MOVIES LIFT TIME WARNER

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).

RECESSION COULD HURT MOVIE BUSINESS, TOO, SAY ANALYSTS

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."

MPAA OVERTURNS NCO-17 RATING

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."

HARRISON FORD IS INDIANA JONES, NOT SHIA, SAYS LUCAS

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 REFUSES TO ISSUE VISA TO FINNISH FILMMAKER

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?"

NEW BRIDGE FROM PC TO TV

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.

SPRUCE GOOSE HANGAR TO BE SOLD

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.

Brian B.