• by David Goetzl  @dgoetzl, August 3, 2006

Getting tough pays off. Time Warner's recent move to take complete ownership of Court TV drove the company's 8 percent ad revenue growth for its broadcast and cable networks in the second quarter. Court TV's $43 million ad take accounted for 64 percent of the network group's $67 million gain.

Without Court TV, the network group--which includes the Turner cable networks, and WB broadcast outlet--grew only 2.8 percent.

Until this spring, Time Warner owned 50 percent of Court TV. Historically, the company put the dollars from that partnership in a different basket. As a result, Court TV's $43 million essentially functions as new money, when comparing the network unit's ad revenue performance a year ago.

Overall, with Court TV bundled in, the network group took in $923 million in ad dollars, compared to $856 million a year ago--hence the 8 percent gain.

Going forward, Court TV will function under the Turner Entertainment umbrella, along with fellow cable outlets TNT and TBS. Time Warner reports that Turner's ad revenue grew 11 percent, but much of that growth is due to the "new money" from Court TV, fueling speculation that the cable ad market is slowing.

Further evidence came in a conference call to discuss the second-quarter results. President/COO Jeff Bewkes says the ongoing cable upfront is weaker compared to past years. As a result, both broadcast and cable networks are withholding inventory for the scatter market, he says, and "managing their inventories...with more intent toward the opportunities (for price increases) in scatter." Bewkes says the current scatter market for the broadcast nets is weaker compared to previous years.

However, Bewkes predicts that Turner networks will be at the "high end" of the cable upfront when it finishes, although he didn't specify whether he was referring to CPMs or volume--or both. "We're quite happy about where we stand," he adds.

Time Warner's WB also continued to struggle, with a 9 percent decrease in ad dollars for the quarter. The limping WB will be shuttered later this summer, and Time Warner incurred $81 million in shutdown costs in the second quarter. The WB is merging with UPN to form the CW, with Time Warner owning a 50 percent stake.

Separately, Time Warner Cable saw 157,000 homes add DVRs in the quarter, bringing penetration up to 32 percent of its households with digital cable.