Time Warner CEO Discusses Network Carriage Fee Growth Goal, CNN's Future

2. Jeff Bewkes
Michael Loccisano/Getty Images

Chairman and CEO of Time Warner

From the Time Warner Center in Midtown Manhattan, Bewkes oversees Hollywood's most profitable studio, Warner Bros., which has scored with the Harry Potter juggernaut; cable networks including HBO, CNN, TNT and TBS; and increasingly digital magazines including Time, People and Sports Illustrated. Bewkes led Time Warner to $5.4 billion in operating profit last year, exceeded only by West Coast-based Disney.

Jeff Bewkes also discusses the "Dark Knight Rises" shooting and addresses possible content deals with Netflix and Google.

Time Warner chairman and CEO Jeff Bewkes on Wednesday emphasized that CNN will focus on drawing an audience that sticks around by putting on programming "that will hold viewers."

Speaking on his company's earnings conference call, he also vowed that the conglomerate would get carriage fee increases in the coming years and expressed his company's sadness about the recent shootings in Colorado during a screening of Dark Knight Rises, which TW's Warner Bros. released.

Bewkes shared ”our profound sadness about the terrible events” in Aurora, Colo. during a screening  And he said that the company's ”deepest sympathies go out to the victims of this appalling crime, their families and their loved ones.”

Discussing CNN where president Jim Walton has announced his departure at year's end, Bewkes reiterated his previous comments that he is not happy with ratings and CNN's performance when it comes to attracting viewers longer-term.

"To be clear, we are not satisfied with CNN's ratings performance and we are focused on fixing it," he told analysts on the call. He vowed that CNN's presentation must come "in a very compelling and more engaging way" to not only attract folks during big news stories. He didn't detail programming plans further.

Bewkes also discussed the outlook for content deals with Netflix and Google. Asked about Netflix and a possible future relationship with HBO, Bewkes said Wednesday that both companies have been complimentary of each other, but they remain mostly competitors.

"There are not talks now going on" between HBO and Netflix, he said, reiterating a comment from HBO last week after Netflix CEO Reed Hastings' comments on an earnings call seemed to suggest current talks. "Sometimes there are ways for other relationships to emerge over time. Not now, but we'll see in the future," Bewkes said. He added that HBO looks to be on track to end 2012 with more U.S. subscribers than in 2011.

He also reiterated that there were no plans for a standalone HBO Go service offer as that continues to be against the company's best economic interest.

Broadly speaking, Bewkes said TW remains in talks with all subscription VOD providers about possible content deals, with the CW looking to make $80 million-$85 million in revenue this year. CBS Corp. and TW each own 50 percent of that network.

Bewkes also signaled that TW could strike a possible content deal with Google's fiber-based pay TV service that is scheduled to launch in Kansas City. He said that the service would be a more traditional pay TV offer rather than an over-the-top service and said he was applauding Google's initiative.

Following the recent Viacom-DirecTV carriage spat, Bewkes said that the 2013-2016 period will see the "biggest affiliate renewal cycle in years" for the conglomerate's networks. He touted program investments and his channels as "some of the strongest brands," emphasizing that the value of TW's networks "exceeds the value we are receiving." As a result, he said TW is targeting the Turner networks will grow domestic subscriber fees at a double digit percentage pace annually.

Finally, TW CFO John Martin cautioned that the third quarter will see advertising challenges before a fourth-quarter return to ad growth. He said that money is "being diverted to the Olympics" and pointed out that this year's third quarter has fewer MLB games than last year's. While the impact of the Olympics is difficult to quantify, he said it seems to be "quite material" in the current quarter..

The fourth quarter will be "much, much stronger," Martin said, driven by election ad spending, improved ratings, easier comparisons, a healthier post-Olympics scatter market and various other factors.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai