Straight Talk: Bewkes Begins Cable Drill Down

We never tire of multichannel execs holding forth on industry competition, and Time Warner Cable pres/CEO Glenn Britt obliged Fri during the Sanford Bernstein conference. But Time Warner pres/CEO Jeff Bewkes ‘ candor surrounding the company’s cable nets was particularly refreshing, and owing to the forthcoming TW/TWC split will fortunately become the norm going forward. In short, Bewkes is bullish on Time Warner’s basket of cable channels, particularly HBO, TNT and TBS, and enamored of the purchasing and distribution synergies offered by the company’s entire content collection (AOL, Warner Bros, etc). Using the nets’ strengths in combination "leads to the kind of earnings growth that you have at Turner [and] to a platform into which you essentially have fertile ground to put more and more original programming," said Bewkes, who rates originals as key growth drivers. And thanks to "cable networks’ reach coming up equal to the broadcasters," he said, the economics of original content are increasingly manageable. Furthermore, the plan to air original content nightly from Mon-Wed on TNT and TBS will serve "to drive advertising [and] close the gap with broadcast CPMs," he said. Of the 2 nets, Bewkes said "really solid returns" aren’t guaranteed but "close." While numerous media outlets have recently lambasted HBO for a perceived dearth of breakout shows, Bewkes has nothing but confidence in the premium net. It failed to grow double digits just 1 year over the last 15 (’07), he said, and that slowdown was expected due to a few syndication and film rights anomalies. "The HBO earnings juggernaut will continue," said Bewkes. Also, advertising across the aforementioned nets plus CNN and Cartoon Net is solid, he said, with the scatter market rebounding nicely following a slight recent dip. Meanwhile, Britt said the MSO’s switched digital roll out will prevent any additional dip in HD business vis-a-vis DirecTV. This year, "we’re going to be at parity or better than them with HD," said Britt. "It won’t be anything they can brag about going forward." In NYC, where TWC has chosen to go all-digital, customers will be able to receive "almost every available HD signal… over the next three months," he said. This will aid in the impending local fight with Verizon, he said, as will DOCSIS 3.0, which will remedy the only real market advantage (broadband speeds) that Verizon currently owns.