Harry Potter lifts Warner home video revenue, bucking a trend [updated]
Strong sales for "Harry Potter and the Deathly Hallows -- Part 1" pushed up Warner Bros.' home video movie revenue by 29% amid an overall shrinking market, helping drive improved financial results for media conglomerate Time Warner during the second quarter ended June 30.
The New York-based owner of Warner Bros., cable networks HBO, TNT and TBS, and the Time Inc. magazine group reported a 10% increase in revenue to $7 billion and a 14% rise in net income to $638 million. Both figures were slightly ahead of Wall Street expectations but not good enough to defy an overall down day for the stock market.
Time Warner shares were trading down 4% at $32.61 Wednesday morning.
Revenue at the Burbank-based Warner Bros. film and television studio grew 13% to $2.8 billion due largely to home video and video games. DVD and digital download revenue for films hit $708 million, defying an overall trend in Hollywood that has seen such revenue steadily falling for the last few years. Warner's results were boosted by the second-to-last "Harry Potter" film, which is the bestselling home entertainment release of the year so far.
The studio's video game unit also grew substantially to $170 million thanks to a new Mortal Kombat game, the first result of its 2009 acquisition of Midway Games, and Lego Pirates of the Caribbean, which a Warner-owned development studio produced for Walt Disney Co.
Time Warner Chief Executive Jeff Bewkes admitted box-office results were mixed in the quarter, with theatrical revenue down 6% at $443 million. While the superhero adaptation "Green Lantern" "fell short of our expectations," the he said, the comedy hit "The Hangover Part II" "substantially exceeded them."
In the television networks group, revenue grew 9% to $3.5 billion, due largely to NCAA basketball on TNT and TBS as well as international sales of HBO programs like "True Blood" and "Game of Thrones." Bewkes was particularly bullish on the new HBO Go application that allows subscribers to watch HBO programs and movies on digital platforms. The applicaiton has been downloaded 4 million times for Apple and Android phones and tablets and will launch later this year on video game consoles and Internet-connected televisions.
Time Warner's long-challenged magazine publishing unit Time Inc. saw revenue grow a modest 3% during the quarter to $946 million. It was helped by digital revenue and People magazine's coverage of the royal wedding.
[Update, 11:47 a.m.: An earlier version of this post incorrectly said that Warner Bros.' home video movie revenue grew 22% in the second quarter. This post was also updated with the quarter's video game revenue and theatrical revenue.]
-- Ben Fritz
Photo: Daniel Radcliffe and Emma Watson in "Harry Potter and the Deathly Hallows -- Part 1." Credit: Warner Bros.