• by Wayne Friedman , March 12, 2008

With Time Warner spinning off its Time Warner Cable unit, the media giant now positions itself mostly as a content company. Is there still growth in those businesses--and are there possible acquisitions in its near future?

Jeff Bewkes, president/CEO of Time Warner, says yes--there's plenty of growth. But he stoped short of saying Time Warner would be interested in acquiring new networks--such as Cablevision's Systems Corp. Rainbow Media network, which is possibly up for sale.

"We don't need to acquire anything and only would if it had a fair return, and only if we knew that we could make it more profitable," he said at the Bear Stearns Media Conference in Palm Springs, Fla. "We want to focus on operational performance and competition advantage for our businesses."

He added that its networks and content have plenty of room for growth. "We don't think our core content [businesses] are mature," he stated.

For example, he noted that CNN has seen major growth. A couple of years ago, he said, CNN doubled its earnings "in a business that everyone thought was mature." Bewkes added that there was big growth globally as well as many other new digital extensions to explore.

For its general entertainment networks, Bewkes said, TBS and TNT are growing--with half of each of the networks' respective programming now in either original entertainment shows or a combination of originals and sports programs. As a result, these networks will benefit from the rapid growth of video-on-demand businesses.

For example, Bewkes said, for all VOD businesses at the local cable operator level, it's another Time Warner network that dominates. "The largest use of [VOD] is HBO on demand," he said.

Concerning AOL, he said the possible merger of Microsoft and Yahoo will put AOL at a disadvantage in terms of scale when it comes to search advertising. "It makes our competition have more scale than us," he says. "We have pretty good scale domestically, less so internationally."

Still, he said the possible deal verifies that Time Warner has made the right decision in pushing the advertising businesses of AOL--especially with all the ad business acquisitions it has made, some $2 billion worth. "Those are high-growth areas," he said.

Bewkes also noted that the merger of Time Warner's Warner Bros. and New Line Cinema theatrical units helped save marketing costs.