http://www.hollywoodreporter.com/news/time-warner-pay-tv-studio-815128
Howard Averill also discusses the company's appetite for deals, says there is
no evidence of superhero fatigue and predicts smaller cable bundles will be
more common in the future.
Time Warner is focusing on strengthening the existing pay TV system, while at
the same time reaching out to users outside the established eco-system, CFO
Howard Averill said at an investor conference on Thursday. He also discussed
the outlook for Warner Bros. and superhero movies.
Speaking at Nomura's Media & Telecom Conference in New York in a session that
was webcast, Averill said the company was "focusing on enhancing and
strengthening the [pay TV] eco-system." At the same time, "we want to really
make sure and reach those consumers outside the eco-system." He said the launch
of streaming-only service HBO Now was the clearest such move to date.
"The priorities haven’t really changed," he said about the conglomerate's
overall strategy. "But the pace of change has," so the company feels it must
move faster in some respects.
Averill said TW continues to expect to be able to have "industry-leading
financial performance" and "grow at attractive levels" in 2016 and beyond.
Asked about the speed of pay TV subscriber losses, the CFO said the company has
long assumed such losses and that trends were maybe moving a bit faster than
people had at first believed, but there has been "nothing significantly
different over the last several quarters." He also argued that cord-cutting has
not really accelerated.
"Smaller bundles are going to be more common," Averill said. Larger networks
are in a better position in that scenario, he added. "We have must-have
content," he said in arguing the company was well positioned.
Discussing the film business, Averill said "the industry is really doing well
this year," which bodes well for Warner Bros. He lauded a strong 2016 slate,
including Batman vs. Superman and Suicide Squad. He said the unit would again
have attractive growth next year.
"We just don't see any evidence of that," he said when asked about possible
superhero fatigue. "You have to make good movies." He said Warner's slate has
superhero films with different tones and sensitivities, which should help.
Averill on Thursday reiterated that HBO Now would lose money this year due to
launch costs, but then be profitable after that. The profitability in 2016 will
be driven by the number of subscribers the streaming service reaches, he said.
Averill also once again signaled previous management commentary that HBO would
launch an over-the-top service in an international market soon, hinting that
more markets could follow.
"We are in a really strong competitive position," he said. "We are not in a
position where we need to do anything." He mentioned financial returns,
strategic benefits and reasonable execution risk as key filters for deals,
saying that makes big deals unlikely.