What Is Time Warner’s Strategy in International Markets?



Time Warner’s strategy

As English-language content becomes more popular around the world, media companies in the United States are increasingly looking at international markets. Media companies in the United States are either licensing their content to pay-TV operators in international markets or going OTT (over-the-top) in these markets.

Time Warner (TWX) stated at a Deutsche Bank (DB) investor conference early last month that it has been pursuing a content licensing strategy for its businesses. This is in contrast to having an international network like 21st Century Fox’s (FOXA) STAR entertainment network in India (EPI).

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Time Warner also stated that it considers its content licensing strategy to be a “high profit, low risk strategy.” The company has entered into the content licensing deals with pay-TV services in Western Europe, the UK (EWU), Germany (EWG), Italy (EWI), and Canada (EWC). It doesn’t plan to change its strategy in the next three to four years.

Time Warner also said that for a show that enjoys popularity around the world, it has observed that linear television networks and SVOD (subscription video on demand) services like Netflix (NFLX) are both ready to bid for it.

Time Warner also stated at the conference that HBO Now is also eyeing international markets and is expected to expand to Mexico (EWW), Brazil (EWZ), Spain (EWP), and Argentina in 2016.

Other companies eyeing international markets

Viacom (VIAB) has also stated that when it comes to international territories, it continues to pursue growth, either in terms of expansion of its brands or through strategic acquisitions. Other US media companies that are trying to grow internationally include The Walt Disney Company (DIS) with its launch of DisneyLife, a direct-to-consumer service in the UK.

Other major US OTT (over-the-top) players such as Netflix (NFLX) and Amazon’s Prime Instant Video service (AMZN) already have a strong presence in the United Kingdom.

Disney makes up 0.86% of the SPDR S&P 500 ETF (SPY). SPY also has a 2.6% exposure to the communication services sector.


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