Time Warner CEO Jeff Bewkes sold his company to AT&T last year for $85 billion, as America’s first telecom and one of its oldest production companies decided to join forces as content and distribution increasingly converge on the internet.
However, while Bewkes touted the technical and advertising advances Time Warner has made through its streaming ventures, he thinks traditional pay-TV will still be the main way most Americans watch television for the next few years.
“You’re going to see still in three to five years the majority of subscribers existing through the ecosystem and existing business we know,” he said at the Deutsche Bank 2017 Media & Telecom Conference in Palm Beach, Florida.
However, Bewkes does believe pay-TV will “evolve into a bigger variety of skinnier and fuller packages,” saying, “you’ll have some genre-focused packages in sports and other things.”
And to accommodate the increasing amount of TV delivered online, Bewkes said Time Warner is already investing heavily into bolstering its technical capabilities.
“We’re putting more into tech operating systems,” he said. “Think of what we’ve built for HBO GO and HBO NOW.”
Bewkes also said Time Warner’s digital strategy of putting many of its shows on demand, available for viewing online through authenticated apps, has helped the company evolve its advertising strategy.
“What we do we have is all of our originals, including at CNN, on demand [with] full seasons,” he said. “We are increasingly putting emphasis on that at Turner. We’re leading with data-driven advertising products to give you [return on investment] and engagement. We think our partnership with AT&T will help accelerate our capabilities there.”
Bewkes returned to the topic of targeted ads as one of the biggest benefits Time Warner has received from the growth of its streaming services, like HBO NOW, which recently topped 2 million subscribers.
“The more over-the-top or digital standalone HBO subs we get and the more data we get from it, the more capable we are of [delivering those products],” he said.
He also said that having a show in demand by streaming services is actually good for the traditional distribution business, as broadcast or cable channels are more willing to distribute a show they know has a built-in fan base and motivated investors.
“You should never think of SVOD licensing, whether it’s an HBO or Netflix [as just] a discrete set of rights,” Bewkes said. “It could motivate a bid from a television distributor.”
And while the proliferation of distribution outlets has caused original TV production to soar, Bewkes said Time Warner doesn’t plan to shut off that tap.
“More investment, more growth,” he said.
He also expressed confidence in Warner Bros.’ upcoming film slate, from its DC Comics tentpoles to “Lego Batman” to a handful of horror movies the studio has produced “to our own surprise.”
“That will be one of our leading growth areas at Time Warner this year,” Bewkes said.