Time Warner Inc misses first quarter estimates on lower advertising revenue

Time Warner Inc, owner of cable networks TNT and HBO, reported first-quarter sales that missed estimates as advertising fell partly due to a later schedule for college basketball's biggest event.

Revenue was down less than 1 per cent from a year earlier to $6.93 billion, the company said today. The National Collegiate Athletic Association tournament extended later into the second quarter than it typically does, with the championship game on 8 April bringing TV ad revenue down 1 per cent to $1.08 billion as against a year earlier, when it was held on 2 April.

Chief executive officer Jeffrey Bewkes has focused the company's growth strategy on its TV business, which brought in over 70 per cent of Time Warner's sales. Under plans announced in March the company would spin off magazine publisher Time Inc -- the company's worst-performing division, following failed merger talks with Meredith Corp, publisher of women's titles including Ladies' Home Journal.

Shares in the company closed less than 1 per cent down to $59.48 in New York. The stock was up 24 per cent this year.

Bewkes opted to spend money on shows such as HBO's ''Game of Thrones,'' or getting rights to sports programming, such as the NCAA tournament, to command higher fees from pay-TV providers and bring in higher advertising revenue.

Meanwhile, The Wahsington Post reports, Time Warner Cable's chief executive said his company might consider capturing television content from public airwaves and delivering them to customers over an internet connection, a practice that had shaken the entertainment industry.

The idea was pioneered by a web start-up called Aereo, whose business model was opposed by all broadcasters including NBC, CBS, Fox and ABC with lawsuits, but their complaints in courts had failed.

According to analysts, the entry of Time Warner Cable into Aereo's space would be a game changer, with broad implications for how television was created and delivered to households. Unlike Aereo, which served only two markets, Time Warner which is the second-largest cable company in the US has has broad influence over delivery of TV content into millions of living rooms.

Time Warner Cable chief executive Glenn Britt said in an interview that what Aereo was doing to bring broadcast signals to its customers was interesting and if it was found legal, Time Warner could ''conceivably use similar technology.''