Videoconferencing Kept Lord of Rings on Track - ' Time Warner Base Case '

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Headquarters: 1 Time Warner Center, New York, NY 10019
Phone: (212) 484-8000
Business: Media, entertainment, cable and Internet services. Principal units include Time Inc., America Online, Time Warner Cable, Home Box Office, New Line Cinema, Warner Bros. and Turner Broadcasting System.
Financials in 2004: $42.1 billion in sales; $3.4 billion in profits.
Challenge: Create more movie "events" like The Lord of the Rings to ensure additional profits through merchandise and DVD sales. The film trilogy grossed $3.1 billion at the box office and brought in another $3 billion in related sales.

BASELINE GOALS:

Grow revenues by 8% to 9% in 2005, to $45.5 billion, compared to 7% growth in 2004.

Put together more "events" like The Lord of the Rings trilogy, to boost home DVD sales past $5 billion in 2006 from $4.2 billion in 2004.

Use technology to keep a lid on movie production costs. The average film cost $98 million to make and market in 2004, according to the Motion Picture Association of America, down 5% from $103 million in 2003.

Use videoconferencing technology to hold spending on all three Rings films to $270 million, saving $130 million or 33%

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