Warner 4Q 2011 Earnings Same- UltraViolet Early Window? Rental Delay Helps

[Kosty]

Bewkes: Warner Not Opposed to Early Releases for UltraViolet Titles


8 Feb, 2012
By: Erik Gruenwedel

Jeff Bewkes

CEO said studio also is working to extend embargoes to kiosks and video stores

Time Warner CEO Jeff Bewkes Feb. 8 said Warner Bros. wouldn’t be against releasing UltraViolet titles earlier into the retail chain, provided there were safeguards in place with digital televisions against piracy.

During a fiscal call with analysts, Bewkes was asked whether offering movies with UltraViolet functionality ahead of other home entertainment channels would help jumpstart consumer adoption of the industrywide cloud-based digital locker platform. UltraViolet is seen as means of reinvigorating sellthrough of physical and digital content at a time when lower-margin rental (kiosks) and subscription video-on-demand flourish.

Bewkes said he believed an early UV release window could fit within the theatrical window to satiate consumer demand for on-demand digital access to content across multiple devices in the home. He said that as the industry becomes more confident in the security of digital distribution regarding piracy, tweaking distribution windows would be an ongoing process.

“As the ability to secure the early releases [arises], and we get more confident in that, then I think the whole industry will move toward earlier sellthrough,” Bewkes said. “We don’t see any reason that has or will cannibalize theatrical. And we think it can fit in correctly with the current retail distribution system for physical.”

The CEO did not say when, or if, such a UV window might occur.

Warner Bros., which includes Warner Home Video, will release all DVD and Blu-ray Disc titles in 2012 with UV compatibility.

Meanwhile, Warner is looking to extend delays of new releases on street date access to rental kiosks and brick-and-mortar video stores.

Bewkes said the studio would follow up on last month’s 56-day embargo agreement with Netflix’s by-mail disc rental service with other distribution channels. He did not elaborate on when those extensions would occur. Indeed, Redbox and Dish Network-owned Blockbuster have stated publically intentions to ignore expanded windows through workaround content acquisition programs.

“We’ll keeping working to extend the window of kiosk providers and for brick-and-mortar retailers,” Bewkes said.

He said Warner’s leadership role in creating the original 28-day embargo has contributed to the studio generating its best fiscal year in history with more than $1.1 billion in profit.

“That enabled our titles last year to significantly outperform comparable titles released by other studios without a window,” Bewkes said. “In 2012, we’ll keep pushing to define the next generation of business models for home entertainment. As part of that we are using windows to advantage our higher contribution, distribution channels.”


The CEO did not say when, or if, such a UV window might occur.

Indeed, video-on-demand and electronic sellthrough of Harry Potter and the Deathly Hallows — Part 1 and Part 2 contributed to Warner Bros. reporting fourth-quarter (ended Dec. 31) operating income of $427 million — identical to the operating income reported during the prior-year period.

Revenue increased 7% ($254 million) to $3.9 billion, due to stronger home entertainment and video game release slates and an increase in subscription video-on-demand content agreements, including Netflix and Amazon Prime. The growth partially was offset by lower theatrical film revenues and lower television license fees.

Specifically, Warner generated more than $1.1 billion in home entertainment and electronic delivery revenue from theatrical releases, up 25% from revenue of $927 million last year. Home entertainment and electronic delivery revenue of Warner TV programming jumped to $411 million, a 42% increase from $289 million last year.

Warner produces more than 30 programs for primetime TV networks.

For the fiscal year, home entertainment revenue from Warner movies topped $2.8 billion, compared with $2.7 billion in 2010. Home entertainment revenue from Warner TV programming reached $830 million, up 5% from $790 million in 2010.

http://www.homemediamagazine.com/war...t-titles-26362

[Kosty]

Time Warner Chief Urges Investors To Focus On Digital Growth Instead Of Rising Costs


By DAVID LIEBERMAN, Executive Editor | Wednesday February 8, 2012 @ 12:25pm EST
Tags: Jeff Bewkes, Time Warner, TV Everywhere, UltraViolet




Time Warner CEO Jeff Bewkes channeled his inner Les Moonves in a conference call with analysts this morning to deliver one of the most relentlessly cheery infomercials he has ever presented for his company. But he wasn’t able to duplicate the CBS chief’s ability to mesmerize investors: Time Warner shares dipped sharply during the presentation after opening up on the company’s strong 4Q results and announcement of a new stock buy-back plan. The drop was due to the company’s warning that corporate expenses will rise in 2012. Execs also acknowledged that the film studio — which won’t have a new Harry Potter film — faces difficult comparisons with the 2011 results.

Still, Bewkes hammered on his theme that “our best years are ahead of us” — especially due to TV Everywhere and business models that promote digital distribution. “We’re at the vanguard of the industry” in promoting them, Bewkes says. For example, the HBO Go app soon will be available for Microsoft’s XBox. The company also is developing apps so pay TV subscribers can watch programs from all Time Warner networks on a VOD basis — including on television sets. Turner has made 1,000 hours of content available for digital distribution, and Bewkes says there’s more to come in 2012. He doesn’t understand why some pay TV companies including Comcast and Time Warner Cable have been reluctant to let subscribers access shows on demand on a wide array of broadband-connected devices. It would “make it less likely that the subscriber will ever cut the cord” and encourage young people to become pay TV customers. “Now it’s time for the whole industry to drive consumer awareness and consumer usage” of TV Everywhere, he says. Bewkes adds he’s “optimistic that the industry will get past the minor concerns that they have.”

The CEO reaffirmed his support for the entertainment industry’s UltraViolet initiative, which gives people who buy certain DVDs and Blu-ray discs the additional opportunity to stream the titles to broadband-connected devices. Yesterday Disney’s Bob Iger said that it hasn’t been “as consumer friendly as we had hoped.” But Bewkes says that “the consumer response we’ve seen so far reinforces how much pent up consumer demand exists” for streaming. He’d also like to see the studios sell digital downloads of their films earlier than they do now. “The whole industry will move to earlier sell-through” of home video, he says adding that it won’t necessarily cannibalize theater ticket sales or home video revenues.

Bewkes adds that he’s eager to see Apple expand its presence in media — for example by developing an easy to navigate multi-media television set. Indeed, it already exists: Any Apple screen “is a television,” Bewkes says. Ultimately anything that makes it easy for consumers to access hit content is “great for Time Warner. It’s great for films, great for networks and great for magazines.”

http://www.deadline.com/2012/02/time...-rising-costs/

[Elee s]

We don’t see any reason that has or will cannibalize theatrical. And we think it can fit in correctly with the current retail distribution system for physical.”

Instead of worrying about what is cannibalizing what maybe the studios could instead EMBRACE it.

Watching a movie in the theater, renting a movie at a kiosk. Everything should be connected to the UV account. ie. a UV code on a movie ticket could add $5 credit to your account, which would signal a rebate/coupon when you buy that movie on home video.

[OneManShow]

He said Warner’s leadership role in creating the original 28-day embargo has contributed to the studio generating its best fiscal year in history with more than $1.1 billion in profit.

“That enabled our titles last year to significantly outperform comparable titles released by other studios without a window,” Bewkes said.

I have a hard time believing the increase was due to the 28 day window. Are there really that many people who allow themselves to be forced into buying a movie because they can't wait to rent it?

[ack_bak]

He said Warner’s leadership role in creating the original 28-day embargo has contributed to the studio generating its best fiscal year in history with more than $1.1 billion in profit.

“That enabled our titles last year to significantly outperform comparable titles released by other studios without a window,” Bewkes said.

I have a hard time believing the increase was due to the 28 day window. Are there really that many people who allow themselves to be forced into buying a movie because they can't wait to rent it?

No. Packaged media sales are down and cheap rentals are growing.