12 November 2010

Newsweek, The Daily Beast to announce Merger on Friday

NY Daily News

Tina Brown to have editorial control

Tina Brown
Will they call it NewsBeast? Or Tinaweek?

Newsweek and The Daily Beast will announce their much-speculated merger on Friday morning, according to a report by former Newsweek senior reporter-turned-New York Observer media reporter Nick Summers.

The new publication will be a 50-50 merger and the editorial staffs will combine, Summers reported late Thursday on the Observer’s website.

Daily Beast Editor and former New Yorker magazine honcho Tina Brown will be in charge of editorial content for the new venture. Brown confirmed the report on Thursday night.

"The union of The Daily Beast and Newsweek magazine finally took place with a coffee-mug toast between all parties Tuesday evening," Brown wrote on her website on Thursday night. "The final details were only hammered out last night."

The publications were in talks to merge last month after Sidney Harman bought the flailing magazine for $1, but fell apart when the two parties couldn't agree on management structure.

"Why in the world would I invest, engage in something like this, and be hands-off?" Harman told New York Magazine shortly after the deal had reportedly fallen through.

That issue became clear to Brown, who didn't seem to like Harman having control over the magazine's content if she was Editor.

"Sidney clearly enjoys coming up with cover ideas and story ideas," Brown told New York.

On October 18, when reports emerged that the talks had fallen apart, Brown addressed the issue in a memo to her staff.

"There's a report on the [Wall Street Journal] now saying we have decided not to go forward in any more conversations with Newsweek," she wrote in an email. "The engagement was fun but the pre-nup got too complex. We wish Newsweek all the best. The Daily Beast is on a tear and any partnership we think about has to build on that incredible growth. Onward and upwards!"

But according to the Observer, the talks never really stopped.

Harman will also have a role in the new project, according to the report, but Brown is slated to have complete editorial independence.

Since Harman bought Newsweek, it has struggled to find an editor as a large portion of its staff fled.

Before talking to Brown in October, Newsweek Editor Jon Meacham resigned.

Harman's first choice, star reporter Fareed Zakaria, fled to Time Magazine.

And when it appeared he couldn't get Brown, rumors flew that Harman had also tried to snag Terry McDonell, Editor of the Sports Illustrated Group. The duo were spotted having lunch last month.

11 November 2010

Man Who Blacked Out World Series Blames Politicians


News Corp.’s Chase Carey, the man who oversaw Fox’s talks with Cablevision Systems Corp. during a two- week blackout, has advice for government officials who want to keep more TV channels from going dark: Stop meddling.

News Corp. last month cut off World Series games and shows including “Glee” to Cablevision’s 3 million customers after the two sides couldn’t agree on how much Cablevision should pay Fox. One problem, Carey said, was that the government wasn’t clear about whether it would intervene, leading Cablevision to think it might get better terms if it held out until the U.S. weighed in.

“This process would have been resolved more easily, more quickly,” said Carey, chief operating officer and second-in- command to Rupert Murdoch. “I would actually contend we wouldn’t have gone off the air at all.”

Clashes between media and cable companies are on the rise as broadcasters such as Fox and Walt Disney Co.’s ABC ask to be paid for programming that used to be free. The number of TV blackouts this year is the most in at least a decade, triggering consumer wrath and lawmaker scrutiny.

Carey, 56, spoke during an interview at News Corp.’s New York headquarters, in a wood-paneled, windowless room barely large enough for an oversized conference table. He said he was eager to clear up what he thinks are misperceptions about the longest blackout for such a large customer group in at least a decade.

“This wasn’t a good experience,” Carey said. “Everybody here found this really painful.”

Kerry’s New Bill

News Corp., controlled by Chairman and CEO Murdoch, fell 5 cents to $14.28 on the Nasdaq Stock Market at 4 p.m. New York time. Cablevision rose 1 cent to $29.33 in New York Stock Exchange composite trading. News Corp. has gained 4.3 percent this year, while Cablevision added 38 percent.

Cablevision, based in Bethpage, New York, declined to make anyone available for comment. A spokesman referred to a conference call last week, when Chief Operating Officer Tom Rutledge said the U.S. Federal Communications Commission should prevent broadcasters from cutting off programming to obtain negotiating leverage.

Senator John Kerry says he plans to introduce a bill when Congress reconvenes next week to keep companies from pulling signals before regulators check for good-faith negotiations. The Massachusetts Democrat is chairman of the communications, Internet and technology subcommittee of the Senate Commerce Committee, which plans to hold a hearing on the issue.

“They’re very high-profile battles because it can turn into the politicians’ constituents losing their TV service,” David Joyce, an analyst with Miller, Tabak & Co. in New York, said in an interview.

‘Not a Nonprofit’

Carey has said Fox needs fees from cable companies, in addition to advertising revenue, to afford marquee events including professional football and baseball games. He’s made subscriber fees a top priority since becoming COO last year, as he strives to return the broadcast network to profitability instead of losing a “few hundred million dollars” each year.

“We’re not running a nonprofit,” Carey said.

Fox and Cablevision reached an agreement Oct. 30 without direct government intervention. Though terms weren’t disclosed, Cablevision called it an “unfair price.” Michael Nathanson, an analyst at Nomura Securities International Inc. in New York, estimates Cablevision will pay Fox about $1 per subscriber a month after a few years.

Carey said he visited politicians in Washington to explain that Fox needs a dual-revenue stream, and to argue that giving Cablevision hope of government intervention encouraged the cable operator to drag out the process.

‘Unfortunate Stalemate’

“As long as they feel they have in places a somewhat receptive audience, it incents them to not resolve this as a business matter but to politicize it,” he said.

At least 50 elected officials sided with Cablevision during the dispute and called for arbitration, the company says. Distributors say they resist paying broadcasters the new fees because they have to pass the costs on to consumers.

“Just because deals are getting signed doesn’t mean that’s going to be the end of the story,” analyst Joyce said.

FCC Chairman Julius Genachowski said in an Oct. 29 letter to Kerry the agency doesn’t have the authority to prevent service disruptions. Congress should revisit current law and examine whether mandatory mediation and binding arbitration could prevent impasses like the “unfortunate stalemate” between Fox and Cablevision, Genachowski wrote.

Kerry’s bill isn’t likely to pass during the post-election session, Andrew D. Lipman, a Washington-based partner with the law firm Bingham McCutchen LLP, said in an interview.

Republican Reluctance

Newly elected Republicans “are going to be less willing to insert government into disputes between cable providers and broadcasters,” Lipman said.

Carey used to be on the other side of the negotiating table. Before returning to News Corp. in mid-2009, he was chief executive of DirecTV, the largest U.S. satellite-television provider. He said broadcasters were “delinquent” in the 2000s for not addressing their faltering business models and not seeking payments from pay-TV operators.

Now that Fox has deals locked up with its four largest distributors, the network is on the path to profitability, Carey said.

Carey said he understands that politicians want to reassure their constituents and show they’re taking action. The problem is that such actions are often counterproductive, he said.

“You’re going to bastardize every negotiation because you’re going to have this specter of arbitration,” he said.

Food Network, HGTV among Channels removed from AT&T U-verse Menu

Chicago Tribune

Millions of AT&T Inc.'s U-verse video customers lost access to the Food Network and HGTV after it couldn't reach a deal with Scripps Networks Interactive Inc. over distribution fees.

AT&T pinned the blame on Scripps, saying in a statement Friday that the programming provider "won't provide a fair deal for AT&T customers" and is "punishing viewers for leverage in programming negotiations."

But Scripps Networks, which also owns the Cooking Channel and DIY Network, claims Dallas-based AT&T refused an extension of the contract, which expired early Friday.

AT&T had 2.7 million U-verse subscribers at the end of the third quarter. The company said U-verse is available to more than a million households in the Chicago area.

Tribune Co., parent company of the Chicago Tribune, owns a stake in the Food Network and Cooking Channel.

The number of programming blackouts this year between content owners and distributors has escalated to the highest level in at least a decade. TV providers, like AT&T, are trying to stem rising programming costs, which are typically passed on to consumers, in a weak economic environment. Programmers are trying to maximize their distribution and content fees.

AT&T said Scripps is demanding it pay more than double what its competitors pay for the same programming.

Scripps denies the claim, saying the "impasse is not about money" and that the two parties came to an agreement in principle before their deadline.

"We are shocked and disappointed that AT&T would rather deprive its customers of fan favorites" than "continue to negotiate in good faith," Scripps said in a statement Friday.

The president of the Food Network also expressed disappointment over Friday's developments.

"This came out of left field," Brooke Johnson told the Tribune. "We had reached an agreement on economics," she said, referring to the fees that U-verse would pay to air the channels on television and as part of its video-on-demand service.

Scripps said it had asked for more time to negotiate the use of video in new media.

"We mutually agreed on two (negotiation) extensions, and we had offered to even extend the previous terms until the end of the year," Johnson said.

The problem, Johnson said, is that Scripps did not want to sign away rights to its programming on various non-TV platforms without specifics from U-verse.

"They are asking for broad, unlimited distribution on nonlinear platforms that go well beyond emerging media technologies," Johnson said.

A spokesman for AT&T declined to comment further, referring the Tribune to its earlier statement: "We've been working for weeks to reach a fair deal, but they didn't hold up to what had been agreed upon verbally, leaving us without the rights to offer these channels.

"We apologize to our customers who've been affected by this. We want to keep these channels on, at a fair price for you."

Increased use of video on the Web and mobile platforms represents new territory for programmers like Scripps and providers like U-verse. While Internet video services like Hulu and Netflix Streaming have wide popularity, their offerings are typically not comprehensive.

As for where this leaves consumers, Johnson said, "Our request is to turn on (the channels) and go back to the negotiating table."

08 November 2010

MSNBC says Olbermann will be back on Air Tuesday

Associated Press

MSNBC says Keith Olbermann will be back on the air Tuesday, ending his suspension for violating NBC's rules against making political donations after two shows.

MSNBC's chief executive Phil Griffin said late Sunday that after several days of deliberation, he had determined that two days off the air was "an appropriate punishment for his violation of our policy."

The left-leaning cable network's most popular personality acknowledged donating $2,400 apiece to the campaigns of Kentucky Senate candidate Jack Conway and Arizona Reps. Raul Grijalva and Gabrielle Giffords. NBC News prohibits its employees from making political donations unless an exception is granted in advance by the network news president. In this case, Olbermann's bosses didn't know about them until being informed by a reporter.

"We look forward to having him back on the air Tuesday night," Griffin said in a statement.

Liberal groups had taken on Olbermann's suspension as a cause. An online petition calling for his reinstatement, run by the Progressive Change Campaign Committee, had exceeded 300,000 signatures Sunday, and Michael Moore had tweeted his support. The committee's Adam Green said Griffin was repeatedly e-mailed updates on the petition drives.

"Progressives proved that when one of our own are targeted, we will have their backs," he said.

Left unanswered is the question of why Olbermann would do something he undoubtedly knew would be provocative, or whether he was trying to make a statement against NBC's policy. He did not immediately return an e-mail message seeking comment Sunday.

On his Twitter page, Olbermann wrote: "Greetings from exile! A quick, overwhelmed, stunned THANK YOU for support that feels like a global hug."

The incident raised questions about how long-standing rules designed to preserve the appearance of objectivity for news organizations fit at a time that cable news networks, most prominently Fox News Channel and MSNBC, have increased their popularity through prime-time programs that dispense with any notion of impartiality.

"What we've seen in the last five years is the rise of these personalities that eclipse the journalism that these organizations do," said Kelly McBride, ethics group leader at the Poynter Institute journalism think tank.

Many mainstream news organizations take these rules dead seriously. National Public Radio subjected itself to some teasing this fall when it issued a memo forbidding its personnel from attending comic Jon Stewart's rally in Washington last month, but NPR didn't want reporters seen at an event that some people could interpret as political, unless the reporters were covering it.

Olbermann's fans note that he's made no secret of his support for Democrats on his prime-time "Countdown" show. So why should he be suspended for putting his money where his mouth is?

His prime-time MSNBC colleague, Rachel Maddow, said on her show Friday night that Olbermann should be reinstated. Her bosses were told she'd be saying that before going on the air, however.

McBride said she wouldn't be surprised if some news organizations drop these rules in the next few years, or at least carve out exceptions for certain personalities. Fox News seems to have effectively done this. Prime-time host Sean Hannity made a $5,000 donation to Minnesota Republican Rep. Michele Bachmann's PAC this summer; Fox says he's a conservative talk show host, not a journalist. Part-time commentators the network has hired like Karl Rove and Sarah Palin continue their political work while drawing pay from Fox.

"It's getting harder and harder to draw the lines in general," McBride said. "The public doesn't spend a lot of time differentiating between commentators and journalists."

Yet the principle of journalistic independence is more important now than ever, said Bob Steele, director of the Prindle Institute for Ethics at DePauw University in Indiana.

Prime-time opinion hosts are journalists as well as commentators, Steele said. They host news programs, make decisions on what stories to emphasize, what guests to bring on, and what questions are asked, he said.

"There's a huge difference between having a belief and becoming an activist," he said, "and when you contribute to a campaign with your money or your energy, you're an activist."

Donations to some Democratic candidates by a commentator who clearly supports Democrats may seem simple. But why these candidates in these states and not others? What if these candidates get involved in primaries?

In other words, it can get messy.

Griffin's statement about Olbermann's return said nothing about any changes to NBC's rules.

For NBC News, there's also the risk of having its journalists associated with activist hosts. Olbermann and Maddow are clear in their opinions on MSNBC, but veteran NBC journalist Andrea Mitchell hosts a daytime hour on the network. So do White House reporters Chuck Todd and Savannah Guthrie.

The question of whether MSNBC is an opinion network or news network seemed particularly hard to answer on election night. In the 2008 political season, MSNBC went back and forth between having Olbermann serve as a news anchor or commentator on nights of big political news; on election night this year, Olbermann was one of the hosts. Chris Matthews was an anchor, too, and he put some tough questions to GOP guests like Bachmann. But beyond asking tough questions, he wondered aloud whether Bachmann was under "hypnosis," and some of MSNBC's personalities were heard laughing at their guests' responses.

Some journalists may also get mixed signals when they see corporate overseers active in political campaigns. Fox's parent News Corp. donated $1 million to the Republican Governors Association this summer. Steele noted there's a long tradition of political activism among owners of news organizations in this country.

Beyond the decision on Olbermann's future, some broader thinking on these issues appears in the offing.

"I would really struggle if I were running one of these organizations to figure out where the journalism fits in," McBride said. "It's obvious that journalism still has some role in these organizations, but it's not sure where it figures in anymore."

06 November 2010

Report: Apple to Increase iTunes Song Previews to 90 Seconds

PC Mag

Apple will extend the song preview length on iTunes from 30 seconds to 90 seconds, according to Mashable.

The additional preview time will apply to songs that are longer than 2 minutes and 30 seconds.

Apple has informed music labels of its plans. "We are pleased to let you know that we are preparing to increase the length of music previews from 30 seconds to 90 seconds on the iTunes Store in the United States. We believe that giving potential customers more time to listen to your music will lead to more purchases," the company said in its letter.

Apple did not provide a timeline for when this might happen. As of Wednesday morning, the top songs on iTunes were still providing 30-second previews.

Apple did not immediately respond to a request for comment.

Reports of extended Apple iTunes previews most recently made the rounds in August when the blogosphere was trying to nail down what Apple might announce at its September iPod event. At the time, CNet reported that Steve Jobs would extend iTunes previews from 30 seconds to 60 seconds, but that didn't happen. CNet later said that the National Music Publishers Association told Apple that it needed to negotiate with music publishers, not just record labels, if it wanted to implement such a feature.

05 November 2010

News Corp. Profit Rises on Higher Ad, Subscriber Fees


News Corp., the owner of Fox News and the Twentieth Century Fox film studio, said first-quarter profit rose 36 percent because of higher advertising and subscriber fees at its television channels.

Net income climbed to $775 million, or 30 cents a share, from $571 million, or 22 cents, a year earlier, the New York- based company said today in a statement. Excluding a tax benefit, earnings were 27 cents a share. Analysts on average estimated 24 cents, according to Bloomberg data.

Profit was driven by increases in the TV and publishing advertising markets. The company is also wringing higher fees out of television distributors for its broadcast and cable channels. Last week, Fox secured new deals with Dish Network Corp. and Cablevision Systems Corp., which agreed to pay what it called an “unfair price” to end a programming blackout.

“These deals are critical to driving the Fox network’s financial success to reflect its real value,” News Corp. Chief Operating Officer Chase Carey said today on a conference call. “Over the next couple of years as we continue to close new agreements we will be taking this business to a whole new level of profitability.”

Chairman and Chief Executive Officer Rupert Murdoch wasn’t on the call because he’s been traveling overseas, the company said. The last time he skipped an earnings call was November 2006, Bloomberg data show.

Sales in the first quarter ended Sept. 30 gained 3.2 percent to $7.43 billion, compared with the $7.41 billion average of 11 analysts’ estimates compiled by Bloomberg.

Case Closed

News Corp. rose 38 cents, or 2.6 percent, to $15.22 in late trading after U.S. markets closed. The Class A shares gained 23 cents to $14.84 today in regular Nasdaq Stock Market trading and are up 8.4 percent this year.

Cablevision and News Corp. resolved their dispute Oct. 30, after Fox broadcast stations and some Fox cable channels had been cut off to 3 million customers for two weeks. It was the longest blackout of a major broadcast network for a million or more people in at least a decade, and may signal media companies are gaining the upper hand in seeking payment for over-the-air telecasts that used to be free.

News Corp. is turning to so-called retransmission fees after advertising sales took a hit during the U.S. recession. Fox has also seen viewership fall, 16 percent among viewers 18 to 49 in the first six weeks of the TV season, threatening its six-year run as the ratings leader.

Cablevision and Dish probably will pay 55 cents per subscriber per month in the first year, rising to $1 in the fifth year, analyst Michael Nathanson of Nomura Securities International Inc. estimated in a Nov. 1 report.

TV Profit

Operating profit for the television unit more than doubled as a 22 percent jump in local-station ad revenue offset higher programming costs at the Fox broadcast network.

The cable networks, such as FX, increased operating income 28 percent to $659 million, on a 17 percent gain in revenue. At the U.S. channels, advertising grew 16 percent and affiliate fees rose 14 percent.

As part of Murdoch’s efforts to add to subscription operations, the company is bidding for the 61 percent of pay-TV operator British Sky Broadcasting Group Plc it doesn’t already own. In June the biggest U.K. pay-TV operator rejected News Corp.’s buyout offer of 700 pence a share, or 7.8 billion pounds ($12.5 billion). BSkyB’s independent directors are seeking more than 800 pence from News Corp.

Today, News Corp. formally asked for approval from European Union antitrust regulators, which set a Dec. 8 deadline for reviewing the BSkyB transaction. U.K. regulators may still decide to raise objections.

Box Office

During the quarter, the film studio generated $243.6 million at the box office with its top release being “Predators,” according to Box Office Mojo. That compares with $333.8 million a year ago when “Ice Age: Dawn of the Dinosaurs” was released.

Film operating income fell 28 percent to $280 million.

Advertising increased an average of 13 percent at the company’s newspapers around the world, including the Wall Street Journal and the Times of London. Publishing operating profit was up 51 percent to $178 million.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. and its Dow Jones division in providing financial news and data.

04 November 2010

Red Bull’s $675 Million F-1 Spree Helps Top Ferrari


Red Bull GmbH leads Formula One brands including Ferrari SpA in television exposure after spending more than $675 million in five years, research shows.

The energy drink maker, its logo emblazoned on four racing cars, got 4 hours, 27 minutes of TV airtime at the first 15 races this season compared with about 52 minutes for Ferrari, research by Guildford, England-based Margaux Matrix Ltd. found. Only series sponsor LG Electronics Inc., with almost 11 hours, had more coverage.

Red Bull spent an average $135 million a year on its main Milton Keynes, England-based team since 2005, according to company filings in the U.K. by Red Bull Technology Ltd., allowing it to rely less on sponsorship from other companies to cover costs, said Mick de Haas, a motor sports sponsorship consultant who has advised ING Groep NV.

“Red Bull is a brand that’s still emerging and it’s looking for as much publicity as possible,” De Haas said. “It’s all over the place.”

Fuschl am See, Austria-based Red Bull also runs a second team, Toro Rosso, and last year had a deal with Kimi Raikkonen under which the former champion drank from a branded Red Bull bottle when racing for Ferrari. Red Bull said in an e-mail it spends “30 to 40 percent” of company sales on marketing, including F-1 expenditure. It had net income of 123.1 million euros on sales of 1.85 billion euros last year, according to a filing with the Austrian company register.

Market Share

Closely held Red Bull was the 7th biggest maker of soft drinks last year, with 0.7 percent of the American market, according to industry journal Beverage Digest. While volume in the U.S. total soft drink industry declined 2.1 percent, Red Bull’s rose 1.2 percent. Red Bull sold about 4 billion cans of its energy drink last year, and plans to increase volume by more than 10 percent this year, Chief Executive Officer Dietrich Mateschitz told the Sonntag newspaper.

It purchased Ford Motor Co.’s unprofitable Jaguar Racing team in 2004 to enter Formula One. Its sports portfolio includes soccer’s New York Red Bulls, while it sponsors Olympic downhill champion skier Lindsey Vonn among other athletes.

In the racing series, Red Bull’s Mark Webber trails championship leader Fernando Alonso of Ferrari by 11 points ahead of the Nov. 7 Brazilian Grand Prix, the second-to-last race. McLaren’s Lewis Hamilton is 10 points further back, four ahead of another Red Bull driver, Sebastian Vettel.

Ferrari, in Formula One since 1950, doesn’t spend any additional money on marketing, team spokesman Luca Colajanni said by telephone. He declined to discuss team costs. The carmaker said in May it planned to maintain production at 6,000 road models this year.

Limited Market

“Ferrari’s audience is limited” to the high-end car market, De Haas said. It’s in Formula One to associate itself with elite technology, he added.

To be sure, Red Bull ceded space on its racing cars this year as part of “healthy seven-figure deals” with LG and FXDD Malta Ltd., said Zak Brown, chief executive of Just Marketing International, which brokered the deals.

It may come under pressure to sell the Toro Rosso team to reduce costs further, according to Mark Jenkins, a business strategy professor at the U.K.’s Cranfield University who has written about Formula One.

“They’re sinking a lot of money into Formula One,” Jenkins said. “It doesn’t make any sense with the current regulations for Red Bull to own two teams.”

Red Bull said it has no “concrete” plans to sell the squad, whose top-ranked driver Sebastien Buemi is 16th in the championship.

Human Billboards are Signs of the Times

Seattle Times

Imagine this help-wanted ad: "Employee needed to work outside. Smiling and waving required. Dancing encouraged. Bring your headset."

We've all seen one: a person dressed in a costume near a busy street, waving to drivers and usually holding a sign with a deal to a pizza place, hair salon or even a tax service. Many of us have probably never done much more than smile or wave back, which makes a person wonder, does this kind of advertising really work?

Dan Hendrickson of Minneapolis wondered that as he drove by the guy holding an "early bird special" sign outside Jiffy Lube on W. 7th Street in St. Paul.

"Companies seem to be pulling out all the stops to attract business," he said. He hasn't pulled in to Jiffy Lube — out of loyalty to his regular mechanic — but, Hendrickson said, "it makes me root for businesses that try it."

In tough economic times, small businesses try new ways to draw in customers. Many have gone to social networking on Facebook and Twitter and coupon sites such as Groupon, but old-fashioned methods are resurfacing.

They're human billboards, said Glenn Karwoski, managing director at Martin Williams Advertising in Minneapolis. It's a variation on an old marketing strategy, the sandwich board. "But any way you look at it, it's inexpensive outdoor advertising," he said.

The past two years have been especially hard on businesses that sell luxury items such as jewelry, said Crystal Lundquist Mely, co-owner of Park Diamond in Maple Grove, Minn. To survive, she adapted. She moved to a smaller location and when city ordinances wouldn't allow a sign in the window, she took to the streets. Or at least her grandkids did, dressed as fairies in one outing, "Wizard of Oz" characters in another and most recently, a "bride" in a wedding gown wearing a diamond as big as a golf ball, waving to cars driving by on a busy street.

"It triples my traffic when I have my grandkids helping out," Lundquist Mely said.

Jennifer Max, the owner of a Great Clips franchise, said her business more than doubles when she has a pair of scissors near her salon — a 6-foot-tall pair of scissors worn by a woman who snips along busy Weaver Lake Road in Maple Grove. It also doesn't hurt that the scissors sister is holding a sign saying, "Haircuts $6.99."

If on-street marketing works so well, why aren't more businesses doing it? Like any pursuit, not everyone is good at it. The poor schmucks with hangdog faces staring at the pavement don't do much to attract customers. It's the ebullient characters who strut, smile and make us laugh who pull us in.

Briton Tomasko, 18, of Brooklyn Park, Minn., doesn't mind putting on a wedding dress and waving like a member of the royal family to potential Park Diamond customers as long as there are cars driving by. "It gets boring when there isn't anyone to wave to," she said.

The wavers have to be appropriate to the brand, Karwoski said. You probably won't see a person in a robin's-egg blue box dancing in front of the Galleria to coax big spenders into Tiffany's.

Generally, the concept works best for a spontaneous purchase, such as an oil change or a pizza, he said.

Little Caesars on S. Snelling Avenue in St. Paul tries to have a person holding a sign every weekday from 4 to 7 p.m., when people are heading home for supper.

"It's a great marketing tool, and it does work," manager John Ryan said.

What sounds like a great job for class clowns and "So You Think You Can Dance" wannabes isn't as easy as it looks. Turnover is high, according to most small-business owners. The pay is usually minimum-wage, and most wavers don't get commissions, despite the uptick in sales.

On the positive side, breaks are frequent and shifts rarely last more than four hours.

A big ham, Jenny Bagwell, 39, loves putting on the scissors costume for her Great Clips gig. But it was a rocky start.

"You're not seriously going to do this, are you, Mom?" her 20-year-old son asked. "You're going to be slushed," he said, referring to the fate of uncool students on the TV show "Glee."

Not to worry. Bagwell has been the recipient of people blowing kisses out the car window, found herself in the middle of admirers having their picture taken with her and has been invited to join a group of kids for trick-or-treating.

"It's the funnest thing I've ever done," she said.

MGM Studios, Icahn Agree on Bankruptcy Plan

The Wall Street Journal

Metro-Goldwyn-Mayer Inc. filed for bankruptcy-protection Wednesday, cementing a long fall for the iconic Hollywood studio with the roaring-lion logo.

MGM filed a "prepackaged" Chapter 11 bankruptcy in New York that has approval from nearly all its creditors. Creditors last week approved a plan to forgive more than $4 billion in debt for ownership stakes in the restructured studio and turn over management to Spyglass Entertainment co-founders Gary Barber and Roger Birnbaum.

MGM said it anticipates a bankruptcy judge approving its restructuring in about a month, paving the way for a quick trip through bankruptcy court. The studio plans to raise about $500 million upon exiting bankruptcy to fund new films and television shows along with other operations.

Stephen Cooper, a turnaround specialist and co-founder of Zolfo Cooper, will continue to lead MGM during its bankruptcy-court restructuring, the studio said.

MGM had hoped to seek bankruptcy-protection over the weekend but delayed its filing to negotiate with dissident creditor Carl Icahn. Mr. Icahn had offered to buy out other MGM creditors at a premium to upend the vote on the Spyglass restructuring plan but failed to get enough support to block the deal.

Mr. Icahn has been pushing MGM's creditors—led by J.P. Morgan Chase & Co. and hedge funds Anchorage Advisors and Highland Capital Management—to merge with Lions Gate Entertainment Corp., a rival studio that the activist investor has been trying to take over all year as its largest shareholder.

To get its reorganization plan approved by a bankruptcy judge, MGM needed creditors holding roughly two-thirds of the studio's $4 billion debt load and more than half of individual debt holders to vote for the deal. In the end, Mr. Icahn remained among the only holdouts, the people said.

Mr. Icahn said today he would support MGM's restructuring plan after the studio altered certain parts of the deal.

Mr. Icahn will get a board seat once MGM exits bankruptcy. Messrs. Barber and Birnbaum will no longer be chairmen of MGM's new board at the holding company level. And older Spyglass films, including "Seabiscuit" and "The Sixth Sense," will no longer be merged with MGM's film library.

Spyglass, the small production company behind recent films such as the latest incarnation of "Star Trek" and "Get Him to the Greek," had planned to merge its older films for a little more than a 4% equity stake in the studio. But Mr. Icahn protested that the films were overvalued.

In addition, MGM's new shareholders will have the ability to call special meetings under certain circumstances.

Mr. Icahn said the changes enabled MGM to "avoid a potentially costly and disruptive bankruptcy process." MGM called the changes "immaterial" and said they would be filed with the bankruptcy court for approval.

As part of the restructuring plan, the Spyglass founders should still get a sliver of equity in the restructured studio in exchange for other assets. They also have a management-incentive plan that allows them to increase their ownership stakes should MGM's performance rebound.

MGM's largest creditors have agreed informally to continue discussing a possible merger with Lions Gate. But they stopped short of inserting language in the studio's restructuring plan that would require "good faith negotiations."

MGM struggled amid debt taken on in a 2005 leveraged buyout. The studio tried to sell itself in fall 2009 and the early parts of this year but failed to garner offers suitable to creditors. MGM then shifted to pursuing a standalone restructuring through a streamlined bankruptcy process.

MGM was advised by top law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Moelis & Co. Investment bank Houlihan Lokey advised MGM's creditors.

03 November 2010

Ailing Washington Times sold to Founder for $1

Associated Press

The Washington Times, one of many ailing newspapers, has been sold for a $1 to a group backed by its founder, Unification Church leader Rev. Sun Myung Moon.

The deal closed late Monday after months of wrangling, according to a story published Tuesday on newspaper's website. Sam Dealey, executive editor of The Washington Times, confirmed the sale with The Associated Press.

Preston Moon, the oldest son of Rev. Sun Myung Moon, had been running the newspaper since his father turned it over to him four years ago.

The elder Moon's group also will take on the newspaper's liabilities. The new ownership will bring back executives that had been ousted last year: former chairman Doug Joo and former publisher Thomas P. McDevitt.

Like many newspapers, The Washington Times has been hard hit by a downturn in advertising that has depleted its main source of income in recent years. The slump began as the Internet attracted more readers and marketers and became worse as the U.S. economy collapsed into a deep recession that lasted from December 2007 through June 2009.

To cope, The Washington Times has cut about 40 percent of its staff this year and eliminated its sport section.

A preliminary deal to sell the 28-year-old newspaper was announced in August, but delays in closing the deal raised fears that it might shut down instead.

The new ownership group appears confident that it can revive The Washington Times.

In Tuesday's story on the newspaper's website, Joo and McDevitt vowed to attract more subscribers while expanding The Washington Times' activity on the radio and Internet.

"We'll continue to keep the highest standard in journalistic excellence in this leading democratic country that upholds the values of freedom, faith, family and service," Joo said in The Washington Times' story.

02 November 2010

Ford bets big in Digital Marketing Departure


Forget the Super Bowl: Ford's marketing chief Jim Farley says he can get more for less on Facebook, Twitter and YouTube.

If Farley is right, millions of hits for Ford Motor Company on social media websites will dwarf the impact of ads broadcast during the National Football League's February championship game -- high-profile space selling for $3 million for 30 seconds.

"Customers are spending as much time with the mobile smart phone or online as they are watching TV now, so our advertising dollars have to flow to where the people are," Farley told Reuters in an interview.

Under Farley, 48, who joined Ford from Toyota Motor Co in 2007, the No. 2 U.S. automaker has bet bigger on the emerging category of digital advertising including websites and social media than any of its rivals.

Farley has taken the approach credited with the early success of the youth-oriented Scion brand he launched at Toyota and applied it to the makeover of an established auto brand.

He is betting Ford can use Facebook and Twitter to accelerate the word-of-mouth recommendations long familiar to the auto industry and help the blue-oval brand connect with younger and richer people.

Farley said he learned at Scion that the only way to push past consumer skepticism is "to break into their world."

"You have to shove your way in there. The way we do that is to break down myths. The great thing about Americans is they are always hungry for something new," he said.

Ford's U.S. sales are up almost 22 percent so far this year, twice the growth rate of the industry overall.

Farley's term at Ford has coincided with a sharp turnaround in its image. ALG, a firm that tracks consumer perceptions, said in a report issued on Monday that Ford cars and trucks lead all brands in gains in perceived quality since 2008.


Farley, who is seen as a potential successor to Ford Chief Executive Alan Mulally, called the Super Bowl, "a fantastic advertising opportunity" -- for unknown brands.

"If you are a company that wants to launch a new product that no one has ever seen before, it's a great venue."

Under Farley, Ford has spent 25 percent of its advertising budget on digital media in 2010, the same proportion as in 2009. That ratio is twice what J.D. Power and Associates says will be the average digital media spend in 2012.

Farley would not disclose the dollar amount of that spending.

One of the first experiments in Ford's new approach was its 2009 move to recruit Web-based "agents" who would help promote its launch of the Fiesta subcompact. In a follow-up, Ford used Facebook to reveal key aspects of the Explorer SUV rather than wait for an established auto show.

Now, Ford is seeking "bloggers, social media mavens and Facebook friends" to submit video applications to be one of 100 who will drive the 2012 Focus around southern France or Spain early next year, ahead of the car's launch.

The effort, called "Ford Focus Global Test Drive" seeks to create buzz ahead of the launch of a vehicle central to Mulally's vision for a streamlined product lineup.

Farley said that the Fiesta campaign had boosted consumer awareness of the Ford subcompact over direct competitors like the Honda Fit or the Toyota Yaris. At the same time, Ford only spent one tenth of what it would have through traditional media, including television, he said.

Farley's moves mark something of a contrast with the approach by cross-town rival General Motors Co.

Under its new marketing chief Joel Ewanick, GM is pushing back into advertising at the kinds of high-profile, high-cost events like the Super Bowl that it had abandoned in its slide toward bankruptcy.

In one example, last week GM rolled out a campaign for Chevrolet that plays to its base -- patriotic Americans with memories of the days when Chevy dominated.

By contrast, Ford is playing up the new elements in its product line-up, both new vehicles and new technology like the MyFord Touch system for navigation, entertainment and communications in campaigns that include videos for Google's YouTube.

Charlie Vogelheim, executive editor of Intellichoice, a consumer auto consultant, said Ford had pushed beyond its rivals in the way that it is building online buzz.

"Everyone is involved in digital marketing. The extent that Ford is doing it, wrapping it around events and utilizing the media with its launches, that is where Ford is taking leadership," he said.

01 November 2010

How Fusty TBS Is Selling Conan O'Brien

Bloomberg / BusinessWeek

The cable network is courting a Web-savvy audience for its offbeat new headliner with a marketing quirk-fest

How do you reinvigorate a populist comedy uprising that's settled into a complacent lull? Try hiring a blimp, tricking it out with interactive Internet gadgets, and flying it across country. Or perhaps hire a man in a taco suit to dance in front of a live Web cam. Maybe even stuff a stunt car full of popcorn and fireworks and drive it off a cliff.

Conan O'Brien and his new bosses at the Atlanta-based cable network TBS have tried all those stunts—and more—in recent weeks as part of an all-out marketing push to reignite interest in O'Brien's imminent migration to one of the less-edgy networks on cable. The target of this marketing quirkfest is potential viewers, particularly those who frequent Twitter, Facebook, and YouTube.

Being the late-night headliner at TBS, the erstwhile "Superstation" that was long the purveyor of I Love Lucy reruns and the television home of the Atlanta Braves, is a bit of a comedown from O'Brien's former chair at NBC's (GE) The Tonight Show, the top comedic venue on broadcast TV. That perch brought household-name status to the likes of Steve Allen, Johnny Carson, and Jay Leno—and steady profits to the coffers of the Peacock Network for decades. But in today's fragmented media market, comedians such as Jon Stewart and Stephen Colbert, who appear on Viacom's (VIA.B) Comedy Central, have shown that the big broadcast networks no longer have a lock on late-night eyeballs.

TBS, which according to The Daily Beast is paying O'Brien $10 million to $15 million annually, is betting it can get similar results from the red-headed comic's 11 p.m. nightly show, Conan, which makes its debut on Nov. 8. "Conan is arguably the biggest broadcast celebrity to come to cable," says Steve Koonin, president of Time Warner's (TWC) Turner Entertainment Networks, which include TNT and TBS. "You look at a lot of networks—they have good shows, but they don't mean something. I'm not talking ratings; I'm talking identity. By aligning with Conan, it gives us an identity that instantly equals comedy, which is what we're trying to be. We think Conan is one of the best brand enhancers in all of television."

O'Brien and longtime sidekick Andy Richter have been on TV hiatus since January when, amid lackluster ratings, NBC executives cut short O'Brien's brief tenure as The Tonight Show's host. The nasty public parting, which cost NBC an exit package estimated to be worth roughly $45 million, touched off a frenzied public backlash. Along the way, O'Brien emerged as a folk hero for the social media set. Google's (GOOG) YouTube exploded with clips of fellow comedians supporting O'Brien and mocking his predecessor-turned-successor and sometimes nemesis, Jay Leno. Fans marched in protest outside of NBC. They uploaded triumphant photos from their Conan love-ins on Tumblr. They pledged allegiance to "Team Coco" on Facebook. O'Brien grew a beard and kept in touch with the faithful on Twitter.

Now, some nine months later, TBS is attempting to revive the Team Coco fervor. Over the summer, TBS kicked things off with a series of 30-second TV spots featuring the chorus from the John Waite song Missing You and images of lovelorn fans coping with their bereavement in unusual ways—such as a despondent fellow spelling out "Conan" with the letters in his bowl of alphabet soup.

In late September, TBS unleashed the full campaign. During TBS's annual coverage of the Major League Baseball playoffs, the network provided aerial views of the games, courtesy of a big, orange Conan-TBS-branded blimp. Online, fans could follow the blimp's movements, look at constantly updated photos, and interact with fellow O'Brien fans by "checking into"

the blimp on location-based social network Foursquare. There was even a 24-hour Coco Cam on the Web streaming live video of Conan and his crew making odd preparations for the new show.

The rollout was designed to maximize Conan's visibility on the Web. So ads featuring the blimp—like the print ads in Vanity Fair, the photo shoot of O'Brien posing with a European barn owl, and the music video of O'Brien soaping up his desk in slow motion—were cross-posted on a handful of Conan-centric websites, including teamcoco.com, a Facebook page, and a YouTube channel. One reason for the Web focus: O'Brien's popularity with younger viewers. "Here's a guy, Conan, who is in his 40s who attracts audiences in their 20s and 30s, competing against guys in their 60s who attract audiences that are virtually the same age," says Koonin. "The audience should be the youngest in late night. That's what advertisers crave."

Since introducing its "Very Funny" tag line in 2004, TBS has grown into one of the top-rated channels on cable, thanks in large part to the network's acquisition and repackaging of proven comedy series, such as Seinfeld, Everybody Loves Raymond, The Office, and Family Guy. Despite the network's success, TBS is still largely perceived as an accidental destination—a place people stumble on while channel surfing, not a go-to place for original programming, says Robert Thompson, the director of the Bleier Center for Television and Popular Culture at Syracuse University.

Turner executives hope Conan's arrival could change that. "There may be some college students who will discover what number TBS is on their cable dial for the first time because they want to watch Conan," says Thompson. "Comedy Central has demonstrated that late night is no longer just the purview of the broadcast networks," he adds. "Late night is potentially a cash cow."

A recent study by Advertising Age estimated that in 2009, CBS's (CBS) The Late Show with David Letterman earned $271 million in ad revenue; NBC's The Tonight Show brought in $175.9 million; and ABC's (DIS) Jimmy Kimmel Live! earned $138.1 million. Time Warner Chairman Jeffrey Bewkes in August boasted that TBS was already getting ad rates for Conan on par with its late-night competitors.

O'Brien's move to cable sets up a potential showdown against Comedy Central's The Daily Show with Jon Stewart followed by The Colbert Report. So far this television season, according to Nielsen research, The Daily Show has averaged 1,948,000 total viewers. During the final, frenzied week of O'Brien's NBC run, The Tonight Show averaged 5.3 million viewers. So do TBS execs think O'Brien is going to trounce Stewart? "Conan is top of the class," says Koonin diplomatically. "We think his ratings will be extremely competitive with late night both on broadcast and cable." No potshots from the blimp just yet.

31 October 2010

Phillip Daniels calls NFL's Concussion Crackdown "Crazy"

The Washington Post

Here's a sneak peak of what you can expect from your national Wednesday NFL open locker room coverage: defensive players complaining loudly and eloquently about the league's sudden emphasis on preventing concussions. You will see stories like this from just about every NFL market, with players arguing that a certain level of violence is inevitable, and that legislating it out through fines and/or suspensions is both hypocritical and impossible.

For your sneak peak, I present Phillip Daniels's Tuesday appearance on the LaVar and Dukes show. Daniels actually began his critique of the NFL on Twitter; some of his comments are grouped together here:

    Have we become a cupcake league? We already have better helmets and gear. Wonder how the old school players feel about this. Not in the back of minds when talking about 18 game season so let's play football please....Even guys using shoulders to hit are getting flagged for helmet-to-helmet. Defense is getting sloppy because guys are avoiding fines and will get worse if suspending comes into play....

    There has been a warning sticker on the back of every helmet since pee wee league. When u put that helmet on you know you will hit or be hit. We still choose to play. Parents are asked to sign forms for their kids to play because of the dangers of the sport. Nothing is different.

On the radio, he was perhaps even more pointed when asked about the NFL's response to last week's carnage.

"To me, when I hear guys getting fined that much money for a game in which we're taught to be physical and hit people, I think it's ridiculous," Daniels said. "When this game started, from way back, your dream is to go out there and hit somebody and bring some excitement to the game. You're talking about taking that away. Guys are gonna get hurt. This is football. This ain't no cupcake league.You're gonna go out and play football, you're gonna get hit. Offensive players know they're gonna get hit, and defensive players go out to hit. Nothing's changed. You just go out there and play football and take all this other stuff out of it, this suspension stuff. It's kind of crazy. The fines are crazy too."

Daniels echoed a widespread opinion that the double knockout shot leveled by Dunta Robinson on DeSean Jackson was actually clean, and he said that players are virtually never trying to hurt each other.

"I don't think guys should just go be blatant and go after a head or leave their feet and spear somebody with a helmet, but we're taught to be physical, we're taught to go out and hit people," he said. "And now you get a couple of stars hurt in this league, now they want to talk about suspending guys? I just think this game is going downhill. Defenses right now are sloppy, there's more missed tackles, because guys are trying to avoid the helmet-to-helmet hit. Now you're talking about suspending guys? You definitely gonna get a lot of guys trying to go in the wrong way, missing tackles....You've just got to go out and play football."

Daniels said he uses an "old-school" helmet and is suspicious of the new helmet technology, saying that all three Redskins who have suffered concussions this season were using newer models. He said he's never been on a team that suffered as many concussions as these Redskins, who have already lost Chris Cooley, Rocky McIntosh and Anthony Bryant to head injuries. But he also said that when you go into his profession, you do so with the understanding that your body might be damaged.

"They've done a lot to make this league safer," he said. "It's changed a whole lot already. We protected the quarterback, you've got the horse collar [rule] that happened when T.O. went down. A superstar goes down, the rules change, that's just how it is. I don't get it. We get a couple big name guys go down this weekend, now we're talking about the helmet issue. I just think the NFL, they've done a lot to keep players safe.

"You're gonna get hurt, and if people ever wonder why we get paid so much, this is why. They're talking about this helmet-to-helmet stuff, but it's not coming into play when they're talking about 18 games....How can they argue the 18 game increase? It's crazy. This game is already tough enough with 16 games. To add two more, as physical as this game is, is kind of ridiculous."

TV Commercials shrink to match Attention Spans

USA Today

And now, a word from our sponsors. A very brief word.

TV commercials are shrinking along with attention spans and advertising budgets. The 15-second ad is increasingly common, gradually supplanting the 30-second spot just as it knocked off the full-minute pitch decades ago.

For viewers, it means more commercials in a more rapid-fire format. For advertisers, shorter commercials are a way to save some money, and research shows they hold on to more eyeballs than the longer format.

"It used to be that the most valuable thing on the planet was time, and now the most valuable thing on the planet is attention," says John Greening, associate professor at Northwestern University's journalism school and a former executive vice president at ad agency DDB Chicago.

So instead of seeing a lengthier plot line, viewers are treated to the sight of, say, the popular "Old Spice man" riding backward on a horse through various scenes for just 15 seconds.

Or the "most interesting man in the world," the suave, rugged, Spanish-accented character pitching Dos Equis beer, appearing just long enough to turn his head and weigh in on the topic of rollerblading. (Verdict? A deadpan "No.")

The number of 15-second television commercials has jumped more than 70% in five years to nearly 5.5 million last year, according to Nielsen. They made up 34% of all national ads on the air last year, up from 29% in 2005.

Commercial-skipping digital video recorders and distractions such as laptops and phones have shortened viewers' attention spans, says Deborah Mitchell, executive director of the Center for Brand and Product Management at the University of Wisconsin. Viewers are also watching TV streamed on sites like Hulu, where advertisers have less of a presence.

So companies figure: "Why spend money on anything longer anyway? Plus, if they're going to skip our ads, at least we have a better chance of them seeing something if it's really short," Mitchell said.

Fifteen-second ads cost about the same per second as longer ones. A 15-second ad on network TV cost about $20,000 on average last year, according to Nielsen.

"It becomes a very seductive thing to get your message out there at half the cost," says Mike Sheldon, CEO of advertising agency Deutsch LA, a unit of Interpublic Group.

On average, about 5% of an audience viewing a 15-second commercial will give up on it. The number jumps to about 6% for 30 seconds and 6.5% for 60 seconds, says Jeff Boehme, chief research officer for Kantar Media.

Previously, 15-second ads were mostly edited versions of 30-second spots, but that's changing. Advertisers are making shorter commercials as stand-alones. The length is ideal to remind people of products, stores or prices, but not to introduce them.

More than half of commercials run by packaged-goods companies and 60% of fast-food ads are 15 seconds, according to Kantar. The advertisers simply show a picture of the products, flash a price and the brain knows what the marketer means.

Take the new campaign for Burger King, which is selling its breakfast options. A 15-second ad airing now features a mailman walking down the street carrying a plate of eggs, pancakes and hash browns. There's no verbal description of the product. Instead he sings: "Did you know that breakfast was served at Burger King? The ultimate breakfast platter. That's what I call delivering."

The shorter ads also mean marketers can be on the air more frequently, even within the same commercial break. For example: During a recent episode of CBS' "How I Met Your Mother," viewers were bombarded with five ads in just a minute and a half, including two spots for Dunkin Donuts sandwiched around a more traditional 30-second ad for Aetna.

The quick-hit formula is common in the political ads flooding viewers ahead of Tuesday's elections. Fifteen seconds is plenty of time for an attack ad that can then be repeated, and repeated again.

Such repetition helps beat messages into viewers' heads. That's why Anheuser-Busch would rather air four 15-second ads for Select 55, its 55-calorie beer, than one 60-second ad, says Keith Levy, marketing vice president for the St. Louis subsidiary of Anheuser-Busch InBev.

"With Select 55, we were trying to establish the notion that this was the lightest beer in the world," he says. Simple commercials featuring a bottle that floats on air don't need long to drive home that message.

Big advertisers are driving the shift. Procter & Gamble, the maker of Crest toothpaste and Tide detergent and the world's biggest advertiser, doubled its number of 15-second ads to more than 299,000 last year from the year before.

Walmart, the world's largest retailer, has increased its use of 15-second ads nearly 30-fold to 148,000 last year from only about 5,700 in 2005. The retailer plans even more this holiday season.

Shorter ads can be just as effective as longer ones. Viewers can form new associations — say, knowing about a discount — in a few seconds and then recall that information in just one second, Mitchell says. People can't help soaking up the message.

"When things are working that fast, you can't tell yourself, 'No, I'm not going to think about that,'" she says. "Your brain lights up so you don't have a choice."

28 October 2010

Cablevision Makes New Offer to Fox

The Wall Street Journal

Cablevision Systems Corp., attempting to end a TV-station blackout over a contract dispute, proposed paying News Corp. the same rate that Time Warner Cable Inc. pays the media giant for local Fox affiliates in New York and Philadelphia.

News Corp., which owns Fox television networks, rejected the offer, calling it "yet another in a long line of publicity stunts" by Cablevision.

The programming blackout, now in its 12th day, is threatening to deprive 3 million households in the New York Metropolitan region of the World Series Wednesday night—a prospect that would lead to more public outcry against both companies.

In a news release, Cablevision said that for one year it would pay the rate Fox charges Time Warner Cable for carrying the local affiliates in New York and Philadelphia.

"This is higher than the rate we pay any other New York broadcast station," Cablevision said. "This solution is in the best interest of not only baseball fans but of all Cablevision customers and Fox viewers."

News Corp. said it remains committed to negotiating a fair deal, but Cablevision's "incomplete proposal is not acceptable." The media giant added that "Cablevision is seeking a discounted 'package rate' without buying the entire package."

News Corp. said it is willing to negotiate a deal "based on an entire suite of channels" under the terms it reached with Time Warner Cable and other providers, or a stand-alone agreement for three local broadcast Fox affiliates.

The blackout for Cablevision customers included the main Fox station in the New York area, as well as a smaller station, the Fox station in Philadelphia and other cable networks owned by News Corp., such as Nat Geo Wild and Fox Deportes, a Spanish-language sports service. Fox News is unaffected because it is part of a separate contract.

Cablevision responded to Fox's rejection by renewing its plea for intervention by the Federal Communications Commission.

"It is now clear beyond a shadow of a doubt that News Corp. is operating in bad faith," Cablevision spokesman Charles Schueler said. "We call on the FCC to intervene immediately to restore the Fox signals to Cablevision's 3 million homes and order News Corp. to agree to binding arbitration to resolve this conflict."

Cablevision has said it already pays News Corp. more than $70 million a year for its channels and that News Corp. is demanding more than $150 million a year for the same programming--a claim that News Corp. said is "simply not true."

Cablevision also has said it has agreements with every other major broadcast station, including CBS, NBC, ABC and Univision, but News Corp. is asking for more in fees for the two New York stations—FOX 5 and My9—than Cablevision pays for all of the other broadcast stations combined.

By offering to match the rate paid by Time Warner Cable, which reached a multiyear agreement with News Corp. early this year in a dispute that avoided programming blackouts, Cablevision appears to be moving off its previous negotiating stance. Still, the extent of any concessions is unclear, because most major distribution deals between media companies and distributors like this run for several years and include guaranteed fee increases over time among other provisions.

A Time Warner Cable spokesman declined to comment on that company's deal with News Corp. and the value of Cablevision's offer.

News Corp. is believed to be under pressure to reach a deal with Cablevision on at least the same terms as the one with Time Warner Cable. If it is unable to do so, News Corp. likely would have to make concessions to Time Warner Cable, based on that deal's terms.

Last year, Cablevision delayed by one year a contract negotiation with News Corp. for its Fox stations that could have affected broadcasts of a World Series eventually won the New York Yankees, a home team in Cablevision's main market. The delay allowed Time Warner Cable to negotiate its deal with News Corp. first, setting a new standard for payments for its broadcast signals. This year, the Yankees didn't make the World Series, taking some pressure off Cablevision.

The resulting dispute has left about 3 million homes, largely in the New York area, without access to their local Fox affiliate and major sports events, such as National Football League games and Major League Baseball's National League Championship Series last week. Fox is broadcasting the first game of the World Series between the Texas Rangers and San Francisco Giants on Wednesday.

27 October 2010

BBC World Service considers hosting Ads on some foreign-language Websites

Guardian UK

The BBC's director of global news, Peter Horrocks, has revealed the corporation is looking at introducing advertising on some of the World Service's 31 foreign-language websites as part of a "seismic shift" for the whole organisation.

Hosting advertising on some of the World Service's language sites could provide new revenue for the BBC, Horrocks told staff today. The idea is being considered as BBC executives work out the practical implications of this week's licence fee settlement, which will see £140m-a-year cut from the corporation's annual £3.6bn budget, plus additional funding commitments including the World Service.

George Osborne confirmed on Wednesday that the BBC will see its budget cut by 16%, as well as take on responsibility for funding the World Service and BBC Monitoring by 2015, and provide most of S4C's budget. In addition the BBC licence fee will be used to help meet the cost of rolling out broadband internet access to rural areas and establish local TV and online news services.

The World Service budget will also fall by 16% over four years, Osborne said. Its annual foreign office grant currently stands at £272m.

"With commercial and the World Service there are some possibilities," Horrocks told a gathering of global news staff. "Fundamentally, public money to support journalism is likely to be in places where the media is not free or [in] a proper market – but in some areas and more advanced markets, there could be potential for blending things together and that could be a sensible thing.

"Dot com [the international news site run by BBC Worldwide] already has adverts so the logical step could be an income stream for World Service language sites. That's just an idea, not a policy."

A BBC World Service spokesman confirmed that opportunities to increase the World Service's commercial income were being considered.

Addressing staff concerns in an internal session lasting more than an hour, Horrocks conceded that there would have to be job losses to meet the scale of the savings required in what is "clearly a seismic shift and will have huge implications for the whole of the organisation".

"Until just a few days ago we were working on the assumption that the settlement was just about the World Service," he said. "It is now clear that this is a fundamental change for the whole of the BBC, not just global services."

Horrocks confirmed that the BBC executive board were looking at possible closures of World Service operations "where the need [for a World Service presence] is least and the impact [of closure] is lowest – all of these things can be assessed".

"For international language services the consideration of need is the most legitimate thing to take into account," he added.

The World Service will announce where the majority of the savings will be made in late November, though there will be a series of announcements in the coming weeks. "The board are now looking carefully at the funding settlement and at where we can revise plans and obtain approvals," Horrocks said.

He added that he received assurances on Wednesday morning from William Hague, the foreign secretary, that the government still "buys the argument that [the World Service is] a huge asset for the UK".

From April 2011, the World Service will need to deliver cumulative savings of around £67m over four years. "That equates to more than 25% of the current costs. It is a very steep task indeed," Horrocks said.

The coalition government's comprehensive spending review, published yesterday , advised that the BBC World Service and the British Council should "find savings by finding greater efficiencies and enhancing the commercialisation of their operations".

Some World Service insiders are anticipating certain foreign-language websites could take advertising as early as the first quarter of next year. It is understood that work combining these sites with World News TV Online, which already has ads, is "well advanced".

An update to the content production system used by staff across BBC Online, and launched just before the summer, introduced the ability to select an advertising campaign to sit alongside articles, MediaGuardian.co.uk has learned. Previous versions did not have this capability.

Asked to comment on the proposals, a spokesman for BBC Global News said: "BBC World Service already makes £4m in commercial revenues which are ploughed back into our services for audiences. The government are encouraging us, in the settlement, to exploit opportunties to increase this figure further. We will be looking at all possibilities but this will be a very small part of the huge challenge ahead for BBC World Service.

"The priority for BBC World Service is to manage a real-terms cut in our grant of 16% over the next four financial years; plus extra costs like pensions which we estimate will take that figure closer to 28% of our income – we estimate some £67m over the period.

The BBC launched advertising on its BBC.com international news site in November 2007, and moved to stave off criticism by appointing an "editorial guardian" to ensure that ads did not compromise the corporation's journalism.

What Earnings Reports have revealed about Ads

Associated Press

Here are highlights of recent quarterly earnings reports from selected Internet, media and advertising companies and what they say about the state of spending on advertising:

Oct. 14: Google Inc. says its average cost per click rose 3 percent from a year ago, meaning companies paid more to place ads. People clicked on ads 16 percent more than they did in the same period last year. Executives also indicate that display advertising accounted for nearly 10 percent of ad revenue in the quarter, and mobile advertising was almost 4 percent. Those figures helped justify two of Google's biggest acquisitions - of DoubleClick Inc. and AdMob.

Oct. 15: Gannett Co. reports a 37 percent rise in third-quarter earnings on Friday, helped by a jump in broadcasting revenue. A recovering auto industry and political campaigns heading into midterm elections poured money into Gannett's 23 television stations. That, plus an increase in advertising on the company's websites, helped the biggest U.S. newspaper publisher halt declining revenue for the first time since 2006.

Tuesday: The New York Times Co. and McClatchy Co. both report that print advertising fell compared with a year ago, when ad sales had already taken a big plunge from 2008 levels. And neither company was able to draw enough new business from its digital operations to make up for the losses in print.

Yahoo Inc. says search advertising revenue fell 7 percent from last year to $331 million. But Yahoo generated slightly more revenue from each search in the third quarter, the first time that has happened in two years. The company fared much better in its stronghold, the "display" advertising category that covers banner and full-screen ads, sometimes featuring video. Revenue in this segment climbed 17 percent to $465 million.

26 October 2010

Tribune CEO resigns, Bankruptcy Filed

Traverse City Record-Eagle

Tribune Co. CEO Randy Michaels resigned Friday amid tales of raunchy behavior as the company looked to shift attention back to its efforts to emerge from bankruptcy protection. Hours later, the company filed its latest reorganization plan in court.

Michaels' departure comes at a pivotal time for the troubled media company. After nearly two years operating under bankruptcy protection, Tribune Co. is drawing up a reorganization plan that it hopes a federal judge will approve before the end of the year.

Michaels, 58, joined Tribune Co. three years ago following an ill-fated $8.2 billion buyout engineered by real estate mogul Sam Zell in 2007. Michaels became Tribune Co.'s CEO late last year. Michaels, a former radio disc jockey, won Zell's trust as CEO of a radio broadcast company that Zell owned, Jacor Communications.

It seemed likely Michaels' reign was nearing an end anyway. Lenders in line to become the company's new owners will probably want to install their own management team once a bankruptcy reorganization plan gains approval.

Tribune Co., whose holdings include the Chicago Tribune, the Los Angeles Times and more than 20 television and radio stations, offered its latest plan just before a midnight deadline Friday in U.S. Bankruptcy Court in Wilmington.

It came nearly two years after the company filed for Chapter 11 protection, dogged by an industrywide decline in newspaper advertising revenue and debt totaling nearly $13 billion, mainly associated with the Zell-led buyout just a year earlier.

In line with a previously announced settlement with major creditors, Friday's plan promised to increase how much Tribune Co.'s bondholders would get compared with a previous proposal. Tribune is hoping that would be enough to win approval of the much-debated reorganization plan.

The earlier plan got derailed after an independent report found evidence of fraud in the leveraged buyout that led to Tribune Co.'s bankruptcy filing.

Friday's plan proposes a trust, financed by a $20 million loan from the company, that could pursue legal claims arising from the buyout. Earlier in the day, the judge overseeing the case gave the official committee of junior creditors permission to file lawsuits against some parties involved in the 2007 buyout. He gave them until Nov. 1 to file the complaints.

An independent investigator concluded this summer that some aspects of the deal had bordered on fraud. The lawsuits could allege that Tribune Co. wouldn't have had to file for bankruptcy protection if not for fraudulent conduct by Tribune's board members, including Zell, and by some of the company's financial advisers and lenders. Tribune Co. spokesman Gary Weitman declined comment on the possibility of lawsuits.

In exchange for relinquishing more money to Tribune Co.'s bondholders, senior lenders would be shielded from any legal claims tied to early stages of the Zell-led buyout.

The reorganization plan could still be derailed by other Tribune Co. creditors. The proposal has the support of major creditors — JPMorgan Chase & Co., distressed debt specialist Angelo, Gordon & Co. and hedge fund Oaktree Capital Management — as well as the committee of junior lenders. Tribune Co. has not said where some of the company's other lenders stand.

Messages left with attorneys for Aurelius Capital Management, which holds some of Tribune's senior bonds, and for Tribune's junior bondholders were not immediately returned Friday evening.

Once Tribune Co.'s bankruptcy plan is approved, the company is expected to be controlled by creditors who are getting ownership stakes in exchange for forgiving most of the debt incurred in Zell's buyout, which took Tribune Co. private. The debt holders in line to become Tribune Co.'s owners include JPMorgan Chase, Oaktree and Angelo, Gordon.

With new owners likely to appoint new leadership, a four-man executive committee will fill the void created by Michaels' departure in the meantime. The new bosses are Don Liebentritt, Tribune Co.'s chief restructuring officer; Nils Larsen, chief investment officer; Tony Hunter, publisher of the Chicago Tribune; and Eddy Hartenstein, publisher of the Los Angeles Times.

Michaels' exit apparently was accelerated by an unflattering portrait drawn of his management style in a front-page story published by The New York Times two weeks ago.

The story, based on interviews with more than 20 current and former Tribune Co. employees, likened Michaels to the ringleader of a college fraternity house. The newspaper asserted that Michaels helped cultivate a culture filled with sexual innuendo, profanity, poker parties and other bawdy behavior.

Tribune Co.'s board of directors issued statements supporting Michaels in that article, but he quickly found himself under fire again last week when a top lieutenant sent an internal memo with an Internet link featuring a racy video that included a bare-breasted woman pouring booze down her chest. The executive, Lee Abrams, resigned as Tribune Co.'s chief innovation officer.

"During the last few weeks the company has drawn a lot of media attention, much of it negative," the board wrote in an e-mail sent Friday to Tribune Co. employees. "That coverage has diverted attention from the things that matter most: The quality of our media products, the talent and dedication of our people, and the very real progress that we've made over the last two-and-a-half years." Michaels was Tribune Co.'s executive vice president in charge of its broadcasting and interactive divisions before his promotion to CEO. When he was hired, Michaels also brought in many of his former colleagues from his days in radio.

By the time he was named Tribune Co.'s CEO, Michaels already had gained a reputation for using language and engaging in conduct more befitting of the "shock jock" that he once was. Michaels and Zell said they were trying to loosen up a traditionally staid company and usher in fresh thinking at a time of upheaval in the media business. Zell remains Tribune Co.'s chairman.

While Michaels was CEO, Tribune Co.'s financial performance improved, helped by cost cutting that has become common at newspaper publishers throughout the country as they try to offset a steep downturn in advertising sales that has depleted their main source of revenue.

Tribune Co. already has projected its newspapers' revenue will continue to drop for at least two more years while its broadcasting division rebounds. The company's other major newspapers include The (Baltimore) Sun, Hartford (Conn.) Courant and the Orlando (Fla.) Sentinel.

25 October 2010

NPR CEO apologizes for Handling of Williams Firing


Vivian Schiller, the NPR CEO who has gotten criticism from all sides about NPR’s decision to fire Juan Williams, apologized to her colleagues Sunday evening for the way the firing was handled.

Among the most problematic aspects of the firing was the NPR’s initial statement suggesting that Williams's statements on “The O’Reilly Factor” were to blame. Schiller later said that Williams had long been in hot water at NPR, and the recent statements were simply the last straw, but the timing of his firing undermined this argument.

In her latest statement, Schiller acknowledges that “reasonable people can disagree about timing” and apologizes for firing Williams over the phone, but doesn’t back down from the decision itself.

The letter:

    Dear Program Colleagues,

    I want to apologize for not doing a better job of handling the termination of our relationship with news analyst Juan Williams. While we stand firmly behind that decision, I regret that we did not take the time to prepare our program partners and provide you with the tools to cope with the fallout from this episode. I know you all felt the reverberations and are on the front lines every day responding to your listeners and talking to the public

    This was a decision of principle, made to protect NPR’s integrity and values as a news organization. Juan Williams’ comments on Fox News last Monday were the latest in a series of deeply troubling incidents over several years. In each of those instances, he was contacted and the incident was discussed with him. He was explicitly and repeatedly asked to respect NPR's standards and to avoid expressing strong personal opinions on controversial subjects in public settings, as that is inconsistent with his role as an NPR news analyst. After this latest incident, we felt compelled to act. I acknowledge that reasonable people can disagree about timing: whether NPR should have ended its relationship with Juan Williams earlier, on the occasion of other incidents; or whether this final episode warranted immediate termination of his contract.

    In any event, the process that followed the decision was unfortunate – including not meeting with Juan Williams in person – and I take full responsibility for that. We have already begun a thorough review of all aspects of our performance in this instance, a process that will continue in the coming days and weeks. We will also review and re-articulate our written ethics guidelines to make them as clear and relevant as possible for our acquired show partners, our staff, Member stations and the public.

    The news and media world is changing swiftly and radically; traditional standards and practices are under siege. This requires us to redouble our attention to how we interpret and live up to our values and standards. We are confident that NPR’s integrity and dedication to the highest values in journalism and our commitment to serving as a national forum for the respectful discussion of diverse ideas will continue to earn the support of a growing audience.

    I stand by my decision to end NPR’s relationship with Juan Williams, but deeply regret the way I handled and explained it. You have my pledge that the NPR team and I will reflect on all aspects of our actions, and strive to improve them in the future.

    Please feel free to share your concerns and suggestions.


    Vivian Schiller

Do Hello Kitty graphics on Smart Cars go too far?

USA Today

Is Smart USA getting too smart for its own good?

You've got to wonder when you see the new, pink Hello Kitty wrap for the Smart car. No doubt about it, it's cute. But is it so cute that it might alienate Smart's more macho fans?

As Suzanne Ashe at CNET's Cartech blog sees it, "It's like driving your elementary school lunch box--without the sour-milk smell." At least Sanrio, who owns the Hello Kitty brand, couldn't be more delighted.

"Our collaboration with Smart USA allows fans to truly embrace the Hello Kitty lifestyle," said Janet Hsu, president of Sanrio, Inc. "This is the first time that Sanrio will offer a Hello Kitty car in the United States.

If any of you are living a "Hello Kitty lifestyle" out there, please message us hear at Drive On to tell us about it.

Smart teamed with Hello Kitty creator Sanrio for the wraps available through the car's brand's "Smart Expressions" program that it started over the summer.

Before you think that Smart has gone kitten crazy, consider that they might be smart -- like a fox:

"We are expanding the highly successful Smart program by adding licensed brands as part of our wrap offerings," said Kim McGill, Smart USA's vice president of marketing. "Both Hello Kitty and Smart are expressive with a passionate following, and this is a special opportunity to bring the two fan bases together."

The smart Expressions program offers Hello Kitty wraps in three different full body designs, each with a selection of color schemes, in addition to a series of partial wrap designs and colors.

The Hello Kitty-wrapped cars will appear at many Sanrio 50th Anniversary events this fall.

24 October 2010

Networks Block Web Programs From Being Viewed on Google TV

The Wall Street Journal

ABC, CBS and NBC are blocking TV programming on their websites from being viewable on Google Inc.'s new Web-TV service, exposing the rift that remains between the technology giant and some of the media companies it wants to supply content for its new products.

Full-length episodes of shows like NBC's "The Office," CBS's "CSI: Crime Scene Investigation," and ABC's "Modern Family" can't be viewed on Google TV, a service that allows people to access the Internet and search for Web videos on their television screens, as well as to search live TV listings. Logitech International S.A. and Sony Corp. began selling devices running the software this month.

Spokespeople for the three networks confirmed that they are blocking the episodes on their websites from playing on Google TV, although both ABC and NBC allow promotional clips to work using the service. ABC is owned by Walt Disney Co., CBS is part of CBS Corp., and NBC is a unit of General Electric Co.'s NBC Universal.

"Google TV enables access to all the Web content you already get today on your phone and PC, but it is ultimately the content owners' choice to restrict their fans from accessing their content on the platform," a Google spokeswoman said in a statement.

The move marks an escalation in ongoing disputes between Google and some media companies, which are skeptical that Google can provide a business model that would compensate them for potentially cannibalizing existing broadcast businesses.

Over the summer, Google pressed major media companies to optimize their websites and videos to work more seamlessly with Google TV. Some outlets, including Time Warner Inc.'s HBO and Turner Broadcasting networks, did so. Even NBC Universal's CNBC embraced the service, optimizing some content to work specifically on Google TV.

But many other companies declined to specifically optimize their websites, and some held out the possibility that they could block their content from the service, as the three networks are now doing. Some TV executives said they were worried their shows would be lost in the larger Internet. Some, including Disney and NBC, were also concerned about Google's stance on websites that offer pirated content, according to people familiar with their thinking.

Disney executives, for example, asked that Google filter out results from pirate sites when users search for Disney content, like "Desperate Housewives." But they were unsatisfied with Google's response, according to people familiar with the conversations.

News Corp.'s Fox Broadcasting and Viacom Inc.'s MTV aren't blocking Google TV from playing episodes on their websites, according to a spot check Thursday. Spokespeople for Fox and MTV confirmed they are not currently blocking Google TV, but the Fox spokeswoman said "a firm decision has not yet been reached." News Corp. also owns The Wall Street Journal.

For its part, Google has tried to assure broadcasters and content owners such as Disney that Google TV's search feature is optimized to promote their TV broadcasts and own websites' video content rather than pirated content, according to a person familiar with the matter.

In addition, Google has also told broadcasters and content owners they can submit requests to Google to delete unauthorized results from the Google TV search feature, just like they do for results in Google's traditional Web search engine, this person said.

Some shows—from siblings of the networks that are blocking their content—were working on Google TV on Thursday. Shows from the CW network, which is jointly owned by CBS and Time Warner, appear to play on Google TV, as do some from Lifetime, a cable channel jointly owned by Walt Disney Co., Hearst Inc., and NBC Universal.

Google won't directly make money from the sale of the Google TV software, but the software's use will benefit Google's ad-supported Web search engine and is expected to increase viewership of the ad-supported YouTube site, which is owned by Google. The company also has been in talks with Madison Avenue's media-buying firms to discuss how to sell ads on the Google TV interface without interfering with TV commercials, people familiar with the matter have said.

But the three networks are also not alone in blocking their content. Video site Hulu, whose owners include Disney, NBC Universal and News Corp., also blocks its video from being played through the Google TV interface. Spokeswomen for both Hulu and Google said the companies are in talks to bring the Hulu Plus subscription service to Google TV.