IMAGE SOURCE: TIME WARNER.
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Time Warner shares have been volatile since the company turned in its fourth-quarter earnings earlier this month. The media giant, which owns HBO, TNT, and Warner Bros., posted sales that fell just short of analyst expectations.
During the company's subsequent earnings call, CEO Jeff Bewkes, CFO Howard Averill, and HBO head Richard Plepler commented on the trends affecting the business and their expectations for its future. Here are five of the most important quotes from that call (transcript provided by Thomson Reuters).
It's giving its cable networks a makeover
Time Warner's Turner business centers around its cable networks, including TBS, TNT, Cartoon Network, and CNN. The ongoing fears surrounding the state of the traditional paid-TV industry and the big cable bundle have, in recent months, pressured Time Warner's share price. Time Warner has undertaken several initiatives to improve the quality of its cable business, including reducing commercials on some networks and rethinking syndication deals. Time Warner is also in the process of transitioning its content. During the call, Bewkes explained the steps Turner is taking to shore up its networks.
This year we will also start the brand refreshes of TBS and TNT. TBS recently kicked off its new lineup with the launches of Angie Tribeca and Full Frontal with Samantha Bee. They are already changing perceptions of what to expect from the network and there is a lot more to come.TNT will start its own refresh later this year...These changes at TBS and TNT are just the latest steps in a multiyear transformation at Turner. Over the last several years we put in place new management teams at Cartoon Network, CNN, truTV and Turner's international portfolio. And the results give us a lot of confidence in our ability to further strengthen TBS and TNT in the years ahead. In 2015 CNN and Cartoon significantly outpaced their peers. And one year after its rebrand, truTV's ratings in its key demos returned to growth in the fourth quarter.
DC will play a key role in driving its business
Walt Disney has used its ownership of comic book powerhouse Marvel to generate massive profits in recent years. Films based on key Marvel characters, including Guardians of the Galaxy and The Avengers, have led to box office blowouts. Meanwhile, Marvel-themed TV series have made their way to Disney's networks. Some of the most compelling content on the Disney Channel and ABC feature Marvel characters.
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Time Warner's Warner Bros. owns DC Comics, Marvel's longtime rival. Warner Bros. has used DC characters, most notably Batman and Superman, in dozens of films over the years, but in 2016, will step up its efforts dramatically. During the call, Bewkes touched on how Time Warner will leverage DC in the years ahead.
Batman v Superman: Dawn of Justice arrives in theaters on March 25 and it is one of the most anticipated films of this or any year. More than just a clash between the two iconic superheroes, it will mark the beginning of a multiyear slate of franchise films ... . DC will be a significant part of that slate including Suicide Squad this August and Wonder Woman and the first Justice League movie in 2017.
There's more to Warner Bros. than superheroes
While DC will play a key role in driving Warner Bros., it won't be thestudio'ssole focus. In addition to DC films, Warner Bros. will put out new Harry Potter and Lego movies in the months and years ahead. During the call, Bewkes commented on Warner Bros.'s other projects and how they would eventually benefit the rest of the company.
The strength of our theatrical slate extends far beyond our DC titles. We are just as excited about Fantastic Beasts and Where to Find Them, the magical return to JK Rowling's world of Harry Potter set for release this November. And we are already looking forward to the return of our Lego franchise in 2017 with Lego Batman and Ninjago. As those titles migrate into premium and broadcast windows we will also benefit from them on HBO and Turner's networks.
HBO will continue to add subscribers
Last year, for the first time, Time Warner offered its premium cable network HBO directly to consumers. Would-be viewers can sign up for HBO NOW directly over the Internet -- no paid-TV subscription required. During the call, Averill discussed how the launch of HBO NOW would benefit the company's business in the quarters to come.
At HBO we also expect faster growth in subscription revenue in 2016 driven by continued subscriber gains including from HBO NOW and improved monetization of our subscriber base. Over the next couple of years we would expect that to take HBO subscription revenue growth into the high-single-digits.
HBO NOW is doing well
During the call, Time Warner's management revealed that HBO NOW had 800,000 subscribers. That figure fell short of some analyst estimates, which had put the number at more than 1 million. During the call, Plepler defended the state of HBO NOW, explaining that the company was only getting started.
First of all, I wouldn't say only 800,000 HBO NOW subs. We are just getting started... I think we are going to make a lot of progress as we put new content on and get onto new platforms. And listen, our distributors are selling HBO in a variety of different ways. ...
The article 5 Things Time Warner, Inc. Management Wants You to Know originally appeared on Fool.com.
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