NEW YORK (AdAge.com) -- Improving ad sales and popular content helped Time Warner take in profits of $562 million in the quarter ending in June, a 7.2% improvement over the quarter a year earlier, as total revenue rose 7.7% to reach $6.38 billion. The company's improved results were driven in particular by an uptick in subscription and advertising revenue for its cable division, which includes Turner properties TNT and TBS, as well as HBO. Overall advertising revenue for the media giant was up 11% to $1.52 billion.
"We just completed another very strong quarter, capping off a great first half for the year," said CEO Jeff Bewkes, attributing the performance to an improved ad environment, appealing content and strong brands.
Stressing the importance of its original programming initiatives, Mr. Bewkes cited the high demand among subscribers for HBO's "True Blood" series, as well as strong ratings for a host of new shows appearing on Turner, such as "Rizzoli and Isles" and "Memphis Beat."
Given its depth and breadth of businesses, which include TV, film and print, Time Warner has long been a closely watched touchstone of the overall media industry, and its performance in these divisions reflects to some degree the challenges facing many media companies today. The company's Time Inc. division, for example, which publishes Time and People, saw a modest 4% growth in advertising revenue to about a half billion dollars, with print advertising up in the high single digits and digital ad revenue up in the high teens.
But Time Inc.'s print subscription revenue for the second quarter remained relatively flat at $321 million, a 1% increase over last year, and seems to be softening. "We think subscription revenue could be down for rest of 2010," said CFO John Martin.
That suggests the urgency of capitalizing on digital publishing efforts, particularly on Apple's iPad, for which Time Inc. is selling app editions of Time, Sports Illustrated and Fortune so far. Though the tablet computing market is almost entirely comprised of Apple's iPad at the moment, the emergence of competing devices is sure to offer a potentially more attractive choice for publishers given the dominant grip Apple CEO Steve Jobs currently holds over the content, pricing and distribution of iPad apps and publications. "Over time, we anticipate our subscribers will be able to enjoy the same experience on every tablet," Mr. Bewkes said.
The theme of de-coupling content from traditional venues and sending it into a broader array of outlets is carrying over into the company's TV plans. As one of the progenitors of the "TV Everywhere" scheme, Mr. Bewkes pointed to the growth of its HBO Go product, which allows some HBO subscribers to watch HBO programming on the internet. "Our HBO Go interface is superior to every other interface out there," Mr. Bewkes said. "We're encouraging all our affiliates to take advantage of that interface." He also indicated that the company's HBO On Demand product will soon be available on all broadband devices. "That's going to be the big news for this year," he said, though he did not elaborate on when that would be available or how it may be priced, if at all.
Time Warner's TV division accounts for 49% of its overall revenue, compared to 39% for film and 14% for its publishing business. Although advertising accounted for a big portion of its TV dollars, helped in part by the broadcast rates advertisers paid for Conan O' Brien, subscriptions accounted for $1.92 billion, the single-biggest line-item on the balance sheet.