Bewkes: ‘Big Bang Theory’ Not Streaming Anytime Soon2 May, 2012 By: Erik Gruenwedel
Fans of “The Big Bang Theory” hoping the popular geek sitcom soon finds its way to Netflix, Amazon Prime or Hulu Plus shouldn’t get their hopes up, said Time Warner CEO Jeff Bewkes.
Bewkes — unlike other media chief executives — maintains a rocky relationship with subscription video-on-demand services, arguing that supplying them with premium content is penny wise and pound foolish.
While certainly not ignorant to the fiscal largess Netflix (and Amazon Prime to a lesser extent) is spending licensing premium content, Bewkes remains cautious to the short-term lure of SVOD dollars (unlike CBS CEO Les Moonves) and their impact on long-term incremental revenue.
Speaking May 2 to analysts discussing Time Warner’s fiscal results, Bewkes reiterated that maximizing the lifetime value of content through traditional distribution channels such as second- and third-cycle TV syndication typically exceeds the value of SVOD.
“If you've got something up on SVOD … you're going to erode the value for those kinds of shows that have second and third cycle syndication,” he said.
The CEO said top-rated “The Big Bang Theory,” which airs on CBS and went into syndication last fall on Fox and TBS (cable) for a reported $1.5 million per episode, “obviously is commanding very high license fees from traditional networks and stations that want exclusive rights for those exhibitions.”
Bewkes said, “There is a very large barter component to that, which, of course, doesn't exist on SVOD as a source of monetization.”
Instead, the CEO believes SVOD works for older shows that have already gone through syndication, in addition to serialized programming. Bewkes cited the recent deal between The CW (which Warner co-owns with CBS) and Netflix as an example of programming that had a higher value in SVOD than traditional syndication.
Meanwhile, Bewkes said he would take a look at licensing content to ad-supported Hulu should it mandate access via authenticated pay-TV subscriptions.
“We think the authentication of the programming inside Hulu, which is basically nbc.com, fox.com, abc.com, makes sense also, obviously because they're trying to strengthen their economic base by adding a carriage fee,” he said. “What's emerging, as we always thought it would, is basically an efficient market where the addition of SVOD makes content more valuable.”
Bewkes said the added value of syndicating “Big Bang Theory” is that cable buyers are putting programing on their TV Everywhere platforms, which enable authenticated subscribers to access episodes on connected devices 24/7.
Indeed, HBO Go, which is the Time Warner-owned pay-TV channel’s TV Everywhere platform, now is aligned with all major cable operators. Bewkes, who used to head HBO, said a key to circumventing SVOD is not allowing overexposure of shows on myriad channels, in addition to offering original programming on pay-TV channels.
Bewkes said there are internal discussions about dropping a studio partner when the license agreement ends and replacing it with increased original programming. HBO’s studio deals reportedly are set to expire beginning in 2013 and 2014.
“We've said very clearly that the advantage HBO has, given the fairly large throw weight advantage we've got in movie deals and the large advantage in original series, that we have the luxury of choice of whether we want to drop a studio,” he said. “And we're essentially going to evaluate that.”