It’s best to ignore the solid result overall from the huge Time Warner media conglomerate, now shorn of its cable networks business, and concentrate instead on the Time Inc publishing business, which was once the backbone of the group.

The publishing group is a mess — it’s operating unsustainable losses and doesn’t seem to be long for this world in its present structure — unless there’s an upturn in the US economy and in turn, ad spending.

First quarter profit for Time Warner, which owns the Warner Bros movie studio, CNN and HBO, fell to $US661 million, from $US771 million, in the opening quarter of 2008, after revenue fell 7% to $US6.9 billion.

In light of the 45% fall at NBC Universal, on a 2% rise in revenues, Time Warner’s figures seemed credible.

Revenue at AOL fell 23% to $US867 million, but the company is aiming to get rid of the flailing internet business. Time revealed overnight that it is planning to spin that off, just as it separated the cable businesses last year.

Warner Bros’ revenue fell 7% to $US2.6 billion, primarily due to lower DVD sales (which will also hit News Corp when it reports its first quarter result next week).

Revenues at the company’s cable networks unit rose 6% to $US2.8 billion, thanks to a 9% in subscription revenues which offset a 2% decline in advertising revenues.

But at Time Inc revenue dropped 23% (almost $US250 million) to $US806 million as advertising sales plunged. Earnings slumped by more than 90% before depreciation and amortisation, and the division incurred a loss after taking those deductions into account.

On the revenue side there was no good news whatsoever. The 23% fall in group revenue came from a 30%, or $US167 million, drop in advertising; a 16% or $US58 million in subscription revenues and an 18% ($US21 million) drop in other revenues.

Higher pension expenses also cut earnings and overall profits plunged 92%, or $US133 million, to $US12 million. That’s despite the company cutting jobs and other expenses in the quarter.

After depreciation and amortisation, Time Inc had a loss of $US25 million, compared with the $US93 million earned in the first quarter of 2008.

And that is unsustainable, especially in a company like Time Warner whose TV and movie production businesses are doing well. Time’s cable businesses and content providers can be supported by higher subscription charges, which helped offset lower advertising in the quarter.

In Time’s magazine and publishing business, subscription revenues, which had been a buttress against a fall in ad revenues, fell sharply in the quarter.

“Subscription revenues decreased, due primarily to the negative impact of foreign exchange rates at IPC (in the UK) and lower magazine newsstand sales, resulting in part from wholesaler disruptions, and lower subscription sales,” the company said in its commentary.

It’s just not the newspaper side of the media in the US that is taking a pounding at the moment: all forms of print journalism are being subjected to enormous and unrelenting pressures from the recession, rising unemployment, the internet and the credit crunch which has eliminated asset sales as a way of getting rid of troubled businesses.

For the likes of Time Inc and other groups, outright closure is looming as the only option, as we have seen this year with daily papers in Seattle and Denver, which were shutdown after falling revenues could not be covered by deep cost cuts and job losses.

The online substitutes of both papers are not doing well, especially in Seattle. So going totally online won’t be an option for any of Time Inc’s publications which reach the end of the road. An old fashioned analogue presence is still required to do well in the media and remain viable.