Speaking Friday morning in New York, Bewkes also expressed confidence that the TV business is not threatened by the likes of Netflix or Amazon because these services are largely distribution platforms that don’t own the quality content audiences want to watch. He added that such platforms compete with each other and not with traditional TV companies.

“It’s a good thing to have more of them,” said Bewkes, adding that multiple universal platforms are good for consumers because they mean the content industry “can’t be held hostage” to a given distributor.

Despite his dismissal of cord-cutting, Bewkes did acknowledge the emergence of “cord nevers,” which are younger people who never acquire cable in the first place. For them, he said it’s not a question of money — “they can afford three Starbucks a day” — but rather different habits and expectations. Bewkes pointed out that the “cord nevers” are not receiving the best content (it will be interesting to see if this argument one day sways them into signing up).

In the meantime, the traditional cable model is under other strains, including the spiraling cost of sports. As Bewkes noted, “half of the population that doesn’t want sports is subsidizing the other half that does” because the former are forced to buy expensive sports channels they don’t want as part of their cable plans.

All of this suggests that the cable industry will finally have to give in and offer consumers a full-blown a la carte model — but don’t hold your breath. As Peter Kafka has pointed out, even a company as rich and powerful as Apple has proved incapable of dislodging “the TV industrial complex.” The simple reality is that the mighty incumbents are going to ensure that a cable subscription remains a toll to get access to things like HBO and the NFL on the iPad.

Finally, there is the question of advertising. According to Bewkes, advertising-only models are not viable for most types of content, pointing to the era of the big three networks as a “wasteland” for TV. He called on companies to make more ads that people want to watch, citing a James Bond trailer or ads in GQ magazine as examples.

Bewkes made the remarks during a chat with Reuters’ Chrystia Freeland at the Paley Center for Media’s “Innovation without Borders” event. (Highlights available here).

(Image by holbox via Shutterstock)

Truth be told, Sarandos (pictured left with his better angels and worser devils) told a morning panel that also featured Time Warner CEO Jeff Bewkes and News Corp. deputy chairman Chase Carey, and which was moderated by CNN personality Piers Morgan, Netflix’s impact on the multichannel business is far from “black and white.”

“We’re additive to certain programs,” he told the audience, that included entertainment trades Deadline Hollywood and the Hollywood Reporter. “We’re additive to certain programs. Whether we are cannibalistic or not to other programs, I don’t know. We have billions of hours of viewing, so we are going to take away from something.”

Patrick Esser, president of the No. 5 pay TV service in the U.S., Cox Communications, summed up Netflix’s role as a teenager might break down a dichotomous classmate: the company is simply a “frenemy” to the pay TV industry.

Moderator Morgan brought up a recent hot media-on-media story, which has tied double-digit ratings losses for Viacom-owned kids channel Nickelodeon to tikes choosing to stream shows like Dora the Explorer on Netflix.

Sarandos denied a direct connection between his company’s streaming deal and ratings drops on Nick.

“People’s tastes are so diverse that no specific network and no specific show has such high viewing concentration that you’d see that kind of cause-and-effect on ratings,” he explained.

The flip side of that story is that AMC’s popular adult dramas, Mad Men, Breaking Bad and The Walking Dead, have reportedly received ratings help from the streaming service, with new viewers turned on by watching legacy seasons of these shows on Netflix.

Perhaps belying his earlier deflection regarding Nick, Sarandos definitely sees a connection on that positive interaction.

“In the gap between season four and season five, we brought maybe 1 million new viewers to AMC,” he boasted. “There were people who had four years to watch the show and didn’t. Because we gave them a good opportunity and a well-priced model (they were able) to catch up on the show.”

Netflix’s positive impact on the broadband business was also brought up.

Esser noted that in March, about 40 percent of Cox’s nearly 4.8 million subscribers were streaming Netflix — a boost to the cable company’s high-speed internet services.

“We think Hulu authenticating makes sense,” he added. “We think Hulu is heading in the right direction now and it might continue to be viable.”

Bewkes was responding to a question on rumors that Hulu will start requiring users to prove that they have a cable TV subscription before using its service.

HBO Go to more platforms soon

HBO Go is having “a significant positive impact” on Time Warner’s business and 93 percent of users say Go makes them more loyal to HBO, Bewkes said. Consumers using HBO Go are watching HBO more than they used to, Bewkes said, and HBO Go will launch on more platforms soon — it will “become widely accessible on connected TVs.” Microsoft’s Xbox Live added HBO Go in March.

Ultraviolet added 1 million registered users in last four weeks

Bewkes said that UltraViolet, the digital cloud initiative being jointly launched by Hollywood’s major studios — Time Warner’s Warner Bros. division included — is still in its early stages, “but consumers are downloading and streaming in very large numbers,” Bewkes said. “More than 2 million accounts have been created and 5,000 titles are available. [It took five months to gain]the first million registrations, then we added 1 million more in the past 4 weeks.”

Choosing what to stream

“We’re more than happy to work with SVOD [subscription video on demand] companies to license our content,” Bewkes said. “Our overarching goal is simply to maximize the lifetime value of the content.”

He cited CBS sitcom hit “The Big Bang Theory” as a show that is “likely to have multiple cycles” and is “unlikely … to go to SVOD anytime soon. We’re trying to balance the value of the later cycles.”

“For older content that has either gone through several cycles, or for shows that are serialized and work better on a VOD basis … those are the kinds of things you can be more efficient with when you put them on SVOD,” Bewkes said. “Take the CW deal we did as an SVOD sale to Netflix. Those shows had more efficient and higher value in an SVOD service, with a little earlier availability, than we thought we could get in traditional syndicated buy-ins. It really depends on the nature of the programming.”

Bewkes sought to play down the threat posed by so-called ‘cord cutters’ to the lucrative cable business by saying that only a small number of low-income people were ceasing to pay for tv. In his view, any drop in cable subscribers is attributable to the economy and is not due to “some kind of distribution change.” Such distribution changes would presumably include services like Netflix which some cord cutters are using as a partial alternative to cable or satellite.

A year ago, the Time Warner CEO famously belittled the would-be upstart as “the Albanian army” and then this week reflected on Netflix’s recent stumbles by telling the Financial Times, “It can do certain things and not other things. It can fly, it’s not a submarine. Don’t turn a hamburger into a cow.”

At today’s gathering, Bewkes did, however, acknowledge that the price of cable packages are beginning to strain consumers and added that the squeeze stems in no small part from the price of sports channels. He suggested that hefty fees like those charged by ESPN (NYSE: DIS) are resembling a tax on subscribers but said that Time Warner has the right amount of sports in its current programming mix. The company appears to be sitting out a recent bidding frenzy for slices of the NFL and is instead looking forward to using the end of the NBA strike to showcase its new basketball offerings.

On the more fundamental question of how Time Warner plans to keep making money from its cable offerings, Bewkes was candid.

“The monetization strategy is simple. It’s the one we all love and the one we’ve used for years,” he said, explaining that carriage fees and a broad subscription base would continue to be the enormous driver of profits that they have been for years.

Time Warner is also enjoying a rebound in other parts of its business empire, including CNN which is profitable and has increased ratings after an abysmal 2010. As for publishing, Bewkes noted that its flagship magazine, Time, was named ‘hottest in its category’ by AdWeek and that magazines have not suffered in the way that newspapers have. But he was also vague about the company’s digital strategy, only noting that tablets allowed publications like Sports Illustrated to show a “more powerful version of their pictures.” Time Warner just appointed digital advertising veteran Lara Lang to lead its magazine division which has been slow out of the gate to exploit opportunities like the iPad.

Audience members asked what Time Warner was going to do to juice its flagging channels, TNT and TBS, and improve sales of its video games. Bewkes acknowledged that numbers in these areas were weak but said he saw promise in the success of the show The Big Bang and the value of games like the Midway franchise.

In coming years, Time Warner can also look forward to cash cows like the Harry Potter and Dark Knight franchises helping it retool the flagging parts of its operations.

Bewkes was speaking at the 39th annual UBS Global Media and Communications Conference.

He hastened to add that he isn’t being complacent about flat or declining video sub rates but he attributes that more to the economy than a shift in viewing habits away from pay TV. He later mentioned that internet viewing makes up one percent of all TV viewing.

Bewkes was one of the earliest and loudest proponents of efforts to make sure viewers who want to spread beyond TV have reasons to stay with pay and he remains convinced it’s the best way to keep and add viewers. His elevator pitch for TV Everywhere hasn’t budged since he launched the effort in 2009: “If you pay for access to programming,we think you should have it on demand on any device wherever you want.”

He earned bragging rights with HBO GO, which allows subscribers to watch current and library HBO content on demand across platforms and devices. The catch? You can’t get access to HBO GO unless you have a multichannel provider who has a deal for the service with Time Warner. I can get it through DirecTV (NYSE: DTV), which like Charter (NSDQ: CHTR), Cox, launch partner Verizon Comcast Xfinity and others but not through Comcast (NSDQ: CMCSA) — or Time Warner Cable (NYSE: TWC), which was part of the early test but has no deal now.

Cinemax has a companion app and Turner just launched a version for its basic cable net TNT. It’s not premium programming like HBO but the only way in is through authentication.

As head of a company that owns both networks and Warner Bros., Bewkes also needs to make the most out of licensing so it’s not too surprising he’d rather see Netflix as a checkbook than a competitor. He told investors: “We are quite happy to give vigorous licensing to all the SVOD (subscription video on demand) companies, including Netflix (NSDQ: NFLX). … We don’t see that as competitive to them in the sense that we wouldn’t license.”

But he also doesn’t want to undercut his other licensing or the value of those networks to operators: “Don’t sell products into a platform where you end up with less money than when you were selling it to the previous buyers and there is a place for everybody in this. The place we thought — and do think — for SVOD is essentially for movies or TV shows that don’t have a higher value and a higher monetization capability in the other networks like syndication, basic cable networks with first to run, re-runs like TNT and USA, etc. They take pretty high prices, they have regular audiences. They have a very powerful economic model that pays huge fees for TV serials or movies into studios like Warner.”

Where Netflix, Amazon (NSDQ: AMZN), Hulu Plus and the others come in handy is “they are licensing products that have a higher value in that window than where you could if you were selling it to somebody else.” (He only identified Netflix by name.) Bewkes doesn’t rule out licensing in the syndication window “provided they are paying higher price than the syndication buyers or the basic cable buyers.”

He suggests a serialized drama makes the most sense as a “sustainable” model for SVOD — and “we think it’s a big ad to the economic market for us as a producer who sell through it and we think it has no detrimental effect through the powerful cable program networks like TMT USA certainly not HBO. So it’s all working out as a net plus for everybody including consumers.”

Correction: Comcast is a provider and was there early on. When I was looking at the HBO chart referenced above, I made the mistake of checking for Comcast — not Xfinity, its brand for cable services. I know better and I regret the error.

It’s not that Bewkes doesn’t want the money. He just wants more of it and without external pressure to show instant results, he thinks Time Warner will make more by waiting. In a call with analysts and investors to discuss upbeat second-quarter results for Time Warner, Bewkes said Warner Bros., which has the biggest film and movie library, has “ongoing discussions” with all of the digital outlets — he singled out Apple (NSDQ: AAPL), Amazon and Netflix — to license series and movies. Asked by Credit Suisse analyst Spencer Wang for an update on TW’s “conservative” approach, Bewkes replied:

“I think we have been pretty clear generally that we’re eager to maximize the value of all of our series and movies and we want to do it in a way which adds to the value of these over their lifetime — not detracts from it. … We had thought that some of the sales that we saw content owners make to various digital outlets actually undervalued or reduced the lifetime stream of earnings for those products. So we didn’t want to do that. And we think there are some good opportunities from all the digital players, including Netflix.”

Warner Bros. already has a streaming deal with Netflix for some out-of-production shows (including all 100 episodes of Nip/Tuck and catalog films but it’s not as broad or deep as it could be.

But Bewkes also insists pricing isn’t the sticking point, explaining, “We can make structures that accommodate the different positions that digital distributors are in as they try to build their businesses.” But, he added, subscription video on demand (SVOD) services like Netfliz or Amazon are good for older content but not for everything: “… If you think of all the big series or the movie products that are out there in the relatively early windows, that’s probably not the right outlet for the newer, higher value content, because it has so much money behind it, you know.”

Why not make short-term deals while they figure it out? That’s the approach some programmers are taking but Bewkes wouldn’t commit to anything, even on that scale.

HBO Go: What Bewkes and TW have committed to on a major scale is making much of the company’s content available across platforms for current subscribers, the implementation of the “TV Everywhere” strategy he starting evangelizing more than two years ago. HBO Go moved beyond the browser to iOS and Android in May. The apps have been downloaded more than four million times since then; internal research shows 85 percent of the users are watching more HBO and with higher satisfaction levels. In the second half of the year, TW plans to make HBO Go available on connected TVs, game consoles and other connected devices. It’s also going to continue international expansion with Brazil and Mexico this year, then Asia in 2012.

Streaming Turner nets: Bewkes said about 7 million households have “TV Everywhere” access to some Turner networks. CNN added authenticated live streaming last month and other apps are en route. As important, it’s covered in C3 data, which, says Bewkes, makes Turner “agnostic to whether viewers watch our shows on TVs, PCs or mobile devices.”

UltraViolet: The good news: Warner Bros. is set to deliver its first digital movie as part of UltraViolet, the Digital Entertainment Content Ecosystem (DECE) effort to make purchased movies available across devices. The bad news? It’s the woefully underperforming Green Lantern so may not be much of a test. After that, though, most of the new releases should be available through UV.

Time Warner will integrate UltraViolet with recently acquired Flixster. New versions of the movie service will allow users to manage their UltraViolet-enabled purchases. It should be in beta this week and launch in the fall. Here’s how Bekwes describes the new program:

Remember with UltraViolet, if you go and buy a physical DVD, you will have it in the cloud as you walk out of the store. If you buy an electronic copy of the movie, from either a cable operator or any electronic retailer, you will also have a copy that is up in the cloud that you can move from device to device. If you want to take your old DVDs into retailers and have them put into the cloud and therefore available for you to move from device to device, you will be able to do that also.

Take the small matter of making money. While TV Everywhere evangelist Bewkes declared, “Put the TV on all the internet devices, don’t change the business model and don’t charge people to do it,” fellow programmers Viacom (NYSE: VIA) CEO Philippe Dauman and News Corp (NSDQ: NWS) COO Chase Carey sounded notes of caution.

“We need to remember we serve the consumers and provide them what they want,” Dauman said, quickly adding, “at the right time in the right ways when the business model has been met.” Carey admitted “you have to embrace it” but stressed that whatever “it” is doesn’t come free. Consumers are willing to pay “fair value” for quality content, and while I don’t think he came straight out and said it, the implication was distributors should be willing to the same.

The programmers aren’t alone in business model concerns. Talking about the multi-billion-dollar investment cable has made in the infrastructure needed to expand beyond standard cable, Cox CEO Pat Esser also talked about the need to find the right business models.

But Britt raised the concern that fretting about business models in every case can stand in the way of innovation. Time Warner Cable went for forgiveness instead of permission earlier this year when it debuted an in-home service that streamed dozens of cable channels live on the iPad. Some of the programmers who pushed back quickly were sitting on the stage with him when he said, “We do have to experiment. Sometimes business gets in the way of that.”

Carey’s reply — not directly to that but when asked about the situation by moderator Liz Claman of Fox Business News — was measured. “There’s a long history here; you’re always going to have a buyer-seller tension. … At the end of the day I do believe we can resolve those issues of commerce and get to what is fair value.”

What about cord cutting? Comcast (NSDQ: CMCSA) Cable’s Neil Smit said the country’s largest cable operator isn’t seeing any evidence of cord cutting. For Britt, it’s a “barely measurable” warning sign that cable operators have to avoid giving people reasons to leave: “If something makes consumers not want to buy, that’s a threat to all of us.” He spoke of the need to create less-expensive packages to keep or encourage customers facing difficult economic choices.

We need to embrace all of the screens, Britt said. “There’s no such thing as a TV anymore.”

The insider added: “It was a difficult but bold decision to move him out before he becomes a distraction. He was worried about losing talent.” Bewkes was aware some business and editorial executives he considered to be important to Time Inc.’s current push in the right direction were considering leaving out of frustration with Griffin and concern about their positions. (To be sure, Griffin may have a very different story to tell — and if he does, we’ll report it.)

Another insider, who is aware personally of staffers who had reached out to Bewkes with their concerns, spoke of shock and relief mixed with some worries over the way Griffin was fired, saying it was handled badly. It could have waited until a permanent CEO was put in place, instead of a temporary fix that also has people worried about what comes next. But this allowed Bewkes to avoid the inevitable leaks about problems and a different kind of disruption.

Griffin not only failed to acclimate to the Time Inc. culture, he brought in a number of outsiders who also didn’t mesh with the existing staff — including consultants, leaving an impression that he didn’t respect a lot of what he found at Time Inc.. At the same time, veteran Time Inc. staffers were disturbed by the way communications head Dawn Bridges was isolated and then pushed out and the departure of other execs.

Both stressed that the concern about outsiders does not extend to Randall Rothenberg, brought in by Griffin as chief digital officer. Rothenberg, the former head of IAB, has been on the job less than a month and they do not want him to leave. Rothenberg did not reply to interview requests Thursday night,

A Time Inc. executive said bringing in Peter Kreisky as a consultant was a major mistake, and that his “extreme opinions” caused problems. This exec didn’t find fault with trying to change the organization but said the failure to listen to people and the lack of desire to find a “happy medium” was the problem: “There was a schism between the old and the new, and Jack failed to bring that together.” At the same time, people took note that the company he came from, Meredith (NYSE: MDP) was smaller than some Time Inc. divisions,

Some of the present and former Time Inc. staffers who spoke with me and my colleague David Kaplan cited examples of improvements Griffin made but multiple people described being uncomfortable with language that was sexist or racist. He talked about being at a company where he could “read the magazines” — Meredith focuses on women and shelter magazines — and emphasized Time over the lifestyle and entertainment titles; and there was a feeling, said one exec, that the people he brought in tilted toward men.

What does this have to do with AOL? Although the situations are quite different, many of the concerns now coming out are similar to those expressed by AOL staff following the Bewkes swap of Jon Miller for Randy Falco.. It was an often-poisonous situation that was allowed to fester until some of the talent AOL needed to keep slipped away or was pushed — and the unit, with Bekwes’ full backing, spent $850 million to acquire Bebo. He rebounded there by bringing in the more charismatic and team-oriented Tim Armstrong to lead AOL to a spinoff and move it off the Time Warner books.

That Bewkes move came after a failed direction exacerbated by poor leadership at the top. (Yes, I know Ron Grant takes a lot of heat for this as part of the duo.) This one is not about a change of direction, the first insider stressed — it’s about leadership at Time Warner and Time Inc. This time, Bewkes is admitting he made a mistake — and early enough in the process to make a difference.

If he can avoid the issues that crop up with management by committee in the interim — and make the right choice after his own failure finding a successor to Ann Moore, he’ll come out ahead and Time Inc. should, too.

Update: An unidentified person close to Griffin rejected the management style allegations in an interview with the New York Times, saying it was all about entrenched insiders reacting to change: “Jack’s exit had nothing to do with management style and everything to do with the question of whether Time is manageable so long as entrenched interests fiercely resist the change necessary to position the organization for the future.”

First up was Verizon’s CEO, Ivan Seidenberg, who delivered a morning keynote address on how advanced networks and innovative content are fuelling “one of the most innovative eras in the history of technology.” He brought on a number of guests to share the stage and expand on his point: Verizon’s COO Lowell McAdam, Time Warner (NYSE: TWX) CEO Jeff Bewkes, Motorola (NYSE: MOT) Mobility CEO Sanjay Jha, and Google’s chief architect behind Android, Mike Cleron.

But don’t think this assembled cast of stars was about to announce anything new, or engage in anything like insightful dialogue: it was more like a high-level love-in.

Bewkes brought up the “TV Everywhere” project that their two companies launched with in May 2010 to rebroadcast, free of charge, selected Time Warner television programming online to Verizon’s FiOS customers, as a model of what should be happening on a larger scale.

(And why wouldn’t he? If audiences are getting more fragmented, and you are basing your business model on advertising, then making sure you are on as many devices as possible is an obvious way of trying to capture that audience.)

Meanwhile, Sanjay Jha talked about Motorola’s devices for Verizon’s 4G network, the Droid Bionic and the Xoom tablet. He illustrated the latter with the same video that Motorola had used the day before in its own press conference.

Finally, more tablet demos from Mike Cleron, whose Android baby is probably the real star of CES, and of Verizon’s CES in particular: although there are a number of OSs in the market today, every single handset and tablet that Verizon will be launching initially on its LTE network will be running on Android.

More on Verizon’s second press conference, where it goes through devices and services for its 4G network, is here. Release for the keynote, with a link to the video, is here.

Addressing what he called “the elephant in the room,” Kent singled out Netflix as the fly in the ointment when it came to the syndicated acquisitions two of his biggest cable properties, TBS and TNT, count on as key to their businesses. He spoke of a dawning awareness throughout the TV industry “to the long-term effect to having top-tiered programming on SVOD services,” he said, referring specifically to Netlix. “We tell our suppliers, the studios we buy from: This is going to have a significant impact on what we’ll be willing to pay for programming or even bid at all.”

But if you thought Kent was being hard on the studios–Warner Bros. is actually a corporate sibling of Turner’s–that’s nothing compared to what he says the industry is doing to Netflix to effectively block Reed Hastings from getting his hands on premium TV series. The new and old broadcast sitcoms and dramas Turner pays billions for may never even get an opportunity to be on Netflix because Kent implied SVOD rights are being “frozen” in the latest rounds of dealmaking.

“I think there’s a heightened sense across the industry of the importance of freezing those rights, and that’s what you see us from us in the future,” said Kent. “We’re going back to other series on renewals and attempting successfully to retroactively freeze the SVOD rights.”

Kent also talked up what he positioned as “a fantastic consumer alternative to SVOD”: TV Everywhere. He spoke of the progress the cable operators’ authentication strategy was making, including an upcoming deal with Comcast (NSDQ: CMCSA) that he indicated would set the standard for programming deals in that nascent area.

But Kent is not without some measure of mercy. He did say that Netflix still has a seat at the table, but for the scraps. He talked about a deal between Netflix and Warner Bros. TV Distribution for the FX series “Nip/Tuck,” a program that drew little interest from the TNTs of the world.