Time Warner’s Bewkes: Premium VOD Serves To Balance Films’ “Three-Week Life” in Theaters

Speaking at a Bloomberg-sponsored event at the Tribeca Film Festival, Time Warner chief executive Jeff Bewkes said that the Warner-backed premium video-on-demand push was in response to the “three-week life” that most films have in theaters. That said, Bewkes noted that studios “have to” keep theater owners’ interests in mind if they are to persevere (via The Hollywood Reporter).

Perseverance will be an issue as well for pay-TV distributors over the next 10 years, Bewkes mused: the marketplace, he said, could consolidate to three to five big companies.

Time Warner Talks of Longer Windows, Premium VOD, UltraViolet

In an earnings call with analysts Wednesday, Time Warner chief executive Jeff Bewkes shared his company’s desire to widen the window of exclusivity between a movie’s release on disc and video-on-demand, and its availability via services such as Netflix and Redbox.

Bewkes said that the current 28-day window was better than none at all “in terms of supporting higher-priced DVD sales, electronic sell-through, and rentals and VOD. But it’s getting kind of clear that the acceleration of the consumer usage of [subscription] services, including Netflix, makes it a good time for us to reevaluate the terms.

“In our view,” Bewkes said, “the current pricing and window are not really commensurate with…the value that our film company should get for that period of exhibition is considerably higher than what’s there now.”

In addition to lengthening home entertainment windows, Bewkes said the company’s filmed entertainment division also is mulling “how much to increase what we charge [Netflix and Redbox] for our DVDs.”

Warner is looking to modify the release window of theatrical films this year as well, with plans to add a “premium VOD” option via that will enable consumers to watch new movies at home 60 days after their theatrical release.

The first premium VOD titles will bow in the second quarter, Bewkes said, with Warner expecting to make the service available through all of its “major distributors” by year’s end. No word yet on pricing of the films, or specific launch partners for the service.

Of the emerging UltraViolet (UV) digital content standard, Bewkes reiterated that in the second half of 2011, all theatrical new releases from Warner Bros. will be UV-enabled, along with new releases from Fox, Sony, and Universal.

“If the industry executes it right,” Bewkes said, “UV should dramatically boost the appeal of owning movies.”

Total home video and electronic delivery revenues at Warner Bros. during 2010 were $3.5 billion, off 3% from 2009. The decline, however, is hardly as dramatic as it was in the previous year, when the home video segment finished down 13% from 2008.

Time Warner said that its Warner Home Video led the domestic home entertainment industry in DVD sales, Blu-ray Disc sales, video-on-demand, and electronic sell-through in 2010. The company added that its 2010 home video revenues faced difficult comparisons to the prior year, “which benefitted from higher catalog sales and the release of ‘Harry Potter and the Half-Blood Prince.’” Home video versions of the final two “Harry Potter” films are due in 2011.

The company’s 2010 earnings release is here.

‘Premium Video-on-Demand’ Slated for Second Quarter, Says Time Warner’s Bewkes

Warner Bros. could be one of the first major studios to distribute movies still in their theatrical run directly to U.S. consumers’ homes, with the company looking to offer a “premium video-on-demand” service by the second quarter of next year.

Time Warner chief executive Jeff Bewkes told analysts yesterday that the studio was “near agreement with our distributors on the right window and the right price point” for premium VOD (earnings call transcript via Seeking Alpha). Previously Warner Bros. had hinted that such screenings may cost between $20 and $30 each. But Variety reports that Warner is now considering a higher price range of between $30 and $50 per film.

The even higher premium may be linked to Warner’s plan for the new VOD service to eventually offer new 3D releases as well. In any event, the range is in line with current pricing for pay-per-view events on cable and satellite networks — as well as the cost for a family of four to see a film like “Harry Potter and the Deathly Hallows” in theaters ($45 for two adults and two children at an AMC theater in Manhattan).

Talk among major studios of premium VOD’s potential is not new. But Warner’s comments nevertheless came to the consternation of major theater chains, which fear the home screenings will undermine their business.

Exhibitors “assume that Warner Bros. would discuss new models with their existing exhibition partners prior to finalizing radical agreements that could damage the entire movie industry,” John Fithian, president of the National Association of Theater Owners, told Variety.

From Warner’s perspective, premium VOD would build on the studio’s successful implementation of a 28-day sales window for new DVD and Blu-ray releases.

At the Blu-con conference in Beverly Hills, Calif. earlier this week, Warner Home Video president Ron Sanders said the delayed DVD access to Netflix and Redbox has yielded a 10%-15% sales lift for the studio’s top new releases. But Sanders also mused during a panel discussion that 28 days might not be long enough to maximize sell-through.

Bewkes followed up on Sanders’s point in his earnings discussion with analysts. “We’re not religious” about the length of windows, he said. “We’re just trying to maximize the value of our content as we see these alternatives develop. What we think is that so far the 28-day window has clearly been a success versus no delay.”

The idea of a longer window to protect DVD and Blu-ray sales “is very much under scrutiny,” Bewkes said, adding that if it saw promise in a longer window, “we can do that next year because that’s when our deals all come up for a decision by us.”

Time Warner Names New Studio Heads

Time Warner CEO Jeff Bewkes announced yesterday the formation of an Office of the President for the Warner Bros. studio, comprised of Jeff Robinov, President, Warner Bros. Pictures Group; Bruce Rosenblum, President, Warner Bros. Television Group; and Kevin Tsujihara, President, Warner Bros. Home Entertainment Group. The three executives will assume their new roles in April, 2011, reporting to Warner Bros. CEO Barry Meyer.

Bewkes said that Meyer was extending his contract with the studio, while current Warner Bros. President and COO Alan Horn would step down from his posts next spring and enter into a consultancy agreement. Both contracts will run through December 2013.

The Wrap reports that Bewkes has been under pressure from investors to establish a new leadership path at the studio unit, as both 66-year-old Bewkes and 67-year-old Horn had signed only two-year contracts.

Warner: 28-Day Windows Help Boost VOD by as Much as 30 Percent

Warner Bros. Chief Executive Barry Meyer says that the studio’s 28-day delay on DVD releases via Redbox or Netflix has not only helped spur DVD sales — it has helped increase consumer video-on-demand purchases by 20-30%.

Meyer made his remarks at the Bank of America/Merrill Lynch 2010 Media, Communications & Entertainment Conference in Newport Beach, Calif. yesterday (via AP). Echoing comments made by Time Warner CEO Jeff Bewkes early last month (via paidContent), Meyer noted that the 28-day window, implemented by the studio earlier this year, has had a positive effect on the studio’s DVD business.

Meyer also weighed in on Apple’s plan to rent TV shows via iTunes for 99 cents an episode, telling Merrill Lynch analyst Jessica Reif Cohen in an interview at the conference, “We just don’t think the value proposition (of Apple TV) is a good one for us” (via the Los Angeles Times). According to the LA Times report, Meyer added that he would prefer to license entire seasons of shows rather than “open up a rental business in television at a low price.”

Warner’s Bewkes: Studio Sees Sales Boost From 28-Day Window

Warner’s agreements with Redbox and Netflix to delay rental availability of new releases for 28 days had a positive effect on sales of titles such as “Sherlock Holmes” and “The Blind Side,” according to Time Warner CEO Jeff Bewkes (via paidContent).

Discussing the company’s second-quarter performance, Bewkes said that Warner’s positive experience with the 28-day window was similar to that of other studios testing the new business model, “while other studios not using that window structure appear to be underperforming.”

paidContent notes that Bewkes did not offer specific figures. That’s in keeping with the general vagueness of the public release-window debate. On the other side, Disney’s Robert Iger asserted in June that his studio saw no cannibalization in sales of its “Alice in Wonderland” from the titles day-and-date availability in Redbox kiosks. But Iger did not offer unit or revenue specifics either.

Revenue at Time Warner’s filmed entertainment division was up 8% year-over-year during the second quarter, to $2.5 billion (via Home Media Magazine).

Time Warner’s Bewkes: Film Piracy Threat ‘Seems To Have Stabilized’

Speaking today at Time Warner’s investor day in New York, company chairman Jeff Bewkes said that the global outlook for film piracy is “very different than a few years ago,” thanks to improved regulations and compelling content. The executive also contends that the rise of digital distribution augurs well for Time Warner’s film, TV, and magazine businesses, since it enables greater consumption of content while reducing distribution costs. By The Hollywood Reporter

Time Warner, Comcast On The State Of ‘TV Everywhere’

One year after heralding the concept of “TV Everywhere,” Time Warner and Comcast acknowledge that acceptance from both fellow content owners and consumers has been slow. But as the LA Times reports from The Cable Show trade event, TV Everywhere’s boosters remain upbeat.

Time Warner’s Jeff Bewkes says the current level of support from networks and content distributors is a “huge change” from one year ago. And Comcast’s Brian Roberts vows to simplify the consumer interface of the cable company’s Fancast Xfinity TV service, which it rolled out to its 16 million broadband Internet subscribers last December. By the Los Angeles Times

At UBS Conference: DVD Decline Seen To Slow, But Challenges Won’t End With Recession

More from the UBS Global Media & Communications Conference in New York: two takes on the health of the DVD business.

Time Warner CEO Jeff Bewkes told conference attendees yesterday that “DVD trends are not declining as fast as they were last year.” Some of the sales slide, Bewkes said, had been attributable to “the pressure of the economic contraction.”

Bewkes added that there is “certainly a place” for rental kiosks in the packaged media marketplace, but the question of “where they should be in the temporal chain of distribution” remains open.

While a slower rate of decline is certainly welcome news to those with ties to the DVD business, home entertainment executives still will have their work cut out for them as them as the economy picks up.

“The downturn in the economy has some impact on DVDs, but it goes way beyond that,” said Robert Iger, Walt Disney Company CEO, in his conference presentation this morning.

Packaged media faces “huge competition in the marketplace for people’s time and money when it comes to entertainment,” Iger said. “We see that trend continuing regardless of the economy…We don’t see that trend slowing down.”

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