1 00:00:04,400 --> 00:00:07,800 Speaker 1: Welcome to Tech Stuff, a production from I Heart Radio. 2 00:00:12,240 --> 00:00:15,120 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host, 3 00:00:15,280 --> 00:00:18,400 Speaker 1: Jonathan Strickland. I'm ad executive producer with I Heart Radio 4 00:00:18,480 --> 00:00:21,680 Speaker 1: and I love all things tech. And this is the 5 00:00:21,880 --> 00:00:26,720 Speaker 1: third part of the continuing story of the evolution of 6 00:00:26,760 --> 00:00:30,560 Speaker 1: Warner Media, which A T and T plans to spin 7 00:00:30,600 --> 00:00:33,879 Speaker 1: off to merge with Discovery, and we will talk a 8 00:00:34,000 --> 00:00:37,040 Speaker 1: lot about that at the end of this episode. Our 9 00:00:37,159 --> 00:00:40,800 Speaker 1: first episode in this series trace the very early history 10 00:00:40,920 --> 00:00:45,239 Speaker 1: of Time Incorporated, that is, the publishing company that was 11 00:00:45,320 --> 00:00:49,839 Speaker 1: on you know, one side of the episode and Warner 12 00:00:49,880 --> 00:00:54,440 Speaker 1: Brothers known as the Movie, TV and music studio on 13 00:00:54,480 --> 00:00:57,840 Speaker 1: the other side of that podcast, and trace their evolutions 14 00:00:57,880 --> 00:01:00,600 Speaker 1: up to their merger in the late night teen eighties. 15 00:01:00,840 --> 00:01:03,840 Speaker 1: Our second episode backtracked a little bit to talk about 16 00:01:03,880 --> 00:01:07,000 Speaker 1: the early days of cable TV and the emergence of 17 00:01:07,160 --> 00:01:11,560 Speaker 1: HBO and then how Time invested in that particular endeavor 18 00:01:11,959 --> 00:01:15,240 Speaker 1: and thus brought HBO into the mix upon the Time 19 00:01:15,280 --> 00:01:18,840 Speaker 1: Warner merger, so HBO became part of that group. And 20 00:01:18,880 --> 00:01:22,920 Speaker 1: we also talked about the disastrous merger between Time Warner 21 00:01:23,440 --> 00:01:26,880 Speaker 1: and America Online or A O L and how that 22 00:01:26,959 --> 00:01:32,039 Speaker 1: deal went sour even while it was being executed. Between 23 00:01:32,080 --> 00:01:35,360 Speaker 1: the announcement that the merger was going to happen and 24 00:01:35,560 --> 00:01:38,360 Speaker 1: the completion of that deal, which took about a year, 25 00:01:38,800 --> 00:01:42,280 Speaker 1: the whole dot com industry had a massive financial collapse. 26 00:01:42,840 --> 00:01:46,360 Speaker 1: So that acquisition completed in two thousand one, and in 27 00:01:46,480 --> 00:01:49,920 Speaker 1: two thousand two, A o. L. Time Warner had the 28 00:01:49,920 --> 00:01:54,480 Speaker 1: worst financial quarter ever of any company up to that point, 29 00:01:55,320 --> 00:02:00,120 Speaker 1: losing fifty four point two four billion dollars in a 30 00:02:00,160 --> 00:02:06,200 Speaker 1: single quarter that is just three months. Yikes. For about 31 00:02:06,240 --> 00:02:09,320 Speaker 1: a decade, A O. L. Time Warner struggled to get 32 00:02:09,360 --> 00:02:12,400 Speaker 1: its footing and tried to become the new model for 33 00:02:12,440 --> 00:02:18,480 Speaker 1: all media companies, you know, combining traditional media like music, publishing, movies, 34 00:02:18,520 --> 00:02:22,640 Speaker 1: and TV with the futuristic world enabled by the Internet, 35 00:02:23,120 --> 00:02:25,160 Speaker 1: which is what we're seeing today, by the way, Only 36 00:02:25,440 --> 00:02:28,440 Speaker 1: back then it just totally didn't work. Now, to be fair, 37 00:02:28,480 --> 00:02:32,040 Speaker 1: there were a lot of extenuating circumstances that contributed to that, 38 00:02:32,200 --> 00:02:37,239 Speaker 1: like the aforementioned dot com crash that was a big one. Uh, 39 00:02:37,280 --> 00:02:40,280 Speaker 1: there was the terrorist attack in two thousand one that 40 00:02:40,320 --> 00:02:44,120 Speaker 1: was another big one that There were general economic recessions 41 00:02:44,160 --> 00:02:47,480 Speaker 1: that contributed to them. Also, the company at that point 42 00:02:47,520 --> 00:02:52,000 Speaker 1: had changed its name to Time Warner Incorporated in two 43 00:02:52,080 --> 00:02:54,320 Speaker 1: thousand three, dropped the A O L. I mean A 44 00:02:54,440 --> 00:02:58,320 Speaker 1: L was still part of the mix. But because of 45 00:02:58,360 --> 00:03:02,080 Speaker 1: that dot com drop and because of some scandals that 46 00:03:02,160 --> 00:03:05,760 Speaker 1: A O L was pulled into or was you know, uh, 47 00:03:06,000 --> 00:03:08,600 Speaker 1: some scandals that involved A O L. It's not that 48 00:03:08,680 --> 00:03:12,240 Speaker 1: A was pulled into it. They were complicit in them. 49 00:03:12,720 --> 00:03:14,640 Speaker 1: I feel like the company felt it was in the 50 00:03:14,639 --> 00:03:18,239 Speaker 1: best interests of the organization to rename itself and kind 51 00:03:18,240 --> 00:03:21,320 Speaker 1: of you know, not advertised, that was part of A 52 00:03:21,400 --> 00:03:23,200 Speaker 1: O L. Still for me and for a lot of 53 00:03:23,200 --> 00:03:26,280 Speaker 1: folks of that time period, we still called it A 54 00:03:26,360 --> 00:03:29,799 Speaker 1: O L Time Warner for a while, and I mean, 55 00:03:30,040 --> 00:03:32,440 Speaker 1: like I said, A O L was still part of 56 00:03:32,440 --> 00:03:36,360 Speaker 1: the company at that point. Well, anyway, we're gonna look 57 00:03:36,400 --> 00:03:39,160 Speaker 1: a little bit more today at what happened towards the 58 00:03:39,320 --> 00:03:42,080 Speaker 1: end of the A O L Time Warner days and 59 00:03:42,120 --> 00:03:46,200 Speaker 1: then see what happened with Warner following that failed marriage 60 00:03:46,200 --> 00:03:49,640 Speaker 1: between old and new media. And one of the things 61 00:03:49,680 --> 00:03:52,320 Speaker 1: I failed to mention in my last episode, and honestly, 62 00:03:52,440 --> 00:03:55,760 Speaker 1: I hadn't even seen this bit of the history while 63 00:03:55,800 --> 00:03:58,640 Speaker 1: I was doing my research, So this was due to 64 00:03:58,720 --> 00:04:02,240 Speaker 1: my own ignorance. Was that during the time of A. O. L. 65 00:04:02,320 --> 00:04:05,760 Speaker 1: Time Warner, the company divested itself of a major part 66 00:04:05,920 --> 00:04:09,240 Speaker 1: of its assets, and that part was that in two 67 00:04:09,280 --> 00:04:13,040 Speaker 1: thousand three, the company sold off its music division to 68 00:04:13,200 --> 00:04:18,000 Speaker 1: the tune Ha Ha of about two point three billion 69 00:04:18,080 --> 00:04:20,680 Speaker 1: dollars according to the New York Times, although some other 70 00:04:20,680 --> 00:04:23,200 Speaker 1: sources put it as high as two point six billion, 71 00:04:23,880 --> 00:04:27,240 Speaker 1: so I'm not sure who's in the right there. Anyway, 72 00:04:27,839 --> 00:04:30,480 Speaker 1: the reason for that move was that A. O. L. 73 00:04:30,560 --> 00:04:34,000 Speaker 1: Time Warner was in a lot of debt. And I've 74 00:04:34,000 --> 00:04:37,160 Speaker 1: talked about this previously, like whenever you're talking about mergers 75 00:04:37,160 --> 00:04:40,880 Speaker 1: and acquisitions, typically you're talking about companies that are really 76 00:04:41,000 --> 00:04:45,440 Speaker 1: over extending themselves in order to acquire another company, and 77 00:04:45,480 --> 00:04:47,040 Speaker 1: then they have to figure out how are they going 78 00:04:47,080 --> 00:04:50,360 Speaker 1: to manage all the debt that results from that. And 79 00:04:50,400 --> 00:04:54,000 Speaker 1: that's that's before you get into things like you know, 80 00:04:54,080 --> 00:04:57,680 Speaker 1: market crashes in really bad years. So there's this enormous 81 00:04:57,680 --> 00:05:00,640 Speaker 1: amount of debt to settle. And when the two companies 82 00:05:00,680 --> 00:05:04,400 Speaker 1: initiated their merger, Time Warner was struggling a little bit 83 00:05:05,000 --> 00:05:07,120 Speaker 1: and A. O. L. Was was king of the mountain, 84 00:05:07,240 --> 00:05:09,880 Speaker 1: but then just a few months into the acquisition process, 85 00:05:10,760 --> 00:05:13,320 Speaker 1: we saw that switch places right A O L suddenly 86 00:05:13,360 --> 00:05:16,839 Speaker 1: saw a massive drop in its market value as its 87 00:05:16,880 --> 00:05:20,600 Speaker 1: stock price plummeted, and suddenly the company that had been 88 00:05:20,680 --> 00:05:25,360 Speaker 1: flushed with cash as an Internet giant was now in 89 00:05:25,640 --> 00:05:29,719 Speaker 1: a really rough place financially as a giant media company. 90 00:05:31,160 --> 00:05:34,520 Speaker 1: So who bought the music group? Well, the party that 91 00:05:34,600 --> 00:05:39,080 Speaker 1: made that purchase was led by Edgar Bronfman Jr. Bronfman's 92 00:05:39,120 --> 00:05:42,719 Speaker 1: family had run the company Sea Gram since the nineteen twenties. 93 00:05:43,320 --> 00:05:47,719 Speaker 1: Uh So, the Bronfman family had a whiskey distillery company 94 00:05:47,839 --> 00:05:51,960 Speaker 1: and then Seagram. The Seagram family also had a similar company, 95 00:05:52,000 --> 00:05:55,760 Speaker 1: and the two companies merged. The Bronthman's effectively took over, 96 00:05:55,920 --> 00:06:00,320 Speaker 1: but they kept the Seagram name. Edgar Bronfman Senior was 97 00:06:00,600 --> 00:06:03,560 Speaker 1: chairman and CEO of this company from the nineteen seventies 98 00:06:03,640 --> 00:06:06,960 Speaker 1: until the mid nineteen nineties, and in that time the 99 00:06:07,000 --> 00:06:10,960 Speaker 1: Seagroom company diversified and through a complicated series of events, 100 00:06:11,480 --> 00:06:15,240 Speaker 1: ended up becoming the largest shareholder of the DuPont Company, 101 00:06:15,279 --> 00:06:18,000 Speaker 1: which you might remember played a really big part in 102 00:06:18,040 --> 00:06:22,280 Speaker 1: our episodes about General Motors a few months ago. So 103 00:06:22,400 --> 00:06:25,039 Speaker 1: Edgar Jr. Took over the business for his dad in 104 00:06:25,160 --> 00:06:29,159 Speaker 1: nineteen and he made the controversial deal to allow the 105 00:06:29,240 --> 00:06:33,960 Speaker 1: DuPont family to buy back the shares held by Seagram 106 00:06:34,000 --> 00:06:37,839 Speaker 1: for around nine billion dollars. They said, well, Seagram holds 107 00:06:38,520 --> 00:06:41,360 Speaker 1: these enormous shares in DuPont, That's where a lot of 108 00:06:41,400 --> 00:06:43,400 Speaker 1: money is coming from. But I kind of want to 109 00:06:43,480 --> 00:06:45,920 Speaker 1: use that money to do other stuff, so I'm gonna 110 00:06:45,960 --> 00:06:48,000 Speaker 1: sell it back to them. Now. I say that this 111 00:06:48,040 --> 00:06:52,800 Speaker 1: was controversial because Seagram's ownership of that steak accounted for 112 00:06:52,920 --> 00:06:57,080 Speaker 1: nearly seventy percent of the company's revenue, So, in other words, 113 00:06:57,200 --> 00:07:02,000 Speaker 1: Seagram's dependence upon DuPont was very high, So getting rid 114 00:07:02,000 --> 00:07:04,760 Speaker 1: of that meant that sevent of your revenue source is 115 00:07:04,800 --> 00:07:09,039 Speaker 1: just gone. Then Ed Junior began to invest that money 116 00:07:09,120 --> 00:07:13,120 Speaker 1: into the entertainment industry, buying up controlling interests in m 117 00:07:13,160 --> 00:07:16,960 Speaker 1: c A, which was the parent company for Universal Pictures. 118 00:07:17,000 --> 00:07:19,080 Speaker 1: We'll talk more about that a little bit later in 119 00:07:19,080 --> 00:07:23,240 Speaker 1: this episode two, and he also purchased PolyGram record label. 120 00:07:24,120 --> 00:07:27,240 Speaker 1: Things did not go smoothly, and so Ed Junior led 121 00:07:27,320 --> 00:07:31,360 Speaker 1: Seagram into a deal that would see Vivendi acquire Seagrum 122 00:07:31,880 --> 00:07:36,160 Speaker 1: in an all stock transaction into thousand. Vivendi then sold 123 00:07:36,160 --> 00:07:39,320 Speaker 1: off the beverage division of Seagram, you know, the part 124 00:07:39,320 --> 00:07:42,640 Speaker 1: of the company that was the core of the business 125 00:07:42,720 --> 00:07:45,560 Speaker 1: at the beginning. Anyway, things didn't work out, and within 126 00:07:45,600 --> 00:07:49,240 Speaker 1: a couple of years Bronfman had stepped down from his 127 00:07:49,320 --> 00:07:54,160 Speaker 1: position within Vivendi slash Seagrum. Perhaps he viewed the acquisition 128 00:07:54,200 --> 00:07:57,160 Speaker 1: of Warner's Music division as a second chance to have 129 00:07:57,200 --> 00:07:59,520 Speaker 1: a go at running a company in the entertainment industry. 130 00:07:59,560 --> 00:08:02,280 Speaker 1: So he had already had this one go of trying 131 00:08:02,280 --> 00:08:05,560 Speaker 1: to become an entertainment mogul, and that didn't work out, 132 00:08:05,560 --> 00:08:08,960 Speaker 1: and Vivindi came in and took up the gap. So 133 00:08:09,000 --> 00:08:10,800 Speaker 1: now he was trying it again. He was going to 134 00:08:10,920 --> 00:08:15,360 Speaker 1: buy the Warner Music Group. Part of the negotiation included 135 00:08:15,400 --> 00:08:18,360 Speaker 1: the rights to use the name Warner Music Group, even 136 00:08:18,400 --> 00:08:21,160 Speaker 1: though this new company was no longer part of the 137 00:08:21,200 --> 00:08:25,240 Speaker 1: Warner family of companies. So w MG would go public 138 00:08:25,360 --> 00:08:28,360 Speaker 1: in two thousand five, and Bronfman would hold on to 139 00:08:28,640 --> 00:08:31,800 Speaker 1: w MG until two thousand eleven, when he would sell 140 00:08:31,800 --> 00:08:35,320 Speaker 1: it to a company called Access Industries for more than 141 00:08:35,440 --> 00:08:39,280 Speaker 1: three billion dollars. Bronfman would step down as chairman of 142 00:08:39,280 --> 00:08:42,240 Speaker 1: the board in two thousand and twelve. Apparently at one 143 00:08:42,240 --> 00:08:46,800 Speaker 1: point was considering purchasing Time Incorporated. But that's kind of 144 00:08:46,840 --> 00:08:50,240 Speaker 1: peaking ahead a little bit. So by two thousand four, 145 00:08:50,520 --> 00:08:54,160 Speaker 1: the Warner Media empire no longer included all those music 146 00:08:54,240 --> 00:08:59,560 Speaker 1: studios like Warner Records, Electra Atlantic, Rhino Entertainment, and more. 147 00:08:59,640 --> 00:09:02,319 Speaker 1: All of these were part of Warner Music Group. Word 148 00:09:02,400 --> 00:09:05,360 Speaker 1: Music Group still existed, but was no longer connected to 149 00:09:05,480 --> 00:09:10,760 Speaker 1: Time Warner. Again super confusing. Now I mentioned that the 150 00:09:10,760 --> 00:09:14,480 Speaker 1: company spun off its cable service division in two thousand nine. 151 00:09:14,559 --> 00:09:17,839 Speaker 1: That was Time Warner Cable, so we're gonna jump over that. 152 00:09:18,400 --> 00:09:20,679 Speaker 1: And that was also the year that Time Warner and 153 00:09:20,800 --> 00:09:24,120 Speaker 1: A O L would part ways, and Time Warner spun 154 00:09:24,240 --> 00:09:27,160 Speaker 1: off A O L to do that, which still makes 155 00:09:27,200 --> 00:09:31,079 Speaker 1: me think that businesses all food do because effectively A 156 00:09:31,240 --> 00:09:35,360 Speaker 1: O L acquired Time Warner back in two thousand and 157 00:09:35,400 --> 00:09:39,120 Speaker 1: then we see in two thousand nine Time Warner spinning 158 00:09:39,200 --> 00:09:42,280 Speaker 1: off A O L, which really just shows how far 159 00:09:42,400 --> 00:09:45,320 Speaker 1: the mighty had fallen at that point. All right, so 160 00:09:45,360 --> 00:09:49,720 Speaker 1: now we're up to Time Warner, freshly divorced from A 161 00:09:49,840 --> 00:09:53,920 Speaker 1: O L, tried to find its new path Turner Sports 162 00:09:54,280 --> 00:09:57,440 Speaker 1: division within Time Warner, because remember at this point, time 163 00:09:57,440 --> 00:10:02,760 Speaker 1: Warner includes the Turner family of products like Turner Broadcasting. Well, 164 00:10:02,760 --> 00:10:06,240 Speaker 1: Turner Sports signed a fourteen year deal with the National 165 00:10:06,280 --> 00:10:09,720 Speaker 1: Collegiate Athletic Association or n C Double A, and that 166 00:10:09,800 --> 00:10:12,920 Speaker 1: agreement gave Turner the job of managing all the digital 167 00:10:12,920 --> 00:10:16,080 Speaker 1: platforms for the n C Double A and also gave 168 00:10:16,320 --> 00:10:19,720 Speaker 1: Turner more access to coverage of all eight eight inn 169 00:10:19,760 --> 00:10:22,960 Speaker 1: C Double A championships, So that was a pretty big deal. 170 00:10:23,520 --> 00:10:26,960 Speaker 1: That year also saw Time Warner expand operations in Chile. 171 00:10:28,040 --> 00:10:32,720 Speaker 1: So the company already operated CNN Chile, but in it 172 00:10:32,760 --> 00:10:37,000 Speaker 1: acquired a television station called Chile Vision from the former 173 00:10:37,040 --> 00:10:40,040 Speaker 1: president of Chile. And this gives me a quick chance 174 00:10:40,080 --> 00:10:43,040 Speaker 1: to talk about the cable channel side of business. I 175 00:10:43,120 --> 00:10:45,640 Speaker 1: have some insight into this because I used to work 176 00:10:45,679 --> 00:10:49,160 Speaker 1: for a company that, among other things, was a cable 177 00:10:49,240 --> 00:10:53,160 Speaker 1: channel company. So let's say you happen to own a 178 00:10:53,320 --> 00:10:57,200 Speaker 1: group of cable channels. You've got one that's your primary channel. 179 00:10:57,320 --> 00:10:59,960 Speaker 1: This is the one that lots of people are familiar with. 180 00:11:00,040 --> 00:11:03,520 Speaker 1: It's the most famous of your channels, and maybe you've 181 00:11:03,559 --> 00:11:06,720 Speaker 1: got a few second tier channels that are popular, but 182 00:11:06,760 --> 00:11:09,760 Speaker 1: they're just not as widely known as your primary one. 183 00:11:10,360 --> 00:11:13,040 Speaker 1: And then you've got maybe a few other channels that 184 00:11:13,080 --> 00:11:15,720 Speaker 1: are more niche in appeal and so they have lower 185 00:11:15,800 --> 00:11:20,559 Speaker 1: viewer numbers. Now, as a cable channel owner, your job 186 00:11:20,679 --> 00:11:26,040 Speaker 1: is to get your channels carried on various cable service providers. Right, 187 00:11:26,160 --> 00:11:29,400 Speaker 1: you're making the content, you have to make the deals 188 00:11:29,440 --> 00:11:34,320 Speaker 1: for the cable companies that service homes to carry your content. 189 00:11:34,720 --> 00:11:36,680 Speaker 1: So you want to make these deals with these various 190 00:11:36,679 --> 00:11:40,319 Speaker 1: cable service companies that provide cable feeds to customers. So 191 00:11:40,559 --> 00:11:43,040 Speaker 1: they're the ones who own the pipes. You're the one 192 00:11:43,080 --> 00:11:46,439 Speaker 1: who's making the content. So you negotiate deals that are 193 00:11:46,480 --> 00:11:51,000 Speaker 1: called carriage agreements with these various cable companies. And typically 194 00:11:51,320 --> 00:11:54,600 Speaker 1: the way this works is that you, as an owner 195 00:11:54,720 --> 00:11:58,280 Speaker 1: of these cable channels, you want all of those channels 196 00:11:58,320 --> 00:12:01,280 Speaker 1: to find a space on the feeds of these various 197 00:12:01,320 --> 00:12:06,240 Speaker 1: cable television providers. Now, the television providers might only really 198 00:12:06,280 --> 00:12:10,080 Speaker 1: be interested in that primary channel, or maybe they want 199 00:12:10,120 --> 00:12:14,240 Speaker 1: the primary and maybe the secondary channels. But you end 200 00:12:14,360 --> 00:12:18,760 Speaker 1: up drafting a deal that requires the cable TV providers 201 00:12:19,080 --> 00:12:21,880 Speaker 1: to carry all of your channels or else they don't 202 00:12:21,920 --> 00:12:25,840 Speaker 1: get any of them. So for the beginning of your business, 203 00:12:25,960 --> 00:12:30,520 Speaker 1: that's really your focus, your negotiating and then renegotiating carriage 204 00:12:30,520 --> 00:12:35,640 Speaker 1: agreements with various cable TV providers and satellite providers. But 205 00:12:35,720 --> 00:12:40,000 Speaker 1: eventually you're gonna hit market saturation. You're going to get 206 00:12:40,040 --> 00:12:44,000 Speaker 1: your channels on pretty much every major provider, and then 207 00:12:44,040 --> 00:12:46,920 Speaker 1: there's nowhere else to go. So now you're also going 208 00:12:46,960 --> 00:12:50,240 Speaker 1: to make money by selling ads space on your programming 209 00:12:50,360 --> 00:12:53,840 Speaker 1: to various advertisers. Assuming you're not just an outright pay 210 00:12:53,960 --> 00:12:58,040 Speaker 1: TV channel, you're gonna have ads, so the primary channel 211 00:12:58,120 --> 00:13:01,040 Speaker 1: is likely going to be your premium products, right, advertisers 212 00:13:01,080 --> 00:13:04,160 Speaker 1: are going to spend more money to put ads against 213 00:13:04,360 --> 00:13:08,240 Speaker 1: those popular programs because of course more people are watching 214 00:13:08,280 --> 00:13:11,560 Speaker 1: those and it is harder to sell ad space on 215 00:13:11,679 --> 00:13:15,800 Speaker 1: the niche programming channels, so often add deals will actually 216 00:13:15,800 --> 00:13:18,520 Speaker 1: include ad space on some of the smaller channels in 217 00:13:18,559 --> 00:13:22,199 Speaker 1: addition to prime space on the big ones. It all 218 00:13:22,320 --> 00:13:25,280 Speaker 1: tends to get wrapped up into these very complicated ad deals. 219 00:13:25,320 --> 00:13:29,640 Speaker 1: But again, eventually you start to maximize your profits and 220 00:13:29,679 --> 00:13:32,880 Speaker 1: you don't have really anywhere else to go. So what 221 00:13:32,920 --> 00:13:36,560 Speaker 1: do you do? I mean, you pretty much saturated your market, 222 00:13:36,800 --> 00:13:39,679 Speaker 1: you don't have more channels to put on cable, so 223 00:13:39,720 --> 00:13:44,600 Speaker 1: you can't add stuff you've already carried. You're already carried 224 00:13:44,600 --> 00:13:47,000 Speaker 1: about all the major cable service providers, so there's no 225 00:13:47,040 --> 00:13:50,680 Speaker 1: one to else, you know, to jump onto. So unless 226 00:13:50,679 --> 00:13:53,720 Speaker 1: you knock it out of the park with a few 227 00:13:53,800 --> 00:13:57,360 Speaker 1: real big hit shows, your ad revenues are going to 228 00:13:57,440 --> 00:14:00,640 Speaker 1: start to plateau. And if you do hit it out 229 00:14:00,640 --> 00:14:02,400 Speaker 1: of the park, if you do make like the next 230 00:14:02,520 --> 00:14:07,400 Speaker 1: Blockbuster TV show, well, in order to grow in subsequent years, 231 00:14:07,440 --> 00:14:09,760 Speaker 1: you've got to do it again. It's hard enough to 232 00:14:09,760 --> 00:14:13,000 Speaker 1: get that to work once, let alone multiple times. So 233 00:14:13,640 --> 00:14:17,920 Speaker 1: one solution at this point is to expand into new markets. 234 00:14:18,559 --> 00:14:21,520 Speaker 1: This is why if you follow news about cable companies, 235 00:14:21,600 --> 00:14:24,160 Speaker 1: as in you know, the companies that are making cable 236 00:14:24,200 --> 00:14:28,680 Speaker 1: television content, you'll frequently see that they announced that they're 237 00:14:28,680 --> 00:14:33,360 Speaker 1: expanding into places like South America or Asia. The companies 238 00:14:33,400 --> 00:14:37,479 Speaker 1: will develop regional offices that are dedicated to creating programming 239 00:14:37,720 --> 00:14:41,600 Speaker 1: for those markets or their localizing content that you know, 240 00:14:41,640 --> 00:14:44,840 Speaker 1: originated from somewhere else. And this is one of the 241 00:14:45,080 --> 00:14:48,920 Speaker 1: few opportunities for growth once you reach this stage, and 242 00:14:48,960 --> 00:14:51,320 Speaker 1: if it weren't for the fact that we typically judge 243 00:14:51,360 --> 00:14:54,360 Speaker 1: the health and success of a business by how much 244 00:14:54,400 --> 00:14:57,840 Speaker 1: it grows year over year. This wouldn't be a big deal. 245 00:14:57,960 --> 00:15:00,480 Speaker 1: You know, you could just operate as is and you'd 246 00:15:00,480 --> 00:15:03,280 Speaker 1: be fine, But that's not how things work. We do 247 00:15:03,400 --> 00:15:07,560 Speaker 1: judge companies on that metric of growth. That means that 248 00:15:07,600 --> 00:15:12,800 Speaker 1: an entity like Time Warner or Discovery often has to 249 00:15:12,840 --> 00:15:16,960 Speaker 1: look at ways to grow beyond regional borders in order 250 00:15:16,960 --> 00:15:19,800 Speaker 1: to appear healthy, because it's not just good enough to 251 00:15:19,840 --> 00:15:24,120 Speaker 1: do good business, You've gotta grow. So what happens once 252 00:15:24,160 --> 00:15:28,800 Speaker 1: a company starts to approach a global reach, Well, I 253 00:15:28,840 --> 00:15:32,120 Speaker 1: suppose they could weep like Alexander, for there are no 254 00:15:32,280 --> 00:15:36,240 Speaker 1: more worlds to conquer. Or they could try something else, 255 00:15:36,400 --> 00:15:40,480 Speaker 1: like merging with another big media company. We'll get back 256 00:15:40,520 --> 00:15:44,840 Speaker 1: to that anyway. Beyond Chile, Time Warner made some moves 257 00:15:44,880 --> 00:15:49,200 Speaker 1: to increase its ownership stake in various regional HBO networks. 258 00:15:49,760 --> 00:15:54,160 Speaker 1: So HBO was kind of operating like a franchise. So 259 00:15:54,280 --> 00:15:58,160 Speaker 1: Time Warner owned some, but not all, of these regionally 260 00:15:58,320 --> 00:16:02,240 Speaker 1: focused branches of h BO, which were you know, co 261 00:16:02,400 --> 00:16:06,880 Speaker 1: owned by other partners. So companies like HBO Latin America 262 00:16:06,960 --> 00:16:10,960 Speaker 1: Group UH. Time Warner HBO purchased a larger stake of 263 00:16:11,000 --> 00:16:14,240 Speaker 1: that particular group in two for more than two hundred 264 00:16:14,240 --> 00:16:18,240 Speaker 1: million dollars, which gave HBO an eighty percent ownership in 265 00:16:18,280 --> 00:16:22,480 Speaker 1: the Latin America Group. Similarly, over in Europe, HBO bought 266 00:16:22,520 --> 00:16:26,560 Speaker 1: out its partners that had some ownership in HBO Europe UH. 267 00:16:26,880 --> 00:16:29,760 Speaker 1: The companies spent about a hundred thirty six you know 268 00:16:29,800 --> 00:16:33,440 Speaker 1: million bucks in order to buy those partners out. And 269 00:16:33,560 --> 00:16:36,640 Speaker 1: Time Warner also purchased a company called Shed Media in 270 00:16:36,680 --> 00:16:41,080 Speaker 1: twenty for one dred million pounds. Now, as that implies, 271 00:16:41,400 --> 00:16:45,080 Speaker 1: Shed Media was a UK based TV content creator and 272 00:16:45,120 --> 00:16:50,680 Speaker 1: distributor and behind such shows as Waterloo Road and Footballers Wives. 273 00:16:51,640 --> 00:16:55,080 Speaker 1: I admit I'm not familiar with those shows, but anyway. 274 00:16:55,120 --> 00:16:58,400 Speaker 1: In twenty ten, Time Warner acquired a majority share in 275 00:16:58,520 --> 00:17:01,600 Speaker 1: shed Media. The the management team still owned a bit 276 00:17:01,640 --> 00:17:05,320 Speaker 1: more than of the company at that point. In fourteen, 277 00:17:05,400 --> 00:17:09,720 Speaker 1: Time Warner increased its ownership and purchased the remainder of 278 00:17:09,760 --> 00:17:14,200 Speaker 1: the company. Then they transformed Shed Media into Warner Brothers 279 00:17:14,280 --> 00:17:20,600 Speaker 1: Television Productions UK in the Warner Brothers Home Entertainment Group 280 00:17:20,680 --> 00:17:25,040 Speaker 1: division of Time Warner acquired an online social platform dedicated 281 00:17:25,080 --> 00:17:28,639 Speaker 1: to helping people discover movies that they might be interested in. 282 00:17:29,400 --> 00:17:32,520 Speaker 1: That site was called flick Ster, and at that point, 283 00:17:32,560 --> 00:17:35,719 Speaker 1: Flickster was also the parent company of another site that 284 00:17:35,760 --> 00:17:40,320 Speaker 1: relates to movies, one called Rotten Tomatoes, and that would 285 00:17:40,400 --> 00:17:44,320 Speaker 1: raise a few questions which I'll talk about after we 286 00:17:44,440 --> 00:17:55,919 Speaker 1: take this quick break. Run Tomatoes started out as a 287 00:17:56,000 --> 00:18:00,119 Speaker 1: pet project for Sinduong. It was just a site at 288 00:18:00,160 --> 00:18:04,000 Speaker 1: aggregated movie critic film reviews so that people could, you know, 289 00:18:04,080 --> 00:18:06,760 Speaker 1: pop on over to the site, look at the reviews, 290 00:18:06,840 --> 00:18:08,720 Speaker 1: and get an idea about whether or not they might 291 00:18:08,880 --> 00:18:12,439 Speaker 1: like a particular film. So it was a pretty simple idea. 292 00:18:12,720 --> 00:18:16,320 Speaker 1: Now obviously that grew quite a bit, with the site 293 00:18:16,359 --> 00:18:19,919 Speaker 1: developing its own metrics to judge the quote unquote freshness 294 00:18:20,080 --> 00:18:23,320 Speaker 1: of a movie. Uh. This is essentially looking at all 295 00:18:23,359 --> 00:18:26,160 Speaker 1: of the positive reviews and all of the negative reviews 296 00:18:26,560 --> 00:18:29,280 Speaker 1: and doing some quick math on that ratio. So if 297 00:18:29,320 --> 00:18:32,520 Speaker 1: there are more positive than negative reviews of a film, 298 00:18:32,600 --> 00:18:35,639 Speaker 1: then that film is fresh, even if those positive reviews 299 00:18:35,640 --> 00:18:39,359 Speaker 1: are just lukewarm. So if you see a high freshness 300 00:18:39,520 --> 00:18:43,040 Speaker 1: rating on a movie, it doesn't necessarily mean that movie 301 00:18:43,080 --> 00:18:46,879 Speaker 1: is spectacular or better than movies that have lower ratings. 302 00:18:47,280 --> 00:18:50,959 Speaker 1: It just means that more critics gave it a positive review. 303 00:18:51,440 --> 00:18:54,680 Speaker 1: But that positive review might have been like, it's okay, 304 00:18:55,400 --> 00:18:58,679 Speaker 1: right as opposed to this thing is amazing anyway. I've 305 00:18:58,680 --> 00:19:01,040 Speaker 1: done a full episode about Atten Tomatoes, so I'm not 306 00:19:01,080 --> 00:19:03,679 Speaker 1: gonna go over the whole thing here. I g N 307 00:19:03,760 --> 00:19:07,800 Speaker 1: Entertainment bought Rotten Tomatoes in two thousand four, but then 308 00:19:07,920 --> 00:19:11,240 Speaker 1: News Corps, the parent company of Fox at the time, 309 00:19:11,440 --> 00:19:15,280 Speaker 1: acquired I g N in two thousand five. Five years later, 310 00:19:15,560 --> 00:19:19,119 Speaker 1: the I g N division of News Corps sold Rotten 311 00:19:19,160 --> 00:19:22,760 Speaker 1: Tomatoes to flix Stir. Okay, so let's flip over to 312 00:19:22,800 --> 00:19:28,520 Speaker 1: flixster just really quickly surround. Chari and Joe Greenstein founded 313 00:19:28,560 --> 00:19:32,000 Speaker 1: flixter back in two thousand six. Flick Stir was a 314 00:19:32,119 --> 00:19:35,879 Speaker 1: social media platform centered around movies, and you could watch 315 00:19:35,960 --> 00:19:39,879 Speaker 1: trailers on the site and explore posts about new and 316 00:19:40,040 --> 00:19:43,280 Speaker 1: upcoming films. Clearly, the site grew large enough to purchase 317 00:19:43,359 --> 00:19:48,560 Speaker 1: Rotten Tomatoes from I g N, and then in Warner 318 00:19:48,640 --> 00:19:52,640 Speaker 1: came calling. People began to express some concern that a 319 00:19:52,720 --> 00:19:55,879 Speaker 1: company that was in the movie business, that is Time 320 00:19:55,920 --> 00:20:00,119 Speaker 1: Warner with Warner Brothers Studios was purchasing a different come an, 321 00:20:00,440 --> 00:20:03,639 Speaker 1: this one being Rotten Tomatoes that was in the movie 322 00:20:03,720 --> 00:20:06,760 Speaker 1: review business. So would that mean that Warner Brothers would 323 00:20:06,800 --> 00:20:10,359 Speaker 1: pressure Rotten Tomatoes to make sure that Warner Brothers films 324 00:20:10,400 --> 00:20:14,520 Speaker 1: got a fresh rating. Turned out that concern was largely 325 00:20:14,640 --> 00:20:19,359 Speaker 1: not a problem, though people would occasionally make accusations otherwise. Um, 326 00:20:19,400 --> 00:20:21,960 Speaker 1: but it was, you know, something to think about, Like, 327 00:20:22,040 --> 00:20:24,960 Speaker 1: there is clearly a conflict of interest if you are 328 00:20:25,000 --> 00:20:28,840 Speaker 1: the owner of both a movie production studio and a 329 00:20:28,920 --> 00:20:34,359 Speaker 1: movie review aggregator. Anyway, the incorporation of flick Stir into 330 00:20:34,359 --> 00:20:38,040 Speaker 1: Warner Brothers was supposed to lead to a bunch of 331 00:20:38,080 --> 00:20:41,320 Speaker 1: new digital products that would give Time Warner opportunities to 332 00:20:41,320 --> 00:20:45,280 Speaker 1: reach customers in new ways, not that different from how 333 00:20:45,680 --> 00:20:47,800 Speaker 1: you were looking at a O L and Time Warner 334 00:20:47,880 --> 00:20:50,640 Speaker 1: just a couple of years earlier. But by twenty sixteen 335 00:20:51,040 --> 00:20:54,000 Speaker 1: things had changed. Either Time Warner had gotten all it 336 00:20:54,119 --> 00:20:57,080 Speaker 1: needed out of the arrangement or the arrangement just didn't 337 00:20:57,119 --> 00:21:00,840 Speaker 1: work out, and so Time Warner sold off Flixster and 338 00:21:00,960 --> 00:21:04,919 Speaker 1: Rotten Tomatoes to fan Dango. Now, Time Warner got a 339 00:21:04,960 --> 00:21:07,639 Speaker 1: little stake of ownership in fan Dango as a result 340 00:21:07,640 --> 00:21:11,879 Speaker 1: of that, which is also complicated because fan Dango's parent 341 00:21:12,040 --> 00:21:16,199 Speaker 1: company is NBC Universal, and that means that now two 342 00:21:16,440 --> 00:21:20,280 Speaker 1: major media companies, both of which have film divisions, have 343 00:21:20,720 --> 00:21:24,600 Speaker 1: some ownership of Rotten Tomatoes. The conflict of interest concerned 344 00:21:24,600 --> 00:21:27,920 Speaker 1: remains intact, though again from what I've seen, there's been 345 00:21:28,400 --> 00:21:32,439 Speaker 1: little evidence of any actual manipulation. The Rotten Tomatoes scores 346 00:21:32,480 --> 00:21:35,840 Speaker 1: for movies out of w B and Universal don't seem 347 00:21:35,880 --> 00:21:39,240 Speaker 1: like they've been boosted at all, so at least there's that, 348 00:21:40,160 --> 00:21:44,160 Speaker 1: all right. So that Time Warner acquisition of flick Ster 349 00:21:44,560 --> 00:21:47,680 Speaker 1: happened inven and we're gonna skip forward a little bit 350 00:21:48,119 --> 00:21:50,200 Speaker 1: because a lot of the nitty gritty stuff is just 351 00:21:51,119 --> 00:21:56,560 Speaker 1: not that interesting, gets tiresome. It's mostly like smaller acquisitions, 352 00:21:56,840 --> 00:22:00,320 Speaker 1: so we're gonna move up to twent that year, Time 353 00:22:00,320 --> 00:22:03,919 Speaker 1: Warner was looking to actually offload a property rather than 354 00:22:04,000 --> 00:22:07,000 Speaker 1: make another acquisition, so in this case, it was the 355 00:22:07,040 --> 00:22:12,160 Speaker 1: publishing arm of Time Incorporated. So originally, Time Warner entered 356 00:22:12,200 --> 00:22:16,719 Speaker 1: into discussions with another company called Meredith Corporation. Like Time Warner, 357 00:22:16,840 --> 00:22:19,679 Speaker 1: Meredith is a media conglomerate company, and one of the 358 00:22:19,720 --> 00:22:23,919 Speaker 1: things Meredith owns is a Publishing arm a magazine publishing arm, 359 00:22:24,000 --> 00:22:26,200 Speaker 1: and arguably I would say it's best known for the 360 00:22:26,240 --> 00:22:29,360 Speaker 1: magazine Better Homes and Gardens, which always makes me think 361 00:22:29,359 --> 00:22:32,560 Speaker 1: of the musical Little Shop of Horrors. But this is 362 00:22:32,560 --> 00:22:35,560 Speaker 1: not a show where you know, I sing stuff typically, 363 00:22:35,960 --> 00:22:38,640 Speaker 1: so to endure that kind of punishment, you should listen 364 00:22:38,680 --> 00:22:42,639 Speaker 1: to large nerd Dron Collider. Anyway, the talks between Time 365 00:22:42,680 --> 00:22:46,960 Speaker 1: Warner and Meredith Corporation focused on the two companies combining 366 00:22:47,000 --> 00:22:52,280 Speaker 1: their publishing divisions into a single independent entity, but Meredith 367 00:22:52,520 --> 00:22:55,360 Speaker 1: eventually backed away from that deal, so Time Warner went 368 00:22:55,480 --> 00:22:58,800 Speaker 1: with their backup plan, and that was to spin off 369 00:22:59,200 --> 00:23:02,520 Speaker 1: the publishing to vision of Time Incorporated into its own 370 00:23:02,520 --> 00:23:06,160 Speaker 1: independent company. And it's easy to understand why they wanted 371 00:23:06,160 --> 00:23:10,639 Speaker 1: to do this, by the publishing world in general was 372 00:23:10,800 --> 00:23:16,040 Speaker 1: really struggling. The Web had disrupted the industry. Subscriber numbers 373 00:23:16,040 --> 00:23:20,679 Speaker 1: were dropping, advertising revenues were following suit. So across the board, 374 00:23:20,720 --> 00:23:24,960 Speaker 1: companies were scrambling to find solutions as they saw revenues decrease. 375 00:23:25,520 --> 00:23:28,399 Speaker 1: For Time Warner, this became a point of concern because 376 00:23:28,440 --> 00:23:30,480 Speaker 1: you had a company that you know, kind of wanted 377 00:23:30,520 --> 00:23:34,880 Speaker 1: to restructure more around television and film. So Time Incorporated 378 00:23:34,960 --> 00:23:39,720 Speaker 1: got spun off from Time Warner. In Time Warner retained 379 00:23:39,760 --> 00:23:42,960 Speaker 1: the name Time Warner even though the Time part was gone. 380 00:23:43,000 --> 00:23:47,560 Speaker 1: Now as for Time Incorporated, that company became a publicly 381 00:23:47,600 --> 00:23:53,520 Speaker 1: traded media company, and then in another company came around 382 00:23:53,600 --> 00:23:58,359 Speaker 1: and acquired Time inc. So what company was that? Well, 383 00:23:58,400 --> 00:24:01,199 Speaker 1: it was Meredith Corporation, you know, the same company that 384 00:24:01,240 --> 00:24:04,560 Speaker 1: had been in discussions with Time Warner about combining their 385 00:24:04,600 --> 00:24:08,760 Speaker 1: publishing arms of the respective entities, and now Meredith had 386 00:24:08,800 --> 00:24:13,800 Speaker 1: scooped up Time all for its own. In fourteen, Time 387 00:24:13,800 --> 00:24:17,240 Speaker 1: Warner got another suitor. This time it was twenty first 388 00:24:17,440 --> 00:24:22,000 Speaker 1: Century Fox. So just imagine how different our world would 389 00:24:22,000 --> 00:24:26,320 Speaker 1: be if that deal had gone through. If Fox had 390 00:24:26,359 --> 00:24:31,640 Speaker 1: purchased Time Warner, and then subsequently, if Disney had continued 391 00:24:31,680 --> 00:24:34,840 Speaker 1: to go on and purchase Fox, that would mean that 392 00:24:34,920 --> 00:24:38,479 Speaker 1: Disney would own both Marvel and d C Comics at 393 00:24:38,520 --> 00:24:42,840 Speaker 1: the same time. Imagine those possibilities, except, of course, I 394 00:24:42,880 --> 00:24:45,440 Speaker 1: suspect that the US government would have thrown up some 395 00:24:45,520 --> 00:24:48,600 Speaker 1: major roadblocks to that kind of merger. At that point. 396 00:24:49,119 --> 00:24:52,240 Speaker 1: The US allowed a lot of really big media companies 397 00:24:52,280 --> 00:24:57,720 Speaker 1: to get really really bigger, sometimes in extremely questionable ways. 398 00:24:58,080 --> 00:25:00,520 Speaker 1: But I think if Disney were to own the sets 399 00:25:00,560 --> 00:25:03,960 Speaker 1: of both Fox and Warner Brothers, that might be a 400 00:25:04,000 --> 00:25:06,399 Speaker 1: bridge too far. That would probably be saying that Disney 401 00:25:06,440 --> 00:25:10,080 Speaker 1: owns way too many of the movie studios that still exist. 402 00:25:10,800 --> 00:25:14,120 Speaker 1: So it's a moot point because it never went through. 403 00:25:14,200 --> 00:25:17,000 Speaker 1: Fox made an offer of eighty five dollars per share 404 00:25:17,000 --> 00:25:20,159 Speaker 1: of Time Warner stock, which was a deal valued at 405 00:25:20,200 --> 00:25:23,400 Speaker 1: around eighty billion dollars at the time, but the board 406 00:25:23,400 --> 00:25:26,880 Speaker 1: of directors over at Time Warner said, yeah, nah, thanks, 407 00:25:27,480 --> 00:25:31,440 Speaker 1: we're good. So Fox's bid to acquire Time Warner fizzled out. 408 00:25:31,760 --> 00:25:34,280 Speaker 1: If the deal had gone through, we would have seen 409 00:25:34,400 --> 00:25:38,320 Speaker 1: CNN gets spun off in some way because Century Fox 410 00:25:38,400 --> 00:25:42,639 Speaker 1: also owned you know, the Fox News Network, competing twenty 411 00:25:42,640 --> 00:25:45,639 Speaker 1: four hour news channel, so that would have also been 412 00:25:45,680 --> 00:25:48,240 Speaker 1: a conflict. So CNN would have had to have gone 413 00:25:48,280 --> 00:25:52,200 Speaker 1: if that deal went through. Of course it didn't. Okay, 414 00:25:52,200 --> 00:25:53,920 Speaker 1: Now we got to take a step back and see 415 00:25:53,960 --> 00:25:57,159 Speaker 1: what else was going on in the media landscape around 416 00:25:57,240 --> 00:26:00,399 Speaker 1: this time, that time being you know, the decade between 417 00:26:00,400 --> 00:26:04,160 Speaker 1: twenty and twenty twenty, because that's going to help explain 418 00:26:04,520 --> 00:26:08,200 Speaker 1: the next stage of events for Time Warner and Honestly, 419 00:26:08,840 --> 00:26:12,280 Speaker 1: the key to the whole story is the concept of consolidation, 420 00:26:12,680 --> 00:26:19,359 Speaker 1: or of various companies coming together to form truly enormous organizations. Now, 421 00:26:20,080 --> 00:26:22,479 Speaker 1: the really big one we need to talk about was 422 00:26:23,040 --> 00:26:26,720 Speaker 1: and still is Comcast. We got to do a super 423 00:26:26,720 --> 00:26:30,280 Speaker 1: fast summary of a ton of stuff that happened with Comcast, 424 00:26:30,400 --> 00:26:32,680 Speaker 1: and that involves a lot of other properties. So here 425 00:26:32,680 --> 00:26:36,080 Speaker 1: we go, all right, way way way back. Just after 426 00:26:36,160 --> 00:26:39,680 Speaker 1: World War One, you had the Radio Corporation of America 427 00:26:40,080 --> 00:26:43,120 Speaker 1: or r c A, which in turn ended up being 428 00:26:43,480 --> 00:26:47,080 Speaker 1: you know, owned by General Electric or g E. So 429 00:26:47,200 --> 00:26:50,320 Speaker 1: our c A created a couple of different radio station networks, 430 00:26:50,560 --> 00:26:54,159 Speaker 1: both of which were called NBC for National Broadcast Corporation. 431 00:26:54,840 --> 00:26:57,280 Speaker 1: One of those two would split off to become ABC, 432 00:26:57,760 --> 00:27:01,720 Speaker 1: but the other one remained n B e C. Upon 433 00:27:01,800 --> 00:27:05,359 Speaker 1: the rise of television, NBC branched out being just a 434 00:27:05,440 --> 00:27:09,320 Speaker 1: radio network and also became a television network as well. 435 00:27:09,880 --> 00:27:12,800 Speaker 1: Now we're gonna skip forward to the nineteen eighties. Through 436 00:27:12,800 --> 00:27:15,920 Speaker 1: a story that I have covered in other episodes, General 437 00:27:15,960 --> 00:27:21,720 Speaker 1: Electric reacquired NBC. UH they had been forced to divest 438 00:27:21,800 --> 00:27:25,480 Speaker 1: themselves of NBC and r c A back in nineteen 439 00:27:25,480 --> 00:27:28,800 Speaker 1: thirty two, but by nine six, apparently it was tote 440 00:27:28,800 --> 00:27:32,000 Speaker 1: school for GE to buy them back. Apparently, whatever the 441 00:27:32,080 --> 00:27:35,280 Speaker 1: anti competitive nature was back in the thirties no longer 442 00:27:35,359 --> 00:27:38,920 Speaker 1: existed in the Grand Old eighties, so g E bought 443 00:27:39,320 --> 00:27:42,760 Speaker 1: our c A and NBC back then. They ended up 444 00:27:42,800 --> 00:27:45,880 Speaker 1: selling off most of our CIA's assets, but they kept NBC. 445 00:27:46,880 --> 00:27:50,920 Speaker 1: NBC then began to acquire other companies to diversify its holdings, 446 00:27:50,960 --> 00:27:54,640 Speaker 1: so it acquired cable channels like Bravo. It also acquired 447 00:27:54,680 --> 00:27:58,439 Speaker 1: the Spanish speaking channel Telemundo. And in parallel with that 448 00:27:58,560 --> 00:28:01,720 Speaker 1: story we've got the story of Universal Studios is in 449 00:28:02,359 --> 00:28:08,320 Speaker 1: the movie studio originally founded back in nineteen twelve, it 450 00:28:08,359 --> 00:28:12,879 Speaker 1: had changed dramatically, Like like Warner Brothers. It had a heyday, 451 00:28:12,960 --> 00:28:18,199 Speaker 1: and then the Department of Justice and various UH anti 452 00:28:18,280 --> 00:28:23,240 Speaker 1: monopoly parties really broke up the movie industry, probably probably 453 00:28:23,320 --> 00:28:26,760 Speaker 1: for the best in the nineteen fifties and sixties. So 454 00:28:26,800 --> 00:28:29,959 Speaker 1: by the nineteen sixties they were in a very different 455 00:28:30,000 --> 00:28:32,280 Speaker 1: place than the company was when it was at its 456 00:28:32,680 --> 00:28:36,359 Speaker 1: height in like the twenties and thirties. So the Music 457 00:28:36,400 --> 00:28:39,520 Speaker 1: Corporation of America or m c A, which I mentioned 458 00:28:39,520 --> 00:28:43,960 Speaker 1: earlier in this episode acquired Universal in the nineteen sixties. 459 00:28:44,360 --> 00:28:48,040 Speaker 1: But there's always a bigger fish, right, So skip ahead 460 00:28:48,080 --> 00:28:51,840 Speaker 1: to and then Hannah Sonic, which at the time was 461 00:28:51,880 --> 00:28:56,320 Speaker 1: known as Matt Sushida Electric, acquired m c A. Because 462 00:28:56,320 --> 00:29:00,280 Speaker 1: all these media stories are really messy. In ninety five, 463 00:29:00,360 --> 00:29:03,760 Speaker 1: Matt Sushida sold off eight of its ownership in m 464 00:29:03,800 --> 00:29:07,960 Speaker 1: c A and thus, by extension Universal to Seagram, which 465 00:29:08,080 --> 00:29:11,520 Speaker 1: again I mentioned earlier in this episode. And as I said, 466 00:29:11,520 --> 00:29:14,000 Speaker 1: Seagram was best known as a whiskey distillery, so you 467 00:29:14,000 --> 00:29:17,640 Speaker 1: know all of this tracks anyway. In two thousand a 468 00:29:17,800 --> 00:29:23,040 Speaker 1: French water and utility and media company called Vivendi acquired 469 00:29:23,440 --> 00:29:28,479 Speaker 1: Sea Graham because again bigger fish. So now Vivendi owned 470 00:29:28,640 --> 00:29:32,200 Speaker 1: Sea Gram and thus by extension, owned controlling interest in 471 00:29:32,400 --> 00:29:37,200 Speaker 1: m c A, and thus by extension in Universal, so 472 00:29:37,480 --> 00:29:42,040 Speaker 1: the overall company became known as Vivendi Universal. Then in 473 00:29:42,080 --> 00:29:45,840 Speaker 1: two thousand four, Vivendi Universal sold off eighty percent of 474 00:29:45,920 --> 00:29:53,600 Speaker 1: Vivendi Universal Entertainment to drumroll please General Electric. Yeah, the 475 00:29:53,640 --> 00:29:58,360 Speaker 1: same company that had purchased, or rather bought back NBC 476 00:29:58,400 --> 00:30:05,520 Speaker 1: in bought up of the control of Vivendi Universal Entertainment. 477 00:30:06,240 --> 00:30:12,120 Speaker 1: So ge renames this now mega media company NBC Universal 478 00:30:12,440 --> 00:30:16,320 Speaker 1: all one word, combining the media assets of both companies. 479 00:30:17,160 --> 00:30:21,080 Speaker 1: NBC had eight share in this concern, with Vivindy holding 480 00:30:21,080 --> 00:30:25,000 Speaker 1: the other. G E would then end up buying up 481 00:30:25,040 --> 00:30:28,720 Speaker 1: the rest of Vivendy steak In, and thus GE had 482 00:30:28,760 --> 00:30:32,920 Speaker 1: full ownership of the full thing by that point. That's 483 00:30:33,120 --> 00:30:37,400 Speaker 1: same year as when Comcast, the cable company, swooped in 484 00:30:37,600 --> 00:30:43,920 Speaker 1: and then purchased from g E a steak in NBC Universal. Now, 485 00:30:43,920 --> 00:30:47,720 Speaker 1: the fact that the FCC cleared this deal still blows 486 00:30:47,800 --> 00:30:52,720 Speaker 1: my mind because Comcast is a cable television and internet 487 00:30:52,800 --> 00:30:55,680 Speaker 1: service provider and it was buying up one of the 488 00:30:55,800 --> 00:30:59,360 Speaker 1: largest media companies in the world. So now you had 489 00:30:59,360 --> 00:31:02,560 Speaker 1: a corporation was not only in the business of providing 490 00:31:02,800 --> 00:31:06,160 Speaker 1: the pipes, but also in the business of creating a 491 00:31:06,200 --> 00:31:09,440 Speaker 1: lot of content going through those pipes. This was the 492 00:31:09,480 --> 00:31:11,600 Speaker 1: kind of stuff that was making people nervous about net 493 00:31:11,640 --> 00:31:15,680 Speaker 1: neutrality and anti competitive practices. It was the kind of 494 00:31:15,720 --> 00:31:18,560 Speaker 1: thing that the US government had frowned upon just a 495 00:31:18,600 --> 00:31:21,960 Speaker 1: few decades earlier, when the government had told movie studios 496 00:31:22,360 --> 00:31:27,840 Speaker 1: that they weren't allowed to control production, processing, distribution, and exhibition. 497 00:31:28,520 --> 00:31:32,440 Speaker 1: So clearly we were in a different world at this point. Anyway, 498 00:31:32,760 --> 00:31:35,800 Speaker 1: Comcast bought out the remainder of g S stake at 499 00:31:35,880 --> 00:31:41,440 Speaker 1: NBC Universal in and that story is, as you probably guessed, 500 00:31:41,560 --> 00:31:44,440 Speaker 1: way more complicated than what I've just laid out in 501 00:31:44,520 --> 00:31:47,360 Speaker 1: that quick summary. It really shows that the history of 502 00:31:47,480 --> 00:31:51,200 Speaker 1: media companies is incredibly challenging to tell, just because of 503 00:31:51,240 --> 00:31:54,760 Speaker 1: all the different entities that become involved over the years. 504 00:31:55,200 --> 00:31:58,320 Speaker 1: But for the purposes of our story, the important bit 505 00:31:58,360 --> 00:32:02,960 Speaker 1: here is that comcasts acquisition of NBC Universal sent shock 506 00:32:03,040 --> 00:32:06,400 Speaker 1: waves not just through the entertainment industry, but also the 507 00:32:06,440 --> 00:32:11,400 Speaker 1: telecommunications industry, and A T and T, a major competitor 508 00:32:11,480 --> 00:32:15,320 Speaker 1: to Comcast, began to consider an acquisition of its own. 509 00:32:16,480 --> 00:32:19,920 Speaker 1: This brings us back to good old Time Warner. Yeah, 510 00:32:19,960 --> 00:32:23,440 Speaker 1: the company had ditched Time Incorporated, but it kept the name. 511 00:32:23,880 --> 00:32:26,680 Speaker 1: It no longer had Time Warner Cable that got spun 512 00:32:26,680 --> 00:32:29,880 Speaker 1: off years earlier. That probably was a good thing, because 513 00:32:29,920 --> 00:32:31,600 Speaker 1: if A. T and T was making a move to 514 00:32:31,680 --> 00:32:34,040 Speaker 1: buy Time Warner, it probably would have had to get 515 00:32:34,120 --> 00:32:36,480 Speaker 1: rid of Time Warner Cable anyway, because otherwise that would 516 00:32:36,480 --> 00:32:40,000 Speaker 1: have been a conflict. Uh. It also was no longer 517 00:32:40,240 --> 00:32:42,880 Speaker 1: the owner of Warner Music group, but it did still 518 00:32:42,920 --> 00:32:47,480 Speaker 1: have its movie and television production units, plus it's digital assets. 519 00:32:47,960 --> 00:32:49,920 Speaker 1: A T and T decided that it needed to make 520 00:32:49,920 --> 00:32:52,760 Speaker 1: a move to get on the same playing ground as Comcast. 521 00:32:53,480 --> 00:32:56,520 Speaker 1: There was also another player and upstart in the media 522 00:32:56,600 --> 00:32:58,680 Speaker 1: game that was putting pressure on both A T and 523 00:32:58,760 --> 00:33:02,880 Speaker 1: T and Comcast, as well as other media companies. This 524 00:33:02,920 --> 00:33:05,680 Speaker 1: company had started off as a kind of humble competitor 525 00:33:05,760 --> 00:33:09,560 Speaker 1: to video rental stores in general and the company Blockbuster 526 00:33:09,640 --> 00:33:14,800 Speaker 1: in particular, and that company is, of course Netflix see 527 00:33:14,840 --> 00:33:19,920 Speaker 1: Netflix represented a threat to cable channels and cable companies 528 00:33:20,240 --> 00:33:23,440 Speaker 1: With streaming media. The number of new subscriptions for cable 529 00:33:23,480 --> 00:33:27,120 Speaker 1: TV ended up changing directions and began to go on 530 00:33:27,160 --> 00:33:30,480 Speaker 1: the decline, which meant that companies like Comcast and A 531 00:33:30,560 --> 00:33:33,520 Speaker 1: T and T had another thing to worry about. If 532 00:33:33,520 --> 00:33:37,360 Speaker 1: you were people were subscribing to cable TV services, or 533 00:33:37,400 --> 00:33:41,760 Speaker 1: worse yet, if existing subscribers started to cancel their service, 534 00:33:42,120 --> 00:33:44,880 Speaker 1: well that's a major hit to revenue. And if people 535 00:33:44,920 --> 00:33:47,960 Speaker 1: were relying more heavily on the Internet as the delivery 536 00:33:48,000 --> 00:33:52,040 Speaker 1: system for entertainment, that threatened the whole media structure. So 537 00:33:52,080 --> 00:33:54,640 Speaker 1: with those factors in mind, A T. T made a 538 00:33:54,680 --> 00:33:58,400 Speaker 1: move to acquired Time Warner in two thousand sixteen. When 539 00:33:58,400 --> 00:34:01,040 Speaker 1: we come back, I'll talk about how that shook out 540 00:34:01,480 --> 00:34:04,040 Speaker 1: and why today A T n T is looking to 541 00:34:04,120 --> 00:34:09,400 Speaker 1: divest itself of Warner Media. But first, let's take another 542 00:34:09,480 --> 00:34:19,920 Speaker 1: quick break, all right. So A T and T announces 543 00:34:19,960 --> 00:34:24,120 Speaker 1: its plan in to acquire Time Warner. The US government 544 00:34:24,200 --> 00:34:27,040 Speaker 1: had something to say about that. The U s Department 545 00:34:27,040 --> 00:34:30,400 Speaker 1: of Justice, under the administration of Donald Trump, filed a 546 00:34:30,480 --> 00:34:34,440 Speaker 1: lawsuit in an attempt to block the merger. Now, according 547 00:34:34,480 --> 00:34:38,360 Speaker 1: to Trump, the merger would put quote too much concentration 548 00:34:38,400 --> 00:34:41,320 Speaker 1: of power in the hands of two few end quote. 549 00:34:42,160 --> 00:34:45,080 Speaker 1: And you know what, I find it hard to disagree 550 00:34:45,080 --> 00:34:47,480 Speaker 1: with that, though I do need to point out that 551 00:34:47,520 --> 00:34:50,600 Speaker 1: if you do the full quote donald Trump's statement, it 552 00:34:50,640 --> 00:34:55,120 Speaker 1: indicates that he was also kind of upset about CNN 553 00:34:55,200 --> 00:34:57,319 Speaker 1: in general, and CNN would have been part of this 554 00:34:57,400 --> 00:35:00,600 Speaker 1: deal because CNN was part of Time Warner, and then 555 00:35:00,640 --> 00:35:03,719 Speaker 1: A T and T would be buying CNN, and his 556 00:35:03,760 --> 00:35:06,960 Speaker 1: personal gripe against CNN was enough to make him speak 557 00:35:06,960 --> 00:35:10,840 Speaker 1: out against this kind of thing. Now, I also mentioned 558 00:35:10,880 --> 00:35:15,040 Speaker 1: that with Comcast and NBC Universal, there already was a 559 00:35:15,080 --> 00:35:19,360 Speaker 1: massive precedent for exactly this kind of merger, Like, it 560 00:35:19,360 --> 00:35:21,759 Speaker 1: would seem pretty hypocritical for the U. S. Government to 561 00:35:21,800 --> 00:35:23,640 Speaker 1: tell A T and T, hey, you can't buy a 562 00:35:23,719 --> 00:35:27,000 Speaker 1: media company when Comcast had just gone and done the 563 00:35:27,040 --> 00:35:30,120 Speaker 1: same thing a few years earlier. So I just happened 564 00:35:30,160 --> 00:35:33,040 Speaker 1: to think that the government should have raised some concerns 565 00:35:33,120 --> 00:35:38,240 Speaker 1: back during the Comcast an NBC Universal deal. Honestly, well, 566 00:35:38,360 --> 00:35:41,680 Speaker 1: this matter went to trial. The trial lasted six weeks 567 00:35:41,719 --> 00:35:45,440 Speaker 1: and ultimately Judge Richard Leon found in favor of Time 568 00:35:45,440 --> 00:35:47,840 Speaker 1: Warner and A T and T and said that the 569 00:35:47,920 --> 00:35:51,719 Speaker 1: merger would be allowed to proceed, which it did. The 570 00:35:51,760 --> 00:35:56,000 Speaker 1: Department of Justice appealed this decision, which sent the whole 571 00:35:56,040 --> 00:35:58,399 Speaker 1: matter to the Court of Appeals, but by that time 572 00:35:58,440 --> 00:36:01,520 Speaker 1: the merger had finalized, so A. T and T did 573 00:36:02,080 --> 00:36:06,279 Speaker 1: officially own Time Warner. Um, I suppose this would be 574 00:36:06,680 --> 00:36:11,040 Speaker 1: more about undoing a merger than preventing one from happening, 575 00:36:11,239 --> 00:36:14,600 Speaker 1: which would have been an enormous deal. Right if the 576 00:36:14,640 --> 00:36:20,160 Speaker 1: government could come in and reverse a merger, that that 577 00:36:20,200 --> 00:36:23,840 Speaker 1: would have been enormously huge. But A T and T was, 578 00:36:24,040 --> 00:36:27,760 Speaker 1: you know, fighting that and ended up winning the appeal, 579 00:36:27,840 --> 00:36:30,560 Speaker 1: so it ended up not mattering. So A T. T 580 00:36:30,719 --> 00:36:34,080 Speaker 1: was also looking to create its own digital advertising division, 581 00:36:34,560 --> 00:36:37,400 Speaker 1: something akin to what we see with web based companies 582 00:36:37,480 --> 00:36:42,400 Speaker 1: like Google and Facebook, and A T. T was also 583 00:36:42,480 --> 00:36:46,000 Speaker 1: looking forward to the ability to play hardball with other 584 00:36:46,200 --> 00:36:51,040 Speaker 1: cable TV providers by owning the means of production for 585 00:36:51,120 --> 00:36:54,000 Speaker 1: certain TV and film properties. That means that the A 586 00:36:54,040 --> 00:36:57,080 Speaker 1: T and T could demand higher prices in carriage agreements 587 00:36:57,560 --> 00:37:02,160 Speaker 1: with competing cable service providers that wanted access to that content. 588 00:37:02,600 --> 00:37:05,560 Speaker 1: The US government was making an argument that this process 589 00:37:05,560 --> 00:37:09,279 Speaker 1: would likely result in higher costs to US consumers as 590 00:37:09,360 --> 00:37:12,480 Speaker 1: these big cable companies started to fight against each other 591 00:37:12,600 --> 00:37:16,600 Speaker 1: using their own content divisions as weapons, and the result 592 00:37:16,640 --> 00:37:19,319 Speaker 1: would be that the consumer, you know, people like you 593 00:37:19,400 --> 00:37:22,759 Speaker 1: and me, we would end up facing higher fees as 594 00:37:22,760 --> 00:37:25,320 Speaker 1: a result. But ultimately, as I said, A T and 595 00:37:25,360 --> 00:37:27,480 Speaker 1: T won the appeal, and the court said that the 596 00:37:27,520 --> 00:37:29,960 Speaker 1: Department of Justice just failed to meet the burden of 597 00:37:30,040 --> 00:37:33,359 Speaker 1: proof that this merger would actually lead to that kind 598 00:37:33,360 --> 00:37:36,960 Speaker 1: of thing, those higher fees for consumers, and the Department 599 00:37:36,960 --> 00:37:41,120 Speaker 1: of Justice dropped the matter. In twenty nineteen, shortly after 600 00:37:41,360 --> 00:37:45,920 Speaker 1: the acquisition completed, in A T and T renamed Time 601 00:37:45,920 --> 00:37:50,360 Speaker 1: Warner again and thus gave us the name Warner Media. 602 00:37:50,920 --> 00:37:55,120 Speaker 1: So if I do a quick rundown memory lane, we 603 00:37:55,200 --> 00:37:59,040 Speaker 1: had Warner Brothers or Warner Bros. If you want to 604 00:37:59,080 --> 00:38:01,839 Speaker 1: be if you want to be silly about it, because 605 00:38:01,840 --> 00:38:04,200 Speaker 1: it's B R O S with A with a period. 606 00:38:04,440 --> 00:38:07,680 Speaker 1: But you had Warner Brothers. Then you had Warner Brothers 607 00:38:07,960 --> 00:38:12,200 Speaker 1: seven Arts. Then you had Warner Brothers Incorporated when it 608 00:38:12,239 --> 00:38:15,880 Speaker 1: was part of Kinney National Company. Then you had Warner 609 00:38:15,960 --> 00:38:20,520 Speaker 1: Communications after Kinney had to split the entertainment division away 610 00:38:20,560 --> 00:38:24,360 Speaker 1: from its other companies. Then you had Time Warner after 611 00:38:24,400 --> 00:38:28,040 Speaker 1: the Time Incorporated merger. Then you had a O L 612 00:38:28,239 --> 00:38:33,040 Speaker 1: Time Warner. Then you had Time Warner again once they 613 00:38:33,400 --> 00:38:36,239 Speaker 1: dropped a O L from the name, and now you 614 00:38:36,360 --> 00:38:40,399 Speaker 1: have Warner Media under a T and T. We isn't 615 00:38:40,440 --> 00:38:44,200 Speaker 1: this fun? While all that was being settled, Time Warner 616 00:38:44,360 --> 00:38:47,680 Speaker 1: slash Warner Media purchased a ten percent steak in video 617 00:38:47,760 --> 00:38:51,400 Speaker 1: streaming service Hulu for more than half a billion dollars. 618 00:38:52,000 --> 00:38:54,839 Speaker 1: This really does show how the big media companies were 619 00:38:54,880 --> 00:38:59,439 Speaker 1: getting super concerned about streaming services like Netflix. We've seen 620 00:38:59,600 --> 00:39:03,359 Speaker 1: several companies launched their own streaming efforts, but it's tough 621 00:39:03,440 --> 00:39:05,520 Speaker 1: to go toe to toe with the really big players 622 00:39:05,560 --> 00:39:08,839 Speaker 1: that are already established. So Netflix had had built up 623 00:39:09,040 --> 00:39:13,000 Speaker 1: a really strong head start. Hulu launched as a cooperative 624 00:39:13,000 --> 00:39:17,160 Speaker 1: effort between multiple studios, But then you've got Disney with 625 00:39:17,200 --> 00:39:21,080 Speaker 1: Disney Plus. HBO has tried a few different streaming services 626 00:39:21,120 --> 00:39:26,960 Speaker 1: before it's settled on Hbo Max, NBC Universal has Peacock, Viacom, 627 00:39:27,080 --> 00:39:31,600 Speaker 1: CBS has Paramount Plus previously known as CBS All Access, 628 00:39:31,640 --> 00:39:36,080 Speaker 1: and so on. And that big, messy situation helps explain 629 00:39:36,160 --> 00:39:39,200 Speaker 1: why A T and T, just a few years after 630 00:39:39,320 --> 00:39:44,160 Speaker 1: having acquired Warner Media, is now looking to divest itself 631 00:39:44,200 --> 00:39:47,480 Speaker 1: from that very same property. And it might seem weird 632 00:39:47,840 --> 00:39:51,000 Speaker 1: at a casual glance. I mean, here's an example of 633 00:39:51,080 --> 00:39:56,040 Speaker 1: a really big telecommunications company spending around eight five billion 634 00:39:56,120 --> 00:40:00,160 Speaker 1: dollars to acquire Time Warner. Then the company had to 635 00:40:00,200 --> 00:40:02,960 Speaker 1: spend even more money because it gets pulled into a 636 00:40:03,000 --> 00:40:06,759 Speaker 1: series of trials to fend off efforts from the US 637 00:40:06,840 --> 00:40:11,040 Speaker 1: government to block that merger. Those legal battles stretched into 638 00:40:11,080 --> 00:40:15,480 Speaker 1: twenty nineteen. Then we get the global pandemic, which obviously 639 00:40:15,560 --> 00:40:20,080 Speaker 1: had an enormous impact on various entertainment industries, and as 640 00:40:20,120 --> 00:40:22,520 Speaker 1: we seem to be moving to the other side of 641 00:40:22,560 --> 00:40:25,360 Speaker 1: the pandemic. Now we see that A. T and T 642 00:40:25,560 --> 00:40:29,040 Speaker 1: wants to ditch Warner Media for a proposed forty six 643 00:40:29,080 --> 00:40:33,000 Speaker 1: billion dollar deal in order for Warner Media to merge 644 00:40:33,000 --> 00:40:38,600 Speaker 1: with Discovery. What A T and T discovered and didn't 645 00:40:38,600 --> 00:40:42,040 Speaker 1: mean to right discovered rafter Discovery, but I did, was 646 00:40:42,080 --> 00:40:44,719 Speaker 1: that it was going to have to fight battles on 647 00:40:44,840 --> 00:40:48,319 Speaker 1: multiple fronts in order to succeed as a business. It 648 00:40:48,400 --> 00:40:50,719 Speaker 1: was going to have to dedicate assets to growing the 649 00:40:50,760 --> 00:40:54,160 Speaker 1: telecommunications side of the business, and it was also going 650 00:40:54,200 --> 00:40:58,040 Speaker 1: to have to dedicate resources to the entertainment the media 651 00:40:58,200 --> 00:41:01,240 Speaker 1: side of the business and all Stimately, the company leaders 652 00:41:01,239 --> 00:41:04,960 Speaker 1: decided that this was not really realistic. It they needed 653 00:41:04,960 --> 00:41:07,719 Speaker 1: to be able to focus. So in order to do 654 00:41:07,760 --> 00:41:09,640 Speaker 1: that and to focus on A. T and t s 655 00:41:09,719 --> 00:41:13,000 Speaker 1: traditional core business, it would need to say goodbye to 656 00:41:13,080 --> 00:41:17,359 Speaker 1: Warner Media. Maybe part of that decision also came out 657 00:41:17,400 --> 00:41:21,040 Speaker 1: of some of the controversial choices the company made during 658 00:41:21,280 --> 00:41:25,440 Speaker 1: the pandemic, controversial at least within the entertainment industry. I 659 00:41:25,480 --> 00:41:29,439 Speaker 1: should add, so with the pandemic, we had obviously lockdowns 660 00:41:29,680 --> 00:41:32,720 Speaker 1: in various countries all over the world, and that meant 661 00:41:32,920 --> 00:41:36,840 Speaker 1: that businesses like movie theaters were empty for most of 662 00:41:38,440 --> 00:41:41,879 Speaker 1: movie production. Studios thus had some tough choices to make. 663 00:41:42,600 --> 00:41:45,520 Speaker 1: For any film that was essentially in the can and 664 00:41:45,520 --> 00:41:49,319 Speaker 1: thus ready for distribution, what do you do? Do you 665 00:41:49,760 --> 00:41:52,319 Speaker 1: sit on it for a year and hope that things 666 00:41:52,360 --> 00:41:56,080 Speaker 1: get better than you just wait? Do you wait for 667 00:41:56,239 --> 00:42:00,400 Speaker 1: various cities to start opening up and then aggressively market 668 00:42:00,440 --> 00:42:03,239 Speaker 1: the film in those regions and make it available to 669 00:42:03,280 --> 00:42:06,480 Speaker 1: those theaters. I mean, if some cities opened up much 670 00:42:06,560 --> 00:42:08,719 Speaker 1: later than others, how does that affect your strategy? Does 671 00:42:08,719 --> 00:42:11,640 Speaker 1: that mean you have to have a rolling movie premiere 672 00:42:11,760 --> 00:42:15,800 Speaker 1: where it's going to launch in like five cities one week, 673 00:42:16,239 --> 00:42:19,440 Speaker 1: maybe three cities the following week. You know, that kind 674 00:42:19,480 --> 00:42:22,360 Speaker 1: of rollout is tough to manage, and it all gets 675 00:42:22,480 --> 00:42:26,680 Speaker 1: really really complicated. And you also just didn't know if 676 00:42:26,719 --> 00:42:29,600 Speaker 1: people would go to the movies, right, Like, even with 677 00:42:29,680 --> 00:42:32,719 Speaker 1: movie theaters open, people might be too concerned about their 678 00:42:32,760 --> 00:42:35,680 Speaker 1: health to go and sit in a big room with 679 00:42:35,719 --> 00:42:38,600 Speaker 1: a bunch of other people. So there was no guarantee 680 00:42:38,600 --> 00:42:41,680 Speaker 1: that releasing a film in theaters would even be a 681 00:42:41,719 --> 00:42:45,160 Speaker 1: success in the first place. So back in twenty we 682 00:42:45,200 --> 00:42:47,440 Speaker 1: just didn't know how long things were going to be 683 00:42:47,680 --> 00:42:50,240 Speaker 1: really bad, and to be fair, even as I record 684 00:42:50,280 --> 00:42:55,000 Speaker 1: this in early June, we still don't know how long 685 00:42:55,040 --> 00:42:56,880 Speaker 1: things are going to be really bad. Things in the 686 00:42:56,960 --> 00:42:59,759 Speaker 1: United States are opening up like crazy, but we don't 687 00:42:59,800 --> 00:43:03,520 Speaker 1: yet know if that's a good thing. So A. T 688 00:43:03,640 --> 00:43:06,239 Speaker 1: and D and Warner Media made the decision to make 689 00:43:06,440 --> 00:43:11,640 Speaker 1: all of the theatrical releases out of Warner Brothers studios 690 00:43:11,680 --> 00:43:17,600 Speaker 1: available on the HBO Max streaming service. That decision caused 691 00:43:17,680 --> 00:43:21,319 Speaker 1: some major waves in the entertainment industry. Of course, had 692 00:43:21,400 --> 00:43:25,520 Speaker 1: the movie theater chains that were really upset with films 693 00:43:25,600 --> 00:43:28,839 Speaker 1: available to watch at home, how are movie theaters going 694 00:43:28,880 --> 00:43:33,160 Speaker 1: to convince people to come into a theater. Various filmmakers 695 00:43:33,239 --> 00:43:37,080 Speaker 1: also got upset because they envisioned their work being experienced 696 00:43:37,120 --> 00:43:40,319 Speaker 1: on a big screen, not in someone's little home theater 697 00:43:40,400 --> 00:43:43,799 Speaker 1: set up, at least not on its initial run. Other 698 00:43:43,880 --> 00:43:47,840 Speaker 1: movie studios also got upset because now they also had 699 00:43:47,880 --> 00:43:51,279 Speaker 1: these properties that were sitting on a shelf, and they 700 00:43:51,480 --> 00:43:54,000 Speaker 1: felt the pressure to release them digitally so as not 701 00:43:54,040 --> 00:43:56,680 Speaker 1: to lose ground to Warner Brothers. But they also didn't 702 00:43:56,719 --> 00:43:59,160 Speaker 1: want to upset the same folks that Warner Brothers had. 703 00:43:59,719 --> 00:44:03,640 Speaker 1: It is a very ugly situation in the industry for 704 00:44:03,640 --> 00:44:05,680 Speaker 1: our consumers. On the other hand, I think it was 705 00:44:05,719 --> 00:44:08,840 Speaker 1: a pretty darn good deal. I mean, seeing a film 706 00:44:08,840 --> 00:44:11,839 Speaker 1: on your television is always a different experience from going 707 00:44:11,880 --> 00:44:14,160 Speaker 1: to the movies. But if it means that you can 708 00:44:14,280 --> 00:44:17,760 Speaker 1: enjoy some entertainment and you're not risking yourself or others 709 00:44:17,800 --> 00:44:21,319 Speaker 1: with regard to a deadly infectious disease, I think that's 710 00:44:21,320 --> 00:44:24,080 Speaker 1: a pretty good option. And it did drive people to 711 00:44:24,120 --> 00:44:28,280 Speaker 1: subscribe to HBO Max, which was something the company really needed. 712 00:44:28,320 --> 00:44:32,640 Speaker 1: They needed that win. With Disney and Netflix and other 713 00:44:32,680 --> 00:44:35,719 Speaker 1: players like Amazon and Hulu already taking up a lot 714 00:44:35,760 --> 00:44:38,880 Speaker 1: of mind share and a lot of home budgets in 715 00:44:38,920 --> 00:44:42,280 Speaker 1: the streaming media space, what are media needed a hook 716 00:44:42,520 --> 00:44:45,400 Speaker 1: to convince people to try out their own digital streaming 717 00:44:45,440 --> 00:44:48,880 Speaker 1: service and making it the go to location for warners 718 00:44:49,719 --> 00:44:53,680 Speaker 1: One Releases was a big part of that. Now I 719 00:44:53,680 --> 00:44:58,200 Speaker 1: haven't really covered Discovery, which, if you don't know, used 720 00:44:58,239 --> 00:45:01,319 Speaker 1: to be my employer, And mean, that's another story, right, 721 00:45:01,600 --> 00:45:04,360 Speaker 1: the story of how the division I work for and 722 00:45:04,480 --> 00:45:07,719 Speaker 1: I heart Radio. That one started out as part of 723 00:45:07,719 --> 00:45:11,120 Speaker 1: the How Stuff Works dot com and it changed hands 724 00:45:11,160 --> 00:45:15,440 Speaker 1: a few times. Arguably, the story of the department I 725 00:45:15,520 --> 00:45:18,760 Speaker 1: work in is a microcosm for the sorts of journeys 726 00:45:18,760 --> 00:45:22,520 Speaker 1: that we see with these really big media companies. Anyway, 727 00:45:22,680 --> 00:45:25,919 Speaker 1: Discovery has its own suite of channels across different parts 728 00:45:25,960 --> 00:45:29,080 Speaker 1: of the world, and recently the company revealed the name 729 00:45:29,360 --> 00:45:33,839 Speaker 1: of what this new merged entity with time Warner will 730 00:45:33,880 --> 00:45:36,680 Speaker 1: be or Warner Media will be, and it will be 731 00:45:37,440 --> 00:45:44,120 Speaker 1: Warner Brothers Discovery. Okay, upon the merger, assuming that it 732 00:45:44,120 --> 00:45:48,680 Speaker 1: goes through Discoveries CEO David Zaslov will head up the 733 00:45:48,760 --> 00:45:52,320 Speaker 1: new media company, which is also interesting because Warner Media 734 00:45:52,560 --> 00:45:57,320 Speaker 1: is the larger entity of these two groups. Despite Discoveries 735 00:45:57,320 --> 00:46:00,279 Speaker 1: global reach, Warner Media is just bigger, and yet it's 736 00:46:00,320 --> 00:46:04,200 Speaker 1: Discovery CEO who will take charge. The motto for the 737 00:46:04,239 --> 00:46:07,440 Speaker 1: company appears to be the stuff that dreams are made of, 738 00:46:08,400 --> 00:46:11,240 Speaker 1: and The Verge points out that this is a line 739 00:46:11,320 --> 00:46:16,600 Speaker 1: from The Maltese Falcon, which is a classic Warner Brothers film. However, 740 00:46:17,080 --> 00:46:20,319 Speaker 1: I would like to point out that it really is 741 00:46:20,400 --> 00:46:24,640 Speaker 1: in itself a reference to a much older line written 742 00:46:24,640 --> 00:46:29,080 Speaker 1: by William billy Bard Shakespeare. It comes from The Tempest. 743 00:46:29,800 --> 00:46:33,760 Speaker 1: Prospero says the line, He's the old magician in the tempest, 744 00:46:33,800 --> 00:46:37,920 Speaker 1: and he proclaims, we are such stuff as dreams are 745 00:46:38,000 --> 00:46:43,640 Speaker 1: made on. So I think it's a Shakespearean reference. Ultimately, anyway, 746 00:46:43,800 --> 00:46:47,319 Speaker 1: as it stands, the companies expect that this merger will 747 00:46:47,320 --> 00:46:51,560 Speaker 1: complete in mid twenty two. A majority stake in the 748 00:46:51,600 --> 00:46:54,719 Speaker 1: new company will belong to a T and T shareholders, 749 00:46:54,920 --> 00:46:57,840 Speaker 1: who will keep a little bit more than sev ownership 750 00:46:58,040 --> 00:47:02,359 Speaker 1: of this new media company presumably will also see these 751 00:47:02,400 --> 00:47:05,640 Speaker 1: two companies attempt to combine forces to create a more 752 00:47:05,800 --> 00:47:10,840 Speaker 1: unified and powerful streaming service. Both of them individually operate 753 00:47:11,239 --> 00:47:14,400 Speaker 1: those kinds of services. You've got HBO Max on the 754 00:47:14,440 --> 00:47:18,200 Speaker 1: Warner side and you've got Discovery Plus on the Discovery side. 755 00:47:19,080 --> 00:47:21,000 Speaker 1: There's no telling yet if those two are going to 756 00:47:21,120 --> 00:47:24,520 Speaker 1: combine into a single service. Uh. If it does, it 757 00:47:24,520 --> 00:47:27,680 Speaker 1: wouldn't surprise me. If I had to guess, I would 758 00:47:27,719 --> 00:47:30,799 Speaker 1: say that the HBO Max name would stick around. I 759 00:47:30,800 --> 00:47:35,400 Speaker 1: think it might have slightly better name recognition, But we'll 760 00:47:35,400 --> 00:47:37,319 Speaker 1: have to wait and see. And of course that does 761 00:47:37,360 --> 00:47:40,719 Speaker 1: assume that the merger actually does go through. This has 762 00:47:40,760 --> 00:47:45,759 Speaker 1: been one of the most convoluted, complicated histories I've ever 763 00:47:45,920 --> 00:47:51,640 Speaker 1: had to trace. The the ownership of the various Warner 764 00:47:51,680 --> 00:47:57,160 Speaker 1: properties has changed so frequently in so many different ways, 765 00:47:57,200 --> 00:48:01,640 Speaker 1: sometimes in spectacular fashion, sometimes in a very sad way. Obviously, 766 00:48:02,040 --> 00:48:04,440 Speaker 1: one of the big issues with all the major media 767 00:48:04,520 --> 00:48:08,040 Speaker 1: companies is that most of them don't actually own all 768 00:48:08,120 --> 00:48:12,560 Speaker 1: of their content anymore. With the exception of companies like Disney, 769 00:48:13,280 --> 00:48:16,360 Speaker 1: most of them, at some point or another have sold 770 00:48:16,400 --> 00:48:20,600 Speaker 1: off parts of their libraries, usually in an effort to 771 00:48:20,640 --> 00:48:23,640 Speaker 1: take care of some debt that the companies had accrued. 772 00:48:24,600 --> 00:48:28,160 Speaker 1: And that means that, you know, if you look at MGM, 773 00:48:28,200 --> 00:48:32,759 Speaker 1: which Amazon is trying to acquire, you realize, oh, that 774 00:48:32,840 --> 00:48:36,200 Speaker 1: deal doesn't include The Wizard of Oz. That movie is 775 00:48:36,200 --> 00:48:38,440 Speaker 1: not part Even though the Wizard of Oz was an 776 00:48:38,560 --> 00:48:44,160 Speaker 1: MGM movie, that doesn't belong to MGM anymore. Instead, that 777 00:48:44,239 --> 00:48:48,760 Speaker 1: belongs to Warner Media because Ted Turner bought the rights 778 00:48:48,800 --> 00:48:54,040 Speaker 1: to all those old MGM films and that ended up 779 00:48:54,080 --> 00:48:59,120 Speaker 1: being part of the Time Warner deal, which thus eventually 780 00:48:59,160 --> 00:49:04,080 Speaker 1: evolved into Warner Media. So yeah, very complicated stuff, but 781 00:49:04,200 --> 00:49:07,279 Speaker 1: really important. Um also really important just to keep an 782 00:49:07,280 --> 00:49:11,440 Speaker 1: eye on where the landscape of modern media is, like, 783 00:49:11,520 --> 00:49:15,720 Speaker 1: how is shaping up and what it means for us. UM. 784 00:49:15,760 --> 00:49:18,319 Speaker 1: I think competition is always a good thing. So in 785 00:49:18,400 --> 00:49:22,800 Speaker 1: some ways it's good to see lots of competing streaming services, 786 00:49:22,800 --> 00:49:26,160 Speaker 1: but in other ways it's very frustrating, right because you 787 00:49:26,239 --> 00:49:30,319 Speaker 1: probably don't want the burden of having to subscribe to 788 00:49:30,400 --> 00:49:33,160 Speaker 1: all of them, right, But it may be that each 789 00:49:33,200 --> 00:49:35,120 Speaker 1: one of them has a few pieces of content you 790 00:49:35,160 --> 00:49:37,800 Speaker 1: really want and there's no other way to get them, 791 00:49:37,880 --> 00:49:42,480 Speaker 1: so that remains kind of a difficult situation for the consumer. 792 00:49:42,640 --> 00:49:46,680 Speaker 1: On the flip side, if some entity, and let's be honest, 793 00:49:46,880 --> 00:49:53,040 Speaker 1: if Disney were to ever really completely monopolize the industry, 794 00:49:53,520 --> 00:49:56,000 Speaker 1: that wouldn't be good for us either. We need to 795 00:49:56,040 --> 00:50:00,359 Speaker 1: have those different perspectives and those different outlets in order 796 00:50:00,480 --> 00:50:05,319 Speaker 1: for good stories to continue to be told. But that 797 00:50:05,360 --> 00:50:10,160 Speaker 1: wraps up our epic, long and winding road to follow 798 00:50:10,200 --> 00:50:14,440 Speaker 1: the history of Warner Brothers. I hope you enjoyed those episodes. 799 00:50:14,520 --> 00:50:17,319 Speaker 1: The other two episodes, as I said, published last week, 800 00:50:17,520 --> 00:50:20,640 Speaker 1: so if you missed out and you're thinking, well, sure, 801 00:50:20,680 --> 00:50:22,279 Speaker 1: we'd be good to know where they started, you can 802 00:50:22,280 --> 00:50:25,000 Speaker 1: go back and listen to those. If you have suggestions 803 00:50:25,120 --> 00:50:27,960 Speaker 1: for topics I should cover in future episodes of tech Stuff, 804 00:50:28,280 --> 00:50:31,000 Speaker 1: reach out to me on Twitter. The handle is text 805 00:50:31,040 --> 00:50:34,640 Speaker 1: stuff h s W. That's a hold over from the 806 00:50:34,680 --> 00:50:37,960 Speaker 1: old house stuff works days that hs W. But you 807 00:50:38,000 --> 00:50:40,959 Speaker 1: know what, that's the Twitter handle and I haven't tried 808 00:50:41,000 --> 00:50:43,160 Speaker 1: to change it. I'm pretty sure someone else already has 809 00:50:43,840 --> 00:50:48,439 Speaker 1: just tech stuff, so I can't do that anyway. Send 810 00:50:48,440 --> 00:50:50,840 Speaker 1: me a message that way, whether it's a topic I 811 00:50:50,880 --> 00:50:54,000 Speaker 1: should cover, or maybe you have some questions or suggestions 812 00:50:54,040 --> 00:50:56,600 Speaker 1: for things, let me know and I'll talk to you 813 00:50:56,640 --> 00:51:06,040 Speaker 1: again really soon. Text Stuff is an I Heart Radio production. 814 00:51:06,280 --> 00:51:09,080 Speaker 1: For more podcasts from I Heart Radio, visit the i 815 00:51:09,200 --> 00:51:12,440 Speaker 1: Heart Radio app, Apple Podcasts, or wherever you listen to 816 00:51:12,480 --> 00:51:13,400 Speaker 1: your favorite shows.