Time Warner CEO Talks 'House of Cards,' Sees No Proof of Cord Cutting

2012-43 REP Jeff Bewkes P

Time Warner's chairman and CEO scores a new five-year deal that could earn him an additional $30 million in stock bonuses if the company thrives.

Jeff Bewkes at an investor conference declines to comment on a potential sale of the Time Inc. magazine unit though.

Time Warner chairman and CEO Jeff Bewkes on Monday shrugged off any suggestions of cord cutting or cord shaving that could threaten the business of pay TV giants or his company's cable networks and lauded Netflix's first original, House of Cards, as a "pretty good" show.

But he said his company's HBO continues to feel that making all episodes of a season available at once isn't the best way to launch a series. "We want to have the water cooler effect," he explained.

Speaking at the Deutsche Bank 2013 Media, Internet & Telecom Conference in Palm Beach, Fla., he also said that HBO's Game of Thrones is the "most stolen show on Planet Earth," adding that while this shows the series' popularity, "we have to fix that." His appearance was webcast.

Asked about a potential sale of all or large parts of TW's Time Inc. magazine division, Bewkes on Monday said that "we can't comment on these things." He also declined to comment on whether Time Inc. was a non-core asset in that context.

Questioned about Netflix's offerings of full seasons of TV shows on demand and its own original fare, Bewkes said that was mindful of HBO in 1997. "That's great," he said. "We have been encouraging that."

Asked if HBO could license its series to subscription VOD services like a Netflix or competitor Showtime, he said he feels that there is more money in HBO and furthering its growth.

Has the pay TV bundle become too expensive for consumers amid rising network carriage fees, which many pay TV operators have criticized? To the contrary, Bewkes said. "It is becoming a better deal for consumers," including thanks to the increasing availability of pay TV shows online and programming investments from companies like his, he argued. Pay TV providers don't have to fear a consumer backlash, because "we all know that the reason [why programming costs and pay TV bills are up] is the sports fees."

That is why there is no real cord cutting as consumers have decided they mostly want to continue pay TV subscriptions, he argued. "You don't see evidence of cord cutting or even cord shaving," Bewkes said. Netflix has grown from zero to 27 million subscribers, and there has been no real decline in pay TV penetration in the U.S., he said.

And addressing low-end pay TV packages that provide a smaller number of basic channels for a low price, Bewkes said: "Nobody buys them."

Could TW offer all its cable networks to a broadband video service? Maybe, Bewkes said. "But noone has come along with that yet," he said. "It would have to be economically accretive to us."

Bewkes lauded Warner Bros. for continuing to report strong earnings every year and also cited positive ratings momentum at his company's Turner networks. "We're looking towards a real resurgence at CNN," he said when asked about the news network.

Discussing TW's broader outlook, Bewkes said "we're going to accelerate our growth" thanks to affiliate fee growth, continued momentum in TW's international TV networks business, new ways of monetizing content and cost cuts. 

Email: Georg.Szalai@thr.com

Twitter: @georgszalai