AOL Time Warner pushes alliances to forefront
The newly merged media giant announces a blizzard of deals and relationships, coinciding with its first earnings statement and an analyst briefing on the company's future.
As expected, the company moved quickly to capitalize on cross-marketing opportunities, such as packaging software for AOL Time Warner's America Online Internet service with Time Inc.'s flagship Time magazine and extending a promotion on AOL that Chief Executive Gerald Levin said has netted 800,000 new Time subscribers to date.
The company also expanded on and unveiled new advertising and marketing deals between companies such as Nortel Networks, Cendant, Compaq Computer and PurchasePro and the range of AOL Time Warner's print, online publishing and TV properties.
In addition, the company said it will run all of its media Web sites using AOL's infrastructure, a move expected to produce substantial savings.
The breadth of the announcements partly reflects the merger's lengthy gestation period. Regulators took about a year to approve the deal, giving the companies ample time to lay the groundwork for the marriage.
Many of the deals build on previous initiatives begun last year after the combination was announced; most fell short of breaking substantial new ground.
On the music front, for example, AOL Time Warner has said it may eventually launch an online subscription service, although Wednesday's announcements stayed on well-trodden paths.
AOL has worked with Warner Music Group since last year to promote musicians on its service, most notably for Madonna's recent "Music" CD. On Wednesday, the companies said they will expand that relationship, promoting new releases from Warner's label groups, including Atlantic Recording, Elektra Entertainment Group, London-Sire and Warner Bros. Records. The artists that are expected to participate include Barenaked Ladies, Bjork, REM and Tracy Chapman.
AOL said the new releases will be available via the music and entertainment channels of its Internet service as well as its two music services, Winamp.com and Spinner.com.
The announcement comes shortly after AOL Time Warner picked former BMG Entertainment executive Kevin Conroy to head AOL's online music initiatives.
Conroy could not be immediately reached for comment.
"This is clearly the first fruit of the Kevin Conroy regime," said Aram Sinnreich, senior analyst at Jupiter Media Metrix. "AOL is going to have to walk the fine line between taking advantage of its corporate ownership of Warner Music and excluding the major labels without whom you can't build a successful music destination."
Among the announcements Wednesday, TiVo said that its ties to AOL Time Warner will be tightening.
The announcement includes an enhanced multimillion-dollar marketing campaign for San Jose, Calif.-based TiVo across the media giant's online, print and TV properties. The goal is to make consumers more aware of the benefits of TiVo's digital video recorder service, which allows subscribers to record TV programs to a hard drive.
Research company IDC estimates that over 50 percent of TV households in the United States are not aware of digital video recorder services.
Mary Joyce Scafidi, an analyst at IDC, said that closer ties to AOL Time Warner may give TiVo a better chance of being integrated into an interactive TV service.
"The more of these services that can converge into a single device the better," said Scafidi. "No one wants to have several boxes, each doing their own thing, attached to their TV."
She went on to say that by combining the services, "companies can also combine marketing efforts and help these types of services receive mass market acceptance."
In addition, AOL Time Warner said HBO would have the rights to releases from Universal Pictures, and announced the expansion of Time Warner Cable's Internet telephony trial to Rochester, N.Y.
Staff writer Richard Shim contributed to this report.