Bewkes: DVD Sales Decline ‘Moderating’

20 Sep, 2012 By: Erik Gruenwedel

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Time Warner CEO Jeff Bewkes Sept. 20 told an investor group that while sales of movie discs continue to decline, the drop off is moderating a bit due to evolving strategies aimed at making content ownership easier and more price effective.

Speaking Sept. 20 at the Goldman Sachs Communacopia Conference in New York, Bewkes reminded attendees that Warner Home Video continues to lead the home entertainment industry in market share even when its theatrical business doesn’t. He said that is due in part to the studio’s effort in mirroring TV Everywhere strategies in TV programming. Specifically, the concept is to return the consumer mindset to the value of content ownership enjoyedyears ago with DVD.

Bewkes said titles offered on Blu-ray with UltraViolet and released on altered street dates underscore marketing efforts aimed at the consumer. He said Walmart’s disc-to-digital platform and studios making content available digitally on myriad consumer electronics devices, includes Warner subsidiary Flixster.com, which operates an UltraViolet platform open to any studio.

“The industry will continue to experiment to get electronic sellthrough effectively priced offered … at a time when … it is more appropriate [economically], and easier to manage across all your devices, so [content] ownership is worth something,” Bewkes said.

Separately, the CEO said offering HBO Go as a standalone service to broadband subscribers in the United States is a concept that could become reality if the multichannel video distribution ecosystem allowed it. Bewkes said currently about 30 million of the 100 million cable households in the U.S. get HBO. He said the other 70 million aren’t because those consumers consider it too expensive when included in a bundled premium TV package.

“People want to buy HBO [separately],” Bewkes said.

As a result, efforts are being made through Time Warner’s affiliate distributors to target those 70 million non-HBO households with lower-priced content bundles that include the premium channel. A standalone option is not currently in the planning.

“We’re getting there,” Bewkes said. “In the long run if there’s a clear development and enough people need an a la carte offering of HBO, when we get there we’ll look at it. But it’s not the main opportunity to enter now.”

He said included in carriage deals negotiated with multichannel video distributors, there is language allowing Time Warner to market HBO Go as a separate entity. Time Warner did launch HBO Go independently in Scandinavia due to the lack of a penetrated TV distribution network.

“We didn’t have a way to get [into Scandinavia] where HBO could have an adequate position,” Bewkes said. “So we decided on a broadband plan. If that was the situation in the United States, we would do the same thing.”

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