Parsons Expects Turnaround at Entertainment Division

NEW YORK, December 6: Acknowledging that 2006 was “a bit of
a step back” for Warner Bros., Richard
Parsons, the chairman and CEO of Time Warner, told investors at a
conference yesterday that he is expecting an improved 2007 for the company’s
entertainment segment.

Speaking at Credit Suisse’s Media & Telecom Week
Conference, Parsons said, “Warner Bros., for the first time in a half a dozen
years, has had a stand-down year. This year has been a bit of a step back. But
the fourth quarter is going to be a good and that augurs well for 2007. We’ve
got [a new] Harry Potter, Ocean’s
13, and New Line has Rush Hour 3 coming out next year and the first installment of His
Dark Materials, which could be their next
tent-pole franchise.”

Parsons continued, “It’s a tough business and one of the
things we’re doing is laying off more of the production costs on partners. As
tough of a business as it is, you still find people who want to finance motion
pictures. You’ll see us using more of other people’s money to finance
productions and maybe a small reduction in the number of films. Warner Bros.
will probably do 20 films next year. New Line will be half that.”

Commenting on Warner Bros.’ television business, Parsons
noted that several shows will be going into syndication next year. “2007 looks
like it’s going to be a good year for the entertainment group,” he said. “The
challenge for us in the television business—and it’s a challenge in all
of our content businesses—is to ride the wave of technology, as opposed
to get too far in front of it or be behind it. Television viewing is still
going up, this business is not going away tomorrow. We want to maintain our
strength in that business. We’re realigning so that we have a digital
production studio, so to speak, so that things produced for television can find
their way to other purely digital platforms. As that business grows, we can
modify and morph our content into a form that is more suited to those
platforms. We’re trying to catch the wave, ride the wave, stay with the thing
that has been successful for us in the past but be alert to new opportunities
as they materialize.”