Bewkes Says Pay-TV Must Go On-Demand

16 Sep, 2015 By: Erik Gruenwedel

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In a market impacted by over-the-top video, the pay-TV industry has to adapt by offering programming on a video-on-demand basis across multiple devices, Time Warner CEO Jeff Bewkes told an investor group.

Speaking Sept. 16 at the Goldman Sachs 24th Annual Communacopia Confab in New York, Bewkes said the popularity of serialized programming mandates content’s ubiquitous offerings, including access to entire seasons and catalog. Time Warner has long been critical of laggard industry efforts with TV Everywhere, the on-demand platform aimed at competing against OTT video that never gained traction with consumers.

Indeed, Time Warner subsidiary Turner Broadcast Systems in August acquired iStream Planet, a company Bewkes expects will help Turner’s network affiliates better transition to OTT video distribution.

“Those 100 [pay-TV] channels we all watch, they need to be on-demand,” Bewkes said, adding that subscribers might take greater interest in the traditional channel bundle if all programing was available upfront. It’s a strategy Netflix has employed on its original content, and in the process created the social phenomena known as binge-viewing.

"That’s the kind of flashing green light that everybody ought to pay attention to,” Bewkes said.

While the CEO downplayed what he characterized as 1% to 1.5% declines in pay-TV subs, Bewkes reiterated little concern on the rise of skinnier pay-TV bundles and OTT services such as Dish Network’s Sling TV — due in large part to their lack of on-demand options.

Specifically, he contends that networks and pay-TV operators may have popular programming that myriad viewers access midseason with few options of watching from the beginning. Instead, he said the programming is often available a year later via OTT video with no advertising at a fraction of the cost to the consumer than pay-TV.

“People are watching more and more [programming], they’re just not watching it all on the first-run with an ad [attached]. [Pay-TV has] got to be effective with on-demand. It has to have a good [user] interface. Which ever [channel] bundle combination has that is going to be fine,” he said.

The CEO contends that the successful strategies Netflix, Hulu Plus and Amazon Prime employ offering full-season access to original shows from the beginning underscore the dearth of syndication for the programing — and an opportunity for pay-TV.

“Why wouldn’t the lesson of Netflix and HBO be that neither of them are selling old seasons of their shows to somebody else? Why wouldn’t the natural thing be for a network … to have even more than one season available [on VOD]? We think there’s a real question whether it wouldn’t make sense to put even more than that [on VOD], as part of a network, rather than as part of some volume [OTT] aggregation,” Bewkes said.

The CEO conveniently ignored HBO’s recent landmark license deal with Amazon Prime for catalog programming no longer airing, while at the same time promoting sales of in-season programing stacking rights to networks. Thus far, media companies (with the exception of Time Warner) have been reluctant to expand a show’s stacking rights beyond a few episodes — a mindset Bewkes says is changing. 

“I would think so,” he said.

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