×

Jeff Bewkes: Time Warner Doesn’t Need Plan B if AT&T Deal Hits Roadblocks (EXCLUSIVE)

Opportunities to innovate, not the need to bulk up, are the driving forces behind the $85.4 billion union, TW chief says

Time Warner doesn’t need to merge with AT&T to survive in the near term. On that question, Time Warner CEO Jeff Bewkes is coolly confident. If, by chance, regulators throw up too many roadblocks, Warner Bros., HBO, and Turner will sally forth as before.

“Plan B is Plan A,” Bewkes tells Variety in an exclusive interview. “We don’t need to do a merger with anyone. We don’t have to acquire any other company. We’re big enough to continue on the independent course we’ve been on. We just think AT&T’s capabilities accelerate and enhance the course we’re on. And we think we’ll have a much bigger effect if we are together.”

Bewkes essentially wants to make sure Time Warner doesn’t find itself at the mercy of digital gatekeepers à la Facebook, Google, and Amazon for distribution into America’s living rooms, smartphones, and tablets. He sees hitching Time Warner’s wagon to AT&T’s massive, consumer-facing video and mobile platform as the muscle needed to stay competitive with the tech giants.

In the 10 weeks since the $85.4 billion merger agreement was unveiled, Bewkes has only become more convinced of the influence the combined company could exert. The most vital part of the entertainment ecosystem — distribution of film and TV to home and portable screens — is most in need of innovation by traditional leaders, he says. “It’s consumers who are voting for what they want in our business. They want more choice — they want better interfaces and the ability to choose between not only price points but types of network packages.”

Time Warner on its own tried to push the MVPDs to respond to the rise of Netflix and Hulu as cable-like alternatives. But Bewkes was a lonely cheerleader for TV Everywhere and needed the buy-in of the cable operators and rival programmers to make it work. While MVPDs and others fiddled, Netflix began burning through Rome with its easy-to-use services and deep pockets.

AT&T chief Randall Stephenson is a man in a hurry to get in the game — witness the gamble he’s taking in dicing up channel packages at lower price points for the OTT DirecTV Now service.

With AT&T and DirecTV’s mobile and video distribution platforms, Time Warner would have a big national footprint. And having Time Warner channels as an “anchor tenant” will give DirecTV more clout to push new packages and services that will benefit the entire industry.

“When we all look at the exciting new products coming out of the big tech companies, you can see that you need to work at a fairly large scale, as they do, in order to bring those benefits to consumers,” Bewkes says. “We’re trying to move in that direction to support the diversity of expression in media.”

But can one company — even one as big as AT&T-Time Warner — really move the industry forward? Bewkes and Stephenson have been arguing a loud “yes,” referring to not only pay TV’s distribution shortcomings but to the advertising arena.

“The ad model for TV is being reinvented as we speak,” Bewkes says. “It’s becoming more targeted. It’s becoming more relevant to you versus some other person. The ads are more valuable, and they are less intrusive because they are relevant to you. Again, it’s a convergence of what goes on in the digital world. Take Google and Facebook last year: More than half of the growth in advertising in the entire U.S. went to those two companies. It’s very clear that we need more competition in advertising.”

Time Warner and AT&T are bracing to run the regulatory gauntlet in securing federal approval for the merger. In a moment of populist fervor in Washington, it’s clear that the specter of competing against tech giants with global reach and massive balance sheets will be a common refrain. Time Warner, with its enviable content, and AT&T, with its wireless distribution muscle, are natural partners but not direct competitors, argues Bewkes.

“What we do not have that AT&T/DirecTV does is the direct retail business with consumers: billing, servicing, communicating with customers. They have that at scale, so that’s a very complementary set of things for us. And even if we are coordinating together, you’re still facing competition from huge integrated platforms in Google, YouTube, Facebook, Apple, and Amazon.… We think this enables us to help level the playing field.”

Popular on Variety

More TV

  • THE BACHELORETTE - "The Bachelorette: Season

    'The Bachelor': ABC Announces Leading Man For Season 24

    ABC has cast its next leading man for Season 24 of “The Bachelor.” Peter Weber has officially been named the upcoming “Bachelor.” The announcement was made Tuesday night on ABC’s “Bachelor In Paradise” reunion special. Weber appeared on Season 15 of “The Bachelorette” with Hannah Brown, ultimately becoming the second runner-up. He was a fan-favorite [...]

  • SEAL TEAM stars David Boreanaz (left),

    Showrunner John Glenn Exits 'SEAL Team' at CBS

    CBS is cutting ties with “SEAL Team” showrunner John Glenn, Variety has confirmed. Glenn joined the show for its second season, which premiered in October of last year. Christopher Chulack, Sarah Timberman and Carl Beverly also executive produced. “Regarding ‘SEAL Team,’ I am proud of the work we did – and greatly enjoyed having the chance to [...]

  • NBC Campaign Aims to Reclaim Brand

    NBC Launches Campaign to Reclaim Brand Ownership of Hit Comedies (EXCLUSIVE)

    NBC is preparing a new salvo in the streaming-era TV branding wars. As audiences increasingly watch shows like “The Good Place” and “Superstore” on other platforms, the Peacock network has launched a new campaign to remind them that these are, first and foremost, NBC shows. And they’re even enlisting a real-life peacock to convey the [...]

  • Shane Gillis

    'SNL' Sought Conservative Appeal With Shane Gillis Hire

    “Saturday Night Live” was looking to shake things up with the casting of Shane Gillis — and it did, albeit unintentionally. According to sources, the long-running NBC comedy show and series mastermind Lorne Michaels were actively looking to cast a comedian for its new season who would appeal to more conservative viewers. This was meant [...]

  • TV News Roundup: Netflix Announces Arsenio

    TV News Roundup: Netflix Announces Arsenio Hall's Comedy Special Premiere Date

    In today’s TV news roundup, Netflix announced the premiere date for Arsenio Hall’s comedy special and a “Marvelous Mrs. Maisel” duo (among others) will guest star on “Elena of Avalor.” CASTING “The Marvelous Mrs. Maisel” stars Rachel Brosnahan and Tony Shalhoub, as well as Auli’i Cravalho (“Moana”), John Leguizamo (“When They See Us”), Taye Diggs (“All American”), Eugenio Derbez [...]

  • How 'Save Our Show' Campaigns Affect

    From 'The OA' to 'One Day at a Time': How 'Save Our Show' Campaigns Affect Network Interest

    Organized flash mobs and mounting billboards still may not save your favorite shows, as some fan campaigns are finding out. Following Netflix’s most recent decision to stand firm on its cancellation of “The OA,” the question remains, “what will save these shows?” When networks and streamers find that smaller favorites aren’t big cash cows, fans [...]

  • Afton WilliamsonABC All-Star Happy Hour, TCA

    Afton Williamson 'Rookie' Investigation: Studio Finds No 'Inappropriate' Workplace Behavior

    Updated: Former “The Rookie” star Afton Williamson has responded to Entertainment One’s (eOne) findings into her claims of racial discrimination and sexual harassment and assault on the ABC series. In an Instagram post Tuesday night, Williamson lamented “the lengths that were taken to Deceive, Lie, and Cover Up the Truth” following eOne’s statement. “It’s Heartbreaking [...]

More From Our Brands

Access exclusive content