Time Warner Chief Executive Jeff Bewkes has attempted to allay a key concern about the pay-TV industry by predicting healthy subscription revenue for the TV channels that generate the bulk of the media conglomerate’s profits.
Bewkes said he has “every confidence” that the company’s Turner division will generate double-digit percentage increases in subscription fees between 2013 and 2016 and added that Turner will negotiate contract renewals with almost all of its domestic distribution partners during those years.
Time Warner’s TV Networks division, which also includes premium channel HBO, had a 5 per cent decline in operating income in Q2. That was partly due to a 3 per cent increase in programming costs, driven by the purchase of sports broadcast rights and the production of original shows. Revenue rose 4 per cent to $3.6 billion as higher subscription and advertising sales offset a decline in licensing revenue.
Overall, Time Warner’s net income for the three months through June slid to $430 million from $638 million a year earlier. Operating income fell 16 per cent to $1.1 billion, and revenue declined 4 per cent to $6.7 billion.