May 24, 2021 • 45 mins
AT&T plans to spin off WarnerMedia and have it merge with Discovery Communications, but this is just the most recent example of corporate shuffling for Warner. We look at the origins of the Warner Brothers Studio and how it gradually mutated into Time Warner.
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Episode Transcript
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Speaker 1 (00:04):
Welcome to Tech Stuff, a production from I Heart Radio.
Hey there, and welcome to tech Stuff. I'm your host,
Jonathan strick Lind. I'm an executive producer with I Heart
Radio and I love all things tech. And recently I
covered in a tech News episode that A T and
(00:24):
T is looking to jettison Warner Media and have it
merged with Discovery Communications. And in that episode, I talked
about how the Warner Media group of companies has a
pretty complicated lineage. Well, today I thought we'd start down
the road to talk about the various companies that make
up Warner Media kind of unravel at all. And this
(00:47):
is gonna be a heck of a story because it
includes several influential media companies that had their own distinct
histories before coalescing into Warner Media. But it also includes
companies that are not media companies at all, like funeral
homes for real. Now, when I say complicated, I'm not kidding.
(01:08):
Our story includes a window washing company, parking company, and
online service provider company, UM, few magazine publishers and more.
There are mergers, there are acquisitions, there are spinoffs, there's
family betrayal, and lots of other stuff. So where the
(01:29):
heck do I get started? Well, I suppose I should
talk about the core components and then work to the
point where they all come together. And I could start
pretty much anywhere, because there's so many different pieces to
the story, But I'm going to begin with Time because
it's on my side, Yes it is. Henry Loose and
(01:49):
Britton Haddn't had a lot in common. They both attended
Yale University, they both worked as reporters for the Baltimore News,
and both of them were in their early twenties back
in nineteen twenty two, and they also both wanted to
try something that was a new idea. Newspapers were a thing, obviously,
(02:10):
but Luce and Haddn't had the idea for a news magazine.
They decided to try and create one because no one
had really done it before, and they raised more than
eighty thousand dollars, which was a princely sum in nineteen
twenty two, and they quit their jobs to found a
company called Time Incorporated and a magazine called Time. It
(02:32):
would publish weekly starting in March of nineteen twenty three.
Luce served as the business manager for the young publishing
company and Hadden was editor in chief, and together they
found success with this weekly magazine format. Seven years later,
haddn't passed away suddenly after an illness had developed into sepsis.
(02:55):
Loose pressed on becoming editor in chief and launching other
magazines like Fortune, which launched just as the Great Depression
was settling in. So that's kind of ironic timing. He
also published Life, which I think already existed as a
as a different kind of publication, but he essentially acquired
(03:15):
it and then relaunched it under a new format, effectively
making a new magazine, and then much much later magazines
like Sports Illustrated. He also, according to some accounts, essentially
erased Hadden's contributions to the company time Inc. Was becoming
a giant publisher. Moreover, Loose oversaw the launch of other
(03:38):
forms of media content. In nineteen thirty one, the company
sponsored a radio news series that aired on CBS Radio,
and in nineteen thirty five the company expanded this to newsreels,
which were these things that we play in movie theaters
between pictures. So instead of you know, just watching a movie,
you might actually see a ten or fifteen that segment
(04:00):
about the latest news or kind of a documentary or
a highlight of something. The newsreels were slightly different from
others at the time. They had a longer format and
the inclusion of stuff like re enactments. The concept was
to make a newsreel that was the cinematic sibling of
Time magazine or Life Magazine, something that was akin to those.
(04:25):
The March of Time series would end up receiving several awards,
including an Honorary Academy Award. This made Time Incorporated a
multimedia company, publishing and newsreels and radio. It was one
of the earliest examples of such a thing. Luce was
editor in chief until nineteen sixty four, and he passed
(04:47):
away just three years after that. But the publisher, the
company that is continued to grow over the years, and
by the late nineteen eighties it was poised to play
a bigger part in our story. But now we're going
to switch over to another company. Because really, when you
get to it, Times story is really one of publishing
(05:08):
and growing a company over time. Uh. It doesn't have
a whole lot to do with with tech, apart from
the fact that obviously technological advancements can mean smoothing out
the processes of a company's operations like from printing to distribution.
But I don't really think that that's worthy of us
really diving into here. So we're gonna switch over to
(05:30):
Warner Brothers Entertainment Incorporated, or the old w B. Now,
the Warner family immigrated to the United States from Poland
in the early eighties, and in fact, three of the
four Warner brothers referenced in the name of the company
We're born in Poland, those being Harry, who was the eldest,
(05:51):
and then Albert and Sam. Now some sources ice I've
seen suggest that Albert and Sam were born in North America.
But a to a guy who was hired by Warner
Brothers to come in and do research on this kind
of stuff, that wasn't the case. Jack, the youngest of
the four Warner brothers, was born in North America. He
(06:12):
was born in Canada. And they also had other siblings
as well. This was a big family. I think there
were nine of them total, so that wasn't all of them,
but those were the four brothers of the Warner Brothers fame. Now,
this family wasn't exactly impoverished, but it was a lot
of work to make ends meet. So the brothers worked
in all sorts of lines of work in the Midwest.
(06:35):
They worked in the meat industry, they worked at bowling alleys,
They did all sorts of stuff, and they were all
looking for ways to be a success, and gradually they
built up a little money. In nineteen o three, the
four brothers rented a vacant store in Newcastle, Pennsylvania, and
they wanted to turn it into a film exchange in
(06:56):
a movie theater that they had also acquired a film
projector now obvious sleeve. This was in the extremely early
days of cinema. The brothers mainly focused on getting hold
of films and making them available to other theaters in
the region, thus the film exchange business. They were kind
of a go between between the movie studios and the
(07:16):
movie theaters. And it turned out that motion pictures weren't
just a fad. Also turned out that it was a
really shady business. There were a lot of um criminal
types who got interested in stuff like film exchanges. I
have no idea how involved the Warners were, if at all,
(07:37):
in that side of life, but it was definitely a
thing that was going on. Not turned out that since
motion pictures were so popular, you know, I feel pretty
confident saying motion pictures were a success, you know, from
the perspective of one the brothers business was also successful,
and they began to, you know, use the money that
(07:57):
they made to open more theaters and expand by n
they decided that they would branch out from the business
of exhibiting films and get into the business of making them,
because one of the downsides of this is that you
couldn't guarantee the quality of the movies that were being
sent to you, and a lot of the movies were
on the not so great side, like either they were
(08:20):
just poorly made or they frequently involved material that was
considered risk a or worse. So movies had a really
bad reputation in the early days, and the brothers kind
of wanted to have more control over the whole process,
so they decided to create their own movie studio. Jack
(08:42):
Warner would be in charge of movie production. He oversaw
the film operations side of things. Harry handled all the
business operations for the company. He was effectively the head
of Warner Brothers, and Sam was in charge of securing
and maintaining technical equipment, and Alb would work with other
theaters to handle distribution of the Warner Films. The four
(09:05):
opened up Warner Brothers Studio in Hollywood, California, in nineteen eighteen,
originally on Sunset Boulevard, which at the time was considered
a seedy part of of Hollywood. Um, I don't know
if it still is. I actually kind of like Sunset Boulevard,
but maybe it's because I'm a seedy guy. Anyway. They
(09:26):
incorporated as Warner Brothers Pictures in nineteen twenty three. By
that time, they had already produced several films, and the
first really big success for them was a series of pictures,
that is, movies that started a four legged actor that
being rentin Tin. Uh. That's a dog for those of
(09:47):
you who have never seen a rentin Tin picture. And
the dog was learning like a thousand bucks a week,
which was, you know, quite the princely pooch. I would
imagine that's a lot of money back in those days,
not a not a small shake of these days. Warner
Brothers was an independent studio back then and was facing
off against three much more established companies. There was Paramount,
(10:09):
there was MGM, and there was a company called First National.
Warner Brothers was scrappy compared to those three and Sam
had a vision for what could help set the studio
apart and change the industry forever. See this was again
the era of the silent film. Movies would play in
movie houses and typically you would have like a house
(10:30):
musician who would play along with the film on on
an oregon or something, and all dialogue would be represented
in little interstitial cards that would pop up, which created
a certain interesting style of cinema, like you could make
really compelling movies this way, but it also clearly limited
the actors range. Sam wanted to synchronize sound with the
(10:50):
images on screen, and he wanted the company to pioneer
the technologies and the installations that would allow for talking pictures.
He initially met with some resistance from Harry, who was like,
why the heck do we need to hear the actors talk?
But the studio hit a bit of a rough patch,
and maybe in desperation, Harry ended up giving Sam the
green light. Warner Brothers then purchased a company that had
(11:14):
spun off from Western Electric. This company was called the
Vitograph Company. The Vitogram system was a film sound recording system,
but it wasn't recording sound to film the way we
do it today. Instead, this system used sixteen inch discs
like records, they had a groove recorded in them, representing
(11:36):
a soundtrack. So this is like a vinyl album, and
it included everything like music and sound effects and eventually
dialogue and vocals, though originally Harry did not want that included.
He just wanted, you know, music and sound effects on there. Uh.
A side of a desk would run for about eleven
minutes when played back at an RPM of thirty three
(11:57):
and a third. Eleven minutes was about the same amount
of time it took to project through a thousand feet
of film. And you know, in those early days you
would end up just having about a thousand feet per
real of film, and so one side of the record
would typically have a groove on it, the other side
would be blank, and each record would go with a
(12:18):
single reel of film, and you were just supposed to
keep them two of them together. So with a setup,
you would have a projectionist who would use a special
piece of equipment that was part projector part record turntable,
and they would feed the film into the projector they
would set the little needle or stylus of the record
player on the beginning of the recording, which from what
(12:41):
I understand, was actually at the center of the disk.
And you know most records, you know, you put the
needle on the outside of the record and it follows
the groove gradually all the way to the inside. Apparently,
with the vitaphone system, you would put the needle at
the center of it, and because the way that the
(13:02):
record turned and the way the groove was laid out,
it would actually go outward to the outer edge starting
the projector would mean that the film and soundtrack playback
would be synchronized at least, you know, theoretically. The first
Warner Brothers film using a vitophone soundtrack was Don Juan,
but the piece had already been filmed. The soundtrack included
(13:25):
the score for the movie and some sound effects, but
no dialogue, so Don Juan was still largely a silent film.
The first talkie was The Jazz Singer, a film with
a recorded sound all the way through, so there was
dialogue and singing within the film itself. Now I'm going
to leave it to film historians to talk about the movie,
(13:47):
which has elements in it that I think are, you know,
to put it charitably, challenging, but from a technical perspective,
it was marking a new era, and this was also
an era that would go without it's early champion. Sam Warner,
who had pushed so hard to incorporate sound into movies,
died the night before the premiere of The Jazz Singer.
(14:10):
The narrative goes that he worked himself to death, though
author David Thompson suggests that perhaps there were some other
underlying health conditions that contributed to his early demise. But
now the Warner Brothers were three. Now Warner Brothers, the
company would stick with vitaphone for a few years, but
even when The Jazz Singer came out, the writing was
(14:33):
already on the wall. The future of sound on film
wasn't with separate recorded discs, but a methodology that would
allow filmmakers to actually record sound directly onto film itself.
I've covered how this works in previous episodes of Tech Stuff,
so I'm not going to go into it here. But
what it really meant for Warner Brothers was that the
(14:53):
company would eventually have to come around to adopting the
industry standard and abandoning the vitaphone of coach. The Jazz
Singer was a huge hit for Warner Brothers, and the
company was able to afford new digs, so they relocated
off of Sunset Boulevard and they purchased land to build
a studio in Burbank, California, setting out a whole new
(15:16):
studio there, and the company also acquired the Stanley Company
of America, a business that owned more than two hundred
movie theaters across the United States. This gave the Warner
Brothers a distribution channel for the company's movies, and it
would also be one of the big elements that would
prompt the US government to take a closer look at
the film industry. So to be clear, I should really
(15:37):
point out this was something that every major movie studio
was doing. It was pretty much common practice for companies
like MGM and Paramount to have their own movie houses
across the US, and it created a pretty rough environment
for independent theater owners. In the nineteen thirties, Warner Brothers
began to produce cartoons for movie theaters, and that's when
(15:59):
we got the Loon It Tunes, characters like Bugs, Bunny,
you know, they rabbit in space, Jam, Filthy Young People.
It's also when Warner Brothers turned to producing a lot
of gangster movies, like a lot of them. These were
the studio days when companies would sign directors and stars
(16:19):
to long term contracts which made them exclusive talent for
that studio. Same was true for film cruise too, so
people would go in day after day working with the
same group of folks. Sometimes from one picture to the other.
You might not even really be able to tell what
movie you're working on, just because you're always around the
same people in the same studios. James Cagney became the
(16:41):
top star for the company, and Humphrey Bogart, who was
on the company payroll, was held back because Harry Warner
wasn't convinced that Bogart was star material. Talk about a
a wrong take anyway. Warner Brothers also acquired another company
called Cosmopolitan Films, which was formerly owned by the newspaper
(17:03):
giant William Randolph Hurst, who perhaps has the tackiest home
I've ever seen. The Hearst Castle is just a monument
to gaudiness. Anyway, the company kept on growing. In nine four,
most movie studios, including Warner Brothers, signed onto the Motion
Picture Production Code also known as the Haze Code, after
(17:25):
the then president of the Motion Picture producers and distributors
of America Will h Code. Now I'm just kidding. It
was Will H. Hayes. That was his name, and the
Haze Code was meant to perform triage on Hollywood's image.
Like I said, the movie business was seen as something
of a seedy thing, especially because around this time there
were some really nasty scandals that were surrounding Hollywood. Uh,
(17:51):
scandals that involved stuff like sex and death. It was
not a not a good thing too to have if
you're trying to put forth the the aura of respectability.
So the movie business was no stranger to scandal, both
on and off screen, and the US government was kind
of starting to think about ways that they might censor
the film industry. So rather than have the government come
(18:13):
in and regulate the movies, the goal was to create
a code of standards of what was and wasn't suitable
to show in movie theaters and head off the US
government at the past and have movie studios sign on
to you know, produce films under this code. For the record,
this is something that has happened numerous times in American
history with industries that range from comic books to film
(18:38):
to video games. We've seen it happen again and again.
The Haze Code was extremely restrictive. Movie studios weren't forced
to comply to the Haze Code, but generally speaking, it
was best to play the game if you wanted your
films to get played in theaters. Warner Brothers scrapped the
gangster film genre pretty much, as it would be pretty
(18:58):
challenging to make a compel in gangster movie while still
holding true to the restrictions of the Haze Code. And
that's where we're going to leave off for our first break.
When we come back, we're going to skip forward a
little bit in time to talk about some other changes
at Warner Brothers that lead up to the birth of
Warner Media. We still got a long way to go,
so let's take a quick break and we'll be right back.
(19:28):
So the Haze Code would hold true in Hollywood until
the late nineteen sixties. Warner Brothers continue to make lots
of movies and cartoons in that time. And this isn't
a pop culture podcast, so I'm not going to go
into all of them here. It would just be, you know, ridiculous.
But Warner Brothers continued to make films in the nineteen
forties during World War Two. They didn't stop, and after
(19:51):
the war, television, which had been development for decades but
had largely been paused during the war, debuted in earnest.
The movie industry as a whole was not too happy
about television. They were fearing that people would purchase a
TV set and then just elect to stay home rather
than head out for a night at the movies. Now, gradually, studios,
(20:13):
including Warner Brothers, would expand their operations to include TV productions,
but at first it was as if you had like
one giant predator suddenly spotting a totally different predator in
its home turf and things get real tense. That was
kind of how it was between movie studios and television
at the time. In the late nineteen fifties, Warners established
(20:34):
a subsidiary company called Warner Brothers Records, later known as
just Warner Records and then later still Warner Music Group.
This was the recorded music division of the movie studio
business and largely focused on producing recordings of the various
soundtracks to Warner Brothers movies, as well as securing their talent.
One of the things that Warner Brothers executives were upset
(20:57):
about was that Occasionally, an actor in one of their
films would record a song and it would get released
on some other record label, and that meant that Warner
Brothers suddenly didn't have total control over the talent that
was signed to them, and they hated that. They wanted
to make sure that if if that person who was
(21:18):
signed to a contract was gonna make money by gully,
Warner Brothers was gonna get a cut of it. So
that was really the reason why they created a records division.
Also in the nineteen fifties, Warner Brothers was forced to
divest itself of its theater chains. This was the consequence
of a legal battle between the US government and the
film industry in the United States, and the issue at
(21:40):
the heart of all this was anti competitiveness. So movie
studios had been buying up all aspects related to movie production,
from the actual companies that would process film to the
content creation side, you know, the actual movie studios, to
the movie theater side, so everything from production, processing and distribution.
(22:01):
This was not necessarily great for the average consumer who
might find themselves with no way to see the latest
pictures from movie studio A because the one theater in
their town happened to be owned by movie studio B
and for actors and directors, there was the issue of
getting locked into contracts that made them exclusive talent, and
it meant that the actors wouldn't really have much of
(22:22):
a say about what projects they pursued. And in addition,
studios would sometimes barter with other studios and use talent
as a kind of you know, bargaining chip. It wasn't
super cool. Uh. There were a lot of other considerations
too that would into this, but ultimately the important point
is that the big movie studios all had to spin
off their movie theater holdings. They couldn't keep them any longer.
(22:44):
They also weren't allowed to have talent agencies and stuff
like that, and so this was sort of the beginning
of the end of the big studio era, although studio
contracts would still be kind of a thing for a bit.
And yet another development in the nineteen fifties, Jack more
Or saw an opportunity, but it would mean doing some
underhanded stuff. So you see, Harry Warner was technically in
(23:06):
charge of the company, but Jack Warner was the guy
who was kind of making stuff happen on the studio level.
Also not very well liked Mr Jack Warner. A lot
of his stars positively hated the man. Jack wanted to
lead the company, but Harry essentially said, over my dead body.
So Jack one day approaches his brothers, Harry and Albert,
(23:31):
and he essentially says, Hey, you know what we're all
getting on in years, we're all getting older. We should
sell our company off. We had a great run. Let's
sell it off while we're still on top. We'll make
a ton of money and we can retire in comfort.
And the elder brothers agreed, and the studio was quote
unquote sold but low and behold. A couple of weeks later,
(23:51):
Jack Warner is revealed as the new president of this
new Warner Brothers company, which was kind of only new
on paper. Really, Harry would not last very long. He
actually died not too long after this happened. And of
course that narrative is that Jack Warner broke his brother's
heart and that's what killed Harry Warner. There was definitely
(24:13):
a schism in the Warner family at this point. This
was also around the same time that Warner actually created
its television division called Warner Brothers Television Studios in nineteen
fifty five, Jack Warner's son in law, William t Or,
would head up that division. One of their early major
productions was the first one hour television Western series called Cheyenne.
(24:37):
The studio would go on to produce lots of other
shows like Maverick is another great example. In the nineteen sixties,
the studio began to produce a bunch of movie musicals.
These were lavish, expensive productions, and they helped convince people
to you know, leave their homes, leave their televisions behind
to see these films that they could only see in theaters.
(24:58):
So they included movies like The Music Man, uh Anti Name,
and Gypsy. These were all adaptations of Broadway musicals. But
it was My Fair Lady, which debuted in nineteen sixty four,
that proved to be a truly enormous success, as did
the movie's soundtrack, which really helped establish Warner Brothers Records.
(25:19):
That will come back to Warner Brothers Records a little
bit later on, but let's stick with My Fair Lady.
There was one big drawback on that deal. So when
Jack Warner purchased the rights the film rights to make
My Fair Lady, it cost him five and a half
million dollars. This was before they had shot even a
foot of film. The rights to the film, however, reverted
(25:41):
to CBS after seven years because CBS was the company
that had actually financed the original Broadway production that My
Fair Lady was based off of. So once those seven
years were up, CBS got the rights, which means that
while My Fair lay He was a Warner Brothers film,
it's not in the Warner Brothers library today. In nineteen
(26:05):
sixty six, Jack Warner decided to sell Warner Brothers for
real zies. This time he kind of faked it out
the decade earlier, and now he's actually doing it. He
sold off his controlling shares of the company to another
company called Seven Arts Productions for thirty two million dollars.
He stayed on with with the Warner Company in various roles,
(26:29):
um but he irritated the heck out of the Seven
Arts Productions folks. So let's talk about Seven Arts for
a second. Seven Arts Productions made movies, but did not
distribute movies. So instead Seven Arts Productions would make films
and then partner with other studios for their release. Three
film professionals had founded the company in nineteen fifty seven,
(26:50):
and they were able to make films using a more
independent studio approach. So like one of those films was
Whatever Happened to Baby Jane, which they made on behalf
of Warner Brothers. Warner Brothers actually distributed that film. The
studio films were successful enough to give the owners the
cash they needed to buy out Jack Warner in nineteen
sixty six. So this new company was called Warner Brothers
(27:13):
Seven Arts, and the logo changed to the W B
shield was now a stylized combination of the letter W
and the number seven. So if you've ever seen a
really weird looking Warner Brothers logo, it might be that one.
To be fair, there's been a few weird Warner Brothers logos.
So if it looks like there was a number seven
(27:34):
merged onto the end of a W, that would be
this era. And the deal included Warner Brothers Studios, all
of the black and white Looney Tunes catalog, and Warner Records.
So why just the black and white Looney Tunes catalog. Well,
that's a really complicated story all by itself. It mostly
involves how Warner Brothers handled the rights to various cartoons
(27:56):
during the early era of television. The company originally made
these cartoons to play in movie theaters, not for TV,
and Warners didn't have an established television studio in the
early nineteen fifties, so the company sold television distribution rights
to a few different companies, including one that was called
Guild Films. That was the one that got the black
(28:17):
and white ones. But Guild Films would go bankrupt, and
then Seven Arts Productions acquired that company's assets. So technically
the distribution rights to the black and White ones already
belonged to Seven Ages Productions, but now they also owned
the company that made it. The distribution rights to the
other cartoons belonged to other companies. And I'm not going
(28:37):
to get into all that because wolf y'all, this is
already complicated enough as it is. The company did also
acquire Atlantic Records, which joined the Warner Records label as
a music label owned by this bigger media company. So
Warner Brothers Seven Arts was a new movie and record
company that lasted all of nearly three whole years. Why
(29:02):
is that, Well, partly it's because the company overextended itself
with all these acquisitions, which is something we see way
too frequently in business and partly well it's because of
the mob and parking lots and window cleaners plus a
funeral home. All right, hear me out, because things are
about to get way more bizarre. Okay, So for this
(29:25):
part of the story, we gotta go way way back again,
back before time. Not not you know, time is in space,
time or the experience or whatever. I mean, time incorporated.
So we're gonna go back to eighteen six. That's when
Max Swag founded a window cleaning company that he called
(29:46):
National Window Cleaning and House Renovating Company, and it was
in New York City. A guy named Louis Frankel joined
the company in the early nineteen hundreds and the name
changed slightly to National House and Window Cleaning Company. In
nineteen thirty seven, Max passed away, Frankel ended up leading
the company. Uh Frankel died a decade later in nineteen seven,
(30:10):
and his son, William Frankel took over the company. At
that point, the name of the company changed again and
became the National Cleaning Contractors, Incorporated. William Frankel would oversee
operations at the company until nineteen sixty six, which is
when a different company swoops in to acquire it, and
that company was Kinney Service Corporation. Now, for some reason,
(30:35):
the Antitrust Division of the Justice Department opposed this merger.
I think I know why, but I couldn't find anything
like firm about it. However, I do know that Kinney
Service Corporation was let's say, it was creative in the
way it did business, So I'm gonna switch over to
them now. So, while the cleaning company was doing business
(30:57):
in New York City in the nineteen forties, you at
another company that was taking shape over in New Jersey.
This one was founded by Sigmund dornbush Manny Kimmel and
mob boss Abner's Willman. Now, I'm sure you've heard that
the mob was involved in Hollywood to some extent, but
(31:18):
I'm not sure that you guessed it came from a
parking lot company in New Jersey, huh. Anyway, the three
of them founded the Kenny Parking Company. Anyways, Willman is
not really part of our story here because the merger
we're going to talk about happen in nineteen sixty six.
Willman died under potentially controversial circumstances. In nineteen fifty nine,
(31:42):
he was found hanged, but some argued that it was
suicide and some argued that it was murder. I don't
know what the truth of the matter is, but anyway,
in the early sixties, the parking Company formed a partnership
with a rental car company owned by Edward Rosenthal. And yeah,
this is getting more complicated. I'm sorry. The partnership worked well.
(32:06):
It was the Abbey rent a Car Company, and a
couple of years later, these two companies, the parking Company
and the rent a car company, decided that, hey, this
works so great, let's merge and make a single company. Now.
In that process, Rosenthal decided he would bring in some
of his other concerns, some of his other companies that
he owned, which included a funeral home called Riverside Memorial
(32:30):
Chapel and another company called the City Service Cleaning Contractors incorporated.
This collection of rag tag companies became the Kinney Service Corporation,
which I mean, I guess you've got to call it
something and and it is hard to come up with
a name for a company that has divisions that specialize
(32:51):
in parking lots, window cleaning, rental cars, and funeral homes.
I'm drawn a blank here, so I guess Kinney Service
Corporation it is. The company also bought up nine more
funeral homes too. They really took service to a new,
really weird level. Edward Rosenthal's daughter Carol, married a man
(33:13):
named Steve Ross, and in nineteen sixty six, Kenney Service
Corporation merged with the National Cleaning Contractors, the one that
was founded in eighteen six. And I'm guessing that the
Department of Justice was worried that the cleaning National Cleaning
Contractors and the the City Service Cleaning Contractors that were
(33:35):
part of Kinney could have represented an anti competitive monopoly
in cleaning. That's the only thing I can guess. Anyway,
whatever the beef was, the merger still happened, and the
new company had the name Kinney National Company, and Steve
Ross took the helm. We'll talk a little bit more
about Kinney National Company and what happened next after this
(33:57):
quick break. In nineteen sixty seven, the Kinney National Company
purchased a publishing company called National Periodical Publications. But you
probably know that company better as d C Comics. Yep,
(34:18):
this is how d C Comics would eventually become part
of the Warner Brothers family. By way of a funeral
home slash window cleaning slash parking lot company, you know, naturally. So,
just so we're clear, Warner Brothers didn't so much as
acquire d C Comics, as both DC and w B
(34:40):
got gobbled up by the same company. Steve Ross, the
head of Kinney National Company, must have had a real
love of the movie industry, because he, in short orders
set about using the newly merged companies assets to acquire
companies in the business that is show. He bought a
talent agency, and he bought the Cabra and Lynn company
(35:00):
Pana Vision, and he had his eye on Warner Brothers. Now,
as I mentioned earlier, Seven Arts Productions purchased Warner Brothers
from Jack Warner for thirty two million dollars a few
years earlier. Then they went and purchased Atlantic Records, and
they ended up being a little strapped for cash. Ross
was given a hot tip about it from the owner
(35:21):
of the talent agency they had acquired, and so he
made an offer to the heads of Warner Brothers seven Ages,
and they accepted it. The offer was for sixty million
dollars for four hundred million dollars. Honestly, I found a
lot of conflicting information about this um. I tend to
(35:41):
believe the sixty million more than the four hundred million,
but I kept coming up against different amounts. Anyway, the
companies ended up merging, and consequently Kenny National Company would
sell off its talent agency because otherwise that would be
seen as being anti competitive to have both movie studio
and a talent agency, not just a movie studio, a
(36:04):
television studio too. Ted Ashley, who had previously overseen said
talent agency, would become the head of the new Warner
Brothers Incorporated. Around this time, Jack Warner officially retired from
Warner Brothers, but he continued to work with the company
in some respect for nearly another decade until his death.
(36:24):
As for the new Warner Brothers Incorporated, it ran into
some trouble before too long, but for once it wasn't
because of the movie side of the business, at least
not overtly. Rather, there was a price fixing scandal that
focused on the parking operations of the company, and so
in an effort to kind of salvage operations, the company
(36:46):
leaders decided that they needed to split this company into two,
so in one company would be all the entertainment assets
such as the Warner Brothers Movie Studio, the television studio,
the record studios, cetera. The other company would be everything else,
you know, window washers and funeral directors and parking lots
and all that kind of stuff. So what we got
(37:09):
was Warner Communications on one side and the Kinney National
Company on the other side. So now we can say
goodbye to Kenny and we'll stick with Warner. Okay. So
at this point we've got Warner Communications, which serves as
a parent company, and its subsidiaries include Warner Brothers Studios.
(37:30):
That's the movie studios, h the Warner Music Group, which
included not just Warner and Atlantic, but also record companies
like Asylum, Elektra and more. Then we've got Dimension Pictures,
which is a film production company or was a film
production company that was largely known for making movies in
(37:50):
the exploitation categories. So that includes classics like Dolomite, Returned
to Boggy Creek, which MST. Three K did an episod
it on oh In Satan's Cheerleaders, you know, real classics,
and the company also owned d C Comics and Mad Magazine.
Warner Communications would make several more acquisitions. In ninety nine,
(38:15):
it partnered with American Express to create a joint venture
called Warner Amex Satellite Entertainment, which oversaw cable channels like
MTV and Nickelodeon and the movie Channel YEP. Those started
out as Warner Brothers Concerns or I guess Co. Warner
Brothers Concerns and Warner Communications also purchased a little company
(38:38):
called Atari in nineteen seventy six. Now I covered this
in my episodes about Attari several years ago, but let's
go over a real quick version. So Nolan Bushnell, who
was leading a Torii when it was a private company,
had a problem. He was about to launch a video
game console to the home market. But producing hardware is expensive.
(39:01):
You have to pay the manufacturing costs, and then there's
issues like supply chain, both before when you're just getting
all the parts to put together and after when you're
shipping the finished units out to retail outlets. It was
going to require more money than the company had on hand,
and so Bushnell made the decision to see if some
other company would be willing to buy Atari and essentially
(39:24):
foot the bill for production. Warner Communications turned out to
be that company. In nineteen Warner Communications acquired Attari for
the princely sum of twenty eight million dollars. It took
some time for that investment to actually pay off. Early
issues with manufacturing caused delays, which cost the company a
lot of money, but things turned around fairly quickly, and
(39:47):
the success of Atari helped Warner Communications offset some shortfalls
that the company was experiencing in their movie and music divisions.
Of course, anyone familiar with the home video game market
knows what ultimately happened. While the industry was writing high
in the late seventies and early eighties, sometimes literally, as
(40:08):
I understand, companies like Atari sometimes resembled more like a
rock star party than a media company. Anyway, it all
came crashing down in a glut of consoles and cheap
games had saturated the market, and consumers were drifting away
from consoles and toward a new technological wonder, the personal computer.
(40:30):
The entire industry had a massive collapse, and Atari was
essentially at the center of it. By the end of
nineteen eight three, Warner Communications was hurting. Its film and
music divisions weren't performing so well, and the video game
division was now in shambles. Warner sold off the parts
of Atari associated with consumer products, which included stuff like
(40:52):
consoles and computers and game development, and sold it to
Jack Tramiel, the former CEO of Commodore. I've done episodes
about Tramuel in the past. It's kind of a vindictive guy.
But that's off topic for our discussion about Warner. Warner
retained the arcade game division of Atari, so they sold
(41:12):
off the home market stuff, but they kept the arcade
market stuff. They renamed that Atari Games. So this was
the great split of Atari into two different entities, and
it would fracture further from there. And if you listen
to my episodes about Midway, you might have heard that
this division of Atari would ultimately shift over to Williams
(41:32):
slash Midway Games, and Atari Games would eventually become Midway
Games West. So Warner Communications was in some financial trouble.
In Warner bought out American Expresses Steak in the Warner
Amex satellite entertainment company. It's the one that owned cable channels,
(41:53):
and then in Night five, Warner sold this company off
to Viacom, which has its own incredbly complicated history, but
for now we'll just say that Warner's brief fling and
owning cable companies had come to an end for now,
with Viacom assuming a big chunk of debt from Warner
as part of this deal. And now finally we get
(42:17):
to the merger between Time Incorporated and Warner Communications. So
Time announced in March of nine nine that it was
going to merge with Warner Communications and thus create a
new company called Time Warner. But at that same time,
a company called Gulf and Western later known as Paramount Communications,
(42:37):
attempted a hostile takeover of Time. And these hostile takeovers
really big in the eighties, So I guess i'll go
over that really quickly, just to explain what they are. So,
typically you have the board of directors of a company
that makes decisions on behalf of a company, and those
decisions include whether or not to accept some other companies
(42:58):
acquisition offer. So if it's a private company that this
is just These are the people who make all the decisions.
What they say goes. If they don't want to sell,
no one sells. But for publicly traded companies like Time Incorporated,
it's different. So in a publicly traded company, it's possible
to convince shareholders to agree to an acquisition against the
(43:21):
wishes of the board of directors. The acquirer has to
convince enough shareholders to vote for the measure, and then
even if the Board of directors disagree, the acquisition goes through.
One way to do this is to appeal to the
greed of shareholders and promise higher share prices than whatever
the market currently values them at. Time raised its bid
(43:43):
for Warner Communications and rushed to complete the merger. Now,
at this point, the deal was valued at nearly fifteen
billion dollars, and there were a couple of court cases
that Paramount Communications brought against this, but Time ended up
winning those time and time again, and thus the Time
Warner merger finally got greenlit and we got ourselves emerged company.
(44:08):
This is a good place for us to wrap up.
When we come back for the next entry into this series,
we'll learn more about the business of Time Warner, which
was pretty complicated and got into things like amusement parks
and and other things. We'll talk about how a O
L would fit into all of this not well, by
(44:29):
the way, and all the messy stuff that would follow
leading up to the modern take on Warner Media and
what is going on with the proposed merger with Discovery Communications.
But that's for the next episode. If you have suggestions
for other things I should cover on tech Stuff, reach
out to me on Twitter the handle I use as
(44:49):
Text Stuff hs W, and I'll talk to you again
really soon. Tech Stuff is an I Heart Radio production.
For more podcasts from I Heart Radio, visit the i
Heart Radio app, Apple Podcasts, or wherever you listen to
your favorite shows.
Welcome to Tech Stuff, a production from I Heart Radio.
Hey there, and welcome to tech Stuff. I'm your host,
Jonathan strick Lind. I'm an executive producer with I Heart
Radio and I love all things tech. And recently I
covered in a tech News episode that A T and
(00:24):
T is looking to jettison Warner Media and have it
merged with Discovery Communications. And in that episode, I talked
about how the Warner Media group of companies has a
pretty complicated lineage. Well, today I thought we'd start down
the road to talk about the various companies that make
up Warner Media kind of unravel at all. And this
(00:47):
is gonna be a heck of a story because it
includes several influential media companies that had their own distinct
histories before coalescing into Warner Media. But it also includes
companies that are not media companies at all, like funeral
homes for real. Now, when I say complicated, I'm not kidding.
(01:08):
Our story includes a window washing company, parking company, and
online service provider company, UM, few magazine publishers and more.
There are mergers, there are acquisitions, there are spinoffs, there's
family betrayal, and lots of other stuff. So where the
(01:29):
heck do I get started? Well, I suppose I should
talk about the core components and then work to the
point where they all come together. And I could start
pretty much anywhere, because there's so many different pieces to
the story, But I'm going to begin with Time because
it's on my side, Yes it is. Henry Loose and
(01:49):
Britton Haddn't had a lot in common. They both attended
Yale University, they both worked as reporters for the Baltimore News,
and both of them were in their early twenties back
in nineteen twenty two, and they also both wanted to
try something that was a new idea. Newspapers were a thing, obviously,
(02:10):
but Luce and Haddn't had the idea for a news magazine.
They decided to try and create one because no one
had really done it before, and they raised more than
eighty thousand dollars, which was a princely sum in nineteen
twenty two, and they quit their jobs to found a
company called Time Incorporated and a magazine called Time. It
(02:32):
would publish weekly starting in March of nineteen twenty three.
Luce served as the business manager for the young publishing
company and Hadden was editor in chief, and together they
found success with this weekly magazine format. Seven years later,
haddn't passed away suddenly after an illness had developed into sepsis.
(02:55):
Loose pressed on becoming editor in chief and launching other
magazines like Fortune, which launched just as the Great Depression
was settling in. So that's kind of ironic timing. He
also published Life, which I think already existed as a
as a different kind of publication, but he essentially acquired
(03:15):
it and then relaunched it under a new format, effectively
making a new magazine, and then much much later magazines
like Sports Illustrated. He also, according to some accounts, essentially
erased Hadden's contributions to the company time Inc. Was becoming
a giant publisher. Moreover, Loose oversaw the launch of other
(03:38):
forms of media content. In nineteen thirty one, the company
sponsored a radio news series that aired on CBS Radio,
and in nineteen thirty five the company expanded this to newsreels,
which were these things that we play in movie theaters
between pictures. So instead of you know, just watching a movie,
you might actually see a ten or fifteen that segment
(04:00):
about the latest news or kind of a documentary or
a highlight of something. The newsreels were slightly different from
others at the time. They had a longer format and
the inclusion of stuff like re enactments. The concept was
to make a newsreel that was the cinematic sibling of
Time magazine or Life Magazine, something that was akin to those.
(04:25):
The March of Time series would end up receiving several awards,
including an Honorary Academy Award. This made Time Incorporated a
multimedia company, publishing and newsreels and radio. It was one
of the earliest examples of such a thing. Luce was
editor in chief until nineteen sixty four, and he passed
(04:47):
away just three years after that. But the publisher, the
company that is continued to grow over the years, and
by the late nineteen eighties it was poised to play
a bigger part in our story. But now we're going
to switch over to another company. Because really, when you
get to it, Times story is really one of publishing
(05:08):
and growing a company over time. Uh. It doesn't have
a whole lot to do with with tech, apart from
the fact that obviously technological advancements can mean smoothing out
the processes of a company's operations like from printing to distribution.
But I don't really think that that's worthy of us
really diving into here. So we're gonna switch over to
(05:30):
Warner Brothers Entertainment Incorporated, or the old w B. Now,
the Warner family immigrated to the United States from Poland
in the early eighties, and in fact, three of the
four Warner brothers referenced in the name of the company
We're born in Poland, those being Harry, who was the eldest,
(05:51):
and then Albert and Sam. Now some sources ice I've
seen suggest that Albert and Sam were born in North America.
But a to a guy who was hired by Warner
Brothers to come in and do research on this kind
of stuff, that wasn't the case. Jack, the youngest of
the four Warner brothers, was born in North America. He
(06:12):
was born in Canada. And they also had other siblings
as well. This was a big family. I think there
were nine of them total, so that wasn't all of them,
but those were the four brothers of the Warner Brothers fame. Now,
this family wasn't exactly impoverished, but it was a lot
of work to make ends meet. So the brothers worked
in all sorts of lines of work in the Midwest.
(06:35):
They worked in the meat industry, they worked at bowling alleys,
They did all sorts of stuff, and they were all
looking for ways to be a success, and gradually they
built up a little money. In nineteen o three, the
four brothers rented a vacant store in Newcastle, Pennsylvania, and
they wanted to turn it into a film exchange in
(06:56):
a movie theater that they had also acquired a film
projector now obvious sleeve. This was in the extremely early
days of cinema. The brothers mainly focused on getting hold
of films and making them available to other theaters in
the region, thus the film exchange business. They were kind
of a go between between the movie studios and the
(07:16):
movie theaters. And it turned out that motion pictures weren't
just a fad. Also turned out that it was a
really shady business. There were a lot of um criminal
types who got interested in stuff like film exchanges. I
have no idea how involved the Warners were, if at all,
(07:37):
in that side of life, but it was definitely a
thing that was going on. Not turned out that since
motion pictures were so popular, you know, I feel pretty
confident saying motion pictures were a success, you know, from
the perspective of one the brothers business was also successful,
and they began to, you know, use the money that
(07:57):
they made to open more theaters and expand by n
they decided that they would branch out from the business
of exhibiting films and get into the business of making them,
because one of the downsides of this is that you
couldn't guarantee the quality of the movies that were being
sent to you, and a lot of the movies were
on the not so great side, like either they were
(08:20):
just poorly made or they frequently involved material that was
considered risk a or worse. So movies had a really
bad reputation in the early days, and the brothers kind
of wanted to have more control over the whole process,
so they decided to create their own movie studio. Jack
(08:42):
Warner would be in charge of movie production. He oversaw
the film operations side of things. Harry handled all the
business operations for the company. He was effectively the head
of Warner Brothers, and Sam was in charge of securing
and maintaining technical equipment, and Alb would work with other
theaters to handle distribution of the Warner Films. The four
(09:05):
opened up Warner Brothers Studio in Hollywood, California, in nineteen eighteen,
originally on Sunset Boulevard, which at the time was considered
a seedy part of of Hollywood. Um, I don't know
if it still is. I actually kind of like Sunset Boulevard,
but maybe it's because I'm a seedy guy. Anyway. They
(09:26):
incorporated as Warner Brothers Pictures in nineteen twenty three. By
that time, they had already produced several films, and the
first really big success for them was a series of pictures,
that is, movies that started a four legged actor that
being rentin Tin. Uh. That's a dog for those of
(09:47):
you who have never seen a rentin Tin picture. And
the dog was learning like a thousand bucks a week,
which was, you know, quite the princely pooch. I would
imagine that's a lot of money back in those days,
not a not a small shake of these days. Warner
Brothers was an independent studio back then and was facing
off against three much more established companies. There was Paramount,
(10:09):
there was MGM, and there was a company called First National.
Warner Brothers was scrappy compared to those three and Sam
had a vision for what could help set the studio
apart and change the industry forever. See this was again
the era of the silent film. Movies would play in
movie houses and typically you would have like a house
(10:30):
musician who would play along with the film on on
an oregon or something, and all dialogue would be represented
in little interstitial cards that would pop up, which created
a certain interesting style of cinema, like you could make
really compelling movies this way, but it also clearly limited
the actors range. Sam wanted to synchronize sound with the
(10:50):
images on screen, and he wanted the company to pioneer
the technologies and the installations that would allow for talking pictures.
He initially met with some resistance from Harry, who was like,
why the heck do we need to hear the actors talk?
But the studio hit a bit of a rough patch,
and maybe in desperation, Harry ended up giving Sam the
green light. Warner Brothers then purchased a company that had
(11:14):
spun off from Western Electric. This company was called the
Vitograph Company. The Vitogram system was a film sound recording system,
but it wasn't recording sound to film the way we
do it today. Instead, this system used sixteen inch discs
like records, they had a groove recorded in them, representing
(11:36):
a soundtrack. So this is like a vinyl album, and
it included everything like music and sound effects and eventually
dialogue and vocals, though originally Harry did not want that included.
He just wanted, you know, music and sound effects on there. Uh.
A side of a desk would run for about eleven
minutes when played back at an RPM of thirty three
(11:57):
and a third. Eleven minutes was about the same amount
of time it took to project through a thousand feet
of film. And you know, in those early days you
would end up just having about a thousand feet per
real of film, and so one side of the record
would typically have a groove on it, the other side
would be blank, and each record would go with a
(12:18):
single reel of film, and you were just supposed to
keep them two of them together. So with a setup,
you would have a projectionist who would use a special
piece of equipment that was part projector part record turntable,
and they would feed the film into the projector they
would set the little needle or stylus of the record
player on the beginning of the recording, which from what
(12:41):
I understand, was actually at the center of the disk.
And you know most records, you know, you put the
needle on the outside of the record and it follows
the groove gradually all the way to the inside. Apparently,
with the vitaphone system, you would put the needle at
the center of it, and because the way that the
(13:02):
record turned and the way the groove was laid out,
it would actually go outward to the outer edge starting
the projector would mean that the film and soundtrack playback
would be synchronized at least, you know, theoretically. The first
Warner Brothers film using a vitophone soundtrack was Don Juan,
but the piece had already been filmed. The soundtrack included
(13:25):
the score for the movie and some sound effects, but
no dialogue, so Don Juan was still largely a silent film.
The first talkie was The Jazz Singer, a film with
a recorded sound all the way through, so there was
dialogue and singing within the film itself. Now I'm going
to leave it to film historians to talk about the movie,
(13:47):
which has elements in it that I think are, you know,
to put it charitably, challenging, but from a technical perspective,
it was marking a new era, and this was also
an era that would go without it's early champion. Sam Warner,
who had pushed so hard to incorporate sound into movies,
died the night before the premiere of The Jazz Singer.
(14:10):
The narrative goes that he worked himself to death, though
author David Thompson suggests that perhaps there were some other
underlying health conditions that contributed to his early demise. But
now the Warner Brothers were three. Now Warner Brothers, the
company would stick with vitaphone for a few years, but
even when The Jazz Singer came out, the writing was
(14:33):
already on the wall. The future of sound on film
wasn't with separate recorded discs, but a methodology that would
allow filmmakers to actually record sound directly onto film itself.
I've covered how this works in previous episodes of Tech Stuff,
so I'm not going to go into it here. But
what it really meant for Warner Brothers was that the
(14:53):
company would eventually have to come around to adopting the
industry standard and abandoning the vitaphone of coach. The Jazz
Singer was a huge hit for Warner Brothers, and the
company was able to afford new digs, so they relocated
off of Sunset Boulevard and they purchased land to build
a studio in Burbank, California, setting out a whole new
(15:16):
studio there, and the company also acquired the Stanley Company
of America, a business that owned more than two hundred
movie theaters across the United States. This gave the Warner
Brothers a distribution channel for the company's movies, and it
would also be one of the big elements that would
prompt the US government to take a closer look at
the film industry. So to be clear, I should really
(15:37):
point out this was something that every major movie studio
was doing. It was pretty much common practice for companies
like MGM and Paramount to have their own movie houses
across the US, and it created a pretty rough environment
for independent theater owners. In the nineteen thirties, Warner Brothers
began to produce cartoons for movie theaters, and that's when
(15:59):
we got the Loon It Tunes, characters like Bugs, Bunny,
you know, they rabbit in space, Jam, Filthy Young People.
It's also when Warner Brothers turned to producing a lot
of gangster movies, like a lot of them. These were
the studio days when companies would sign directors and stars
(16:19):
to long term contracts which made them exclusive talent for
that studio. Same was true for film cruise too, so
people would go in day after day working with the
same group of folks. Sometimes from one picture to the other.
You might not even really be able to tell what
movie you're working on, just because you're always around the
same people in the same studios. James Cagney became the
(16:41):
top star for the company, and Humphrey Bogart, who was
on the company payroll, was held back because Harry Warner
wasn't convinced that Bogart was star material. Talk about a
a wrong take anyway. Warner Brothers also acquired another company
called Cosmopolitan Films, which was formerly owned by the newspaper
(17:03):
giant William Randolph Hurst, who perhaps has the tackiest home
I've ever seen. The Hearst Castle is just a monument
to gaudiness. Anyway, the company kept on growing. In nine four,
most movie studios, including Warner Brothers, signed onto the Motion
Picture Production Code also known as the Haze Code, after
(17:25):
the then president of the Motion Picture producers and distributors
of America Will h Code. Now I'm just kidding. It
was Will H. Hayes. That was his name, and the
Haze Code was meant to perform triage on Hollywood's image.
Like I said, the movie business was seen as something
of a seedy thing, especially because around this time there
were some really nasty scandals that were surrounding Hollywood. Uh,
(17:51):
scandals that involved stuff like sex and death. It was
not a not a good thing too to have if
you're trying to put forth the the aura of respectability.
So the movie business was no stranger to scandal, both
on and off screen, and the US government was kind
of starting to think about ways that they might censor
the film industry. So rather than have the government come
(18:13):
in and regulate the movies, the goal was to create
a code of standards of what was and wasn't suitable
to show in movie theaters and head off the US
government at the past and have movie studios sign on
to you know, produce films under this code. For the record,
this is something that has happened numerous times in American
history with industries that range from comic books to film
(18:38):
to video games. We've seen it happen again and again.
The Haze Code was extremely restrictive. Movie studios weren't forced
to comply to the Haze Code, but generally speaking, it
was best to play the game if you wanted your
films to get played in theaters. Warner Brothers scrapped the
gangster film genre pretty much, as it would be pretty
(18:58):
challenging to make a compel in gangster movie while still
holding true to the restrictions of the Haze Code. And
that's where we're going to leave off for our first break.
When we come back, we're going to skip forward a
little bit in time to talk about some other changes
at Warner Brothers that lead up to the birth of
Warner Media. We still got a long way to go,
so let's take a quick break and we'll be right back.
(19:28):
So the Haze Code would hold true in Hollywood until
the late nineteen sixties. Warner Brothers continue to make lots
of movies and cartoons in that time. And this isn't
a pop culture podcast, so I'm not going to go
into all of them here. It would just be, you know, ridiculous.
But Warner Brothers continued to make films in the nineteen
forties during World War Two. They didn't stop, and after
(19:51):
the war, television, which had been development for decades but
had largely been paused during the war, debuted in earnest.
The movie industry as a whole was not too happy
about television. They were fearing that people would purchase a
TV set and then just elect to stay home rather
than head out for a night at the movies. Now, gradually, studios,
(20:13):
including Warner Brothers, would expand their operations to include TV productions,
but at first it was as if you had like
one giant predator suddenly spotting a totally different predator in
its home turf and things get real tense. That was
kind of how it was between movie studios and television
at the time. In the late nineteen fifties, Warners established
(20:34):
a subsidiary company called Warner Brothers Records, later known as
just Warner Records and then later still Warner Music Group.
This was the recorded music division of the movie studio
business and largely focused on producing recordings of the various
soundtracks to Warner Brothers movies, as well as securing their talent.
One of the things that Warner Brothers executives were upset
(20:57):
about was that Occasionally, an actor in one of their
films would record a song and it would get released
on some other record label, and that meant that Warner
Brothers suddenly didn't have total control over the talent that
was signed to them, and they hated that. They wanted
to make sure that if if that person who was
(21:18):
signed to a contract was gonna make money by gully,
Warner Brothers was gonna get a cut of it. So
that was really the reason why they created a records division.
Also in the nineteen fifties, Warner Brothers was forced to
divest itself of its theater chains. This was the consequence
of a legal battle between the US government and the
film industry in the United States, and the issue at
(21:40):
the heart of all this was anti competitiveness. So movie
studios had been buying up all aspects related to movie production,
from the actual companies that would process film to the
content creation side, you know, the actual movie studios, to
the movie theater side, so everything from production, processing and distribution.
(22:01):
This was not necessarily great for the average consumer who
might find themselves with no way to see the latest
pictures from movie studio A because the one theater in
their town happened to be owned by movie studio B
and for actors and directors, there was the issue of
getting locked into contracts that made them exclusive talent, and
it meant that the actors wouldn't really have much of
(22:22):
a say about what projects they pursued. And in addition,
studios would sometimes barter with other studios and use talent
as a kind of you know, bargaining chip. It wasn't
super cool. Uh. There were a lot of other considerations
too that would into this, but ultimately the important point
is that the big movie studios all had to spin
off their movie theater holdings. They couldn't keep them any longer.
(22:44):
They also weren't allowed to have talent agencies and stuff
like that, and so this was sort of the beginning
of the end of the big studio era, although studio
contracts would still be kind of a thing for a bit.
And yet another development in the nineteen fifties, Jack more
Or saw an opportunity, but it would mean doing some
underhanded stuff. So you see, Harry Warner was technically in
(23:06):
charge of the company, but Jack Warner was the guy
who was kind of making stuff happen on the studio level.
Also not very well liked Mr Jack Warner. A lot
of his stars positively hated the man. Jack wanted to
lead the company, but Harry essentially said, over my dead body.
So Jack one day approaches his brothers, Harry and Albert,
(23:31):
and he essentially says, Hey, you know what we're all
getting on in years, we're all getting older. We should
sell our company off. We had a great run. Let's
sell it off while we're still on top. We'll make
a ton of money and we can retire in comfort.
And the elder brothers agreed, and the studio was quote
unquote sold but low and behold. A couple of weeks later,
(23:51):
Jack Warner is revealed as the new president of this
new Warner Brothers company, which was kind of only new
on paper. Really, Harry would not last very long. He
actually died not too long after this happened. And of
course that narrative is that Jack Warner broke his brother's
heart and that's what killed Harry Warner. There was definitely
(24:13):
a schism in the Warner family at this point. This
was also around the same time that Warner actually created
its television division called Warner Brothers Television Studios in nineteen
fifty five, Jack Warner's son in law, William t Or,
would head up that division. One of their early major
productions was the first one hour television Western series called Cheyenne.
(24:37):
The studio would go on to produce lots of other
shows like Maverick is another great example. In the nineteen sixties,
the studio began to produce a bunch of movie musicals.
These were lavish, expensive productions, and they helped convince people
to you know, leave their homes, leave their televisions behind
to see these films that they could only see in theaters.
(24:58):
So they included movies like The Music Man, uh Anti Name,
and Gypsy. These were all adaptations of Broadway musicals. But
it was My Fair Lady, which debuted in nineteen sixty four,
that proved to be a truly enormous success, as did
the movie's soundtrack, which really helped establish Warner Brothers Records.
(25:19):
That will come back to Warner Brothers Records a little
bit later on, but let's stick with My Fair Lady.
There was one big drawback on that deal. So when
Jack Warner purchased the rights the film rights to make
My Fair Lady, it cost him five and a half
million dollars. This was before they had shot even a
foot of film. The rights to the film, however, reverted
(25:41):
to CBS after seven years because CBS was the company
that had actually financed the original Broadway production that My
Fair Lady was based off of. So once those seven
years were up, CBS got the rights, which means that
while My Fair lay He was a Warner Brothers film,
it's not in the Warner Brothers library today. In nineteen
(26:05):
sixty six, Jack Warner decided to sell Warner Brothers for
real zies. This time he kind of faked it out
the decade earlier, and now he's actually doing it. He
sold off his controlling shares of the company to another
company called Seven Arts Productions for thirty two million dollars.
He stayed on with with the Warner Company in various roles,
(26:29):
um but he irritated the heck out of the Seven
Arts Productions folks. So let's talk about Seven Arts for
a second. Seven Arts Productions made movies, but did not
distribute movies. So instead Seven Arts Productions would make films
and then partner with other studios for their release. Three
film professionals had founded the company in nineteen fifty seven,
(26:50):
and they were able to make films using a more
independent studio approach. So like one of those films was
Whatever Happened to Baby Jane, which they made on behalf
of Warner Brothers. Warner Brothers actually distributed that film. The
studio films were successful enough to give the owners the
cash they needed to buy out Jack Warner in nineteen
sixty six. So this new company was called Warner Brothers
(27:13):
Seven Arts, and the logo changed to the W B
shield was now a stylized combination of the letter W
and the number seven. So if you've ever seen a
really weird looking Warner Brothers logo, it might be that one.
To be fair, there's been a few weird Warner Brothers logos.
So if it looks like there was a number seven
(27:34):
merged onto the end of a W, that would be
this era. And the deal included Warner Brothers Studios, all
of the black and white Looney Tunes catalog, and Warner Records.
So why just the black and white Looney Tunes catalog. Well,
that's a really complicated story all by itself. It mostly
involves how Warner Brothers handled the rights to various cartoons
(27:56):
during the early era of television. The company originally made
these cartoons to play in movie theaters, not for TV,
and Warners didn't have an established television studio in the
early nineteen fifties, so the company sold television distribution rights
to a few different companies, including one that was called
Guild Films. That was the one that got the black
(28:17):
and white ones. But Guild Films would go bankrupt, and
then Seven Arts Productions acquired that company's assets. So technically
the distribution rights to the black and White ones already
belonged to Seven Ages Productions, but now they also owned
the company that made it. The distribution rights to the
other cartoons belonged to other companies. And I'm not going
(28:37):
to get into all that because wolf y'all, this is
already complicated enough as it is. The company did also
acquire Atlantic Records, which joined the Warner Records label as
a music label owned by this bigger media company. So
Warner Brothers Seven Arts was a new movie and record
company that lasted all of nearly three whole years. Why
(29:02):
is that, Well, partly it's because the company overextended itself
with all these acquisitions, which is something we see way
too frequently in business and partly well it's because of
the mob and parking lots and window cleaners plus a
funeral home. All right, hear me out, because things are
about to get way more bizarre. Okay, So for this
(29:25):
part of the story, we gotta go way way back again,
back before time. Not not you know, time is in space,
time or the experience or whatever. I mean, time incorporated.
So we're gonna go back to eighteen six. That's when
Max Swag founded a window cleaning company that he called
(29:46):
National Window Cleaning and House Renovating Company, and it was
in New York City. A guy named Louis Frankel joined
the company in the early nineteen hundreds and the name
changed slightly to National House and Window Cleaning Company. In
nineteen thirty seven, Max passed away, Frankel ended up leading
the company. Uh Frankel died a decade later in nineteen seven,
(30:10):
and his son, William Frankel took over the company. At
that point, the name of the company changed again and
became the National Cleaning Contractors, Incorporated. William Frankel would oversee
operations at the company until nineteen sixty six, which is
when a different company swoops in to acquire it, and
that company was Kinney Service Corporation. Now, for some reason,
(30:35):
the Antitrust Division of the Justice Department opposed this merger.
I think I know why, but I couldn't find anything
like firm about it. However, I do know that Kinney
Service Corporation was let's say, it was creative in the
way it did business, So I'm gonna switch over to
them now. So, while the cleaning company was doing business
(30:57):
in New York City in the nineteen forties, you at
another company that was taking shape over in New Jersey.
This one was founded by Sigmund dornbush Manny Kimmel and
mob boss Abner's Willman. Now, I'm sure you've heard that
the mob was involved in Hollywood to some extent, but
(31:18):
I'm not sure that you guessed it came from a
parking lot company in New Jersey, huh. Anyway, the three
of them founded the Kenny Parking Company. Anyways, Willman is
not really part of our story here because the merger
we're going to talk about happen in nineteen sixty six.
Willman died under potentially controversial circumstances. In nineteen fifty nine,
(31:42):
he was found hanged, but some argued that it was
suicide and some argued that it was murder. I don't
know what the truth of the matter is, but anyway,
in the early sixties, the parking Company formed a partnership
with a rental car company owned by Edward Rosenthal. And yeah,
this is getting more complicated. I'm sorry. The partnership worked well.
(32:06):
It was the Abbey rent a Car Company, and a
couple of years later, these two companies, the parking Company
and the rent a car company, decided that, hey, this
works so great, let's merge and make a single company. Now.
In that process, Rosenthal decided he would bring in some
of his other concerns, some of his other companies that
he owned, which included a funeral home called Riverside Memorial
(32:30):
Chapel and another company called the City Service Cleaning Contractors incorporated.
This collection of rag tag companies became the Kinney Service Corporation,
which I mean, I guess you've got to call it
something and and it is hard to come up with
a name for a company that has divisions that specialize
(32:51):
in parking lots, window cleaning, rental cars, and funeral homes.
I'm drawn a blank here, so I guess Kinney Service
Corporation it is. The company also bought up nine more
funeral homes too. They really took service to a new,
really weird level. Edward Rosenthal's daughter Carol, married a man
(33:13):
named Steve Ross, and in nineteen sixty six, Kenney Service
Corporation merged with the National Cleaning Contractors, the one that
was founded in eighteen six. And I'm guessing that the
Department of Justice was worried that the cleaning National Cleaning
Contractors and the the City Service Cleaning Contractors that were
(33:35):
part of Kinney could have represented an anti competitive monopoly
in cleaning. That's the only thing I can guess. Anyway,
whatever the beef was, the merger still happened, and the
new company had the name Kinney National Company, and Steve
Ross took the helm. We'll talk a little bit more
about Kinney National Company and what happened next after this
(33:57):
quick break. In nineteen sixty seven, the Kinney National Company
purchased a publishing company called National Periodical Publications. But you
probably know that company better as d C Comics. Yep,
(34:18):
this is how d C Comics would eventually become part
of the Warner Brothers family. By way of a funeral
home slash window cleaning slash parking lot company, you know, naturally. So,
just so we're clear, Warner Brothers didn't so much as
acquire d C Comics, as both DC and w B
(34:40):
got gobbled up by the same company. Steve Ross, the
head of Kinney National Company, must have had a real
love of the movie industry, because he, in short orders
set about using the newly merged companies assets to acquire
companies in the business that is show. He bought a
talent agency, and he bought the Cabra and Lynn company
(35:00):
Pana Vision, and he had his eye on Warner Brothers. Now,
as I mentioned earlier, Seven Arts Productions purchased Warner Brothers
from Jack Warner for thirty two million dollars a few
years earlier. Then they went and purchased Atlantic Records, and
they ended up being a little strapped for cash. Ross
was given a hot tip about it from the owner
(35:21):
of the talent agency they had acquired, and so he
made an offer to the heads of Warner Brothers seven Ages,
and they accepted it. The offer was for sixty million
dollars for four hundred million dollars. Honestly, I found a
lot of conflicting information about this um. I tend to
(35:41):
believe the sixty million more than the four hundred million,
but I kept coming up against different amounts. Anyway, the
companies ended up merging, and consequently Kenny National Company would
sell off its talent agency because otherwise that would be
seen as being anti competitive to have both movie studio
and a talent agency, not just a movie studio, a
(36:04):
television studio too. Ted Ashley, who had previously overseen said
talent agency, would become the head of the new Warner
Brothers Incorporated. Around this time, Jack Warner officially retired from
Warner Brothers, but he continued to work with the company
in some respect for nearly another decade until his death.
(36:24):
As for the new Warner Brothers Incorporated, it ran into
some trouble before too long, but for once it wasn't
because of the movie side of the business, at least
not overtly. Rather, there was a price fixing scandal that
focused on the parking operations of the company, and so
in an effort to kind of salvage operations, the company
(36:46):
leaders decided that they needed to split this company into two,
so in one company would be all the entertainment assets
such as the Warner Brothers Movie Studio, the television studio,
the record studios, cetera. The other company would be everything else,
you know, window washers and funeral directors and parking lots
and all that kind of stuff. So what we got
(37:09):
was Warner Communications on one side and the Kinney National
Company on the other side. So now we can say
goodbye to Kenny and we'll stick with Warner. Okay. So
at this point we've got Warner Communications, which serves as
a parent company, and its subsidiaries include Warner Brothers Studios.
(37:30):
That's the movie studios, h the Warner Music Group, which
included not just Warner and Atlantic, but also record companies
like Asylum, Elektra and more. Then we've got Dimension Pictures,
which is a film production company or was a film
production company that was largely known for making movies in
(37:50):
the exploitation categories. So that includes classics like Dolomite, Returned
to Boggy Creek, which MST. Three K did an episod
it on oh In Satan's Cheerleaders, you know, real classics,
and the company also owned d C Comics and Mad Magazine.
Warner Communications would make several more acquisitions. In ninety nine,
(38:15):
it partnered with American Express to create a joint venture
called Warner Amex Satellite Entertainment, which oversaw cable channels like
MTV and Nickelodeon and the movie Channel YEP. Those started
out as Warner Brothers Concerns or I guess Co. Warner
Brothers Concerns and Warner Communications also purchased a little company
(38:38):
called Atari in nineteen seventy six. Now I covered this
in my episodes about Attari several years ago, but let's
go over a real quick version. So Nolan Bushnell, who
was leading a Torii when it was a private company,
had a problem. He was about to launch a video
game console to the home market. But producing hardware is expensive.
(39:01):
You have to pay the manufacturing costs, and then there's
issues like supply chain, both before when you're just getting
all the parts to put together and after when you're
shipping the finished units out to retail outlets. It was
going to require more money than the company had on hand,
and so Bushnell made the decision to see if some
other company would be willing to buy Atari and essentially
(39:24):
foot the bill for production. Warner Communications turned out to
be that company. In nineteen Warner Communications acquired Attari for
the princely sum of twenty eight million dollars. It took
some time for that investment to actually pay off. Early
issues with manufacturing caused delays, which cost the company a
lot of money, but things turned around fairly quickly, and
(39:47):
the success of Atari helped Warner Communications offset some shortfalls
that the company was experiencing in their movie and music divisions.
Of course, anyone familiar with the home video game market
knows what ultimately happened. While the industry was writing high
in the late seventies and early eighties, sometimes literally, as
(40:08):
I understand, companies like Atari sometimes resembled more like a
rock star party than a media company. Anyway, it all
came crashing down in a glut of consoles and cheap
games had saturated the market, and consumers were drifting away
from consoles and toward a new technological wonder, the personal computer.
(40:30):
The entire industry had a massive collapse, and Atari was
essentially at the center of it. By the end of
nineteen eight three, Warner Communications was hurting. Its film and
music divisions weren't performing so well, and the video game
division was now in shambles. Warner sold off the parts
of Atari associated with consumer products, which included stuff like
(40:52):
consoles and computers and game development, and sold it to
Jack Tramiel, the former CEO of Commodore. I've done episodes
about Tramuel in the past. It's kind of a vindictive guy.
But that's off topic for our discussion about Warner. Warner
retained the arcade game division of Atari, so they sold
(41:12):
off the home market stuff, but they kept the arcade
market stuff. They renamed that Atari Games. So this was
the great split of Atari into two different entities, and
it would fracture further from there. And if you listen
to my episodes about Midway, you might have heard that
this division of Atari would ultimately shift over to Williams
(41:32):
slash Midway Games, and Atari Games would eventually become Midway
Games West. So Warner Communications was in some financial trouble.
In Warner bought out American Expresses Steak in the Warner
Amex satellite entertainment company. It's the one that owned cable channels,
(41:53):
and then in Night five, Warner sold this company off
to Viacom, which has its own incredbly complicated history, but
for now we'll just say that Warner's brief fling and
owning cable companies had come to an end for now,
with Viacom assuming a big chunk of debt from Warner
as part of this deal. And now finally we get
(42:17):
to the merger between Time Incorporated and Warner Communications. So
Time announced in March of nine nine that it was
going to merge with Warner Communications and thus create a
new company called Time Warner. But at that same time,
a company called Gulf and Western later known as Paramount Communications,
(42:37):
attempted a hostile takeover of Time. And these hostile takeovers
really big in the eighties, So I guess i'll go
over that really quickly, just to explain what they are. So,
typically you have the board of directors of a company
that makes decisions on behalf of a company, and those
decisions include whether or not to accept some other companies
(42:58):
acquisition offer. So if it's a private company that this
is just These are the people who make all the decisions.
What they say goes. If they don't want to sell,
no one sells. But for publicly traded companies like Time Incorporated,
it's different. So in a publicly traded company, it's possible
to convince shareholders to agree to an acquisition against the
(43:21):
wishes of the board of directors. The acquirer has to
convince enough shareholders to vote for the measure, and then
even if the Board of directors disagree, the acquisition goes through.
One way to do this is to appeal to the
greed of shareholders and promise higher share prices than whatever
the market currently values them at. Time raised its bid
(43:43):
for Warner Communications and rushed to complete the merger. Now,
at this point, the deal was valued at nearly fifteen
billion dollars, and there were a couple of court cases
that Paramount Communications brought against this, but Time ended up
winning those time and time again, and thus the Time
Warner merger finally got greenlit and we got ourselves emerged company.
(44:08):
This is a good place for us to wrap up.
When we come back for the next entry into this series,
we'll learn more about the business of Time Warner, which
was pretty complicated and got into things like amusement parks
and and other things. We'll talk about how a O
L would fit into all of this not well, by
(44:29):
the way, and all the messy stuff that would follow
leading up to the modern take on Warner Media and
what is going on with the proposed merger with Discovery Communications.
But that's for the next episode. If you have suggestions
for other things I should cover on tech Stuff, reach
out to me on Twitter the handle I use as
(44:49):
Text Stuff hs W, and I'll talk to you again
really soon. Tech Stuff is an I Heart Radio production.
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