“We have a pretty hefty budget, a couple of billion dollars,” he told the UBS Global Media and Communications Conference. “We’re not spending our programming money on library product. We’re doing original shows. … We’ve been increasing it, and we’ll keep increasing it.”
The plans won’t be hurt by AT&T’s new decision to offer HBO to DirecTV Now customers for an additional $5 a month — a surprisingly low amount.
Acknowledging that the pricing arrangements are “complicated,” Bewkes said Time Warner just controls HBO’s wholesale price.
“A lot of times the distributors have priced it very high in order to drive other pay TV services they bundled with it,” he said. But Time Warner “always wanted to [offer] HBO in a more affordable price range. … It’s all aimed at providing good retail offerings for consumers.”
The CEO offered nothing new about the status of AT&T’s $85 billion plan to buy Time Warner. He expects it to be “done by the end of 2017, if not sooner.”
Bewkes reiterated his belief that the union will “motivate everybody including the cable operators” to increase their capabilities to offer high-priced advertising targeted to specific viewers.
“It’s good for programming development and helps to take the burden of paying for media and puts it on advertising,” which he says has been “focused on two companies: Google and Facebook.”
Speaking of the ad market, Bewkes said scatter pricing is up by a double-digit percentage versus the upfront market. Time Warner will be “basically flat” in Q4 with pressure overseas as local currencies lose value vs the strong dollar.
Responding to questions about other parts of the company, Bewkes defended the approaches Warner Bros took to Batman v Superman: Dawn of Justice and Suicide Squad that irked some critics and fans.
“We were launching new characters,” he said. “So we had triple duty to do: launching those characters and producing a good film. I don’t think we fell short by a giant amount.”
The CEO also talked up CNN for having “a killer year.” It wasn’t just due to coverage of the U.S. presidential election.
“It’s global news, not just American, and there’s more going on in the world than things that go through the political process,” he said. In addition to investing in global news coverage, CNN has built its Internet offerings.
“We are the leading source of digitally accessed news around the world,” Bewkes told the conference. In addition, “CNN created a lot of great original shows, and almost all of them worked.”