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February 3rd, 2009

Pay TV: Shelter from the storm?

Posted by: Paul Thomasch

Safe haven. Two magical — and mysterious — words. Cable and satellite companies didn’t fit the safe haven bill in 2008, but 2009 just may be there year.

According to a Reuters story out today, “cable and satellite service providers now hold the promise of strong free cash flow growth as they retain old customers but spend less on deploying set-top boxes and digital video recorders due to a fall in new subscriber growth.”

Remember, however, that before the economy fell apart, a number of investors considered the pay TV industry “recession proof.” The argument went that even in the toughest of times, Americans would stay home and watch TV, saving money on trips to movies or out to dinner.

But this argument overlooked a number of factors that have really undermined the industry. For example, fewer people are moving into new homes, and those that do aren’t likely  to spend their savings on discretionary channels like HBO.

Before jumping on the bandwagon, however, it may be wise to take a look at some of the earnings coming up over the next couple weeks. Start with Time Warner Cable tomorrow, that should be a good gauge of whether these guys really can provide shelter from the storm.

Keep an eye on:

  • The age of Obama dawned with a wake-up call to the U.S. television industry to get serious about Internet-based sources of revenue (Reuters)
  • Barry Diller’s Internet media company IAC/InterActiveCorp posted a fourth-quarter profit on Tuesday after benefiting from the sale of a Japanese TV shopping channel last December (Reuters)
  • Sirius XM Satellite Radio later this month will have to find a way to handle $174.6 million in debt that is coming due (Wall Street Journal)

(Photo: Reuters)

December 29th, 2008

Holidays bring much-needed cheer to Hollywood

Posted by: Paul Thomasch

Christmas was good to Hollywood.

The top holiday movie, “Marley & Me,” sold an estimated $37 million worth of tickets during the traditional three-day weekend beginning on Friday, and overall Christmas Day sales reached $75 million, up about $10 million from last year.

While that’s good news, particularly during the downturn, it won’t be nearly enough to salvage an otherwise rough year in the movie business, as Reuters points out.

Still, Hollywood is on course for a down year. With three days left, year-to-date sales are off about 1 percent at $9.5 billion, while the number of tickets sold has slid 5.2 percent, Media By Numbers said.

“Bedtime Stories” was No. 2 for the weekend with $28.1 million and its Christmas Day haul of $10.5 million drove its total to $38.6 million, said Walt Disney Pictures. Sandler plays a man whose bedtime stories come true in real life.

“Benjamin Button,” in which Pitt’s character ages backward, did better on Christmas Day with a $12 million opening. Its weekend tally of $27 million took its total to $39 million, said Paramount Pictures.

The adaptation of an F. Scott Fitzgerald short story has racked up five nominations from the Golden Globes and eight from the Critics Choice Awards. Women accounted for 60 percent of the audience and 70 percent of ticket buyers were over the age of 25, Paramount said.

Tom Cruise’s fact-based thriller “Valkyrie,” about a failed plot to kill Adolf Hitler, opened at No. 4 with $21.5 million for the weekend and $30 million for the four days — much better than skeptics had predicted. The United Artists movie has been plagued by bad publicity and shifting release dates.

“We had obstacles to overcome,” said Erik Lomis, head of worldwide distribution at the studio’s closely held Metro-Goldwyn-Mayer parent. “But the movie speaks for itself.”

Keep an eye on:

  • A top advertising researcher says U.S. ad spending actually fell in full-year 2007, with bigger drops seen in 2008 and expected in 2009. If true, it would mark the first three-year decline since the Great Depression (AdAge)
  • The premiere episode of HBO’s offbeat comedy “Flight of the Conchords” has drawn 250,000 streams in its first 10 days on FunnyOrDie (The Hollywood Reporter)
  • Stuart Elliott, of the New York Times, recaps the best and worst of advertising for 2008 (NYTimes)

(Photo: Reuters)

December 22nd, 2008

We need our music videos!

Posted by: Paul Thomasch

For all of you expecting a slow week at work, and looking forward to killing some time by watching your favorite music videos on YouTube, we have some bad news for you. Warner Music Group ordered YouTube on Saturday to remove all music videos by its artists. So, in other words, you’re not going to find the Red Hot Chili Peppers or T.I. on YouTube today — or at least you shouldn’t.

Essentially, the disagreement boils down to Warner seeking a bigger share of the huge revenue potential of YouTube’s massive visitor traffic. “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,” Warner said in a statement.

But all is not lost, according to the Wall Street Journal, which writes: “In the wake of Warner’s move, people close to the other major labels said they didn’t anticipate taking down their content in the immediate future. These people say they are discussing new, more lucrative ways to do business with YouTube. The four music companies don’t necessarily have the same terms with YouTube, which could explain the discrepancy in their stances.”

Besides, you can still watch many Warner Music videos on MySpace Music.

But this goes well beyond how we’re going to spend the next few days at the office. It’s part of the broad, ongoing battle between content providers and content distributers. That’s why, even if you don’t care about My Chemical Romance or any other Warner bands, you should be watching how this plays out.

Keep an eye on:

  • Jim Carrey’s new comedy “Yes Man” got the nod from moviegoers across North America, but brutal weather in key markets combined with holiday shopping distractions to hit overall ticket sales (Reuters)
  • General Motors Corp. may finally be getting its loan from the Federal government, but that doesn’t mean it’s going to resume its former marketing-spending levels (AdAge
  •  Arthur Spiegelman, one of Reuters’ finest writers and longest-serving correspondents, died at home in Los Angeles on Saturday. He was 68 (Reuters)

(Reuters photo: Vocalist Gerard Way of the rock band My Chemical Romance )

December 5th, 2008

Football in 3D, coming to a theater near you

Posted by: Nichola Groom

The first-ever 3D broadcast of an NFL game was rushed into movie theaters in three U.S. cities last night, kicking off what many hope could be a new way of generating revenue for theater operators.

We attended the event in Los Angeles, where a throng of football fans, reporters and Hollywood executives donned black plastic 3D glasses and crammed into a stadium-style theater for kickoff between the Oakland Raiders and the San Diego Chargers.

In an interview the day before the game, Michael Lewis, chief executive and co-founder of 3D system provider RealD 3D, said of the experience: “You feel like you are really on the field in the middle of the action,” and called the event “the dawn of live events at your local theater.”

For us, sitting in the theater, the 3D technology really did make it feel like we were right on the field at San Diego’s Qualcomm Stadium. Most of the camera angles were field-level, which even in conventional “2D” broadcasts offer viewers a better sense of what it’s like for players than other angles.

The NFL Network cable network showed the same game in the conventional fashion as we saw it in 3D. There were different announcers for our game, because 3D production company 3ality Digital’s cameras followed the action differently as well as presenting it in three dimensions. The camera angles were closer to the action. We were surprised how realistic it was. It was not as if we were on the field with the players, but just like we were on the sideline with the coaches.

The announcers kept quiet for minutes at a time to allow the sounds of the game — players colliding, grunting and at times cursing. That enhanced the “being there” experience.

So what’s the catch? There were a few. First, though the visuals were top-notch for most of the game, there were times when the image, or parts of it, were fuzzy. These instances weren’t a huge distraction, and not long-lasting, but they did make your head hurt a little bit until the cameras cut to a clearer shot.

Secondly, the satellite feed gave out twice during the game. Not the fault of the 3D technology, we were told, just a plain old satellite glitch. Still, that forced many of us from the theater and into the VIP room, where we could eat and drink while waiting for the game to come back on.

That brings us to a major point about the experience.  Once the game returned (about a 10-minute interruption), many people chose not to go back to the theater. As several people we talked to noted, sitting quietly in a theater just seemed like a strange, overly polite way to watch a live sports broadcast. In the VIP room, we could watch the game on specially outfitted 3D TV sets and chat, yell or debate about it over drinks and snacks — pretty much the same way we would normally watch a game at home or in a bar.

Eventually, the staff working at the event pressured people to return to the theater, which we did, only to find the crowd had thinned significantly since kickoff.  That didn’t minimize what we thought was a pretty cool viewing experience, but goes to show that for sports fans, the experience of game-watching goes beyond just how it looks on the screen. Loudly criticizing referee calls or cheering touchdowns is equally as important for fans. But, let’s face it, that kind of noise is nearly impossible to make in a movie theater, where we have been conditioned to shush even the smallest whisper by the stranger next to us.

It may not be the innovation that was instant replay when it was introduced in the 1960s. But 3D football is just about ready for prime time and already very ready for a theater near you, if they allow beers and cheers.

If you want to try out the experience yourself, RealD’s Lewis said the Bowl Championship Series college football championship game will be shown at selected theaters early next year, one of several live 3D sports broadcasts planned for 2009.

Bernie Woodall contributed to this post. Photos by Reuters.

December 4th, 2008

Diller to profitable companies: Lay off the layoffs

Posted by: Ben Klayman

IAC Chief Executive Barry Diller took several groups to task at the Reuters Media Summit, but he reserved special disgust for CEOs at profitable companies who add to the country's rising unemployment rate.

Also targeted by the former Hollywood executive were "incredibly, shockingly stupid" Big 3 auto executives, the Internet's strange and growing dictionary, and Hollywood's lack of creativity.

Diller said companies had a higher obligation, especially in tough times like these:

"The idea of a company that's earning money, not losing money, that's not, let's say 'industrially endangered,' to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one's counting is really a horrible act when you think about it on every level. First of all, it's certainly not necessary. It's doing it at the worst time. It's throwing people out to a larger, what is inevitably a larger unemployment heap for frankly no good reason."

A few seconds later, he added:

"It's not that you don't want to earn as much money as you can -- it is your obligation, of course -- but companies have obligations beyond that and they certainly have obligations beyond that at certain times, in the times in which they operate. And they also certainly ought to know that meeting and beating expectations is probably yesterday's game and it will be increasingly so, which would be by the way very healthy for companies. Running a company that meets and beats expectations, and that runs their company accordingly, are companies that I would question why anyone would invest in."

Diller was equally confounded by the top three U.S. auto executives, who recently were criticized for separately flying corporate jets to Washington before hearings to request a $25 billion taxpayer bailout.

"It's incredibly, shockingly stupid if you're going, when you think about it. On that count alone I wouldn't give them any money. And not because of any reason other than why would I give money to someone so dumb to go to Washington to ask for money and fly in a Gulfstream. You'd say, 'You're not qualified. Unless you leave, I'm not giving you money.'"

Other topics:

* When discussing social networking: "Think of the bimbo words this Internet has created: portal, social network; I could riff on .... networking, horrible word too."

* Hollywood: "Margins used to be very good in the movie business. They're now, what, 4, 5 percent in a decent year, so where's the joy in that? Is there really a joy in 'Superman 17' or "Iron Man 2'?"

* Movie studio executives: "'Mogul' is yesterday. It just doesn't apply. You use the word 'mogul' and what you do is conjure up the fantasy, the memory of when there were actual movie moguls who made their decisions, believed in what they did, were outsized personalities. There's no outsized personalities in the movie business anymore."

* Indiscriminate spending: "There is a reluctance, even with people who have vast resources. Right now, it just isn't the order; it isn't the day. You're not going to see a birthday party for three million bucks. I don't care how many billions you have or paying Mick Jagger $3 million to come and sing for your birthday. I notice this with my friend. I just notice this as a condition of this period."

To hear the always entertaining Diller riff, go ahead and click on the links...

(Photo: Reuters)

December 4th, 2008

Cell phones still No. 1 movie irritant for Regal CEO

Posted by: Gina Keating

People who talk and text on cell phones are still the number one source of movie theater complaints tracked by Regal Entertainment Group, Chairman and Chief Executive Mike Campbell told the Reuters Media Summit on Wednesday.

Campbell made news at a the 2006 Reuters summit by disclosing that Regal, the largest U.S. theater chain, had armed patrons in a few test theaters with gizmos that summon ushers to deal with problems ranging from rowdy audiences to a freezing auditoriums. Back then, Campbell reported that some patrons were “getting into physical battles in the theaters” over cell phones and that the chain had “had people assaulted with bats, knives and guns” over their electronic umbilical cords.

The program worked so well that Regal has now expanded it to 100 of its highest volume locations, and cell phone talkers and texters seem to be getting the message, Campbell said.

“We have noticed — at least our perception over the last couple of years is — we don’t seem to be having quite as many issues there,” Campbell said. “I think the message that we are trying to get out to customers, both subtle and not so subtle, is beginning to have some impact.”

Regal has used data from the expanded program to track whether a particular disturbance “is mostly a… one-off situation or is there a pattern across the country,” Campbell said.

Still, the most common problems are “cell phone related – texting…and cell phone usage,” Campbell said. “In general, the number one complaint… continues to be some kind of customer disruption.”

(Photo: Director/actor Woody Allen uses his phone, but not in the movie theater. Reuters)

October 24th, 2008

AP tries to help grumpy, cash-strapped members

Posted by: Paul Thomasch

More cracks are appearing in the newspaper industry. Things have become so tough that the Associated Press has agreed to slash $9 million from its membership fees. With newspaper’s reeling from depressed advertising revenue, they are looking to save money wherever they can, and have been clamoring for a break from the AP.

PaidContent’s Staci Kramer talked to AP chief revenue officer Tom Brettigen about the cuts. Here’s what he said about how AP will make up for the drop in income.

“We have a lot to make up. We’ve been working on the revenue side; this undoubtedly is going to require some work on the cost side. For a company where the costs are primarily its people, it’s going to mean having to look at some positions.” AP already has a hiring freeze; now it’s looking at staff cuts. “It’s too early to be specific. It is a peculiar situation where we reduce the costs to the newspapers, which means we may be more than likely to make cost reductions. It will affect the news report as little as we can possibly make it.”

Keep an eye on:

  • Major Hollywood studios said they would accept the intervention of a federal mediator to help break a nearly 4-month-old deadlock in contract talks with the Screen Actors Guild (Reuters)
  • Ticketmaster Inc’s purchase of a big stake in a powerful artist-management company on Thursday signals more industry consolidation as it vies with Live Nation Inc for dominance in live entertainment (Reuters)
  • Chinese Internet search leader Baidu posted a 91 percent rise in quarterly net profit, after a surge in Web usage tied to the Beijing Olympics, and said it expects continued strong revenue growth (Reuters)

(Photo: Reuters)

October 20th, 2008

It’s budget cutting time

Posted by: Paul Thomasch

scissors2.jpg

In the media world, it looks like it’s time for a trim. Whether that’s jobs, travel expenses, or anything else, budgets are coming down… With the economy in the sick ward, what did we expect?

Yahoo is among those expected to outline ways to cut expenses, including further job cuts, a source tells Reuters. The announcement will likely come when it reports quarterly results on Tuesday:

The Internet company will discuss the scale and timing of the future layoffs, but specific details on the exact jobs to be eliminated will not be disclosed, the source said.

Over at NBC Universal, they are also cutting some costs. The Wall Street Journal says the media company wants to shave $500 million from its 2009 budget. That would be about 3 percent.

The question is can any of the other media companies be far behind?

Keep an eye on:

  • Is the decision by Paramount Pictures to push back two major holiday films an early indication that the economic crisis is taking a toll on Hollywood? (WSJ.com)
  • The Screen Actors Guild’s board voted to have a federal mediator brought into labor contract negotiations with Hollywood studios (Reuters)
  • Tribune Co, the heavily indebted U.S. newspaper publisher and broadcaster, plans to borrow $250 million from an existing line of credit to gain more flexibility amid the world financial crisis (Reuters)
  • The fake Sarah Palin has been doing great things for “Saturday Night Live,” but the real one put “SNL” over the top to its highest overnight ratings in 14 years (The Hollywood Reporter)

(Photo: Reuters)

October 7th, 2008

What to say at times like these?

Posted by: Paul Thomasch

wallstreet.jpgThe financial crisis is tough on everybody — Madison Avenue copywriters included.

Stuart Elliott of the New York Times looks at how tough it can be to craft an advertising campaign in this climate, particularly if your client is in financial services.

He points to a new campaign by Washington Mutual, which was sold to JP Morgan Chase amid all the upheaval. What do you say to consumers? The creatives working on the campaign went for humor, Elliot writes, deciding on a headline reading “We love Chase,” followed by “And not just because they have a trillion dollars.”

The same challenge is playing out in the marketing department of virtually every financial institution. As the stock market swoons, investors are watching their paper losses mount and their retirement accounts dwindle. As the most trusted names in banking and brokerage have fallen like dominoes - despite reassurances from top executives that nothing was wrong - what message or slogan could possibly reassure a jittery public?

If Madison Ave figures out what the slogan or message should be, they may want to share it with governments around the world.

Keep an eye on:

  • Screen Actors Guild leaders said they are confident union members will support authorizing a strike against major Hollywood studios if the issue is put to a vote, despite a faltering U.S. economy (Reuters)
  • Spending on global advertising is expected to grow 4.3 percent in 2008, less than initially forecast, with developed markets such as North America the hardest hit (Reuters)
  • CBS, Fox and the CW are off to the best starts in the new fall TV season, a new report from research agency Magna says (AdAge)

(Photo: Reuters)

August 25th, 2008

Does the video games industry offer anything distinctively European?

Posted by: David Milliken

Visitors play at an exhibition stand at the Games Convention 2008 fair in the eastern German city of Leipzig    At Europe’s biggest video games convention in Leipzig last week, evidence of a distinctive European flavour was largely absent, apart from in karaoke-style titles such as Activision’s Guitar Hero or Sony’s SingStar and sports games.
    Music from local bands and singers is a necessity for these titles, and the new World Tour edition of Guitar Hero delivered it in the form of artists such as Germany’s emo-lite Tokio Hotel, Swedish rockers Kent and Spanish 80s classic Radio Futura.
    Sony offered a more unusual twist with a Turkish Party edition of SingStar for release in Germany in November, to capitalise on the country’s large Turkish population as well as nostalgic holidaymakers.
    In the case of sports games, a title such the next annual revamp of Konami’s Pro Evolution Soccer is understandably expected to sell better in Europe than the United States.
    But outside these two genres, industry executives struggled to pin down differences. Konami’s head of Europe, Kunio Neo, noted that Europeans did not take to games with manga-style graphics as readily as gamers in the company’s Japanese homeland. Konami also said it expected one game in development, Lords of Shadow, to appeal particularly to European sensibilities — early artwork leans heavily on director Guillermo del Toro’s film Pan’s Labyrinth, which was set in Spain.
    Neo’s counterpart at Electronic Arts, Jens Uwe Intat, made similar claims for Mirror’s Edge, which he said had a high-end aesthetic which he hoped would be particularly successful in Europe.
    But Intat in general saw little difference between what made a hit game in Europe compared to the United States.
    “With the exception of American football all franchises that work in the U.S. work in Europe too — though as in the movie industry you see slightly different top tens,” he told Reuters just before the start of the Leipzig event.
    Yet critics can easily point to distinctive traditions of French, Italian and British film alongside Hollywood and Japanese movies, which has no equivalent in video games. Why do you think this is? Does it bother you?