Monday, June 21, 2010

True Blood Season 3 Mini Episode #5: Bill

This is the best of the 6 mini webisodes that HBO released for the upcoming season of True Blood. Together with Snoop Dogg's Oh Snookie song, this is another great marketing season by the folks at HBO - congrats on the high-quality production and wit.

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Friday, June 18, 2010

Starbucks looks for a sustainable paper cup - and finds a chalkboard....

Thursday, 17 June 2010  posted by justin

The Finale

We were able to bring together great creative minds from around the world to tackle a complex and important challenge. We’ve been absolutely floored by both the process and the winning submissions.

There were 430 submissions and these were updated on average of at least 3 times in response to more than 5,000 ratings and 13,000 comments. We believed that good ideas might come from anywhere, but now we also believe the same is true of great feedback that helps make ideas better.

We’d like to thank our partners, our jurors, the participants and everyone who contributed their time and energy to writing about the project, creating submissions, and rating and commenting on ideas. We’re looking forward to helping these ideas into action.

Jury Winners:


Karma Cup (Mira Holley, Nick Partridge, Gillian Langor, Mira Lynn, Zarla Ludin, Ruth Prentice)

Special Mentions:

The Betacup & The Betacup Campaign (Jesko Stoetzer)

Champion Cup (Raph D’Amico) -

Band of Honor (Scott Moorhead) -

Community Rating Winners:

1. The Betacup & The Betacup Campaign (Jesko Stoetzer) Berlin

2. Cuptokeep (Katarina Mattsson & Angelica Lindgren) Stockholm

3. The NextCup (Wouter Middendorf) Rotterdam

4. The Neutral Resource Coffee Cup (Aaronn Levine) Solomon Islands

5. Networked Loyalty (joshbg2k) Brooklyn

Posted in: Uncategorized | Tagged: | 5 Comments

This sounds like a great program by Starbucks; funny that the winner of the sustainable cup contest is... a chalkboard to encourage people to bring their own mug.

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Snoop Dogg loves Sookie from True Blood - smart move by HBO

Great custom song by Snoop Dogg for the folks from HBO - wonder how much they paid him for this; True Blood has done some exceptional marketing over the last years and this combined with the mini series is a strong continuation.

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Thursday, June 17, 2010

Microsoft Xbox blows big opportunity - ESPN not available for Time Warner Cable customers et al

(Credit: screen cap by Jeff Bakalar)

Monday we told you about Microsoft's ESPN on Xbox Live announcement made at the company's E3 press conference. The service allows Gold Xbox Live members to access content from the ESPN3 portal and stream live and on-demand sporting events right to their consoles.

Unfortunately, a major caveat reveals that not everyone with an Xbox 360 and Gold membership will be able to enjoy the content. According to and the press release announcing the partnership with Microsoft, only certain Xbox 360 owners with participating ISPs will be able to receive the streams.

Xbox Live Gold members who have high-speed Internet service from an affiliated service provider will enjoy more than 3,500 live sporting events from's 24-7 broadband sports network.

Among the people this affects are New York City area Time Warner Cable and Cablevision subscribers. For a complete list of participating ISPs to see whether you'll be left in the dark, check out ESPN's list here.

I just got excited about getting ESPN3 on my Xbox/TV (I don't have cable) - alas, ESPN is hiding behind their existing cable partners - and Microsoft didn't have the balls to get them to change it - so no TWC customers can watch ESPN on their Xbox....

Posted via web from digbits's posterous

Creepiosity - love that book title

I'm not against smiling animals at all - especially with that devilish look!

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Thursday, June 10, 2010

AOL will hire hundreds of journalists - at least someone is getting them back to work


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AOL to Hire 'Hundreds' of Journalists, Reorganize Content Division

Sites to Be Grouped Into 'Super Networks' and Sold to Advertisers

by Michael Learmonth
Published: June 08, 2010

NEW YORK ( -- AOL is planning to hire hundreds of journalists, editors and videographers in the coming year as it builds out its content-first business model.

David Eun

David Eun

--> David Eun, president of AOL's media and studios division, is expected to announce the push in an all-hands meeting of the group in New York today when he lays out his strategy for the unit that will include grouping all the sites into 17 "super-networks."

In an interview, Mr. Eun said he had not only familiarized himself with all of AOL's far-flung content operations in his first 90 days on the job, but also visited many of them personally, studied the economics and data from traffic across AOL's properties and search, and come to one overarching conclusion: produce more content, faster.

"Our mission at this company is to be the world's largest producer of high-quality content, period," he said. "The content driving our traffic is home-grown, and 80% of it is now produced by folks on the AOL payroll."

AOL employs about 500 full-time editorial employees. And while Mr. Eun said the marketplace will determine the pace of new hires, it is conceivable that number could double in the coming year. "We are going to be the largest net hirer of journalists in the world next year," he said.

The content operation, which includes more than 100 brands, including AOL Health and AOL Autos and brands such as Fanhouse and PopEater, will be reorganized into 17 separate "networks" the company will package to advertisers.

The networks themselves represent every significant type of content that the data show AOL users want and advertisers are willing to buy. As an example, the Life network will include sites such as Kitchen Daily and Stylist; Family will include content around parents, kids, tweens, teens and pets. Other "super-networks" will include finance, news, sports, movies, music, local and "communities," which includes AOL Latino and Black Voices.

"We have insights into our audience, and can produce content they want, which leads to engagement, which leads to what advertisers want," said Jeff Levick, president of global advertising at AOL.

Mr. Eun said the bias is toward strengthening the collection of brands AOL already has, but the company will also look to new launches, acquisitions and partnerships. "In this world you have to be doing all three," he said.

In addition to hiring hundreds of full-time employees over the next year, Mr. Eun wants to quickly ramp up the number of freelancers contributing to AOL. Currently there are about 40,000 freelancers contributing to AOL, its SEED content production arm and Studio One. Mr. Eun said the company is still working on a system that measures the value of a piece of content based on the number of people that click, how long they stay, and the amount of ad revenue associated with it.

If AOL is doubling down on their now yearlong effort to transform the company from its dial-up internet access roots to a media company, they're not alone.

After a few years of recovery from the Terry Semel era, the former studio boss who once ran the portal, Yahoo is now calling itself "the world's largest media company" and dropped close to $100 million on Associated Content in May to bolster its offerings.

Like AOL, Yahoo has concluded that its original content performs and monetizes better and it's now in a push to create more of it. In an interview earlier this week, Yahoo Exec VP Hilary Schneider said Yahoo's goal is to boost home-grown content to 20% worldwide.

Indeed, Ms. Schneider said a key rationale for acquiring Associated Content is the sheer number of contributors (340,000) on its freelance rolls. "We know what unmet need we have from of content," Ms. Schneider said. "We can start putting in requests for the content we know our consumers are looking for."

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I'm a fan of producing original content for the web - it tends to be most respected by advertisers and people do appreciate high-quality articles and videos. My question is whether they will be able to do this cost-effectively and "web-style" - meaning quick, rewarding and low cost. Traditional journalists might still not be a great fit for these new hundreds of jobs.

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Wednesday, June 09, 2010

Apple rears the ugly monopoly head: no more google ads on the iphone and ipad?


Google Inc. protested Apple Inc.'s new rules for iPhone and iPad programmers, saying the changes would prohibit application developers from using Google's advertising technology on the devices.

Apple's new terms, released Monday, target companies with competitive mobile technologies, such as Google, as well as any company whose primary business is not serving mobile ads, said Omar Hamoui, founder of Google's recently acquired AdMob mobile-advertising unit.

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"Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress,'' Mr. Hamoui wrote in a blog post.

Apple's terms hurt large and small developers by limiting their choice of how best to make money, Mr. Hamoui said. And because advertising funds many free and low-cost apps, these terms hurt consumers as well, he said.

Apple wasn't available for comment. Earlier this year, Apple unveiled an upgrade to the iPhone operating system that included its new advertising network, dubbed iAd, which is set to launch July 1.

Billed as an alternative to current options, Apple said developers would benefit from the choice. U.S. regulators agreed, clearing Google to buy mobile-advertising firm AdMob in May and noting that Apple's entry into the market would provide sufficient competition.

However, Apple's new terms appear to exclude competing networks such as AdMob from collecting critical information about the devices to which their ads are served.

Apple has said it wasn't interested in banning rivals from its platform but rather simply wanted to prevent abuse.

At issue is a clause in Apple's new terms that states developers may not use third-party analytics software in their apps to collect and send device data to a third party for aggregation, processing or analysis.

The new agreement also says developers must request Apple's permission to collect specific types of information about their users and may only disclose user data to independent advertising-service providers whose primary business is serving mobile ads.

That would exclude advertising-service providers owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple. People familiar with the situation said Apple's terms of service could affect Microsoft Corp., AOL Inc. and Yahoo Inc. as well as Google.

The changes don't appear to affect smaller competitors such as Jumptap Inc., Greystripe Inc. and Millennial Media Inc., although they could make such companies less attractive to prospective acquirers.

Mr. Hamoui said in his post that he will tell Apple his concerns about the company's new terms.

Write to Scott Morrison at

This smells like the mobile space - Apple is blocking Google from serving ads into iphone apps going forward. This might be a dangerous path with regulators - not the smartest way to go IMHO.

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Thursday, June 03, 2010

Stecchino in Hell's Kitchen - much better than the average midtown grub

Stecchino Your Hell's Kitchen Tavern

Fine Fare - Small Plates - Classic Cocktails 765 9th Ave (bet. 51st & 52nd), New York, Ny

I went to Stecchino last night with two friends and a livingsocial coupon; we had a very good meal, good service, strong cocktails and overall very pleasant experience. Highly recommend the duck and the naked calamari. I hope this place survives as the interior is somewhat bland (reminded me of a mediocre Irish pub) and overall somewhat non-descriptive from the outside. Give it a shot next time you're on 9th Avenue in the 50ies (especially if Caselulla is booked)!

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Google Buys Invite Media and goes into the DSP space

UPDATE: Google has now confirmed the deal.
Google has indeed bought ad technology start-up Invite Media, I’ve confirmed with multiple sources.

As I wrote last month, Invite is a three-year-old “demand-side platform” designed to help buyers navigate high-volume display-advertising exchanges–like the one Google launched last year.

I don’t have  a price for the deal nailed down, but I believe it’s in the $70 million range. Google (GOOG) declined to comment; I haven’t heard back from Invite Media CEO Nat Turner.

People familiar with the transaction say Google’s plan is to leave Invite running as a standalone unit, which will work at arm’s length with exchange’s like Google’s AdX, as well as competitors like OpenX, Yahoo’s (YHOO) Right Media and Microsoft’s (MSFT) AdECN.

That makes sense, because ad buyers who use Invite, like Publicis’s Vivaki, expect to be able to buy inventory from multiple exchanges.

But over time, Google does plan on investing in Invite and integrating it with DoubleClick for Advertisers, its ad-serving technology. Invite users wouldn’t be required to use DFA, but the two would be designed to match up seamlessly, sources said.

It will be interesting to see what becomes of Invite’s competitors, like MediaMath, Turn and X+1, in the wake of this deal. Venture capitalists have poured money into demand-side platforms in recent years, but I’ve heard increasing skepticism about valuations those investors are seeking. And now the most obvious buyer, with the deepest pockets, is off the table.

Turner and his co-founders started Invite Media when they were still undergraduates at the University of Pennsylvania; the company has offices in Philadelphia and New York City. Investors include Comcast’s (CMCSA) venture arm and First Round Capital.

Invite had previously considered selling to Omniture last summer, but that deal went away after Adobe (ADBE) purchased the analytics company.

Google keeps gobbling up smart technology teams - this is an interesting acquisition that fits well with the Doubleclick strategy of pushing harder on the display side of things - Google's second $1bn+ business after search. Congrats to the Invite Media folks! It'll be interesting to see how the agency clients react to their "Frenemy" now offering them access to the exchanges; even more data residing with Google than before.

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Tuesday, June 01, 2010

How Jeff Bewkes is reinventing Time Warner - content vs distribution discussion

How Jeff Bewkes is reinventing Time Warner

By Kenneth Li

Published: May 29 2010 00:23 | Last updated: May 29 2010 00:23

Media executives thrive on high-wattage company – Hollywood celebrities, publishing legends, fellow tycoons. The tycoons, at least, were in abundance last summer at the annual retreat sponsored by boutique investment bank Allen & Co in Sun Valley, Idaho, where the wealthy and powerful of the media and technology worlds gather to talk shop. But by day four, the chief executive of Time Warner, one of the biggest producers of entertainment and news, couldn’t wait to leave.

Jeff Bewkes’ bags were sitting in the boot of a hire car ready to speed to nearby Friedman Memorial Airport, where corporate jets were lined up wingtip to wingtip. Bewkes was flying commercial. He’s not a private-jet kind of guy, and routinely takes to the streets of New York to flag down his own taxis – or did until the company decided it was too much of an insurance liability. Nor does he welcome profile writers. Our stories, he told me in the cool mountain air of Sun Valley, are relics of a dying breed of mogul, whose empire-building was little more than an ego-trip at the expense of shareholder returns.

But Bewkes was happy to talk about his company, if not himself. It has thrived during one of the worst periods for the economy since the Great Depression. Warner Brothers secured the top spot in Hollywood last year with blockbuster franchises such as Harry Potter and the surprise hit The Hangover, which in January became the bestselling R-rated comedy DVD of all time. It benefited from the resilience of its cable and satellite channels TNT, TBS and its most famous offering, HBO. And while there are some trouble spots – CNN’s ratings, for example, and the long-term viability of Time Inc, the magazine division facing a decline in print advertising – the company today barely resembles the Time Warner of a few years ago, a struggling goliath in real danger of insolvency.

Now, Time Warner is set to report the highest earnings growth of its industry peers and to return more capital to shareholders than any large US media company. This is everything investors in the media begged for over the decades but rarely received, as “visionary” executives chased the next big deal, never doubting they could find a better use for their excess cash than simply handing it back to shareholders. “We’re trying to make money. That’s what we’re doing,” said Bewkes. “At Time Warner, we intend and we expect to have superior returns in the media sector for investors.”

Getting there meant tearing the old Time Warner apart. In Sun Valley in summer 1999 – about a hundred feet away from where Bewkes and I sat – the top lieutenants of Time Warner and America Online (AOL) had embraced the deal-hatching ethos that defined the mountain resort, huddling in full view of their rivals to flirt with a clever little plan. Six months later, on January 10, 2000, they announced the largest and arguably the worst merger in US history, plunging the new company into two US federal investigations and forever discrediting the term “synergy” – corporate shorthand for making 1+1=3.

Bewkes took the top job at Time Warner two years ago, succeeding Richard Parsons and replacing a laid-back corporate culture with one of shrewd (some say cold-blooded) tactical focus. To the rank and file, his swift decision-making sometimes came off as arrogant, especially when set against his predecessor’s grandfatherly style, but there is no denying that the company has changed for the better. He quickly dismantled not just the colossus created by the AOL merger – a spin-off of AOL was completed in December – but two decades of buying sprees that erased more than $200bn in shareholders’ equity.

Although Bewkes is not philosophically opposed to buying other companies (Time Warner has bid for the Hollywood studio MGM on his watch), he has resisted three rounds of dealmaking since becoming CEO. He walked away from the chance to buy the Weather Channel in 2008 and the Travel Channel last year, and he sat out the bidding for NBC Universal, at $30bn the biggest media prize in recent memory. Instead, he took a public potshot at Comcast, the company that snapped up NBC. “Somebody has finally noticed,” he remarked at a TV industry conference, to guffaws from his audience, “that these things don’t work out so well. We love to see our competitors taking risks.”

That remark infuriated people close to the deal – in part, of course, because they fear he may be right. Tom Freston, former chief executive of Viacom, a business partner and friend of Bewkes, says: “If you look at [past] growth in media, it’s been largely through focus, not mergers and acquisitions.” And yet if Bewkes is to lead Time Warner – and perhaps others – into the new era that he talked about in Sun Valley, he’ll have to do more than turn his back on traditional dealmaking. He’ll have to show us all whether, and how, a media company can grow organically once again.

. . .

Even as a child in New Jersey, Jeff Bewkes wanted to be in the media. “When I was very young, I told my parents that I wanted to be in the entertainment industry,” he’s said, setting up the joke: “That’s when they sat me down and broke it to me that we were not Jewish.” His entr√©e into entertainment was decidedly unspectacular. During one summer break at Yale in 1973, Bewkes, through his father’s connections, worked as a production assistant. (According to his Yale schoolmate Lloyd Grove, he got to chauffeur Diana Rigg as part of the job.) He was a researcher at NBC News for a year after graduating, then took an MBA at Stanford Business School and started his career in a commercial lending division of Citibank.

Soon, though, he was looking for another job in media. In a commencement speech at his alma mater last year, he joked: “When I came out of Stanford, I looked at my brilliant classmates, who were going into Wall Street high finance, Silicon Valley, advanced engineering, and I said to myself, ‘Jeff, go into an industry where nobody can add’.” Self-deprecation, of course, but the most important career move he’s made came in 1979, when he left Citibank and joined the seven-year-old cable channel HBO, or Home Box Office, which was owned by magazine publisher Time Inc.

Long before AOL became Time Warner’s redheaded stepchild, HBO was the target for scorn. To the blueblood sophisticates at Time Inc in the 1970s, the upstart HBO was a cesspool of profanity-laden TV: as a premium channel that did not run commercials, it was beyond the purview of US censors. But by 1980, when profits from Time’s video businesses (including cable operations) overtook the magazine division, HBO was an object of envy in the TV business, and of jealousy elsewhere in the company.

Bill Roedy, chairman and chief executive of MTV International, who started at HBO in the same week as Bewkes, remembers the late 1970s and early 1980s as the golden years of cable. US television was dominated by three broadcast channels; all cable had to offer, for a small fee, was better reception and a handful of channels. The cable guys’ goal was to show consumers why they should pay for television, an idea as far-fetched then as paying for content on the internet is today. “It wasn’t just about building a business for HBO, but building a business for cable television,” Roedy says. At the time, HBO was known for airing feature films after theatrical release, and for sport, notably pioneering satellite transmission for 1975’s epic fight between Muhammad Ali and Joe Frazier – the Thrilla in Manila.

Bewkes climbed the ranks quickly, which former colleagues put down to his deep financial and strategic sense (contrary to that quip in his Stanford commencement speech). He also had a certain irreverence combined with an unusual sense of diplomacy. Under the guidance of his boss and mentor Michael Fuchs, HBO prospered, airing its first wave of original programming in the 1980s, scoring early hits such as Tales from the Crypt in 1989 and The Larry Sanders Show in 1992, and going on to create or co-found other successful channels including E! Entertainment and Comedy Central (now owned by Viacom and home to comedian and political pundit Jon Stewart).

In 1995, Gerald Levin, three years into his decade as chief executive of Time Warner, forced out Fuchs as head of HBO and asked Bewkes to take his place. Over the next seven years, Bewkes took the division to the next level. The channel went from being a luxury for upper-middle-class viewers to a haven for shows that much of America was talking about. Big bets on expensive original programming such as The Sopranos, Sex and the City and Band of Brothers resulted in big hits that traded on their lavish production values. Between 1995, when Bewkes took over, and 2002, when he moved on, HBO’s profits trebled to about $1bn a year, and now account for 27 per cent of Time Warner’s operating profit. Even rivals are generous in their praise. Peter Chernin, former right-hand man to Rupert Murdoch, says: “The time when he was head of HBO was about as significant a creative achievement as has been done in this industry for a long time.”

. . .

Bewkes’ business sense shone in his time at HBO. His personality and style also won him attention. “He has an uncanny ability to undress someone intellectually while leaving them naked and thanking him for the experience,” says Curt Viebranz, who joined HBO shortly after Bewkes. “It did not matter if it was someone more senior. I watched him do it firsthand to Levin and Steve Ross [former Time Warner CEOs].”

“He knows when to pick the moments to speak out,” says Frederick Iseman, a private equity executive and college friend from Yale. It is a knack that has helped him escape career suicide many times, even while publicly attacking a superior’s ideas. When, during a meeting in 2002, Bewkes cut off AOL founder Steve Case’s rant on the benefits AOL brought to the combined business, Bewkes was admired for saying aloud what many Time Warner executives were feeling. Synergy, he said, was “bullshit”.

Fortunately – for him, at least – he wasn’t wrong. The $164bn buyout of Time Warner by AOL, the deal of the century that would “change the course of history” according to reports at the time, was unravelling even before regulators got round to approving it a year later. Investors soon learned that AOL’s public valuation of $200bn was propped up by fraudulent accounting and undermined by no real internet strategy. The combined company’s forecasts of 30 per cent-plus growth in advertising revenue for the foreseeable future were absurd, former executives say.

Bewkes had tried to talk Levin out of the idea a month after the deal was announced. In fact, Levin agreed the terms with virtually no input from his senior executives. “You had a lot of people saying you should’ve combined a donkey with a rabbit and gotten a flying unicorn,” Bewkes would say years later. “Everyone bought it.”

After Levin departed, his career finished by his inept dealmaking and shareholders’ fury, the avuncular Dick Parsons was promoted to clean up the mess. Parsons’ strategy, as one senior executive recalls, could be summed up in two words: “Don’t fight”. Bewkes, on the other hand, was ready to cause friction if it would help save the struggling company.

. . .

And yet for all the talk of poisonous corporate culture wars, Bewkes has a more technocratic explanation for the disaster of the AOL-Time Warner deal. He blames its failure on a flawed broadband strategy. The break-up of the US telecoms monopoly AT&T in 1984 gave internet service providers such as AOL the right to use telephone companies’ lines without negotiating a price with each of them individually. But by 1999, it was clear that web users were moving over to high-speed broadband, and no such law governed the broadband world. AOL and its rivals had to reach individual agreements with cable and phone companies. This gave the latter the upper hand, naturally, and left AOL and its peers with a fraction of the profits to which they had become accustomed.

AOL’s executives reasoned that buying Time Warner, with the second-biggest cable company in America, would solve its problem by guaranteeing it access to Time Warner Cable’s customers. But with only 12 per cent of the US cable market, Time Warner Cable was unable to persuade its rivals to pipe a souped-up version of AOL into American homes in return for prices that even Time Warner Cable found unattractive. “It’s a classic example of a company-centric innovation that depended on central authority over AOL and Time Warner Cable,” says Bewkes today. “Not only didn’t it fly, but its premise turned the entire broadband industry against AOL.”

What the architects of the merger forgot was that innovation at mature companies requires strategies that will work for rivals as well. Time Warner should have known this: the history of video technology is littered with business decisions at the company that not only enhanced profits, but also helped the rest of the media world make the transition from one technology to another. Time Warner played a key role in the proliferation of DVDs (and, along with Sony, it’s the only media company to share patents in the technology with the electronics manufacturers). A decision in 2001 to slash the retail price of DVDs initially drew fire from Blockbuster, the largest US rental chain, but ushered in a period of unprecedented profits in Hollywood from home entertainment sales, which are now more than half of movie revenues. Warner Bros was also the first studio to try offering films on demand before their DVD release, as a reaction to the slide in DVD sales.

Seven years later, according to Sir Howard Stringer, chairman and CEO of Sony, Bewkes played an important role in breaking the deadlock between competing successors to DVD technology, Sony’s Blu-ray and Toshiba’s HD-DVD. Despite its close relationship with Toshiba, Time Warner’s endorsement of Sony’s more robust technology proved decisive. “He may look conventional. But he is startlingly original,” says Stringer. “That’s what makes him competitive.” Had Bewkes gone the other way, next-generation 3-D televisions, videos and video games that are set to hit the stores this year would probably have been delayed indefinitely, Stringer says.

Of course, he’s not the only person in the media with vision, and his first internet strategy for TV collapsed – and was then usurped. Bewkes wanted to persuade the industry to offer all its programmes on-demand on cable, to make watching TV something akin to internet surfing. But this failed in 2006 because of technological hurdles, including difficulties inserting relevant adverts into shows that might be watched days after they first aired. Meanwhile, News Corp and NBC Universal announced a joint venture, Hulu, that would offer their top programming online for free, supported by internet advertising. Launched in spring 2008, the site is now second only to YouTube as the most popular video destination on the web.

Hulu’s immense popularity with viewers is not necessarily a problem for free-to-air broadcasters who rely on advertising to make their money. But it poses a big problem for channels that depend on the fees they receive from cable networks that want to carry their programming. Bewkes is scathing about the idea: “They went and put their shows on Hulu with neither fee support nor [enough] advertising support, apparently in order to prove that they can drive themselves out of business.”

. . .

Shortly after Hulu launched, Bewkes convened a meeting of the top executives from the Warner Bros film and television studios; from Time Warner’s pay-TV channel owners, HBO and Turner Broadcasting; and from its cable operator, Time Warner Cable. Very quickly, tensions rose as it became clear that there was little co-ordination of online strategies, and little understanding in some areas of how other parts of the group made money. An executive who attended the meeting recalls unease from Time Warner Cable executives about giving away programming for free on the internet, when the business depended on charging cable systems for distribution.

“There were moments where we realised that some of this we can do and some we should not do,” Turner’s chief executive Phil Kent says, diplomatically. The meeting underscored what Bewkes had already realised: that in all this unwinding of deals, the idea could not simply be to keep what worked and lose what didn’t. Rather, Time Warner needed to do something more visionary: separate the distribution of media from its creation – thereby reversing the conventional wisdom behind two decades of the industry’s thinking. (And conventional wisdom that lives on today: think of News Corp’s purchase of MySpace, or Comcast’s impending takeover of NBC Universal – essentially ways of bringing content and distribution under the same roof.) “He’s taking a risk,” says Peter Kreisky, a media consultant and former business school roommate. “The old model was built around scale and distribution – in print and movies and television and internet. He’s moved away from that. It is a tectonic shift.”

At that meeting, the need to clarify the company’s objectives, ultimately by splitting media creation from distribution, became clear. But so did something else: the need to learn the lessons of AOL’s failure and come up with a way of operating online that would work for the whole TV industry, not just Time Warner. “All these innovations, if they’re going to work, they’re going to have to be adopted by all the other studios and the other networks,” Bewkes explains. “They’ve got to be plausible and they have to work with every distributor, not just Time Warner Cable, but other cable, satellite and telephone companies.”

The breakthrough occurred a few months after the meeting, when Glenn Britt, head of Time Warner Cable, called Bewkes and Kent to tell them that cable companies were working on an online technology that could identify whether an internet viewer was also a cable TV subscriber. The ability to block freeloaders from watching their shows online would allow the cable operators to offer more programmes to their customers over the internet. From there, Bewkes refined the “TV Everywhere” concept he’d mulled back in 2006. Now he proposed that far more television programming be offered online – but only to people who already pay for cable and satellite TV, which now means almost 90 per cent of homes in the US. It would earn money through cable subscriptions but retain viewers by giving them flexibility about when and how to watch.

The plan is not without flaws, its backers concede, and it presents big technical challenges. But Bewkes has made it his personal mission to push this idea as a way to save the media industry from itself. Time Warner Cable and Comcast have solicited the support of big TV broadcasters including NBCU, Viacom’s MTV Networks and CBS (the only one of the four nationwide free-to-air networks not to have put its programming on Hulu). Comcast began a nationwide test of the system at the end of last year.

. . .

One morning last November, Bewkes sprinted into an 11th floor conference room just down the hall from his office overlooking Manhattan’s Central Park for a demonstration of the TV Everywhere prototype. He was joined by six executive vice-presidents, including the company’s general counsel – on alert for anything that might smack of a TV industry cartel. Bewkes began firing off questions even before sitting down. “Who’s seen it? What are we going to see here? Is this what consumers are seeing? Is this what’s going live? What did you have to type to get there?”

Andy Heller, vice-chairman of Turner, who was leading the demonstration, broke in. “We’ll get to that, Jeff. Let me set the stage to see how far we’ve come…”

If they can go almost as far again, Time Warner may be credited with conjuring a future – not just for itself, but for the entire television industry. Bewkes sat down to listen.

Kenneth Li is the FT’s US media correspondent


What’s in, what’s out

Jeff Bewkes doesn’t hide his disdain for deal-driven empire-building. So what has he booted out since taking over at Time Warner – and where has he not been able to resist a little shopping?

Logo of BeboMarch 2008: purchase, Bebo, $850m

As Jeff Bewkes’ first big deal as Time Warner CEO, the purchase of a UK-based internet social network at the height of inflated valuations was hardly the best sign of the prudence he preached. The acquisition capped a buying spree aimed at the umpteenth facelift in AOL’s decade under Time Warner rule. Bebo was popular in the UK and parts of Europe and had a small following in the US. Less than a year later, Facebook and MySpace left Bebo in the dust. Bebo, now shunted to a corner of AOL, faces closure if a buyer does not emerge. Some people say regrets over Bebo figure prominently in Bewkes’ disciplined approach to deals.

Logo of Time Warner CableFebruary 2009: spin-off, Time Warner Cable, net $9.25bn

The initial plotting for the separation of cable systems from Time Warner’s content units began before Bewkes took over in 2008. The decision to move ahead was Bewkes’ alone. It eliminated from the conglomerate a big contributor to cash flow, but went a long way towards helping Bewkes realise a long-time goal – to become the world’s biggest producer of entertainment and news. The separation also came with a $9.25bn cash dividend back to the parent company. Not a bad way to dominate the content world.

Logo of AOLNovember 2009: spin-off, AOL, net $0

Years before Bewkes took over as chief executive, the media world wondered how he would some day unravel what one analyst called the “long national nightmare” of AOL-Time Warner. Less than three months after the formal separation of cable operations from Time Warner, Bewkes announced the spin-off of AOL into a separate company, which completed last December. The problem of resuscitating AOL now belongs to another capable executive: Tim Armstrong, the former north America advertising chief of Google.

Logo of CMEMarch 2009: stake purchase, Central European Media Enterprises (CME), $241.5m

Wall Street wondered if Bewkes, freshly minted with close to $10bn, would go after big game. Instead, he sought to diversify Time Warner’s assets by expanding into international regions with smaller strategic investments. He took a one-third stake in CME, founded by American businessman Ron Lauder. A weak advertising market in the region and worse-than-expected performance in the first quarter knocked shares 13 per cent lower on Nasdaq. With a TV ad market unlikely to return to 2008 levels for a further two years, Bewkes will need to be patient.

Logo of NDTV ImagineDecember 2009: purchase, NDTV Imagine, $126.5m

Time Warner joined the land grab – alongside News Corp and Viacom – for stakes in local TV and entertainment properties in India. Taking control of NDTV Imagine was the latest in a series of investments there, born in part from disillusionment with China as a centre for long-term growth.

Logo of IPC MediaSpring 2010: sale under consideration, specialist titles at Time Inc’s IPC UK magazine division; price dependent on scope of sales

Even before the spin-off of AOL, investors and analysts were calling for Time Warner to split off the magazine division. One Time Inc senior executive recently appealed directly to Bewkes for a separation, to no avail. Despite spending the bulk of his career nurturing television and film properties, Bewkes remains a believer in big brands and is convinced he can parlay the prodigious attraction (53 million monthly visitors) of the publishing group’s online properties into future profits. He has, however, considered shedding smaller titles. In the UK, where Time Inc owns IPC, one of the biggest publishers of consumer titles, the company has signalled a review of its assets with an eye to selling niche and specialist titles.

Logo of TurnerSpring and summer 2010: big spending on content, Turner Networks, basketball (more than $5.4bn), Conan O’Brien ($10m-15m per annum)

Turner Networks, the cable division, invested heavily in programming in the past few years, with shows such as Saving Grace, starring Holly Hunter – but nothing matches recent investments. In back-to-back deals, Turner took aim at free-to-air channels, which have audiences many times larger than cable. It snatched Conan O’Brien shortly after his high-profile fallout with NBC, and followed that with a 14-year, $10.8bn co-licensing deal with CBS for the rights to college basketball championships, of which it is paying more than half. The link has also led to discussions about how the two could collaborate on news-gathering, to fix both CBS News’s money-draining operations and CNN’s long-suffering ratings.

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Very interesting article about how Jeff Bewkes is cleaning up Time Warner. The most relevant piece is how he's decided to split content from distribution internally as they couldn't really align the goals for both. Great reading for anyone interested in media.

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