Time Warner CEO Jeff Bewkes said that his company’s stock market performance was “a little frustrating” give its superior operating performance.
Speaking at the 38th Annual UBS Global Media and Communications Conference in New York, Bewkes laid part of the blame on investor uncertainty over the future of media business models as digital delivery eats away at more distribution systems that have historically been more luctrative.
But Bewkes maintained that digital delivery was more of an opportunity than a threat to a company specializing in content creation.
“What digital does is allows us to take our networks and our magazines . . . and make them more powerful” he said, because consumers can use them whenever and wherever they want. He added that on the supply side, digital offers new low-cost ways to deliver content, open new windows and create new business models.
And while investors fret about new low-cost distributors like Netflix or Red Box, Bewkes suggested that the days in which tech get content at low prices while other outlets pay higher prices will come to an end.
“Those won’t continue because it’s not in the best interest of the value of content,” Bewkes said.
On Time Warner’s most recent earnings call, the company reported that HBO and Cinemax subscribers had fallen by 1.5 million. But Bewkes said “don’t worry about HBO.”
He reiterated that the subscriber losses were mainly promotional and that revenue is up.
“There’s not a cord-cutting issue. You’re not seeing it at HBO and Cinemax,” he said.
Bewkes said that HBO’s strength will be reinforced by HBO Go, which gives subscribers digital access to HBO movies and series. HBO Go has begun rolling out and should be fully deployed by the end of the first half of 2011.
He said there was also a possibility that HBO could be sold to people not subscribing to cable. That way they could become subscribers without buying a $100 a month package of cable programming.
That could happen through the network’s current distribution partners or through a direct to consumer offering. But he said the first priority was granting digital distribution to HBO 30 million paid cable households.
“We’ll start there before we start getting radical,” Bewkes said.
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