Wednesday, September 29, 2010, 06:00 pm PT (09:00 pm ET)
Time Warner CEO says Apple 99-cent rental model 'jeopardizes' salesTime Warner chief executive Jeff Bewkes has warned other media execs that low cost rentals from Apple threaten sales of TV shows to branded networks.
Bewkes issued the warning at the Royal Television Conference in London, according to The Hollywood Reporter.
"How can you justify renting your first-run TV shows individually for 99 cents an episode and thereby jeopardize the sale of the same shows as a series to branded networks that pay hundreds of millions of dollars and make those shows available to loyal viewers for free?" Bewkes said.
According to Bewkes, "new entrants" like Apple need to offer up a "superior TV experience" while simultaneously supporting or improving the overall economics that make the programming possible. He remains confident that revenues are on the uptake, with the number of viewers growing, paid-television penetration increasing, and advertising and subscription revenues improving.
Also of note, Bewkes candidly admitted after his speech that the Time Warner merger with AOL was "the biggest mistake in corporate history."
Bewkes is the latest in a line of media conglomerate bosses that have decried Apple's new 99-cent rental model. Although Apple CEO Steve Jobs believes the studios will quickly "see the light" and agree to the rentals, several executives from the major studios have remained vocal in their opposition of the plan.
At last week's Goldman Sachs media executive conference, Viacom CEO Philippe Dauman called the 99-cent price "not good." "We don't think Apple has it quite right yet," Dauman said.
NBC Universal exec Jeff Zucker believes the pricing "devalues" his company's content. "We do not think 99 cents is the right price point," Zucker said.
Zucker has fought long and hard with Apple on the pricing of digital media content, but his days at NBC are now numbered. An internal document from last week states that he will be replaced as CEO after Comcast finalizes its acquisition of NBC Universal, CNET reports. Comcast is currently awaiting government approval of the deal.
Not all media execs are critical of Apple's new model, though. Fox and ABC were the first studios to agree to the 99-cent rentals. News Corp President Chase Carey views Fox's participation as a "short-term test." Robert Iger, CEO of ABC's parent company Walt Disney Co., thinks his company is better off "aligning with technology companies than fighting them."
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