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Speaking on Sept. 12 at the Bank of America–Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills, Calif., MartinTime Warner CFO John Martin didn’t identify the programming but agreed that the media company’s longstanding distrust of subscription video-on-demand (notably by CEO Jeffrey Bewkes) has softened and now considers it a viable long-term growth opportunity for both domestic and international markets. Martin hat added tTime Warner currently realizes about $250 million in SVOD revenue (not including Warner’s ownership stake in The CW) — an incremental revenue tally he expects to grow significantly by the end of the year. He said the studio is in license discussions with Amazon Instant Video, Amazon-owned LoveFilm, Comcast’s Streampix, Netflix and QuickFlix in Australia, among others adding that SVOD is a buyer for catalog programming that hasn’t sold in other secondary distribution channels, and a buyer of TV shows that don’t syndicate well, such as serialized hour-long dramas, as well new original programs.
“What’s proving interesting about SVOD is that over time it could prove to be a syndication window for original programming on basic cable,” Martin said, adding that there currently does not exist an established syndication market for basic cable.
“When you add all of that up, we think [SVOD] is a meaningful amount of opportunity,” the CFO said. “I would be surprised at the end of the year if those [SVOD] revenues weren’t higher than they are right now.
“If SVOD offerings are going to stay popular [among viewers], if they are going to be relevant in consumers’ lives, we believe very strongly that the nature of the content offerings are continually needed to be refreshed and be new,” Martin continued. “We feel like we are in a good position to take our fair share and help contribute to that ecosystem.”
“And it has to be on the TV. Most of TV Everywhere we have been talking about tablets and online,” he said. “It only now is making its way on to the TV through connected devices and smart televisions.”