Time Warner Cable Posts Q4 Profit Despite Declines in VOD28 Jan, 2010 By: Erik Gruenwedel
Time Warner Cable Jan. 28 said it returned to profitability in the fourth quarter (ended Dec. 31), despite posting declines in video-on-demand (VOD) transactions and fewer consumers subscribing to premium channels.
The No. 2 cable operator reported net income of $322 million, compared to a loss of $8.16 billion during the previous-year period when it engaged in write-downs prior to its spin-off from parent Time Warner Inc.
Revenue from video increased 1.6% to $2.68 billion from $2.64 billion last year, the smallest increase in two years.
The New York-based cable operator said revenues increased primarily due to increase use of digital video recorders (DVRs) and higher video prices. However, Time Warner Cable said subscribers watched fewer transactional VOD titles and dropped premium channels, such as HBO and Showtime.
The declines in premium channel subscribers and lower VOD transactions are significant as Hollywood studios increasingly opt to release movies on VOD day-and-date with DVD and Blu-ray Disc.
Advertising revenues fell more than 17% to $201 million as recessionary measures continue to impact advertisers and consumer confidence remains unsettled.
Revenue for the quarter rose 3% to $4.5 billion from $4.4 billion last year.