Time Warner's Jeff Bewkes can feel pretty good about not buying a big broadcast network like NBC. But there's more to this big broadcast TV story.
"The broadcast networks have fewer
people watching, for shorter times of day, lower and declining ratings; they have reducing revenue from advertising, they have declining programming budgets and lower earnings, so they have fewer of
the scripted shows than they used to have," says Bewkes, chairman and chief executive officer of Time Warner.
"So therefore their business model is becoming increasingly not viable," he adds. "If you look at broadcast networks, which are the only ones in TV that have 'free'
aspect, if they don't get some form of carriage fee, they may not survive."
This also goes for the CW -- we're assuming. That small broadcast network is co-owned by Time Warner
(along with and CBS Corp.) CW isn't highlighted in earning call conversations, which instead focus on HBO, TNT, TBS, and CNN.
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Media analysts have speculated that NBC, under the control of
cable system giant Comcast Corp, would definitely be a candidate to transition into a cable network -- or least get a sizable monthly fee for its TV stations and affiliates in the form of
retransmission fees.
The troubled network needs it more than most. But it wouldn't be the only one in this category. Surely next on the list would be CW.
While the network has seen
a turnaround of sorts over the last two seasons, there's still a long way to go -- with the necessity of a dual revenue stream more crucial than ever in the coming years.
Somewhat close
competitors to the CW, such as MTV, VH1 and ABC Family, already have this financial model.
Bewkes is right to talk about the need for "branded networks." He points to Time Warner's own TNT, for drama;
TBS, for comedy; MTV, for "young lifestyle and music"; and Discovery for "nonfiction" programming. On the news front, he says. CNN is "broad journalistic fact-based
news," and Fox and MSNBC have "their own points of view."
CW is branded as well. Time
Warner and CBS will increasingly need to let cable operators know that in the near future.