Film, DVD up 33% at Time Warner in Q3
By Susanne Ault -- Video Business, 11/7/2007
NOV. 7 | Although Time Warner enjoyed higher revenue in nearly all business segments, including its film and DVD unit, soft AOL earnings curbed earnings in the third quarter.
Time Warner tallied $1.1 billion in net income for the three months ended Sept. 30. That represents a 53% drop from what the company recorded during the same frame last year.
Total revenue rose 9% to $11.7 billion.
Due to such hot theatricals as Harry Potter and the Order of the Phoenix and Ocean’s 13 and the strong DVD performance of 300, Time Warner’s filmed entertainment division revenue lifted 33% to $3.2 billion. Other divisional highlights included hefty theatrical contributions from New Line Home Entertainment titles Rush Hour 3 and Hairspray.
For the first nine months of the year, Warner Home Video ranks No. 1 in DVD sales, cornering a 19.7% industry share. The quarter’s top title was Warner’s 300.
Time Warner cable achieved nearly as much improvement, jumping 25% to $4 billion. The company credited continued growth of households signing onto digital video, high-speed Web, among other services. By September, 6.9 million customers subscribed to two or more of Time Warner Cable offerings, including digital video and Web, representing a net addition of 213,000 during the quarter.
AOL, however, declined 38% to $1.2 billion in revenue. That was largely due to a 56% decrease in subscription revenue, somewhat offset by a 13% hike in advertising revenue. For some time, Time Warner has been working to transition AOL into a business that relies more on advertising than membership for revenue.
Elsewhere at Time Warner, network revenue jumped 6% to $2.6 billion. TNT, as the top-rated ad-supported cable channel in adults 18 to 49, helped boost this division’s performance. TNT’s The Closer commands the most viewers of all original series on ad-supported cable networks.
“I’m delighted to report that Time Warner delivered solid earnings growth in the quarter,” Time Warner outgoing CEO Dick Parsons said. “This performance keeps us squarely on track to meet all of our full-year financial objective. We look forward to a strong finish to this year, and we’re confident of our growth prospects in 2008.”
Earlier this week, Jim Bewkes was named CEO for Time Warner, effective Jan. 1. Previously, Bewkes served as president and chief operating officer. Parsons will remain as Time Warner chairman.
