Time Warner CEO Jeff Bewkes appears to have changed his tune on the potential threat from pay TV cord cutting. He used to say that those concerns were “overblown.” But today he acknowledged, in a conference call with analysts, that “we did see some sub declines last year in the basic cable universe and we have plans for the modest declines to continue.”
Still, he urges investors not to worry: Time Warner has digital expansion plans, including an eagerly anticipated streaming service for HBO this year. (Time Warner provided no additional details except that it will be “priced accordingly” for being a premium product.) What’s more, “we are working closely with all of our distributors to improve the consumer value proposition.” That could mean more VOD options, better user interfaces, and perhaps smaller bundles similar to the one Dish Network is offering at its $20 a month Sling TV streaming service.
Turner chief John Martin says that most of the cord cutters “either can’t afford [conventional cable and satellite service] or they don’t think there’s enough value in the offerings that are currently being provided.”
But Bewkes is optimistic that traditional content providers including Time Warner “will take back share from digital competitors over time…On the whole we think the value of the content networks is growing.”
On another matter, he says that Time Warner still doesn’t have a final carriage deal with Dish, which dropped most Turner channels including CNN, Cartoon Network, and truTV for about a month ending November 21. The companies are “having good conversations,” Bewkes says.
HBO chief Richard Plepler added, in response to a question, that the premium network’s program licensing deal with Amazon Prime last year has helped by introducing people to its shows — contrary to investor fears that it would cannibalize subscriptions to HBO itself. “The performance on Prime has exceeded even their expectations in terms of usage and customer satisfaction,” he says. And last year HBO saw the biggest growth in subscriptions in 30 years. “A lot of factors contributed to that, but Amazon was one of them.”