That won’t help employees at Time Warner’s Time Inc. publishing unit: The company confirmed that it will make big cuts this quarter and spend up to $100 million on restructuring charges. This is different from the $100 million in cuts that had been previously reported, but it will still mean hundreds of layoffs at the publisher.

Time Warner also boosted its guidance for the remainder of the year and confirmed once again that it wants to spin off AOL before the end of the year. As well it should: The company said it has already spent a staggering $24 million on the spinoff so far this year, which includes $9 million in “pretax direct transaction costs (e.g., legal and professional fees).” It has spent another $83 million in restructuring charges at that unit in 2009.

As usual, Time Warner said ad sales have been lousy, but that its cable networks and film divisions had done okay. The breakdown:

• Cable networks: Revenue up five percent, because subscriber fees were up nine percent. Ad revenue was down one percent.
• Warner Bros. movie studio: Revenue down four percent, because of slumping DVD sales.
• Time Inc.: Revenue down 18 percent; advertising down 22 percent. Adjusted operating income down 42 percent. Hence the coming cuts.
• AOL: Revenue down 23 percent. Subscription revenue, which will continue to shrink, was down another 29 percent, and ad revenue, which is supposed to improve one day, was down 18 percent.

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.”

Employees at MySpace have been waiting to find out who their new ad sales boss will be, as All Things Digital reported earlier this week.

And here she is: Nada Stirratt, who until today was running digital sales for Viacom’s (VIA) MTV Networks. (You can read her goodbye memo to MTV colleagues below.)

It looks as if MySpace CEO Owen Van Natta is assembling a team of MTV veterans at his company, which he’s in the process of overhauling.

In addition to Stirratt, MySpace has brought former digital guru Jason Hirschhorn over as chief product officer. And Courtney Holt, who runs MySpace Music, had run digital music for MTV before Chris DeWolfe, Van Natta’s predecessor, brought him on board last year. Viacom hasn’t named a replacement for Stirratt.

Next week could be Stirratt’s debut in front of the entire advertising sales staff of MySpace, who are set to gather at a new seaside resort about 20 miles south of Los Angeles to get a first glimpse of the fresh direction the company is preparing to take under its new management.

The struggling social networking site, HQed in Beverly Hills, has been trying to reboot its image, spur innovation in its product and most of all, pull itself out of a too-long slump, even as longtime rival, Palo Alto, Calif.-based Facebook, has seen explosive growth.

In late August, MySpace sales and marketing head Jeff Berman left the company as MySpace hired MediaLink, a New York- and Los Angeles-based media consultancy, to help get its ad sales business back on track.

That effort has been led by MediaLink President Wenda Millard, who is well known in the ad industry and was longtime leader of the ad sales force at Yahoo (YHOO).

Getting an experienced top ad exec in place will round out a recent spate of new hiring by MySpace, including a new CTO, Alex Maghen, who moved over from its MySpace Music joint venture, and a new CFO, Mark Rosenbaum.

This has been part of Van Natta’s wholesale flushing out of most of the top execs who worked under DeWolfe.

Now, with a new team of execs, the News Corp. (NWS) property is putting the finishing touches on a master plan, which will include a new redesign of its hopelessly messy interface and doubling down on a product strategy that will center on, said one source, “what we own,” namely, music and entertainment.

Music is the obvious key leverage point, the still-bright spot of MySpace, followed by adding big entertainment categories like movies, television, gaming, video and other pop culture arenas.

Once the rejiggered product is in place, it will be up to Stirratt to sell it to advertisers.

Until we see how she does in that key job, here’s her missive to MTVers:

From: Stirratt, Nada
To: MTVN Digital Advertising
Sent: Fri Oct 09 16:34:51 2009
Subject: Thank You for Everything

Hi Everybody–

It is with mixed emotions that I write to inform you that I will be leaving MTV Networks. I have accepted the job of Chief Revenue Officer at MySpace and will be starting there later in the month.

The past 3+ years have been such a wonderful experience and I thank you for the extraordinary work you all have done to make MTVNetworks Digital stand for a best-in-class sales organization unlike any other in the business. Truly. We rocked the industry with our innovation, ideas, relationships and results. And we had a ridiculous amount of fun along the way. So thank you for everything. And a special heartfelt thanks to my leadership team of Kevin, Brad, Jason and Heather: I have learned so much from each of you and will cherish your friendship.

Xo 
Nada

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

Warner (WMG) is handing those duties over to Outrigger Media, a New York-based rep firm that specializes in Web media (Outrigger’s preferred description: “Internet video sales and marketing firm”), the companies announced today; oddly, Warner’s release goes on and on without even once mentioning Google (GOOG) or YouTube. Go figure.

I’ll admit that I hadn’t heard of Outrigger before this morning, but I had heard of its CEO, Mike Henry, an ad sales veteran who was previously running ad sales for Veoh, one of the many video sites that aimed to become the next YouTube in the past few years. Turns out, Henry is still running ad sales for Veoh–the company has outsourced its ad sales business to Outrigger.

Warner’s strategy is different from the one rival Universal Music is taking with Vevo, the “Hulu for music videos” joint venture it launched with Sony (SNE), with help from YouTube. Vevo is creating its own in-house salesforce, to be led by Nokia (NOK) and and Viacom (VIA) vet David Kohl.

I can understand Warner’s reluctance to build a salesforce of its own–if you really want to do this stuff right, you’re looking at 20 or 30 people–but it seems that long term, if the labels have a future, it’s going to be primarily as a sales and marketing force, and you’d want to make a bet on that now. It will be interesting to see how this plays out.

Maybe, says CNET’s Greg Sandoval. He reports that Viacom’s attorneys have unearthed emails that indicate that YouTube employees uploaded copyrighted material to the site and that “managers” knew there was copyrighted stuff on the site but didn’t do anything about it.

Those allegations happen to be key parts of Viacom’s (VIA) suit against Google (GOOG) and YouTube, and a good part of what the company has been looking for in the discovery/deposition process that has stretched on for more than a year and is slated to extend through the end of 2009.

Viacom has argued that senior YouTube employees, including cofounders Chad Hurley and Steve Chen, knew full well that their site was full of copyrighted material and not only didn’t try to prevent it, but at some point even encouraged it.

So what exactly do the emails say? I don’t know. Sandoval is summarizing the documents, not reproducing them. And if I’m reading his story correctly, he may not have seen them either, but may be relying on someone else’s description of them. (That said, in a separate story, Sandoval does reproduce parts of Google CEO Eric Schmidt’s deposition from the same case.)

Here’s his description:

Lawyers working on a $1 billion copyright lawsuit filed by Viacom against Google’s YouTube may have uncovered evidence that employees of the video site were among those who uploaded unauthorized content to YouTube.

In addition, internal YouTube e-mails indicate that YouTube managers knew and discussed the existence of unauthorized content on the site with employees but chose not to remove the material, three sources with knowledge of the case told CNET.

The e-mails, according to the sources who asked for anonymity because of the ongoing litigation, surfaced during an exchange of information between the two sides of the legal dispute.

I’ve asked Sandoval for more information about the emails he’s referring to, but I don’t expect him to say much; anyone who released documents from discovery would be violating a court order. Viacom had no comment. Here’s YouTube’s comment, via CNET: “The characterizations of the supposed evidence, made in violation of a court order, are wrong, misleading, or lack important context and notably come on the heels of a series of significant setbacks for the plaintiffs. The evidence will show that we go above and beyond our legal obligations to protect the rights of content owners.”

Vevo

Kohl’s job is a key one at the venture, whose premise is that the music industry can do a better job of selling its video inventory than sites like Google’s (GOOG) YouTube. Vevo is a joint venture owned (for now) by Sony (SNE) and Vivendi’s Universal Music Group; YouTube will help power the site and share in some of its revenue.

In theory, there could be a lot of dollars to go around. When Vevo opens its doors later this year, it is expected to generate some 450 million video streams a month. In theory, the fact that a single company controls the way the videos are displayed and distributed will make those streams more attractive to advertisers.

But there are plenty of skeptics who think the site will flounder, in large part because the music industry has never figured out how to run a successful consumer business and because media companies have a terrible track record when it comes to joint ventures. In Vevo’s favor: They said the same thing about Hulu, and that venture has been a success, at least operationally.

Kohl will run a six-person sales team he intends to expand, people familiar with Vevo’s strategy tell me. Until now, Vevo head Rio Caraeff has been overseeing sales himself–and learning on the job, since he didn’t have any sales experience of his own. Vevo now employs about 45 people.

At Nokia, Kohl ran the company’s interactive ad group; he has also put in time at Viacom’s (VIA) MTV Networks, Vivendi Universal and Comedy Central.

Want to see this in action? Go to YouTube and try to find a clip of the Kanye West/Taylor Swift/Beyoncé incident from Sunday night’s Video Music Awards. Everyone’s still talking about it (I don’t know why, really, but I guess I’m out of the demo), but if you want to watch it on YouTube, you’re stuck watching shaky, grainy footage created when people film their TV sets with a camcorder.

That’s the result of Viacom (VIA) and YouTube using the site’s Content ID system–which YouTube installed after Viacom filed suit more than two years ago. Content ID allows YouTube to track copyrighted material on the site as long as the copyright owner tells it what to look for.

It’s not a plug-and-play solution: On Sunday, Viacom had to have staff work through the night to provide YouTube with “reference files” from the live show so that the Google’s video service could find the offending clips and take them down.

But it worked pretty well. Decent-quality clips of the Kanye incident were taken down fairly quickly, and the grainy shots had only generated some 700,000 views by Monday afternoon, according to video-tracker TubeMogul. Meanwhile, MTV’s official version was approaching two million views (it’s now above three million).

You could argue that both Google and MTV would be better served if the official clip was on YouTube. And one day, that might happen. But first, they have to settle their court case.

That looks less likely today than it did a week ago, by the way, because of the recent ruling in the Universal Music/Veoh case. Team Viacom says the case, which appears to be quite similar to its own, won’t have any bearing on the how the company proceeds, while the YouTube guys see it as an affirmation of their position. Translation: More legal back and forth and fewer Viacom clips on the world’s biggest video site.

Here’s one of the low-fi versions, by the way. Not recommended if you’re prone to motion sickness:

Depends on who you ask, of course.

Executives at Veoh say Judge A. Howard Matz has given them a new lease on life, and at least some of the company’s investors are doing some chest-beating. Universal, the world’s largest music label, says it’s confident it will win an appeal.

You can get the same split opinion by asking two different companies that happen to be locked in a similar fight. Executives at Google’s (GOOG) YouTube, which is trying to fend off a copyright suit filed by Viacom (VIA), say the Veoh ruling bolsters their case. You can guess what Viacom says.

The gist of the fight: Universal says Veoh didn’t try hard enough to keep illegally uploaded material off the video site; Veoh says it made a good-faith effort. Matz agreed with Veoh and tossed out Universal’s claims.

Even if you disregard the posturing, it’s fair to say there’s a genuine debate over the ruling’s meaning. Veoh, along with some of my bloggy colleagues, is treating the decision as the final word on Web copyright disputes, or at least those that involve the Digital Millennium Copyright Act.

And Matz certainly slapped Universal around. But it’s worth noting that copyright owners have lost Web cases in the Ninth District before, but ultimately won on appeal. Ask Grokster, the now-defunct file-sharing network that dissolved after a 2005 Supreme Court ruling.

You can read all of Matz’s judgment at the bottom of this post. But this excerpt, in which he argues that simply having illegal material on your site isn’t a crime, and neither is knowing about it (at least, in a general sense), gives you a good idea of Matz’s thrust and tone:

No doubt it is common knowledge that most websites that allow users to contribute material contain infringing items. If such general awareness were enough to raise a “red flag,” the DMCA safe harbor would not serve its purpose of “facilitat[ing] the robust development and world-wide expansion of electronic commerce, communications, research, development, and education in the digital age,” and “balanc[ing] the interests of content owners, on-line and other service providers, and information users in a way that will foster the continued development of electronic commerce and the growth of the Internet.”

Legal debate aside, the ruling does give a practical benefit for Veoh. It allows the company to fetch a higher price on the auction block.

CEO Dmitry Shapiro has been shopping the site to bidders over the summer, and as of a few months ago, he was willing to accept less than the $70 million investors like Time Warner (TWX), Goldman Sachs (GS) and former Disney (DIS) CEO Michael Eisner have poured into the site.

Selling a Web video site in 2009 is a tough challenge without a handicap, but the lawsuit was a big one. It was a huge time-and-money suck–Veoh may have spent as much as $6 million fighting the case in the last two years–and more important, the unresolved case was a huge liability. Who wants to buy a lawsuit?

Now, Shapiro says, Veoh’s options include not selling at all. He insists that some of Veoh’s existing backers are willing to recapitalize the company and that new investors might join in as well.

I’ll take him at his word, but if I had to bet, I’d wager that Veoh ends up getting acquired sooner than later. Maybe quite soon–the company has a board meeting today.

Wonder what they’ll talk about?

VEOH –

Still here? How about that? You get a bonus video! (But be warned: Pacino chews up a lot of scenery here, and there is some impassioned cursing.)

A couple of years ago, it was Britney Spears wobbling across the stage; this time around, it’s Kanye West interrupting Taylor Swift on behalf of Beyoncé and…pfft.

I can’t work up the enthusiasm to describe it, but happily for Viacom (VIA), MTV’s corporate parent, there are plenty of people who will do that for you: The story is dominating Twitter and Google (GOOG), and it’s the lead story on Yahoo’s (YHOO) front page.

You can also see the incident on Google’s YouTube, of course. But you’ll have to do a little bit of hunting since Viacom clips aren’t supposed to be on the most popular video site in the world–because Viacom is still suing Google and YouTube for $1 billion.

Remember that copyright case? It’s still motoring along, slowly but steadily: Executives from both companies are still being deposed, and if things keep moving forward, there will actually be a trial in 2010–some three years after Viacom filed its first complaint.

In any case, here’s the official version, served up by MTV, which says it has generated more than 1.1 million views of the clip since last night.

But if you’re pressed for time, you might prefer this parody version, which only requires 13 seconds and even manages to incorporate some political commentary.

I’m sure that Apple (AAPL) will indeed sell the Fab Four’s music via its digital music store one day. But it’s not happening at Apple’s keynote presentation tomorrow.

The Beatles estate, Electronic Arts (ERTS) and Viacom’s (VIA) MTV will be releasing a new version of “Rock Band” that features the band’s songs tomorrow. And on the same day, EMI Music Group will release all of the band’s music on remastered compact discs.

But that’s it, a source familiar with the band’s plans tells me. For now.

UPDATE: Want an on the record source? The Financial Times obliges with a follow-up:

“Conversations between Apple and EMI are ongoing and we look forward to the day when we can make the music available digitally. But it’s not tomorrow,” Ernesto Schmitt, EMI’s global catalog  president, told the FT’s Andrew Edgecliffe-Johnson.

Beatles-to-iTunes is a story that never goes away. And some day, it will turn out to be true–there’s no good reason for it not to happen. But predictions that it will happen Wednesday have been tied to wafer-thin logic.

Two years ago, the Web was convinced an announcement was in the offing because of the wording of an Apple keynote invitation. This year, even sober-minded publications are noting the timing of Apple’s keynote event and the Rock Band and CD launches, concluding that an iTunes launch makes sense too.

But I’d argue that it makes less sense: If you’re trying to convince people to spend $16.99 for a remastered copy of the White Album or as much as $250 to play along with the band’s ghostly avatars, why offer a competing product from Apple at the same time?

Nor do I see Steve Jobs expressing much interest in coordinating his marketing announcements with the likes of Viacom.

Anyway, if you really want to get the Beatles on the Web, you don’t have to wait for Apple–a quick Google search will do. Or you can head to Google’s (GOOG) YouTube, which is flooded with great clips like this:

But if you want to save money and time, you can head over to JamLegend, where you can play along with “Ticket to Ride” or any other song, for free.

What’s the catch? Well, there are a bunch: For instance, you need to own whatever song you want to play, and you’ll have to upload a copy of the tune (in MP3 form) to JamLegend, which will store up to five songs at a time.

And JamLegend is no Rock Band–instead of a high-end console game featuring “real” fake instruments and expensive animation, it’s a relatively crude Web game you play with a keyboard.

Oh. And the “play your own music” feature the company is promoting today could end very soon, maybe even today. The year-old start-up hasn’t run the idea by the big music labels–Warner Music Group (WMG), Sony (SNE), Universal Music Group and EMI–and odds are that at least one of them is going to growl about this.

If they do, says CEO Andrew Lee, he’ll back down fairly quickly. “The music industry has reached a point where they don’t always send out a cease & desist [letter] whenever anyone tries something,” he says. “But if they do send out a C&D we’ll definitely abide by it.”

But give Lee and his two-co-founders credit: This is a smart stunt that should get their year-old start-up some well-deserved attention. And it makes a fine point, too–there’s no reason you shouldn’t be able to play Rock Band, Guitar Hero, or any of the many knockoffs with music you own.

Especially in the form that Lee is doing it: While JamLegend offers a multiplayer game, the only way you can only play with your uploaded songs is by yourself. There’s no “sharing” going on here. And in the end, that’s really not going to be that much fun; the whole point of these games, as far as I can tell, is to play them, karaoke-style, with a bunch of your pals (drinking doesn’t hurt, either).

Lee acknowledges this and says he’d be happy to work out something with the labels that lets him expand the use of their music. That’s already happened, on an ad hoc basis: A handful of the 600 songs his game features come from little-known artists signed to Sony and Universal, whose promotional staffs have asked JamLegend to incorporate the tunes.

But Lee says that when he’s talked to the labels about wide-ranging pacts in the past, he’s been told he doesn’t have enough reach or money to cut a deal. He has about 800,000 unique monthly users, and the three-person company, sprung from Washington, DC-area incubator LaunchBox Digital, has raised about $500,000 in angel funding. Let’s see if his bid for attention changes that.

Meanwhile, if you haven’t seen what the Beatles edition of Rock Band looks like, take a gander here. Personally, I find these uncanny valley renderings unpleasant, but I’m probably not the target demo for this stuff anyway. And great songs are great songs, so maybe it will do as well as everyone hopes.

(Happy Birthday, Ben!)

The Pali Capital researcher has rethought his prediction for Viacom’s 2010 U.S. ad sales and now says they’ll drop by three percent. He previously estimated an increase of two percent.

His logic is straightforward: The cable network conglomerate (MTV, VH1, Comedy Central, etc.) has had a hard time hanging onto viewers, and advertisers are following suit. Greenfield:

The risk to our estimates has increased substantially… particularly with Viacom’s ratings remaining mostly down year-over-year during Q3 qtr-to-date… If Viacom is able to turn its ratings positive over the next couple of quarters and the economic rebound begins to meaningfully impact cable network industry ad spending, Viacom could conceivably grow ad revs in calendar 2010 (as we had been forecasting), however, that feels aggressive.

The answer shouldn’t be a surprise, but somehow the performance Gamestop reported this morning managed to catch Wall Street off guard anyway.

The company’s revenue of $1.74 billion was in line with estimates, but earnings of 23 cents a share missed consensus by five cents. More worrisome is that the company had to knock down its guidance for the rest of the year and says that comparable store sales will be down between four percent and eight percent through 2009. Now Gamestop (GME) shares are trading down five percent in a flat market.

Did I mention that this shouldn’t be a surprise? Game sales, once thought to be immune to the recession, have been slumping for months. Turns out that a tough economy may indeed prompt more gamers to huddle in the basement in front of their Xboxes, but it won’t prompt them to buy new games (used ones may be a different story).

Gamestop says it’s still optimistic that coming games, like yet another Call of Duty sequel from Activision (ATVI) and yet another version of Halo from Microsoft/Bungie (MSFT), will help perk things up. But I’m interested to note that the company didn’t cite the new Beatles version of Rock Band, from Electronic Arts (ERTS) and Viacom’s (VIA) MTV as a catalyst.

By the way, for fantasists who persist in pretending that the Beatles are coming to iTunes at Apple’s (AAPL) event next month: Stop! It’s not true.

Alas, you’ve got no choice but to remember that last part. It has disappeared from the Web, apparently at the behest of Major League Baseball.

Stewart dissected the media hubhub about Obama’s pitch–and in particular Fox News’s analysis of it–on his July 15 show. But if you watch the archived version of that show at Viacom’s (VIA) “Daily Show” Web site, you’ll find that the bit has been cut out of his opening monologue. It once ran for two minutes and 43 seconds, but now the archive stops short at the 55-second mark.

And if you try to watch that episode on Hulu, the Web site owned by News Corp. (NWS), GE’s (GE) NBC and Disney (DIS), you’ll find that it’s gone altogether, replaced by a message blaming “rights issues” (click image to enlarge):

What happened? The story, via Viacom officials, is that pro baseball officials contacted them this week and told them to take down the Obama footage, which it owns.

The argument, I’m told, is that the MLB was fine with Stewart (and every other TV show in the country) using the clip under “fair use” terms–the footage itself was a news story, and Stewart was adding value via his commentary, etc. But it balked at the notion of the footage remaining in Viacom’s archives, and circulating on the Web, forever.

None of that makes any sense, of course: There’s no reason that Stewart’s use of the clip should be okay, but only for a limited time. And if Viacom wanted to spend time fighting MLB on this, it certainly could have.

But presumably, the company figures it wants to use its legal resources elsewhere–like fighting the never-ending copyright lawsuit it filed against Google (GOOG) and YouTube. Remember that one?

In any case, I’ve reached out to MLB to make sure I’m not missing anything here. And of course, you can still find all sorts of footage of the pitch, along with other anchors making fun of it, all over the Web. Like this one:

Here’s an edited version of the beginning of the July 15 episode of the “Daily Show.” Before you click on it, note the title of the clip, and it’s original running time.

I’m told that an edited version of the show will show up on Hulu again later tonight or on Thursday.

So says Viacom’s MTV, which reached that conclusion after testing various ad units in more than 50 million video clips it ran across its various sites. Viacom (VIA) says the intro-and-overlay package works best for advertisers’ “brand lift,” which it defines via metrics like unaided awareness, aided awareness and purchase intent.

And, it insists, customers like it, too! You can see an example at the bottom of this post, as well as a schematic that shows the order and timing of the ads.

This isn’t necessarily groundbreaking stuff: Overlays combined with another ad message have been popular with advertisers for some time. And when a company that makes its money selling ads boasts about how great its ads are, it’s best to accept those claims with just a pinch of reserved skepticism.

But these kinds of studies and promotions are taken seriously within the ad business, and Web publishers of all sorts are eager to find new ad formats (see–or try to ignore–the new ginormous ads rolling out this summer).

Meanwhile, as MediaPost notes, Publicis’s VivaKi is working with video providers, including Hulu, CBS (CBS), Microsoft (MSFT) and Yahoo (YHOO), to produce its own “killer ad unit,” which is expected to debut next year. And Google’s (GOOG) YouTube, which once avoided ads like the plague, is now trying every possible combination it can find.