Turner Broadcasting CEO Says "We're in the Fan-Engagement Business"
John Martin told market watchers that the Time Warner division eyes fandom, not mass audiences, to succeed amid peak TV and cord-cutting.
Turner Broadcasting chairman and CEO John Martin said he'd be happier with smaller yet insanely enthusiastic audiences for his network TV brands.
"We're no longer in the Nielsen, day part, CPM game. We're in the fan-engagement business. We need fans," Martin told market watchers Thursday at the MoffettNathanson Media & Communications Summit in New York City during a session that was webcast.
Turner and rival broadcasters increasingly face cord-cutters, -shavers and -nevers, as some households can't afford their current cable bundles or younger viewers head online for video consumption. The result is a cable TV business facing new video aggregators making content available a la carte to cord-cutters.
Given those technological shifts, Martin told investors "we need fans, not viewers." TV, he argued, had always been about getting as much reach as broadcasters could.
Not anymore: "I'd rather have a smaller audience that is more dedicated and loves the products we have, versus casual viewing that may aggregate to greater reach," he said. Fan engagement, Martin added, will ultimately lead to monetization, with emerging digital technologies underpinning that strategy.
Turner has done deals with Sling TV and Sony's Playstation Vue to reach younger consumers eyeing pay TV packages at a lower cost. Martin told investors that Turner faces higher expenses, mainly due to higher programming costs, including higher sports costs related to Turner's new agreement with the NBA and greater original programming costs.
But increased expenses would ultimately be offset by higher overall revenues, he predicted. And Martin said the planned sale of parent Time Warner to AT&T is on track to close this year, with Turner standing ready to leverage the phone giant's distribution platforms and audience data capabilities to better drive ad revenues.
"There's a lot we can do to try to grow advertising for the benefit of AT&T and Time Warner, and possibly for the benefit of the entire industry," he argued. Time Warner, the entertainment conglomerate behind Warner Bros., HBO and the Turner TV networks, has agreed to be acquired by AT&T for $85.4 billion.
Martin also talked about Turner's attempts to reinvent its drama network, TNT, and its comedy sibling, TBS, which now skews younger with a focus on original shows. "I think it's going fantastically well, better than we could ever have expected," he said of TBS, with new comedies such as Full Frontal With Samantha Bee, Jason Jones-starrer The Detour, Wrecked and People of Earth scoring with viewers in their first seasons.
"This is the year for the rebrand. … The talent we've been able to attract into our network — this will be a huge year for us," Martin added about TNT, which has moved to more highbrow, critically acclaimed, serialized programming.