Revenue at Time Warner was up 3% in the third quarter, driven by strong double-digit subscription revenue growth at its Turner networks and Home Box Office premium channel.
Subscription revenue at Turner and HBO were up 10% in the period, helping to push total revenue to $6.2 billion, but adjusted operating income fell 38% to $993 million, largely because of one-time charges associated with the cancellation of shows on Turner and for restructuring and severance charges. Turner announced in October its decision to eliminate about 1,475 employees across its divisions as part of a plan dubbed Turner 2020 to streamline the company and make it more efficient.
The Turner division was hot hardest by the changes – revenue in the period was up 5% to $2.4 billion, mainly due to the 10% increase in affiliate fees and 17% increase in content revenue offset a 2% decline in ad sales. The ad sales decline was due mainly to its international network s—domestic ad revenue was essentially flat, the company said.
At Home Box Office, subscription revenue was up 10% to $1.3 billion and content revenue rose 7%.
In a statement, Time Warner chairman and CEO Jeff Bewkes said the company had another solid quarter and has refocused the company to aggressively pursue opportunities in video content.
“Once again, we are seeing the benefits of our increased investments in great content and storytelling,” Bewkes said in a statement. “In the quarter, both Turner and HBO had double-digit increases in subscription revenues, reflecting the growing strength and appeal of their programming. HBO received 19 Primetime Emmy Awards, the most of any network for the 13th straight year, including five Emmys for newcomer True Detective. At Turner, TNT ranked as ad-supported cable’s #1 primetime network for the second consecutive quarter, TBS was the #2 ad-supported cable network in primetime among adults 18-49 and 25-54, and Adult Swim again shined as ad-supported cable’s #1 total day network among its key adult demos. Turner’s extension last month of its longstanding relationship with the NBA through the 2024-25 season is another great example of investing in distinctive programming that will serve us well for years to come. This fall, Warner Bros. is once again the number one producer for broadcast television, including a strong slate of new shows. Season-to-date, Gotham ranked as broadcast’s #2 new show among adults 18-49, while The Flash had the most-watched telecast ever on The CW. These shows are among five series featuring DC characters that will air this season. DC is also a key component of the ambitious film slate that Warner Bros. recently unveiled. Further demonstrating our continuing commitment to shareholder returns, so far this year we’ve returned over $5.7 billion to our shareholders in the form of share repurchases and dividends.”
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