Even among media titans, this company is a giant. Time Warner is the world's third-largest media conglomerate behind Walt Disney and News Corporation, with operations spanning television, film, and publishing. Through subsidiary Turner Broadcasting, the company runs a portfolio of popular cable TV networks including CNN, TBS, and TNT. Time Warner also operates pay-TV channels HBO and Cinemax. Its Warner Bros. Entertainment, meanwhile, includes films studios (Warner Bros. Pictures, New Line Cinema), TV production units (Warner Bros. Television Group), and comic book publisher DC Entertainment. In the magazine world, venerable Time Inc. is the top publisher of consumer titles including People, Time, and Fortune.
The company is organized through three business segments: Networks (primarily cable TV networks), Filmed Entertainment (primarily movie, TV, and other content production and distribution), and Publishing (primarily magazine production). Most of Time Warner's operating units rank at or near the top of their respective industries.
With the company's Networks segment accounting for more than 45% of sales, cable TV continues to be a leading source of revenue for Time Warner. Its TBS and TNT channels rank among the most watched ad-supported channels. Time Warner's Filmed Entertainment division, meanwhile, has been delivering at the box office with such hits as Inception and movies from the Harry Potter series. Its Publishing business, which produces some 20 magazines in the US and 70 magazines outside the US, generates revenues primarily from the sale of advertising, magazine subscriptions, and newsstand sales.
Time Warner is greater than the sum total of its parts. Like other media conglomerates, the company focuses on maximizing the profit potential of its original content by distributing that material through multiple channels. For example, a film produced by Warner Bros. can be shown in theaters, aired for subscribers on HBO, and then aired again on one of its advertising-supported cable outlets. The company also uses its vast array of media outlets to cross-promote its movies, TV shows, and magazines.
The company's Networks segment has adopted a successful programming strategy: TBS has positioned itself as a popular outlet for sitcoms and other comedy programming (including late night talk shows Conan and Lopez Tonight), and TNT has focused largely on airing dramatic movies and TV shows, including its original series The Closer. Its flagship HBO pay-TV service attracts loyal audiences to shows such as True Blood, Entourage, and The Pacific.
Warner Bros. is also capitalizing on the rising demand for content based on comic books by turning to its stable of DC Entertainment properties. It is busy developing movies based on DC characters, including the upcoming releases The Dark Knight Rises and Superman: Man of Steel. Its Warner Bros. Television Group supplied more than 30 scripted prime time shows for the 2011-2012 television season. Its biggest money-makers include the Big Bang Theory and Two and a Half Men.
It is apparent, however, that the company's Publishing unit is working hard to adapt to the challenging environment of declining print readership. Magazine subscription and newsstand sales both declined in 2011. Like the rest of the publishing world, Time Warner is focused on creating digital media that is compatible with portable devices such as Amazon's Kindle and the iPad from Apple, and in 2010 Time Warner created the Chief Digital Officer position at Time Inc. to oversee such efforts. In a clear signal that the parent company desires a quick turnaround at the Publishing unit, in 2011 Time Warner fired Time Inc. CEO Jack Griffin less than 6 months after he was hired.
In 2011 the company reported an overall increase in revenues and profits for the year. Such success was in part due to growth in advertising at its Networks division, specifically from the broadcast of the NCAA Tournament. Its Filmed Entertainment unit benefited from the strong performance of the final Harry Potter film, Harry Potter and the Deathly Hallows: Part 2. The title was the year's top film in terms of ticket sales, pulling in a colossal $1.3 billion in 2011.
Putting an end to one of the most disastrous mergers in corporate history, Time Warner disposed of AOL in 2009 in order to focus on its core entertainment and publishing operations. The spinoff closed a long and torturous chapter of the company's history that began when it merged with Internet business in 2001. Time Warner also exited the cable-TV system business in 2009 when the company spun off its 84% stake in Time Warner Cable. As a result of that deal, Time Warner reaped a $9.25 billion dividend and was able to cut its debt in half. Time Warner Cable had accounted for about a third of sales.