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.

Man Who Blacked Out World Series Blames Politicians

Bloomberg

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."

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."

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.

News Corp. Profit Rises on Higher Ad, Subscriber Fees

Bloomberg

 

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.