Time Warner Incorporated

1
Time Warner Incorporated

• Charles Favia
• Anthony Passalacqua
• Jorge Tovar
• Caroline Kihara
• Allison Caroccia
• John Tedesco
• Kevin Matyger

2
Globalization

• Time Inc. is the leading magazine publisher in
  the U.K.
• Warner Bros. Entertainment leads its industry
  worldwide
• Turner Broadcasting operates worldwide news
  networks
• HBO programming is sold in over 150 countries
  worldwide
• AOL worldwide is struggling

3
E-Business Trends

• Time Warner announces new policy for AOL
• Warner Bros. Online has been shutdown
• Warner Music Group signed a deal with YouTube

4
Key Components to Company Turnaround

• Severe cost cutting strategy
• Restructuring of AOL has saved 1million in
  operating costs
• Narrowband market is no longer a focus
• European divisions of AOL have been sold off
• Refocus of revenue drivers
• Advertising revenue is now main focus
• Industry growth projected at 30
• Time Warner has already seen growth of 40
• Further acquisitions into the cable industry
• Recently purchased Adelphia Communications for
  17.8 billion

5
Technology Trends

• Current cable network has successfully put Time
  Warner in new markets
• Verizon is beginning to set up fiber optic
  network that will create a very difficult
  operating environment for company
• Their Digital Phone service has allowed customers
  to bypass the phone company and received bundled
  services
• Current network has enabled them to enter market
  with minimal investment in new technology

6
Environmental Trends

• Environmental issues are no longer feel good
  programs
• Increased overall recycling rate from 7 in 1992
  to 65 in 2005
• Recycling has saved 300,000 in disposal costs
  just for Warner Brother Studios alone
• Building a new green building
• Uses 35 less energy than current standards
• Will save 25 in operating costs

7
Company Size

• Number of Employees - 87,850
• Estimated revenue for 2006 - 40,000 (mil)
• 40 in the Fortune 500

8
2005 Sales
9
Subsidiaries

• AOL
• Time Warner Cable
• HBO
• Time Inc.

• New Line Cinema
• Warner Brothers Entertainment
• Turner Broadcasting system (TBS)

10
Company Profitability
(All amounts in Millions of US dollars)
11
Governmental Regulations

• Federal Communications Commission
• - The FCC is the U.S. government agency that
  is responsible for
• regulating interstate and international
  communications by television,
• radio, wire, satellite, and cable. They
  regulate such companies like
• Time Warner.
• - When AOL and Time Warner merged, FCC agreed
  in order of the
• following conditions
• AOL Time Warner have its cable wires open to
  competitors
• AOL Time Warner must allow any
  independent service
• providers (ISP) to control the
  content of their customers first
• screen
• AOL Time Warner may not enter any
  contract with any ISP
• for connection with AOLs Time
  Warner cable systems that
• prevents that ISP from revealing
  terms of contract to the FCC

12
Govt Regulations cont..

• Time Warners cable business
• Governmental regulation dictates the manner in
  which Time
• Warner operates its cable systems or
  determines what to offer
• Government controls the video programming
  rates and the
• programming Time Warner has to carry
• Government also controls other services,
  such as high speed and
• voice services including regulation that
  results in the obligation of
• higher pole fees for such services
• Time Warners entertainment
• The Government has regulations in regards to
  directing marketing
• Time Warners network businesses
• Government has increased regulations of
  distributions agreements

13
Govt Regulations cont.

• Telecommunications Act of 1996
• Passed by congress on February 1, 1996
• This act is a rewrite of the Communications
  Act of 1934
• Changes the ground rules of competition and
  regulations in all sectors of the industry of
  communications
• Has provisions that cover five different
  major areas
• Telephone service, Cable service, Radio and
  Television broadcasting, Internet and Online
  computer services, Telecommunications Equipment
  manufacturing
• Regulations include
• - Cross market entries were all eliminated
• - Concentration and merger rules
• - Promotes more appropriate moral behavior
  in regards to TV.
• violence and indecent online
  communications

14
Competition

• Time Warner is the worlds largest media
  conglomerate with operations spanning
• 1.) Film
• 2.) Television
• 3.) Cable T.V
• 4.) Publishing and online services
• Two main key competitors are Yahoo and Disney