WarnerMedia is the new name for what was previously Time Warner, adopted following its acquisition in 2018 by AT&T. That takeover followed a long series of deals to unwind what had at one point been the world's biggest media company. Warner Music, Time Warner Cable, Time Inc and finally AOL were all divested between 2003 and 2014, leaving the slimmed-down group focused on its filmed entertainment and cable networks businesses. In 2000 the merger of the old Time Warner with internet pioneer AOL had been billed as the deal that would transform the entertainment industry, but the world then simply wasn't ready for such a transformation. By 2016, though, the time was finally right for a combination of content and internet-based delivery, and Time Warner accepted an offer to be acquired for $85bn by AT&T. Despite opposition from the Trump administration, the deal was cleared by regulators in 2018, at which point Time Warner adopted the new name WarnerMedia. There are three main engines to the business. Warner Bros is the group's film and TV studio generating feature entertainment for cinema distribution as well as hundreds of hours of television content for its own or third-party networks. This is partnered by the Turner cable channel collection, and revered pay-TV network HBO, original home of such multi-award winning series as Game of Thrones, The Sopranos, Veep, Sex & The City, Big Little Lies, Westworld, Succession, and many many more. The Turner and HBO assets were combined in 2020, and then realigned as two themed divisions. Flagship of WarnerMedia News & Sports is CNN, the original 24-hour news channel, though its one-time lead has more recently been overturned by rival Fox News. Other assets include regional sports channels under the Turner Sports banner and news portal the Bleacher Report. WarnerMedia Entertainment is home to HBO as well as to several of America's most prominent cable channels. TBS and TNT are the two top-rated channels in the US for scripted comedy and drama, averaging over 1m viewers a night. Other important strands include Cartoon Network/Adult Swim, TruTV and TCM. WarnerMedia's most important new venture is OTT streaming entertainment service HBO Max, launched in 2020 as a new home for all the group's premium content. It got off to a slightly shaky start as a result of the challenges posed by the Coronavirus pandemic, but had accumulated 41m subscribers by the end of 2020. Former Hulu chief Jason Kilar was appointed as CEO in 2020, taking over from John Stankey, now CEO designate of AT&T. WarnerMedia contributed revenues to AT&T of $30.4bn in 2020 and operating income of $8.2bn. Warner Bros accounted for revenues of $12.1bn; the Turner channels for $12.6bn and HBO for $6.8bn. In May 2021, WarnerMedia parent AT&T sealed a deal to combine the entire WarnerMedia business with smaller rival Discovery in a new publicly quoted company, which will become known as Warner Bros Discovery.
Capsule checked 4th June 2020
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Historical profile information for Time Warner
Adbrands Daily Update 17th May 2021: It didn't take long for AT&T to regret its high-priced push into media. Following on from the partial demerger of DirecTV, the group has now confirmed plans to spin out all its other WarnerMedia operations - including HBO, CNN and other cable strands as well as the Warner Bros production business - and combine them with smaller rival Discovery to create a new publicly quoted company, as yet unnamed. The enlarged entity - which will have pro forma sales of around $52bn - will be led by Discovery CEO David Zaslav. AT&T shareholders would end up with around 71% of equity in the new company, while Discovery shareholders would have 29%. The main focus of the business will be its twin streaming services of HBO Max and Discovery+. The two groups said their combined content creation budget of $20bn annually would exceed that of rival Netflix. However, perhaps the most significant aspect of AT&T's dramatic about-face is the huge cost in wasted shareholder funds. It acquired Time Warner just three years ago for more than $80bn and spent millions more on lawyers' fees defending the takeover against the strong objections of the Trump administration. The demerger will net AT&T just $43bn for the business.
Adbrands Daily Update 22nd Feb 2021: News outlet Insider reports of a wholesale cull by WarnerMedia of its global agency roster in a bid to reduce costs. That follows hardball negotiations in recent months over terms. According to Insider, the media giant began renegotiating contracts last summer to enforce an extension in payment terms to 90 days, as well as lower agency fees. The group has also slashed its roster from more than 3,000 agencies globally to a hard core of just "a few dozen" who were prepared to accept the new terms in return for higher volumes of work. It's not clear which agencies remain on the roster and which have been eliminated. Insider says "WarnerMedia created an agency database to save money by channeling most of its marketing through a handful of agencies that work at a discount.... One person with direct knowledge said the agencies in the database negotiated to get more assignments in exchange for long-term contracts at lower rates. In a new, unusual requirement, the source said, the agencies also have to report on the revenue they earn from WarnerMedia and the discounts they bring the company on a quarterly basis."
Adbrands Daily Update 10th Dec 2020: WarnerMedia agreed to offload its specialist anime channel Crunchyroll, an early entrant in OTT streaming services, to Sony Pictures Entertainment for almost $1.2bn. AT&T originally backed the launch of Crunchyroll in 2014, two years before it bought Time Warner, and took full control in 2018, at which point the business was transferred into WarnerMedia. Sony is already the owner of smaller rival Funimation, which also specialises in Japanese anime and manga. Crunchyroll claims to have the world's largest library of anime, with 1,000 titles and over 30,000 episodes. It has 70m registered users in more than 200 countries, as well as 3m paid subscribers to its premium on-demand service.
Adbrands Daily Update 2nd Apr 2020: AT&T named former Hulu chief Jason Kilar as the new CEO of WarnerMedia. He takes over from John Stankey who has moved up to COO of AT&T and heir apparent to group CEO Randall Stephenson.
Adbrands Daily Update 16th Apr 2019: AT&T sold its near-10% stake in Hulu for $1.4bn, almost three times the $583m Time Warner originally paid for the shares three years ago. The acquiror was Hulu itself, which is expected to reallocate the shares to its two remaining shareholders Walt Disney, with around 60%, and Comcast with 30%. The sale values Hulu at $15bn, a good price, but still only a 10th of Netflix's $150bn valuation. AT&T sold the shares to avoid any conflict of interest when it launches its own OTT streaming service later this year.
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