Turner revenues in 4Q17
In 4Q17, Time Warner’s (TWX) Turner segment, which includes popular networks like TNT, Turner Sports, Cartoon Network, and CNN, reported revenue growth of 10% YoY (year-over-year) to ~$3.1 billion.
The increase in top-line growth in the Turner segment was mainly due to a 32% YoY content growth and a 14% YoY growth in subscription revenues. Advertising also added 2% to the segment’s total revenues in 4Q17.
Despite a decline in domestic subscribers, Time Warner reported a 14% increase in subscription revenues in the Turner segment, driven by growth in domestic rates and among international networks. Strong growth in licensing revenues led to a significant growth of 32% in content and other revenues.
In 4Q17, the company also witnessed a 2% increase in advertising revenues, backed by higher revenues associated with MLB’s (Major League Baseball) postseason games and growth at Turner’s international networks.
However, Turner’s news businesses declined during the quarter. Notably, the company has been posting softness in the advertising business for the past few quarters due to lower audience delivery in Turner’s entertainment networks.
Time Warner’s focus on remaining competitive
Turner is investing in digital streaming capabilities to stay competitive in the OTT (over-the-top) service space, provided by Netflix (NFLX) and Amazon.com (AMZN). The acquisition of a majority stake in iStreamPlanet in 2015 helped the company with streaming and cloud-based video and technology services for Turner’s digital properties for sports leagues, including the March Madness Live app and the NBA League Pass property.
In April 2017, Turner and Warner Bros started a new domestic SVOD (subscription video-on-demand) service under the Boomerang brand. Turner plans to launch a premium sports SVOD service in 2018 that will feature UEFA (Union of European Football Association) soccer matches.
Similarly, media giant Walt Disney (DIS) is also seeking to promote a direct-to-consumer distribution service. Disney is planning to launch ESPN sports and Disney movie apps in 2018 and 2019, respectively.
Time Warner’s merger with AT&T (T) is likely to help both companies gain a competitive advantage over its rivals.