Time Warner execs: TV has to adapt to an on-demand world
TV, both traditional linear television and streaming services like Netflix and HBO Now, are moving to an on-demand world, Time Warner C.E.O. Jeff Bewkes told analysts this morning on the company's earnings call. "All TV will be going on-demand," Bewkes said.
The job of the TV executive, therefore, is to try to find a way forward in this new media environment, one that is poised to become splintered between traditional cable and satellite packages, niche streaming services, and streaming bundles like Sling TV.
For Time Warner, the foothold in the on-demand world is HBO Now, the company's inaugural subscription video-on-demand service. Right now it is exclusive to Apple TV and for Cablevision customers, though in a few weeks' time it will become available to other digital players. HBO C.E.O. Richard Plepler said that by the end of the year all of the company's cable partners will be on board too.
"Decidedly we are out of the gate fast," Plepler said on the call, while declining to go into specifics. "We got out of the gate very fast with Apple. We are delighted, they're delighted."
That said, there were some things that could be inferred on the call.
For starters, Amazon is likely to sell HBO Now to its customers once Apple's exclusivity window expires. HBO is “currently in discussions with Amazon about the size and scope of our relationship [with Amazon]," Time Warner's C.F.O. Howard Averill told the analysts on the call, adding that it could impact the company's results. Amazon Prime currently has streaming rights to past seasons of HBO series.
In addition, there is a good chance that Time Warner adds more options or packages to HBO Now, or creates new streaming services in the future, though nothing is imminent.
"We think the HBO Now product as it currently exists is quite extraordinary," Plepler said, in response to a question about adding more kids' or alternative programming. "There is no barrier to expanding what that content could be, we have an open mind about that. Our cousins at Turner and Warner Bros. could certainly be a part of that."
In other words, other Turner networks like TBS, TNT or Cartoon Network could find their way to HBO Now or a similar service.
A big reason for Time Warner's sudden embrace of streaming services and bundles: it isn't causing people to cut the cord. At least not yet.
"I will tell you that we are seeing absolutely no intrusion into people in the ecosystem. None at all. It is all additive," Plepler said. "We always thought this would be an expansion of the pie, and that is what it appears to be."
HBO's primary objective this year is to market the service. Any profits beyond the initial expectations will be spent on increased marketing for HBO Now. Time Warner, meanwhile, is also open to streaming bundles beyond Sling TV. Say, for example, one from Apple.
"We think Apple is very forward thinking about television, and the combination of TV and Internet," Bewkes said, coyly, when asked whether Apple was developing a bundled TV service. "I don’t think it would be a surprise to anybody that Apple would be interested in offering a more traditional bundle."
Still, while Time Warner is open to experimentation, it remains old school in some regards. HBO's Plepler and Bewkes both agreed that releasing all episodes of shows at once for "binge-viewing" is not in the cards for now, despite Netflix's strategy of doing so for all of its programs. Plepler said that HBO has the ability to do it, but that "I think there is a lot to be said for social media and being in the zeitgeist."
"We don't think much of the binge strategy for our networks," Bewkes said, more bluntly. He then channeled Jack Nicholson in the film A Few Good Men, saying "You want to binge? You can't handle the binge!"