Turner Broadcasting CEO Discusses CNN Turnaround Efforts, 'Conan'

Phil Kent says Parker Spitzer is a 'work in progress,' he has 'very high expectations' for Piers Morgan, and content producers shouldn't over-expose shows online.

NEW YORK - CNN's primetime turnaround and its Parker Spitzer show are a work in progress. Conan O'Brien's TBS show may have seen its ratings decline after its premiere week, but is dominant among viewers 18-34. And programmers shouldn't over-expose programs online if they don't want to reduce their rerun value as, he suggested, was the case with Modern Family. Those were some of the highlights from an investor conference presentation Wednesday by Phil Kent, chairman and CEO of Time Warner's Turner Broadcasting System division.

The primetime ratings situation at CNN is "a bit more concerning" than other issues his division faces, Kent said, but highlighted that U.S. primetime only amounts to 10% of total revenue for CNN. Still, a show-by-show rebuilding is key in primetime, he said, adding that he has "very high expectations" for Piers Morgan's upcoming new show.

Meanwhile, Parker Spitzer is "a work in progress," he told the conference. It has the right form and idea, but he isn't quite happy yet with its execution, meaning it is "not everything that we want it to be at this point," Kent said at the Phoenix conference, parts of which were webcast.

Discussing TBS late night show Conan, Kent said that its first week in November was "phenomenal," but his team knew those ratings were unsustainable. "We're very happy with where he [the show has] settled in," he said, highlighting its "real dominance" in the 18-34 demo and its solid showing in the key 18-49 demo.

Kent also signalled that Turner will in the future push for higher carriage fees for Cartoon Network, telling the conference that "I don't think we get fair value."

Kent also downplayed recent investor concern about Netflix and cable cord cutting, but provided some words of warnings about the fast-evolving digital media space.

Echoing recent comments from Time Warner CEO Jeff Bewkes, he said content that can get top dollars elsewhere in the TV eco-system won't go to Netflix in the future. Warner show Nip/Tuck was an example that didn't get high bids elsewhere and therefore went to Netflix, he said. Kent argued that there is now "much heightened sensitivity" across the entertainment industry to the effect of new distribution platforms, including the Internet, on the value of content.

Time Warner's willingness to bid for content and to offer top dollars depends on where else the content is available, when and how easily, he highlighted, pointing to last year's cable syndication auction for Modern Family. Turner and its TBS thought the show was "a little too prevalent" on the Internet to pay up for a deal, which ended up going to USA, he said.

Meanwhile, cord cutting concerns were "verging on hysterical for a while," Kent said. "We just don't see it." The fact that most households that dropped cable subscriptions had no broadband connection and had low-level cable
packages is proof that the economy rather than changing viewing habits in the digital age have driven most subscriber losses.

Discussing advertising trends, Kent said Turner has seen "healthy" double digit growth in scatter prices over upfront levels this year and minimal cancellations.

The gap between ad rates for broadcast and cable networks have continued to narrow, with primetime entertainment shows being "the last frontier," he told the investor conference without offering a prediction on when that may close. "We don't want the broadcast networks to do badly," Kent said. "We actually want them to to be successful" and get good ad rates and push ad and new retransmission consent revenue into new shows that Turner can later buy in syndication.