Tag Archives: aol

Time Warner

Posted on by 
Lizzie Michael and Andrew Maercklein
Time Warner, Inc. logo

Time Warner, Inc. logo [1]

Time Warner, Inc.

One Time Warner Center
New York, NY 10019-8016
212-484-8000

Company

Time Warner, Inc. is an entertainment and media conglomerate whose works and influence reaches all over the world. First created in 1989 in a $14 billion merger between Time, Inc. and Warner Communications, Time Warner now owns magazines such as Time, People, and Sports Illustrated; HBO, The CW, and Cinemax, as well as the Turner Broadcasting System, which in turn holds networks such as TBS, CNN and Cartoon Network; DC Comics; and one of the world’s largest production companies, Warner Brothers Entertainment. [2] [3].

Some of Time Warner's assets. [4]

Some of Time Warner’s assets. [4]

The company has undergone a few trouble spots in the past, including a $164 deal with AOL in the year 2000. [5]. The deal, which eventually proved to be misguided and led to major financial losses in 2002, was said to be “the biggest mistake in corporate history” by current CEO and Chairman Jeff Bewkes. [6]. That being said, Time Warner has since rebouded and is currently enjoying success from several of its assets, including HBO and Warner Brothers, and is looking forward to the completion of an acquisition, with a total transaction value of
$108.7 billion, with AT&T. [7].

Who are some key executives?

Financial information

Time Warner is a publicly traded company on the NYSE under the ticket TWX. As of 11/17/16, their current stock price is $93.20, as compared to one of their primary competitors, Walt Disney Co., who is at $98.82. [9]. On Oct. 27 the company announced cash dividends for Common Stock at $0.4025 per share, with a record date of Nov. 30. and a payment date of Dec. 15. [10] [11]. Thanks in part to the AT&T announcement, Time Warner’s stock has been on the upswing, having increased nearly 22.07% since April 2016; additionally, about 67% of analysts covering Warner’s stock rate this as a good time to buy. [11].

TW revenues and earnings per share [12]

TW revenues and earnings per share [12]

In Warner’s 3rd quarter reports for 2016, total revenues for Turner, HBO, and Warner Broadcasting combined were at more than $7 billion, and there was an increase of $153 million in cash and cash equivalents. [13]. With the recently released Fantastic Beasts and Where to Find Them and HBO’s Westworld recently having success, revenues from ticket sales and merchandising for Time Warner can be expected to increase in 2016’s 4th quarter, and should give the company a strong year-end yield. [14].

Warner Brothers

Warner Bros. Logo [14]

Warner Bros. Logo [15]

Warner Bros., which was founded in 1923 and notably produced the first “talkie” in 1927’s The Jazz Singer, is one of the largest production companies in the world, with both New Line Cinema and DC Films in its toolbox. [16]. In 2015, Warner Bros.’ worldwide box office receipts exceeded $3 billion for the ninth consecutive year ($3.71 billion worldwide), and saw both international and domestic reaching the billions. [17].

[18]

The company houses several major franchises, including the Matrix series, the Harry Potter Franchise, and the world of DC Comics. In 2016 alone, multiple films were released to massive success, including Batman v Superman: Dawn of Justice, Sully, Suicide Squad, and Fantastic Beasts and Where to Find Them. Suicide Squad was in theaters for an impressive 14 weeks and earned more than $700 million worldwide, while Fantastic Beasts has been open for less than two weeks and has already made nearly $500 million. [19] [20].

This success will likely carry into 2017, as Wonder Woman, Justice League, and two more animated Lego movies are all slated for wide release. [21].

Machinima's logo [23].

Machinima’s logo [22]

In news besides its releases, Warner Bros. also recently announced it will acquire Machinima, a “global programming service and production company” with a focus on gamer culture. [23]. The deal, which was estimated to be just slightly under $100 million, will allow Machinima to be its own entity within the Warner Bros. Digital Networks. [24].

HBO

HBO logo [31]

HBO logo [31]

Home Box Office, or HBO, is one of Time Warner’s most successful divisions. In terms of its financial performance, in the 2016 third quarter HBO’s revenues increased 4%, or $59 million, to $1.4 billion due to a 5% increase in subscription revenues. [12].

HBO’s content has gone over incredibly well with viewers. HBO took home 22 Primetime Emmys at the 2016 Emmy Awards, the most of any other network for the 15th year in a row. [12] [29]. Shows such as Veep, Game of Thrones, and Last Night with John Oliver all have loyal fan bases, while newcomer Westworld premiered in October 2016 to more than 13 million viewers. [12].

In other news, HBO just recently launched a new video streaming service in Spain, HBO España, that is expected to very well. The service offers both original HBO content, as well as films and programming from other networks as well, like Disney, Nickelodeon, and other Spanish programming. [30].

AT&T Merger

Click here for AT&T and Time Warner Merger (Video): http://nyti.ms/2exY5SK [27]

AT&T is looking to purchase Time Warner, Inc. in a $85 billion deal, and despite many setbacks, AT&T is confident the deal will go through. [25]. Were the FCC to oversee this deal, the time frame would have been elongated and the deal itself would be much less likely to go into effect. However, it is likely the deal will not be subject to the tight restrictions set by the FCC, as the FCC may be excluded from the process and the decision will be made by the Department of Justice. Randall L. Stephenson, the CEO of AT&T, is very optimistic regarding this scenario and said this deal will satisfy not only those looking for earnings growth, but also investors that are simply searching for income. [27]. However, this deal will cause AT&T to push its debt upwards of $190 billion. [27]. The average user of DirecTV Now will pay $35 per month, which translates to $1.32 gross margin, and despite an apparent lack of funding, there are expected to be approximately 15 million paid subscribers by 2020. [26].

AT&T logo []

AT&T logo [28]

Many investors are skeptical of the deal and doubt the level of success predicted by AT&T. AT&T, being the only company of its competitors to move in this direction, will be able to corner a large section of the market before anyone else. Through securing customers with a low price now, AT&T hopes to attract many more consumers in the future while still being able to raise the price of service as necessary. [26]. Furthermore, AT&T wants to boost their wireless business in an attempt to take back some of the market from other wireless companies. They plan to do this by allowing wireless users to watch DirecTV without using data. This is known as zero-rating and it’s frowned upon by the FCC because it would allow for AT&T to reduce competition, especially among its own assets. [25]. Between the low prices as well as other incentives to switch, AT&T is focused on increasing its consumer following as opposed to generating revenue. Revenue will theoretically be the focus after AT&T has accrued a mass following. In addition, it’s predicted there will be less subscription cancellations as well as a large boost in advertising revenue. [25]. Should the deal be successful, it will be one of the largest to date and will push AT&T further ahead of competitors. Should the deal not be approved, or even fail, AT&T will have to tread very carefully to avoid serious damage to the company’s finances, as well as the integrity of the company.

 [27]

Resources

[1] Time Warner Cables Customer Service Phone Number, Office Address, Toll Free Helpline Support. Retrieved November 27, 2016. http://www.officeaddresshelplinenumber.com/time-warner-cables-customer-service-phone-number-office-address-toll-free-helpline-support/

[2] The Creator of Time Warner, Steven J. Ross, Is Dead at 65. Retrieved November 27, 2016. http://www.nytimes.com/1992/12/21/obituaries/the-creator-of-time-warner-steven-j-ross-is-dead-at-65.html

[3] Top 3 Companies Owned By Time Warner (TWX). Retrieved November 27, 2016. http://www.investopedia.com/articles/markets/102215/top-3-companies-owned-time-warner.asp

[4] Company Profile. Retrieved November 27, 2016. http://www.timewarner.com/company

[5] Statistics on Mergers. Retrieved November 27, 2016. https://web.archive.org/web/20120106045040/http://www.imaa-institute.org/statistics-mergers-acquisitions.html

[6] AOL merger was ‘the biggest mistake in corporate history’, believes Time Warner chief Jeff Bewkes. Retrieved November 27, 2016. http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/8031227/AOL-merger-was-the-biggest-mistake-in-corporate-history-believes-Time-Warner-chief-Jeff-Bewkes.html

[7] AT&T to Acquire Time Warner. Retrieved November 27, 2016. http://about.att.com/story/att_to_acquire_time_warner.html

[8] Senior Corporate Executives. Retrieved November 27, 2016. http://www.timewarner.com/company/management/senior-corporate-executives

[9] TWX: NY. Retrieved November 27, 2016. https://www.bloomberg.com/quote/TWX:US

[10] Time Warner Declares Regular Quarterly Cash Dividend. Retrieved November 27, 2016. http://www.timewarner.com/newsroom/press-releases/2016/10/27/time-warner-declares-regular-quarterly-cash-dividend

[11] Dividend Action: Time Warner Inc. (NYSE:TWX) advises to “Mark your calendars” for Dec 15, 2016; dividends expected to reach $0.40. Retrieved November 27, 2016. http://friscofastball.com/2016/11/27/dividend-action-time-warner-inc-nysetwx-advises-to-mark-your-calendars-for-dec-15-2016-dividends-expected-to-reach-0-40/

[12] Time Warner Inc. Revenue & Earnings Per Share (EPS). Retrieved November 27, 2016. http://www.nasdaq.com/symbol/twx/revenue-eps

[13] Earnings Releases & Related Materials. Retrieved November 27, 2016. http://ir.timewarner.com/phoenix.zhtml?c=70972&p=quarterlyearnings

[14] Weekend Box Office: November 25-27, 2016. Retrieved November 27, 2016. http://www.boxofficemojo.com/weekend/chart/

[15] Warner Bros. Logo Design Evolution. Retrieved November 28, 2016. http://annyas.com/screenshots/warner-bros-logo/

[16] Warner Bros. Entertainment Inc. Retrieved November 28, 2016. http://www.warnerbros.com/studio/divisions/warner-bros-entertainment-inc

[17] Warner Bros. Pictures. Retrieved November 28, 2016. http://www.warnerbros.com/studio/divisions/warner-bros-pictures

[18] Fantastic Beasts and Where to Find Them – Final Trailer [HD]. Retrieved November 28, 2016. https://www.youtube.com/watch?v=Vso5o11LuGU

[19] Box Office Mojo: Suicide Squad. Retrieved November 28, 2016. http://www.boxofficemojo.com/movies/?id=dc2016.htm

[20] Box Office Mojo: Fantastic Beasts and Where to Find Them. Retrieved November 28, 2016. http://www.boxofficemojo.com/movies/?id=fantasticbeasts.htm

[21] Warner Bros., Quietly Thriving, Recasts Its Own Story. Retrieved November 28, 2016. http://www.nytimes.com/2016/11/08/business/media/warner-bros-quietly-thriving-recasts-its-own-story.html

[22] Machinima. Retrieved November 28, 2016. http://www.machinima.com/

[23] Warner Bros. Entertainment to Acquire Machinima. Retrieved November 28, 2016.  http://www.warnerbros.com/studio/news/warner-bros-entertainment-acquire-machinima

[24] Warner Bros. Acquires Full Control of Machinima. Retrieved November 28, 2016. http://variety.com/2016/digital/news/warner-bros-acquires-machinima-1201920793/

[25] McAlone, Nathan. “Here’s Why AT&T Is Buying Time Warner, and Why It Thinks the Government Can’t Stop the Sale.” Business Insider. Business Insider, Inc, 15 Nov. 2016. Web. 28 Nov. 2016. http://www.businessinsider.com/att-time-warner-merger-government-regulation-2016-11

[26] Molla, Rani, and Shira Ovide. “AT&T Plays It Forward.” Bloomberg.com. Bloomberg, 23 Nov. 2016. Web. 28 Nov. 2016. https://www.bloomberg.com/gadfly/articles/2016-11-23/at-t-wants-digital-video-share-with-direct-tv-now

[27] Morgenson, Gretchen. “The AT&T-Time Warner Merger: A Match Built on Hope.” The New York Times. The New York Times, 28 Oct. 2016. Web. 28 Nov. 2016.  http://www.nytimes.com/2016/10/30/business/the-att-time-warner-merger-a-match-built-on-hope.html?_r=0

[28] LLC, UnderConsideration. “Reviewed.” Brand New: New Logo and Identity for AT&T by Interbrand. N.p., n.d. Web. 28 Nov. 2016.  http://www.underconsideration.com/brandnew/archives/new_logo_and_identity_for_att_by_interbrand.php#.WDyz-6IrL_Q

[29] How FX Broke HBO’s Grip on the Emmy Awards. Retrieved November 28, 2016. http://fortune.com/2016/09/19/emmy-awards-2016-hbo-fx/

[30] HBO Launches in Spain, Adds Content from Disney, Nickelodeon. Retrieved November 28, 2016. http://variety.com/2016/biz/global/hbo-espana-spain-disney-nickelodeon1201927778-1201927778/

[31] HBO Logos. Retrieved November 28, 2016. https://www.homeboxoffice.com/lodging/cmp/logos.html

AOL

Posted on by 
Laura Sanfilippo

Source: corp.aol.com

Source: AOL [20]

770 Broadway

New York, NY

10003

212-206-4400

KEY EXECUTIVES

CEO Tim Armstrong Source: corp.aol.com/leader/tim-armstrong

CEO Tim Armstrong
Source: Corp AOL [1]

President AOL Inc. and Executive VP Bob Lord Source: corp.aol.com/leader/bob-lord

President AOL Inc. and Executive VP Bob Lord
Source: AOL [3]

CFO and Executive VP Holly Hess Source: corp.aol.com/leader/holly-hess

CFO and Executive VP Holly Hess
Source: AOL [2]

Overview

America Online started out as an Internet service provider and has since become a multifaceted Internet giant. America Online is probably most known for its iconic “You’ve got mail” and for its email and instant messaging services, but it is so much more. Not only does AOL provide these more well known services, but it also produces original content, creates apps and continues to grow. The AOL Huffington Post Media Group (AOL HPMG) has over 350 million monthly consumers and consists of 56 sites, including The Huffington Post, Cambio, Moviefone, Mapquest, Engadget, and TechCrunch that lead in news, entertainment, digital, and community content [4]. The AOL HPMG has over 9,000 bloggers including celebrities and politicians, like Aaron Sorkin and Neil Young, who discuss topics making headlines today. The sites combine journalism, technology, engagement and video across all platforms[4]. Today the AOL HPMG is owned by Verizon with whom they continue to grow[4].

History

America Online is an online platform that offers many different services, such as email, apps, video, and blogs that serves millions of people and has continued to grow since its origin. America Online was founded originally in 1985 with the name Quantum Computer Services by Steve Case [5]. It’s name was officially changed to America Online (AOL) in 1991[4]. Soon after, an instant messaging service and AOL’s classic “You’ve got mail” notification were launched [6]. In 1994 AOL hit one million users and began using advertisements within its service. No more than two years later it hit five million subscribers [7]. In 2011 AOL purchased the Huffington Post to form the AOL Huffington Post Media Group and it has continued to grow, buying services like Moviefone and Netscape, and Mapquest [4]. In early 2015 AOL was acquired by Verizon in an over four billion dollar acquisition [8].

AOL Originals

Citizen Mars Source: engadget.com

Citizen Mars Source: Engadget [22]

Source: Deadline.com

Making A Scene Source: Deadline [23]

Source: aoladvertising.com

Park Bench Source: AOL Advertising [24]

In addition to providing various online services, AOL also produces original content from some of the biggest names in Hollywood. AOL’s originals appeal to a wide variety of users because there is something for everyone. Currently in AOL’s library of originals are reality series spanning from #Candidly Nicole, a series following Nicole Richie, based off her Twitter feed, Citizen Mars, a series that follows the finalists for the one way mission to mars, and True Trans which follows trans musician Laura Jane Grace and other members of the trans community [9]. Also in their catalog are series from James Franco and Steve Buscemi. James Franco’s series “Making a Scene” is in it second season where Franco and his team take famous movies, and scenes and recreate them through Franco’s imagination [9]. Steve Buscemi’s acclaimed series “Park Bench With Steve Buscemi,” is a non fiction series hosted by, you guessed it, Steve Buscemi. He sits on a park bench and talks to a wide variety of guests including, Kenan Thompson, and Gilbert Gottfried [10]. The series was nominated for an Emmy in 2014 for Outstanding Short-Form Nonfiction Program [9]. This is only the cusp of AOL’s original content. Their library also includes comedy shows, shows about food, cars, and even ballet [9]. Everyone can find something for them on AOL originals.

Financials

AOL released its last financial update on May 8, 2015 [11]. Though not in the last few months, It contains all of AOL’s first quarter 2015 financial information. In this quarter AOL had a 12% increase in its advertising revenue, going from $433.4 million in the last quarter of 2014 to $483.5 million in the first quarter of 2015 [11]. Additionally, their price for global advertising has increased 10% [11]. These are both important because it is becoming harder and harder to reach people via advertising. If the price for advertising is going up, one can assume that AOL’s advertising strategies are effective. AOL has overall had a successful first quarter with an increased total revenue of 7% going from $583.3 million in the last quarter of 2014 to $625.1 million in the first quarter of 2015 [11].

What’s New

In the past few months AOL has launched a number of new originals and services. In October, Jared Leto’s new series launched on Build called “Beyond the Horizon” which talks about the future of humanity and will have guests such as former Vice President Al Gore and author of The Martian Andy Weir [12].

Source: AOL Advertising advertising.aol.com

Beyond The Horizon Source: AOL Advertising [25]

Earlier this month AOL launched their new series on AOL.com called “Act Like A Musician” which brings together musicians and actors to talk about their passion and create music [13]. Danny Masterson, of “That 70s Show” fame, and The Strokes Albert Hammond Jr. join in the first episode to perform music and talk about their careers [14]. The series, which is currently in its third week, will be a limited run and end after six weeks [13].

In the recent months AOL has also launched various new apps and acquired thousands more. To target millennial users they launched the app “Kanvas” in late October [15]. The app is like a combination of Periscope and Snapchat [15]. It is similar to Snapchat in the sense that you can put filters and effects on your videos, but hopes to outdo the live streaming services, like Meerkat and Periscope, by not removing live streams after periods of time [15].

Source: Entrepreneur entrepreneur.com

Kanvas Source: Entrepreneur [15]

In addition to creating a new app, AOL acquired Millennial Media granting them access to over 65 thousand apps and allowing them to reach over one billion global users [16]. It will also make available more advertising across ONE, AOL’s advertising service, by AOL [17], [27].

In September AOL launched LIVE by AOL which is a start to finish service for live events [18]. These productions will be distributed through AOL’s various channels such as Tech Crunch and The Huffington Post [18].

In October AOL went back to its email roots and relaunched ALTO, a service that puts all of your email accounts, be that Gmail or AOL, in one place [19]. ALTO has a dashboard, and many other features, to find the most important things among your email accounts [19]. The goal of ALTO is to make using email on your mobile device more user friendly.

ALTO

Source: ALTO [26]

Wrap Up

In the past few months AOL has launched a number of new programs, videos, and made strategic acquisitions that gives it a leg up in the world we live in today. Its wide variety of online shows appeal to mass audiences. Its new app and newly launched shows appeal again to a wide crowd and specifically to the millennial generation. Its successful financial quarter will help AOL continue to grow. 

[1] Corporate AOL. “Tim Armstrong.” Retrieved November 30, 2015. http://corp.aol.com/leader/tim-armstrong

[2] Corporate AOL. “Holly Hess.” Retrieved November 30, 2015. http://corp.aol.com/leader/holly-hess

[3] Corporate AOL. “Bob Lord.” Retrieved November 30, 2015. http://corp.aol.com/leader/bob-lord

[4] Corporate AOL. “AOL has a strong strategy, a clear mission and a firm commitment to delivering value.” Retrieved November 30, 2015. http://corp.aol.com/about-aol/overview

[5] Time. “A Brief Guide to the Tumultuous 30-Year History of AOL.” Retrieved November 30, 2015. http://time.com/3857628/aol-1985-history/

[6] The Washington Post. “25 Years of AOL: A Timeline.” Retrieved November 30, 2015. http://www.washingtonpost.com/wp-dyn/content/article/2010/05/23/AR2010052303551.html

[7] CNBC. “Timeline: AOL Through the Years.’ Retrieved November 30, 2015. http://www.cnbc.com/2015/05/12/timeline-aol-through-the-years.html

[8] CNN Money. “Verizon Buys AOL for $4.4 Billion.” Retrieved November 30, 2015. http://money.cnn.com/2015/05/12/investing/verizon-buys-aol/

[9] AOL. On. “Shows” Retrieved November 30, 2015. http://on.aol.com/shows

[10] AOL. On. “Park Bench” Retrieved November 30, 2015. http://on.aol.com/parkbench

[11] AOL Financial Information. “Q1 2015 Earnings Presentation.” Retrieved November 30, 2015. http://ir.aol.com/phoenix.zhtml?c=147895&p=quarterlyearnings

[12] Beyond the Horizon. “Beyond the Horizon.” Retrieved November 30, 2015. http://www.aol.com/beyondthehorizon/

[13] AOL Press Releases. “Act Like a Musician Premieres on AOL.com.” Retrieved November 30, 2015. http://corp.aol.com/2015/11/16/act-like-a-musician-premieres-on-aol-com/

[14] Act Like A Musician. “S1E1.” Retrieved November 30, 2015. http://www.aol.com/actlikeamusician/519231493/

[15] Entrepreneur. “AOL Launches Live Streaming App That’s Part Periscope, Part Snapchat.” Retrieved November 30, 2015. http://www.entrepreneur.com/article/252218

[16] TechCrunch. “AOL Confirms It’s Buying Millennial Media in $238M Deal To Expand Mobile Ads.” Retrieved November 30, 2015. http://techcrunch.com/2015/09/03/aol-acquires-millennial-media/

[17] Business Wire. “AOL to Deepen Its Programmatic Leadership with Agreement to Acquire Millennial Media.” Retrieved November 30, 2015. http://www.businesswire.com/news/home/20150903005064/en/AOL-Deepen-Programmatic-Leadership-Agreement-Acquire-Millennial

[18] AOL Press Releases. “AOL Launches LIVE by AOL.” Retrieved November 30, 2015. http://corp.aol.com/2015/09/28/aol-launches-live-by-aol/

[19] AOL Press Releases. “AOL Launches ALTO.” Retrieved November 30, 2015. http://corp.aol.com/2015/10/28/aol-launches-alto/

[20] AOL. “AOL. image” Retrieved November 30, 2015. http://corp.aol.com/

[21] Science Borealis. “America Online image.” Retrieved November 30, 2015. http://blog.scienceborealis.ca/youve-got-mail-and-everything-else-whats-a-science-blogger-to-do/

[22] Engadget. “Citizen Mars.” Retrieved November 30, 2015. http://www.engadget.com/citizen-mars/

[23] Deadline. “Hot Trailer: James Franco’s AOL Comedy Series Makes a Scene.” http://deadline.com/2014/09/james-franco-aol-trailer-scott-haze-ahna-oreilly-832391/

[24] AOL Advertising. “AOL Originals Releases Season 2 of ‘Park Bench with Steve Buscemi.'” Retrieved November 30, 2015. http://advertising.aol.com/blog/aol-originals-releases-season-2-park-bench-steve-buscemi

[25] AOL Advertising. “Jared Leto’s ‘Beyond the Horizon’ Launches on AOL Build.” Retrieved November 30, 2015. http://advertising.aol.com/blog/jared-letos-beyond-horizon-launches-aol-build

[26] ALTO. “ALTO.’ Retrieved November 30, 2015. https://altomail.com/

[27] AOL Platforms. “ONE by AOL.” Retrieved December 1, 2015. http://www.aolplatforms.com/onebyaol

Time Warner (TV/cable channels only)

Image

by Cameron MacPherson
 
Time Warner, Inc.

[1] Time Warner Logo

 Time Warner Inc.
One Time Warner Center
New York, NY 10019-8016
212-484-8000
www.timewarner.com

About

          Time Warner, Inc. is an American media company with properties in the television and film industries, including cable properties under the Turner Broadcasting System, its premium cable property Home Box Office (HBO), and its production unit Warner Brothers Studios. [2]

Time Warner has three major divisions: HBO, Turner, and Warner Brothers

[3] Time Warner has three major divisions: HBO, Turner, and Warner Brothers

Executives

jbewkes_0

[4] Jeff Bewkes, Chairman and CEO

gginsberg

[6] Gary L. Ginsberg, Executive VP, Corporate Marketing and Communications

Howard M. Averill, Executive Vice President and CFO

[5] Howard M. Averill, Executive Vice President and CFO

 

Financials and Strategies

           Time Warner Inc., a publicly traded company, posted a $29.8 billion revenue for 2013, a 4% increase from 2012. [7] On July 16, 2014, news broke that Time Warner had rejected an $80 billion buyout offer from 21st Century Fox. The proposal offered $85 a share for a stock that, just before the announced rejection, sat just above $70 a share. [8] CEO Jeff Bewkes has made a commitment to reach the $85 per share target to encourage stockholders that the company has growth potential. Under Bewkes, the financial strategy of the company has been to minimize expenses to maximize profits. Time Warner Inc. has recently spun off Time Warner Cable and Time Inc. properties, retaining only its Turner cable properties, HBO, and the Warner Brothers Studios. [9]

Time Warner rejected a buyout bid from 21st Century Fox

[12 ] Time Warner rejected an $80 billion buyout bid from 21st Century Fox

            Even with a smaller portfolio of properties, the emphasis on streamlined efficiency still dominates Time Warner’s financial strategy. In recent months, there have been layoffs in all three of Time Warner’s divisions. Turner Broadcasting offered a buyout option to 6% of its staffers in August, two months before announcing that the company would cut 1,475 jobs.[10][11] Time Warner cut seven percent, or 150, of its domestic employees for HBO in late October, one week before cutting 1,000 jobs at Warner Brothers Studios. [13][14]

            The strategy, to this point, has been successful. The newly enacted efficiencies and bold strategies for expansion of Time Warner’s HBO property have led to a surge in market valuation. On November 30, the price of Time Warner’s stock reached $85.12 per share, 12 cents above the buyout offer from 21st Century Fox in July (before falling slightly below the line the next day). [15]

[13] A graph showing the price of Time Warner's stock prices over the last three months (TWX)

[16 ] A graph showing the price of Time Warner’s stock prices over the last three months (TWX)

HBO Developments

HBO, a division of Time Warner

[17 ] HBO, a division of Time Warner

 According to Time Warner, a major reason for rejecting the buyout offer was the growth potential of HBO. On September 16, ten days after 21st Century Fox CEO Rupert Murdoch withdrew his buyout offer, Time Warner announced plans for a fourth quarter marketing push for HBO across broadcast, cable, and digital platforms. [18]  A week later, HBO partnered with AT&T to offer customers broadband service, HBO GO, and Amazon’s Prime membership for a limited time offer. [19] The move, similar to Comcast’s “Internet Plus” package, signaled another step towards unbundling HBO from pricey cable subscriptions. Just a month after that, Time Warner made a major announcement that expanded on this departure from cable bundles. Time Warner stated that it planned to offer a standalone streaming platform through its online HBO GO service starting in 2015. The service will be available without a cable subscription to HBO, using broadband as its distribution channel. [20] While the details about available programming and distribution channels are yet to be released, many analysts predict the over-the-top service will be marketed towards cord-cutters and millenials rather than those with existing HBO subscriptions. [21] 

            With the new online streaming service, Time Warner hopes to attract customers to HBO who might otherwise be deterred by cable’s lofty price tag. Additionally, it has positioned itself as a viable competitor to Netflix in the digital arena. HBO has fewer domestic subscribers than Netflix, but far more international subscribers; HBO boasts 130 million global subscribers to Netflix’s 50 million. [22] In recent months, Time Warner has sought to expand this international presence. HBO struck a deal with Chinese content distributor Tencent Holdings Ltd., granting the Chinese media giant the exclusive rights to distribute HBO’s original programming. Tencent Video, the company’s online streaming site, will air episodes of HBO shows that have become wildly popular in China through piracy sites. [23] Executives at HBO hope that this move will cut down on piracy, and create a loyal fan base in the world’s most populous country. 

Programming

HBO          

Boardwalk Empire

[24] In 2014, HBO aired the final season of its hit crime show, “Boardwalk Empire”

HBO is known for its award winning original programming and loyal fan bases, particularly with hits like “Game of Thrones,” and “True Detective.” One such program, the smash crime hit “Boardwalk Empire,” finished its television run after five seasons. The series, which has won 18 Emmys, had a strong showing with 2.3 million viewers tuning in live for the series finale. When coupled with a same-night rerun and HBO GO statistics, total same-day viewers exceeded 6.6 million. [25]

HBO launched the final season of its news drama "The Newsroom" [26]

[27 ] HBO launched the final season of its news drama “The Newsroom”

            HBO launched three new shows in its Sunday lineup, including the third and final season of Aaron Sorkin’s “The Newsroom.” The premiere of the truncated season reached a disappointing 1.2 million viewers live, a 40% decrease from the season two premiere. This year, the series does not benefit from the strong lead-ins of “True Blood” and “Boardwalk Empire,” leading to decreases in live ratings. [26]

            It should be noted that live viewership is not as important for HBO due to its lack of advertising. Only about 25 to 30 percent of viewers watch programs live on HBO, as many viewers use the on-demand services or the web-based HBO GO. [28]

 Turner

Turner CEO John Martin [#]

[31 ] Turner CEO John Martin

            Turner Broadcasting and its CEO John Martin have expressed a commitment to take more “creative risks,” and announced that the company would double its funding for original programming by the end of 2018. [29] Turner’s TBS and TNT channels have greatly benefited from airing live sporting events. Alongside Disney, Time Warner renewed its rights to air live NBA games through the 2024-2025 season. TNT is granted the rights to broadcast 64 games a year. [30] 

            The 2014 American League Championship Series on TBS was the most viewed MLB playoffs on the network since 2010. The 2014 ALCS averaged 4.3 million viewers, despite featuring teams from mid-sized markets. [32] Because sporting events can draw large numbers of live viewers, Turner is able to charge higher prices for advertising and licensing fees. Thus, investing in live sporting rights will continue to be a major component of Turner’s business strategy.

            The mass viewership of sporting events gives Turner additional leverage in negotiations with television distributors. When contract negotiations were stalling between Dish Network and Time Warner in October, Dish Network suddenly blacked out many of Turner’s cable channels, including CNN, TruTV, and Cartoon Network. Dish Chairman Charlie Ergen stated that while blacking out these channels was a “non-issue,” it would be “more painful” to take down the popular Turner channels Dish had left running: TBS and TNT, which both carry major sporting events. [33]

Future

            The future of Time Warner will be heavily scrutinized by corporate analysts. The question remains: can Time Warner create sustained growth, or was it foolish to pass

[34] The Time Warner Center, headquarters of Time Warner, Inc.

[34] The Time Warner Center, headquarters of Time Warner, Inc.

on the 21st Century Fox buyout offer? Time Warner has made decisions to bring its stock prices up in both the short-term, through corporate restructuring and job layoffs, and the long-term, through strategic HBO expansions and property spinoffs. Only sustained growth, most likely fostered by HBO’s continued expansion and Turner’s programming decisions, will determine the success of Time Warner.

[1] Time Warner Inc. logo. Timewarner.com, retrieved 1 December 2014

[2] Time Warner Inc. Timewarner.com, retrieved 1 December 2014

[3] Time Warner Operating Divisions. Timewarner.com, retrieved 1 December 2014.

[4] Jeff Bewkes bio page. Timewarner.com, retrieved 1 December 2014.

[5] Howard Averill bio page. Timewarner.com, retrieved 1 December 2014.

[6] Gary Ginsberg bio page. Timewarner.com, retrieved 1 December 2014.

[7] Time Warner’s quarterly reports. Ir.timewarner.com, retrieved 1 December 2014.

[8] “Time Warner rejected $80B offer from 21st Century Fox: Sources”. CNBC, 16 July 2014. Retrieved 1 December 2014.

[9] “Time Warner Profit Tops Estimates as CEO Pursues Growth”. Bloomberg.com, 5 November 2014. Retrieved 1 December 2014.

[10] “Turner Broadcasting offers voluntary buyouts”. CNN Money, 26 August 2014. Retrieved 1 December 2014.

[11] “Turner Broadcasting, Home of CNN, TBS and TNT, Will Cut 1,475 jobs”. The New York Times, 6 October 2014. Retrieved 1 December 2014.

[12] “Time Warner’s HBO to cut 7 percent of staff”. Reuters, 28 October 2014. Retrieved 1 December 2014.

[13] “Warner Bros. Layoffs Beginning Tuesday to Eliminate Roughly 1,000 Jobs”. The Hollywood Reporter, 3 November 2014. Retrieved 1 December 2014.

[14] Twenty First Century Fox logo. Logopedia, retrieved 1 December 2014.

[15] Time Warner (TWX) stock. MarketWatch, retrieved 1 December 2014.

[16] Graph of TWX stock. Google Finance, retrieved 1 December 2014.

[17] HBO logo. Homeboxoffice.com, retrieved 1 December 2014.

[18] “Time Warner Plans HBO Marketing Push to Speed Growth”. Bloomberg.com, 18 September 2014. Retrieved 1 December 2014.

[19] “AT&T Lures Cord Cutters With $39-a-Month Deal for Broadband, Amazon Prime and HBO”. The Wall Street Journal, 23 September 2014. Retrieved 1 December 2014.

[20] “HBO Plans New Streaming Service, With Eye on Cord Cutters”. The New York Times, 15 October 2014. Retrieved 1 December 2014.

[21] “Before HBO Starts Streaming, Time Warner Wants to Make Big Cable Happy”. Businessweek, 5 November 2014. Retrieved 1 December 2014.

[22] “The battle between Netflix and HBO is just beginning. And this man holds the key”. The Washington Post, 28 November 2014. Retrieved 1 December 2014.

[23] “Tencent to Distribute HBO Dramas, Movies Online in China”. Nadsaq, 28 November 2014. Retrieved 1 December 2014.

[24] Boardwalk Empire poster. IMDB, retrieved 1 December 2014.

[25] “‘Boardwalk Empire’ Ratings: Series Ends With 2.3M Watching HBO Finale”. Deadline, 27 October 2014. Retrieved 1 December 2014.

[26] “HBO Has a Quiet Sunday With ‘Newsroom’ and ‘Comeback’ Returns”. The Hollywood Reporter, 11 November 2014. Retrieved 1 December 2014.

[27] Businessweek, ibid.

[28] The Newsroom poster. IMDB, retrieved 1 December 2014.

[29] “Turner Broadcasting CEO Pledges to Double Original Programming Investment”. The Hollywood Reporter, 12 November 2014. Retrieved 1 December 2014.

[30] “Walt Disney, Time Warner Said to Renew NBA TV Contracts”. Bloomberg.com, 6 October 2014. Retrieved 1 December 2014.

[31] John Martin bio page. Turner.com, retrieved 1 December 2014.

[32] “TBS Finishes Its Most-Viewed MLB Postseason Since 2010”. Multichannel.com, 16 October 2014. Retrieved 1 December 2014.

[33] “Turner Warns Dish Users That TNT & TBS Might Follow CNN, Toons Going Dark”. Deadline, 18 November 2014. Retrieved 1 December 2014.

[34] Associated Press file image of the Time Warner Center. Syracuse.com, 08 August 2013. Retrieved 1 December 2014.

AOL

Posted on by 
By Raven Irabor
AOL Logo

Photo Courtesy Of: Hot Digital News

Location:

770 Broadway
New York, NY 10003
United States
Phone: 1-212-652-6400

Key Executives:

AOL Key Executives(Left to Right)

CEO/Chairman: Timothy M Armstrong

Exec. VP/Chief Financial Officer: Karen E Dykstra

Exec. VP/CEO: AOL Brand Group: Susan M Lyne

Exec. VP/Secretary/Gen. Cnsl: Julie M Jacobs

 

ABOUT AOL

Brief Overview:

AOL Inc is a brand company that focuses on producing original content that connects and engages its audience on a local and global scale.

History:

Originally known as Quantum Computer Services, AOL has been in the business of improving internet service for over 25 years. In 1989, the familiar epigram, “You’ve got mail” was introduced alongside its first instant messaging service. Due to an employee contest, Quantum Computer Services changed its name to AOL (America Online) in 1992. AOL first began expanding its products and services with its homepage that was launched in 1995. Over time AOL has acquired: Mapquest, CompuServe, ICQ, Moviefone, Netscape, AOL/Time Warner merge, Advertising.com, TechCrunch, AOL Huffington Post Media Group, Patch, Gravity, and many other companies. AOL made history in 2005 by becoming the first internet company to win an Emmy. In 2006, America Online officially changed its name to AOL and began offering its services free of charge. [1] [2] AOL Inc. then and now

AOL Inc. then and now [3] [4]

FINANCIALS

Summary:

AOL FISCAL

2013 Fiscal Overview

According to Armstrong, 2013 was AOL’s most successful year in the last decade. In the past year, AOL Inc revenue was $2.32 billion, an increase from $2.192 billion in 2012. This increase was predominately due to its growth in its advertisement business. AOL Inc. was able to come ahead in analysts’ estimated reporting of revenues but not of earnings. In 2013, it earned 43 cents per share while the estimation was 46 cents per share. The fourth quarter of 2013 shows a 13 percent increase of revenue in comparison to 2012’s fourth quarter. Subscription revenue declined by 10 percent, $156.7 million, in the fourth quarter. The anchor on AOL’s success was its newest acquisition, Patch. Due to major cutbacks and layoffs, Patch weighed down the company’s earnings for 2013. With the acquisition of Gravity, AOL is hoping for a better turn out for 2014. [5]  [6]  [7]  [8]

WHAT’S BEEN GOING ON

The leaders at AOL Inc. are constantly looking at the realm of media and figuring out innovative ways to constantly push forward their presence in the industry. In the beginningPATCH of the year, Hale, an investment firm that specializes in distressed business, joined AOL Inc in the holdings of Patch. Patch was acquired by AOL in 2009. Armstrong had high aspirations for this company, but it gave back little financial return. The idea for Patch was that AOL would be able to use it as a platform to create a series of hyper-local news sites, which would then allow AOL to get its hands into local and even national advertisement [9]. Unfortunately, in April AOL agreed to sell its minority holding to Hale as it was not reaping the benefits it had expected [10]. While Patch failed to be AOL’s ticket to advertising revenue, its new project shall be its next venture into further success in the advertising world.

In March AOL announced that they plan to lauONEnch One. One will be an ad system/software that helps companies automate the process of buying and selling advertisements online. According to Armstong, “the move represents a switch in focus from original content to ad technology.” With this expansion, AOL will now be able to reach audiences that its original contest would not have reached. With AOL making $1.6 billion in ad revenue, Armstrong plans on taking full advantage of this new window of opportunity [11].

In a continuum of advertising ventures, AOL also announced in theGRAVITY beginning of the quarter of its acquisition of Gravity. Gravity is a content personalization start up venture. It works with online publishers to offer tailored customized content based on the activity of each visitor. Gravity’s technology will act as a catalyst in all of the areas of AOL Inc. to create more engaging, relevant and valuable experiences for its consumers, advertisers and publisher partners. [12]

Other than advertisements being part of the new wave of media experience, video has become another popular avenue. In April AOL announced its media makeover on its site. In an interview with Maureen Sullivan, president of aol.com, she talks about the AOL SITEoverwhelming increase of video streaming. More and more AOL users are consuming more video based content. This caused for AOL to push more towards video. With content producing partners such as: ESPN, HSN, and Conde Nast, AOL will begin providing its users with more video content related to their previous searches. This will allow users to have a more personalized web experience and also allow advertisers to reach a more direct audience.

AOL has not completely left its focus on producing original content. In April, AOL announced the renewal of its four original web series:

CITY BALLET

city ballet

HARDWIRED 2.0

HARDWIRED

THE FUTURE STARTS HERE

FUTURE

#CANDIDLYNICOLE

NICOLE

These shows have allowed AOL not only to reach the number one spot for premium curated network on the web, but also to give advertisers a whole different platform to reach consumers. AOL’s full slate of new original series for 2014 will be announced at the Digital Content NewFronts on April 29th in Brooklyn, New York [13].

Since its spun off from Time Warner in 2009, AOL has been pressured by shareholders to make moves such as a patent deals. In April, AOL agreed to share and patent licenses to Microsoft Corp (MSFT). This deal has brought AOL to an increase of 43% the day of the closing, the biggest one day increase since 11/25/09. The arrangement, which will give more than 800 patents and related applications to Microsoft, AOL generate additional funds amid slow advertising growth and a decline in dial-up Internet subscribers. [14]

With AOL moving from content producing to a largely advertisement based company, it will be interesting to see how these new ad based ventures benefits the company and contributes to the ever growing world of media.

SOURCES

[1] 25 Years of AOL. April 20, 2014

[2] AOL Overview. April 20, 2014

[3] AOL Then. April 21, 2014

[4] AOL Now. April 21, 2014

[5] AOL’s Q4 Revenue Grows To $679M But Earnings Per Share of $0.43 Fall Short Of Estimates. April 20, 2014

[6] AOL Q3 Beats Estimates On Sales Of $561M But Net Income Weighed Down By $25M Patch Restructuring. April 20, 2014

[7] Setting Its Sights On Content Personalization, AOL To Acquire Gravity For $90.7M. April 20, 2014

[8] Analysis Tools. April 21, 2014

[9] AOL Calls Patch Spin Out A “Pivot”. April 20, 2014

[10] AOL Chief Tim Armstrong’s Pay Drops 46%. April 20, 2014

[11] AOL Chases $32 Billion Market With Automated Ad System. April 20, 2014

[12] AOL Makes It Personal With Agreement to Acquire Gravity. April 19, 2014

[13] AOL Announces Renewal of Four Original Web Series for 2014. April 19, 2014

[14] AOL Jumps After $1.06 Billion Patent Accord With Microsoft. April 20, 2014