Time Warner is the world’s leading multimedia conglomerate, with operations in filmed entertainment, broadcast and cable television, Internet services and print media. The company generated more than $43 billion in revenues in 2005.
Time Warner was built through a series of mergers over more than 80 years. Time, Inc. began in 1922 as a publishing company for Time magazine, which first appeared in 1923. Over the years, the company would create additional titles such as Fortune, Life, Sports Illustrated, and Money magazines. In 1965, Time entered the cable distribution business; it launched Home Box Office (HBO), a premium cable program network, in 1972.
Warner Brothers, a producer of filmed entertainment, was founded in 1923. It was home to the first talking picture, The Jazz Singer, and the production home for the animation studio Looney Tunes. Warner Bros also became a major producer of recorded music, with Atlantic Records, Elektra Records, and Reprise Records among its many labels. As television became popular in American homes, Warner Bros began producing programming for this medium, and it remains one of the leading producers of broadcast prime time as well as syndicated programming. Warner Bros entered the cable television business in 1973.
In 1989, Time merged with Warner Communications and the combined company was renamed Time Warner in 1990. This merger created the first vertically integrated media behemoth, mixing the publishing and cable system expertise of Time with the filmed entertainment – both motion picture and television – and cable networks of Warner Communications. The company continued to create new magazines and cable networks after the merger, but achieved its most significant growth in 1996 when it acquired the Turner Broadcasting System, home of several major cable networks, including CNN.
Taking the industry by surprise, America On Line (AOL) and Time Warner announced merger plans in 2000, with AOL being the lead company. This merger was proclaimed by some to be the death knell for traditional media. Another bellwether of the decline in traditional media came when AOL Time Warner sold off the Warner Music division in 2003. However, the changing fortunes of the Internet space, and AOL in particular, were evident as early as that same year, when the company removed AOL from its moniker and became simply Time Warner.
As of 2007, Time Warner had five broad product areas: filmed entertainment, television networks, cable systems, interactive services, and publishing. These were contained within seven umbrella corporate brands: AOL, HBO, New Line Cinema, Time Inc., Time Warner Cable, Turner Broadcasting System, and Warner Bros Entertainment.
Filmed entertainment included the production and distribution of theatrical motion pictures, television shows, and animated programming, as well as the distribution of syndicated television properties. Warner Bros Entertainment Group included, among many other companies, Warner Bros Pictures, Warner Bros Television Group, Warner Bros Animation (Looney Tunes and Hanna-Barbera), and the CW Network. New Line, made up of New Line Cinema and Fine Line Features, was the corporation’s independent production and distribution arm. Both of these divisions produced and distributed motion pictures as well as television programming, for both major networks and cable outlets. Prime-time programming included Without a Trace and Smallville, while syndicated hits included Friends, The Ellen Degeneres Show, and The Tyra Banks Show. Movie hits from 2005 included Harry Potter and the Goblet of Fire, Charlie and the Chocolate Factory, and Batman Begins. Releases for 2006 were less successful and included box office bombs Poseidon and Ant Bully.
The network area included broadcast, basic cable, and premium cable services. It was made up of the Turner Broadcasting System, HBO, and the CW Network. Turner Broadcasting consisted of cable networks including CNN and Headline News, TBS, TNT, Turner Classic Movies (TCM), and the Cartoon Network. Most of these had international counterparts, such as Cartoon Network Latin America and TCM Europe. HBO was the most widely distributed pay-cable service and had approximately 40 million subscribers in the US. Originally created as a purveyor of commercial-free movies, HBO became a leader in prime-time television programming, with shows such as Sex and the City, The Sopranos, and The Wire, which also became successful syndicated products. Cinemax, a second-tier movie channel, was also part of HBO. The CW was a 50–50 joint venture with CBS. This network was launched in late 2006 with a combination of programming from the former UPN and the WB networks.
Time Warner Cable was the second largest US cable provider in the United States behind Comcast. Time Warner served more than 13 million subscribers in 2007 (National Cable and Telecommunications Association). The company had 7 million digital subscribers, and 6.4 million received high-speed Internet access through the company. While the company began to roll out digital phone service, this made no rapid inroads as a significant business. In addition to providing cable service, Time Warner operated 24 hour local news channels in New York, North Carolina, and Texas.
AOL was the largest Internet access provider in the United States with more than 19 million subscribers, down from 30 million in 2001 (Holahan 2006). According to the company’s website, AOL planned to reposition itself as a global web services company in response to consumers choosing broadband services over AOL’s dial-up service. To that end, the company would offer AOL mail and AOL software to anyone with broadband
access. The intention was to take advantage of the continuing growth in online advertising. Other changes included providing innovative programming such as Gold Rush! – a 7-week interactive event produced in conjunction with Mark Burnett Productions. In addition to AOL, the company owned a number of well-known online properties including MapQuest, Moviefone and TMZ.com, an entertainment industry insider site which Time Warner planned to turn into a syndicated television program.
Time, Inc. was the leading publisher of consumer magazines and home to more than 150 titles worldwide. Time, People, Sports Illustrated, Entertainment Weekly, In Style, Fortune, Money, and Cooking Light were just some of the brand names published by this company.
According to Hoover’s, Time Warner had surmounted the debacle of the merger with AOL. While AOL subscriptions declined, the company’s restructuring and the divestiture of the music and book businesses appeared to have created a more focused institution.
References:
- Datamonitor (2006). Time Warner Inc.: Company profile. At www.marketresearch.com/vendors/ viewVendor.asp?VendorID=72, accessed July 2006.
- Holahan, C. (2006). Will less be more for AOL? BusinessWeek (July 31). At www.businessweek.com/ technology/content/jul2006/tc20060731_168094.htm, accessed February 10, 2007.
- Hoover’s Company Records (2007). At www.hoovers.com/time-warners/–ID__102518–/free-cofactsheet.xhtml, accessed October 2, 2007.
- National Cable and Telecommunications Association (2007). At www.ncta.com, accessed October 2, 2007.
- Time Warner website (2007). At www.timewarner.com, accessed October 2, 2007.