Time Warner Inc, the world’s largest media company, has reported revenues up by $2.5 billion or 6% over the year to $42.1 billion, with a profit of $4.9 billion, boosted by broadband services.

Chairman and chief executive Richard Parsons, who took over in 2002 following the unfortunate acquisition of America Online, said “2004 was the year when the company settled down”.

Revenues in the Time Warner Cable division grew 10% by $785 million to $8.5 billion, representing a 10% rise in subscription fees, driven by a 25% increase in earnings from both broadband data and enhanced digital video services.

At the end of 2004, Time Warner cable had 10.9 million basic cable subscribers, down by 35,000 over the year, while the number of digital subscribers rose by 457,000 to a total of 4.8 million, representing 44% of subscriptions.

Video-on-demand subscribers rose by 595,000 over the year to a total of 1.5 million. Penetration rates for digital video recorder and video-on-demand services reached 18% and 32% of digital video customers, respectively.

The number of subscribers taking high-speed internet services rose by 685,000 over the year to 3.9 million, representing just over a fifth of those homes for whom the service was available.

Meanwhile, the number of AOL subscribers in the US was down 2.2 million to 22.2 million, and down by 49,000 in Europe to 6.3 million.

The Time Warner Cable and America Online subsidiaries previously announced a new strategic agreement whereby the cable division will aim to accelerate its acquisition of high-speed data subscribers, while AOL will attempt to maximise revenues from online advertising, search, commerce and premium services. The online and cable divisions will work together to migrate existing AOL and Road Runner subscribers and prospects to the new offering, and AOL will provide broadband content and communications services.