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Time Warner CEO belittles Netflix, says too cheap

updated 12:00 pm EST, Mon December 13, 2010

Time Warner chief claims Netflix insignificant

Time Warner chief Jeff Bewkes in an interview published Sunday tried to downplay the significance of Netflix. He insisted the streaming video provider was far less than it was made out to be in the media. Netflix was much smaller than Time Warner, he argued, and had no chance of disrupting the larger company, likening it for the New York Times to the Albanian military's relative insignificance.

"It's a little bit like, is the Albanian army going to take over the world?" he asked. "I don't think so."

He nonetheless characterized Netflix as having betrayed the video industry. Time Warner and others embraced Netflix at the end of the 1990s as a supplement to their DVD businesses but didn't expect its Internet-based business, with a much larger catalog and lower prices than retail stores, to undermine DVD sales. The service is widely credited for leading to Blockbuster's bankruptcy as the retailer's inherently small stock and high prices made it difficult to compete.

Bewkes further suggested that Time Warner may not renew an instrumental deal with its TV channel Starz, which helped get Netflix much of its content, unless the service paid significantly more. "At $8 to $10 [per month], it doesn't have the economics to support high-value programming," he said.

He called the current period just a temporary one of "experimentation" and that it would return to a more traditional model soon.

The remarks nonetheless contradicted some of Time Warner's recent behavior, much of which is believed to have been tailored to actively curbing the rise of Internet video. It recently launched a barebones cable package that was ostensibly tailored to those hit by economic factors but is widely believed to have been to stem cord-cutting users going to Internet video. It also made an abortive attempt to trial low bandwidth caps that were supposed to recoup costs from frequent users but were simultaneously low enough to make it difficult or impossible to use Internet video as a substitute for Time Warner's cable packages.

Netflix is now believed to be one of if not the most popular digital video service in the US and could represent a fifth of peak US Internet traffic. It has near-ubiquity on computers, game consoles and home theater equipment, even leading to a placement on the new Apple TV despite Apple's interest in safeguarding iTunes.



By Electronista Staff
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Comments

  1. Flying Meat

    Dedicated MacNNer

    Joined: Jan 2007

    +11

    Hmmm. This sounds familiar.

    Is he the new Balmer? He could be scrounging for the lunch he used to have before too long, with that attitude. How's that AOL thing working out for ya?

  1. Sebastien

    Registered User

    Joined: Apr 2000

    +9

    "high-value programming"? HA!

    Since when is any of Time-Warner's stuff "high-value programming"? They're simply a notch above Fox, no more. I won't shed any tears if they pull their c*** off Netflix (probably rejoice, actually)

    Oh, and way to totally insult another country; what a douchebag.

  1. mozart11

    Junior Member

    Joined: Aug 2000

    +8

    comment title

    Another apparent clueless CEO dismissing the competition.

    I dumped Cablevision (with KIDS saying too also - pay for commercails) at $104 per month after years for NO tv in the house. Buy only from iTunes. Upgraded my AppleTV version 1 to AppleTV generation2. I was introduced to Netfilx.

    US $7.99 per month for Netflix. Paid a year in advance.

    Yeah Cablevision and Time Warner - your future business model is working.

    Denial - just as the music companies are. Laughable. And they pay people like this clueless CEO MILLIONS.

    Apple or Microsoft will buy Netflix long before Cablevision, TIme Warner or anyone else will even think too. They just dismiss the ones that have CLEANED THEIR CLOCK ini their very field.

  1. droz

    Fresh-Faced Recruit

    Joined: Jul 2009

    +2

    In the Classic Words of Austin Millbarge....

    The Time Warner CEO needs to watch Spies Like Us because "we mock what we don't understand". He clearly does not understand Netflix.

  1. facebook_Karen

    Via Facebook

    Joined: Dec 2010

    0

    Time Warner vs. Time Warner Cable

    Time Warner no longer owns Time Warner Cable. The CEO of Time Warner Cable is Glenn Britt. Jeff Bewkes is the CEO of Time Warner. It feels like you're conflating the two of them in your post. Am I incorrect?

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +1

    someone desperately needs to buy a clue

    Cable and satellite TV are going the way of dial-up for internet access. Most people simply don't have $100/month to spend on TV! Yet that is his business model... tapping households for $100+ per month which includes a lot of channels people don't want to watch.

    And if he thinks he's going to strong-arm people back into the cable or satellite subscription, he's wrong.

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