Why Conan O'Brien Will Boost Time Warner (TWX)

Conan O'Brien is making his triumphant return to late-night television tonight, establishing his new home at Time Warner's TWX TBS Network. The show, simply called "Conan", premieres at 11pm on Monday, November 8. TBS has worked hard to promote the network's new superstar, even launching the popular TeamCoCo.com website. Visitors are even encouraged to celebrate and share the much-anticipated show with their own premiere parties. The first show's guests include Seth Rogen, Glee's Lea Michele and musical guest Jack White. Later this week, Conan will chat with Tom Hanks, Jon Hamm, Julie Bowen and Michael Cera. "I want there to be some really special moments, especially near the top of the first show," Conan told Entertainment Weekly. The new show comes after the very public removal of Conan in favor of comedian Jay Leno. NBC management took a lot of flak for the odd move earlier this year, and Conan cashed out with a multi-million dollar settlement for him and his staff. Conan also used the firing as an ego boost, allowing him to grow in popularity while remaining true to his loyal fans. Notably, the late-night lineup will be especially crowded now that Conan, Leno and David Letterman share the same time slot. Advertising dollars follow viewers, and it will be telling how the ratings pan out over the next year. Irregardless of ratings, Conan's new deal could signal a resurgence in Time Warner's stock. The media and entertainment business has entered a period of rapid change, and such companies must respond with precision or face extinction. TBS (Time Warner) embodies this, as management quickly seized on the popular entertainer when he was available, and is actively pursuing new ways to generate revenue outside of advertising. Further, according to Ben Silverman, the former NBC entertainment chief, O'Brien's move to cable from a broadcast network further blurred distinctions about where people watch their shows. "I think what it means is everything is open for discussion," he said. "I wouldn't have been surprised if we were talking about it being on YouTube. I think the walls are breaking down." If a majority of Conan's viewers catch his show online the next day, then Time Warner could further capitalize on consumers who digest media in ways previously unimaginable. The lifestyles of many people nowadays allow content viewing on phones, tablets, laptop computers, and pretty much anywhere with an internet connection. It appears that Time Warner is cognizant of this, and is making a play to profit on the trend. While near-term optimism must remain restrained, it's difficult to ignore the following that Conan has picked up in the last six months. He is the most exciting thing to happen to Time Warner's sleepy corporate culture in a number of years, and he could realistically provide a material impact on long-term earnings. Keep an eye on Conan's popularity and Time Warner's stock price. The correlation may surprise you.