
Time Warner's Jeff Bewkes Isn't Crazy Worried About Cord-Cutting
For all the talk of cord-cutting and Netflix (NFLX) - Get Report and the impending arrival of Apple's (AAPL) - Get Report turbo-charged AppleTV, Time Warner (TWX) CEO Jeff Bewkes remains a believer in his company's ability to produce entertainment that viewers will want.
Whether viewers access Time Warner's networks through a 150-channel or so-called "skinny bundle" offered by their cable-TV operator or through an Internet streaming platform is far less important than whether they're watching or not.
"There's tremendously valuable niche programming in the various bundles, whether it's big or small," Bewkes said at the Goldman Sachs Communacopia conference on Wednesday in New York. "It has to be effective with on demand and have a good interface - whatever bundle has that will be fine and we think Cartoon Network, CNN, TNT and TBS will be fine."
While mindful that viewers, especially younger viewers are not subscribing to pay-TV, Bewkes told the conference gathering of fund managers that he didn't foresee a tipping point at which cord-cutting would accelerate.
"We saw maybe 1 to 1.5% for us, but for others, it might've been more," Bewkes said. "We have an unusually strong concentration of networks for either the big bundle or smaller bundles, and we'll probably be in those. To the extent that those give consumers what they want, it probably works out well for us."
Bewkes, who noted that Time Warner was in favor of giving consumers more flexibility in terms of devices, how you watch it and when you watch, also noted that so-called skinny bundles, would not affect the New York-based company.
The question of distribution, of course, remains the giant variable as Internet-based platforms take viewers, subscribers and marketing dollars away from the traditional pay-TV bundle. Bewkes and his rival CEOs at Disney (DIS) - Get Report , Viacom (VIAB) - Get Report , CBS (CBS) - Get Report , Comcast's (CMCSA) - Get Report NBCUniversal and 21st Century Fox (FOXA) - Get Report are all experimenting with Internet-based streaming services. Disney and Fox have increased their offerings on Hulu, Viacom has launched a Noggin app for pre-schoolers and Disney is even making ESPN available on Dish Network's (DISH) - Get Report SlingTV.
Of course, the pace of the decline in pay-TV subscribers is likely to accelerate in the coming years, and this is where the picture gets cloudy. A study by Magid Associates, a media consultancy, reported that viewers aged 25 to 34 who said they are "extremely likely" to discontinue their pay-TV service numbered 7.1% of some 2,400 consumers in the survey compared to an average across all age groups of 3.9%.
That's particularly concerning given that people aged 25-34 are in their household formation years when they typically settled down, start a family and subscribe to a 150-channel TV bundle. Additionally concerning, 20% of those surveyed said they had never subscribed to a pay-TV service.
Maybe Bewkes has content people love, but getting it to them in a cost-efficient manner remains the big test.








