Time Warner’s Turner programming unit intends to invest heavily in original programming at TNT and TBS, mobile distribution at CNN and put new efforts behind its kids’ content in an effort to derive more fees from distributors and push growth in overseas markets including Latin America, the division’s chief executive told investors Wednesday.
“We are getting the rate increases we are seeking, and the distributors understand the value of the networks,” Turner CEO John Martin said during a presentation held by Time Warner.
The unit’s strategy is to “be more aggressive than we have been in the past,” Martin said, while eliminating costs across the division. Already, Turner has announced it will lay off approximately 10% of its employees. At the same time, the division has unveiled a new 9 year alliance with the NBA and a new effort that will beef up its kids’ networks at home and abroad. Martin said he expected Turner to take charges in the third quarter for severance for dismissed employees as well as for the removal of programming that is not performing.
Martin delivered his remarks as his unit has come under more scrutiny from investors and the industry. Ratings at TNT and TruTV have been weaker than in the past as rival outlets like FX and AMC have found success with edgier fare. And Turner has lost two of its top programming executives, Steve Koonin and Michael Wright. Koonin left to run the Atlanta Hawks while Wright has taken over the chief executive position at DreamWorks Studios.
Martin pledged to invest heavily in original programming at outlets like TNT, TBS and TruTV. He predicted annual investment in original programming for TNT and TBS alone would to reach $1 billion by 2018. TBS will debut six new programs, including one from Steve Carrell that stars Rashida Jones. TruTV wil have 12 new series on the air by the end of the year, he said.
Sports programming continues to be hugely important for the unit, Martin said. Sports drives viewership and advertising, he said, and “cements the must-have status of our networks.”
He also described other potential growth opportunities. Turner is “dramatically under-punching its weight in the kids’ business,” Martin said. On Tuesday, the company said it would do more to burnish its Boomerang cable outlet, which has largely functioned as a place to run old cartoons from its Warner Brothers and Hanna-Barbera libraries. Now the network will aim to capture family viewing and accept advertising for the first time. Martin said the company could do more with its kids’ properties to drive licensing and consumer-products revenue. He also articulated a strategy to increase the distribution of its popular Adult Swim content through digital distribution, suggesting the company could make Adult Swim programming that is for broadband distribution only and never runs on the traditional network.
At CNN, the opportunity for growth is coming in the form of both new original series as well as mobile distribution of news, Martin said.The company is “hugely bullish” on the future of CNN, and expects the network’s new CNN Go on-demand product to create new reach.
Another property that has potential is the company’s Bleacher Report sports-content site, which gives advertisers a chance to run “cross platform” campaigns with Turner sports broadcasts.