Whether Time Warner Should Reduce its Cable-TV Holdings

From an article of The Wall Street Journal, April 17th, the world's biggest media company- Time Warner Inc. is considering whether it should substantially reduce its cable-TV holdings over time. Cable is the biggest contributor to profits in Time Warner. Time Warner 2006 revenue got $11.8 billions in Cable System and $10.3 billions in Cable Networks, which counted about 48.3% of its total revenue. Since it already owns AOL, some executives in Time Warner wonder whether it should get out of cable and double down on the Web by buying another major internet company. This issue will be put at a meeting next month before the board.As we know, when the internet emerges as a viable venue of watching TV, the long-term future of cable is murkey. Of course, a totally exit is the least case to be adopted. If Time Warner gradually reduce its most stake, say around 80%, in Time Warner Cable Inc. through acquisitions would be a good idea. Getting rid of big part of its cable holdings will make Time Warner more reliant on its role of a provider of filmed entertainment and print and web content. The fact is whether Time Warner get rid of or reduce a majority of the cable hodlings, it is a sign that the cable industry is shifting. It would free up resources for more investment in the web. Whatever Time Warner will do, it should try the best way to build their shareholders' value.