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Time Warner And Aol Merger Essay

1518 words - 6 pages

Time Warner and AOL Merger

Time Warner Corporation has numerous subsidiaries which are moving media materials across media boundaries. They are doing this in numerous ways, based on synergies and joint ventures. For example some of these include gaining more access to cable lines by a joint venture with US West, and merging with AOL. They are also using a tactic called co-development as properties are knitted together by sister companies both interested in profiting off of them. This is a type of synergy because it occurs within one media conglomerate itself, and it encourages cross-media activity between the two sister companies. Time Warner can place some of its music on its television shows or movies, or write about its musicians in their magazines. The theory is that these different media would help promote one another and sell more records, more advertising,more tickets, and then certainly more revenue.

Terry Hershey, president of Time Warner Interactive's Entertainment division says "We have now built into our process the protocol that when we look at a project we automatically say, what other applications are there?" Time Warner Interactive is a subsidiary of the media conglomerate Time Warner Inc. and is currently making use of this idea of co-development.

For example, in the fall of 1994 they launched a CD-ROM version of the classic "Peter and the Wolf" at the same time that Warner Books published a print edition and Time Warner Audiobooks debuted its cassette edition as well as a CD version. "Each 'Peter' product will talk about the other products," says Hershey. "The audiocasette will have a teaser for the other products, for instance and the book jacket will mention the CD-ROM." There were also ideas about creating a television special on Peter and the Wolf which would raise awareness about everything on the market. There are numerous cases of these sister companies working together.

In 1995 Warner Books and Time Warner Interactive launched their own version of a new story which was written specifically to be both a novel and a CD-ROM. It was to be called "Mirage" and was a story about two sisters. The music that accompanied it ranged from opera to classical to alternative rock. Co-author Matthew Costello stressed using multiple types of media to make the story have more of an emotional impact on the audience.

This is why these products are being developed together. Hershey says "Rather than cannibalizing on sales, this will spur them. Consumers will be more likely to buy the other product if they have bought on-not less likely."

These types of synergies, which are basically collaborations within the media conglomerate encourage sales by adding more excitement and the cross-promotion brings all of the products more visibility than they would be able to receive on their own. This type of synergy is also happening in another section of the Time Warner conglomerate.

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