Jeff Bewkes says content investments are paying off
Ratings are up at CNN, but so are costs, Time Warner's top brass admitted on a conference call with analysts on Wednesday.
The news network has struggled to position itself against rivals like MSNBC and Fox News that take a partisan approach to reporting, but under new chief Jeff Zucker it has introduced new programming and emphasized lighter pieces about pop culture and cooking.
“We're going to be investing more both in talent and shows” Time Warner CEO and Chairman Jeff Bewkes said, shortly after the media conglomerate released a strong third quarter earnings report.
“The new leadership and new programming is off to a great start,” he added.
But introducing fresh shows like the hyper-caffeinated morning program “New Day” and high-wattage talent like celebrity chef Anthony Bourdain are costly. Time Warner does not break out the revenues and profits of its individual television brands, but Chief Financial Officer John Martin acknowledged that operating income is down at CNN because of the rising programming costs.
“We're seeing the benefits of that [investment] show up in the ratings,” Martin said, adding that the company would continue to evaluate its financial commitment.
The call came at an unfortunate moment in terms of emphasizing the value of the new programs and personalities. Last week, CNN had its worst ratings in more than a year and poorest showing since Zucker took over, as viewers largely changed the channel amidst ongoing coverage of the clunky roll out of the Affordable Care Act. CNN averaged only 385,000 viewers, which was lower than Fox, MSNBC, HLN and CNBC, according to the New York Times.