Time Warner

Overview

This profile considers Time Warner, the US media group formerly known as AOL Time Warner.

Introduction

The 2000 merger between America Online (AOL) and Time-Warner - itself the product of the merger between the Time-Life publishing group and the Warner music, film, publishing and theme parks conglomerate - was praised by some analysts as an ideal marriage of content with carriage.

Others were been less enthusiastic, noting that the conglomerate had a market value of US$300 billion in January 2000 but had slumped to US$105 billion two years later. In September 2003 that dissatisfaction was manifested through the Board's decision to remove 'AOL' from the AOL Time Warner corporate title. During the same year the group's recording and music publishing arm was sold for US$2.6 billion to a consortium led by Edgar Bronfman (former head of Universal), becoming Warner Music.

The down-sized group, based of course in the US, operates in all continents except Antarctica. As of October 2005 it had 84,000 employees, US$42 billion in annual revenue and a market valuation of US$82 billion

In 2001 it paid £1.15 billion for IPC Group, the UK magazine group spun off by Reed-Elsevier in 1998. IPC produces around 100 titles, with aggregate annual sales of 350 million magazines.

A chronology of its development is here.

Time-Life and Luce

The group traces its origins to launch in 1923 of Time magazine by Henry Robinson Luce (1898-1967) and Briton Hadden (1898-1929). Time was initially envisaged as a Tit-Bits or Readers Digest style compilation of abstracts, based on the partner's claim that

"People in America are, for the most part, poorly informed. This is not the fault of the daily newspapers; they print all the news. People are uninformed because no publication has adapted itself to the time which busy men are able to spend on simply keeping informed. Time is a weekly news-magazine, aimed to serve the modern necessity of keeping people informed, created on a principle of complete organisation. Time is interested - not in how much it includes between its covers - but in how much it gets off its pages into the minds of its readers."

Circulation reached 30,000 by the end of 1923, 70,000 by the end of 1924 and 250,000 in mid 1929 (with advertising revenue up from US$13,000 to US$414,000), despite residence in Cleveland from 1925 to 1928.

After Hadden's death in 1929 Luce became editor and majority shareholder, launching Fortune in 1930, Life in 1936 and Sports Illustrated in 1954, riding the wave of photojournalism. He proclaimed that Fortune would capture "the dignity and beauty, the smartness and excitement of modern industry" -

"Business takes Fortune to the tip of the wing of the airplane and through the depths of the ocean along the bebarnacled cables. It forces Fortune to peer into dazzling furnaces and into the faces of bankers. Fortune must follow the chemist to the brink of worlds newer than Columbus found and it must jog with freight cars across Nevada's desert. Fortune is involved in the fashions of flappers and in glass made from sand. It is packed in millions of cans and saluted by Boards of Directors on the pinnacles of skyscrapers ... Into all these matters Fortune will inquire with unbridled curiosity."

Luce was a passionate Republican, dismissing notions of objectivity as meaningless

"If everyone hasn't brains enough to know by now that I am a Presbyterian, a Republican and a capitalist, he should . I am biased in favor of God, the Republican Party, and free enterprise. Hadden and I invented Time. Therefore we had a right to say what it would be. We're not fooling anybody. Our readers know where we stand"

Luce appointed Hedley Donovan as editor-in-chief in 1959, retiring in 1964.

Time Inc expanded into paper production through a merger with Temple Eastex and launched Home Box Office (HBO) and Money magazine in 1972, with People Weekly appearing in 1974. It acquired Southern Progress Corporation (publisher of Southern Living, Progressive Farmer, Travel South and Cooking Light) in 1988 and launched Entertainment Weekly in 1989, bringing its stable of magazines to 25. In that year it paid US$14 billion for Warner Communications Inc., hailed as "the world's largest entertainment and media concern", albeit one whose publications were increasingly flaccid.

In 1996 it absorbed Turner Broadcasting. Four years later America Online (AOL) announced plans to acquire Time Warner for US$160 billion in what became the largest corporate merger in US history as of 2001.

Adelphia's assets were acquired by Time Warner Cable and Comcast in July 2006. The combined purchase price was US$12.5 billion in cash and Time Warner Cable common stock representing approximately 16% of Time Warner Cable's total common equity.

The deal saw Time Warner Cable gain cable systems passing approximately 7.6 million homes (roughly 3.3 million basic subscribers), increasing its subscriptions to some 14.4 million basic subscribers (with 27.6 million homes passed). Comcast added 1.7 million additional basic subscribers, increasing its total base to approximately 23.3 million owned-&-operated customers, with a further 3.5 million subscribers through different partnerships.

Under agreements entered into in connection with the acquisition, Adelphia is required to sell at least a third of Time Warner Cable common stock received in the transaction or distribute those shares to Adelphia's creditors. Time Warner Cable concurrently redeemed Comcast's 17.9% interest in Time Warner Cable Inc.; Time Warner Entertainment (TWE) redeemed Comcast's 4.7% interest in TWE. In aggregate those interests represented an effective 21% economic interest in Time Warner Cable.

Holdings

The following page provides a map of Time Warner holdings.

A supplementary profile of the AOL arm is here, highlighting works such as the adoring aol.com: How Steve Case Beat Bill Gates, Nailed the Netheads and made millions in the War for the Web (New York: Times 1998) by Kara Swisher. It can be supplemented by Michael Wolff's Autumn of the Moguls (New York: HarperCollins 2003) and two Wired profiles from 1995 and 1996.

Studies

There is no comprehensive study of Time Warner and readers are accordingly reliant on works that look at different parts of the empire or personalities.

Alec Klein's Stealing Time: Steve Case, Jerry Levin & the Collapse of AOL Time Warner (New York: Simon & Schuster 2003) and Nina Munk's Fools Rush In: Steve Case, Jerry Levin & the Unmaking of AOL Time Warner (New York: HarperBusiness 2004) offer an account of high expectations and disappointment since 1999. Kara Swisher's There Must Be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest for the Digital Future (New York: Crown Business 2003) is notably less enthusiastic - albeit more self-reflexive - than her 1998 aol.com.

The best biographies of the curiously neglected Henry Luce, whose media offspring are now part of the AOL-Time-Warner behemoth, are Robert Herzstein's Henry R Luce: A Political Portrait of the Man who created the American Century (New York: Scribners 1994) and Henry R. Luce and the Rise of American News Media (Baltimore: Johns Hopkins Uni Press 2001), a perceptive study by James Baughman. For Hadden see The Man Time Forgot: A Tale of Genius, Betrayal, and the Creation of Time Magazine (New York: HarperCollins 2006) by Isaiah Wilner.

We were underwhelmed by Wilfred Sheed's Clare Boothe Luce (New York: Dutton 1982), an insider's account of Henry's wife. Rage for Fame: The Ascent of Clare Boothe Luce (New York: Random 1997) by Sylvia Jukes Morris is another effort by a friend.

David Halberstam's insightful The Powers That Be (New York: Knopf 1979) is essential reading.

Outsider, Insider (Darien: Marian-Darien 1998) is a memoir by Luce's successor Andrew Heiskell, depicting the supposedly warmer, gentler Time-Life before the Warner boys moved in. It is complemented by Thomas Stanley Matthews' Name & Address: An Autobiography (New York: Simon & Schuste 1960). The three volume Time Inc: The Intimate History of a Publishing Enterprise (New York: Atheneum 1968-1986) by Robert Elson is a solid corporate history.

We have noted Richard Clurman's To The End of Time (New York: Simon & Schuster 1992) for its insider's-eye view of the Warner takeover of the Time-Life empire in a previous bout of industry consolidation. Unsurprisingly, more accountants, nicer offices, more ulcers but none of the forecast massive profit increases.

Loudon Wainwright's Life: The Great American Magazine (New York: Ballantine 1986) is another view from inside the beast of the decline and fall of Life - a jaundiced reader might conclude that Wainwright on occasion confuses Life and life - the magazine since resurrected by the suits at Time-Warner. Dora Hamblin's That Was the LIFE (New York: Norton 1977) has less verve. Wendy Kozol's Life's America: Family and Nation in Postwar Photojournalism (New York: 1994) and Looking at Life Magazine (Washington: Smithsonian Institution Press 2001) edited by Erika Doss offer perspectives on the magazine and its readers.

For People and the post-Luce magazines see Jeannette Walls' gossipy Dish: How Gossip Became The News & The News Became Just Another Show (New York: Perennial 2000).

Turner and CNN

Ted Turner - somewhat unkindly described as a frenetic selfpublicist and the Richard Branson of the 1980's - was captured in the superficial It Ain't As Easy As It Looks: Ted Turner's Amazing Story (London: Virgin 1994) by Porter Bibb and slightly more substantial Lead, Follow or Get Out of the Way: The Story of Ted Turner (New York: Times Books 1981) by Christian Williams. Media Man: Ted Turner’s Improbable Empire (New York: Norton 2004) by Ken Auletta is disappointingly thin

There's a dissenting view in Me & Ted Against the World: The Unauthorised Story of the Founding of CNN (New York: HarperCollins 2001) by former partner Reese Schonfeld.

Among studies of CNN and the news industry we recommend Carla Johnson's Winning The Global TV News Game (Boston: Focal 1995), Hank Whittemore's CNN, The Inside Story (Boston: Little Brown 1991) and Citizen Turner: The Wild Rise of an American Tycoon (New York: Harcourt Brace 1995) by Robert Goldberg.

Music

Fredric Dannen's Hit Men: Power Brokers & Fast Money Inside The Music Business (New York: Vintage 1991) is an acerbic expose of fine times among the contemporary music business. Norman Lebrecht's When The Music Stops (New York: Simon & Schuster 1996) provides a similar account of classical music recording.

Tom King's David Geffen: A Biography Of New Hollywood (London: Hutchinson 2000) suggests that while industry structures have changed - more independent production for example - the personalities haven't. Stephen Singular's The Rise & Rise of David Geffen (New York: Birch Lane 1997) is less substantial.

There is a gentler portrait of Geffen in John Seabrook's Nowbrow: The Culture of Marketing, the Marketing of Culture (Knopf: New York 2000), much hyped but largely devoted to angst about whether the author should wear a t-shirt with his tailored suit and whether Tina Brown really is the Wicked Witch of the West.

For Atlantic see Music Man: Ahmet Ertegun, Atlantic Records, & the Triumph of Rock 'n' Roll (New York: 1990) by Dorothy Wade & Justine Picardie and Making Tracks: Atlantic Records and the Growth of a Multi-Billion-Dollar Industry (London: Panther 1975) by Charlie Gillett.

Old and new Hollywood

Connie Bruck, author of The Predator's Ball, provided the best study of Steve Ross and Warner in Master of the Game: Steve Ross & the Creation of Time Warner (New York: Simon & Schuster 1994).

A detailed profile of the Warner production, distribution and exhibition arm is here as part of the Cinetext.net site.

Christopher Byron's The Fanciest Dive: What Happened When The Media Empire of Time/Life Leaped Without Looking Into The Age of High Tech (New York: Norton 1986) is overly anecdotal but suggests that the suits at AOLTW are rediscovering - the hard way - that 'it ain't as easy as it looks'.

Digital Babylon (New York: Arcade 1999) by John Geirland & Eva Sonesh-Kedar is a similar account of Hollywood meets the internet.

For perspectives on the evolving cable television industry we recommend Vertical Integration in Cable Television (Cambridge: MIT Press 1997) by David Waterman & Andrew Weiss.

Personalities and corporate couplings are described in Stephen Keating's Cutthroat: High Stakes & Killer Moves on the Electronic Frontier (Boulder: Johnson 1999), Inside HBO: The Billion Dollar War Between HBO, Hollywood & the Home Video Revolution (New York: Dodd Mead 1986) by George Mair and The Billionaire Shell Game: How Cable Baron John Malone & Assorted Corporate Titans Invented A Future Nobody Wanted (New York: Doubleday 1998) by L J Davis.

For the Warner studio see Jack Warner's thin My First Hundred Years in Hollywood (New York: Random House 1965) and Clown Prince of Hollywood: The Antic Life & Times of Jack L. Warner (New York: McGraw-Hill 1990) by Bob Thomas.

Charles Higham's Warner Brothers (New York: Scribner 1975) concentrates on the warts; Here's Looking at You, Kid: 50 Years of Fighting, Working, and Dreaming at Warner Bros (Boston: Little-Brown 1976) by James Silke looks at the stars. The Warner Bros. Story (New York: Crown 1979) by Clive Hirschhorn and Inside Warner Bros. (1935-1951) (New York: Viking 1986) offer photos and anecdotes.

Books

For the book publishing arm see One Hundred and Fifty Years of Publishing, 1837-1987 (Boston: Little, Brown 1987), a corporate history. The Book-of-the-Month Club is dissected in The Making of Middlebrow Culture (Durham: Uni of North Carolina Press 1992) by Joan Shelley Rubin.