In 2000, AOL-- a company that most people were unaware of just 5 years earlier-- merged with one of America's largest media companies, Time-Warner. It was the largest merger (in effect, AOL bought TW) in American history.
Now, just 9 years later, the companies have split. The marriage is over and the divorce is final. Based on the following video and your own thoughts, explain what you think happened. If the convergence between the PC and the TV is so imminent, then why did two of the most powerful media companies fail at it? Post your responses in a blog and incorporate what you think might have happened based on the historical and cultural context presented in chapter 3.
(Once you open the link, you need to choose "chapter 8"-- unless you want to watch the entire Newshour).
http://www.pbs.org/video/video/1135943970/chapter/8/search/media
Peace,
Jack
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Brandon McCullough
ReplyDeleteIntroduction to Mass Media
Professor Powers
Blog Reaction 3
In our history, AOL and Time Warner Cable got together in 2000 with the intention of building the biggest possible merger in the media world imaginable. The goal of this action was to create the largest media and online services company. In the beginning, when the merger was actually announced to the media world and the public, people believed that Time Warner's music and cable system would actually speed up AOL's slow internet connection into broadband and having AOL as the main internet source provider would grow in numbers. Unfortunately, that goal was slowly disappearing in numbers because people ended up criticizing the whole idea of the merger.
The criticism of the entire merger was practically come from the Time Warner side in the sense that people did not believe that there were so many benefits for this company in the merger. Also, that the combination of AOL in the merger did not help as much either. Many individuals started to turn for other services such as Road Runner because their advertisement was possibly better or that they simply felt that this merger was not going to be successful as a whole.
At the beginning of the process, AOL was the main source of internet service in the form of dial-up and Time Warner really wanted individuals to have a better time using the internet so they thought why not come together and make the internet a huge success? Everyone can enjoy the internet in the same speed, fulfill any goals they needed for the day, and not have to complain on how long it takes to actually get started up on the internet. Honestly, I feel that both companies have excellent intentions because in their hearts, they wanted people to be happy but as years progressed, people started to really not like what the companies together had to offer. Outsiders in the media world realized that AOL and Time Warner were strong separately which gave them the ultimatum to safely split up the two companies.
The idea of this merger within the beginning was fantastic in the sense that in 2000, the internet service was absolutely horrible and the media world thought it was their job to finally make a change for the consumers! EXCELLENT :). The bad news is that it seems that both companies had different approaches into actually going through with the merger. For example, Time Warner did not want to feed into commercial advertising which is something that AOL was preferable to. In the advertisement market, AOL came up through phones, emails, TV, and popups on the internet while Time Warner was a bit less hectic about their company and just spoke about their rewards on TV. AOL had the opportunity to build upon one of the biggest internet sectors in our nation while Time Warner Cable had the opportunity to work with Road Runner which was a far better service than AOL which practically caused them to go their separate ways. They both had great opportunities to work together but as a result of this merger, each company started to realize the flaws while work together and realized more so on what each had to offer separately.
AOL and Time Warner got together with the intention of converging the medias of film, television, radio, and Internet. This was back in 2000 when the only type of Internet was dial-up, and AOL was the most popular Internet service provider. AOL knew that Time Warner was going to come up with a fast cable Internet and they wanted their name on it. The fact that it never happened unquestionably put their merger on the rocks.
ReplyDeleteIt seemed, initially, as though the two companies combined the technologies of computers and television with the agenda of improving people’s access to entertainment, information, and their ability to communicate. However, their contrasting corporate cultures made it hard for them to work together. AOL was into all kinds of guerilla marketing (that consisted of pop-ups on their browser) while Time Warner was more into succeeding by providing good content for people.
Media analyst, Frank Ahrens describes how the heads of AOL were young, aggressive entrepreneurs with a “go-go” mentality. The marketing tactics that result from this mentality can be really annoying to people. I know, because I had an experience where I called AOL for customer support and I got the information I needed, but then the representative snapped into telemarketing mode.
Given their hard core business approach, it is not surprising that Instead of making AOL the face of their new Internet service, Time Warner came up with Road Runner, which eventually turned into a more popular and efficient service than AOL could offer. Ultimately, I think that the merger didn’t work because each thought the other was incompetent in certain ways, and, while they had compatible agendas, they did not have compatible tactics.
Frankly, I feel relieved that the merger failed, because the idea one huge corporation having such powerful control over the mass media is scary. Fortunately, as has been demonstrated throughout human history, people do not stand for this. The recent technological advances have made it possible for individual consumers to play their role in contributing to mass media content. With Facebook, Youtube, wikipedia, and many other media outlets, people can easily voice their opinions and share their knowledge and talents in order to play an active role in society. Television entertainment is also a more interactive medium now, with the popularity of shows like American Idol were viewers determine the outcome.
I wonder if the consumer preferences had a role in the failure. If so, would show progress towards a media democracy.
In the beginning the merger of AOL and Time Warner seems like a good idea. It is easy to see why these two companies would think it would work. Bringing together television and the Internet seems like the perfect idea because these are the two of the biggest ways people receive information. AOL and Time Warner are also two of the biggest companies in their specific areas, so bringing them together would be merging everything.
ReplyDeleteThere are many reasons why this merger failed. One reason may have been because both companies are so big that it is difficult to get all the decision makers to agree on something. Both companies know what is best for them but coming together they had to think about both sides, the Internet and the television. Also the fact that the companies were located in different areas made it hard to make decisions. The locations that they were in were very opposite from each other, and this may have made it difficult to see how everyone was viewing ideas.
A second reason could have been because the companies were so different from each other, and customers were very dedicated to the side that they were on. At the time Time Warner was offering broadband Internet, Road Runner. Many people knew that this Internet service was much faster than dial-up, so they preferred it to AOL. Time Warner allowed customers to get their news and information fast using the Internet and the television. The only problem with Time Warner was that the broadband Internet did not reach all customers who wanted cable. These people would use AOL. I think that when AOL and Time Warner merged, Time Warner was able to spread out and reach more people who then switched from AOL Internet to Road Runner. AOL would be losing customers and not able to keep up with their partner. It also seems as though Time Warner, after spreading out and gaining more customers, saw that with their broadband Internet, they already had both Internet and television and could make better deals to customers than they could with AOL.
With Time Warner already having everything, and AOL possibly losing customers, it seems imminent that a split would happen. It is very difficult to bring such huge companies together and have everything work out perfectly and have everyone agree on things that should happen.