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Industry Trends

Time Warner is better positioned today than ever. We've got strong operational and financial momentum and there's increasing evidence that industry trends are going our way. And now I think we're structured to run our business more aggressively than ever. Jeff Bewkes, Time Warner Inc.

With a diverse portfolio of businesses and widely popular brands, Time Warner has strategically positioned itself to lead the fast-changing media industry. Time Warner uses its scale, brands and creative know-how to grow, adapt to and drive the latest consumer, technological and industry trends.

The following articles and research studies provide further information on issues that are important to our corporate strategy and the operation of our businesses, as well as instances of how these trends and strategies have proven successful in our companies and across the industry.

Consumer Consumption Trends
 
As with all emerging platforms, whether it's TV, film or publishing, we want to provide consumers with the best choices and we want to do it in a way that gives us fair economics. Jeff Bewkes, Time Warner Inc.

 
"Customers Will Pay for Online Content," Wall Street Journal, August 2, 2010
"Until Home Box Office emerged in the mid-'70s, the notion that people would pay to watch a television show was unheard of."

"All Things Digital," Wall Street Journal, June 7, 2010
"Companies of all kinds and in all arenas are racing to be part of the social, mobile, app-centric, cloud-based action. This fusion—and, really, collision—of key trends was at the heart of our focus for D8, as the major companies in tech and media try to figure out how consumers want to conduct their digital lives going forward, and with what devices."

"Our Changing Relationship with TV," Reuters, May 25, 2010
"Today's media landscape is radically different from the days when the nation would gather around the television and watch the same show. There are simply more choices, and I don’t have to settle for what's on broadcast or cable."

"TV and Internet use together growing in America," Reuters, March 22, 2010
"Americans are spending more time watching television and surfing the Internet simultaneously, and nearly 60 percent of TV viewers use the Web at the same time at least once a month, according to a Nielsen report released on Monday."

"Nielsen reveals top media trends in 2010," Examiner.com, December 16, 2009
"If you are reading this article online, watching TV out of the corner of your eye and answering text messages between paragraphs, you are not alone. In fact, the word "simultaneous" best describes American's media participation behavior. As this year comes to an end, predictions are that this trend will continue and in fact, increase with the creation of new technology."

 
"Media Consumption and Multi-tasking Continue to Increase Across TV, Internet, and Mobile," Nielsen, September 2, 2009
Nielsen's three screen report -- TV, internet and mobile - breaks down how much time Americans spend on each of the three screens. Results show that consumers’ time with TV, Internet and Mobile video continues to increase across the board.

Did You Know
"Media Is On Demand - But Content Is Still King," Nielsen, April 2009
"Whoever said "content is king” was prescient. In today' world, media is an on-demand experience with an array of platforms delivering rich content to on-the-go consumers via multiple devices. The fight for share of wallet is being played out on three screens: mobile, television and the Internet. So far, TV is winning."

 
"Cable Looking on the Bright Side," AdAge, Apr. 30, 2009
"Each year, Americans are spending more time watching television, and each year more of that time is spent with cable networks. The industry's investment in original programming, particularly scripted dramas, has generated critical acclaim, fiercely loyal audiences and advertiser respect."

 
"Ads Heighten Pleasure of TV Watching, study finds," Reuters, Feb. 4, 2009
"The finding flies in the face of the Hollywood creative community's assumptions about ads limiting fan appreciation for their shows. Many television showrunners have said that watching their programs on DVD is the ideal way to see them, free from the distracting hindrance of ads."

 
"Why Television Still Shines in a World of Screens," New York Times, February 7, 2009
"...television stands out as the one old-media business with surprising resilience. Though we are spending a record amount of time online, including a record amount of time watching video, we are also watching record amounts of very old-fashioned television, according to Nielsen Media Research."

Did You Know
Google's view on the future of business: An interview with CEO Eric Schmidt
"How the Internet will change the nature of competition, innovation, and company operations." Schmidt explains the success of having a Long Tail strategy while emphasizing that you must have a Head -- which is where the revenue is generated.

Watch the Video Clip
(Launch Interactive)
"Does the Long Tail create bigger hits or smaller ones?," Chris Anderson's Blog, November 15, 2008
"It's hard to make money in the Tail...But revenues are disproportionately in the Head. Perhaps that will never change, but what will change is our definition of the Head. Once that was choice counted in tens or hundreds of items. Now, especially in Google's world, it's counted in tens or hundreds of thousands. Powerlaws may indeed create bigger fish, but the Long Tail is all about the bigger pond."

Identifying the LongTail," Chris Anderson, YouTube
Wired's Chris Anderson explains the logistics of the Long Tail.
(Watch the video Clip)



Watch the Video Clip
The Power of Big Brands

The biggest hits, the biggest brands are being used more than ever and are becoming more important...Big brands help consumers sort through the clutter and the capabilities of digital allow each of us to get to the big hits without waiting in line. Jeff Bewkes, Time Warner Inc.

 
"Pay TV paying off in down economy," The Hollywood Reporter, July 1, 2010
"HBO not only boasts the most premium subscribers, but the Time Warner-owned paybox also has the biggest profit margins."

"App for That: Magazines Forge New Vision of Digital Future," Advertising Age, February 22, 2010
"But as mobile devices added capabilities, app stores took off and the dawn of e-readers and tablet computers finally arrived, magazines have pushed aggressively to participate, experiment and hopefully make money from the new opportunities presented. And with an emerging economy of app "stores," they may have found a way to get consumers to pay once again."

"Business Model: Inside the Sports Illustrated Swimsuit Issue", CNBC Media Money, February 9, 2010
"The Sports Illustrated Swimsuit Issue means big business not only for parent company Time Inc., but also for the models, advertisers, fashion designers and locations that grace its pages. Rovell gives viewers a behind-the-scenes look at the scouting, set-up and inner-workings of the photo shoots as he travels to one of the exquisite undisclosed locations and interviews the models vying for the ultimate prize—being featured on the cover of this year’s issue and becoming a household name."
 

Business Model: Inside The Sports Illustrated Swimsuit Issue
Watch the video

 
"2009's B.O. Paradox: Less Movies, More Money," The Wrap, December 10, 2009
"With nearly 20 percent fewer films at the cineplex in 2009, studios are set to shatter the revenue record, winding down the year at a pace to collectively eclipse $10 billion for the first time in history. And Hollywood has a flurry of strong franchises and the steady rise of ticket prices to thank for that."

 
"Time Warner CEO: There Is a Willingness To Pay for Quality Content," Wall Street Journal, December 8, 2009
"Time Warner’s chief executive gave an upbeat assessment of the company’s TV Everywhere initiative Tuesday, saying that he believes consumers are willing to pay for high-quality content and that virtually all networks and broadband providers are supportive of it."

 
"A World of Hits," The Economist, November 26, 2009
"The internet has greatly expanded choice in music and books. Yet the ever-increasing supply of content tailored to every taste seems not to have dented the appeal of the blockbuster. Quite the opposite."

  Did You Know
"CW Adds Shows to Text About," New York Times, May 20, 2009
"One broadcast network, CW, is devoting its promotional campaign for the 2009-10 season to the changing nature of TV viewership. The campaign will carry the theme 'TV to talk about,' a line that will change from ad to ad to include iterations like 'TV to text about,' 'blog about,' 'chat about' and even 'tweet about.'"

 
"Box Office Returns Recession Proof So Far", CNBC, April 13, 2009
Box office returns have been recession proof so far, reports CNBC's Julia Boorstin. "The bottom line is that established brands draw devoted fans."

 

Box Office Returns Recession Proof So Far
Watch the video

"Online shopping and the Harry Potter effect," New Scientist, Dec. 22, 2008
"...And yet the big sellers have never been bigger. Take the latest Harry Potter book, which on launch in 2007 sold 11 million copies in its first day, exceeding the record for the fastest-selling book - set consecutively by the previous three Potter tomes. So what's the real deal? Is the internet really broadening our horizons? Or is it all marketing fluff masking the fact that best-sellers still rule?"

  Did You Know
"Blockbuster or Bust" Wall Street Journal, January 3, 2009
"Media companies' hit-focused marketing did not emerge in a vacuum. It reflects how consumers make choices. The truth is that consumers prefer blockbusters. Because they are inherently social, people find value in reading the same books and watching the same movies that others do."

Did You Know
"'N.Y. Times' Editor: Good Journalism Is Not Cheap," NPR, December 8, 2008
"Good journalism does not come cheap. And, therefore, you're not going to find a lot of blogs or nonprofit Web sites that are going to build a Baghdad bureau."

Did You Know
Extending Reach

And the reasons are basically on the consumer side what digital is bringing is a much better deal for consumers. More convenience, more choice, getting things the way you want it, when you want it on the devices you want and then, this is critical, not only is it a better deal for consumers but because the digital system is so efficient, it allows us to give those more affordable, more attractive deals for our content in a way where the economics that we've enjoyed are sustainable and probably can grow. Jeff Bewkes, Time Warner Inc.

 
"Future Thinking" Adweek, May 10, 2010
"Accenture survey unveils four characteristics of tomorrow's thriving media company."

 
"TV Disruption to Happen More Slowly Than You Think," TMCnet, May 4, 2010
"Cable companies are marketing their TV Everywhere concept where all content will be available in various forms - computer, iPhone, iPad etc."

 
"The Future of TV" AdWeek, May 3, 2010
"We're on a new playing field where smart marketers will enhance the viewing experience"

 
"Publishers eye path to sales increase," Financial Times, March 29, 2010
"When Time magazine goes to press this Wednesday night, there will be more than the usual sense of expectation among its editors. The issue will be one of the few iPad applications available to early buyers of Apple's tablet."

 
"The Winners of the Video Game Awards," BAFTA.org, March 19, 2010
"The atmospheric and immersive Batman: Arkham Asylum brought the hugely popular DC Comics superhero to life and duly took away the award for Gameplay along with the coveted Best Game BAFTA."

 
"Magazines Get Ready for Tablets," New York Times, Dec. 15, 2009
"The new approaches depend on two assumptions: that consumers will finally embrace the tablet computers that manufacturers have promised for years, and that they will want to read magazine-style content on them."

 

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