Time Warner Inc. chairman and CEO Jeff Bewkes said he was concerned about the high cost of programming for distributors, but added that rising rates are sustainable given strong product offerings outside of video and enhanced value they get through TV Everywhere rights.
“We do have a concern,” over the sustainability of rising programming costs, Bewkes said at the UBS Global Media & Communications conference Tuesday, adding that distributors have other products like broadband and commercial services that more than offset the cost of programming. And programmers that offer robust TV Everywhere rights, like Time Warner, enhance the value of those offerings.
“We have offered a more robust suite of TV Everywhere rights than anyone else,” Bewkes said. “That’s quite a lot of value..”
While he was confident that the distribution model will be maintained, he warned that multichannel video service providers do face some
But Bewkes warned that the slow pace of video on demand offerings from most distributors could threaten their businesses in the future.
Outside of Comcast and Verizon, VOD performance on the part of distributors has been “spotty,” he said, adding that the secret to the success of providers like Netflix has been the consumers ability to watch what they want whenever they want.
While Bewkes wouldn’t name names, he said that is video service providers don’t pick up the pace, someone else will , most likely a tech company.