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Time Warner Inc.
Transcript of Time Warner Inc.
Sex and the City premieres
March 31st, 1999--
The Matrix trilogy begins
January 10th, 1999--
The Sopranos Premieres
October 15th, 2000--
Curb Your Enthusiasm premieres
November 16th, 2001--
Harry Potter series begins
November 5th, 2003--
The Matrix trilogy ends
February 22nd, 2004--
Sex and the City ends
July 18th, 2004--
June 10th, 2007--
The Sopranos Ends
July 18th, 2007--
Dark Knight series begins
September 7th, 2008--
True Blood Premieres
HBO GO available to Verizon customers
July 16th, 2010--
Inception is released
September 19th, 2010--
Boardwalk Empire premieres
April 17th, 2011--
Game of Thrones premieres
July 15th, 2011--
Harry Potter series ends
September 11th, 2011--
Chloé Saint Etienne,
Brenna Kilpatrick, Trevor Neuhoff, Kailey Prior, Christine Soler, Kelsey Vega, Marleny Vega, Alina Zafar
Point of View
Porter's Five Forces
- Time Warner consists of 4 main divisions
- Innovation and "Content Everywhere"
- Warner Bros. Entertainment
- HBOgo in the changing digital landscape
- Capitalization without Cannibalization
Where We Stand...
Porter's Five Forces
So what does this all mean?
Time Warner P&L
(US Dollars, in millions, except per share and employees data )
Threat of New Entry
Connection with Warner Bros. gives them access to content, and they have ongoing deals with 20th Century Fox, Summit & Universal Studios
Only have deals with the three studios, could do to expand on movie selection
- Starz, Showtime Netflix
• Netflix has just surpassed HBO in number of subscribers
• "Hemlock Grove" exceeded "House of Cards" in the first few days of viewing, Arrested Development in May
• Showtime's original programming is gaining popularity: Dexter, Homeland, Shameless, House of Lies, coming out with new shows Ray Donovan and Masters of Sex
• Consumers don't want to be limited by a cable subscription,
• Game of Thrones was the most pirated show of 2012
Time Warner has the most revenue in video and with approximately 12 million residential subscribers, have an opportunity to expand their HBO asset and leverage the 40 million subscribers.
- Sony, Paramount, Fox, Disney, Universal
-2012 Subscriber Shares (Domestic)
Strong brand equity (huge viewership base)
Leverage consumer's cable subscriptions
Recurring payments = reliable revenue stream
Strong handle on digital (mobile HBO Go app- top ranked in 1st month)
-2012 Studio Market Shares
1. Sony / Columbia....16.6%
2. Warner Bros.....15.4%
3. Buena Vista.....14.3%
6. 20th Century Fox....9.5%
April 15th, 2012
--HBO reaches 30 million subscribers in the U.S.
December 12th, 2012
--The Hobbit is released
GAME OF THRONES averages 4.5 to 5.5 Million viewers per episode.
BOARDWALK EMPIRE and TRUE BLOOD, 5 and 6 Million in prime
SHAMELESS, DEXTER, and HOMELAND 1.6 - 2.9 Million
CAMELOT topped out at 1.6 Million
Not Public for shows like HOUSE OF CARDS.
BATMAN and HARRY POTTER franchises contribute majority of revenue over the past 5 to 10 years.
summer 2013 large releases include HANGOVER III and the newcomer MAN OF STEEL.
-Disney / Marvel
AVENGERS, IRON MAN SERIES, THOR SERIES, CAPTAIN AMERICA
-In the future,
Warner Brothers only has the concept of a JUSTICE LEAGUE film, in direct competition to Marvel's THE AVENGERS.
Limited international presence (currently expanding as of 2013)
Competitor offerings in other multi-platforms (i.e Netflix, Star Movies)
Unprecedented piracy rates
Continuously evolving technological environment
New outlets for licensing deals in the hospitality and gaming industries
Universal Studios Orlando: revenue increase of 8.2% in 2011 (HP)
Zynga Facebook GOT game generates 500 million installations
-DVD, iTunes and Pirate Websites
-Subscription rates and cable company fees
-HBO will not introduce an internet only option.
-Translates to LOW BUYER POWER
- Nielsen, "95% of Americans watch TV the old fashioned way."
-HBO REVENUES SUPPORT THIS CLAIM
• Epix is emerging, has ongoing movie distribution deals with Paramount, Lionsgate & MGM, but no original programming
Time Warner should capitalize on the popularity of their HBO content, distributing it within more platforms as a part of their Content Everywhere initiative. Using internationally recognized media assets such as Warner Brothers Studios and HBO, Time Warner could leverage their presence WITHOUT cannibalizing HBO sales by expanding in adjacent industries, such as adding feature films in the Warner Bros. division, or creating an interactive "Game of Thrones" experience in theme parks across the country and/or world.
World's 2nd largest M&E conglomerate (Behind Disney), biggest media conglomerate in terms of revenue: $28.7B
: Networks (domestic and int'l), Publishing, Film & TV Entertainment
: 1972 HBO launch
1989 Time Inc. and Warner Co. merge
1996 Turner Broadcasting System acquired
1999 Venture with AT&T
2000 AOL merger, largest in history($181B)
- Innovative with current
- Will separate from Time Warner
by the end of 2013
Home to diverse array of TV Networks:
- World News
- Animation, Kids/Young Adults
Lead Entertainment: Film & TV Company
- Feature Film
- TV Distribution to Home Video
- Digital Distribution
- Comic Books, Animation
Risks of going SVOD:
1. Lose contracts with distributors
2. Threaten the success of TBS and CNN
How have they avoided this?
By not charging for HBO Go, consumers have more incentive to get HBO bundled into their basic cable package.
How to continue avoiding cannibalization?
Move to adjacent industries to capitalize content: gaming, hospitality, etc.
HBO owns the rights to their original content
Point of View
- #1 domestic premium pay television
service in Primetime
- Home to Game of Thrones, Girls,
True Blood, & Boardwalk Empire
Chairman and CEO:
Senior Counsel: Ken Novack
Additional Key Stats
— April 18: Microsoft Corp. says revenue from its Xbox 360 business grew by $641 million, or 55 percent, in the January-March quarter.
— April 3: Mobile game developer Rovio Entertainment Ltd. Net income surged more than 55 percent to 55.5 million euros ($71.2 million).
Ongoing debate with regards to HBO's current subscription model
Jeff Bewkes is not yet willing to unbundle the HBO Go offering for fear of cannibalization
Piracy remains a growing issue in the debate
take a different approach to expand the revenue stream by licensing content elsewhere