Time Warner Offloading Cable TV Biz

Time Warner Inc., following news that it slipped 36 percent in Q1 earnings from a year ago, announced that it will spin off the rest of its cable TV biz.

The company has been under pressure from investors in recent months to simplify its complicated corporate structure, and the spin-off was not unanticipated, according to the Boston Globe.

Time Warner’s cable unit became a separately traded public company a little more than a year ago, but Time Warner maintained an 84 percent stake. The company is working closely with the board of Time Warner Cable, and a final agreement is expected soon, says Time Warner CEO Jeff Bewkes.

The company’s cable TV profits rose 7 percent, on an 8 percent gain in revenue, and added 55,000 basic video subscribers.

Time Warner’s earnings were largely in line with expectations, but served to highlight Bewkes’ challenges in terms of remaking the company, particularly involving AOL, writes CNN Money. Ad-revenue growth at the internet unit slowed substantially, up just 1 percent in the quarter and marking the sixth consecutive quarter of slowing ad growth since AOL stopping being a paid-for service and remade itself into an advertising business in 2006. Display advertising on AOL’s webpages slipped 18 percent.

AOL suffers from “execution challenges,” Bewkes says, particularly problems with integrating about $1 billion worth of acquisitions - including Tacoda and Third Screen Media - that were meant to improve advertising technology and targeting.

Investors were disappointed that Bewkes did not talk more about plans for AOL, though he did say the company had made progress on a planned separation of AOL’s internet-access operation. Such a separation has been seen as a prelude to a possible sale of all or parts of AOL.