AOL Don’t Get No Respect: Jeff Bewkes, President and CEO, Time Warner
While Jeff Bewkes only recently became president and CEO of the media behemoth at the beginning of this year, he has long been an influential executive at Time Warner (TWX) HQ. Mr. Bewkes has been COO, as well as president, since 2005 and has run major parts of the disparate businesses of the conglomerate. That has included its digital assets, like AOL, despite the fact that he was also a prescient critic of the merger of AOL and Time Warner. Mr. Bewkes made his chops in the entertainment arena, especially at Time Warner’s HBO division in its glory days of growth. The media giant now plans to spin off Time Warner Cable, so the obvious next questions are what will it do with AOL and how can Time Warner remain relevant in the Internet business?
- Like the Yang-Decker appearance before it, Jeff Bewkes’s interview is prefaced by a video. This time it’s a parody of a TMZ editorial meeting about the Time Warner CEO.
- Kara welcomes Bewkes to the stage.
- Kara: Let’s get started: Why the hell did you pay $850 million for Bebo? And what happened to Tony Soprano?
- Kara notes that Bewkes was initially quite critical of the AOL-Time Warner merger. Bewkes corrects her saying he was “hopeful.” Kara parries, well what were you hopeful about? Bewkes: I was hopeful that we’d end up where we are today (yeah, right ….)
- Bewkes says AOL is the Rodney Dangerfield of the Web. Doesn’t get no respect. Question is, does it deserve it? Bewkes says AOL has lots of user engagement, and that’s making the division more valuable all the time.
- Kara asks about content. Notes that Time Warner wanted to marry its content business to online, but hasn’t been quite so successful in doing that. Bewkes says that the No. 1 news site in the U.S. is AOL News. He adds that almost half the unique visitors to the site come from CNN.com. Bewkes says the value placed on exclusivity at the time the AOL-Time Warner deal was inked was misplaced. You don’t want to lock your content up. It’s not a good strategy. If you take brands like People and Time and constrain them, it’s not good for People or Time or AOL. Google succeeded because it did the opposite.
- Kara: Would you like to get rid of AOL? Bewkes: No … Ah, there’s a caveat: He might if the right offer was on the table.
- Kara says she feels that AOL missed a lot of great opportunities. Bewkes agrees. “AOL invented social networking. We should be dominating it now.”
- Bewkes says AOL is a great growth business. It’s got a great ad network. It’s not the same magnitude as Google’s, but it’s doing well.
- Kara asks about Time Warner’s content business. Bewkes says that contrary to popular opinion, People, In Style and Sports Illustrated are not slow-growth businesses. Bewkes says their growth is driven not just by journalism, but by the communities that occur around their content.
- Kara circles back to touch on Time Warner’s Bebo acquisition: What are you buying with Bebo, aside from a bunch of 12-year-old girls in England? Bewkes says the company is buying engaged users, a company with a great understanding of content and culture and a great architecture. He adds that Time Warner is bringing the wisdom of Bebo’s founders to bear on products like AIM and ICQ.
- Kara asks who else Time Warner might buy in the social networking-community space. Bewkes dodges. Kara asks how the company competes with MySpace and Facebook. You just do it well, says Bewkes.
- Moving on to Hollywood, the writers’ strike and the film and publishing industries. Bewkes says Time Warner has probably the strongest network group in the world, adds that HBO has the largest subscription business in the world. HBO, he says, was the first digital television network. It was the first to do on-demand, he adds.
- Where’s the network business headed, asks Kara. It’s declining, isn’t it? Bewkes says it isn’t. It’s increasing. TNT, Cartoon Network, etc. are all growing.
- And film entertainment? We see a good growth potential in both our film and TV businesses, says Bewkes, noting the economies provided by digital distribution. If you have the capability of making compelling program, you’re in a great position because you can distribute it to a massive audience very easily. Mentions HBO’s Entourage series as an example of this. The series was broadcast on HBO, distributed as Webisodes, etc., with enormous success.
- Kara: People don’t look at you as a digital company. Bewkes: Well, they should. Kara: Why? Bewkes: We haven’t done a good job of explaining how we are transitioning into the digital world. Kara points out that this is not a simple marketing problem. Bewkes says that it is and lists a number of Time Warner properties that are among the largest in their categories.
- Q&A: How can you justify giving Lou Dobbs an hour a night on CNN? Bewkes says that Dobbs is but one opinion of many, and that the company constantly monitors the viewer response to him and what the general public tolerates. Quips that he asks Dobbs how he wants to make things fair and balanced…
- Q: In response to a challenge from a Yahoo rep, he claims that he meant that Time Warner was No. 1 in finance, not news.
- Q: Jesse Kornbluth: Glen Beck at CNN? Can you defend this hire? Bewkes: Another point of view. You know we’ve not agreed to make CNN the network with one point of view, we want to make the network of many points of view.
- Q: Why did you buy Bebo instead of building it? Bewkes says the company did try, but time was an issue and it needed to move quickly. We needed people with those abilities and we did not have them at the time.
- Kara: Do you feel you have a technology expertise at Time Warner? Bewkes seems to feel it does, just not on the same scale as a Microsoft or Google.
For more coverage, see The Wall Street Journal.
A note about our coverage: This live blog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations expeditiously written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.
Check out the video highlight reel from Jeff Bewke’s interview.