Viacom (VIA) says Q3 ad sales dropped four percent in the U.S., which is two points better than Q2. Companywide, revenue dropped three percent to $3.3 billion, which is what Wall Street expected, but the company slashed enough costs to produce an earnings surprise: After adjusting for one-time charges, Viacom posted earnings of 69 cents a share, well above the 57-cent consensus.

The company’s overall results do a nice job of illustrating why media companies and investors are so enamored of cable TV these days: Even though ads are slumping, the company was able to wring more out of cable system providers (and their subscribers), which more or less kept overall cable revenue flat.

Viacom’s movie business is much less meaningful than its TV operations, but in this case, it underperformed enough to drag the rest of the business down. Viacom blames a six percent drop on crummy DVD sales, which it says suffered compared with strong results a year ago.

But every studio in Hollywood is grappling with crummy DVD sales: The only real question is whether that’s a function of the economy or something larger.

I’ll  listen in on the call (8:30 am ET) and report back if there’s anything else worth noting.

UPDATE: CEO Philippe Dauman mentions the new “Sponge Bob Tickler” for the Apple (AAPL) iPhone app, which I believe means that at least one Viacom employee has won a private bet. Waiting to hear more about Q4 guidance.

The core question: Are Dauman and other Viacom execs mildly optimistic about recovery because of an easy comparison with a year ago or because ads are really coming back? A little of both, Dauman says: “Right now the tone is feeling better, but we have to be cautious.”

This time, though, they’re not trying to convince consumers to pay for music or asking advertisers to subsidize it. Instead, they’re trying to act as a middleman between labels and publishers who own music and advertisers, Hollywood and other folks who want to use the tunes for commercial purposes.

Via Twain Media, their personal investment company, Goldberg and Roback have purchased a smallish start-up called mSoft and renamed it Dashbox, which they describe as a “subscription service that aggregates and manages all of your production music and sound effects.” The idea is to link up people who need to buy music for commercial reasons with rights holders, who are often scattered and hard to track down.

Roback will take the CEO spot at the renamed company; Goldberg, who has a day job running SurveyMonkey, will be chairman. The company hasn’t disclosed the terms of its mSoft purchase, but people familiar with the transaction tell me they bought the company for under $10 million.

Roback and Goldberg founded Launch Media in 1994, and sold it to Yahoo (YHOO) in 2001; the two stayed on to run Yahoo Music until 2007. Earlier this year, Goldberg invested in and took over SurveyMonkey, an online survey coordinator.

Goldberg is one of many former digital music executives I’ve talked to who thinks the music business is fundamentally broken, so at first blush it’s a tiny bit surprising to see him back in it again.

But he and Roback are essentially investing in an entirely different industry–it’s a business-to-business market that really hasn’t been affected much by the digital revolution. If you want to use a song in your TV show, you can’t steal it via BitTorrent or stream it for free on Spotify.

Nor has the digital revolution affected the industry’s infrastructure, which remains pretty ancient. Music supervisors for TV shows and movies still end up resorting to faxes and phone calls to track down tunes they’d like to use.

So there are some obvious opportunities for someone who can amass scale and decrease friction here. It may not be as sexy as providing consumers with all the free music they want, but it may end up being more profitable.

Terms of the deal haven’t been disclosed, but I’m told the transaction values the joint venture at $300 million. Google’s (GOOG) YouTube isn’t an owner in the JV but will share revenue in exchange for lending Vevo its massive distribution platform. The site, which will exist both outside YouTube and within YouTube as a branded channel with its own player, is scheduled to launch later this year.

Vevo has been seeking an outside money source for some time; PaidContent had previously reported the venture was looking for a $300 million valuation.

But the most important part about the outside money is that it’s outside: The investment is designed in large part to allay antitrust issues, given that Vevo’s existing owners represent two of the four major music labels. Providence provided the same cushion to Hulu, which was originally put together by GE’s (GE) NBC Universal and News Corp.’s (NWS) Fox.

Abu Dhabi Media, which is owned by the Abu Dhabi government, has made several forays into Western media, but until now, all of its deals have been focused on Hollywood. Two years ago, for instance, the company announced a $1 billion pact with Time Warner’s (TWX) Warner Brothers to finance movies and build a theme park, though that deal has yet to yield much activity. Earlier this month, it made a much more modest $10 million pledge to back Walter Parkes and Laurie McDonald, the movie producers who once ran DreamWorks studios.

Here’s the release:

VEVO PARTNERS WITH ABU DHABI MEDIA COMPANY

Abu Dhabi Media Company Joins Universal Music Group and Sony Music Entertainment
for World Class Online Premium Music Service

New York, New York, Monday, October 19, 2009…VEVO, the new premium music video and entertainment service powered by YouTube, has received a strategic investment from Abu Dhabi Media Company (ADMC), one of the world’s fastest growing, multi-platform media organizations. The announcement was made today by Doug Morris, Chairman & CEO of Universal Music Group and Co-Chairman/Founder of VEVO, Rolf Schmidt-Holtz, Chief Executive Officer of Sony Music Entertainment & Co-Chairman of VEVO, Rio Caraeff, President & Chief Executive Officer of VEVO, H.E. Mohamed Khalaf Al Mazroui, Chairman of ADMC, and Edward Borgerding, Chief Executive Officer of ADMC. Terms of the agreement were not disclosed.

With this transaction, VEVO is now formed as an independent and fully funded entity with Universal Music Group (UMG), Sony Music Entertainment (SME) and Abu Dhabi Media Company (ADMC) as founding shareholders. Funding from the shareholders will enable VEVO to come to market with an attractive premium music offering for consumers and advertisers alike.

Launching in the United States and Canada later this year with a further international roadmap to be announced, VEVO will be a premium destination and syndication network for the very best in top-notch music video content that will leverage the massive existing traffic of YouTube.

“This global partnership flags Abu Dhabi Media Company’s commitment to establish a leading position in the digital media industry. It is part of an integrated approach to expanding the global digital presence and brand portfolio of Abu Dhabi Media Company, and it illustrates our partnering approach with innovators in digital media services and technologies”, stated H.E. Mohamed Khalaf Al Mazroui, Chairman of ADMC, on joining UMG and SME to create VEVO.

“It’s a credit to the music community, and to the global opportunity that VEVO represents, that we have been able to attract such a solid investment partner with the vision and track record of Abu Dhabi Media Company,” commented Rio Caraeff, President & Chief Executive Officer of VEVO. “Abu Dhabi Media Company brings to the venture important funding support and a team with enormous global media experience and insight, and we look forward to working with them to seize the many opportunities ahead of us.”

“Consumer demand for music video entertainment is growing significantly today and is transforming the digital entertainment market and the music industry by fuelling new media business models. VEVO fits our vision and goals perfectly, as we are expanding our capabilities and continue to build the market for digital entertainment around the world.  VEVO will redefine the way premium music video entertainment is consumed, created and shared in a global community of music audiences,” said Edward Borgerding, Chief Executive Officer of Abu Dhabi Media Company

“We’re now entering a new exciting phase in the digital media industry in the region and we’re determined to be at the forefront of it”, added Ricky Ghai, ADMC’s Executive Director, Digital Group. “With VEVO there’s real opportunity for incredible growth, as both brand advertisers and consumers are looking for new premium video experiences online.”

A treat for those of you who love reading about Hollywood’s inner workings: About 7,800 words in this week’s New Yorker dedicated to power blogger Nikki Finke and those who fear her and/or read her. Which pretty much includes everyone in Hollywood.

It’s a classic New Yorker profile, which means it’s thorough and a great read, though there’s not much in the way of news there. Writer Tad Friend mentions Jay Penske’s purchase of Finke’s services in passing, and there’s no update of Penske’s and Finke’s plans to expand the site.

For the record, in late June, Finke said she’d have a New York correspondent hired within three months; four weeks ago, Penske told me said correspondent was going to be signed within two weeks.

What’s the status now? “Not ready to comment right now,” Finke says via email. I’ve also asked Penske for an update.

Back to the story. There’s a lot of inside baseball about the symbiosis between the studios and the people who write about them, and some smart reporting about the tradecraft of reporting and how it has been altered by the rise of blogging.

I also detected at least a whiff of allusion to Janet Malcolm’s famous description of journalism, published in the New Yorker two decades ago:

Finke’s code is the Hollywood code. She is for hard work, big box-office, stars who remain loyal to their agents and publicists, and the little guy–until, that is, the big guy chats her up. Then she’s for that big guy until some other big guy calls to stick it to the first big guy. And this, too, is the Hollywood code: relationships are paramount but provisional. One executive observes that people who heed Finke’s call to snark about their competitors shouldn’t get too comfortable: “The idea is, The lion won’t eat me if I throw it another Christian. It works for a day, but you’re going back to the Colosseum soon.”

The bond between journalists and their sources is always complex–you’re friends with benefits, without being friends–but its contingent nature is particularly apparent in Hollywood. Finke’s sources can hear in her voice when she sounds low or unwell, and will ask if she needs anything. She’s grateful for the solicitude, but determined to maintain the barrier between her and those she calls “these people.” “A veterinarian treats animals–he’s not an animal,” she says.

What does Finke think? Glad you asked. She has an entire post dedicated to it, of course.

The gist:

As I expected, it’s an amusing caricature, only occasionally true but hardly insightful. Still, I’m relieved that The New Yorker didn’t lay a glove on me. I found Tad Friend, who covers Hollywood from Brooklyn, easy to manipulate, as was David Remnick [the magazine's Pulitzer Prize-winning editor in chief] , whom I enjoyed bitchslapping throughout but especially during the very slipshod factchecking process.

No comment from Friend or the New Yorker’s PR staff, which sent me a copy of the article this afternoon.

Does Google need a Hollywood guide?

It may be getting one: Jim Wiatt, the former head of the fabled William Morris talent agency, has been talking to the company about a consulting gig for its YouTube video site.

Wiatt, who is leaving his old job in the aftermath of his agency’s highly contentious merger with the Endeavor agency, discussed the idea with Google and YouTube executives in Mountain View last week, multiple sources said.

Wiatt hasn’t signed a deal and may end up pursuing something else instead, I’m told.

But the role would make sense, given that Wiatt has already served as a de facto guide for Google CEO Eric Schmidt, who has been trying to ingratiate his company with studio and network executives for some time.

(Schmidt has spent enough time in Hollywood to justify plunking down a reported $20 million for an estate in Montecito, a wealthy resort town an hour or so outside of Beverly Hills.)

Google (GOOG) has tried to convince Hollywood to bring more of its content over to the world’s largest video site, but its biggest players have so far resisted, offering the site promotional trailers but little else. Meanwhile Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC has staked out a reputation as the go-to site for free “premium” movies and TV shows.

Earlier this year, reports surfaced that William Morris and Google had reached a pact that would steer the agency’s high-profile clients to make and star in YouTube videos.

Neither company ever formally acknowledged the so-called “YouTube Gold” program, and it’s not clear if it ever got off the ground. But, in any case, William Morris has more or less been absorbed by onetime rival Endeavor, headed by Ari Emanuel, leaving Wiatt looking for other work.

Wiatt, via a spokesman, declined to comment. YouTube offered up this statement via email: “We are constantly exploring opportunities to reward the talented members of the YouTube community, including helping to distribute their content around the Web and beyond.”

[News Corp. owns Dow Jones, which owns this Web site.]

[Image credit: Sorn]

Global Gaming Factory X, the Swedish software/Internet cafe company that’s supposed to buy the file-sharing haven for $8 million, was supposed to get shareholders to approve the deal today. But in advance of a shareholders meeting, the company issued a press release in which it says 1) that investors that were supposed to finance the deal have disappeared and 2) this is the fault of the U.S. media, which it says spooked said investors.

But wait! There’s more! Global Gaming Factor says it has figured out an alternate way to pay for the deal whereby the company’s majority shareholders in the penny-stock company will offer their equity as a security. Alas, there’s yet another catch: Swedish regulators, who have already suspended trading in the company twice in two months, are now threatening to delist it.

It’s hard to get too worked up about the failure of a plan that made no sense on the day it was announced. But for the record, you can read the backstory to this weird tale here and here. Meanwhile, The Pirate Bay itself is up and running and still cheerfully thumbing its nose at Hollywood, the big music labels, and the rest of the media world.

The movie, an over-the-top retelling of World War II featuring a squad of Jewish Nazi hunters, brought in $37 million at the box office this weekend, which is about $10 million more than the Hollywood prognostication machine expected.

In the old days, you’d simply chalk up the difference to the fact that the Hollywood prognostication machine sometimes gets things wrong. But now when this happens, the impulse is to blame or praise Twitter. The theory: Audiences go to see the movie on Friday, then quickly tweet their 140-character reviews to their pals. This either keeps moviegoers away for the rest of the weekend or makes them flock to the theaters.

All of this sounds believable enough, but I have yet to see anyone spell out exactly how it works. The Hollywood Reporter, for instance, is a big proponent of the “Twitter saved Tarantino” theory. But its evidence is awfully weak: It just notes that some Twitter messages about the film have been positive.

At least NewTeeVee tries to put some numbers behind the argument. Using data from tracking service Trendrr, it notes that the volume of Tweets about the film increased over the weekend (see chart; click to enlarge).

Of course, volume alone doesn’t indicate anything: For all we know the messages were fixated on the mustache Brad Pitt’s character sports in the film. And in any case, we’re a long way from correlating Internet messages with real-world actions–just ask former presidential candidate Ron Paul’s ardent cyberfans.

But marketing always involves at least an equal part art for every part science, and when you add a superhyped, very new phenomenon like Twitter to the mix, all bets are off. Given the way these things work, expect Hollywood to assume that Twitter can now make or break a movie. And there will be an opportunistic flock of “social media” gurus ready to assure them–for just a small monthly retainer–that their insight is correct.

In case you haven’t seen it (left unmentioned in these reports is the fact that the movie got a very big conventional marketing push), here is an “Inglourious Basterds” trailer. And below that, one of my favorite scenes from “Pulp Fiction,” Tarantino’s 1994 breakthrough. (Be warned! These are Tarantino movies, and the second clip is unedited, which means you’re going to get some potentially NSFW cursing and gore. Enjoy!)

YouTube says it’s highlighting the Bill Murray/Dan Akroyd/Sigourney Weaver classic because this summer is the movie’s 25th anniversary.

Which is true! But I’m pretty sure the site is also trying to remind both Hollywood studios and run-of-the-mill YouTube users that the site can and does run more than just short, home-brewed clips–it’s got a bunch of movies, TV shows, and other “premium content,” too.

Not nearly as much as Hulu, of course, but YouTube is still trying to figure out how to change that. One way is by simply creating special sections to highlight movies and TV shows, which is one of the reasons it got Sony’s (SNE) Crackle on board last spring. Another is to offer content owners special incentives to hand over their stuff to the world’s biggest video site.

If you do watch “Ghostbusters,” for instance, note that the traditional YouTube player has been replaced by one from Crackle. YouTube also recently agreed to let Disney’s ESPN.com (ESPN) use its own player as well.

On the other hand, there’s still plenty of other “premium content” on YouTube that doesn’t appear to be sanctioned by the contents’ owners and that doesn’t appear to be generating any revenue or other benefit for them, either. Like this grainy, but still excellent, “Ghostbusters” excerpt:

To recap: Real wants to sell a $30 piece of software called RealDVD that lets you rip and store DVDs on your computer. Real’s software adds its own set of locks to the ripped file to prevent DVD owners from passing along their files to someone else, but that isn’t nearly enough to placate Hollywood.

Real and the studios have been in court since last fall, when U.S. District Court Judge Marilyn Hall Patel issued a restraining order preventing Real from selling the software. Yesterday, Patel (whom you may recall from the old Napster days, when she essentially shut that service down) turned the restraining order into an injunction, along with a sharply worded ruling that basically described Real as a group of willfully obtuse doofuses.

Now Hollywood is dancing, and Real says it needs to “determine our course of action.” I have a suggestion for Real: Move on.

I know there’s a legitimate use for software that lets you rip DVDs you own–and more importantly, software that lets you circumvent the locks the studios put on their discs. But why not let the many other smaller companies fighting this fight, fight this fight?

Best-case scenario is that you end up with software that’s useful for a relatively small group of people: The ones who buy DVDs and want to watch them multiple times. Worst case is the one you have now: An expensive legal battle and the prospect of a product you’ll never be able to sell.

I’ve been puzzling about Real’s plan for this software from the get-go. Why release a product that is destined for a court battle?

A few people familiar with the company’s thinking have tried to explain that this fits into CEO Rob Glaser’s vision for Real’s future, which involves creating software that maintains a connected home entertainment hub. But that seems like a roundabout way to get there.

I have another theory: Glaser is a smart, pugnacious guy with a fondness for big public fights.

He spent some time in the earlier part of this decade jousting with Steve Jobs about Apple’s (AAPL) walled-garden approach to iTunes music, and lost that one. But he did get Microsoft (MSFT) to hand over $760 million to settle an antitrust case in 2005, and he still has a chunk of that cash in the bank.

Or maybe there’s an entirely different impulse behind RealDVD. But whatever it is, I’d love to hear it. Here’s a clip of Rob Glaser explaining the software’s features, but not the rationale behind it, to BoomTown’s Kara Swisher:

]]> http://mediamemo.allthingsd.com/20090812/realnetworks-still-barred-from-the-dvd-backup-business-why-does-realnetworks-want-to-be-in-the-dvd-backup-business/feed/ 0 http://mediamemo.allthingsd.com/20090630/is-the-pirate-bay-going-legit-not-really/ http://mediamemo.allthingsd.com/20090630/is-the-pirate-bay-going-legit-not-really/#comments Tue, 30 Jun 2009 13:32:43 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8789 You can hear the head-scratching going on at movie studios and music labels across the world: What just happened to The Pirate Bay? Reports out of Sweden are murky at best. But supposedly, a Scandinavian software outfit is buying the world’s most notorious file-sharing site for about $8 million and will create a service that pays copyright owners when people download their work. Maybe.

You can read a confusing release from the supposed acquirer, Global Gaming Factory X, here, and an equally confusing post from The Pirate Bay’s operators, here. And The Pirate Bay guys, who are supposedly looking at a big fine and a jail term, say they didn’t actually own The Pirate Bay but will get some of the profits from the sale anyway and will use them to finance an “Internet project.” Etc.

Oh! And the Pirate Bay’s new owners say they can’t promise that copyright holders are actually going to get paid. Here’s Global Gaming CEO Hans Pandeya in the Financial Times:

However, Mr Pandeya said the company would not be able to compel any filesharers to pay content owners. “We are trying to create a different model that addresses the needs of the different parties. However, it is up to them if they want to participate,” he said.

So it’s understandable that Hollywood and big music are mute, or close to it, on the deal. Because it’s difficult to say exactly what the deal is. I was able to extract one statement from the IFPI, the international music trade group. Here’s chairman and CEO John Kennedy:

“We don’t know the details and there are many questions to ask about how this will work in practice, but we would be delighted if this resulted in the Pirate Bay turning into a legitimate licensed service.”

But let’s be honest: There’s no way The Pirate Bay is going legit. And if it does, it won’t be The Pirate Bay, but something else.

Instead of being a massive site that attracts a huge audience that wants to devour free content, it will be a small distributor of licensed content, and the masses will flock somewhere else for their free stuff. Because they don’t want licensed content, even if it’s legal and/or better quality. They want free stuff.

The movie studios and the labels should be able to pat themselves on the back, gently and cautiously, for getting The Pirate Bay’s current owners to more or less abandon the site.

The problem, as they’re well aware, is that The Pirate Bay was only a directory that sent users to “torrents” that allowed them to gobble up as much pirated stuff as they want. And shutting down the Bay doesn’t mean the torrents are gone. And it doesn’t prevent other directory sites from popping up, whack-a-mole style, all over the world.

]]> http://mediamemo.allthingsd.com/20090630/is-the-pirate-bay-going-legit-not-really/feed/ 1 http://mediamemo.allthingsd.com/20090623/sold-hollywood-blog-queen-nikki-finke-goes-to-mailcom/ http://mediamemo.allthingsd.com/20090623/sold-hollywood-blog-queen-nikki-finke-goes-to-mailcom/#comments Tue, 23 Jun 2009 13:26:41 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8495

The Nikki Finke auction is over, and the winner is…Mail.com. Jay Penske’s Mail.com Media Corporation, which owns the Mail.com email service and a small portfolio of Web sites, has acquired the blogger, whose Deadline Hollywood Daily is a must-read for Hollywood.

No details on pricing yet.* But, the fate of Finke’s site, which was managed by the LA Weekly, has been the subject of lots of speculation in recent months, including spirited back-and-forths between Finke and competitors like Variety and Sharon Waxman’s The Wrap.

Reading that stuff has been nearly as entertaining as Finke’s column. She provides blow-by-blow Tinseltown coverage–she seemed to post nearly hourly during the 2007-2008 writer’s strike–and relishes her scoops. One of her most recent: Allegations that GE’s (GE) NBC Universal was trying to “stifle” the Hollywood Reporter’s coverage of the entertainment conglomerate and its parent company.

Finke says she’ll keep full editorial and design control as she begins working for Penske, the son of auto magnate Roger Penske. He’s making an interesting move: Mail.com is a white-label email provider that raised $35 million last year, but he’s been expanding into the content business. Earlier this year, he relaunched Movieline with staff from Gawker Media’s Defamer site.

But Finke’s site will remain separate from the rest of Penske’s portfolio. She says she’ll expand her one-woman show by hiring a “senior” journalist based in New York City within the next three months.

That will be a tricky expansion to navigate: Recent history shows that blogs produced by dedicated/obsessive proprietors often stumble when they expand, in part because dedicated/obsessive proprietors may not be the best managers and in part because it’s tough to find people who want, or are able, to work for dedicated/obsessive proprietors.

And from my perch, this seems like a lousy time to sell an ad-supported news site. Not so, says Finke. Or at least, not her site.

“I was not anxious to sell. I was not looking to sell,” she says. “This was sort of a process where various people kind of wore me down….I’m very pleased with what happened. What wound up happening was nothing like the offers I was getting a year ago.”

UPDATE: You can now pick a number, depending on which news source you like, but they range from “low seven figures” to $15 million. It would be awesome if any of them are true–I need a bigger apartment, among other things, and it’d be great to know that you can get rich blogging–but the only one I think is remotely plausible is the lowest one, from Rafat Ali at PaidContent.

Gabe Snyder at Gawker does a nice job of running through the estimates and explaining why they don’t make sense.

The only thing I’d add is that all of the numbers being floated today are almost certain to include earnout clauses, meaning the deal is potentially worth up to X amount–if Finke’s site hits certain performance goals. Which is a lot different than saying she’s actually made X amount in the deal.

Another way of putting it, from a source who buys and sells media assets for a living: “Presumably it’s one of these billion dollar earnout deals. I’ll pay you a billion dollars–one dollar (more or less) upfront, and the rest as a percentage of revenues (or profits if I ever find someone else to sell this to). But in the meantime you can tell your friends that you were paid a billion.”

UPDATE2: Now the WSJ estimates the deal at $10 million — but says that number includes equity from Mail.com, along with a $1 million upfront payment.

]]> http://mediamemo.allthingsd.com/20090623/sold-hollywood-blog-queen-nikki-finke-goes-to-mailcom/feed/ 0 http://mediamemo.allthingsd.com/20090514/david-geffen-thinks-the-new-york-times-is-a-charity-case-so-what-does-he-want-to-do-about-it/ http://mediamemo.allthingsd.com/20090514/david-geffen-thinks-the-new-york-times-is-a-charity-case-so-what-does-he-want-to-do-about-it/#comments Thu, 14 May 2009 13:10:28 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=7358 More fallout from this week’s Fortune story that disclosed David Geffen’s interest in the New York Times. We’re now seeing a series of stories that say that Hollywood billionaire thinks of the paper not as an investment but a charity case.

BusinessWeek’s Ron Grover says Geffen “doesn’t so much see this as a business venture, but rather as a civic investment.” Newsweek’s Johnnie L. Roberts goes further, suggesting that Geffen would literally turn the Times into a nonprofit if he bought it.

Both Grover and Roberts are longtime media reporting pros, so when they cite sources with knowledge of Geffen’s thinking, I believe them. What I still don’t understand, and what observers and investors I’ve talked to are still puzzled about: How does Geffen plan to do that?

To reiterate: Geffen has reportedly tried to buy the 20 percent stake in the Times now owned by Harbinger Capital, though the two sides couldn’t agree on price. But even if they did, the transaction would only bail out Harbinger, not the Times.

And because the Times has a dual-class stock structure that keeps control of the company in the hands of the Ochs-Sulzberger family, taking on Harbinger’s stake doesn’t give Geffen a foot in the door to the company. It gives him the right to appoint two representatives to the company’s 14-member board of directors, but nothing else. Just ask the Harbinger folks.

Again, there are two plausible ways to acquire the Times:

1. Buy the super-voting shares outright from the Ochs-Sulzbergers, who have said they have no intention of selling. But then again, that’s what the Bancroft family said about Dow Jones, which owns the Wall Street Journal and this Web site. And News Corp.’s (NWS) Rupert Murdoch was able to overcome their objections by offering a 60 percent premium to the company’s share price. Maybe Geffen could try that.
2. Establish a large debt position with the company and exercise the power that comes along with that in the event of a restructuring. The problem: Billionaire Carlos Slim has already done that.

So. Anyone close to David Geffen want to explain what he’s really thinking? I’m all ears.

]]> http://mediamemo.allthingsd.com/20090514/david-geffen-thinks-the-new-york-times-is-a-charity-case-so-what-does-he-want-to-do-about-it/feed/ 0 http://mediamemo.allthingsd.com/20090325/att-starts-wrist-slapping-music-pirates-gently-but-movie-and-tv-thieves-will-be-a-different-story/ http://mediamemo.allthingsd.com/20090325/att-starts-wrist-slapping-music-pirates-gently-but-movie-and-tv-thieves-will-be-a-different-story/#comments Wed, 25 Mar 2009 16:37:12 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=5665

Late last year, the music industry announced that it was going to stop suing music pirates because it had finally gotten Internet pipe companies to help it crack down on file “sharers.” One problem: None of the big cable or telco guys would fess up to joining the plan.

Now one of them finally has–in a very limited, toe-in-the-water, we’re-just-testing-this-out way. CNET:

“At a digital music conference in Nashville, Jim Cicconi, a senior executive for AT&T told the audience that the ISP has begun issuing takedown notices to people accused of pirating music by the Recording Industry Association of America, according to one music industry insider who was present….

Cicconi told attendees of the Leadership Music Digital Summit that the notices are part of a ‘trial.’ AT&T wants to test customer reaction, he said. Whether AT&T included any warnings that repeat offenders would see their service suspended or terminated is still unclear. Music industry sources said AT&T told managers at the top labels the trial letter would include strong language about the consequences of illegal conduct, but would stop short of mentioning service interruptions.”

Can’t really say that “strong language” is going to do much to help solve the music industry’s woes. But from the labels’ perspective, it’s better than nothing, which is what the cable and telco guys have traditionally done about file-sharing for the past decade or so.

But if you want to see what the pipe guys can do about file-sharing when properly motivated, keep your eye on what they do about TV and movie piracy.

Remember that the ISPs get zilch from the music business. But they spend billions a year for the right to show TV programs and movies. And they’re going to try very hard to “disincent” you from watching whatever you want, whenever you want, without paying them for that ability.

]]> http://mediamemo.allthingsd.com/20090325/att-starts-wrist-slapping-music-pirates-gently-but-movie-and-tv-thieves-will-be-a-different-story/feed/ 1 http://mediamemo.allthingsd.com/20090305/blockbuster-look-ma-no-bankruptcy/ http://mediamemo.allthingsd.com/20090305/blockbuster-look-ma-no-bankruptcy/#comments Thu, 05 Mar 2009 16:57:19 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=4903 Why did Blockbuster release some of its fourth-quarter numbers  today–two weeks before it was scheduled to do so? Because it wanted to impress investors who freaked out on Tuesday when the company had to swat away rumors that it was headed for Chapter 11.

Blockbuster (BBI) didn’t provide much detail. It boasted about fourth-quarter same-store sales and said 2008 earnings would be above expectations, and that’s about it. But it assured investors it was working “diligently” to figure out how to pay some $380 million in debt that comes due in August.

Alas, investors are giving the numbers mixed reviews. After Blockbuster put out its release, shares opened up at 61 cents–up almost 30 percent from Wednesday’s close. Now that the penny stock’s shareholders have thought it through, though, they’re selling again, and shares have dropped below 50 cents. At the beginning of the week, they were trading above $1 a share. A year ago, they were worth more than $3.

Related note: On Tuesday afternoon, as the Chapter 11 reports were surfacing, I happened to be talking to someone who worked with the company about a decade ago, when it still ruled the home video market with an iron fist. At the time, he said, Blockbuster used to get frequent calls from an entrepreneur who was desperate to get the video giant to work with, or even buy, his company. Good thing that never worked out for Netflix (NFLX) CEO Reed Hastings.

]]> http://mediamemo.allthingsd.com/20090305/blockbuster-look-ma-no-bankruptcy/feed/ 0 http://mediamemo.allthingsd.com/20090303/blockbuster-rumored-for-chapter-11-shares-cheaper-than-a-late-fee/ http://mediamemo.allthingsd.com/20090303/blockbuster-rumored-for-chapter-11-shares-cheaper-than-a-late-fee/#comments Tue, 03 Mar 2009 20:03:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=4809 The movie rental business is supposed to be recession-proof. That was true for Netflix (NFLX), which posted great results at the end of 2008 and said this year would be even better.

But that hasn’t panned out for Blockbuster (BBI), which is  reportedly mulling a Chapter 11 bankruptcy protection filing. No confirmation from the company yet, but investors aren’t waiting around to find out: BBI shares are now less than a quarter a piece. At the beginning of the day they traded at 96 cents. UPDATE: Blockbuster confirms it has hired law firm Kirkland & Ellis “to advise it with respect to its ongoing financing and capital raising initiatives” but tells Reuters that it can self-fund its debt through the rest of the year and that it “does not intend to file for bankruptcy.”

A little less than a year ago, you may recall, Blockbuster was trying to buy Circuit City for about $1 billion or so. But investors couldn’t see the appeal of mashing a struggling retailer with a struggling video rental company, and the deal fell through. Circuit City is currently in liquidation.

Add this to Blockbuster–and Yahoo (YHOO)–investor Carl Icahn’s list of recent disappointments.

[Image credit: travdir]

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