June 13, 2018
NEWS ANALYSIS — When a federal judge greenlighted AT&T’s $85 billion acquisition of Time Warner, Jeff Bewkes, 10-year CEO of the media giant that includes Warner Bros., Turner (TBS, TNT, CNN, Turner Classic Movies, Cartoon Network), HBO and Cinemax, officially became a lame duck.
Upon consummation of the deal — provided the Justice Department doesn’t appeal — Bewkes will help transition John Stankey, president of AT&T’s entertainment group, into his senior executive position while reportedly getting a $95 million golden parachute for his efforts.
While hardly needing the money — Bewkes saw his 2017 compensation balloon to $49 million — the 1974 Yale graduate departs following a 39-year career at Time Warner that included restructuring media operations, downsizing New Line Cinema, and selling AOL and Time Warner Cable, among other initiatives.
Former top gun at HBO, Bewkes greenlighted the network’s early hits “The Sopranos” and “Sex in the City.” Replacing Richard Parsons as CEO of Time Warner in 2008, Bewkes was an early advocate turning The Hobbit and “Harry Potter” novels into movies followed up by “Game of Thrones” on HBO.
Known for his dry sense of humor, the 66-year-old Bewkes most-famously survived comparing burgeoning media meteor Netflix in 2010 to the Albanian Army.
“Is the Albanian Army going to take over the world? I don’t think so,” Bewkes told The New York Times. It was a catchphrase reiterated on fiscal calls — underscoring Bewkes’ confidence (or arrogance) that Netflix needed Warner Bros.’ TV shows and movies more than it needed to coddle streaming video.
It was the same corporate mindset Blockbuster Video foolishly employed in 2000 when the home video giant turned down a 49% stake in Netflix, thinking it could do better on its own launching the short-lived Blockbuster Movie Pass service in 2011.
“If they had launched two years earlier, they would have killed us,” Netflix co-founder Reed Hastings later told The Wrap.
But it was more than streaming to Bewkes. He believed content ownership — both physical and digital — should trump rental. And SVOD was just rental on steroids. While former CEO Parsons notoriously bragged it would be “cold day in hell” before he entered a video store, Bewkes lauded the rollout of UltraViolet — the cloud-based digital content platform that has seen many of its major studio partners, Warner included, migrate to the competing Movies Anywhere platform.
“There’s a niche shift to rental, kiosk rental, that’s less profitable,” Bewkes told a Wall Street confab in 2012. “[We need to] make [content] ownership more easy and valuable, which we haven’t so far succeeded to do. One way or another, in the long run, we think it’s a business that can grow, although it isn’t growing as fast as television.”
History is filled with what-ifs and “woulda-coulda-shoulda” scenarios that have undermined lesser executives. Not Bewkes.
As Netflix, Amazon Prime Video and Hulu have reshaped the media distribution, Bewkes simply changed the narrative.
In 2013, Bewkes picked Warner Bros. Home Entertainment boss Kevin Tsujihara over other more-established studio executives to run Warner Bros., replacing Barry Meyer. Bewkes believed Tsujihara’s digital expertise (he once headed short-lived digital platform Fandom.com during the dotcom era) would make a better fit going forward.
In 2014, HBO for the first time licensed catalog programming to Prime Video — a move Bewkes said meant getting top dollar for programming with little marginal value on the open market. Three years later, HBO would pull the shows from Amazon for its own SVOD platform, HBO Now.
In 2016, Time Warner acquired a 10% stake in Hulu for $583 million, joining majority owners 21st Century Fox, Disney and Comcast in the SVOD (and online TV) platform that continues to hemorrhage money.
Bewkes said the acquisition would help level the SVOD playing field while increasing “our company’s exposure to the secular growth in over-the-top.”
Indeed, streaming video is now part of Bewkes’ mental resumé, if not more.
“It is the legacy that I have been the steward of,” he told The Times.