Time Warner

Time Warner

“To Keep the Public Informed”

Will Preston

Time Warner

“To Keep the Public Informed”

When Briton Hadden and Henry Robinson Luce began Time Magazine, their company mandate was “To Keep the Public Informed.” It’s nearly a hundred years later, and I’m not sure keeping the public informed is how I would describe what their company does. One thing it does is make money for it’s shareholders and investors, having just this week gained approval on the selling off of its cable division, Time Warner Cable, to Charter Communications for $88 billion. This has largely been the company's sole purpose in the last three and a half decades since the 80’s, acquiring companies or properties and selling them off. In the absence of a buyer, as was the case with AOL, it was broken apart and spun off into a separate entity. News and entertainment, is what Time Warner purports itself to sell. That the border between news and entertainment has vanished coincidentally in the past three and a half decades since the world’s largest media company’s sole purpose became making money, what exactly is it that Time Warner is keeping the public informed of?

The irony of the Charles Foster Kane-like optimism of the youthful Hadden and Luce’s company mandate having suffered such a tragic fall, is not lost on me. Yet the tactics and business model of the company they founded, remain ominously intact, though the motivations and intentions behind said business tactics may be far more shallow, than the company’s founders intended. Nearly a decade after the Time’s first publication, it’s now single creator Luce, Hadden had died in 1929, set out on what would be the company’s lasting legacy, acquiring other companies, he bought another magazine, Architectural Forum. Which would indeed suffer a similar fate to that of AOL, being spun off to a separate company.  In another indicator of business practices to come, in 1938, Time acquired Literary Digest in a bid to bring those subscribers over to Time. It is in these tactics we see what the company would become, but at the core of these inauspicious beginnings, it is still the mandate of informing the public that drives the company.

We see this in the sole living creator of the company, Luce’s decision to step down in 1939 as CEO and focus all of his energy on his position as Editor and Chief, proves that at this time he is fully committed to keeping the public informed, as he saw the political climate in Europe becoming hostile, and the potential for a second World War. How he shaped the magazine's coverage of these events and America’s eventual participation in the War, is a topic for another paper, however what is clear is that he is still devoted to keeping the public informed. However to remain relevant, and to support the weight of the company, expansion and innovation were necessary, and with the end of the war, we see the beginning of a new medium of delivering content.

Though Time had already dabbled in radio broadcasts and short news broadcasts, with “Time On the March”, it wasn’t until after the war that Time began to invest heavily in these new broadcasting mediums. So they began buying interests and shares and eventually whole television and radio stations, broadening its scope and reach and capabilities for informing the public. In 1964 Luce, who co-created this company, finally stepped down, and this is the crucial moment when the company became more interested in making money rather than informing the public. To put it simply, there’s more money in entertainment than in the news. When the news stops selling, make it more entertaining. At this time in the mid 60’s more households than ever have TV’s and radios, more people than ever are watching tv and listening to the radio, print media is still profitable, but the men that Luce turned the company over to could see where the tides were turning.

However, prior to Luce’s retirement, Time acquired a textbook publishing company with a $6 million stock swap. Perhaps in a final attempt to make an effort towards informing the public, to try and make good on that original mandate. Towards the end of the decade, in another attempt to grow the company, to diversify the revenue streams, to corner the market on print media, Little Brown and Company is acquired  by Time for $17 million worth of Time stock. A company it would own for nearly 40 years. Luce had died the year prior, and with him, perhaps the mandate as well.

In 1970, Time sold the broadcast properties to focus on cable television. One of the more important moves in the history of media. They also merged with a building materials company in a $129 million merger, a tactic that would be utilized several times in later decades to varying degrees of success. It is in 1972 when the then Time CEO introduced the Home Box Office as a paid TV service. Unheard of at the time, it would be a few years before the company took off, and as we all know has become one of the main providers for quality entertainment. As the company drifted further away from the mandate of informing the public, and towards the mandate of entertaining the public, and making money for shareholders, it became more financially successful and less journalistically successful.

Again we see in 1983 Time spin off Temple Inland, the product of another failed corporate merger tactic, and that company was sold to the shareholders. Time continued through the 1980’s buying companies and magazines and shares in communications companies, all leading towards the big merger. The $14 billion dollar acquisition of Warner Communications Inc. With this merger is 1989 Time sold its textbook publisher because it, “no longer fit into it’s core businesses.” This is another major turning point for the company, as it pivots fully towards being an entertainment company rather than a informative culture molding company, and it becomes a mirror, reflecting what once was, instead of asking what could be. Mirroring it’s own business practices by repeating the same moves over and over again ad nauseum, buying companies, selling companies, acquiring debt, relieving debt, but never innovating, which is what the company was known for, which is what made the company in the first place.

In the mid 90’s Time Warner created a television network called The WB and then bought the Turner Broadcasting company in the following year. The CNN network and cnn.com is released at this time turning the “news” network into the company it is today. The once prognosticator of the news by 1996 had been reduced to a purchaser of the news. By the new millennium Time Warner, in what is perhaps its most nefarious move, was bought by AOL, in a merging of two of the largest companies in the world. While AOL would own more shares in the newly formed company, it was Time Warner that had more assets and value. And indeed it would be Time Warner whose top operating officials would essentially control the company, and over the next five years, drive out the AOL leadership and dwindle the once thriving company into little more than a subsidiary company. Selling off pieces of AOL and, as stated before, eventually spinning the company off into a separate entity altogether.  

Time had become an amorphous corporate monster, devouring smaller companies to feed its own insatiable appetite, falling further from the original company mandate set forth by its two optimistic creators. But how could they know what their good intentions would lead to? They began the company on good faith and with integrity, but the more powerful it became, the more it needed to stay solvent. Until the point where solvency was its only cause. But if the only reason to exist, is to exist, is that existence? If profit is the only goal, does that truly profit the people? Sure money is nice, but purpose is better. Purpose moves mountains, purpose motivates people to do extraordinary things. Money only seems to motivate greed. People have to eat, people need clothes, people need shelter, but does an unending acquirement of money lead to everyone having these basic needs? I’d argue not.

Since 2005 Time Warner has continued buying up smaller companies, expanding their global media reach internationally, buying companies in every corner of the global market. They’ve been buying interactive gaming companies, in hopes of gaining a foothold in yet another form of media consumption no doubt. The one place that has eluded their grasp is the video game industry. Along with the continued acquisitions of smaller more innovative companies, Time Warner has continued the merger business, and merged their television network The WB with the CBS owned UPN to form The CW. Mergers and acquisitions seem to be the only focus of Time Warner, along with staying afloat financially.

In this regard, it brings us to the next merger between Time Warner and Charter communications. This action creates the second largest cable company, with only Comcast as a rival. The two cable companies together will control some two thirds of internet and cable access in the country. It is precisely this type of control that would give the two giant cable providers enough power to price fix or gouge customers for internet access, or impose limits on streaming services. Along with this there are worries that without multiple options, customer service would decline in quality. We’ve had the same problem in politics, but I digress. This is just the latest example of Time Warner, no longer informing the public, or looking out for the public, but saving its own bacon from spreading itself too thin over the past three decades plus. It is Time who once informed the public of bad business practices, and greedy companies, who must now be informed on.

The only way for this merger to pay for the amount of debt it creates is for the rates to customers to go up. There is no other way around it. It’s literally charging customers more money for the privilege of getting broadband service from a conglomerate. With no other options for customers to turn to, they will have no choice but to pay the higher prices. In fact, this is what the newly formed cable company must be banking on to pay for the merger, this leverage is the only asset in the deal. It will hit poor families the hardest, forcing many people offline without an affordable option of cable providers. All this is to say the ideals of the company have gone so far off the rails, the men that founded the company would be working tirelessly to expose it.

Everything evolves and changes, one corporation or monopoly is toppled, only to be replaced by another. As we see what Time has become as a company, a behemoth, a corporation, the largest media company in the world, worth a hundred billion dollars, monopolizing whatever industry it can get its hands on, we take solace in the knowledge that what Briton Hadden and Henry Robinson Luce began, way back in 1923, continues on. Not in the company that disgracefully bares the name of the magazine they created, but in the integrity of the people who were raised by the people that read their magazine. It is we that embody their spirit, it is we that carry on their legacy, with hopes to inform the public of monopolistic schemes of greedy executives, to fill their coffers off the backs of the poor. It is these hard working poor who are truly successful, for it is better to have something to strive for, something to believe in, some reason to save what little money they have. For what good is all the money in the world, if you have nothing to buy?

Bibliography

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2. Mccabe, D. (2016, May 12). $88 billion deal between Charter, Time Warner clears final hurdle. Retrieved May 12, 2016, from http://thehill.com/policy/technology/279724-charters-88-billion-deal-clears-final-hurdle
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