It's been a busy day for Time Warner .
In addition to reporting earnings that beat expectations— revenue up 6 percent on stronger cable TV ad sales — it announced it's buying Flixter.
This acquisition is significant for its home entertainment strategy, which is focused on driving more digital sales of movies, and speaks to the direction that all the studios will likely be moving. Time Warner snapped up Flixter because like the rest of the industry it's facing the precipitous decline of DVD sales — down 20 percent in the first quarter.
Flixter, a film discovery app, is used by 25 million users per month and has been downloaded more than 35 million times. Flixter also owns Rotten Tomatoes, the movie review site which has over 12 million unique visitors per month. Time Warner didn't disclose how much it paid, but the company was reportedly looking for $60 million to $90 million.
Why Flixter? CEO Jeff Bewkes made Time Warner's intentions very clear on the company's earnings call that this is pat of a grand plan to drive digital sales of movies.