The bottom line, he added, was subscriber declines are not inevitable, and can be reversed.
“I’m saying there’s a path and a course that suggests that doesn’t have to be the outcome,” Martin said.
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