Even among media titans, this company is a giant. Time Warner is one of the world's largest media conglomerates behind Walt Disney and News Corporation, with operations spanning television and film. Through subsidiary Turner Broadcasting, the company runs a portfolio of cable TV networks including CNN, TBS, and TNT. Time Warner also operates pay-TV channels HBO and Cinemax. Its Warner Bros. Entertainment, meanwhile, includes film studios (Warner Bros. Pictures, New Line Cinema), TV production units (Warner Bros. Television Group), and comic book publisher DC Entertainment. In 2016, Time Warner agreed to be bought by AT&T Inc. for $85 billion.
The company divides its business into three reportable segments: Turner, Home Box Office, and Warner Bros. Turner consists of cable networks and digital media properties. It accounted for 36% of revenue in fiscal 2015. Home Box Office consists of premium pay television and streaming services domestically and premium pay, basic tier television, and streaming services internationally. That segment accounted for 19% of revenue in fiscal 2015. The company's Warner Bros. segment consists of television, feature film, home video, and video game production and distribution. The Warner Bros. segment accounted about 45% of revenue in fiscal 2015.
Time Warner's content and brands have a truly global reach. However, in fiscal 2015 almost 75% of the company's revenue came from the US and Canada.
Sales and Marketing
While the company's various media holdings earn millions through advertising sales, Time Warner itself spent $2.5 billion on advertising in fiscal 2015.
Time Warner's revenue was $28.1 billion in fiscal 2015. That was an increase of $759 million (or 3%) compared to the company's revenue the prior fiscal year. The primary reason for the spike was increased sales from its Warner Bros. segment.
The company's net income was $3.8 billion in fiscal 2015. That was an increase of $6 million compared to its fiscal 2014 net income. The increase in net income was largely the result of the Time Warner's increased revenue during fiscal 2015 compared to the prior fiscal period.
Time Warner ended fiscal 2015 with $3.8 billion in cash flow from operations, which was an increase of $170 million (or %5) compared to fiscal 2014.
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 and TNT has focused largely on airing dramatic movies and TV shows.
Back in 2015 Time Warner spun off its Publishing unit (Time Inc.) that had been struggling with the challenging environment of declining print readership.
Mergers and Acquisitions
Time Warner agreed to be bought by AT&T in 2016. AT&T wanted to own Time Warner's premium content.