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Dearth of Video Doesn't Dampen Time Warner Quarterly Results

2 Aug, 2006 By: Erik Gruenwedel

A dearth of year-over-year home video titles, combined with poor results from the theatrical release of Poseidon and costs associated with the Superman Returns launch, resulted in a 10% decline ($273 million) in filmed entertainment for Time Warner Inc.'s second quarter (ended June 30).

Filmed entertainment revenue, which include theatrical, home video and television, declined to $2.4 billion, from $2.6 billion during the same period last year.

Overall, Time Warner reported revenue of $10.7 billion, compared to $10.6 billion last year. Net income was $1 billion compared to a loss of $409 million last year.

In an investor call, Time Warner executives said Warner Home Video had a difficult time competing with last year's results, which included DVD releases of Ocean's 12, The Aviator, select “Harry Potter” titles and several TV seasons of “Seinfeld.”

That said, however, WHV remained ranked No. 1 in home video sales through June 24 with a 19.4% market share, according to Time Warner. In addition, WHV documentaries John Ford/John Wayne: The Filmmaker and the Legend and Stardust: The Bette Davis Story received five combined Emmy nominations.

Notable performers included Time Warner Cable, which saw revenue increase 15% ($364 million) to $2.7 billion, based in part on a 16% increase in subscription revenue ($358 million) and 21% increase ($41 million) in enhanced digital video services.

By comparison, AOL subscription revenue fell 2% ($51 million) to $2 billion, while advertising revenue increased 40% ($129 million) from display, pay-per-view and paid search.

As Time Warner moves away from a subscriber-based business model for AOL, the company said beginning in 2007 it would offer free email, software and related products to broadband subscribers.

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