Can Flixster solve Time Warner’s woes?

Martin offers possible remedy for DVD decline

A top Time Warner exec teased investors on Wednesday about a possible remedy to the slump in home entertainment that’s plagued Hollywood in recent years.

Speaking in Gotham at a media conference hosted by Barclays Capital, chief financial officer John Martin said that in coming months TW will be offering specifics about a cloud-based digital library that will allow consumers to manage their movies in cyberspace, part of an industrywide effort called Ultraviolet. But in Time Warner’s case, it will be tethered to its latest acquisition, social network site Flixster. Martin said Flixster, also home to review service Rotten Tomatoes, would serve as a “front end” for a digital offering that will allow consumers to upload existing DVD collections into the cloud, as well as buy or rent new movies. Flixster would also allows consumers to share their libraries and comment on them with their friends. He suggested that the trend of more people renting as opposed to owning could be reversed with cloud-based libraries. “Brighter days are ahead,” he said. Time Warner bought Flixster, with 25 million users a month, for a reported $80 million in early May.

Martin emphasized that in terms of Time Warner’s studio business, TV production remains strong, with Warner Bros. bringing 27 shows to broadcast TV this coming season, 12 new shows and 15 returning. The only problem with TV production “is the limited shelf space you have. If we could find more shelf space, we would invest more.”

Martin offered very little detail on the prospects for the upcoming upfront advertising sales but said he expected them to be robust for the Turner Broadcasting nets. He did say there has been some ratings softness for Turner’s off-net shows, but the acquisition of “The Big Bang Theory” and the “The Mentalist,” to bow later this year in syndication on TBS and TNT, respectively, should help revive ratings.

When asked about prospects for future growth at Time Warner by Barclays analyst Anthony DiClemente, Martin noted the opportunities for TV outside the U.S., projecting that operating profits from those TW businesses will double to $1 billion over the next four years.

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