Turner Networks chairman and CEO John Martin told an industry audience Thursday that the programmer is no longer focused on traditional ratings, adding he would be happier to have smaller audiences that are more engaged with the company's content.
"We're no longer in the Nielsen, day part, CPM game,” Martin said at the MoffettNathanson Media & Communications Summit in New York Thursday. “We're in the fan-engagement business."
The rise of cord-cutters, cord-nevers and skinny bundles is reshaping the way that people watch TV. And over the top services like DirecTV Now (owned by AT&T), Dish Network’s Sling TV and the recently launched Hulu Live TV, are encroaching on traditional pay TV outlets.
Turner parent Time Warner Inc. is currently in the middle of a $108.7 billion merger with AT&T, a process Martin said he was confident would be completed by the end of the year.
Martin said that Turner has deals with several OTT providers and will likely have more. But the shift in consumer habits is setting the notion that networks should strive for the largest possible number of viewers on its ear.
“It’s become increasingly clear to all of us that we need fans, not viewers,” Martin said. "That’s a different concept in TV because TV has always been about getting as much reach as you can. I'd rather have a smaller audience that is more dedicated and that loves the products we have, versus casual viewing that may aggregate to greater reach. I think engagement si ultimately going to lead to monetization."
Martin also commented on the emergence of virtual MVPDs, adding that while smaller packages may not include all of Turner’s 10 channels, they will include enough.
“My guess is we’re not going to be able to get 10 networks in all of those packages,” Martin said. “But 85% of our affiliate fees are in four networks and 90% are in five. If we can get four or five, we’re in good shape. If that means you could grow the overall pool of subscribers, because aggregate bundles of networks are being bundled in a way that subscribers like better, so they’ll be more subscribers, we’ll be fine.”