TASK 1: Let me explain what Time Warner Incorporated is majoring in before I start with my discussion on the ownership of this

particular company. Time Warner Inc. is a worldwide leader in media and with major operations in entertainment with businesses related to television networks, film and TV entertainment and publishing.1 Time Warner is the world's third-largest media conglomerate behind Walt Disney and News Corporation. It is form by two formal separate companies which were the Warner Communications, Inc. and Time Inc and along with the assets of a third company, Turner Broadcasting System, Inc. Its subsidiaries include New Line Cinema, Time Inc., HBO, The CW Television Network, Warner Bros., Kids' WB, Cartoon Network, and the list just goes on and on.2 Now, as we move on to the ownership of the company, we can see from its respective identities and backgrounds of Time Warners Board of Directors that this company is of an oligopoly industry. Oligopoly as we know it is a market condition where numerous sellers co-exist in the market place, where a few firms dominate a market. It induces competition amongst sellers, thus, it is very consumer-friendly. This competition ensures reasonable prices and vast choices for consumers. A decision made by one seller in an oligopolic market has a direct effect on the functioning of other sellers. The question of why it is an oligopoly business can be answered by looking at the ownership of the companys Board of Directors. Jeff Bewkes, the Chairman of the Board and Chief Executive Officer (CEO) of Time Warner Inc beforehand served HBO as the Chairman and CEO from May 1995 to July 2002; James L. Barksdale previously was a Director of America Online (AOL) from March 1999 until AOL merge with Time Warner in January 2001. 3 Just to name these two Board of Directors and their backgrounds, we can see that those Directors were from companies that deal with some similar products as what Time Warners deal with and from companies that merges or under Time Warners (HBO, AOL etc). It is plain to see that the market structure of oligopoly of Time Warners is the presence of firms that own certain crucial assets that are the incumbents, and others are some best potential competitors. These assets take the form of intellectual property, patents, license to use such technology and in this case as we see above, the industrial know-how, since most of the directors are from companies that deal with identical products.

1 2 3

http://www.timewarner.com/our-company/about-us/ http://en.wikipedia.org/wiki/Time_Warner http://www.timewarner.com/our-company/management/board-of-directors/

TASK 2: Based on Time Warner corporate values, we know that they commercially need to maximize audiences and earn profit by attracting more advertisers since most of their products are grounded on media such as telecommunication, television networks and film, broadcasting, and publishing. Therefore, it is logic to think that there will be a lot of viewers, readers, listeners, members and subscribers, and through that, advertisers can advertise on any of Time Warners chosen media, be it on TV, magazines, websites or radio. Advertisers that have chosen to advertise via Time Warner would be in contract with the company, and as a result would directly give Time Warner its major profits. There are few ways that Time Warner could attract those advertisers. First of all, advertiser should know that Time Warner exist, but well, that would not be a problem since Time Warner is one of the largest media conglomerate. Push that aside, Time Warner should present their rates, specifications and contact numbers to attract advertisers. This information needs to go in the most logical places, either on their TV channels, Magazines, Websites or whichever appropriated. Besides that, advertisers need a reason to buy space in Time Warners publication. The benefits should be highlighted in the contract, for example high web traffic for their websites, large circulations on their television networks and on popular relevant articles on their magazines or what not. Time Warner should also provide information on how many unique visits their sites or network gets a day and provide a competitive advertisement rate. And to do this, they should research their competition and adjust their rates accordingly. Not only that, they can get testimonials from their readers or viewers and other advertisers that previously or currently advertising their products or services via Time Warner. This is to ensure that Time Warner can give the potential advertisers something to gain. To find advertising leads, Time Warner would have to do some groundwork where they should construct a team to do research involving walking and traveling about, away from Time Warner for an immense number of unknown companies that desperately needs their company to be known to the public through advertising. When Time Warner gets a lead, it is important for them to immediately follow-up with the appropriate form of communications. Whether it is through an email, phone call, video or call conferences, Time Warner should let the potential advertiser to know that Time Warner want their business, be it from a small firm or company, they would be amaze at how from a small company could interest bigger companies to advertise via Time Warner.

TASK 3: After looking at the various divisions and branches of Time Warner that are responsible for its media contents, like Turner Broadcasting System, Warner Brothers Entertainment, Home Box Office, Time Inc and so much more are enough evidence to show that Time Warner is a media corporation that is horizontally integrated since Time Warner owns, among other things, properties in broadcasting and cable television, film, radio and the internet, which are all different type of media and it fulfills the general requirement of horizontal integrated structure. There are two general reasons that Time Warner integrated horizontally. First, Time Warner believes that they can use their diverse holdings to better market and promote their media products. Owning properties across media allows one type of media (Warner Brothers Entertainment) to promote and work with another type of media (HBO). Time Warner ownership of the best-selling videogames which include LEGO Harry Potter: Years 1 4 , to use as another example, has allowed it to develop and promote a variety of products that cut across media, including films, books and even a theme park. Second reason for this integration involves technological changes. Before this, each medium used to have its own distinct entity, but all that has changed with the coming of the digital age. With the transformation of text, audio and visual media into digital data, the technological platforms that underlie different media forms have converged, making it hard to distinct these media. The convergence of media products has meant that media businesses have also converged. The common digital foundation of contemporary media has made it easier for companies to create products in different media, for example Time Warners Blu-ray as well as multiple digital downloading and VOD distribution agreements. There are a few possible pitfalls that Time Warner faces consolidating corporate power through horizontal integration. The most possible demise would be the potential collapse of the organization of Time Warner due to its sector downturn. For instance, if hard times hit Time Warner, this would mean that all of Time Warner products take a hit, including its subsidiaries. Horizontal Integration in effect, puts all the companys fishes in one boat. Horizontal structure could also lead to a loose ship, as the team and project leaders have high level of responsibility for achieving results but little real authority over their team members that might be of different companies. This may lead to finger pointing when things go from bad to worse, which can hinder productivity, according to the Practical Management website. 4 Time Warner will face challenges, as its management needs to adjust to a less authoritarian and a more peer-like relationship with its subordinates.

http://www.practical-management.com/Organization-Development/Stuctural-Dimensionsof-an-Organization.html

Last but not least, horizontal integrated structure could give Time Warner antitrust legal issues if the market dominance is excessive and when they eliminated their competitors by merging with them.