Cable Boosts Time Warner's Q2


The continued rebound in the advertising market and strong performance from its cable networks helped drive second quarter revenue up 8% at Time Warner Inc. -- its highest growth rate in two years.
Time Warner ended the quarter with revenue of $6.4 billion, driven by a 14% increase in advertising sales at the Turner Networks in the period. Adjusted operating income for the company rose 15% in the quarter, fueled by strong gains at the networks and publishing units.
At the cable networks, which include Turner Broadcasting Networks, CNN, TNT and Home Box Office, total revenue rose 11% to $3.2 billion. Adjusted operating income at the networks rose 14% to $981 million, bolstered by strong ad sales and higher sales of HBO's original programming, including The Pacific and True Blood.
On conference call with analysts, Time Warner chairman and CEO Jeff Bewkes said the advertising gains at the networks were the best in almost six years. And he added that new, original compelling content at its networks - such as long-time hits like The Closer and new programming like the upcoming late-night show hosted by Conan O'Brien and slated to air in November - is attracting more advertisers and higher prices.
Bewkes claimed that with the O'Brien show, Turner has achieved pricing parity with the broadcast networks for that time slot.
Bewkes added that as advertisers have recognized the value of Time Warner's content, so will distributors, hinting that the networks will strive for meaningful increases in affiliate fees come renewal time.
Bewkes wouldn't say just how big an increase the media giant would request, or when its deals come up for renewal. But the chairman pointed out that Time Warner has spent big in developing and acquiring content, like its NCAA Men's College Basketball venture with CBS that kicks in next year.
"We really think that we're improving our position and our future outlook on the affiliate side,' Bewkes said.
Asked if those benefits would be seen in the near term or long term, Bewkes replied, "Soon."