Media Industry Structure: International Company

In this article, we will look at the structure of an international media company. The company I am investigating is Time Warner, a media conglomerate that is responsible for companies that create movies, television shows, animations, video game production, comic books, magazines, newspapers, radio shows, and music. It is currently the world's second largest media production company (behind The Walt Disney Corporation) in terms of revenue. Time Warner's productions reach billions of viewers, listeners, and readers each day.

Brief History
Time Warner began life as the Kinney Parking Company. KPC became Kinney National Services when the KPC merged with The National Cleaning Company in 1966. Kinney National Services expanded into other markets by purchasing construction contracts, media production houses and talent agencies. During this period of growth it purchased Warner Bros, a movie production company, and DC comics. In 1972, due to a parking finance scandal, Kinney National Services sold off its non media-based assets and renamed itself Warner Communications Inc. In 2000, AOL, an internet service provider, purchased Warner Communications for $164billion, merging into the AOL Time Warner Group. This was in an attempt to combine the internet services of AOL with the media provisions of Warner in order to sell Warner's entertainment services to potentially tens of millions of new subscribers. Ultimately the plan failed, causing a then record loss of $99billion for the merged companies. Corporate restructuring led AOL to become another (lesser) asset for the company which now named itself Time Warner. The current CEO of Time Warner is Jeffrey Bewkes, who has been its Chairman and CEO since 2008.

Type of Company
As a corporate conglomerate that oversees many lesser companies that could ultimately function on their own, Time Warner is known as a horizontally managed company, with vertically managed companies as its assets. A group of men and women, a board of directors, oversee the running of the lesser companies as individual entities. These companies are run vertically, with a CEO of their respective company reporting to the board of directors at Time Warner. Time Warner are responsible for any corporate restructuring, purchasing of new companies and assets, dissolution of companies and assets not making any profit, and the direction of the conglomerate as a whole. There are benefits to having a corporate conglomerate controlling your company. The opportunities for investment are huge, as the controlling company pools the profits from all of its assets and subsidiaries into one pot, which it can distribute as it sees fit. As such, Warner Bros, a movie production company, can rely on Time Warner to make large cash payments to fund a movie. This means Warner Bros should not always have to source funds from outside sources, whereas many smaller movie studios must source funding from multiple investors. This can cause problems with the director losing control of the production as investors can dictate the direction the movie should be taken depending on how they see where the movie's success lies.

Useful Links
Time Warner corporate website
Company "About us" page
Wikipedia page detailing company history