Turner revenue in 1Q18
In 1Q18, Time Warner’s (TWX) Turner segment reported revenue of $3.3 billion, marking an 8% increase YoY (year-over-year). The segment includes popular networks TNT, Turner Sports, Cartoon Network, and CNN, and contributes 41.8% of the company’s total revenue. Time Warner’s total revenue grew 3% YoY to ~$8 billion in 1Q18.
Turner’s YoY revenue growth mainly came from subscription, advertising, and content. While subscriptions contributed 8% of the segment’s YoY revenue growth, advertising and content each contributed 9%.
Key drivers in 1Q18
Turner subscription revenue grew mainly due to favorable domestic rates and growth in Turner’s international networks. A substantial increase in licensing boosted content revenue in 1Q18. However, the division’s local subscriber growth fell.
In 1Q18, the company’s advertising revenue grew 9%, driven by growth in Turner’s sports properties. Networks airing NCAA (National Collegiate Athletic Association) Division I Men’s Basketball Tournament Final Four games boosted advertising revenue by 5%, and the news business also benefited the segment. Mobile viewership hours of March Madness Live rose 10% YoY in 1Q18, and NBA (National Basketball Association) viewership on TNT was 13% higher in the 2017-2018 regular season than in the season prior.
However, the company has experienced sluggish growth in the advertising business for the past few quarters due to Turner’s lower audience delivery. The Turner segment may need to invest in digital streaming capabilities to keep up with the growing popularity of OTT (over-the-top) services such as those delivered by Netflix (NFLX) and Amazon (AMZN). Time Warner’s planned merger with AT&T (T) could benefit the company with AT&T’s extensive customer base and distribution network across TV, mobile, and broadband.