Time Warner CEO Talks Strategy, Media's Future
Since Jeff Bewkes became CEO of Time Warner in January 2008 he's been hard at work streamlining the company into a pure branded content company. He hadn't done a single TV interview since becoming CEO, until he sat down with Media Money at the National Cable Show. He's optimistic about Time Warner's entertainment businesses' ability to ride out the recession. And on the heels of the spinoff of Time Warner Cable he's confident that the company's has retained all its best synergies.
In terms of the economy, Bewkes now sees his businesses stabilizing, and he expects the cable industry in particularly to be recession-resistant. Time Warner is exposed to advertising through its cable ads at Turner Networks and CNN, online ads at AOL and with its magazines. The results range the gamut. While its cable ads are among the strongest in the business, online and magazine ads are mixed. But the company is still confident in the brands and in the content, which Bewkes says will be able to be monetized in one format or another.
Speaking of new ways to monetize content, Bewkes was at the cable show explaining "TV Everywhere," his new service to allow consumers to watch cable content on the web. The idea is that if you pay your subscription service and get the content on your TV, there's no reason you shouldn't be able to get it everywhere. And if the system is carefully regulated, people should keep paying. Time Warner is running some tests of the system now.
Now that Time Warner Cable has been spun off, the question becomes: what's next for AOL? Bewkes says that while AOL's strong brands fit with Time Warner's, it's unclear if the company could grow faster and be more innovative on its own. Bewkes is bullish on AOL's new CEO, Tim Armstrong, who comes from Google and has a strong record for building ad revenue.
Time Warner is in a stronger position financially now, thanks to its $9.2 billion dividend payout from the Time Warner Cable spinoff. This allows the company to reduce its debt and pay its shareholders. It also puts the company in a position where it could make some acquisitions and take advantage of lower prices. But Bewkes is sure to be cautious, saying, with a smile, that there have been a lot of bad acquisitions in the media space, and his company has made some of them.
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