Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment creates and programs branded news, entertainment, sports, and kids multi-platform content for consumers. It operates approximately 175 channels in 200 countries and territories. The Turner segment's networks and related businesses and brands include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Bleacher Report, Cartoon Network, Boomerang, CNN, HLN, and iStreamPlanet; and digital properties comprise NBA.com, NCAA.com, PGA.com, tntdrama.com, TBS.com, adultswim.com, and cartoonnetwork.com. It also provides subscription video-on-demand services; and licenses its original programming, and its brands and characters for consumer products and other business ventures. This segment serves cable system operators, satellite service distributors, telephone companies, and virtual multichannel video programming distributors. The Home Box Office segment provides premium pay, basic tier television, and video content services comprising HBO and Cinemax; operates HBO NOW, a video content service; sells its original programming through physical and digital formats; and licenses home entertainment and content to international television networks and video content services. As of December 31, 2016, this segment had 49 million domestic subscribers. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes videogames, as well as licenses consumer products and brands. The company was formerly known as AOL Time Warner, Inc. and changed its name to Time Warner Inc. in 2003. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.
Business Analysis of Time Warner
The Media & Entertainment Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Time Warner compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Time Warner to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Time Warner with an interactive chart.
- Revenue Growth: Time Warner reported a revenue growth of 4.3% year-on-year during 2016. Broadcasting, Cable, and Filmed Entertainment Industry grew at 4.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Time Warner spent 55.9% of its total revenues on COGS. Broadcasting, Cable, and Filmed Entertainment industry average (COGS share of revenue) in the same period was 28.0%
- R&D share of Revenues: Time Warner R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Time Warner spent 17.5% of its total revenues on Sales, Marketing, and General Administration (SG&A). Broadcasting, Cable, and Filmed Entertainment industry average SG&A spending in the same period was 43.3%
- Inventory share of Revenues: As a percentage of revenue, Time Warner spent 34.0% of its total revenues on Inventories. Broadcasting, Cable, and Filmed Entertainment industry average Inventory spending in the same period was 11.2%
- Accounts Payable share of Revenues: As a percentage of revenue, Time Warner invested 24.5% of its total revenues on Accounts Payable (A/P) Broadcasting, Cable, and Filmed Entertainment industry average Accounts Payable investment in the same period was 10.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, Time Warner invested 29.7% of its total revenues on Accounts Receivable (A/R). Broadcasting, Cable, and Filmed Entertainment industry average Accounts Receivable investment in the same period was 17.3%
- PP&E share of Revenues: As a percentage of revenue, Time Warner invested 8.6% of its total revenues on Property, Plants, and Equipments (PP&E). Broadcasting, Cable, and Filmed Entertainment industry average PPE investment in the same period was 29.4%
- Intangibles share of Revenues: As a percentage of revenue, Time Warner invested 121.2% of its total revenues on Intangibles. Broadcasting, Cable, and Filmed Entertainment industry average Intangibles investment in the same period was 113.0%
- Net Margins: Time Warner Net Margins in the year 2016 were 13.4%. Broadcasting, Cable, and Filmed Entertainment industry average Net Margins in the same period were 11.6%
Sector and Industry Association of Time Warner
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Time Warner is associated with Media & Entertainment Sector and Broadcasting, Cable, and Filmed Entertainment Industry.
Media & Entertainment sector is comprised of the following industries: Broadcasting, Cable, and Filmed Entertainment; Media Agency Services; Publishing. The definitions for each of the industries is as follows:
- Broadcasting, Cable, and Filmed Entertainment industry includes companies that provide radio and television programming. It also includes companies that provide music and filmed entertainment.
- Media Agency Services industry includes companies that provide advertising, public relations and marketing services. It also includes billboard providers and telemarketers.
- Publishing industry includes newspapers, magazine, and book publishers.
Industry Ranking of Time Warner
With $29.3 billion revenues, Time Warner ranked number 3 of all the companies in the US Broadcasting, Cable, and Filmed Entertainment industry. There were a total of 38 public companies in the US Broadcasting, Cable, and Filmed Entertainment industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Broadcasting, Cable, and Filmed Entertainment industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.