Bewkes: Warner Loves Series-Supplier Business

Time Warner chief touts TV-series business and basic cable networks; no decision on AOL
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To pundits who predicted Time Warner’s TV production would suffer if the company did not own a Big Four network as an in-house buyer, Time Warner president and CEO Jeffrey Bewkes says that unattached status has proven to be more advantageous.

“What’s happened is we’ve been the second supplier to all four [networks],” Bewkes told the Deutsche Bank Media & Telecommunications Conference in New York City on Monday. “They can’t really do it themselves.”

He added broadcast network buyers can be persuaded to share costs involved in development and producing pilots, so Warner Bros. Television Group does not always shoulder all the risks.

Bewkes said that not owning a broadcast network has also meant it doesn’t tie up capital in a struggling business. “We’re doing very well with the current structure” of being a third-party supplier, he said.

In other comments, he said upfront ad sales are strong for the company’s basic cable networks; it’s full speed ahead for making more original cable series for its basic cable networks; and the prolific Warner Bros. studio is going to cut the number of films it distributes theatrically. Further, he indicated Time Warner hasn’t decided whether to sell its AOL business, which he said is showing strength despite some recent stumbles.

Bewkes explained that broadcast network TV series production remains a good business because of strong foreign buying of originals and robust prices that re-runs fetch from domestic cable networks. With the broadcast networks often concentrating on reality shows that don’t repeat well for their in-house productions, Bewkes said that leaves less competition for scripted dramas and comedies that Warner Bros. Television makes.

On the advertising upfront, Bewkes said he would not provide specifics for fear of tipping the company’s strategy, other than to say upfront ad demand is strong for the company’s basic cable networks and he expects it to stay strong for the scatter market.

On original cable series, Bewkes said the company’s cable networks such as TNT and Cartoon Network achieve a higher success-to-failure rate than broadcast networks. He explained that the program and audience focus of cable networks, which includes picking syndicated shows that fit the brand, lowers the risk of miscues than for a broad-based broadcaster.

In the studio’s theatrical business – that includes Batman and Harry Potter franchises – he said theatrical output in a year or two would be half what it was two years ago. Though there was no elaboration, Warner has been Hollywood’s most prolific studio distributing films, though it recently downsized its New Line Cinema affiliate.

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