Time Warner reported better-than-expected earnings for its second quarter Wednesday, with its movie and cable businesses substantially offsetting declines in its publishing and AOL units. The Warner Bros. unit was an especially big winner, with solid ticket sales for Sex and the City and Get Smart and store sales of the I Am Legend DVD. (Revenue from The Dark Knight will be reported in its third-quarter filing.) Speaking with analysts on Wednesday, Time Warner chief Jeff Bewkes said that the success of Sex and the City was particularly gratifying because the franchise has benefited so many parts of the company. "It had its inception on HBO; it was syndicated with great success on TBS; then became a film produced by New Line; and finally was marketed and distributed worldwide by Warner Bros." He also forecast increased revenue from video on demand (VOD) and noted that next year every film released on DVD will be available on VOD on the same day (with the exception of the next Harry Potter movie).

Although the film industry has generally boasted that it is immune to economic slowdowns, a new study suggests that moviegoers are already seeing fewer movies at the multiplex. As reported by today's (Thursday) Wall Street Journal, a study by Los Angeles-based market-research firm Interpret LLC found that 52 percent of respondents are cutting back while only 5 percent said they are going to the movies more often. While studio executives have argued that a slow economy is actually good for their business because movies offer low-cost entertainment, analysts have observed that films must now compete with even lower-cost entertainment. "You can't compare how this slowdown might affect the movie industry to previous recessions," industry analyst Hal Vogel told the Journal. "The industry still has a degree of recession resistance, but this time around there is all this new technology and all these new distractions for moviegoers -- you didn't have Web episodes and cable television and computer games coming out of your ears in the past."

In a rare reversal, the Motion Picture Association of America's ratings board has removed the NC-17 rating from Kevin Smith's latest comedy, Zack and Miri Make a Porno and will replace it with an R rating. The MPAA said that it had agreed to overturn the rating after hearing arguments from Smith and attorney Alan Friedman, representing The Weinstein Co., which is distributing the movie. In a statement, Weinstein Co. Co-Chairman Harvey Weinstein said, "This is a great day for Kevin Smith fans and we are grateful that the MPAA's appeals board was able to overturn what we felt was an unwarranted and overly restrictive rating."

Shia LaBeouf will not become the next Indiana Jones, George Lucas has told MTV News. Although Lucas has previously hinted that LaBeouf would take over the franchise, he reversed himself Wednesday, saying, "Indiana Jones is Indiana Jones. Harrison Ford is Indiana Jones. If it was Mutt Williams [the character LaBeouf plays in Indiana Jones and the Kingdom of the Crystal Skull] it would be Mutt Williams and the Search for Elvis or something." Lucas did say that he's planning another Indiana Jones sequel and that Ford will star in it. What he's looking for now, he indicated is what Alfred Hitchcock used to refer to as a "McGuffin," an artifact to propel the story. "They are very hard to find," he said. "It's like archeology. It takes a huge amount of research to come up with something that will fit."

China has refused to allow Finnish documentary filmmaker Arto Halonen to attend the Beijing Olympics as part oF his country's Olympic Committee delegation, because, it claimed, he broke Chinese law on his previous visit. Between 1994 and 1998 Halonen filmed his award-winning Two Ways of Divinity in Tibet and China in which he examined China's policies towards Tibet, claiming in part that China had installed puppet religious leaders in the country. In a statement issued today (Thursday), Halonen said, "If defending the rights of Tibetan and Chinese people and aiming to get to the truth means breaking the law, the Chinese government's idea of justice is at the level of the Inquisition. The events surrounding the Olympics pose important questions to the international community: why do we allow China to politicize the Olympics and manipulate its citizens through the event?"

Iomega, the company best known for its popular computer hard drives, has become the latest firm to develop a device aimed at bringing movie downloads from the Internet to home theater systems. On Wednesday it unveiled a portable ("smaller than a deck of playing cards") device dubbed Iomega ScreenPlay TV Link designed to act as a bridge between the home PC and the home TV set. The device can also display photos and play digitally recorded music, the company said. In a statement, Loren Bryner, global product manager for Iomega, said, "We've created a product that's fun, functional and so affordable that it should be a 'must have' for anyone enjoying digital content today." The company's statement did not indicate how much the device would retail for.

The hangar used during World War II to build Howard Hughes's Spruce Goose and currently used as a movie and TV soundstage is being put up for sale, the Los Angeles Times reported today (Thursday). "Its owner hopes to sell the building to a studio operator who will enlarge its role in the entertainment industry," the newspaper observed. The Times cited real-estate experts as saying that the hangar is worth more than $60 million.

Time Warner's cable-TV networks posted strong results in the company's second quarter with an 11 percent boost in advertising revenue overall and ratings up a whopping 33 percent at TBS and 8 percent at TNT. In a conference call with analysts, Time Warner CEO Jeff Bewkes credited TNT's original programming strategy for its ratings rise. While Time Warner does not own a broadcast network, Bewkes said that he regards Time Warner's entertainment networks as "broadcast substitutes, and this position has increasingly resonated with advertisers as we've continued to enhance our brands." He noted that the premieres of The Closer and Saving Grace on TNT were the highest-rated cable debuts of the year, coming in at No. 1 and No 2 respectively. Bewkes also pointed out that CNN has been making impressive strides against its principal rival, Fox News. Ratings at the cable news network, he said, were up 20 percent in the key 25-54 demographic group versus the same quarter last year. "Each of the broadcast networks' news divisions and our key cable news competitor are down double-digits over the same period," he observed.

The Walt Disney Company, which has found enormous success developing films and cable shows that have strong appeal for "tween" girls, plans to relaunch its Toon Disney channel as Disney XD, aimed at boys ages 9-14, the Los Angeles Times reported today (Thursday). Among its offerings will be an original series titled Aaron Stone, in which a kid who's a whiz at playing video games puts his talent to work in a double life as a secret crime fighter. As the Times observes, the show resembles a male version of Hannah Montana, in which a teenage girl secretly leads a double life as a rock star. Another original series will be Mongoose & Luther, about two best friends aiming to become the world's greatest skateboarders.

FCC Chairman Kevin Martin said Wednesday that he has not decided whether to appeal a court decision reversing the fine imposed on CBS stations for broadcasting the Janet Jackson "wardrobe malfunction" incident. As reported by Broadcasting & Cable, Martin said during a C-SPAN interview that he had been disappointed by the court's decision and noted that the incident has spurred Congress to increase the FCC's ability to fine station. "It would be somewhat ironic if that prompted Congress to increase our fining authority but the courts actually said we were not able to fine them for that instance," he said.

Despite "draconian" cutbacks at WBBM-TV, the CBS-owned station in Chicago, General Manager Joe Ahern has managed to find funds to install a marble shower in the private bathroom of his new office at the station and seek reimbursement for a $5,000 lunch at the trendy Rosebud Prime restaurant on June 9, according to Chicago Sun-Times TV columnist Robert Feder. Feder said that station controller Ron Damron refused to use station funds for the reimbursement and instead went to each of Ahern's department heads and mangers demanding that they cover the cost of the lunch, which, he said, was to celebrate Ahern's 63rd birthday.

New York Governor David Paterson has signed into law a bill that would overturn certain agreements that prevent broadcast personalities from taking jobs with a competitor in the same region if they quit or are fired. The result of such agreements is that many of these personalities are either forced to move outside New York to find work or limit the kind of jobs they can apply for in the state. In a statement, Paterson said, "The contract provisions we're banning placed an unfair burden on these professionals by limiting their ability to move to other employers within the same market or within a certain time period. With the approval of this bill, we hope to empower broadcasters with greater independence as they pursue employment options."