Television finds unlikely ally in troubled economy

Wed Sep 10, 2008 6:20pm EDT
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By Paul Thomasch

NEW YORK (Reuters) - It's been a tough run for the television business, with all the buzz around new media and those killer devices that let audiences skip right through commercials.

But fortunes may be turning for the TV industry, at least for the moment. A number of media executives have indicated this week that TV advertising sales are weathering the current economic storm better than media categories like radio and publishing, and perhaps even the Internet.

Media conglomerate Time Warner Inc became the latest to tout the strength of its television business on Wednesday, telling investors at a Merrill Lynch conference that its cable advertising sales were sailing along.

When asked about the state of the company's cable TV business, which includes HBO, CNN and TBS, Chief Financial Officer John Martin said sales were "very strong" and told the audience that "we're not yet feeling any negative impacts from the economy."

By contrast, Martin issued cautious comments about the company's AOL online division, saying sales of third-party advertising -- working as a broker of ads for other sites -- had slowed. AOL has been a concern among Time Warner investors as it lags behind Internet rivals like Google Inc and Yahoo Inc.

"Since August, there has been some softening in some pretty big advertising categories," Martin said, pointing to automotives and financials in particular and saying the majority of the softening was on the third-party network.

How much advertising growth is slowing -- and what outlets are being hardest hit -- has become the central issue for media companies today, with indications that corporate marketing budgets have been curtailed alongside the shaky economy.

CBS Corp Chief Executive Les Moonves, speaking at the same conference on Tuesday, offered his own upbeat view of the national TV market, describing it as "strong."   Continued...