Time Warner CEO Talks About CNN’s Gameplan Under Jeff Zucker

By Alex Weprin 

During a conference call with investors this morning, Time Warner CEO Jeff Bewkes was asked about CNN. It was the first quarterly earnings call since new CNN president Jeff Zucker began implementing his gameplan to turn the channel’s fortunes around.

On the call, Bewkes said of Zucker: “we think that [he] is off to a great start.”

Aside from a few public appearances however, Zucker has not really given any interviews with regard to what his plan for CNN is. Through Bewkes, however, we can glean some general ideas for where the channel sees the most growth potential.

“Whenever there is a global news item of interest, CNN is the first place to go,” Bewkes said. “Having said that, CNN can’t just mean politics and wars, we will cover those, but we won’t start a war just to have success at CNN.”

In terms of revenue, CNN was cited as one of the weak spots in Time Warner’s Q1. While the entertainment networks like TBS and Adult Swim were up, it “was more than offset by declines at its news networks, due to lower demand,” time Warner CFO John Martin said.

That said, “We are seeing improvement in the news category domestically and internationally in Q2,” Martin added.

One of the biggest sources of revenue growth may come from the affiliate fees CNN is seeking from cable and satellite operators. CNN and HLN (which are bundled together) have not seen the affiliate growth that other channels like Fox News have. “The biggest upside is in affiliate improvement, lots of correction there,” Bewkes said on the call.

Then there are the ratings.

Bewkes chose to focus on the one ratings area where CNN still shines: cume. Cume is factored into affiliate fee discussions, but is not able to be effectively monetized from an ad sales perspective. In a nutshell, more people typically tune in to CNN than other cable news channels in a given month, it is just that they stay for two or three minutes, then watch something else. Fox News and MSNBC, by comparison, are able to keep viewers watching for much longer periods of time–including commercial pods–resulting in higher average viewership numbers. This is not a new problem for CNN, but Bewkes argues that this is the smartest way to grow the Nielsen numbers.

“What you have is a variation in the sense of urgency, whether news channels are delivering the kind of coverage that would motivate people to stay,” Bewkes said, adding that the challenge was for CNN to get viewers “to stay beyond the headlines.”

In some respects, it is the same problem CNN saw back in April 2011, after public interest in news from Japan and Egypt began to fade away. This time however there is a new boss in town, and he seems intent on changing the way CNN conducts its business. Whether it works, of course, remains to be seen.