Netflix Is A Small Time Operation With Bad Economics, Says Time Warner's CEO Jeff Bewkes

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Time Warner CEO Jeff Bewkes is taking more shots at Netflix, calling it small time organisation with a business model that can’t work.

In a New York Times article on Netflix taking over the world, Bewkes is quoted as saying, “It’s a little bit like, is the Albanian army going to take over the world? I don’t think so.”

His rationale, Netflix monthly subscription packages aren’t lucrative enough: “At $8 to $10, it doesn’t have the economics to support high-value programming,” said Bewkes.

So far the economics have worked for Netflix because it didn’t have to pay through the nose for access to programming. Its deal to stream movies from Starz only cost $25 million annually. That could end up costing $250 million annually when the deal is renegotiated next year.

How did Netflix get content so cheap? Bewkes says, “this has been an era of experimentation, and I think it’s coming to a close.” In other words, Netflix is a giant and it can expect hardball negotiations if it wants anymore streaming content.

For its part, Netflix’s content boss shrugs off Bewkes comments saying, “Netflix is the leader in that space. So we become the centre of the rhetoric.”

See Also: CHART OF THE DAY: Netflix’s Growth Should Scare HBO

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