Time Warner Looking to Delay/Forgo SVOD Content Licensing

4 Nov, 2015 By: Erik Gruenwedel

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Time Warner CEO Jeffrey Bewkes has seen the meteoric rise of subscription streaming. And he’s not happy about it.

Facing greater than expected advertising and subscriber declines at its networks, Time Warner CEO Jeffrey Bewkes Nov. 4 said the media giant will look to hold back content licensing rights to subscription-streaming services while accelerating rollout of proprietary digital services, including direct-to-consumer. 

Time Warner properties include Warner Bros., HBO and Turner.

Speaking on the fiscal call, Bewkes – a former vocal critic of Netflix and SVOD’s impact on TV syndication and pay-TV – appeared to revisit that skepticism, saying the company’s brands would look to retain syndication rights to programing (while increasing investment in digital infrastructure and content spend), rather than seeking short-term fiscal gains licensing content to SVOD stalwarts such as Netflix.

“We are evaluating whether to retain our rights for a longer period of time, and forgo or delay certain content licensing,” Bewkes said. “This would effectively push the SVOD window for content on our networks to a multi-year period, more consistent with traditional syndication.”

The CEO said SVOD drives smaller subscription revenue than pay-TV and features largely ad-free content.

“It’s pretty clear that SVOD offers less monetization support in general for the quality an diversity of programing that we’ve all gotten used to seeing on the dial.”

Interestingly, Warner Bros. Television in the third quarter licensed "Person of Interest" to WGN America's subscription streaming platform, and the first season of "Gotham" to Netflix. It also has a separate license deal with Hulu.

Time Warner over-the-top video ventures include HBO Now, CNN’s pending news-style “Great Big Story,” Turner Broadcasting Station’s new digital studio, “Super Deluxe,” and investments in iStream Planet.

Time Warner, along with Comcast, has been a major advocate of TV Everywhere, the digital on-demand antidote to SVOD that thus far has never resonated with subscribers.

“We think it is important to provide even more on-demand content as part of our network bundle,” Bewkes said.

The CEO said subsidiary TruTV would cut its advertising load in half for primetime original shows beginning late next year. Bewkes said such moves, in addition to greater on-demand access, would enhance the pay-TV subscriber viewing experience and drive greater value for Time Warner networks.

“Now, is the time for us to press our advantages,” Bewkes said.

When asked why HBO last year licensed content for the first time to Amazon Prime Instant Video, HBO CEO Richard Plepler said the deal involved library content three or more years removed from its initial broadcast and an opportunity to drive subscriber growth.

"A large percentage of Amazon Prime subs were not HBO subs. We thought it was just a great way for people to have a chance to sample our programing," Plepler said.

HBO plans to expand HBO Now to territories outside of the United States. HBO Latin America recently announced plans to offer a standalone SVOD service to Latin America and Caribbean broadband consumers. The service will launch in Columbia by the end of the year.

“We’re just getting started,” Bewkes said.

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