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Time Warner CFO: Windows Up Disc Sellthrough 15%

23 Sep, 2010 By: Erik Gruenwedel

Warner Bros. Home Entertainment’s 28-day delay of new-release movies to Redbox and Netflix has helped increase packaged-media sales 15% since implementation of the strategy earlier this year, Time Warner Inc. CFO Martin said.

Speaking Sept. 23 to an investor group in New York, Martin said early feedback on the kiosk embargo — also imposed by 20th Century Fox Home Entertainment and Universal Studios Home Entertainment — has improved cable video-on-demand 20% to 30%. Time Warner helped spearhead day-and-date VOD releases with DVD and Blu-ray Disc.

“You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it,” Martin said.

He said the ongoing digital evolution in home entertainment has resulted “an unprecedented” number of third-party players who want to help Warner Bros. monetize its content, including upstart VOD services, digital kiosks, subscription-based streaming.

“Digital is going to be good for our business,” Martin said. “We think it is a great time to be in our business.”

The CFO believes the market is beset with much experimentation as players try and figure out new models and new ways to reach consumers. He concurred that Warner Bros. has been less aggressive than other studios in making content available as it relates to some of these new models.

“Ultimately we have a strong belief that companies that own or control copyrights are going to act in an economically rational way,” Martin said. “Our approach has been to not lose sight of the long-term and don’t jump at short-term economics that may deter the long-term, but at the same time embrace technology that is going to improve consumer offerings.”

Martin denied that Netflix was becoming a direct competitor to HBO, but admitted management remains attentive to the competitive landscape, notably Netflix. Martin cited the recent sale of catalog fare, including FX series “Nip/Tuck,” to Netflix as strategic.

The CFO said HBO has license rights through the decade to half of all major studio movies, in addition to a growing portfolio of original programming, including current hit “True Blood” and “Entourage,” among others.

“We sell to competitors all the time,” he said. “It is how we maximize value as a content company. But it is not lost on us that we have to take into consideration the strategic landscape before we make decisions.”

Martin said the quiet rollout of HBOGO.com, which allows subscribers to access new and archived HBO content online, on demand and on portable media devices, would ratchet up in the near future. 

“We have very aggressive plans to make [HBOGO.com) available in many ways through distributors, and we are working with CE companies to make sure it is out there and available,” he said. “We feel very good about HBO, but we are not blind to competition.”

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