• by David Kaplan , December 8, 2004

Following his pronouncement that America Online would break the $1 billion mark in advertising revenues (see related story in today's MDN) Time Warner chief Richard Parsons outlined results for the rest of the world's largest media company, noting that all of its operations are now either first or second in their respective industries. "We've turned the company around," Parsons said. "We are headed in the right direction now."

On the cable front, Parsons touted the positioning of Time Warner Cable--the No. 2 MSO in the country, with 10.9 million subscribers. He added that the cable company has capitalized on new technologies, and he sees even greater opportunity with digital-phone service.

"Within our footprint, the video, data, and voice industries today account for about $25 billion in consumer spending," Parsons said. "That's important because approximately one-half of these revenues are from residential phone, of which we get almost none today."

Regarding programming-cost increases, Parsons said that although Time Warner Cable's increases have been higher than those of some of its peers, they are in line on a per-subscriber basis with the rest of the industry.

"I'm not going to predict exactly where it will level off, but I do think the programming costs in our own cable systems will come down over time, from the low-double to the high-single-digits," he added.

Parsons reiterated that Time Warner is interested in purchasing Adelphia Communications Corp., but that it is "a bidder for Adelphia at a price that makes sense."

As for challenges in 2005, Parsons said that the company is looking to work with Microsoft on ensuring that its next operating system makes it more difficult to download movies.

"Piracy is the one thing that threatens our business," he said. "Personal video recorders and ad-skipping don't even come close."