WILL THE REAL TIME WARNER PLEASE STAND UP?
By Christie McGuinness. June 9, 2016
Time Warner Cable was bought recently for $60 billion dollars by Charter Communications Inc. Ideally, this sale will solve the many problems associated with Time Warner Cable, which is notorious for “[having] a reputation for poor customer service, consistently ranking near the bottom in customer satisfaction surveys[1]” as a recent Wall Street Journal article commented. What Charter Communications does with this new acquisition is yet to be determined.
However, one issue this acquisition might fix is the name confusion between Time Warner Cable and Time Warner Inc. For the sake of clarity, Time Warner Cable is the cable/internet provider that is prevalent throughout New York City. In the 1980s, Time and Warner merged to create Time Warner, Inc.[2], which most will recognize as responsible for successes such as HBO and Game of Thrones. What makes this merger a bit funny is that Time Warner Cable is a spin off from Time Warner Inc.
The confusion between the identities of the companies can have far reaching implications, from the practical, to the comical. On the practical end, a company’s name is part of its brand, its identity with its customers. It is also attached to the company’s intellectual property—think trademark, which is an asset with value. On the comical end, it seems that even the employees of these companies forget exactly which company they are working for.
“Even HBO talk-show host Bill Maher has failed to differentiate between Time Warner and Time Warner Cable, leaving him inadvertently insulting his own company[3],” the Wall Street Journal Article noted. And the cookie crumbles both ways. “Time Warner Cable executives have received their share of show pitches and complaints about profanity on HBO.” But, I think we can all agree, that is much better than complaints for “excessive hole-drilling in [people’s] house[s],” a comparison drawn in the Wall Street Journal article.
What makes this confusion in name unique is not only that the executives are unsure of what company they are working for, the confusion has had an impact on the stocks of the company. “Executives at both companies said they suspected odd stock moves over the years stemmed from news affecting the other company. Often when Time Warner reports quarterly earnings, a story appears online with a picture of a Time Warner Cable truck,” the Wall Street Journal article explained. This situation is unique to these two companies because of the similarity in name.
As Juliette once opined, what is in a name? As demonstrated by these two companies, a name comes with a reputation, and a company’s value is directly correlated to its stock price. Companies should take care to make sure that when they are doing something right, nobody has any confusion about who to give the credit to because at the end of the day, trademarks are very important to a company. Trademarks are what enables consumers to automatically recognize the difference between the Nike swoosh and the Adidas logo. Brand recognition is very important because it is what makes consumers say “I want that brand over that brand.” That is why companies consider Intellectual Property to be an asset with assignable value.
Because a company, going by another’s name, would be wasting its time.
Paramount Commc’ns, Inc. v. Time, Inc., 571 A.2d 1140 (Del. 1989).
[1] http://www.wsj.com/articles/time-warner-makes-game-of-thrones-confused-customers-think-its-the-cable-company-1464790213
[2] http://www.nytimes.com/1989/03/05/us/time-inc-and-warner-to-merge-creating-largest-media-company.html
[3] http://www.wsj.com/articles/time-warner-makes-game-of-thrones-confused-customers-think-its-the-cable-company-1464790213