Warner Bros. is sleeping with the enemy

Posted Jun 27th 2006 11:06AM by Tom Taulli
Filed under: Launches, Microsoft (MSFT), Apple Inc (AAPL), Time Warner (TWX)

Not long ago, media empires sued file sharers. Now, they strike partnerships.

The latest is from Time Warner's Warner Bros. The deal calls for distribution of Warner Bros.' rich content library of TV shows and movies on Guba.com.

OK, in this deal, "sharing" means selling the movie downloads. Interestingly enough, like other video sites, Guba.com shared copyrighted content for free. Well, it is changing its ways.

Actually, Warner Bros. has been quite visionary. The company recently struck a similar deal with another file sharer, BitTorrent.

Warner Bros. also realizes that – if it wants to find its customers – it must move to the Web. Why not go to places where huge numbers of users gather? Yes, it's not brain surgery. But, in the entertainment business, often the first inclination is to sue, not partner.

By the end of the year, up to 1,000 Warner Bros. titles will be available for download on Guba. Some of the titles: The Matrix, Rebel Without a Cause, Dukes of Hazzard and Good Night and Good Luck. The downloads will be done through Microsoft media technology.

I talked to Greg Kostello, who is the CEO of the video site, vMix: "I like the fact that Warner is trying a number of different companies and approaches. I doubt the deal is exclusive as the movie industry looks to have a series of channels for distribution. They will try to avoid the single distributor model (Apple) in the future so they will have the pricing flexibility they seek."

Tags: Apple, BitTorrent, File sharing, FileSharing, Guba.com, Microsoft, Video, vMix, Warner Bros., WarnerBros.

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Reader Comments (Page 1 of 1)

6-27-2006 @ 12:59PM

swells said...

Is AOL figured into this equation at all? Seems AOL could distribute the content just as well as Guba.com.

6-28-2006 @ 10:00AM

JDaggitt said...

>> Is AOL figured into this equation at all? Seems AOL could distribute the content just as well as Guba.com.

You have to remember that Mr. Bewkes, President and COO of Time Warner, thinks that synergies are "bullshit." And given that Bewkes has yet to find any meaningful ways for TWX, other than AOL, to have a presence on the web, it is unlikely this will be the first venture.

What I can't understand is how TWX can fail to innovate on all fronts. CNN is losing to Fox News. AOL is losing to Google and Yahoo on the web. Sports Illustrated is losing to ESPN Magazine. They are out of the music business. Cable is losing to the phone companies and satelite TV.

Once TWX spins off the cable division, it will be ripe picking for a hedge fund to move in and force the breakup of the company. However, if Parsons and Bewkes think a breakup is in the cards, they will kill the cable spinoff plans so they can keep the company whole.

You just have to look at the ownership interest of management and the board to see they are better off collecting salaries and board payments than they are in driving the stock price up.