WB’s Rosenblum Bullish On Broadcasting

While clearly enthusiastic about the revenue potential of streaming services like Netflix and Hulu, Warner Bros. Television Group President Bruce Rosenblum made it clear that broadcast networks and basic cable remain the most important drivers of his business.

“The best platform for launching a new show is broadcast television,” Rosenblum told a session at the NAB Show in Las Vegas Tuesday. “You want your comedies on CBS on Monday and your promos inside the highest-rated shows. The more we can draw people to broadcast TV the better it is for our studio business.”

Calling Time Warner primarily “a television company” Rosenblum estimates that more than 85% of TW’s profitability comes from Turner, HBO and the studio’s TV Group. Warner Bros. gets roughly half of its profits from TV. The studio currently produces 45 entertainment shows across its various television divisions.

“Anything we can do to preserve that ecosystem and keep the consumer in an authenticated environment helps us. That’s why [Time Warner Chairman] Jeff Bewkes is out in front on TV Everywhere.”

Rosenblum acknowledged that compared to other media, “local stations are the most challenged right now to create new revenue sources” and discounted suggestions that Warner Bros. would seek a portion of station retransmission fees as broadcast networks have done. “Retrans consent is good for stations, and as a business, we want to help them as much as we can.”

Rosenblum also deflected questions about whether he or either of the two other Warner Bros. Presidents would succeed Chairman/CEO Barry Meyer later this year (“I won’t let myself be distracted…”) and denied any plans to purchase its CW partner CBS in order to give his studio a ready network client like Fox, ABC/Disney and NBCUniversal.

Instead, Rosenblum said he prefers “being a supplier to each of the five broadcast networks,” which lets Warner Bros. “take shows to the best network for each show” — flexibility that appeals to prolific producers like JJ Abrams and Greg Berlanti.

Still, Rosenblum was bullish on prospects for growing revenue from over-the-top consumption of Warner Bros. programs. Calling the CW “a hybrid network” that was “revitalized by its three-year deal with Netflix,” Rosenblum emphasized that he’s seen no decline in viewership on air or even on the CW.com website.

In fact, Rosenblum also praised the streaming service as a promotional tool, which has created increased demand for hour-long dramas in broadcast and cable syndication. “Hulu and Netflix make it much easier for consumers to get caught up with characters and stories [from previous seasons] of those dramas.”

Rosenblum also relishes the prospect that streaming services will successfully launch their own slates of original programs and “creates a year-round market for series development.”

But if Warner Bros. supplies that new demand, doesn’t it run the risk of undermining its present business model? That’s a real concern, Rosenblum told TVNewsCheck. “We’re not a consumer brand. We’re dependent on broadcast networks and basic cable to launch and create awareness of our shows.”

Further audience fragmentation could put Warner Television “in a position where we have to pay the marketing expense much like the theatrical side of the business.” Currently, all marketing costs are borne by the network that carries the program “and that’s why our margins are so much higher than the theatrical model.”

With that in mind, wouldn’t it be better for the studio to bypass Netflix and distribute its library of programs through its network partners and stations? “We’d be happy to do that but you’d have to string together enough local stations to build a national footprint to sell national advertising.” If stations can demonstrate that desire, plus the technology to deliver it, “that would be right up our alley.”

Rosenblum cautions that few stations took advantage of a Warner Bros. experiment to allow them to stream past episodes of Two and A Half Men, but attributes that to the limitations of current websites. He’s optimistic that digital and mobile distribution and subscription services will benefit the industry as a whole. “They are all positive steps to create revenue streams for those we supply with content.”

And that’s not all, added Rosenblum, who is also the newly-elected chairman of the Academy of Television Arts and Sciences. “If you look at the original productions being done for broadcast, pay cable and basic cable — and now Hulu and Netflix — the quality and caliber has never been better. We’re in the Golden Age of Television again.”

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