04 February 2010

John Stewart and Bill O'Reilly Have an Adult Conversation

New Yorker

Jon Stewart ventured into enemy territory tonight, taking a seat across from Bill O'Reilly in the No Spin Zone for a little one on one. Their much-hyped conversation was fairly predictable, with O'Reilly vigorously defending the integrity of Fox News and Stewart shaking his head in disbelief. The whole interview was far less combative than we hoped. Stewart even offered O'Reilly a compliment! "You have become, in some ways, the voice of sanity here," he said. Of course, he followed it up by saying that's "like being the thinnest kid at fat camp." When the whole thing ended, there were two highlights to take away from it— Stewart's succinct summary of what's wrong with Fox at the end of this clip and O'Reilly's bizarre Pakistani accent. What was up with that?

News Corp. Offers Cash, Debt Assistance to MGM

Bloomberg


News Corp. has expressed interest in providing Metro-Goldwyn-Mayer Inc. with cash and assistance in restructuring debt to keep the studio independent, according to a person with knowledge of the situation.

The non-binding offer from News Corp., owner of the Twentieth Century Fox film studio, was outlined in a letter this week, said the person, who declined to be identified because the talks are private. The person wouldn’t disclose other terms.

MGM, maker of the “James Bond” movies, is evaluating preliminary bids from possible buyers as it struggles with $3.7 billion in debt. News Corp.’s Fox studio distributes DVDs for Los Angeles-based MGM. Chris Petrikin, a Fox spokesman, declined to comment.

The media investment firm Qualia Capital LLC is separately offering MGM $500 million to fund operations as part of a plan that also seeks to convert some debt to equity, according to a another person with knowledge of the situation. In return, Qualia would receive an equity stake in MGM, said the person, who wasn’t authorized to speak publicly.

Susie Arons, an MGM spokeswoman, declined to comment.

News Corp., the owner of Fox television, signed a non- disclosure agreement with MGM on Jan. 15, overcoming a monthlong impasse and allowing it to proceed with an offer, according to a person familiar with the decision.

News Corp., based in New York, gained 9 cents to $12.61 today in Nasdaq Stock Market trading. Class A shares of the company, controlled by Chairman and Chief Executive Officer Rupert Murdoch, gained 51 percent last year.


Interest Respite

MGM said today its lenders extended a respite on interest payments covering the debt until March 31 to give the movie studio time to restructure or find a buyer. The studio will spend “several weeks” evaluating preliminary bids.

Lenders agreed in October to let MGM skip interest payments. The studio has since put itself up for sale.

MGM, created in 1924, made films including “The Wizard of Oz” and “Ben Hur.” The company, owner of a 4,100-film library with titles including “Rocky,” sold many of its early movies prior to its 2005 buyout by a group led by private equity firms Providence Equity Partners and TPG. It has a co-production deal with Warner Bros. on the planned film “The Hobbit.”

Time Warner Inc., owner of the Warner Bros. film studio, was among the first-round bidders, a person familiar with the offers said last week.

Lions Gate Entertainment Corp., the independent film studio run from Santa Monica, California, is also involved in the auction.

Time Warner, based in New York, rose 64 cents to $27.45 today in New York Stock Exchange composite trading. The shares gained 40 percent in 2009. Lions Gate fell 2 cents to $5.20 after rising 5.6 percent last year.

03 February 2010

Wal-Mart, Target Put Squeeze on Redbox

Business Week

DVD buying limits at the leading retailers hurt movie-rental vendors Redbox and NCR's ability to secure a large supply of discs
Wal-Mart is boxing out Redbox. Wal-Mart (WMT), the world's largest retailer, has imposed strict limits on the number of DVDs any one customer can buy at a time, making it harder for movie-rental kiosks such as Coinstar's (CSTR) Redbox to get their hands on large numbers of newly released discs.

The new rules took effect Feb. 1 and include a five-DVD cap on new releases, mirroring limits placed by Target (TGT) in December. Target's cap remains in effect for one week to several weeks after a movie is released to stores.

Redbox and NCR (NCR) are among the largest U.S. operators of DVD-rental kiosks, which rent movies for about $1 a day and, according to Adams Media Research, are the fastest-growing distributors of movie rentals. Kiosk rental sales are expected to rise 42% to $1.3 billion this year, Adams says, stepping up competition vs. other rental services, including Netflix (NFLX), iTunes owner Apple (AAPL), and rental stores such as Blockbuster Entertainment (BBI), which in 2008 reached an agreement to let NCR rent movies under the Blockbuster Express brand.

Limits at Wal-Mart and Target make it all the more urgent that Redbox and NCR find ways to buy DVDs directly from studios. "The more difficult it is for them to get product, the more motivation they have to reach an agreement with the studios," says Tom Adams, president of Adams Media Research. "It increases the pressure because it increases their costs."
 
Customer Rationale

Before the limits, Redbox got about 40% of its new DVDs from retailers, Adams estimates. It and NCR, which operates DVDPlay and Blockbuster Express kiosks, also purchase DVDs directly from some studios. Redbox is in a legal tussle with studios that have refused to make new releases available on the day they become available for sale in stores.

Retailers say they imposed the limits to avoid running short of new releases. "The idea is that our guests have access to the hot DVDs they want," says Target spokesman Joshua Thomas. Wal-Mart spokeswoman Melissa O'Brien says, "From time to time we have placed purchase limits on products at stores so that they can be accessible to as many customers as possible."

Redbox last year reached agreements to distribute new DVDs on their release date from Sony Pictures Home Entertainment and Lions Gate Entertainment (LGF). Paramount Home Entertainment currently offers titles on a limited basis through Redbox; in exchange, Redbox agrees to destroy the titles once they are removed from its kiosks.
 
Dispute with Studios

Redbox has sued Warner Home Video, Universal Studios Home Entertainment, and News Corp.'s (NWS) Twentieth Century Fox to try to force the studios to sell it new releases on the date the DVDs become available in stores. Limits by retailers may force Redbox to accept less favorable terms to resolve the disputes. "We understand that Wal-Mart was quoted as saying they would be implementing purchase restrictions," Coinstar and Redbox said in a statement. "We are currently evaluating this information." The company declined to elaborate, citing legal proceedings. Representatives of all three studios also declined to comment.

For its part, NCR said it's trying to reach agreements with studios by mid-year. "We have the same challenges in securing DVDs" as Redbox, says Alex Camara, a general manager at NCR. "We are working closely with the studios to find a solution. My intention is to have agreements by spring [or] early summer."

Redbox kiosks are located in more than 19,000 locations, including Wal-Mart, grocery stores, and McDonald's (MCD) restaurants. NCR's 4,000 kiosks are located in Safeway (SWY) and other stores.

Comcast Profit Up on Subscription Boost, Tax Gain

ABC News
Higher revenue and a tax gain helped propel Comcast Corp.'s fourth-quarter earnings sharply higher, as the nation's largest cable operator solidified its position as the biggest U.S. Internet service provider as well.

The company, poised to become one of the largest media conglomerates in the nation if its purchase of a 51 percent stake in NBC Universal goes through, has trumped AT&T in wired broadband customers for a second quarter in a row, with 15.9 million customers.

Strength in Comcast's Internet business, and a smaller loss in video customers than a year ago, offset softness in its phone business to boost revenue by 2.9 percent in the quarter.

Comcast said Wednesday it earned $955 million, or 33 cents per share, in the fourth quarter, more than double the $412 million, or 14 cents per share, earned in the year-earlier period.

Excluding the tax gain, Comcast would have earned 29 cents per share. Last year's quarter had a $600 million charge related to the writedown of its investment in Clearwire Corp., a provider of mobile Internet services that the cable operator uses as its wireless broadband service.

Revenue rose to $9.06 billion from $8.81 billion. Both earnings and revenue exceeded the forecasts of analysts, who expected 27 cents per share and revenue of $8.96 billion, according to Thomson Reuters. Those estimates typically exclude one-time items.

Free cash flow came to $768 million, down 11 percent from the year-earlier quarter.

In the quarter, Comcast added 290,000 net subscribers in its core businesses of video, Internet and phone, the same as the 2008 quarter.

But the total masked weakness in video that was offset by increases in Internet and phone subscriptions.

The Philadelphia company lost 199,000 basic video subscribers, smaller than last year's 233,000 loss. It added 410,000 digital TV customers, up 66 percent. Digital cable TV service is added on top of the basic video service and isn't a separate group of subscribers.

On average, people paid $67.45 per month for video, up 2 percent.

Comcast added 247,000 Internet subscribers, or 34 percent more, and they paid on average $41.95 for the service. About 243,000 new phone customers signed up in the quarter, but that's down from 344,000. Phone subscribers on average paid $37.98 a month, down from the year before, reflecting stiff competition from phone companies and a shift to cell phones.

Video revenue fell slightly to $4.79 billion but Internet and phone revenue rose.

02 February 2010

McClatchy CEO: Focused On Free, Ad-Supported Content Model

The Wall Street Journal


Gary Pruitt, chief executive with McClatchy Co. (MNI), said Wednesday that while the newspaper publisher is willing to experiment with online paid-content models, it's primarily focused on driving revenue with online content from advertising.

"We tend to believe that the overwhelming model [for the online news publishing industry] will be a free, ad-supported model," said Pruitt on a conference call with analysts following McClatchy's fourth-quarter earnings release.

He noted that online advertising "has proven to be very profitable for us."

Pruitt's comments come as many newspaper publishers have signaled a desire to try charging consumers online for news content as a way to stabilize their businesses, which have suffered amid the rise of web media and the recent downturn in ad markets.

Most notably, The New York Times Co. (NYT) said recently it will launch a metered pay model on the Web site of its flagship newspaper next year, aimed at requiring heavy users of its web site that don't subscribe to its print publication to pay in order to access articles.

The Times Co. is widely viewed as a bellwether for the newspaper industry's efforts to adapt to online media, but Pruitt voiced doubts about whether online subscriptions will flourish into a major business model for the publishing industry.

On the advertising side, prices for display ads have suffered as enormous quantities of inventory have populated the web from giant social media sites like Facebook. Pruitt, however, noted that McClatchy has worked with Yahoo Inc. (YHOO) to use behavorial targeting tools on its sites. He said providing advertisers with the ability to target certain consumers effectively online has helped support its ad pricing.

Pruitt also said McClatchy has had more luck recently with smaller, local advertisers than with large national advertisers, suggesting that the company is having some success in filling a void in local advertising that has been particularly painful for smaller, local media outlets.

McClatchy said its online ad revenue rose 15% in the fourth quarter, and accounted for nearly 16% of total ad revenue, compared with 11% a year earlier.

"Our efforts to evolve into a hybrid print and online media company are advancing," said Pruitt, noting that 44% of its 2009 online ad revenue came from online-only deals.

Despite its progress, a large majority of McClatchy's ad revenue comes from print, which continued to decline in the quarter, dragging down the company's overall revenue by 16.5%.

"The model isn't broken, but on the other hand, we are willing to experiment and see what works," said Pruitt. "If somebody cracks the code, we'll copy it."

01 February 2010

Marketing Milestones in Malaysia

Malaysia Star

The college’s new campus in Petaling Jaya incorporates some unique designs 
that are both surreal and welcoming.


WITH an eye firmly fixed on the future while another makes sense of the past, IACT College chief executive officer and principal Lee Kok Leong has no qualms about acknowledging the college’s struggle to attain its rightful place among education institutions.

Having been with IACT since 1993, Lee retraces the college’s past with ease, and articulates its significant journey with gusto.

“In the 70s, advertising was still a fledgling industry in Malaysia and there was a dire shortage of talent,” he muses.

“It was so bad that people enjoyed rapid promotions in a stage of incompetency.”

In a bid to invigorate the industry, the Malaysian Advertisers Association (MAA) and the Association of Accredited Advertising Agents Malaysia (4As) formed a joint education committee to provide training for its members.

Conducted by senior managers of the MAA and 4As on a voluntary basis, the committee offered short courses and seminars that addressed subjects related to the advertising industry.

After nomadic sojourns at several newspaper premises, the two organisations bought a four-storey building to house IACT’s activities in Damansara Utama in 1993.

Registration with the Education Ministry – and several name changes – followed soon after to encapsulate the nature of the college’s services.

Offering two-and-a-half year diploma programmes, IACT began making headways as its tagline — an institution founded, endorsed and taught by industry professionals — spoke volumes.

However, the initial euphoria fizzled, and Lee is in not in denial of the college’s shortcomings in the past.

“In many ways, we were forced to make do,” he concedes.

“Due to outlook issues, some parents were concerned as to whether their children would get enough at IACT.

“The who’s who of advertising knew IACT and what we stood for, but the same did not apply to the uninitiated. And the first impressions they got did not help much.”

As effective advertising has the tendency to stop viewers in their tracks, it is a tad ironic that IACT failed to capture the same effect with their old campus.

Lee, however, harbours no remorse.

“The 4As and the MAA are two big associations looking after the needs of advertising and the advertisers respectively,” he explains.

“Addressing industrial needs by setting up IACT was already a milestone, and they were in no way obligated to maintain and expand an educational institution.”

The promised land

Good things indeed come to those who wait, and 2008 proved to be a milestone for Lee and the college.

Zencall Holdings chairman and Pos Ad Sdn Bhd chief executive officer Raymond Chew bought a majority stake in IACT — and with him came new funding and drive.

“The 4As and MAA decided that IACT could not be stuck in a rut and it was in everyone’s best interest for Chew to take over,” says Lee.

“Chew had a vision to provide affordable education — without compromising quality — to as many people as possible.”

Aware that geography had a strategic correlation with success, Chew started planning for a new campus.

The result: a brand new resort campus at Jaya One Commercial Centre in Section 13, Petaling Jaya.

A stark contrast to the IACT of old, the new campus incorporates some breathtaking designs which bear a hint of Salvador Dali.

Surreal and welcoming at the same time, visitors were greeted with plush sofas, red carpeting and futuristic lighting at the college’s campus day recently.

Campus tours allowed prospective students to get an inside look, and many were waxing lyrical after viewing the cutting-edge facilities at the college.

Former telecommunications business owner Yeo Hook Huat and his daughter Yeo Mei Quen, 18, were two of them.

“I’m very happy with what we saw, as the setup is good and the lecturers are really professional,” he said.

“I want to make sure that my daughter gets the best.”

Nodding in agreement, Mei Quen said that the tour reaffirmed her passion to venture into Animation or Graphic Design.

More, more, more


Encouraged by the turnout, Lee says that the campus day is part of IACT’s plans to reposition itself for public awareness.

“We realised that we cannot be in Nilai or Cyberjaya as our playing field was and is in Petaling Jaya,” he continues.

“It is a good central location as public transport is easily accessible. And with so many businesses around, our students won’t have a hard time securing internships and subsequent job placements.”

The longer-term goal is to set IACT apart as a city campus like the Royal Melbourne Institute of Technology (RMIT), Australia.

A big improvement from its old premises which limited operation to around 350 students, IACT’s current facilities allow a maximum student capacity of 1,000.

However, Lee assures that the current average lecturer to student ratio of 1:20 will remain.

“IACT’s strength is the personalised attention students receive from their lecturers and it will continue to be our guarantee,” enthuses Lee.

“We are aware that student num-bers will mushroom, and plans are afoot to increase the current number of lecturers and academic heads.”

Assuring that IACT’s evolution will not be based on a policy of do-overs, Lee explains that the college’s six diploma programmes in Advertising/ Marketing communications, Mass Communication, Broadcasting, Graphic Design, Creative Multimedia and Sales and Marketing could soon be joined by degree courses.

“An Honours degree in Mass Communication is in the pipeline and these are exciting times for IACT,” he continues.

“With continuous expansion and the necessary student numbers, we hope to achieve university college status one day.”

Now, great expectations often come across as a tall order, but the folks at IACT will be quietly confident, happy that the leitmotif of a new campus has been put to rest.