In the past, Time Warner Chairman and CEO Jeff Bewkes might have been critical of Netflix’s ability to compete with traditional TV networks. But he has softened his tone lately, talking up the additional value that subscription video-on-demand services (SVOD) services like Netflix and Hulu Plus can provide to the company’s top line.
On Wednesday’s earnings call, Bewkes spoke extensively about how SVOD could boost sales by helping it monetize content it couldn’t really sell into syndication. In particular, the CW’s recent deals with Netflix and Hulu highlight the ability of networks to make additional money from certain types of shows. Because CW shows tend to be serialized, viewers wouldn’t necessarily tune into one episode or another on basic cable because they’d be picking up in the middle of a series. But SVOD platforms provide a way for viewers to watch a bunch of episodes in a row and catch up on old series.
“We always thought there was a role for Netflix and Hulu in the distribution ecosystem to give consumers access to content they couldn’t get before,” Bewkes said. “For our studio, what that does is monetize content better than it was being monetized before.”
And the value of those deals are significant. Bewkes didn’t go too far into specifics, but said the Netflix deal was worth hundreds of millions of dollars. As a result, services like Netflix don’t impinge upon the economics and value of traditional network distribution, but helps studios like Warner Bros. and networks like The CW maximize the value of its content, according to Bewkes.
Of course, the most recent talking points come in stark contrast to comments Bewkes has made in the past. At one point, the Time Warner CEO even compared Netflix to the Albanian army. But for now, he seems pretty happy to be striking big money deals with Netflix for content other networks wouldn’t touch in syndication.