The conglomerate's studio Warner Bros. saw its revenue fall 9 percent to $2.3 billion, despite a strong theatrical slate led by surprise hit 'The Hangover.' That's mainly because of the continually troubled home-entertainment market. Time Warner said that Warner Bros. experienced weaker performance for its new DVD releases as well as catalog titles and received lower television licensing fees for its films. Its video-game division, Warner Bros. Interactive, also had no new releases to compare to last year's hit 'Lego Indiana Jones,' which it produced for LucasArts. Thanks to reduced marketing spending and cost-cutting at the studio, including layoffs, operating income for Warner Bros. actually rose 52 percent to $143 million. HBO and Turner Entertainment, which make up Time Warner's networks division, were the only bright spot in the quarter. Despite a 3 percent drop in ad revenue, subscription fees rose 8 percent, giving the unit overall 5 percent growth to almost $3 billion. Consumers pay directly to receive HBO in their homes, while cable systems pay to carry Turner channels including TNT, TBS, CNN and Cartoon Network. Adjusted operating income grew 17 percent to $875 million. The soon-to-be-spun-off Internet division AOL saw no end to its woes, as revenue plummeted 24 percent to $804 million in the face of weak advertising and a continued drop in subscribers. Operating income dropped 28 percent to $165 million. In a statement, Chief Executive Jeff Bewkes said that Time Warner is on track to make AOL a separate company by the end of the year. The magazine publishing unit was also a big drag as it suffered the problems besetting many print publications. Overall revenue was down 22 percent to $915 million, thanks to a 26 percent drop in advertising and 18 percent decline in subscriptions. Operating income was down 53 percent at $102 million. Despite the tough quarter, which was similar to that of competitor Viacom, which reported earnings Tuesday, the results appeared to slightly beat analysts' expectations. 