Time Warner CEO Extends Olive Branch to Netflix, Theater Operators

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Jeff Bewkes discusses at a Tribeca Fest forum how premium VOD may reduce piracy and how studios must work with all distribution partners, while saying he has "a fondness" for Netflix's subscription TV business model.

NEW YORK — Time Warner chairman and CEO Jeff Bewkes extended olive branches of sorts here Wednesday to Netflix and theater operators concerned about the company's participation in a premium VOD partnership with DirecTV.

He mentioned a fondness for the business that Netflix is in and also emphasized that entertainment companies must keep theater owners and other partners in mind to succeed.

He also predicted that pay TV distributors could consolidate during the next 10 years into three to five big companies.

Asked about premium VOD at the Bloomberg-sponsored Business of Entertainment program at the Tribeca Film Festival, Bewkes said that most films "have about a three-week life" before getting a DVD release a few months later. That this is where piracy comes in, and studios, theater owners and production firms are getting hurt, he argued.

In an onstage interview, Charlie Rose asked Bewkes if studios do business with theater owners' interests in mind. "We have to," he replied, pointing out that the media and entertainment business always depends on collaborations and saying that the goal is to offer early-release movies without hurting the theatrical business.

Asked again about his feelings toward Netflix, which he has compared to the Albanian army in the past, Bewkes said: "I do have a fondness for subscription television, and Netflix is subscription television. So, welcome, brother!" The comment earned laughs from the audience.

In a CNBC interview earlier in the week, Netflix CEO Reed Hastings called Bewkes a comedian and signaled that he wasn't hurt by his past comments.

Asked about Netflix's push into original content, Bewkes said Wednesday, "We think it's great that they are doing that." He argued that it makes even clearer what kind of business Netflix is in. "If they move toward original programming, then they will be like HBO" and other premium TV services, he said.

Bewkes said that Netflix has a popular and "pretty cheap" streaming service, at least for now, with content that has been available elsewhere. And given a lack of broad availability of TV content online — something that Bewkes has been pushing for via his TV Everywhere initiative — he said Netflix is "convenient" for consumers. But he echoed that there will be other players in the streaming video space over time. "They have done some things that really, as an HBO person that came up in the shadows of the big giants of network TV, you got to admire," Bewkes said.

How will TW be different in five years? It will be "more global," Bewkes said, citing India and Russia — which has become the world's fifth-largest theatrical market — as examples of growth territories.

On a lighter note, Rose asked Bewkes how involved he was in creative decisions, and the TW CEO quipped, "That Sopranos thing was all mine."

One audience member also wondered if the adult entertainment industry is always ahead of Hollywood in terms of technology. "I'm going to look into this," Bewkes said, drawing more laughs. "I never thought of the adult industry as the cutting edge of technology.