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Will Time Warner’s Programming Strategy for Warner Bros. Work?

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Dec. 4 2020, Updated 10:52 a.m. ET

Batman v Superman: Dawn of Justice rules at the box office

Batman v Superman: Dawn of Justice continues to draw audiences even as critics have panned the movie. The film is the first in the revival of the DC Comics franchise.

In fiscal 2016–2020, Time Warner (TWX) expects to release about 17 movies from its DC, Lego, and World of Harry Potter franchises. At a Deutsche Bank (DB) investor conference early last month, Time Warner stated that a core part of Warner Bros.’ strategy is to leverage its intellectual property and monetize it effectively.

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Time Warner also stated that it is targeting 450 hours of television programming from Warner Bros. this year for Turner’s Cartoon Network and Boomerang. Time Warner believes that some of its television programming that is centered around its franchises can result in increased sales for its Consumer Products business or sales of video games.

Time Warner also said at the investor conference that its programming from Warner Bros. has “more demand from global, regular, linear broadcast buyers and video package network buyers whether it’s in Europe or South America. And so, all of it feeds into a virtuous cycle.”

Warner Bros. in 4Q15 and 2015

Warner Bros. had revenues of $13 billion in 2015, a rise of 4% year-over-year (or YoY). However, Warner Bros. saw a 13% YoY fall in revenues in fiscal 4Q15, with revenues of $3.3 billion. The fall in revenues was the result of a fall in theatrical revenues from releases including The Hobbit: The Battle of the Five Armies, Interstellar, and Annabelle.

In comparison, 21st Century Fox’s (FOXA) Filmed Entertainment segment had revenues of $2.4 billion in fiscal 2Q16, a fall of $392 million over fiscal 2Q15.

The Walt Disney Company’s (DIS) Studio Entertainment segment saw revenues of $2.7 billion in fiscal 1Q16, up by 46% year-over-year, largely driven by the success of Star Wars: The Force Awakens.

Time Warner makes up 0.33% of the SPDR S&P 500 ETF (SPY). SPY also has an exposure of 2.6% to the Communication Services sector.

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