Remember when Time Warner executives were obsessed with cable TV and protecting the pay TV bundle? Although the medium still accounts for most of the company’s profits, seems like those days are gone based on comments to analysts today where most questions in a conference call dealt with digital initiatives including HBO Now and decisions to syndicate hit shows including Friends and Seinfeld to streaming services.
There’s a lot of curiosity about HBO Now, the 3-week-old service streamed to Apple TV and Cablevision customers. Execs say that they’re pleased with the early results, but offered few specifics. Yet HBO chief Richard Plepler says that it has made “absolutely no intrusion into people in the ecosystem” — in other words cord cutting. “It’s an expansion of the pie.”
Plepler adds that he has an “open mind” about the possibility of adding shows from Turner or Warner Bros, or others. “We’re very flexible abut what might evolve,” he says. But here, too, nothing concrete.
CEO Jeff Bewkes says that he’s willing to offer Time Warner programming to Apple if it offers an online competitor to cable and satellite — which he’s “pretty confident” the company will do. “Apple is very forward thinking about television and the combination of TV and the Internet,” he says. In addition to the alliance with HBO Now, CNN has an app on the new Apple Watch, and is carried on Apple TV.
The company doesn’t fear that cable operators will retaliate because Time Warner has “great channels and no weak channels,” which means everybody will want them. Turner networks are on Dish Network’s Sling TV and Sony’s PlayStation Vue online services.
Interestingly, Bewkes — long a big defender of the pay TV bundle — tiptoed around a question giving him an opportunity to take sides in the dispute over Verizon FiOS’ new Custom TV package: ESPN says that the arrangement, which offers subscribers a basic package without the sports channel, violates its contract with the distributor. Verizon says it doesn’t.
He declined to take sides but added: “To the extent that distributors are able to create packages that are more attractive to consumers, that’s great.” About 90% of Turner’s revenues come from five networks.
Meanwhile, the entertainment giant talked up recent agreements to syndicate Friends to Netflix and Seinfeld to Hulu. Time Warner also is talking to Amazon about a deal that could change “the size and scope of our relationship,” CFO Howard Averill says.
Bewkes poked fun at his comment five years ago that Netflix was like “the Albanian army” trying to take over the world: “You have to admit, I’ve had some great quotes about [subscription video on demand],” he says. Now it makes sense to bring streamers into the pipeline for the two mega-hit shows because Seinfeld is in its fourth syndication cycle, and Friends is in the third. In other words, they shouldn’t take too many people away from conventional pay TV.
“As the world moves to offering more on-demand ways to see your favorite shows, all the networks are bringing video on demand into their network offerings,” Bewkes says. “We try to figure out what is the best match for a particular piece of programming.”
But he opposes binge watching, which he underscored in a strained reference to the 1992 film A Few Good Men: “As Jack Nicholson said, ‘You don’t want us to binge. You can’t handle the binge.’ “