Time Warner: $19bn content investment coming

Time Warner chief Jeff Bewkes says spend on production and programme marketing at the US media giant will soon reach US$19 billion.

Bewkes (left) said during an investors’ call the spend was currently at US$15 billion, but would increase as synergies between the Turner Broadcasting System broadcasting business, premium channel HBO and Hollywood studio Warner Bros. ramp up.

The numbers came in response to a question on the dramatic increases in content from SVOD players Netflix and Amazon Prime Instant Video, with the former pledging up US$6 billion on new shows in coming years and Amazon putting aside US$1.3 billion.

“Those were nice numbers you gave on some of our new brothers and sisters in the content business,” Bewkes said to the analyst. “But… we have been ramping up our content spending dramatically over the last five or six years and we’re continuing to do that.

“We’re spending US$15 billion a year on production, marketing, etcetera. It’s going up to $19 billion in the horizon that we’ve been giving plans for.”

Warner Bros. CEO Kevin Tsujihara added his studio was working more closely with sister firm HBO than in the past, citing recent hit The Leftovers and upcoming series such as Westworld.

“It helps us as well because they are going to get access to the best talent that we have on a daily basis,” he said.

“Other people are going to do good work, but we’re going to have a first look at most everything that we want to make an investment in, in terms of content,” added HBO CEO Richard Plepler.

HBO is also gearing up to launch its own OTT service, though questions over pricing and positioning were largely deflected yesterday.

Bewkes’ comments came as Time Warner posted a 1% decline in revenues for the three months to December 31, 2014, with Turner and HBO posting rises that offset a fall in the Warner movie business.

Revenues were down at US$7.53 billion from US$7.6 billion a year earlier. HBO sales were up 6% at US$1.3 billion, with Turner’s revenues up 2% at US$2.6 billion. Warner’s revenues were down 5% at US$3.8 billion.

Time Warner did point to growth in its local TV production output resulting from its takeover of Netherlands-based production group Eyeworks and domestic US broadcast primetime.

Bewkes also reaffirmed optimistic earnings targets for 2016 and 2018 that were first referred to after an US$80 billion takeover by 21^st Century Fox was rebuffed last year.