America Online and Time Warner announced they will join forces in what will be the biggest corporate merger (or acquisition, depending who you talk to) ever. AOL shareholders will own 55% of the resulting media Goliath, to be named AOL Time Warner Inc., with the remaining 45% owned by Time Warner shareholders. The merger, which raised excited predictions about the future of entertainment and the internet, is valued at US$160 billion, with AOL Time Warner’s combined annual revenue projected to be over $30 billion. The merger, which needs the go-ahead from both AOL and Time Warner shareholders and is subject to regulatory approval, is expected to be finalized by 2001.
Time Warner’s media treasure chest contains some of the most established brands in the business. These include TBS, CNN, HBO, Warner Bros. (movie, TV and music) and magazines Time, People, and Sports Illustrated. The new company will have assets that include Netscape, AOL Instant Messenger, AOL.com, and AOL Moviefone.
Manager of HBO Documentaries Greg Rhem feels that the merger will make more venues available for doc programming. ‘The venues are small in a sense because HBO and Cinemax aren’t really documentary networks. They’re really built for movies and such. But, I think net access will broaden things incredibly. Broadband will make things a lot more elaborate in terms of types of information you can get out.’
Reaping the benefits of new media will not, however, simply be a matter of bedding down with a successful internet pioneer and producing wonderful, interactive web pages. Rhem warns, ‘I think it’s going to be geared around technology changing. Not only that but the audience becoming more web savvy. It’s one thing to have a television and watch some interesting programs. It’s another to have a computer and wonder if I can ask a question about [a program]. It’s also based around economics, supply and demand. Who can afford the new $5,000 TV?’ Even so, Rhem doesn’t seem to doubt the change will come, ‘We have to prepare for five years from now, because five years will come upon you so fast. Five years from now people will be saying, `we’ve got the new lines now [cable/fiber optic], what are you going to do with it?”