Big Media Says Pay-TV Needs an Upgrade

NEW YORK (TheStreet) -- Big media stocks soared in 2013 as the country's largest entertainment companies demonstrated they can still extract handsome fees from pay-TV operators and television-station owners eager to carry their programming.

But the pay-TV bundle, most often sold in a package with broadband and telephone service, needs improving, says Time Warner  (TWX) CEO Jeff Bewkes. Viewers want a platform that allows for lots of video-on-demand, and at present, he said, only Comcast (CMCSA) comes close to delivering such a system.

"We need to give the consumer a better viewing experience," Bewkes told a gathering of investors this week at UBS' 41st Annual Global Media and Communications Conference in New York. "If we don't fill that need, then it's going to get filled by somebody else, and that will have been a lost opportunity."

Bewkes wouldn't name names but he was clearly thinking about technology companies such as Apple (AAPL), Google (GOOG) and Intel (INTC) that have made known their interest in building a platform that will make video-on-demand easy, convenient and very portable. Some call this TV Anywhere or Virtual-TV, but the point is the same: getting high-quality TV programming on any device, whenever or wherever the consumer wants it.

Chase Carey, the man responsible for the day-to-day operations of Rupert Murdoch's 21st Century Fox  (FOXA) acknowledged that major media companies haven't been innovators in owning the digital-TV medium via the Internet.

"TV-Everywhere is the right path but has been poorly executed," Carey said. "We have to be part of the solution, not just sitting here, picking and complaining." Time Warner and Fox along with Disney and Viacom (VIA), are well aware that they could make even more money if they can figure out how to get paid for all their digital programming. Carey added that "we haven't scratched the surface."  

It's clear that the success of Netflix (NFLX) still smarts. Sure Netflix has branched into content production but that's only because they built a platform right under the collective noses of the biggest media companies in the world. Carey countered that he's pleased Fox, Disney (DIS) and Comcast at least decided not to sell Hulu. Maybe a few more years of tinkering will produce that breakthough platform. 

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