Time-Warner: A Case Study SPCM 2360 Fall 2005 Evan McLeod Megan Miller Anna Katherine Moody.

Time-Warner:Time-Warner:A Case StudyA Case Study

SPCM 2360SPCM 2360Fall 2005Fall 2005Evan McLeodEvan McLeodMegan MillerMegan MillerAnna Katherine MoodyAnna Katherine Moody

Time-WarnerTime-Warner

In January 2000, the largest merger in In January 2000, the largest merger in history took place, uniting AOL with Time-history took place, uniting AOL with Time-Warner as one powerful conglomerate. It Warner as one powerful conglomerate. It is through this union that abstract terms is through this union that abstract terms such as superbrand and synergy are such as superbrand and synergy are concretely exemplified time and time again, concretely exemplified time and time again, exposing how one company can virtually exposing how one company can virtually dominate the pop culture market.dominate the pop culture market.

Time-Warner: A HistoryTime-Warner: A History

Antecedents:Antecedents: 1903- the four Warner Brothers launch 1903- the four Warner Brothers launch

NickelodeonNickelodeon 1907- Warner Bros. establish film 1907- Warner Bros. establish film

distribution businessdistribution business 1917- First film success with 1917- First film success with My Four My Four

Year in GermanyYear in Germany 1918- The first West Coast studio on 1918- The first West Coast studio on

Sunset Boulevard opensSunset Boulevard opens


BeginningsBeginnings 1923- 1923- TimeTime is launched by Henry is launched by Henry

Luce and Britton HaddenLuce and Britton Hadden 1923- Warner Brothers 1923- Warner Brothers

incorporatedincorporated 1930- Luce’s 1930- Luce’s FortuneFortune magazine magazine

launchedlaunched 1935- Porky Pig introduced from 1935- Porky Pig introduced from

WB animation departmentWB animation department 1936- 1936- LifeLife magazine created magazine created 1937- Detective Comics (DC) 1937- Detective Comics (DC)

foundedfounded


Twilight of the American CenturyTwilight of the American Century 1947- Atlantic Records founded1947- Atlantic Records founded 1954- 1954- Sports IllustratedSports Illustrated

launchedlaunched 1957- Time-Life buys 1957- Time-Life buys

Indianapolis television stationsIndianapolis television stations 1958- Warner Bros. Records 1958- Warner Bros. Records

foundedfounded 1963- Warners closes 1963- Warners closes

animation unitanimation unit


ConglomeratesConglomerates 1967- Jack Warner sells his stake to Seven Arts for $32 million. 1967- Jack Warner sells his stake to Seven Arts for $32 million.

Seven Arts merges with WB as Warner-Seven ArtsSeven Arts merges with WB as Warner-Seven Arts 1967- Atlantic Records bought by Warner-Seven Arts1967- Atlantic Records bought by Warner-Seven Arts 1967- New Line Cinema founded1967- New Line Cinema founded 1969- Warner-Seven Arts acquired by Kinney National to become 1969- Warner-Seven Arts acquired by Kinney National to become

Warner CommunicationsWarner Communications 1970- Warner Comm. Buys Elecktra Records1970- Warner Comm. Buys Elecktra Records 1972- Time buys out Charles Dolan from HBO cable tv network, 1972- Time buys out Charles Dolan from HBO cable tv network,

Dolan establishes CablevisionDolan establishes Cablevision 1972- 1972- MoneyMoney launched launched 1972- 1972- LifeLife ceases ceases


1974- People Launched1974- People Launched 1976- Turner buys the Atlanta Braves1976- Turner buys the Atlanta Braves 1977- Turner buys the Atlanta Hawks1977- Turner buys the Atlanta Hawks 1978- Time buys cable operator American Televisions and 1978- Time buys cable operator American Televisions and

CommunicationsCommunications 1979- American Express buys half of Warner Communications 1979- American Express buys half of Warner Communications

cable subsidiary Warner Cable for $175 million, forming Warner-cable subsidiary Warner Cable for $175 million, forming Warner-Amex Cable CommunicationsAmex Cable Communications

1979- Turner Communications Group becomes Turner 1979- Turner Communications Group becomes Turner Broadcasting SystemBroadcasting System

1980- CNN, the world’s first 24-hour all-news network starts1980- CNN, the world’s first 24-hour all-news network starts 1982- Tri-Star Pictures is formed by CBS, HBO, and Columbia 1982- Tri-Star Pictures is formed by CBS, HBO, and Columbia

PicturesPictures 1985- Quantum Computer Services formed, later renamed AOL1985- Quantum Computer Services formed, later renamed AOL 1985- Warner pays $450 million for American Express stake in 1985- Warner pays $450 million for American Express stake in

Warner-Amex cable operationsWarner-Amex cable operations


The Turner SyndromeThe Turner Syndrome 1986- Turner buys rights to 1986- Turner buys rights to

MGM film libraryMGM film library 1989- Time Warner created 1989- Time Warner created

with Time’s acquisition of with Time’s acquisition of Warner CommunicationsWarner Communications

1989- Quantum renamed 1989- Quantum renamed America OnLineAmerica OnLine

1990- 1990- Entertainment WeeklyEntertainment Weekly launchedlaunched


Life OnlineLife Online1994- TBS, Castle Rock and New Line 1994- TBS, Castle Rock and New Line

Cinemas mergeCinemas merge1994- AOL reaches 1 million subscribers1994- AOL reaches 1 million subscribers1996- Time Warner takes over Turner 1996- Time Warner takes over Turner

Broadcasting SystemBroadcasting System1996- AOL launched in UK, Canada and 1996- AOL launched in UK, Canada and

FranceFrance


AOL Time-Warner MergerAOL Time-Warner Merger

2000- AOL merges with Time-Warner2000- AOL merges with Time-Warner

2000- Frankel releases Gnutella2000- Frankel releases Gnutella

2002- AT&T sells stake in Time Warner Cable2002- AT&T sells stake in Time Warner Cable

2002- AOLTW buys 15.3% of VIVA Media from 2002- AOLTW buys 15.3% of VIVA Media from EMIEMI

2003- AOL dropped from AOL Time-Warner 2003- AOL dropped from AOL Time-Warner corporate namecorporate name

Time-Warner: CompaniesTime-Warner: Companies

A pioneer in the cable industry, Time A pioneer in the cable industry, Time Warner Cable owns or manages cable Warner Cable owns or manages cable systems serving subscribers in 27 systems serving subscribers in 27 statesstates

10.9 million subscribers as of June 30, 10.9 million subscribers as of June 30, 20052005

5.1 million digital subscribers as of 5.1 million digital subscribers as of June 30, 2005June 30, 2005

Time Warner continues is aggressive Time Warner continues is aggressive rollout of Digital Video, High Definition rollout of Digital Video, High Definition TV (HDTV), Digital Video Recorders TV (HDTV), Digital Video Recorders (DVR), Video on Demand (VOD) and (DVR), Video on Demand (VOD) and wireless home networkingwireless home networking

TIME WARNER CABLE


HBO– with its two 24-hour HBO– with its two 24-hour premium television services, premium television services, HBO and Cinemax– is HBO and Cinemax– is America’s most successful America’s most successful premium television networkpremium television network

Approximately 39 million HBO Approximately 39 million HBO and Cinemax subscribers as of and Cinemax subscribers as of Dec. 31, 2004Dec. 31, 2004

HBO is the most watched pay HBO is the most watched pay service in the US– offering service in the US– offering original series, HBO film original series, HBO film presentations, Hollywood presentations, Hollywood blockbusters, documentaries, blockbusters, documentaries, concerts and championship concerts and championship boxingboxing

HOME BOX OFFICE


Turner Broadcasting is a global Turner Broadcasting is a global portfolio of focused entertainment, portfolio of focused entertainment, animation and news businesses and animation and news businesses and brands that are leaders in their brands that are leaders in their segmentssegments

Approximately 90 million US Approximately 90 million US households watch TBS, as of Sept. households watch TBS, as of Sept. 20052005

9 million videos are served on 9 million videos are served on CNN.com on Aug. 29, 2005CNN.com on Aug. 29, 2005

Brands owned by Turner include: Brands owned by Turner include: Atlanta Braves, Cartoon Network, Atlanta Braves, Cartoon Network, CNN, TBS, PGA.com, TNT, Turner CNN, TBS, PGA.com, TNT, Turner Classic Movies, NASCAR.com and Classic Movies, NASCAR.com and Turner South, NBC/TurnerTurner South, NBC/Turner

TURNER BROADCASTING


New Line Cinemas is the most New Line Cinemas is the most successful independent film company successful independent film company in the world. Its mission is to produce in the world. Its mission is to produce innovative, popular and profitable innovative, popular and profitable entertainmententertainment

It rang up $2.9 billion dollars at the It rang up $2.9 billion dollars at the box office for the Lord of the Rings box office for the Lord of the Rings TrilogyTrilogy

It recently produced hits like Elf, The It recently produced hits like Elf, The Notebook, Wedding Crashers and Notebook, Wedding Crashers and Monster-in-LawMonster-in-Law

In 2005, New Line and HBO formed In 2005, New Line and HBO formed Picturehouse, a new film distribution Picturehouse, a new film distribution company dedicated to the production company dedicated to the production and distribution of quality specialized and distribution of quality specialized films.films.

NEW LINE CINEMA


Warner Bros. has a stronghold in the Warner Bros. has a stronghold in the entertainment business, with a grasp on entertainment business, with a grasp on feature films, television, home video/DVD, feature films, television, home video/DVD, animation, comic books, interactive games, animation, comic books, interactive games, product and brand licensing and product and brand licensing and international cinemas and broadcastinginternational cinemas and broadcasting

Warner Bros. Pictures earned $3.41 billion Warner Bros. Pictures earned $3.41 billion at the box office in 2004at the box office in 2004

Warner Bros. Pictures earned nine Warner Bros. Pictures earned nine Academy Awards in 2005Academy Awards in 2005

WB TV was the leading supplier of WB TV was the leading supplier of primetime programming for the 2004-2005 primetime programming for the 2004-2005 seasonseason

WB TV reaches 92% of all US households. WB TV reaches 92% of all US households. Its core demographic is 12-34 year olds, Its core demographic is 12-34 year olds, targeting first-time buyers in order to create targeting first-time buyers in order to create brand loyaltybrand loyalty

WARNER BROS. ENTERTAINMENT


Time owns 155 consumer Time owns 155 consumer magazines around the world, magazines around the world, representing all different representing all different interests– news, sports, interests– news, sports, fashion, business, fashion, business, entertainment and regionalentertainment and regional

Time, Inc. generated $5.565 Time, Inc. generated $5.565 billion in revenues in 2004billion in revenues in 2004

Brands include: Elle, Brands include: Elle, Entertainment Weekly, Fortune, Entertainment Weekly, Fortune, In Style, Life, Southern Living, In Style, Life, Southern Living, Sports Illustrated, Teen People, Sports Illustrated, Teen People, People, Time, Southern People, Time, Southern Accents, Essence, Coastal Accents, Essence, Coastal Living and Little, Brown and Living and Little, Brown and CompanyCompany

TIME, INC.


AOL had approximately 20 million users as of AOL had approximately 20 million users as of June 2005, making it the US’s leading internet June 2005, making it the US’s leading internet service providerservice provider

Each day, over 2.5 billion instant messages are Each day, over 2.5 billion instant messages are sent over AOL’s messaging networkssent over AOL’s messaging networks

AOL is the second largest online network, AOL is the second largest online network, operating Web brands such as AIM, MapQuest, operating Web brands such as AIM, MapQuest, Moviefone and NetscapeMoviefone and Netscape

AMERICA ONLINE

Time-Warner: BrandingTime-Warner: Branding

Time-Warner is responsible for hundreds of Time-Warner is responsible for hundreds of brands. Each brand and company has a brands. Each brand and company has a different function in the conglomerate, different function in the conglomerate, therefore a different brand image. Branding is therefore a different brand image. Branding is an on going process with this many companies. an on going process with this many companies. Many have achieved a sort of fetishism of Many have achieved a sort of fetishism of commodities; however, others are still trying to commodities; however, others are still trying to gain mainstream recognition, and every once gain mainstream recognition, and every once in a while, the well-established brands have to in a while, the well-established brands have to revamp their images.revamp their images.

Time-Warner: BrandingTime-Warner: Branding

According to a Time-Warner press release regarding According to a Time-Warner press release regarding AOL:AOL:

“ “Want a better Internet?” That’s the question Want a better Internet?” That’s the question America Online will be asking in a new brand campaign America Online will be asking in a new brand campaign starting Thursday, October 7, 2004. The starting Thursday, October 7, 2004. The comprehensive new advertising campaign is intended comprehensive new advertising campaign is intended to reposition America Online as the service that is truly to reposition America Online as the service that is truly on the side of the online consumer. It begins with print on the side of the online consumer. It begins with print ads in leading newspapers that outline AOL’s ads in leading newspapers that outline AOL’s commitments to its members. AOL also announced commitments to its members. AOL also announced today the first redesign of its logo since 1991, which today the first redesign of its logo since 1991, which among other things gives the familiar triangle a more among other things gives the familiar triangle a more up-to-date look.up-to-date look.

Time-Warner: SynergyTime-Warner: Synergy

The $163 billion dollar merger combined one of The $163 billion dollar merger combined one of the most successful brands of internet service the most successful brands of internet service provider with the world’s largest entertainment provider with the world’s largest entertainment company, making AOL Time-Warner one of the company, making AOL Time-Warner one of the most powerful conglomerates in the world. most powerful conglomerates in the world. This merger was the first purchase of a major This merger was the first purchase of a major media company by an internet company.media company by an internet company.

According to AOL CEO Steve Case, “No According to AOL CEO Steve Case, “No company will be better equipped to capitalize company will be better equipped to capitalize on the convergence of media, entertainment on the convergence of media, entertainment and communications.”and communications.”


““A really great example of synergy that I’ve been A really great example of synergy that I’ve been talking about is the WB magazine in front of you…This talking about is the WB magazine in front of you…This magazine will be a supplement in the Sept. 21magazine will be a supplement in the Sept. 21stst edition edition of the LA Times. This represents a real of the LA Times. This represents a real accomplishment– synergy you can actually hold in your accomplishment– synergy you can actually hold in your hands. Produced in-house, promoted on-air at KTLA hands. Produced in-house, promoted on-air at KTLA and distributed by the LA Times, this will go out to and distributed by the LA Times, this will go out to almost a million and a half homes. From putting almost a million and a half homes. From putting program promotion in the hands of viewers to driving program promotion in the hands of viewers to driving younger readers to the newspaper, this is something younger readers to the newspaper, this is something the company is very excited about.”the company is very excited about.”

-Pat Mullen-Pat Mullen President/Tribune President/Tribune

BroadcastingBroadcasting


Headline from CNET New.comHeadline from CNET New.com

Nov. 13, 2005Nov. 13, 2005

““AOL says ‘Welcome Back’ to old TV shows”AOL says ‘Welcome Back’ to old TV shows”

America Online early next year will begin offering America Online early next year will begin offering free access to popular vintage television shows free access to popular vintage television shows through video-on-demand under an agreement through video-on-demand under an agreement with Warner Bros., another division of Time-with Warner Bros., another division of Time-Warner.Warner.


According to Robert McChesney, author of According to Robert McChesney, author of Rich Media, Rich Media, Poor Democracy: Communication Politics and Dubious Poor Democracy: Communication Politics and Dubious Times, Times, after the AOL Time-Warner merger “it is now after the AOL Time-Warner merger “it is now clear that the Internet will probably not spawn any new clear that the Internet will probably not spawn any new commercially viable media entities; the media giants commercially viable media entities; the media giants will rule the roost. Indeed, the Internet is encouraging will rule the roost. Indeed, the Internet is encouraging even greater media concentration, not to mention even greater media concentration, not to mention convergence.”convergence.”

The merger between the two companies just ensured The merger between the two companies just ensured greater saturation of their brands and products in every greater saturation of their brands and products in every media facet, allowing them to plug different brands media facet, allowing them to plug different brands through one another creating total market domination.through one another creating total market domination.

Time-Warner: LinksTime-Warner: Links

Time Warner - Time Warner - Newsroom – BrandingNewsroom – Branding Robert Robert McChesneyMcChesney CompaniesCompanies Timeline of Time-WarnerTimeline of Time-Warner SynergySynergy SynergySynergy

Time-Warner: SourcesTime-Warner: Sources

Kupta.net, (n.d.). Kupta.net media profiles: time warner. Retrieved Dec. Kupta.net, (n.d.). Kupta.net media profiles: time warner. Retrieved Dec. 07, 2005, from http://www.ketupa.net/time3.htm.07, 2005, from http://www.ketupa.net/time3.htm.

McChesney, R. (2000). The titanic sails on. Retrieved Dec. 01, 2005, from McChesney, R. (2000). The titanic sails on. Retrieved Dec. 01, 2005, from http://www.fair.org/extra/0003/aol-mcchesney.html.http://www.fair.org/extra/0003/aol-mcchesney.html.

Mills, E. (2005). Aol says 'welcome back' to old tv shows. Retrieved Dec. Mills, E. (2005). Aol says 'welcome back' to old tv shows. Retrieved Dec. 01, 2005, from News.com Web site: 01, 2005, from News.com Web site: http://news.com.com/AOL+says+Welcome+back+to+old+TV+shows/2100http://news.com.com/AOL+says+Welcome+back+to+old+TV+shows/2100-1026_3-5950149.html.-1026_3-5950149.html.

Sarfaty, R. (2004). America onlime launches new branding campaign. Sarfaty, R. (2004). America onlime launches new branding campaign. Retrieved Dec. 07, 2005, from TimeWarner Web site: Retrieved Dec. 07, 2005, from TimeWarner Web site: http://www.timewarner.com/corp/print/0,20858,710804,00.html.http://www.timewarner.com/corp/print/0,20858,710804,00.html.

Time-Warner, (n.d.). Retrieved Dec. 04, 2005, from TimeWarner Time-Warner, (n.d.). Retrieved Dec. 04, 2005, from TimeWarner Businesses Web site: http://www.timewarner.com/corp/businesses/detail/.Businesses Web site: http://www.timewarner.com/corp/businesses/detail/.

Tribune Company, (2003). Merrill lynch media & entertainment Tribune Company, (2003). Merrill lynch media & entertainment conference. Retrieved Dec. 01, 2005, from conference. Retrieved Dec. 01, 2005, from http://www.tribune.com/investors/transcripts/merrilllynch_03.html.http://www.tribune.com/investors/transcripts/merrilllynch_03.html.

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Time-Warner: A Case Study SPCM 2360 Fall 2005 Evan McLeod Megan Miller Anna Katherine Moody.

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