Time Warner saw its second-quarter revenues climb 5% to $7.3 billion thanks in part to increases at HBO and Turner.
Turner’s revenues reached $3.1 billion for the quarter, up from about $3 billion one year ago. Turner’s subscription revenue rose 13% and helped offset a 6% decrease in advertising revenues and 8% decrease in content and other revenues. The subscription growth stemmed from higher domestic rates and growth at Turner’s international networks, helping to fight off a decline in domestic subscribers. The ding in ad revenues was largely due to tougher comps from the year-ago quarter when Turner aired the NCAA Division I Men’s Basketball National Championship and Final Four games and the airing of two fewer NBA playoff games, which contributed a negative impact of approximately 8%.
Despite the rise in revenues, Turner’s operating income fell 7% to $1.1 billion as programming expenses grew 12% on higher costs related to Turner’s new agreement with the NBA.
HBO’s revenues rose slightly to $1.48 billion, up from $1.47 billion one year ago, due in part to an 8% increase in subscription revenues which was somewhat offset by a 44% decline in content and other revenues due to lower home entertainment and international licensing revenues.
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Along with the revenue bump, HBO’s operating income increased 10% to $531 million, partially thanks to programming costs decreasing 3% due to lower original programming expenses.
Meanwhile, Warner Bros. managed to grow its revenues by 12% despite falling television revenues due to lower initial telecast revenues. Operating income for the segment decreased 28% to $223 million.
“Our performance is a result of the continued successful execution of our strategic objectives – with the strong Subscription revenue growth at Home Box Office and Turner a great example of this – along with the investments we’re making in our brands and high-quality video content. Warner Bros. is home to the biggest cinematic hit of the summer so far with Wonder Woman, which has grossed approximately $800 million at the global box office to date, and dazzled audiences again last month with the critically acclaimed Dunkirk. Heading into the 2017-2018 television season, Warner Bros. is the leading supplier of primetime series to the broadcast networks for the ninth straight season. In ad-supported cable, Turner was once again home to three of the top five networks among adults 18-49 in primetime, with TNT and TBS leading the way in the #1 and #2 spots. CNN also continued to distinguish itself, posting its most-watched second quarter ever. And last month, Game of Thrones returned to HBO, with the most-watched season premiere episode ever on HBO,” said Time Warner CEO Jeff Bewkes in a statement.