Introduction

Turner Broadcasting System is an American media conglomerate and subsidiary of Time

Warner Inc. that owns and manages many leading cable television networks and related assets

across the world. It runs many popular channels including the original 24-hour news network

CNN, the number one primetime cable television destination for adolescents and adults TBS,

and the famous Cartoon Network. Other notable channels are HLN, TNT, Adult Swim, and

Boomerang. To make the name it has today in the media industry, Turner Broadcasting System

has grown substantially over time, overcoming various issues and difficult decisions.

History of Turner Broadcasting

It all started in 1970 when Ted Turner, then owner of a successful advertising company,

acquired an unsuccessful UHF (ultra high frequency) station named Channel 17. He renamed

this station WTCG and proceeded to supervise the station towards success. It was WTCG that

originated the term “superstation” in 1976 that broadcasted signals to the satellite and channeled

the signal to cable stations around United States. Later, Ted Turner changed the name of his

satellite channel to Turner Broadcasting System. Four years later, Turner Broadcasting invented

24-hour cable news with CNN, one of the world’s most powerful, respected and honored media

brands (Turner Broadcasting System, Inc., 2013).

In 1986, the company purchased the film library of the renowned film studio Metro-

Goldwyn-Mayer, the libraries of United Artists, RKO and Warner Brothers. With increasing

number of viewers of movies and television, the company figured the scope of making profit in

movie production and distribution. Hence, in 1991 Hanna-Barbera animation studio was one of

the first purchases of the company that also initiated the development of Cartoon Network the

following year. In 1993, motion picture companies such as Castle Rock Entertainment and New

Line Cinema were included in the Turner Broadcasting’s portfolio adding to the company’s

library of films and developing the required potential to produce motion pictures.

Turner Broadcasting crossed another milestone when it launched its new cable channel

Turner Classic Movies (TCM) on April 14, 1994, which gained popularity for its effort towards

restoration and preservation of films. The channel showed classics as well as newly released

movies, uncut and commercial free for 24 hours a day.

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Furthermore, the company grew exponentially during the '90s, extending its core news,

entertainment and animation brands internationally while creating and acquiring new brands for

the U.S. marketplace; building a successful home video, book-publishing and film-distribution

arm; operating championship professional sports franchises; and dramatically expanding its scale

and presence around the world (Turner Broadcasting System, Inc., 2013).

Ownership Issues

In 1995, owing to the trend and need of consolidation in media during that time, Ted

Turner made a shocking decision of settling a 7.5 billion dollar deal with Time Warner to merge

their expansive operations, reinforcing Time Warner’s performance and position as the world’s

most powerful and largest communications company. Furthermore, Time Warner owned 82% of

Turner Broadcasting, which gave access to the valuables of Ted Turner’s empire, together with

the Cable News Network (CNN), the Cartoon Network, the Atlanta Braves baseball team, and

two movie studios. This decision of Ted Turner shook the media world to its core. The Comcast

Corporation and Continental cablevision Inc., two important shareholders of Turner

Broadcasting, drew sharp protest against the agreement. Nonetheless, Turner remained

optimistic about the deal and became the largest shareholder of Time Warner. The acquisition

also helped Turner and Time Warner to fend off an advancing television market blitz by

holdings of Rupert Murdoch’s News Corporation, owner of the Fox network, among many other

media interests.

In 2000, an important merger took place in Time Warner, Inc., which had an impact on

Turner Broadcasting as well. AOL announced a merger with Time Warner, Inc. for

approximately $165 billion depending on the value of AOL’s stock. As the share price fell

steadily in few months, the deal was later finalized for $106 billion and the new company was

called “AOLTimeWarner”. Ted Turner was named Vice Chairman. The structure of the deal was

organized to lead the convergence of media, entertainment, communications and various Internet

industries and to provide varied, comprehensive, and innovative offers to consumers. Each

company was already benefiting millions of people, but the idea was to embed the

AOLTimeWarner experience into the consumer’s everyday lives by integrating each company’s

resources. The merger gave AOL access to 20 million homes connected to Time Warner’s cable

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lines and 300,000 cable modems already in Time Warner’s Road Runner network. Lastly, AOL

was assigned to deliver its content with the help of cable as well as telephone lines.

However, even though the structure and planning seemed adequate enough for the

company to bloom in the stock market at the time of the merger, things didn’t work out well. Ted

Turner relinquished his role in early 2003 and by mid-2003 the company was working with its

share price at one quarter of the level that it was in January 2001. Moreover, the company posted

the largest net loss in world corporate history estimating $US 98.7 billion in 2002. It was evident

that the synergies sought in the merger of AOL and Time Warner had failed gravely. Turner

Broadcasting System faced a big blow as its stake in the company, once valued at $10.7 billion,

had fallen to $1.4 billion. Therefore, in October 2003, Time Warner officially dropped AOL

from its name, reverting back to Time Warner Inc. (Sellers, 2003).

Laws and Regulations

The Federal Communications Commission (FCC) governs television and Radio in the

United States and the regulations decreed by the FCC affect all broadcasting companies,

including Turner Broadcasting System.

For instance, after World War II, the FCC set aside many channels on the new UHF

spectrum after having received a large number of applications for new television stations. This

enabled Ted Turner, an independent producer, to get his start and compete as a UHF station.

Then, the 1972 rules decreed by the Commission imposed limits on the number of distant signals

that any cable system could import (Goodale and Frieden, 2008). This meant that cable systems

catering to larger television markets could import more number of distant signals while the

systems serving markets that did not have local affiliates of each of the broadcast networks were

allowed to import signals of the affiliates. This allowed Turner to broadcast their Atlanta station

to homes in the South, and five years later with the help of an RCA satellite, their signal was

being sent across the nation, thus marking the birth of the Superstation (Turner, 2005).

However, the effects of FCC rules have not always been positive for Turner Broadcasting

System, such as the “must-carry” law that spelt much controversy and conflict for it. As part of

the Cable Television Consumer Protection and Competition Act of 1992 (1992 Cable Act),

Congress included provisions mandating that cable systems with more than 12 channels devote

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one-third of their channel capacity to local broadcast television stations (Peritz, 1994). Turner

Broadcasting filed suit claiming that these “must-carry” provisions violated the First

Amendment. The claim was that the law forced cable systems to air ‘instructed’ content which

suppressed “free speech”, but the Supreme Court rejected the argument in 1997. It ruled that the

“must-carry” provisions were content-neutral and that the vast majority of cable operators had

enough channels to accommodate local stations and their own programming.

Furthermore, a regulation that brought about a huge change in the mechanisms of Turner

Broadcasting System was the repealing of the Fin-Syn (Financial Interest and Syndication) Rules

by the FCC. Created in 1970, the Fin-Syn rules prevented networks from owning any of the

programming that they aired in primetime (Croteau and Hoynes, 2006). They also prohibited

networks from airing any syndicated content in which they had a financial interest. However, the

Commission repealed the Fin-Syn in 1993 starting a string of media mergers and acquisitions.

One of these was Turner Broadcasting System, Inc. being sold to Time Warner, Inc. in 1996, an

illustration of the immense impact the regulation had on the corporation.

Progress and Shifts in Convergence

Turner Broadcasting System has come a long way since it first started out with a single

UHF channel in Atlanta. From being the first national cable television network “Superstation” in

1976 to launching the first 24-hour cable news with CNN in 1980, it set new benchmarks in the

media industry.

Gradually, it ventured into the area of Home Video in 1986 through Turner Home

Entertainment which distributed the company’s own catalogue, films produced by Turner

Pictures, and sports shows. However, after the acquisition of Turner Broadcasting System by

Time Warner, Turner Home Entertainment has been absorbed into Warner Home Video as an in-

name-only unit.

Turner moved from television programming, news, and home videos to other content

such as animated cartoons with Cartoon Network in 1992. Turner then also debuted into the field

of classic movies with Turner Classic Movies in 1994, showing motion pictures from one of the

largest film libraries in the world.

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In recent times, Turner has included digital media as one of its major platforms alongside

television. The online platform started out small for the company with the launch of CNN’s

website in 1995 and Cartoon Network’s official website in 1996. However, today Internet is a

major part of the company, which can be seen from Turner Sports that manages digital sports

such as NBA.com and NCAA.com. Other examples include CNN offering live streams of the

Turner’s HLN for mobile devices to subscribers of certain paid television services from 2011

though HLN launched its own website later that year (Reardon, 2011). Moreover, Adult Swim’s

official website today features forum board discussion, music downloads, adult swim show sites,

etc., and Boomerang’s website offers online games, free videos, and other interactive tools.

Furthermore, Turner Broadcasting has lately struck a long-term distribution agreement

with Verizon, an American broadband and telecommunications company, which will offer FiOS

TV subscribers on-demand programming along with live streaming of all major Turner

networks. These can be viewed in and out of home across multiple devices (TimeWarner, 2013).

Therefore, it is evident that Turner has made large efforts to cater to both to the primary

television screen as well as the secondary digital one, and has progressed in terms of

convergence.

Future Plans

David Levy, announced president of Turner Broadcasting System in August 2013, has

planned some new content for the company’s channels for the near future. For instance, CNN

Films has acquired “Sole Survivor” which is a feature-length documentary exploring the

emotional aftermath of survivors of commercial aviation disasters. The show is planned for

premier in early 2014 on CNN/US. Moreover, Turner Classic Movies is preparing to launch its

third TCM Classic Cruise on December 8, 2013, which will be a treat for classic movie fans.

Additionally, It will stage its fifth annual TCM Classic Film Festival in April 2014, coinciding

with the network's 20th anniversary (Busciglio, 2013). Moreover, Turner plans to revamp the

morning show of CNN and incorporate more business type programming and sports type

programming, while concentrating on global news as well. The company also has plans of new

content for its other channels like Cartoon Network, Boomerang, Adult Swim, and Turner

Sports.

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Conclusion

Turner Broadcasting System has been an integral part of the media industry and has

succeeded in expanding its operations internationally over the past 40 years it has been in

business. It has developed into a powerful and influential force, even after becoming a subsidiary

of Time Warner Inc. Turner has faced many challenges that have been the result of ‘make or

break’ decisions, which have led it to the successful position it holds today. The mission and

vision of the company stands true in maintaining its ground for the advanced competition in the

media world, developing and planning appropriate strategies, and utilizing and adopting new

technologies to provide benefits to consumers; and so it continues to grow.

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