Time Warner chief financial officer, John Martin, said the company's cable networks are on track to be the company's best performing unit of the year.
Speaking at an investor conference in Arizona on the same day Time Warner announced it would make a $25 billion write down and lose money for 2008, the chief financial officer got a chance to underline some brighter spots.
The company counts premium pay-TV service HBO and ad supported networks, CNN, TBS, TNT, Cartoon and TruTV among its cable assets. "They may have been, collectively, our best performing business last year," he said, adding, "We are disproportionately benefitting from money coming off broadcast to cable."
Martin said the entertainment networks were well positioned to take advantage of secular trends in broadcast since advertisers saw TNT and TBS as a value alternative. "We think we are an alternative to broadcast and for the first time we saw the CPM (Cost per thousand) gap close at the upfronts. We believe advertisers will look for places to get value and we believe we'll capture more than our fare share of that."
Historically broadcast networks have garnered higher pricing for their programming while cable networks have long argued that TV should be priced the same no matter where it seen. CPMS are the units used to sell viewership.
Martin added that Time Warner news channel CNN had had the best year its history, "by almost any count."
HBO has not been affected by the recession at this point, though Martin warned, "If there's a prolonged economic recession, its hard to believe HBO would be insulated from that," though he added that home entertainment is often the last thing customers give up in a downturn. "HBO is so deeply sold, even if there's a lightening up, they'd probably give up the marginal ones [premium channels] before they'd give up HBO."
The company also saw a major success this year with vampire tale, True Blood, which in audience numbers sits at number three within the HBO pantheon of hits behind only The Sopranos and Sex And The City, said Martin adding that HBO has more money invested in pilots this year than at any time in its history.