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Moguls: It’s a Great Time to Be in Media

12/12/2011 12:01 AM Eastern

New York — In contrast to a year ago, when investors
feared the network business would be swallowed by online
competitors like Netflix, media moguls descending on
the annual UBS Media & Communications conference here
were decidedly upbeat about
their business and the future.

Executives with some of the
biggest programmers — Time
Warner Inc., Viacom, News
Corp. and Discovery Communications
— all reported
strong double-digit increases
in upfront and scatter pricing.
And though some noted some
sluggishness in the fourth
quarter, they remained cautiously
optimistic.

COZYING UP TO NETFLIX

Gone was the underlying fear
that over-the-top video providers
such as Netflix would
usurp the prevailing programming
business model. Instead,
most of the programmers have
made their own deals with
Netflix and said the relationship
has breathed new life into
once-tired library content.

Time Warner chairman
and CEO Jeff Bewkes, who last
year jokingly compared Netflix’s
feared domination of the
programming space to the Albanian
Army conquering the world, had a new term to describe
the online content provider: partner.

Time Warner struck a deal with Netflix in October for
content on its jointly owned (with CBS) The CW network
for shows like Gossip Girl and The Vampire Diaries.

At the conference last Tuesday (Dec. 6), Bewkes said services
like Netflix, Hulu.com and Amazon Instant Video
have proven to be good outlets for content and have extended
the life of serialized shows that traditionally have
not fared well in syndication.

“Netflix is our friend,” Bewkes said.

Other programming chiefs echoed Bewkes’ sentiments.
News Corp. chief operating officer Chase Carey said Netflix brings “an exciting new
dimension to the business.”

Shows like FX’s Sons of
Anarchy
and Fox’s 24 didn’t
play well in syndication,
but found new life on Netflix, Carey noted.

“They are creating competition
or new markets
for different types of products,”
Carey said of overthe-
top providers. “As new
players come in, it widens
that. Digital platforms are
incremental and additive.”

The networks were a bit
more cautious regarding
their advertising outlooks.
While Bewkes said that upfront
and scatter pricing
was strong and his channels
were doing “fine,” he saw
better days ahead next year.

Bewkes said there was
some softness in the fourth
quarter — which he suspected
was because some
advertisers were pulling
inventory forward into the
next upfront — and he expected
a rebound in the first quarter.

“I think we feel OK,” Bewkes said. “Better about the first
quarter than we did about the fourth.”

Carey said that despite some fourth-quarter softness,
News Corp. saw “signs that there is some fresh money”
coming into the market.

“There may be a bit of renewed energy as people close
out a year and go into a new year,” Carey said.

Viacom CEO Philippe Dauman said fourth-quarter
softness should improve in the next three-month period.

He added that Viacom continues to try to rectify a ratings
slip at kids’ network Nickelodeon. The company had
blamed a September drop in Nick ratings on a glitch at
Nielsen, which the audience-measurement giant has denied.
When that same drop was reported in November,
some analysts feared that the perennial kids’ powerhouse
was losing steam.

Dauman noted the timing of the Nielsen problem was unfortunate
— the middle of the holiday buying season — but
said the network should weather the storm. He pointed out
that Nick’s ad sales, while strong, are increasingly a smaller
part of Viacom’s overall ad-sales picture, which includes
MTV and Comedy Central, among others. And in the kids’
space, Nickelodeon has maintained a 100% ratings lead over
its closest ad-supported competitor, Cartoon Network.

BEWKES TALKS SPORTS

Bewkes also addressed complaints from earlier presenters
who lamented the rising costs of programming. A day
earlier, Liberty Media CEO Greg Maffei said ESPN’s carriage
fees are like a tax on every U.S. household. Bewkes
said most of the complaints have centered on sports programming,
which has some of the highest costs.

Time Warner’s own Turner Sports has some high-cost
sports rights — the programmer and CBS struck a $10 billion
deal for the NCAA Men’s Basketball Tournament last
year, and TNT has a longstanding deal with the National
Basketball Association. Bewkes said the NCAA deal will
be profi table for Turner and with the return of the NBA on
Dec. 25, ratings at TNT should climb.

Asked whether he would be open to acquiring more
sports rights — like the National Football League — Bewkes
said he is willing to look at anything. But before Time
Warner spends a dime on sports, he said, it must prove
such a buy would make economic sense.

“If you look at where sports fit for TNT and TBS, it’s a
very strong part of our program lineup, of what we offer to
affiliates, of how we provide steady audiences to launch
original programs and acquired series programs,” he said.
“It’s part of the mix; it’s not a dominant part of the mix.”

 

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