Time Warner Just Landed Jon Stewart for HBO's War With Netflix

Time Warner is stocking up on big names and big franchises for 2016 as company seeks rebound after 'Our Brand Is Crisis' and 'Pan.'
By Tobias Burns ,

It's always been about Netflix (NFLX) - Get Report .

With a market capitalization of $47.25 billion and a library of serials including Breaking Bad, House of Cards and Orange is the New Black, Netflix at some point over the past decade surpassed Time Warner's (TWX) HBO as the most accessible platform for premium content.

Never mind that Time Warner's market value is $63.3 billion and that the library that feeds the app HBO Go and the standalone online offering HBO NOW is arguably larger and more diverse Netflix, the streaming platform has become synonymous with what's hip and edgy.

That's why Time Warner is adding new names (Bill Simmons) and new programming (Vice), and on Tuesday landed one of the biggest personalities in cable-TV, Jon Stewart. Signing Stewart, whose Daily Show anchored Viacom's (VIAB) - Get Report Comedy Central for more than a decade, to a four-year exclusive deal to produce content for HBO, is a big win in the network's cold war with Netflix.

Questions are certain to rise as to why Viacom let Stewart walk to a rival media company. Comedy Central, of course, was unable to retain John Oliver, whose critically-acclaimed Last Week Tonight has been a hit, especially with young people.

With the addition of Stewart, Time Warner's political content is formidable heading into an election year. HBO also has the sportswriter and former Grantland editor-in-chief Bill Simmons to augment its millennial-focused programming.

Stewart's roster spot at HBO may put pressure on Netflix to develop some news content, though CEO Reed Hastings has described news as "dying." Hastings has said that he recognizes demand for more online content, however, which will likely take the form of more original shows. Comedian Aziz Ansari's Master of None goes online Friday.

While Time Warner has been flat on the mat for much of 2015, enduring some recent flops from its movie studio Warner Bros. including the Sandra Bullock-led Our Brand is Crisis and Pan, analysts are calling a major victory for the media conglomerate in the coming year - regardless of tomorrow's earnings, which are already expected to be rosy.

"We are adhering to a $105 2016 target for Buy-rated Time Warner with our positive stance a function of better global monetization of HBO's best-ever creative product and a decided improvement in the film component within Warner Bros. in 2016," Matthew Harrigan, an analyst at Wunderlich Securities, wrote in a note to investors, a report published before Time Warner let fly that it had landed Jon Stewart in an exclusive four-year production deal to develop short-form digital content for the programmer's HBO Now and HBO Go platforms."

Time Warner shares gained 1% to close on Tuesday $77.32.

Warner Bros. is poised for a better year in 2016 with the superhero movies Batman v. Superman, which stars Ben Affleck, and the ensemble showpiece Suicide Squad with Will Smith, Margot Robbie and Jared Leto. 

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