Bewkes: Pay TV is Healthy, Growing


New York - Time Warner Inc. chairman and CEO Jeff Bewkes said that despite popular belief, the pay television business is healthy and growing, adding that initiatives like TV Everywhere are enhancing the value of subscription video packages.
Speaking at the UBS Media & Communications conference here Tuesday, Bewkes said that quality networks like Home Box Office, Showtime and others are "doing fine," adding that fears that online offerings would encourage so-called cord-cutting haven't materialized.
Time Warner and Bewkes were pioneers in the concept of TV Everywhere, where customers who pay for a video programming subscription are able to view programming on multiple devices for free. Bewkes said that Time Warner's Turner networks will be 80% TV Everywhere enabled by the end of the year. And he said instead of encouraging cord cutting, it is showing customers the inherent value of their video subscription.
Bewkes said that declines in pay TV customers are more due to economic difficulties rather than signaling a shift in distribution.
"If what we think should happen - and it's certainly happening with HBO and the Turner networks are right behind it and everybody else is right behind that - which is every channel you're used to going home and turning the dial to see, if it's on every one of your devices is on demand, it's becoming more useful and valuable to you, it becomes more useful to your kids and it doesn't cost more," Bewkes said. "Why wouldn't it go up?"
On the advertising front, Bewkes said that the Turner networks were at the top of percentage increases in the most recent upfront and that scatter pricing, up in double-digits for the overall market - was similarly strong at Time Warner. While there was some softness in the fourth quarter - which he suspected was because some advertisers were pulling inventory forward into the next upfront - it is expected to rebound in the first quarter.
"I think we feel OK; better about the first quarter than we did about the fourth," Bewkes said.
Bewkes also addressed complaints from earlier presenters who lamented the rising costs of programming - Liberty Media CEO Greg Maffei said Monday that ESPN carriage fees are like a tax on every American household. Bewkes, said most of the complaints have centered on sports programming, which has some of the highest costs. While some Turner networks have some high cost sports rights - including TNT and TBS, which stuck a $10 billion joint venture with CBS over the NCAA Men's Basketball Tournament and already carries National Basketball Association games.
Bewkes said that Turner would be open to acquiring even more sports rights, including for National Football League games, but only if it made economic sense.
The NFL, according to reports, is close to extending its existing agreements with Fox, NBC and CBS by eight years, asking for an additional $3.2 billion per year.
"We will look at anything," Bewkes said. "We could do something like that, but only if it made us money."
Bewkes stressed that Turner was not trying to recreate ESPN. "If you look at where sports fit for TNT and TBS, it's a very strong part of our program lineup, of what we offer to affiliates, of how we provide steady audiences to launch original programs and acquired series programs. It's part of the mix; it's not a dominant part of the mix."
Bewkes also had some kinder words for over-the-top video service providers like Netflix and Amazon - last year at the conference he said a Netflix domination of the video space was akin to the Albanian Army conquering the world. Bewkes said at Tuesday's conference that services like Netflix, Hulu and Amazon have proven to be good outlets for content and have extended the life of serialized shows that traditionally have not fared well in syndication.
"Netflix is our friend," Bewkes said. "We're partners."