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.