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Bewkes: Disc Prices ‘Maybe’ Have to be Cheaper

11 May, 2012 By: Erik Gruenwedel

Jeff Bewkes

Movies sold at retail on DVD and Blu-ray Disc aren’t going away but probably should be less expensive, Time Warner CEO Jeffrey Bewkes told interviewer Charlie Rose.

Appearing May 10 on PBS’ vaunted “Charlie Rose” program almost a year to the day after infamously characterizing Netflix as the Albanian Army, Bewkes fielded questions on a broad range of topics, including movie distribution and home entertainment.

To followers of the charismatic CEO on quarterly fiscal calls or investor events, Bewkes’ answers weren’t new as much as they underscored his acceptance to a changing marketplace and the steps needed to remain competitive.

He appeared to dodge Rose’s question as to when there might be a major studio movie released simultaneously in theaters and retail channels.

“That’s a dangerous question,” Bewkes said.

The CEO restated support for theatrical distribution but said the time is coming when traditional windowing of movies into the retail channel four months after release doesn’t make much economic sense in an era of digital distribution. Characterizing the time lag as opportunistic for piracy and a challenge to consumers coveting ubiquitous access, Bewkes said theater operators and distributors have to find common ground.

“We can to do it in a way that doesn’t undermine the theater experience,” he said. “Everyone in the business, including the theater owners, has an interest in getting [distribution of movies] to a more current release [schedule]. You don’t want movie theaters to disappear. You want them to remain and get better."

Bewkes’ support of packaged-media sellthrough wasn’t surprising considering Warner Bros. Home Entertainment Group is an industry leader in the rollout of UltraViolet — the cloud-based digital locker platform that encourages consumers to purchase, not rent, movies.

He said the fact that discs are still sold at big-box retailers such as Walmart underscored an ongoing market for sellthrough as well as the significance of retail sales to the studios' bottom line. Bewkes reiterated comments from Time Warner's May 2 fiscal call where he hinted that packaged-media sellthrough could remain compelling to broadband-enabled consumers inundated by subscription video-on-demand and low-cost kiosk rentals, if priced correctly.

“If you can get movies now rented and bought electronically and you don't have to go anywhere, then that's going to take over," he said.  "The good news is that we can deliver that without brick and mortar [stores]. The bad news is [movies] maybe have to be cheaper."

During the May 2 fiscal call, Bewkes told analysts the studio does not set retail pricing.

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