Interview between David Kirkpatrick and John Martin, Chairman and CEO, Turner
An excerpt of the conversation with David Kirkpatrick and John Martin can be found below, but the full transcript can be downloaded here.
Kirkpatrick: Here we have John Martin, CEO of Turner, which is really taking some radically new ways of thinking about what a cable network is. It’s probably not the right term anymore but what do you call your company? Maybe that’s the way to start it in this environment.
Martin: Thank you for having me here and good afternoon, everybody. For anyone who is not familiar with our company, it was founded by Ted Turner. It’s historically been an advertising supported television network company. I’m responsible for networks such as CNN, Headline News, TNT, TBS, Cartoon Network, Adult Swim, Tru TV, Turner classic movies, and a few others. I became the chairman and CEO of Turner in the beginning of 2014, and given the trends that are supported in the traditional ad-supported television business, which is being influenced by new entrances such as Netflix, Hulu, or Amazon that are investing in original content, we can’t survive successfully if we merely keep doing the same thing that made the company successful over the last 10 years. And we are a successful company. We have the number one network in TBS, the number four network in TNT, the number one network with millennials. We reach 80 percent of all adult millennials in the United States every month. CNN is the fastest growing news network in the United States. So there’s a lot to crow about.
Having said that, there’s been a dramatic decline in barriers to entry in the television business. There’s been an explosion of more highly produced and quality programming than ever before, and as a result of that, we’re in an arms race, in a war to fight for what is arguably the scarcest resource that human beings have, which is their time. We need fans, so we’re literally in the midst of innovating and transforming the company from the inside out.
And so historically, in the TV business, you would look at overnight ratings that Nielsen would supply you, which gave you viewers of adults 18 to 34 or adults 18 to 49 and how many people watched your channel and that became the currency of the business to sell in advertising. What I’ve been saying to our employees now is, okay, viewers are great and TV is a great reach vehicle because we aggregate lots of viewers. But we need fans. We need people that love our brands, that love our shows, that love our franchises, that love our branded environments, and would be willing to come back to us over and over and over and over again.
The one personal example that I always typically use is—I don’t know, does anybody like Game of Thrones? HBO could put anything anywhere on Game of Thrones and I’m there. And I’d pay money for it, I’d spend time for it, because I’m a fan. That’s what we need.
Kirkpatrick: Well, I asked you on the phone, you know, Hulu has kind of been struggling along for a while. You guys are among those invested in it, and now it has The Handmaid’s Tale and wow, it’s transforming its image in the whole ecosystem.
Martin: A hit show can do that. That is the nice thing about the business.
Kirkpatrick: So in really going back to your issue about the battle for attention, this is becoming a huge topic in the tech industry itself because Facebook and Google in particular are your real enemies there because they are so good at commanding attention. As one pundit has been saying recently, you know, they each have like a thousand engineers whose whole job is to figure out how to keep your attention and keep you from clicking away. So you have to have a very strong pull to get people to do something different. But obviously, you have some very powerful brands and networks that are doing that.
Martin: Well, we do, and I appreciate your kindness in the way you asked the question. But one of the things that has changed dramatically over the last several years at Turner is we realize that we have to become much, much more capable and sophisticated in technology. It used to be that we would have our signal that would get sent up to a satellite and then we called it a day, because we were a wholesaler and we were in business with cable satellite telco partners. By the way, these partners pay us $5.5 billion dollars a year. We love them. But—and there’s always been an argument in the media business, or in the video content business, is content king or is distribution king? And now I would submit that neither one of them independently are king because the third leg of the stool, which has become incredibly clear, is the consumer experience is just as important, if not more important sometimes than the quality of the premium content itself.
Kirkpatrick: It’s intertwined with both aspects of that equation.
Martin: Correct. So as a wholesaler, historically, we’ve been very limited in how we’re able to influence the consumer experience because we’ve dependent on cable satellite and telcos to innovate. And so I can take a shot at one of the cable companies, can’t I? We’ve got to have a little bit of fun.
Kirkpatrick: Yes. We’d love that. The more the better.
Martin: Yes. I’m a Time Warner Cable customer, which now was bought by Charter. By the way, the service hasn’t gotten any better. The experience sucks.