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Bewkes: UltraViolet Going to Australia, France, Germany, Ireland and New Zealand in 2013

6 Feb, 2013 By: Erik Gruenwedel

Time Warner CEO says cloud-based sellthrough platform expanding beyond U.S., Canada and U.K.

UltraViolet, the industry-wide initiative to reinvigorate sellthrough of physical and digital movies, is set to bow international access in the coming months with availability in Australia, France, Germany, Ireland and New Zealand, said Time Warner CEO Jeff Bewkes.

In a Feb. 6 fiscal call with analysts, Bewkes reiterated growing support for the cloud-based digital locker, which Warner helped launch through Flixster.com. The website is a key registration platform for consumers to register UltraViolet titles accessible on compatible devices anytime.

Bewkes said that with more than 9 million registered accounts and 8,500 compatible titles in North America, the time is right to expand UltraViolet internationally.

“In 2013, we expect to see a lot more retailers coming on board,” he said.

When asked about the pending management change at Warner Bros., Bewkes defended his selection of home entertainment executive Kevin Tsujihara to run the studio, saying Tsujihara would work well with Bruce Rosenblum, head of the TV unit, and Jeff Robinov, president of Warner Bros. Pictures, in guiding Warner in the digital age.

“Kevin is going to be a great leader,” Bewkes said. “I chose him because he’s got the experience across Warner’s businesses. I think he’s going to do a very good job putting together the television group, the theatrical group, our digital and home video business, and consumer products. Kevin’s very thoughtful about the studio business and the integration of all those businesses we have.”

Bewkes said Tsujihara, Rosenblum and Robinov underscore a strong “next generation” of leadership at Warner.

“All of them are young enough to go pretty long,” he said. “One of the hallmarks at Warner has been consistency of management over time and a deep bench. I’m very optimistic.”

Separately, Bewkes again expressed support for the subscription video-on-demand market, spearheaded by Netflix. Warner generated $350 million in incremental revenue in 2012 licensing mostly past TV programming to Netflix and Amazon Prime Instant Video. It expects to up that tally to increase 20% in 2013 — a figure that did not include SVOD license revenue from The CW, which Warner co-owns with CBS Corp.

“SVOD is the right place for serialized and library product,” Bewkes said, adding that traditional syndication is not a good fit for serialized programming.

“At the same time, we are seeing positive impacts on ratings on new seasons of serialized shows from having the old seasons available on SVOD basis,” he said. “We think it is feeding into the network ecosystem very well.”

Bewkes said Netflix’s foray into original programming is good for the industry, but would take a while to get up to scale and rival HBO, which has 10 original programs airing currently. He said original premium TV programming reminds consumers of the on-demand TV choices they have.

“But let’s give a little credit to Netflix. They are doing a great job,” he said.

Meanwhile, Warner reported record fourth-quarter (ended Dec. 31) operating income of $552 million, which was 29% higher than operating income of $427 million during the previous-year period.

Time Warner CFO John Martin said the studio’s operating income was a record for Warner and the highest ever within the industry.

Warner, which includes Warner Bros. Home Entertainment Group, said the increase in profit was due mainly to the timing and performance of theatrical releases, lower print and advertising expenses, and mix of television product, offset partially by the decline in home entertainment and video games revenues.

Quarterly revenue decreased 4% ($167 million) to $3.7 billion, due mainly to difficult comparisons to the year ago period. The prior year’s quarter included revenue from the home entertainment release of Harry Potter and the Deathly Hallows — Part 2 and from the video game release of Batman: Arkham City. The decline was offset in part by the global theatrical performance of The Hobbit: An Unexpected Journey and Oscar-nominated Argo.

Home entertainment revenue from theatrical releases topped $985 million, down 16% from $1.2 billion last year. Home entertainment revenue from TV shows reached $358 million, down 16% from $426 million last year.

For the fiscal year, TV DVD, electronic sellthrough, transactional VOD and SVOD revenue topped $1 billion, up 14% from $877 million in 2011. Theatrical home entertainment revenue reached $2.3 billion, down nearly 18% from $2.8 billion last year.

Regardless, Warner in 2012 remained No. 1 domestically in total home entertainment and in each of DVD sales, Blu-ray Disc sales, VOD and EST.

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