Bewkes: Netflix and HBO Reinforce Each Other19 Nov, 2012 By: Erik Gruenwedel
With the rise in on demand content and time-shifted viewing through the Internet and digital video recorder, traditional media is scrambling to adapt to changing consumer habits and evolving technologies, Time Warner CEO Jeff Bewkes told a media panel.
Speaking Nov. 16 at the Innovation Without Borders conference at The Paley Center for Media in New York, Bewkes said subscription video-on-demand service such as Netflix, Hulu Plus and Amazon Prime Instant Video represent broadband-enabled VOD programming conduits.
He said Netflix’s ad-free streaming coupled with ad-supported Hulu, intermittent ad-supported Hulu Plus and iTunes’ transactional VOD represent a spectrum of distribution channels that show the viability of media and media rights.
“Everybody wants to watch [content] and there’s very healthy different models how you can watch it,” Bewkes said.
The CEO said the prevalence of Google and Facebook underscore the importance of search engines and social media recommendations. But he said both still do not own the rights to content, adding that the content business can benefit from the ongoing competition between search engines and social media to navigate consumers toward content.
Re-addressing a service he has become infamously attached to, Bewkes said Netflix represents a good example of how HBO has aggressively evolved to capture evolving technologies and viewer schedules. He said HBO Go, the broadband platform that allows authenticated viewers to watch repurposed and live content on myriad connected devices, has shined due to the success of Netflix.
“One of the proofs that HBO Go will be successful and currently is … would be Netflix. I think they do a good job. I think they have a good [user] interface. I think they have a viable and very useful position for consumers,” Bewkes said.
The CEO has publicly sparred with Netflix (and the rise of SVOD) over the years, once characterizing it as an invading Albanian army. Bewkes has softened his tone more recently as Warner Bros. has inked license agreements with Netflix and other SVOD platforms for catalog content.
“I hesitate in saying that, I always get over-reported on Netflix,” he joked. “The benefits of having content out there to people who very much want it is so huge that it’s hard to imagine that the desired product won’t get there.”
Bewkes again downplayed the so-called cord-cutting phenomena whereby increased numbers of cable and satellite TV subscribers jettison video channels in favor to over-the-top video access. He said the only signs of cord cutting he has seen is skewed toward low income households that don’t have broadband.
Instead, Bewkes said the rise in so-called “cord-nevers,” is a more interesting challenge. He said this younger demographic has the fiscal means to afford cable/satellite access but opts not to subscribe because they prefer their connected device.
“It’s not a money question for them, and that’s a key thing,” he said.
Bewkes said the key will be communicating to this demo that what they think they’re getting is not really what they want without paying for a bundled multichannel video service. He said SVOD has place aggregating TV content if windowed correctly.
“If you took the Hulu navigation system, cloned it, and launched into Fox, NBC, ABC, etc., it would do as well,” Bewkes said.