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The business behind the show

ESPN lands new 3-D channel on Comcast cable systems

May 12, 2010 |  6:53 am
ESPN3D

The nation's largest cable operator, Comcast Corp., has jumped on the 3-D bandwagon.

Comcast is expected to announce Wednesday that it will offer ESPN 3D when it launches June 11 with coverage of the 2010 FIFA World Cup. The new network has pledged to carry a minimum of 85 live sporting events in its first year, including college football's Atlantic Coast Conference championship game and the 2011 BCS National Championship Game.

ESPN announced its 3-D plans at this year's Consumer Electronics Show and worked with Comcast on delivering a 3-D broadcast of the Masters Golf Tournament. Comcast subscribers who want ESPN 3D will have to pay a little extra for it as it will likely be on a specialty tier. Eventually, as more 3-D channels emerge, cable operators will likely create a package just of networks that require special glasses.

"We delivered the first live national 3-D sports event to consumers' homes earlier this year with the Masters tournament and believe that 3-D sports will drive the adoption of this technology and continue to revolutionize how we deliver entertainment," said Comcast Chief Executive Brian L. Roberts, in a statement.

The network has a reputation for being among the early adopters of new technologies. ESPN launched a high-definition channel in 2003 as awareness of the technology had reached most American consumers and prices of the new sets had begun to decline.

"This agreement demonstrates ESPN's and Comcast's shared commitment to bring the latest viewing experience to sports fans," said ESPN and ABC Sports President George Bodenheimer in a statement.

This time around, ESPN was motivated by two factors: the breakthrough box-office performance of the 3-D film "Avatar," which indicated the viewer acceptance for a type of filmmaking that had been disparaged as gimmickry; and the desire of television manufacturer Sony Electronics to bring 3-D screens into the home. Sony is an official sponsor of the network.

ESPN has been refining techniques for broadcasting live sporting events in 3-D and determining the proper camera angle to maximize the effect. The network is showing off its 3-D broadcasts on the floor of the cable show this week in Los Angeles.

-- Dawn C. Chmielewski

Photo: Pittsburgh Steelers wide receiver and Super Bowl XLIII MVP Santonio Holmes, left, checks out the new ESPN 3-D television technology, alongside Anthony Bailey, vice president of the ESPN Emerging Technology group, at the ESPN Wide World of Sports Complex at Walt Disney World Resort. Credit: Todd Anderson / Disney/Getty Images


VOD is on the rise but cable industry consensus on other platforms isn't

May 11, 2010 |  4:41 pm

A $30-million-dollar campaign hyping video-on-demand (VOD) is paying off, according to a senior industry executive.

Kevin Tsujihara, president of Warner Bros. Home Entertainment Group, said the movie studio has seen a 35% increase in buy rates of movies on VOD since the cable industry and several major studios teamed up on the marketing effort. Tsujihara made the remarks during a session at the National Cable & Telecommunications Association convention in Los Angeles Tuesday.

"This is a meaningful contributor to the profitability of the movies," Tsujihara said.

The importance of growing VOD was one of the few things a panel composed of cable operators, programmers, a studio executive and a video gamer could agree on.

Though lots of cable programmers want to put their content online, Discovery Communications Chief Executive David Zaslav still isn't convinced that is such a smart move.

"This jump to put long-form content on all these platforms doesn't make business sense or common sense," Zaslav said, adding that putting episodes of shows on Hulu or elsewhere "diminishes the overall value" of cable TV to viewers. He got a round of applause from the audience of cable executives for that one.

The presidents of cable operators Time Warner Cable and Cox Communications both stressed the need to make content available on broadband -- provided they don't have to pay programmers extra to do that.

"Consumers would like to pay once for things," said Time Warner Cable's Glenn Britt. Cable operators would also like to pay once for things. But not all cable programmers feel that way. Walt Disney Co., parent of ESPN, Disney Channel and ABC Family, has made some waves for hinting that it wants cable operators to pay extra to offer its channels on broadband.

Britt also warned of getting too excited about the potential of the latest gadgets.

"We have a way of over-complicating things ... Every time we see a new screen or technology we think it's a new business."

-- Joe Flint


Electronic Arts back in the black with Bad Company

May 11, 2010 |  3:54 pm

Battlefield Bad Company 2

Electronic Arts snapped a three-year string of losses by posting a profit on higher sales its fourth quarter, fueled by sales of Battlefield: Bad Company 2, Mass Effect and Dante's Inferno.

Sales shot up 14% to $979 million in the quarter ended March 31, shifting the game publisher to a $30-million net profit compared with a $42-million loss a year earlier. It earned 9 cents a share, up form a loss of 13 cents last year.

Could the embattled video game industry be headed for better days? After hitting the skids in 2009, several game companies joined EA in reporting relatively decent quarters. THQ last week said its quarterly losses narrowed as sales grew 16%, while Activision Blizzard Inc. on Thursday said its first quarter profits doubled and sales soared 33%.

“The game industry is starting to emerge from a dark period and is now showing good signs of life,” said Michael Pachter, analyst with Wedbush Morgan Securities.

John Riccitiello, who vowed to cut costs and publish "fewer bigger hits" when he was appointed chief executive of the Redwood City, Calif., company in February 2007, on Tuesday said EA delivered on that promise with 20 titles that scored 80 or more points out of a possible 100 according to Metacritic, a site that averages game reviews across multiple publications.

"EA has turned a corner," Riccitiello said in a conference call with analysts. "We are rebuilding EA's reputation with consumers."

Wall Street, however, was not impressed. Investors drove EA's shares down more than 4% to $18 in after-hours trading following the earnings release. It had gained 56 cents to close at $18.80 earlier in the day.

"They put up solid results," said Todd Greenwald, an analyst with Signal Hill Capital Group who said analysts predicted even bigger profits. "But the expectations were pretty high."

-- Alex Pham

Photo: Screen shot of Battlefield: Bad Company 2, which has sold 5 million copies since launching on March 2. Credit: Electronic Arts


Disney revenues, net income rise as film studio improves

May 11, 2010 |  1:40 pm

Alice Walt Disney Co. reported a 6% increase in revenues and 55% growth in net income for the three months ended April 3 as a significant improvement at its film studio outweighed continued softness at its theme parks.

In total, the Burbank-based entertainment giant reported net income of $953 million on revenue of $8.58 billion, up from $613 million on $8.09 billion in the same quarter a year ago.

Walt Disney Studios, which had a tough 2009 with several major box office disappointments, reported a 7% jump in revenue to $1.54 billion and grew its operating income to $223 million from $13 million a year ago. The company said the jump in operating income was primarily due to higher theatrical revenue from the box office hit "Alice in Wonderland," which was released March 5 and has grossed a total of $960.4 million worldwide.

The company also reported a $71-million restructuring charge that it said was primarily related to the closure of a studio production facility, believed to be director Robert Zemecki's ImageMovers Digital, which was shuttered in March.

Those looking for improved performance at Disney's theme parks as a sign of economic recovery were disappointed, however, as the division reported a 2% increase in revenue to $2.45 billion and a 12% drop in operating income to $150 million. It's the seventh consecutive quarter during which operating income has fallen in Disney's theme parks division. The company said that attendance fell while average guest spending increased.

Growth at powerhouse sports network ESPN drove a 9% increase in Disney's cable networks revenue to $2.4 billion and a 3% increase in cable operating income to $1.18 billion. The ABC broadcast network and television production studio saw revenue grow just 1% to $1.43 billion while operating income plummeted 24% to $123 million, which the company blamed on lower advertising revenue and higher costs. ABC has seen ratings fall this season.

Consumer products revenue was up 20% to $596 million and operating income surged 37% to $133 million, which the company said was in part due to new merchandise from its acquisition of Marvel Entertainment and to the upcoming release of "Toy Story 3."

At Disney's interactive media division, which includes video games and online content, revenue increased 20% to $155 million and operating income swung from to $61 million from a loss of $55 million in the previous year. That improvement included higher subscription revenue from Disney's Club Penguin online games for kids.

Disney stock closed up 1% at $34.76 before financial results were released.

-- Ben Fritz

Photo: Mia Wasikowska in "Alice in Wonderland." Credit: Walt Disney Studios.


Comcast CEO Brian Roberts says cable gets bum rap and he likes 'Californication'

May 11, 2010 |  1:13 pm

The chief executive of the nation's largest cable company says the industry gets a bad rap.

"I think cable has been under-appreciated for its contribution to society," Comcast Corp. Chief Executive Brian Roberts said during an interview Tuesday with former News Corp. President Peter Chernin at the National Cable & Telecommunications convention here in Los Angeles.

ROBERTS "We're the industry people always love to hate," Roberts said. He added that his father, Comcast founder Ralph Roberts, had been pushing for Comcast to put bumper stickers on all its trucks that said "I love cable." Brian Roberts said he wasn't sure he was ready to try that marketing approach, perhaps out of fear of ending up with a bunch of trucks being vandalized. "We need to learn from the content industry how to market," Robert said. That said, "there is not any real evidence" of consumers cutting the cable cord in favor of the Internet," he said.

As Comcast tried to close a $30-billion deal to take control of General Electric Co.'s NBC Universal, which would catapult the family-run company into the top echelon of media companies, Roberts kept much of his remarks focused on how the company was trying to better serve its customers opposed to its plans to merge its vast distribution platforms with NBC Universal's array of cable networks including USA, Bravo, CNBC and MSNBC.

With heat from Washington about what the merger of the country's most powerful cable company with a content giant would mean to consumers, Roberts opened his session with an impressive display of Comcast's latest on-demand capabilities that will offer subscribers as many as 11,000 movies available on-demand. The test markets are -- appropriately enough -- its hometown of Philadelphia and the nation's capital, where the lawmakers and regulators who will decide the fate of the Comcast-NBC deal reside.

Hollywood is starting to play ball with Comcast regarding offering movies on-demand at the same time they come out on DVD. Roberts said that in 2007 about 13 movies were offered on-demand the same day as their DVD release, but last year that number had grown to more than 100.

During his interview with Chernin, Roberts said the cable company did not have plans to "Comcastize" NBC and reiterated that plans to invest in the NBC properties, something that current parent General Electric has become less willing to do over the past few years. Cherin, Roberts reminded his interviewer, had himself told the Comcast chief executive, "don't do this deal if you can't fall in love with NBC." 

Chernin tried to get Roberts to squirm a little by asking him what he would do if MSNBC personality Keith Olbermann started bashing Republican senators during a sensitive time for the company in D.C. or if  Universal Pictures released a controversial religious movie. Roberts didn't play along but did stress the importance of keeping NBC News free from corporate interference.

"The single most awesome asset that comes from this deal is NBC News," he said, adding, "NBC News will help define Comcast."

Roberts said he hopes Comcast's leadership of NBC will perhaps even slow the exodus of big programming events to cable. If that sounds strange coming from a cable company executive, it also highlights the tricky road Roberts is on as both head of a cable giant and a broadcasting legend. For example,the cable operator in him doesn't want to pay broadcasters to carry their signal, but when he has his broadcasting hat on he will ask other cable and satellite distributors to pay to carry NBC stations. "Broadcast is going to have another revenue stream."

Roberts seemed to be caught a little flat footed when Chernin asked what his favorite TV shows and movies were. Like many busy media executives, Roberts either doesn't have time to actually watch much of the content his company pumps into almost 25-million homes or he doesn't want to risk offending anyone. He did surprise some in the audience by finally acknowledging that he and his wife enjoyed Showtime's rather racy drama "Californication."

That might be a little TMI.

-- Joe Flint

Photo: Comcast CEO Brian Roberts. Credit: Matt Rourke / Associated Press


The Morning Fix: Cable comes to town! Berney bails on Apparition. NBC's cable queen.

May 11, 2010 |  6:36 am

After the coffee. Before going to hear Brian Roberts and Peter Chernin.

The interpreter. That's how Bridget Baker, NBC Universal's president of TV Networks distribution, describes herself. She's the one who gets cable and satellite distributors to carry NBC's cable properties and swallow the fees that go with that. She also probably has worked more closely with Comcast, the cable giant trying to buy NBC Universal, than anyone else at the company. Los Angeles Times' scribe Meg James takes an in-depth look at the woman who knows all the secrets of NBC's cable operations.

CTlogosmall Tipping points. The cable industry will be gathering in downtown Los Angeles for the next three days, where they will focus on programming, politics and their own future. Broadcasting & Cable takes a look at the state of the industry, including how cable is making its mark in snagging must-see programming (or at least what it thinks will be must-see programming). Broadcasters, warns writer Melissa Grego, need to step up their own programming if they are going to keep trying to squeeze (our word, not hers) fees from cable and satellite distributors to carry their signals. 

Berney bails. In a surprise (which means reporters didn't see it coming), Bob Berney resigned as head of the indie movie company Apparition. If he meant to time his exit to mess up Apparition than he did a good job since the move comes on the eve of the Cannes Film Festival. Deadline New York's Mike Fleming had the scoop. For some cutting analysis on Apparition, here's the take from Hot Blog's Dave Poland.

Will "Robin Hood" reward or just rob? The Wrap's Sharon Waxman takes a look at what is at stake for Universal Pictures (which has had a tough go of it lately) with "Robin Hood," which has some pretty big costs associated with it (and we don't just mean the shrink bills for everyone who had to work closely with Russell Crowe). Speaking of movies we've seen before, the Daily Beast's Peter Lauria looks at our summer of sequels and what it will mean for summer box office. For me, it means time to catch up on all those episodes of "Lost" I never watched.

Plop them in front of the TV. USA Today looks at the booming marketplace for kids' programming. There are now almost 10 networks chasing after kids, but are there enough dollars (and quality content) to support the number of channels? I'll go with no. Ever wonder what some kid stars pull in? Monday's New York Post offered up a list who's pulling the most dough. I found the numbers for Miley Cyrus to be a little low, but then again she does work for Disney.

Inside the Los Angeles Times: Patrick Goldstein on Nicole LaPorte's new tome about DreamWorks. An appreciation of Lena Horne.

-- Joe Flint

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Bob Berney unexpectedly exits Apparition

May 10, 2010 |  7:23 pm

Berney Less than a year after launching his new independent distribution company Apparition, Bob Berney has unexpectedly left the company.

Berney's partner Bill Pohlad, whose wealthy family has financially backed the company, informed Apparition staff of Berney's sudden resignation in an e-mail Monday, a studio spokeswoman confirmed.

"I suspect that this news comes as a surprise to many of you," he wrote. "It certainly did to me."

Berney could not be reached for comment.

The news was first reported on Deadline.com.

Though Apparition had enough funds to begin its work last summer, Pohlad and Berney were still looking to raise more money at the time.

The studio has released five movies in its short life. "The Young Victoria" and "Boondock Saints II" performed fairly well, grossing $11 million and $10.3 million, respectively, while director Jane Campion's "Bright Star" took in just $4.4 million. The highly publicized "The Runaways," based on the band of the same name, was a disappointment with $3.5 million, and satire "Black Dynamite" managed less than $250,000. Thriller "The Square" is currently in theaters and has grossed $218,000 in five weeks.

Berney co-founded Apparition after his previous venture, Picturehouse, was shut down by Warner Bros.

He had been set to head to the Cannes Film Festival this week. It's now unclear what the fate of the studio is.

In his e-mail, Pohlad said that Valerie Bruce, senior vice president of business affairs, will serve as interim chief operating officer for Apparition.

-- Ben Fritz

Photo: Bob Berney, left, with actress Kristen Stewart and business partner Bill Pohlad at the premiere of "The Runaways" in March. Credit: Alberto E. Rodriguez / Getty Images.


News flash: ABC writers get a pay raise

May 10, 2010 |  4:07 pm

Finally some good news at ABC.

The newscasters, production assistants and researchers behind such ABC shows as "Good Morning America" and "World News with Diane Sawyer" are getting a modest bump in pay.

ABC News employees represented by the Writers Guild of America, East voted overwhelmingly in support of a new three-year contract that provides 2% annual pay increases. The contract covers about 250 employees at national and local television and radio programs in New York and Washington, D.C.

In addition, the contract provides a minimum salary and enhanced severance package for writers who produce shows for WABC-TV in New York, and gives ABC "greater flexibility in work assignments in return for improvement job security protections," the guild said in a statement.

The Walt Disney Co.-owned network is shedding 350 to 400 jobs as part of a sweeping overhaul in the way it gathers and produces news.

-- Richard Verrier


Fox and CBS rejoin TV industry's DC lobbying group

May 10, 2010 |  3:40 pm

News Corp.'s Fox and CBS have rejoined the National Association of Broadcasters, the television industry's key Washington lobbying organization.

This will be a big shot in the arm to the bottom line of the NAB. Fox and CBS rejoining will mean more than $1 million in membership fees.

It is also a boost to morale. All four networks -- CBS, NBC, ABC and Fox -- had left the NAB years ago but now all have returned. Of course, with NBC in the process of being acquired by cable giant Comcast Corp., it might not be too long before they leave again.

The decision of Fox and CBS to return is also a feather in the cap of Gordon Smith, the trade association's new president. Smith, who joined NAB a year ago, was had served in the Senate as a Republican from Oregon.

One of the reasons that the big networks left NAB in the past was concern that its interests were clashing with the interests of other local TV stations that the association represented. For example, the big networks have pushed for further relaxation rules limiting the number of TV stations a company can own while many smaller broadcasters have wanted to keep the status quo. 

However there are several big issues facing the industry and the networks are betting that it makes more sense to present a unified front in Washington. Broadcasters are currently gearing up for a battle with the Federal Communications Commission over the spectrum they have been allocated for digital TV. The FCC is asking the broadcasters to return some spectrum for new services but the industry is reluctant. The FCC is also deciding whether to revisit rules that allow broadcasters to charge cable operators to carry their signals.

-- Joe Flint


Icahn delays Lions Gate tender offer for second time

May 10, 2010 |  1:15 pm

Carl Icahn's crusade to take over Lions Gate Entertainment will last at least another 10 days.

The activist investor announced Monday that he is extending his $7-a-share tender offer for the Santa Monica film and television studio until May 21. The hostile offer was originally set to expire April 30 and was then delayed until May 10.

As of 9 a.m. Pacific time on Monday, Icahn said, shareholders have offered to tender fewer than 7.5 million shares, which represents less than 6.5% of the company's outstanding stock. That's a small increase from the approximately 6.5 million shares that had been tendered to Icahn before his offer's original expiration.

Icahn's offer is contingent on his acquiring about 31% of Lions Gate shares, enough to push his total holdings to more than 50%. However, he could relaunch his offer with a lower ownership threshold or higher per-share price. The more shares Icahn has, the greater the pressure he could put on Lions Gate to strike a compromise deal that gives him several seats on the company's board of directors.

Lions Gate responded to the day's news by trumpeting how few shareholders have so far taken up Icahn's bid, which is only 11 cents higher than the stock's Monday closing price of $6.89.

"Lions Gate’s shareholders have demonstrated that they believe the Icahn Group’s offer is inadequate and does not reflect the value of their investment," the company said in a statement. "Lions Gate appreciates the support of its shareholders and encourages all of its shareholders to continue to reject the Icahn Group’s offer by not tendering their shares, and for those who have, to withdraw them."

Before May 21, Lions Gate shareholders will get more clarity on the company's proposed "poison pill" that could block Icahn from substantially increasing his holdings. The proposal has so far been voided by a regulatory body and appeals court in British Columbia, where the studio is legally domiciled.

Lions Gate may petition the regulatory body to reconsider its decision, however, and is going ahead with a shareholders' meeting scheduled for Wednesday to vote on the poison pill.

Management of the studio has been clashing with Icahn, its second-largest shareholder, for more than a year. As part of his hostile takeover bid launched in March, the well-known Wall Street investor has said he would replace top management, including Chief Executive Jon Feltheimer and Vice Chairman Michael Burns, as well as cut overhead and film production costs.

-- Ben Fritz




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