“We ask it all the time and are always looking at it,” Time Warner chief executive Jeff Bewkes said when asked if HBO could be offered directly to consumers online — without a cable subscription. “Now the broadband opportunity is getting quite a bit bigger. The ability to deliver something robust is stronger, so the question you are asking is getting more viable and interesting.”
CBS chief executive Les Moonves said premium cable networks like Showtime and HBO would make the most sense for that move. He said Showtime was once the “Avis to HBO’s Hertz,” but the network’s image has improved with critically acclaimed shows such as “Homeland” and “Ray Donovan.”
“What is the appropriate way to market your product? Is it good to go directly to the consumer? Is it appropriate to be streaming? What is the future, how do we grow these businesses?” Moonves asked. “I don’t think there is a media guy you’ve got up here that isn’t involved every week” in those discussions.
But CBS also relies heavily on the retransmission fees they get from cable providers. CBS expects retransmission fees to reach $1 billion by 2016 and $2 billion by 2020. HBO, meanwhile, keeps adding new customers to its cable and satellite-only network. Last year, revenue grew four percent to $4.9 billion.
Both executives demurred about the timing on an online-only future. And they joined other executives at the conference in saying speculation about the demise of cable is overblown. Disney’s senior executive vice president, Jay Rasulo, said cable will be around for the foreseeable future.
“People say that people pay for channels they don’t watch. The channels they don’t watch for you and me are different, so it’s easy to make sweeping statements,” Rasulo said. Disney’s ESPN network is seen as a lynchpin to the cable bundle, commanding the highest rates from cable operators.
“The cost of a (cable) system is still an incredible value,” Rasulo said.