Time Warner has a plan to save cable television -- half of it, anyway

It is an attempt to preserve what is now plainly the core business of the slimmed-down Time Warner—and which also happens to be one of the most dependable rackets in media. Subscribers to multichannel television, who may get it from a cable, satellite or telecoms firm, pay for "bundles" of channels, whether they watch them all or not. They are also shown advertisements. Content providers like Time Warner receive carriage fees from the cable and satellite companies, which account for about half of their revenues (and the great majority for a premium channel like HBO). These fees are a handy bulwark against shocks to the advertising market, and they tend to go up faster than inflation. At present the Internet poses a puny threat to this commercial redoubt. But the audience for online video is young and growing, the barriers that prevent people from piping it into their televisions are likely to fall and the broadcast networks are quickly moving online. Time Warner does not want to row against this current. But neither does it want to be swept away.