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Bewkes to Netflix: Want Content? Pay a Higher Price Than Cable

22 Sep, 2011 By: Erik Gruenwedel

Jeff Bewkes

Time Warner CEO Jeff Bewkes said he embraces over-the-top video services such as Netflix, Amazon Prime and Hulu if they stick to their role in the distribution food chain

Downplaying previous comments made about Netflix as “colorful reporting” by the media, Time Warner CEO Jeff Bewkes Sept. 22 said he welcomes engaging in license agreements with Web-based video services and does not see them as competitive to pay-TV channels TNT and HBO — both owned by Time Warner.

Speaking at the Goldman Sachs investor event in New York, Bewkes said Warner has deals in place with the subscription video-on-demand services, including Netflix, and said he would be “quite happy” to do “vigorous licensing” of content going forward.

He said licensing Warner Bros.’ movies and TV content simply comes down to maximizing the value a particular property can get in distribution. Bewkes reiterated that it is important that SVOD add — not detract — from the economic ecostructure of content monetization.

“Don’t sell product into a platform where you end up with less money than when you were selling it to the previous buyers,” Bewkes said.

The CEO said the distribution horizon is big enough to accommodate all players. He said SVOD should distribute movies and TV shows that don’t have a higher value in other traditional channels, including syndication, cable networks and first-run syndication such as TNT.

Bewkes said channels such as TNT have huge economic models that pay big license fees for new TV programs and movies. He said SVOD services have transformed into valuable distribution channels that could accommodate traditional syndication content, provided they pay a higher price for it than traditional cable buyers.

“That is essentially what has happened,” Bewkes said characterizing Netflix’s content acquisitions this year. He said certain serialized dramas would play well on SVOD.

“We think it is a sustainable model and a big add to the economic market,” he said. “It is working out a net-plus to everybody, including consumers.”

When asked about declining DVD sales, Bewkes said the advent of digital access to movies has raised the question: Which titles are worth buying and which are worth renting?

He said rollout of the cloud-based digital locker UltraViolet solves the dilemma by offering consumers a way to store and access their movie/TV program acquisitions (both physical and digital) electronically. Bewkes said the recent acquisition of Flickster.com allows users to manage, rate and store their movie collections.

“You bought it, there it is. You rented it, there it is. That’s where we see [UltraViolet] going,” he said.

About the Author: Erik Gruenwedel

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