AOL Time Warner's future interactive

At least that's what industry analysts think. But first Steve Case might have to break Time Warner's print shackles.

AOL, the magazine? Dawson's Creek with live chat running across the TV screen?

Both scenarios are very real possibilities in the wake of the mega America Online-Time Warner merger, according to industry observers. Just don't expect any significant changes right away.

Instead, analysts predict that breaking the "iron grip" of old-fashioned management attitudes found in Time Warner's print division will be top of AOL Chairman Steve Case and Chief Operating Officer Bob Pittman's to-do list.

Larry Gerbrandt, senior analyst for media analysis firm Paul Kagan Associates said that, for a company with world-recognised brands like TIME, Money and Sports Illustrated, very little has been done to capitalise on their popularity. "It still amazes me we haven't seen a TIME TV show or a Money TV show or Entertainment Weekly or Sports Illustrated," said Gerbrandt.

Gerbrandt thinks AOL Time Warner will likely initially look to ABC television's GO Network for examples of how to bring the Internet and traditional media together. Interactive elements like ABC's online version of its "Who Wants to be a Millionaire" game show and live Webcasts like the one used for the Drew Carey show earlier in the season could begin cropping up on Time Warner's WB television network.

"The problem with Time Warner has been that it doesn't understand that at least half the value of the Internet is people communicating with other people," said Jerry Michalski, president of technology consultant firm Sociate. "The future is one where you and I interact with one another. That is something AOL has known better than almost anyone else in business."

A re-creation of Pathfinder, Time Warner's initial, failed venture on the Internet, isn't likely to be part of the plans. Most analysts agreed Time Warner's portfolio of sites, which includes CNN.com and TIME.com, isn't likely to change dramatically but will likely increase the use of the interactive elements like chat that AOL has pioneered.

The most significant changes are likely to involve the WB. Gerbrandt points to the network's relatively young and Net-savvy audience as a ripe opportunity for AOL's marketing machine. Additionally, AOL's 20 million subscribers are primed and ready to pioneer interactive television opportunities.

"I could see the WB network exploring ways of creating huge, interactive audiences for their television shows," said Gerbrandt. "Combine AOL with the WB and you have the potential to create a giant shared experience that extends beyond the screen."

By adding interactivity to television, advertisers will have the chance to market their products simultaneously on television and the Web while reaching the same audience. It's an advertiser's dream come true and e-commerce will likely play a huge role for the network, said Gerbrandt. He believes the time will soon arrive when people will be able to order the items appearing in their favorite TV shows directly through the TV set.

So far, AOL Time Warner isn't commenting on what kinds of new content it plans to develop. Repeated calls to AOL were not returned. Most of the experts agree, however, that while the future definitely involves increased integration and interactivity, there are certainly some bumps ahead in the road as these two very different companies join together.

"These industries were evolving down parallel paths but with different skill sets. It's essential now to marry the Internet skills with the traditional entertainment skill sets to create something that continues to engage the audience," said Gerbrandt.

For full coverage, see the AOL-Time Warner News Roundup.

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