Turner Broadcasting's GameTap service recently made some pretty big changes. At the end of May, the digital distribution platform revealed that it shut down all editorial, including both written content and video content, resulting in layoffs of what many considered to be an all-star team of editors.

In the weeks following, rumors began to swirl suggesting that GameTap itself may not be long for this world. Industry sources told GameDaily BIZ that they had heard rumblings that GameTap is not at all profitable and that the service would remain online only as a shell through this December, and then would be taken offline permanently. GameTap brass, however,

"categorically denies" that there is any truth to these rumors whatsoever. In a telephone conversation, VP of Content Rick Sanchez, stressed, "The rumors of our death have been greatly exaggerated."

He continued by noting that it's almost a running joke around the GameTap offices. "People love to predict other people's demise," he said. "Ever since the day we launched I've heard people say, 'Oh yeah I hear you're going out of business.' Yeah... I've heard that too, but we're not! I appreciate your concern."

If anything, Sanchez feels GameTap's business will only get stronger now that it's focused solely on games distribution. "In the next couple weeks we'll be revealing a major new partnership deal, which should put to bed any notion that we're not active in the digital distribution space," he affirmed.

"A business plan has been presented to Turner's management... and we are hitting our P&L numbers, so whether or not we're profitable we're hitting the numbers we're supposed to hit."

"Things are going well... the decision to cease publication of our editorial product and our online video had more to do with customer feedback than anything else. ... We launched [editorial] primarily as a way to get people into our service indirectly – e.g. read about Halo and then go play some game like Deus Ex. And that [strategy] was working to some degree, but we knew there were more effective ways to accomplish that goal, and while we had a phenomenally talented editorial team... the business side felt we could better apply these resources in terms of cash and development time to other aspects of GameTap's business. We pared editorial back to reinvest in the core of what GameTap is, which is digital sales, subscriptions and free ad-supported gameplay."

So is GameTap profitable and was the editorial cutback a big cost saver? Sanchez wouldn't say, but he did note that "a business plan has been presented to Turner's management... and we are hitting our P&L numbers, so whether or not we're profitable we're hitting the numbers we're supposed to hit."

Looking at GameTap's business, as Sanchez already alluded to, there are essentially three components: download to own, subscriptions and ad-supported games. But is any one component a bigger driver of revenue, and which component will drive the future of GameTap's business? "Our subscription business is the most mature," noted Sanchez. "We really only launched the free ad-supported and download to own aspects about a year ago, so [subscriptions] are our strongest area because it's our most mature area. ... We launched download to own and ad-supported because we felt the strongest play was the combination, and so by offering all three consumption opportunities you're taking all the paths possible to achieving revenue goals."

Although Sanchez would not point to any one component as the "future" of GameTap, he did acknowledge that ad-supported is definitely making waves in the industry. "We're really bullish on ad-supported, otherwise we wouldn't have invested in it as heavily as we have... but we think it would be difficult to go it alone, doing nothing but ad-supported. Offering all three revenue streams is also the best way to support our publishing partners."