Warner "moving away from DVD," focusing on Blu-ray, VOD and DD

[Grubert]

Source: Home Media Magazine

Jeff Bewkes, president and CEO of Time Warner Inc., June 9 said Warner Bros. Studios by 2009 will bow half the number of films in its theatrical slate from two years ago.

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Speaking to investors at the Deutsche Bank Media & Telecommunications Conference in New York, Bewkes said pressure to improve revenue and cash flow growth from its $1 billion filmed-entertainment division meant taking a step back and making more out of less.

“Our motivation is to improve our return on capital,” Bewkes said. “Doing that we believe we can move profit up.”

To accomplish this, the CEO said the studio will focus on building wider consumer adoption of Blu-ray, expanding cable video-on-demand simultaneously with standard DVD (Bewkes said cable VOD generated more than three times the margins of DVD rental) and other electronic distribution.

Bewkes said the elimination of New Line Pictures, which he characterized as a redundant infrastructure, would result in ongoing overhead improvements as well.

He said DVD has been a reliable revenue generator for all studios the past five years. Bewkes said that for every $100 in box office revenue, Warner Home Video extracted more from DVD.

“Our studio still leads in that area because we have scale superiority in worldwide DVD distribution,” the CEO said.

Bewkes said expansion of Blu-ray, VOD and related improvements in electronic distribution by moving away from physical DVD would help grow filmed entertainment.

“Those kinds of things we think in the long run will bring revenue growth to the total film sector,” he said.

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