If you believe media is ailing from advertising woes and layoffs, its 2009 status according to the "First Draft of History" might be grim. But not according to Time Warner CEO Jeff Bewkes. He thinks, "Everything's fine!" -- with only a hint of sarcasm. Interviewer Jeffrey Goldberg of The Atlantic pressed him on the future of journalism and broader media. Bewkes was adamant in his belief that their future was bright, especially given recent technological advances. What might not be so bright? Comcast's interest in NBC.
This week's news of Comcast's possible acquisition of NBC was obviously a great topic to discuss with someone in Bewkes' position. For starters, he stated that Time Warner had no interest in NBC. When asked whether such acquisitions of content providers by cable providers were a good idea, Bewkes coyly replied, "I don't want to discourage Brian." (That's Brian Roberts, Comcast's CEO.) Through Time Warner's troubled past with ill-fated acquisitions, it was clear that Bewkes thought the move would be a poor one for Comcast. He said, "We've wasted some of the money in deals on the corporate level . . . We have this new idea where we don't do that anymore."
Another topic that interests Goldberg, given his background in magazines, is the future of the print business. Does Time Warner have any interest in getting out of the magazine business, shedding Time? Goldberg denied this possibility, adding "Time Inc. is not for sale."
Regarding print, he emphasized that we are in the midst of a deep advertising recession, but readership is holding up. He even stated that the magazine business has plenty of room for expansion going forward. But that expansion will be more of an evolution. He believes internet and electronic mobile versions of print media are the future. He noted that these new mediums are also more economically efficient.
Technology is also improving the profit picture for Time Warner's cable networks. Despite the fact that HBO's market share is flat, it's making money in other ways. Bewkes says that its additional revenue sources include international distribution, DVDs and on-demand viewing. That final advance is making movies and television even more profitable, as the marginal cost of new viewers accessing content approaches zero with costs like printing and shipping physical media eliminated.
Goldberg pressed Bewkes on another important business question: what happens when consumers don't want what journalists think they should? If hard news journalism becomes unprofitable, how would a media firm like Time Warner cope? Goldberg worried such a predicament would be a major problem for democracy.
Bewkes first insisted that people want socially conscious journalism, so it would always have a place in media firms. And if consumers demand something, it can be profitable. He explained, "The challenge for businesses and business managers is to figure out what you need to redesign" without damaging the quality of content in order to make journalism more profitable.
In the audience question-session afterward, journalist Sam Donaldson further pressed him on the question, forcing Bewkes to concede that it's a problem when gossipy stories are more popular than important ones. But he asserted that it's the journalists' job to make news interesting, which CNN has had success in doing.
Bewkes also had an interesting prediction about how content will transform: the middle will fall out. He believes that viewership will move towards two kinds of content: the very popular stuff that everyone likes and the niche market. As a result, the most interesting and most specialized content will dominate -- which better caters to consumer demand. Technology will enable this transformation. Bewkes believes the change will ultimately be positive.
Goldberg couldn't resist asking the CEO of the media company that owns HBO a very important final question: "The last episode of the Sopranos -- what happened?" Bewkes replied, "I want you to know that I know what happened, but I can't tell you because of the inevitable sequel and film that will come out." Needless to say, Goldberg was not amused.
Watch the full video of this session: