TW boss pushes multi-platform distribution

Jeff Bewkes questions 'reticence' to expand on-demand offerings

As Time Warner unveiled solid fourth-quarter earnings, CEO Jeff Bewkes urged cable operators and other traditional distribs to get moving on multi-platform distribution if they want a leg up on new rivals like Netflix “which are nothing but the same programming offered on demand on a later window.”

Time Warner profit rose slightly to $773 million in the 2011 fourth quarter from $769 million the year before.

Revenue grew 5% to $8.2 billion on the “Harry Potter” franchise and cable biz.

“Frankly, I don’t understand the reticence of distributors,” Bewkes said on Wednesday’s conference call when asked about the HBO GO and TV Everywhere initiatives. Shows “on all voices and platforms would make their packages enormously more valuable and it would be much less likely consumers would cut the cord. It would bring on board all the younger people…and diminish the relative value of over-the-top services.”

“I hope the industry will move past their concerns and they ought to speed up,” he added. “We have great, fresh, really poplar programming and should make it available to viewers as early as we can.”

HBO last December announced distribution deals for HBO GO and MAX GO, its authenticated online video services, with both Time Warner Cable and Cablevision and is now available to basically all the networks’ domestic subs. Viewers must have existing subscriptions to watch and they can from any device. But kinks in the television authentication process are still being hashed out.

Bewkes also said he’s all for Apple TV that’s looming in the near future and making many in the industry nervous. “Apple has been great for Time Warner film, TV and magazines. When you have great interface devices like Apple and Facebook it’s better for consumers” to access our “hit titles, “the new things we are making.”

Time Warner’s TV network revenue rose 5% (by $151 million) to $3.5 billion, including a 5% ($89 million) boost in subscription revenues, a 2% ($25 million) in ad revenues and 16% ($42 million) increase in content revenues. Company cited international advertising revenues and programming and licensing revenues at Turner. TBS is improving, TNT still challenged.

For the full year, company cited NCAA basketball championship events on the advertising side, and more content revenues from sales of HBO original shows.

Execs at the media giant also noted scatter volume softened due in part to the lingering impact of the NBA labor strife. “Some of the ad dollars that are usually spent there were committed elsewhere during the lockout period, but we expect that to reverse during a normal selling cycle,” said Time Warner CFO John Martin.

Operating income for the division rose 26% ($234 million) to $1.1 billion driven by the timing of programming and marketing expenses.

On softer advertising volume, Martin said media spending and movie studio spending in particular has dipped a bit along with other sectors like packaged goods but that it was probably more product specific or cyclical. “We’re not setting off alarm bells in any way. It’s early days and we are in the middle of February and we just think that being cautious is a good way to approach the year.”

Studio revenues increased 7% (by $254 million) to $3.9 billion due mainly to stronger home entertainment and videogame slates and new subscription video-on-demand agreements. Growth was offset partly by lower theatrical film revenues and lower television license fees.

Operating Income of $427 million was flat.

Studio standouts for 2011 included the theatrical and home entertainment performances of “Harry Potter and the Deathly Hallows,”‘ parts 1 and 2; video game “Batman: Arkham City; and syndication of “The Big Bang Theory.”

The media conglom said it acquired $5.6 billion, or about 12% of its outstanding stock last year and announced another $4 billion buyback on Wednesday. It also increased its dividend by 11% to 26 cents a share. Looking ahead, Time Warner expects adjusted 2012 earnings to rise in the low double digits.

At publisher Time Inc., now under a new topper, income rose 21% to $1 billion on lower restructuring and severance costs. Revenue was flat at about $1 billion.

Bewkes continued to note the conglom’s focus on international, where affiliate fees in general are double what they are in the U.S, he said. The company’s clearly been on the move, most recently bidding for pan-European TV production house Endemol, and a big media company in Turkey, Sabah-ATV, and eyeing other assets around the globe with focus on Latin America, where it’s got a strong position, Eastern Europe, and India which has proved tough going, he said.

Time Warner shares were up 1% to $38.48 in midday trading.

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