Time Magazine 2009 Annual Report Download - page 45

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Content revenues primarily include theatrical product (which is content made available for initial exhibition in
theaters) and television product (which is content made available for initial airing on television). The components of
Content revenues for the years ended December 31, 2009 and 2008 are as follows (millions):
2009 2008 % Change
Years Ended December 31,
Theatrical product:
Theatrical film .................................... $ 2,085 $ 1,861 12%
Home video and electronic delivery ..................... 2,820 3,320 (15%)
Television licensing................................. 1,459 1,574 (7%)
Consumer products and other ......................... 129 191 (32%)
Total theatrical product ................................ 6,493 6,946 (7%)
Television product:
Television licensing................................. 2,506 2,274 10%
Home video and electronic delivery ..................... 777 814 (5%)
Consumer products and other ......................... 214 224 (4%)
Total television product................................ 3,497 3,312 6%
Other ............................................. 776 772 1%
Total Content revenues ................................ $ 10,766 $ 11,030 (2%)
The decline in Content revenues included the negative impact of foreign exchange rates on many of the
segment’s international operations.
The increase in theatrical film revenues was due primarily to the success of certain key releases in 2009, which
compared favorably to 2008. Revenues in 2009 included the releases of Harry Potter and the Half-Blood Prince,
The Hangover, The Blind Side, Sherlock Holmes and Terminator Salvation compared to revenues in 2008, which
included the releases of The Dark Knight,10,000 B.C.,Sex and the City,Get Smart and Journey to the Center of the
Earth. Theatrical product revenues from home video and electronic delivery decreased primarily due to the reduced
quantity and performance of new releases and lower catalog sales, driven in part by the negative impact of the
current economic environment and secular trends, partially offset by the effect of lower than anticipated catalog
returns. Significant titles in 2009 included Harry Potter and the Half-Blood Prince,The Hangover,Gran Torino and
Terminator Salvation, while significant titles in 2008 included The Dark Knight,I Am Legend,10,000 B.C.,The
Bucket List and Sex and the City. Theatrical product revenues from television licensing decreased due primarily to
the timing and number of availabilities. Theatrical product revenues from consumer products and other decreased
due to difficult comparisons to consumer product revenues in 2008, which included revenues from arrangements
related to the release of The Dark Knight in the third quarter of 2008 and the release of Speed Racer in the second
quarter of 2008.
The increase in television product licensing fees was primarily due to the effect of fewer network deliveries in
2008 as a result of the Writers Guild of America (East and West) strike, which was settled in February 2008. The
decrease in television product revenues from Home video and electronic delivery primarily resulted from the
reduced quantity and performance of new releases and lower catalog sales, driven in part by the negative impact of
the current economic environment.
Other content revenues in 2009, which included the interactive video game releases of LEGO Indiana Jones 2:
The Adventure Continues,F.E.A.R. 2: Project Origin and LEGO Rock Band as well as the expansion of the
distribution of third party interactive video games, increased slightly compared to Other content revenues in 2008,
which included revenues from the interactive video game releases of LEGO Indiana Jones and LEGO Batman.
The decrease in costs of revenues resulted primarily from lower theatrical advertising and print costs due
primarily to the timing, quantity and mix of films released and lower manufacturing and related costs associated
33
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)