Content distributors recognize the value of Time Warner's (NYSE: TWX) "must-have programming" and will be willing to fork out more in affiliate fees to get it, Time Warner CEO Jeffrey Bewkes has predicted.
Time Warner said its fourth-quarter profit jumped 21.9 percent and net income rose to $769 million, up from $610 million a year ago. Overall revenue was up 8 percent to $7.8 billion. And it wasn't all because of an improved advertising market, Bewkes said.
"Affiliate fees are one of the most important growth drivers for our company (and) lately we've become confident that we will continue to post high-single-digit affiliate fee growth over the next several years," he said.
This seemingly flies in the face of what content distributors--cable, satellite and telco alike--have been saying and even indicating by producing smaller channel packages at lower prices. Those packages, though, won't be particularly effective or damaging because "our distribution contracts have terms and conditions that would limit the potential penetration of this kind of package," Bewkes said. "We don't anticipate any particular effect, certainly not a negative effect, from this."
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