×
You will be redirected back to your article in seconds

A healthy Time Warner plans to spend

Revenue, profits up in 2010 on ad boost, HBO DVD sales

Jeff Bewkes is bullish on Time Warner’s prospects for 2011 thanks to the headwind provided by the conglom’s strong revenue and earnings growth last year.

As a result, the company plans to “ramp up investment in programming, production and marketing even more than we did last year” at Warner Bros., the Turner nets and HBO, the Time Warner topper said as he discussed the conglom’s fourth quarter and full-year results on Wednesday.

For Warner Bros., in particular, that means more tentpole pics and more TV programming, particularly comedies and cable series, with Bewkes saying event films have proved “more consistently profitable” for the studio than smaller movies.

With a slate of tentpole pics — ranging from superhero actioner “Green Lantern” to the final “Harry Potter” title and “The Hangover Part 2” — and a windfall of syndication revenue from “The Big Bang Theory” coming in, Warner Bros. should be on track to have its highest profit year ever, Time Warner chief financial officer John Martin said.

Already skedded for next year are the latest installment in the Batman franchise, “The Dark Knight Rises”; a reboot of the Superman franchise; the first “Hobbit” pic; a sequel to “Clash of the Titans”; and the return of “Godzilla.”

A stronger-than-expected increase in advertising dollars from marketers and the sale of HBO programming like miniseries “The Pacific” and “Entourage” on DVD and in syndication helped bolster Time Warner’s financials in 2010, with revenues up 6% to $26.9 billion and net profits rising 4% to $2.57 billion, the company announced before the market opened Wednesday.

During the fourth quarter, revenues rose 8% to $7.8 billion and net profits by 22% to $769 million.

Solid results from original programming at Turner and HBO and from box office at Warner Bros. remained the bright spots for the conglom, which Bewkes has converted over the past few years into a pure content company.

While followers of the media business continue to watch ad spending closely, the rebound showed no signs of fading at Time Warner. Overall, revenues grew by 10% — rising 14% at Turner and 3% at Time Inc. in 2010.

The strong earnings pushed Time Warner stock up $2.79, or 8.6%, in trading Wednesday to close at $35.10.

On a call with analysts, Bewkes noted that Turner’s domestic cablers “grew ad revenue in the high teens organically” in 2010. He noted that at last year’s upfront, Turner’s CPM growth rate “exceeded all the broadcast networks,” providing “tangible evidence that the CPM gap has narrowed.”

“In 2011, we’re even more confident about how we’re positioned, and we’ll be even more aggressive,” Bewkes said. “We’ll increase our investments in programming, production and marketing even more than we did last year. We’ll keep pushing to accelerate new digital business models. We’ll keep expanding our presence in the most attractive international territories.”

The investment in top-flight programming ranging from the NCAA men’s basketball tourney to Conan O’Brien’s new talker will continue to pay off, Bewkes said. “We’re confident we’ll post strong advertising growth again this year.”

After repurchasing $3 billion in shares last year, Time Warner plans to buy back another $5 billion in shares this year. At the same time, it boosted its dividend by 11% to 23.5¢ a share.

Time Warner is still struggling with its Time Inc. publishing unit, however, where a 3% increase in ad revenue (to $57 million) last year was offset by a decrease in subscription and other revenues, partly due to weak newsstand sales.

For the film division, homevideo revenues took a dip in 2010 but face difficult comparisons because of the success of “Harry Potter and the Half-Blood Prince” on DVD in 2009.

(Marc Graser contributed to this report.)

More TV

  • Content-is-King

    Top TV Execs Tackle New Distribution Landscape in Rome

    ROME – In an increasingly complex TV market, with a host of new big-ticket streaming services preparing to enter an already crowded arena, both buyers and sellers are rethinking some of the fundamentals of the TV business as they grapple with the best way to reach global audiences. A host of top producers, network executives, [...]

  • MIA-MARKET-2019_Europe-Producers-Club_4

    European Producers and Broadcasters Debate How to Weather Streaming Storm

    ROME – The impending rollout of Disney Plus, HBO Max, and other new streaming services promises a new era of uncertainty—and opportunity—for broadcasters and producers in an industry already disrupted by the likes of Netflix and Amazon. At a panel hosted by the European Producers Club Friday afternoon during the MIA market in Rome, executives [...]

  • Kevin-Beggs

    Lionsgate TV Chairman Kevin Beggs on Streamers and TV’s ‘Platinum Era’

    ROME – Over the course of two decades in the industry, Lionsgate Television chairman Kevin Beggs has witnessed the ups and downs of a business that has frequently found itself confronting both dizzying new possibilities as well as existential threats. But these days the veteran exec, who oversees the development of all scripted and non-scripted content [...]

  • MAKING IT -- Season: 1 --

    TV News Roundup: NBC Announces 'Making It' Season 2 Premiere Date

    In today’s TV news roundup, NBC announced the “Making It” Season 2 premiere date and HBO Max greenlit a new docuseries from Brad Goreski and Gary Janetti. DATES Hosts Amy Poehler and Nick Offerman will return with the second season of “Making It” on NBC Dec. 2. After the show’s holiday season premiere, the show [...]

  • Luis Fonsi Erika Ender Latin Grammys

    The Second Latin Explosion: How 'Despacito' Ushered in a New Generation of Stars

    Music is an ever-evolving art, and for the Latin Recording Academy, that’s meant riding multiple waves of attention. The most recent arrived with the stratospheric success of “Despacito,” which kicked off a second Latin Explosion with full force in 2017. The Luis Fonsi and Daddy Yankee hit, later featuring verses by Justin Bieber, made Latin [...]

More From Our Brands

Access exclusive content