Time Warner reminded Wall Street Wednesday that while new media has flash, old media packs heat.
The talk among investors and Hollywood cognoscenti centered on Netflix after the streaming service announced it was taking on the feature film world with deals to back four Adam Sandler projects and to simultaneously release a sequel to “Crouching Tiger Hidden Dragon” digitally and in select Imax theaters. Part of the motivation behind Netflix’s glossy pacts was to insulate itself from challenges posed by Amazon Prime, YouTube, Hulu and other streaming services.
But HBO was the wolf at the door. Wednesday’s announcement that the premium cable channel will launch a standalone streaming service sent Netflix’s stock tumbling. It still hasn’t recovered. After missing its subscriber targets during a doleful third quarter earnings announcement, the company’s shares lost more than a hundred dollars of value.
If Netflix had hoped to overshadow Time Warner’s investor presentation this week by scheduling its financials release on the same day, it was sorely misguided. A spokesman for the company says the timing was coincidental and selected so as not to conflict with Google’s earnings announcement the following day.
Whatever the case, in recent weeks Time Warner has looked like a media empire in decline, slashing jobs at its Turner and Warner Bros. divisions and still reeling from an unsolicited takeover bid from Rupert Murdoch’s 21st Century Fox.
During a stunning three-hour presentation, Time Warner chief Jeff Bewkes and his chief lieutenants, HBO CEO Richard Plepler, Warner Bros. CEO Kevin Tsujihara and Turner CEO John Martin reminded investors what corporate firepower looks like, announcing Harry Potter spin-offs, half a decade’s worth of DC Comics movies, Tom & Jerry reboots, “Friends” licensing deals (with Netflix, no less!) and pledges to collaborate across divisions. The HBO mic drop indicated that Time Warner plans to help steer the future of digital video. Oh, and Bewkes promised to double earnings growth.
Left out of their slideshows was any mention of “Blended 2,” a would-be sequel to Sandler’s recent summer flop.
Netflix looked like a lightweight yesterday. It may have revolutionized streaming. It may have ambitions to upend tired business models with digital age know-how. But it forgot that you never bring a knife to a gunfight.