Bewkes: No Conflict Between HBO and UltraViolet2 Nov, 2011 By: Erik Gruenwedel
The aggressive rollout and promotion of the cloud-based digital storage platform UltraViolet is getting an assist from HBO – despite the proprietary premium pay-TV channel’s exclusive streaming rights to several studios’ theatrical releases, Time Warner CEO Jeff Bewkes said.
Speaking Nov. 2 in a call with analysts to discuss Time Warner’s third-quarter results, Bewkes said movies released into the HBO digital window also would be available in the retail channel with UltraViolet functionality.
HBO, which is owned by Time Warner, has exclusive deals with DreamWorks Animation (through 2013, then moving to Netflix), Fox Searchlight, Universal Studios, Focus Features and Summit Entertainment. It has secondary deals with Sony Pictures, Walt Disney Studios, Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate, among others.
UltraViolet-capable movies are digitally stored in a cloud-based ecosystem and can be digitally accessed via myriad compatible consumer electronics devices. The platform’s goal is to reinvigorate consumer spending on movie ownership (versus rental) of both packaged media and digital content.
Bewkes, former CEO of HBO from 1995 to 2002, said HBO will be part of UltraViolet and that arrangements currently are being made with the studios to make movies available in both platforms.
“The method by which and the arrangements that are being made by the studios to get those rights, I’m not going to go into in detail, but it’s going to work fine,” Bewkes said.
Indeed, with premium pay-TV channels losing subscribers — as witnessed by a combined 312,000 video subscribers lost by Time Warner Cable, Comcast and Cablevision Corp. in the most recent quarter — it would appear not to be in HBO’s interest to allow its content rights to be usurped by a competing technology.
“We understand the value of UltraViolet to buying, owning and having owning be a good consumer attraction,” Bewkes said. “But we don’t think it’s going to be a problem for HBO given some of the tweaks that we’ll make to HBO’s rights.”
Meanwhile, the CEO said he remains platform-agnostic regarding subscription VOD channels such as Netflix, Hulu Plus and Amazon Prime. Bewkes said the separate streaming deals between The CW, Netflix and Hulu are expected to generate $100 million in incremental revenue and about $50 million in operating income, underscoring the value of SVOD, especially for serialized niche programming.
“For our studio, what that does is monetize some content, particularly the serialized, older series, better than it was monetized before,” he said. “It adds money to the ecosystem.”