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Media Companies Recent Headlines  Viacom Should Go Private, Analyst Argues Barron's Pali Research analyst Richard Greenfield says Viacom chief Sumner Redstone ought to consider taking the company private, given the "increasingly broad investor distaste for Viacom's management team." Redstone must act to "create value for public shareholders." News Corp, Disney Chiefs Eye Actor Talks Variety With Screen Actors Guild contract talks going nowhere fast, speculation is rising that News Corp.'s Peter Chernin and Disney's Bob Iger will resume their diplomatic mission with the union. Informal SAG powwows with the studio heads may help break the logjam. Music Sales Fall to Lowest Level In 20 Years Times of London Worldwide music sales are dropping to their lowest level since 1985, according to new figures from the International Federation of the Phonographic Industry. Online piracy is seen as a key culprit. The group wants Internet providers to help to stop illegal copying. U.S. Media Ownership Rule May Face Block Dow Jones A House subcommittee aims to block the Federal Communications Commission's rule allowing cross-media ownership in the 20 top U.S. media markets. The move could affect companies that own local newspapers and broadcast stations, such as News Corp. Obama: I'm Unlikely to Be Big Media's Friend B&C Barack Obama, the presumptive Democratic presidential candidate, says U.S. regulators need to take media merger reviews much more seriously. "The media market is dominated by a handful of firms. ... I strongly favor protection against the excessive concentration of power." News Corp Shares See Jump on Analyst's Nod Associated Press News Corp. shares are getting a boost from their 52-week lows following a positive report by Lehman Brothers analyst Anthony DiClemente. The media giant is a good buy at the current price, DiClemente says, noting that MySpace continues to show strong revenue growth. Murdoch Closes UK Magazine Publishing Unit Mad.co.uk News Corp.'s News International is shutting down its three-year-old News Magazines division, publisher of titles including BSkyB's SkyMag. The decision to close is thought to have been taken by News Corp. exec James Murdoch following a review of News International’s businesses. Disney Partners Pay to Enter 'Dream Home' Atlanta Journal-Constitution Disney is opening its new Innoventions Dream Home at Disneyland in Anaheim, Calif. The "house of the future" showcases new technologies like partner Microsoft's "Surface" table computer. Each partner company paid Disney at least $1 million to participate in the home for five years. General Electric Investors Seek Sale of NBC Reuters Investors say General Electric could help its languishing shares -- now near 4 1/2-year lows -- by selling off businesses. But the company is resisting calls that it should sell its 80% stake in NBC Universal. GE says it is committed to a diversified business model. Murdoch: The 'Hot Ticket' at Cannes Ad Fest Australian The 55th annual Cannes International Advertising Festival is attracting thousands of top ad-industry execs from around the world to the south of France. The week's "hot ticket" will be an appearance by News Corp. chief Rupert Murdoch, who is expected to address the future of media. AOL's Dial-Up Sale Is Next for Time Warner New York Post Time Warner hopes to move swiftly to find a buyer for AOL's dial-up business after the company completes its separation from the Platform A advertising division in the next month. The media giant is said to have held talks with rival dial-up provider EarthLink about a combination. Playboy CEO Sees Growth In Online, Mobile Multichannel News Some 70% of the next generation sees the mobile phone as an entertainment device, says Playboy CEO Christie Hefner. "I don't know what it means exactly yet," she admits, adding that Playboy plans to invest more in technology and content to drive growth in online and mobile. NBC In Exclusive Talks to Buy Weather Channel Associated Press NBC Universal is entering exclusive negotiations to buy the Weather Channel from Landmark Communications after Time Warner dropped out of the bidding on Friday. NBC is working on the bid together with the private equity investment firms the Blackstone Group and Bain Capital. XM-Sirius Merger Wins Support of FCC Chair Washington Post Kevin Martin, the head of the U.S. Federal Communications Commission, says he will support a merger between satellite-radio rivals XM and Sirius. The two companies last week agreed to commitments to prevent the monopoly from raising prices and stifling competition. Time Warner, CBS Take Losses Buying Stock Bloomberg Time Warner, Dell and CBS made combined purchases of $13 billion in their own shares last year, and all have losses to show for it. Time Warner has fallen 27%; CBS is down 37%. While a share buyback often pays off over time, "it doesn't mean you're increasing the value of the company." Viacom, Paramount May Face Hindu Boycott NewsBlaze Hindus are mulling a worldwide boycott of products from Viacom and its Paramount film studio to express resentment over the "anti-Hindu stance" of the new movie "The Love Guru." Hindus are said to be upset by the apparent lampooning of the "one-billion-strong Hindu community." Martha Stewart Downgraded on Lyne's Exit Associated Press JPMorgan analyst Michael Meltz is downgrading shares of Martha Stewart Living Omnimedia, citing a difficult advertising environment and the recent departure of CEO Susan Lyne. The exit of Lyne is "disappointing," says Meltz. "Lyne has helped turn around the company." Thomson Reuters to Sell Dialog to ProQuest Associated Press Thomson Reuters plans to sell its Dialog research database business to the ProQuest unit of privately held Cambridge Information. Dialog's databases include Derwent World Patents Index. Dialog will continue to be a distribution channel for Thomson Reuters content after the deal. Bloomberg LP Stake May Be Up for Grabs Reuters Merrill Lynch says it would consider selling its 20% stake in Bloomberg LP. Media rivals including News Corp. and Pearson could see the news and information company as an alluring asset. But some say the most likely buyer would be founder and billionaire Michael Bloomberg. News Corp Launches Social Media Weather Site Mashable Why buy the Weather Channel? News Corp.'s Fox Interactive Media is launching Fox Weather, at weather.fox.com, a Web site with social tools intended to help build a network of amateur weather watchers. Users can register profiles and write blogs and post photos and videos. Disney Sees Business Exploding -- In Retail CNBC Sales of licensed Disney merchandise is expected to break records and top $30 billion in global retail, up from $27 billion last year. The company's new "tween" businesses -- "High School Musical" and "Hannah Montana" -- are expected to rake in some $2.7 billion this year. Bertelsmann Seeks $1.5B for Sony-BMG Stake Financial Times Germany's Bertelsmann is seeking $1.2 billion to $1.5 billion for its half share in Sony BMG after opening talks that could result in Sony gaining full control of the world's second-largest music company within weeks. The companies hope to strike a deal over the summer. Martha Stewart CEO Susan Lyne to Step Down Associated Press Susan Lyne is stepping down for undisclosed reasons after four years as CEO of Martha Stewart Living Omnimedia and the job is being split between two company execs. Wenda Harris Millard and Robin Marino are to become co-CEOs. Lyne will remain a director during a transition period. Google CEO: 'Moral Imperative' to Help Media Biz CNET Google should be seen by media companies as an ally that is trying to make advertising work on the Internet, says CEO Eric Schmidt. "It's a huge moral imperative to help here." Google's goal "isn't to monetize everything. The goal is to change the world. ... We don't have an evil meter." Time Warner Mulls Sale of AOL Units, Magazines TheDeal Time Warner is considering a possible sale of AOL businesses and certain Time Inc. magazines, says CEO Jeff Bewkes. Celebrity and lifestyle magazines are outperforming news and business titles "by a significant margin." Also: Time Warner has "no agenda" to buy NBC Universal. Viacom: Era of Making Big Acquisitions Is Over MarketWatch Viacom CEO Philippe Dauman says that the company is unlikely to make a major large-cap acquisition, but will focus on smaller deals in the short term. He adds that the era in which big deals bring "value creation" is "largely over." The company is likely to focus on smaller "tuck-in" deals. Liberty May Merge DirecTV Stake, Content Unit Multichannel News Liberty Media may seek to "streamline" its holdings by spinning out its entertainment group and merging it with DirecTV, says the satellite provider's CFO, Pat Doyle. Liberty guys John Malone and Greg Maffei have "got a desire to try to streamline that structure," he says. Time Warner's HBO Buys Stake in FunnyorDie Variety HBO is getting into bed with Will Ferrell's FunnyorDie.com Internet video venture. The pay-cable network is buying a small equity stake in the 2-year-old comedy Web site and is commissioning 10 half-hours of programming from FunnyorDie as part of the deal. Landmark Eyes Possible Sale of Publishing Arm Financial Times Landmark Communications is mulling the possible sale of its other media holdings now that its attempt to sell The Weather Channel is nearing the final stages. Landmark is distributing data to potential bidders on Dominion Enterprises, its portfolio of advertising Web sites and publications. IAC's Barry Diller Sees Drop In Compensation New York Post IAC/InteractiveCorp CEO Barry Diller exercised stock options worth $183 million in 2007, while his salary was unchanged, the company says. His compensation fell to $15.4 million from $17 million in 2006. His salary was unchanged at $500,000 and he received no bonus. Disney to Stream Free Full-Length Movies Online BusinessWire Disney.com is announcing that for the first time ever the site will stream full-length movies. The family films will first air on ABC as part of the network's "Wonderful World of Disney" presentation on Saturdays, then will be available for free streaming the following week. Murdoch Shells Out Max to GOP Senate Runners MediaPost With some speculation that Rupert Murdoch had begun to sour on the GOP, the News Corp. CEO recently gave $28,500 to the National Republican Senatorial Committee. Meanwhile, COO Peter Chernin recently gave $12,500 to the committee to elect Democrats to Congress. United Business, Informa In Early Merger Talks Telegraph United Business Media and Informa, two of Britain's biggest media companies, are in the early stages of talks to merge to create a £3 billion information empire. The combined business-to-business media assets would include PR Newswire, TechWeb and Adam Smith Conferences. WPP Mulls Higher Offer, Hostile Bid for Researcher Bloomberg WPP, the world's second-largest advertising company, is considering raising its unsolicited offer or making a hostile bid for Taylor Nelson, the U.K. market researcher. WPP may also walk away "or stay as we are" with its latest offer for Taylor Nelson, says WPP CEO Martin Sorrell. Disney to Launch Family-Focused Social Network Mediaweek Disney Family.com plans to roll out a new parent-oriented social networking platform that will provide users with the ability to create profiles for their entire family. The new community will be different from typical social networks, which emphasize individual profiles. NBC Fund to Acquire German Games Web Site RTTNews NBC Universal's venture capital fund, Peacock Equity Fund, is entering an agreement for the majority buyout of Bigpoint.com, a German-based computer games Web site, for €70 million. Bigpoint has 23 million registered users and its portfolio includes 20 free multiplayer games. Media Bigs Eye Techie Tykes as Dollars Dwindle Variety Disney, Viacom and Time Warner and other media companies are devoting more than $1 billion on developing casual games and "virtual worlds" for youngsters. But children's advocacy groups are concerned about media projects aimed at kids that are "interactive and very personal." Media, Tech Bigwigs: No Clear Vision of Future BusinessWeek Jeff Bewkes, Barry Diller, Jerry Yang and other big players in media and technology don't appear to possess a clear crystal ball on the future of the media world, writes Jon Fine. Rupert Murdoch withdrew his bid for Tribune's Newsday because, he says, "I got scared." More: "The Future of Media." Media Journos See Cloudy Media Future HuffPo / Reuters Media journalists participating in I Want Media's "Future of Media" forum see uncertainty ahead for the industry. Says Vanity Fair's Michael Wolff: "The New York Times. It's very likely something really dramatic and potentially terrible and certainly historic is going to happen." Microsoft CEO Addresses Future of Media Washington Post What is Microsoft CEO Steve Ballmer's outlook for the future of media? "In the next 10 years, the whole world of media [is] going to be turned upside down. There will be no newspapers, no magazines that are delivered in paper form. There are going to be far more producers of content." Disney to Combine Digital Media, Gaming Units AllThingsD Disney plans to merge its digital media group with its video gaming division to create a new unit called Disney Interactive Media Group. The media giant is making the move "as console and handheld games become more connected to the Internet, says CEO Bob Iger, in a memo. News Corp Sells Stake In Tech Firm Macrovision Silicon Valley Business News Corp. is selling off all its shares of Macrovision Solutions, the Santa Clara, Calif.-based video technology provider. Macrovision's stock has lost almost 42% of its value since the announcement in December that it would purchase Gemstar-TV Guide for $2.3 billion. Murdoch Jr Said to Eye Media Stakes In India Howrah News After Lachlan Murdoch's investment in the Rajasthan Royals cricket team earned him a multimillion-dollar windfall, Rupert's eldest son is said to be eyeing stakes in the fast-growing Indian media. The investment in the Royals is described as the "first step in Indian media" for Murdoch. Zagat Owners End Sale, Aim to Expand on Web Bloomberg Zagat Survey is deciding against selling the restaurant-guide company and now aims to tap growth in its Internet business. Tim and Nina Zagat, who in January hired Goldman Sachs to find a possible buyer, say they have "decided to continue to grow business organically." Time Warner May Sell Certain Magazines MarketWatch / Wired Time Warner expects its Time Inc. publishing unit to be a "growth business," says CFO John Martin. He does not, however, rule out the sale of certain magazine titles. Also: A group led by Time Warner is said to be investing $40 million in "Lord of the Rings Online" creator Turbine. Viacom Combines Film Units to Cut Costs Bloomberg Viacom is combining some operations of Paramount Vantage, maker of the films "Babel" and "There Will Be Blood," with those of the larger Paramount Pictures to lower costs. Time Warner in April merged its New Line Cinema into the larger Warner Bros. unit. News Corp Book Boss Friedman Steps Down New York Post In a sudden move, Jane Friedman is out as president and CEO of News Corp.'s HarperCollins, the fourth-largest consumer book publisher in the world. In the first nine months of the current fiscal year, operating profit for HarperCollins dropped by some $6 million. Disney Gains on Higher Ad Rates at ABC Bloomberg Shares of Disney rose the most in almost three months on speculation its ABC unit is commanding advance advertising rates above analysts' estimates. ABC may boost rates 8% to 10% from a year earlier, which is "much stronger than even the most ardent bulls anticipated." NBC, Time Warner Eye Weather Channel Atlanta Journal-Constitution Time Warner and NBC Universal are the leading contenders to acquire the Weather Channel, sources say. Landmark Communications put the cable network up for sale last year. Final bids were due two weeks ago. It is unclear when Landmark will announce the buyer. Discovery, Advance In Cable Channel Deal Washington Post Liberty Media's Discovery and Advance/Newhouse plan to combine their stakes in Discovery Communications, resulting in a new public company that will consist of the Discovery and Animal Planet cable channels. Discovery says its channels reach a worldwide audience of 1.5 billion. Scripps Eyes Trib Stake In Food Network Bloomberg E.W. Scripps CEO Kenneth Lowe says discussions are intensifying on buying the 31% stake in the Food Network held by Sam Zell's Tribune, but no deal is imminent. He adds that the newly formed Scripps Networks Interactive is "not for sale and won't be for the foreseeable future." Media Moguls Struggle to Survive Bipolar World TheDeal In today's changing environment, media moguls are said to struggling to understand whether they should buy or sell assets. "Old-media guys are trying to transform into new-media 'it' girls," says one observer, "while upstarts are thinking, 'Hey, maybe I can take down a dinosaur.' " Disney Exec Leads in Hollywood 'Digital Power' Hollywood Reporter Disney Internet head Steve Wadsworth, who "seems to be making all the right moves," comes in at No. 1 on The Hollywood Reporter's list of the 50 online innovators in Hollywood. The trade title admits: "With the way the industry is evolving, next year's [list] might look totally different." Time Warner Sees Growth for Content Business Reuters Analyst views of Time Warner's growth prospects once the media giant separates from its cable operating business are too low, says CEO Jeff Bewkes. Some analysts have estimated growth in the mid-single digit percentages. "We're going to do considerably higher than that." Liberty Media May Bid for AOL Internet Access Bloomberg Liberty Media may emerge as a buyer for Time Warner's AOL Internet-access business, says Citigroup analyst Jason Bazinet, who put the chances of a deal at 40%. "While this declining business anchors Time Warner stock, it would bring a cash-generating business to Liberty." GE, Time Warner Asset Merger Rumors Heat Up Newsweek / HR Time Warner and General Electric are said to be starting "preliminary efforts to explore a commingling of their entertainment assets," including GE's NBC Universal. However, CEO Jeff Bewkes says: "We don't need to own anything [else]," in a clear reference to NBCU. NBCU Group Leads Bids for Weather Channel New York Times An investor group led by NBC Universal and two private equity firms appear to be leading the bidding for the Weather Channel. Final offers were due Friday. NBC, the Blackstone Group and Bain Capital are offering about $3.5 billion. Other bidders for the channel include Time Warner. NBC's Universal Studios Lot Ravaged in Fire Los Angeles Times A huge fire broke out early Sunday on the backlot of Universal Studios in Los Angeles, destroying several buildings, sound stages and film sets. Several firefighters suffered minor injuries fighting the blaze. The cause of the fire, which broke out on a "New York Street" set, is under investigation. News Corp Buys More European Media Assets Crain's New York Rupert Murdoch's global media giant is purchasing European properties at a steady clip. In January, News Corp. bought a 14.6% stake in German Pay-TV operator Premiere, which it increased to 20% in February. Now, News Corp. is taking control of Latvian broadcaster TV Riga. Indian Publisher in Record Western Media Buy Times of India Bennett Coleman, the publisher of the Times of India, is buying the U.K.'s Virgin Radio for $105.3 million, a deal believed to be the largest Asian media acquisition in the West. "If Murdoch can do Hindi in India," says one observer, "why can't an Indian media house do English in England?" Bronfman: Music Will See Multiple Biz Models Financial Times Warner Music chief Edgar Bronfman: "The record industry is a purchase model. That model is going to continue, but there will also be subscription models. There will be advertising revenues. There will be access models. And there will be what I call a network licensing model." Mass-Media Extinction Prediction 'On Target' Slate In 1993, novelist Michael Crichton wrote a Wired magazine essay titled "Mediasaurus," in which he prophesied the death of mass media. "I doubt I'm wrong; it's just too early," Crichton says. "It may be that 'media' was never as important as we who work in it imagine it was." Murdoch Predicts Landslide Win for Obama Yahoo Tech Ticker Rupert Murdoch says he expects Barack Obama to win the U.S. presidential election in a landslide. He also admits to influencing his New York Post to back Obama in the New York primary. Murdoch -- a new U.S. citizen -- says he is leaning toward voting for Obama in November. Viacom Hits 52-Week Low on Ad Concerns Associated Press Viacom's stock hit a 52-week low Thursday -- adding to the previous day's slide -- after CEO Philippe Dauman said second-quarter advertising growth will be slower than originally expected. Says one analyst: "This is the tip of the iceberg. Viacom is just seeing it first." CBS's Moonves Anticipates Slower Ad Sales Bloomberg CBS may sign fewer advance advertising agreements for the 2008-2009 television season than last year, reports CEO Les Moonves. The network expects the number of deals to be lower this year and prices to be higher. "Advertisers don't even know what to make of everything yet." Liberty Boss Malone Pay Package Under Fire New York Post Liberty Media chief John Malone is being taken to task for his "outrageous" compensation package, which includes a five-year employment agreement that renews daily. Shareholder firm Proxy Governance is advising Liberty shareholders to vote against the re-election of two directors in protest. Time Warner's 'Sex' Expected to Open at No. 2 Los Angeles Times Warner Bros.' "Sex and the City," this weekend's major motion-picture release, is expected to open at No. 2 to "Indiana Jones and the Kingdom of the Crystal Skull" from Viacom's Paramount Pictures. The R-rated "Sex" is tracking strongly among females over 25. Comcast Web Portal Taken Over by Hackers Associated Press Hackers took over and defaced Comcast's Web portal for several hours Wednesday night, leaving a cryptic message on the site that the company's 14.1 million subscribers use to access e-mail, news and technical support. Hackers posted that they had "RoXed" Comcast. Murdoch: U.S. Economy Faces 'Very Hard Time' Bloomberg News Corp. chief Rupert Murdoch predicts the U.S. economy will be dismal in the coming months. "People are suffering terribly," he says. Newspapers are going to "deteriorate tremendously." Also, Google is "the greatest company in America." Barack Obama is "like a rock star." Viacom Chief Dauman Sees Ad Growth Slowing Reuters Viacom expects a slower rate of U.S. advertising growth in the second quarter than in the first quarter, according to CEO Philippe Dauman. The company's second-quarter domestic ad revenue is expected to grow 3% to 4%. "Right now, we're in an economically uncertain environment." Time Warner CEO Bewkes Open to 'Unload' AOL Dow Jones Time Warner CEO Jeff Bewkes says the media giant doesn't want to "unload" its AOL online division -- but he is open to a deal if it increases the value of the Internet property. "If someone gave [AOL] more scale, and more resources, of course we'd be open to that." Disney's Iger: Hollywood Makes Too Many Movies Bloomberg Disney boss Bob Iger says Hollywood studios should reduce the number of films produced. "Too many movies are being released into the market. They can't all be good enough or marketed well enough to drive good returns." ROI in the film industry "isn't impressive." Murdoch to Lecture on Changing Media World Australian Rupert Murdoch will present a series of lectures on Australia's ABC Radio starting in November. The Boyer Lecture series is a showcase for prominent figures to comment on various issues. Murdoch is in a "rare position" to address the "changing media landscape," says ABC Radio. Hollywood Studios In Digital Deal With Actors Los Angeles Times The American Federation of Television and Radio Artists is reaching a tentative deal with Hollywood studios on a three-year contract. The deal establishes fees for content downloaded online and preserves actors' rights on the use of their voices and images in online clips. Disney Forms Division to Publish Graphic Novels Variety Disney is entering a deal with Ahmet Zappa, former Twentieth Television head Harris Katleman and writer Christian Beranek to oversee the new Kingdom Comics, which will develop graphic novels for film adaptation and turn past live-action films into comic books. Media to Feel Pinch of Sluggish U.S. Economy Hollywood Reporter Media and entertainment companies are likely to feel a pinch from a sluggish U.S. economy all year long, based on the results of the just-ended quarterly earnings season. News Corp. chief Rupert Murdoch puts it most bluntly: "There's no doubt the consumer economy is stressed." News Corp, CBS Most at Risk to Ad Weakness Hollywood Reporter News Corp. and CBS are more at risk than their peers to advertising weakness because of their higher exposure to auto and financial ads amid a sluggish economy, says a new UBS analysis. Viacom is "best positioned," due to its mix of "more economically resilient advertising." News Corp Raises Stake In German Pay-TV Dow Jones German pay-TV station Premiere is said to be naming two investment banks to represent all shareholders should News Corp. raise its stake in the company and makes a tender offer to minority shareholders. News Corp. last week raised its stake in Premiere to 25.01%. Murdoch's Mother Beats Australian Tax Bill Sydney Morning Herald News Corp. boss Rupert Murdoch's 99-year-old mother is triumphing over Australian tax authorities in court over a tax bill on an $81 million payment. Dame Elisabeth Murdoch had appealed an order to pay tax on the sum following a 1994 reorganization of family trusts. Will Time Warner Cable Acquire Rival Charter? The Deal Time Warner Cable may target Charter Communications after it splits from Time Warner, says Pali Research analyst Richard Greenfield. Troubled Charter, which is majority owned by Microsoft co-founder Paul Allen, is a "logical target," with its shares facing "a questionable future." Media Companies 'Endangered' by Old Models JackMyers Media companies are in danger of following the railroad industry model and becoming "Industrial Age mass distribution vehicles," warns media economist Jack Myers. "New models must be quickly developed before the economics of the media business collapse." Sorrell: Traditional Media Are Under Pressure Reuters Traditional media are under pressure in developed markets but still growing in newer markets like India, according to Martin Sorrell, CEO of advertising giant WPP Group. Also: Google plans to grow its business in television, radio and print, "and I am sure they will do that." Time Warner Hoping 'Sex' Sells This Friday New York Post Time Warner film studio Warner Bros. suddenly has a lot riding on the box office performance of "Sex and the City" after the disappointing numbers posted by "Speed Racer" -- which cost $100 million to make but has only grossed $32 million domestically. "Sex and the City" opens Friday. Viacom's 'Indiana' Digs Up Box-Office Gold Los Angeles Times "Indiana Jones and the Kingdom of the Crystal Skull," from Viacom's Paramount Pictures, rang up $151 million over five days in North America, making it the second-best Memorial Day weekend opener -- just $2 million shy of last year's "Pirates of the Caribbean: At World's End." Time Warner, NBC Journos Talk Up Merger Hollywood Reporter Speculation of a possible Time Warner-NBC Universal combination is being talked up by journalists at both companies. "Time Warner is considered the front-runner to merge with NBCU," reports CNBC's Julia Boorstin. Fortune's Richard Siklos describes such a deal as an "enticing prospect." NBC, Time Warner Vie for Weather Channel Wall Street Journal Time Warner and a partnership between NBC Universal and Blackstone Group are said to be the leading contenders to win an auction for the Weather Channel, ahead of Friday's deadline for a second round of bids. Time Warner is seen as a "more aggressive contender." Time Warner to Focus on AOL, Magazine Biz WSJ / Fortune Time Warner CEO Jeff Bewkes is pleasing shareholders by spinning off the cable business. What's next? An update on AOL's dialup business is reportedly coming. Also, the struggling Time Inc. is said to need to shut down unprofitable magazines and cut its workforce. Time Warner: The Sex (And The City) Economy Forbes Time Warner's feature-film version of HBO's "Sex and the City," set for release May 30, aims to be "the Super Bowl for women." The media giant's New Line Cinema has tie-in deals with marketers like Mercedes Benz and Skyy vodka. HBO says it is raking in "hundreds of millions of dollars." News Corp's 'Idol'-Fueled Fox Ranks No. 1 Bloomberg News Corp.'s Fox, the U.S. television network with the top-rated "American Idol," says it finished the season with the largest prime-time audience for the first time, surpassing five-year champion CBS. Fox's "Idol" finale Thursday night won 31.7 million viewers, up 2.9% from a year ago. Redstone: CBS, Viacom Won't Be Reunited Hollywood Reporter CBS chairman Sumner Redstone says that the company never will be reunited with sibling Viacom, which he also controls. A renewed combination will "absolutely not happen" despite a recent report suggesting that Viacom CEO Philippe Dauman is pushing for it sometime in the future. Viacom in Lawsuit by 'Funny Face' Director Bloomberg "Funny Face" director Stanley Donen is filing a lawsuit against Viacom's Paramount Pictures and retailer the Gap, saying they didn't get his permission to use an Audrey Hepburn dance scene from the movie in television commercials for women's pants. Donen wants $5 million. Disney Faces Product Recall Over Lead Paint Forbes Disney is recalling thousands of Tinker Bell magic wands and "Pirates of the Caribbean" sleeping bags contaminated by excessive levels of lead paint, say U.S. federal inspectors. No injuries have been reported. The problems were discovered during random tests. Clear Channel Sues Tribune Over Exec Hire Crain's Chicago Clear Channel is filing a lawsuit against Tribune, accusing the Chicago company of misappropriating trade secrets when it lured away Andrew Friedman to be a VP of interactive media. Clear Channel says it will not "tolerate Tribune's interference with valuable business contracts." Disney, Studios Paid to Drop Online Lawsuit Bloomberg Disney, News Corp. and Viacom are settling a copyright lawsuit against the movie-sharing Web site ShowStash.com after owner Timur Azaev agreed to stop infringing films and pay damages of $2.77 million. The lawsuit's aim was to stop "blatant and illegal activity." Senator in Push Against More Media Mergers The Deal Sen. Byron Dorgan (D-N.D.) is asking the U.S. Government Accountability Office to launch an inquiry into the impact of media consolidation. He wants the study to include an examination of to what extent consumers go to traditional media companies' sites on the Internet. Time Warner to Merge With NBC Universal? Bloomberg / CNBC Time Warner may use the $9.25 billion payout from its cable unit spinoff to pursue acquisitions of assets like the Weather Channel or Discovery Networks. Also: Time Warner is considered the front runner to merge with NBC Universal. Execs at both companies "are thinking about it." News Corp Rumored to Eye Video Game Site Pulse 2.0 News Corp. is said to be interested in acquiring Newsgrounds.com, an online video game company, through its IGN division. The Glenside, Penn.-based Newgrounds, founded in 1995, receives 500,000 unique visitors per day and describes itself as "the largest Flash portal on the Web." Barnes & Noble Mulls Acquisition of Borders BusinessWeek Barnes & Noble, the giant bookseller built through acquisition, may be on the verge of its biggest deal yet as it weighs bidding for top competitor Borders Group. Analysts say the deal could bolster Barnes & Nobles' bottom line at a price tag of well over $1 billion. Cramer: Media Biz Hurt by Apple, Google Hollywood Reporter Jim Cramer, the Web entrepreneur, influential stock-picker and host of CNBC's "Mad Money," says: "I hate media stocks." The reason? "Apple is taking away the profitability of TV, and Google is taking it away in print." Google is "a parasite. It doesn't create content, it steals it." Time Warner Gets $9 Billion on Cable Split MarketWatch Time Warner Cable will pay Time Warner a $9.25 billion dividend as the companies separate. With this deal, says CEO Jeff Bewkes, Time Warner will focus its businesses "on creating and distributing our branded content across traditional and digital platforms worldwide." Obama Vows to Target Big Media Mergers The Deal Sen. Barack Obama, in new public remarks, says he will make Big Media a target of his administration's antitrust enforcers if he is elected president. Much of the Democratic Party base blames media consolidation for uncritical coverage of the Bush administration's lead up to the war. Bertelsmann Names Chief for Random House IHT Bertelsmann is appointing Markus Dohle as the new chief of its crown literary jewel, Random House, the leading English-language trade book publisher. Dohle rose through the ranks of the German conglomerate's subsidiaries to head the company's printing and services division. AOL Time Warner Execs In SEC Hot Water Crain's New York AOL Time Warner ex-CFO John Michael Kelly and seven other former execs are being charged with accounting fraud by the U.S. Securities and Exchange Commission over their role in helping the company inflate revenue by more than $1 billion after AOL's merger with the media giant. Disney to Shutter Free Online Disneyland Wall Street Journal Disney's plan to shut down its Virtual Magic Kingdom on the Web, where fans interact with each other using avatars, is stirring protests among users. While VMK is free, access to Disney's other online game sites -- like Club Penguin and Toontown -- costs as much as $9.95 a month. News Corp: Media Need New Business Models Variety The answer to digital piracy isn't simply fighting it -- find new business models or prepare to die, warns News Corp. boss Peter Chernin. "To the degree we're only trying to protect existing business, we're toast. All we're doing there is staving off the inevitable. We'll be dinosaurs." Old Media Moves Triggered by Fears of Google CNET News.com Traditional media companies appear to be accelerating their acquisitions of Web startups. Recent deals include CBS-CNET and Comcast-Plaxo. The ascent of Google is said to have "forced old media companies to realize they must act immediately or lose relevance in the Internet space." Conde Nast Acquires Tech Blog Ars Technica TC / NYT Conde Nast is acquiring the popular tech blog Ars Technica for a price reported to be in the $25 million range. The site will become part of CondeNet's Wired Digital. Also: The buy includes Webmonkey, a site for Web developers, and Hot Wired, a storied Internet brand. News Corp Launches Ad Network for Finance Reuters News Corp's .Fox Networks is launching an international online advertising network focused on financial news and advice. About 30 web site publishers are part of the network, called Worthnet.Fox, including Dow Jones's Wall Street Journal, Barron's and MarketWatch. Time Warner Chief Parsons Set to Step Down Bloomberg Time Warner chairman Dick Parsons says he will probably step down after this year, a move that will allow CEO Jeff Bewkes to take over the position at the world's biggest media company. "I am leaving the company in good hands," says Parsons at Time Warner's annual meeting in Atlanta. IAC's Diller Plans to Reinvent Himself -- Again Portfolio Barry Diller's soon-to-split-up Internet outfit IAC/InterActiveCorp has created minimal value, analysts say. A new property, FiLife.com, a financial site joint venture with Dow Jones, is floundering and may never see an official launch. Diller seems "less a visionary and more a spastic dealmaker." Viacom Joint Venture Hires Ex-Showtime Exec Reuters A new entertainment joint venture formed by Viacom, its Paramount Pictures unit, and film studios Metro-Goldwyn-Mayer Studios and Lions Gate Entertainment is hiring former Showtime cable exec Mark Greenberg as CEO. Greenberg is a former executive VP for Showtime Networks. Media Sector Targeted by Activist Investors The Deal Activist campaigns in the media industry appear to be on the rise. The CBS acquisition of CNET Networks happened in part due to pressure from activist investors. Also, Carl Icahn is pushing for the sale of Yahoo to Microsoft. Many media assets are seen as "undervalued and worth more to buyers." 50 Cent: News Corp's Largest Shareholder? San Francisco Chronicle Rap performer 50 Cent is said to be on the verge of signing a deal with News Corp. to move his G-Unit Records under the media giant's MySpace Records umbrella. Half of the $300 million deal will be in stock, potentially making 50 Cent one of News Corp.'s biggest shareholders. Murdoch: We're on Cusp of Info 'Golden Age' Globes Thanks to the Internet, "we're on the cusp of a golden age of information," says Rupert Murdoch, speaking at a panel on new media in Jerusalem. News Corp.'s NDS unit, which was founded in Jerusalem, "allows us to secure and distribute our content to customers." News Corp's NDS Unit Cleared in Piracy Trial Reuters A federal court jury is clearing News Corp.'s NDS unit of satellite television piracy charges in a suit brought by DISH Network that could have been worth more than $1 billion. The jury is awarding only $1,500 in damages from NDS for a single test incident with a satellite TV smart card. Senate Votes to Override Media Ownership Rule Reuters The U.S. Senate is voting to overturn new, looser media ownership restrictions in the 20 biggest U.S. cities, fearing that media "will no longer reflect the rich mosaic of our country" after possible consolidation. The vote moves lawmakers a step closer toward overturning the new rule. Hollywood Actors, Studios Renew Labor Talks Reuters The Screen Actors Guild and major Hollywood studios plan to return to the bargaining table by May 28 to resume contract talks that broke off more than a week ago. Renewing talks by then will give the parties a little more than four weeks to reach a deal before the existing contract expires. Pellicano Found Guilty in Hollywood-Fueled Trial AHN Hollywood private eye Anthony Pellicano is being found guilty of racketeering and conspiracy charges after a high profile trial that featured celebrities Chris Rock, Garry Shandling and Sylvester Stallone as witnesses. Pellicano faces eight to ten years in federal prison. Comcast to Buy Plaxo for Social Networking PC World Comcast will acquire social-networking company Plaxo to power upcoming community features on its TV, broadband data and phone services. The Mountain View, Calif., startup will help Comcast build social-networking capabilities accessible by the U.S. cable giant's subscribers. Diller's Ask.com to Acquire Dictionary.com New York Times Ask.com, owned by Barry Diller's IAC/InterActiveCorp, is acquiring Lexico, the owner of Dictionary.com, as well as Thesaurus.com and Reference.com. Ask.com, the No. 4 search engine, and Dictionary.com will attempt to cycle traffic between each other. CBS to Buy CNET Networks for $1.8 Billion CNET News.com CBS is signing an agreement to acquire CNET Networks in a deal valued at $1.8 billion. The acquisition will make CBS one of the 10 most popular Internet companies in the United States, with a combined 54 million unique users per month and about 200 million users worldwide. Analysis: Old Media to Depend on Google for Ads Financial Times As television, newspapers and other media are digitized and move to the Internet, Google's advertising system will become the financial platform on which many of these businesses depend, according to industry observers. Google is "sitting on a goldmine." Its momentum "seems unstoppable." Media Content-Distribution Model in Decline Hollywood Reporter A few years ago, media moguls like Rupert Murdoch and Sumner Redstone touted the benefits of content and distribution "synergy." That strategy appears to be falling out of favor as the digital age shifts the balance of power. Distribution "used to be a monopoly," say industry experts. Murdoch Sees Mideast Peace Through Tech Ha'aretz Promoting technology throughout the Middle East could help advance peace, claims News Corp. chief Rupert Murdoch, speaking at a panel on new media and the Internet in Jerusalem. "We'll continue to do what we can to help Israel maintain its competitive edge," he adds. U.S. 'Business Elite' Embracing Online Media MediaPost America's business elite are changing their personal media habits, says a survey by market research firm Ipsos. Top execs are getting more deeply into the digital space, especially the Web sites of print media outlets, as they reduce their use of other media, especially television. Sony Video Games Unexpectedly Turn Profitable Bloomberg Sony is forecasting its operating income will rise 20% this year, beating estimates, as the games division that makes PlayStation 3 consoles turns profitable. The company says operating profit will climb to $4.3 billion in year ending March 2009, some 13% higher than estimated. Hollywood Studios, Actors Clash Over Web Clips Reuters Whether actors must give consent for snippets of their video work to be displayed online is the No. 1 disputed issue cited by the Screen Actors Guild after labor talks broke down last week. Studios want to pay actors a flat fee to distribute clips of TV shows and movies. Time Warner Sells HBO Shows on Apple iTunes Bloomberg Apple's iTunes will start selling programming from Time Warner's HBO, helping the pay-television network reach fans outside its subscriber base. "Sex and the City" will be priced at the regular iTunes rate of $1.99 per episode, while episodes of "The Sopranos" will cost $2.99 each. Disney Opens Lab to Test Ads for ABC, ESPN Associated Press Disney is opening a laboratory in Austin, Texas, to test the biometric reactions of consumers to advertising over the Internet, mobile devices and other new media. Disney aims to learn whether consumers are more engaged by such new ads and ultimately if it can charge more for them. Big Media Slam Ownership Rule Roll Back Ars Technica Thirteen U.S. broadcast and newspaper groups are filing denunciations of an appeal by public interest groups to redo the government's recent relaxation of the TV station/newspaper cross-ownership ban. The scheme is "perilously out of sync with the realities of today's media marketplace," says CBS. Time Warner Expected to Sell Magazines The Deal Time Warner CEO Jeff Bewkes, who just shut down two of the company's film studios, is expected to turn to the Time Inc. publishing unit for more cost cutting. A sale of the slow-growth Southern Progress division, which publishes Sunset and other magazines, is seen as a "no-brainer." Viacom Blog Buy Rumor 'Not Very Accurate' Wired A rumor that music blog tracker Hype Machine is being sold to Viacom for $10 million is "not very accurate," says its creator, Anthony Volodkin. The rumor may have started because "we've been talking to lots of people." He adds that the firm later may have "something to announce." Cablevision Acquires 97% Stake in Newsday Newsday Cablevision is announcing an agreement to acquire Newsday in a $650-million deal. Cablevision will own about 97% while Tribune will retain about 3% and ownership of real estate assets. Rival bidder Rupert Murdoch withdrew his $580-million offer on Saturday. Liberty Media Appeals IAC Breakup Ruling Bloomberg John Malone's Liberty Media, owner of a 30% stake in the Internet company IAC/InterActiveCorp, is appealing a court decision allowing IAC chairman Barry Diller to split his firm into five parts. IAC says in a statement: "We are quite confident that the decision will not be reversed." News Corp, Google Rumored to Eye Blinkx Reuters Shares of the British video search engine firm Blinkx surged 50% to a seven-month high Friday on talk that News Corp. and Google may bid for the firm. Speculation of a bid "does not sound ridiculous," says Piper Jaffray analyst Rajeev Bahl. Blinkx has "very intelligent" technology. Old Media Still Struggle With Web, Execs Say Red Herring Traditional media are still having trouble dealing with the new era, according to execs speaking at the Argyle Executive Forum on Leadership in Media in New York. Microsoft counsel Thomas Rubin argues that Internet players must become "stewards of intellectual content." Time Warner to Close Two Independent Studios Wall Street Journal Time Warner's Warner Bros. is shutting down its Picturehouse and Warner Independent Pictures film studios, cutting 70 jobs. The move comes as new Time Warner CEO Jeff Bewkes seeks to pare costs across the media company as part of an effort to kick-start the moribund stock price. Disney Fan Creates Citizen Journalism Web Site Wall Street Journal Twisney.com, created by a 34-year-old software developer and Disney fan, offers live updates from ordinary people walking around the Disney World recreational resort, using their cellphones to share their experiences via text and photos. Twisney allows users to share "real-time intelligence." Media Journos to Discuss Industry's Future I Want Media I Want Media is holding its first-ever discussion forum, "The Future of Media," on June 4. A panel of leading media journalists will exchange ideas and opinions on how newspapers, magazines and television are being shaken up by blogs, social-networking sites and online video. Media CEOs Address New Business Models BtoBOnline Tony Uphoff, CEO of TechWeb, says his company was about 85% print just a few years ago. Today, TechWeb is about 25% print, 30% online and 45% events. "We have completely and radically transformed our company" in order to "put us where the dollars are going." Murdoch Sees Economy Hurting Advertising Reuters Stress in the U.S. economy is squeezing advertising budgets, says chief Rupert Murdoch, adding that News Corp.'s Fox Interactive Media will miss its $1 billion annual revenue goal by 10%. News Corp. is nonetheless seeing strong ad sales at the Fox TV network and Fox News Channel. Media, Tech Giants Back Wi-Max Network USA Today Sprint and Clearwire are forming a new $14.5 billion venture to build a nationwide "WiMax" wireless network, with the goal of offering advanced wireless Internet services to millions beginning next year. Google, Intel, Comcast and Time Warner are major investors. Cablevision Nears Deal to Buy Sundance Wall Street Journal Cablevision is close to an agreement to buy the Sundance Channel, jointly owned by NBC Universal, CBS and Robert Redford, in a deal valued at $500 million. The deal could be the first of two big purchases for the cable operator, which has also made a $650 million bid for Newsday. Disney Profit Rises Despite Slow Economy Dow Jones Disney's fiscal second-quarter net income is up 22%, led by growth in the company's ABC, ESPN and Disney Channel, among other divisions. CEO Bob Iger points to the company's "proven ability to create high-quality content across wide-ranging distribution and promotional platforms." News Corp Could Lose Trial Over Murdoch ABC News If Rupert Murdoch doesn't testify in a lawsuit that accuses one of his companies of corporate espionage, it could cost News Corp. hundreds of millions of dollars, says the federal judge in the trial. News Corp. unit NDS is accused of hacking into EchoStar/DISH Network's security code. Redstone: No 'Battle' Between Viacom, CBS AP / Reuters Sumner Redstone is downplaying speculation of a "battle" between his Viacom and CBS, saying such talk "has been manufactured" by the media. Redstone also says: "We cannot tolerate piracy by anyone, including YouTube." Plus: "I will not object" to the return of Tom Cruise. Media Execs: Ad-Supported Content Is King Hollywood Reporter Advertising-supported content will remain the No. 1 business model and digital advertising will eclipse traditional advertising during the next five years, says a survey of media execs by Accenture. Companies "need to implement new digital technologies or be left behind." Hollywood Producers End Talks With Actors Associated Press Hollywood producers are temporarily breaking off contract talks with the Screen Actors Guild, calling its demands regarding DVD sales and online content "unreasonable." Both sides say they want to avoid a repeat of the 100-day writers strike. The union's contract expires June 30. Viacom 'Marvels' at Summer Film Prospects New York Post The summer is looking super for Viacom following a $100 million opening weekend at the U.S. box office for "Iron Man," from its Paramount Pictures unit. Up next is "Indiana Jones and the Kingdom of the Crystal Skull," which could be among the biggest hits of the summer. New York Seeks Crackdown on Film Piracy Los Angeles Times Andrew Cuomo, the attorney general for the state of New York, is proposing a Piracy Protection Act, which would slap first-time piracy offenders with fines of as much as $1,000 and up to a year in jail. Some 50% of all illegally recorded movies are pirated in New York, he says. Traditional Media Must 'Wake Up or Die' Seattle P-I Traditional media that refuse to invest in the Internet and withdraw into old business models are destined to fade away, warns Merrill Brown, a media consultant and former editor of MSNBC.com. However, the "macro trend" does not point to innovation coming from "old" media, he says. Alternative Media Forecast to See Growth Stamford Advocate By 2012, alternative media will comprise 26.6% of all U.S. advertising spending, according to a forecast by PQ Media, led by Internet forums and blogs. New technologies are creating "a generation of elusive consumers" that appears to be bypassing traditional media. Media Industry Job Cuts Adding Up in 2008 Hollywood Reporter Media layoffs are running 57% ahead of last year at 7,949 for the four-month period, says a survey from outplacement firm Challenger, Gray & Christmas. The figure is nearing the 11,700 media layoffs for all of 2007. CEO John Challenger says: "It is too soon to go into panic mode." Global: Media's Lifesaver in Tough Times MediaPost Exploding consumer demand outside the United States is key to sustainable media and Internet company growth, regardless of economic woes, writes Diane Mermigas. One trend gaining traction involves the mushrooming interest by foreign users in U.S. Web programs and TV shows. News Corp Prez is 'Hollywood's Digital King' Forbes Peter Chernin, News Corp.'s No. 2 exec, aims to drag Hollywood into the Internet age, according to the cover story of the new issue of Forbes magazine. Says Chernin: "People want to consume our content digitally. Either we're going to figure out a way to do it or they're going to steal it." Viacom is Recession-Resistant, Analysts Say Reuters / Fortune Viacom says its quarterly net profit rose 33%, beating Wall Street forecasts, on strong sales of the "Rock Band" video game and higher advertising revenue at MTV Networks. Also: Some analysts say Viacom's mix of media businesses makes the company "recession-resistant." CBS Should Be Taken Private, Cramer Says TheStreet.com CBS is seeing very little growth, says Jim Cramer, co-founder of TheStreet.com. "If you do not provide growth, no one wants your stock. CBS doesn't warrant being a public company. Prime-time [television] is not a great business anymore. This is a challenged company." News Corp: Our Focus is On New Media Biz Variety Today's content producers must distribute their work "as ubiquitously as possible," according to News Corp. president Peter Chernin. He says that he and chief Rupert Murdoch now spend more time thinking about their new-media businesses than about the traditional ones. Time Warner Among New Investors in Meebo Reuters Meebo.com, a popular Web-based service where users can simultaneously sign in to multiple instant messaging accounts, is raising $25 million in new funds from various investors, including Time Warner. CEO Seth Sternberg says he plans to use the money to "turn Meebo into a business." Playboy Enterprises to Create Online Network B&C Playboy Enterprises is creating the Playboy Audience Network, a suite of digital partnerships to distribute the company's content. Initial partners include YouTube, Metacafe, Break.com, Veoh and Howcast. Playboy will create original short-form video programming for the network. Thomson Reuters: Media Giant or Muddle? BusinessWeek The 21st century will be dominated by "information majors," says Tom Glocer, CEO of Thomson Reuters. The new company is more than double the size of rival Bloomberg. However, a company that gets 60% of its revenues from the financial industry could "take a beating." Comcast Sees Profit Drop; Sales Gain on Web Bloomberg Comcast, the largest U.S. cable-television company, is reporting a 13% drop in profit from a year earlier, when results were bolstered by a one-time gain. Sales surpassed estimates on new Internet-access subscribers. Revenue from Web access rose 12% to $1.75 billion. Time Warner Spins Off Cable, Eyes Breakup Bloomberg Time Warner CEO Jeff Bewkes says he will separate the cable-systems unit from the film and television businesses, bringing him a step closer to breaking up the world's biggest media company. The revamp of the floundering AOL Internet division may ultimately lead to its sale. Viacom, CBS Could Be Forced to Reunite MediaPost Some on Wall Street and in Hollywood are asking: Can Sumner Redstone afford not to reunite Viacom and CBS? Former Disney CEO Michael Eisner says it is "suicidal" for the two companies to remain separate. Together, Viacom and CBS are "more like Disney or GE." Time Warner to Start Day-and-Date Release CNBC Time Warner's Warner Bros. will start offering its DVD film titles on video-on-demand the same day they release the DVDs. Being the first studio to do this will help Warner Bros. "capture a disproportionate video on demand market share," says Time Warner CEO Jeff Bewkes. Moonves Gets Triple Paycheck of Dauman Bloomberg In 2007, Viacom CEO Philippe Dauman outperformed his corporate sibling, CBS CEO Les Moonves. Yet their surrogate father, Sumner Redstone, paid Moonves 3.2 times more. Both Dauman and Moonves are seen as possible successors to Redstone, who turns 85 in May. CBS, NBC Seen Bidding for Weather Channel Reuters CBS and NBC Universal are said to be planning to bid for the Weather Channel in the second round, with bids expected to range between $3.5 billion and $4 billion. Privately held Landmark Communications, which has put the channel up for sale, had originally sought $5 billion. Viacom Said to Eye Music Blog Aggregator Valleywag A "$10 million Viacom offer" is rumored to be "floating around" Hype Machine (hypem.com), a Web site that aggregates music uploaded to blogs. Fred Wilson of Union Square Ventures once described Hype Machine as "the best thing to happen to music since the Rolling Stones." Studios, Actors Still at Odds Over Media Pay Los Angeles Times Hollywood studios and the Screen Actors Guild appear to have made little headway toward a new contract after more than two weeks of negotiations. The talks are said to have bogged down over how much actors should be paid across both new- and old-media platforms. Gemstar-TV Guide OKs Takeover by Macrovision Associated Press Shareholders are giving a go-ahead to Macrovision's takeover of Gemstar-TV Guide. The deal is expected to close Friday. Macrovision, which develops technology to prevent unauthorized use of digital content, plans to allow consumers to call up data about TV shows on multiple devices. Martha Stewart CEO Eyes More Acquisitions WWD Martha Stewart Living Omnimedia is in the market for "appropriate acquisitions," says CEO Susan Lyne, while on a conference call with analysts. President of media Wenda Harris Millard says she sees technology and consumer electronics as among the "growing sectors." Media Congloms Expected to Talk Deals Hollywood Reporter Several media conglomerates are set to report earnings in the coming weeks. Deal talk will be a hot topic as Time Warner and News Corp. look at plays for Yahoo, Rupert Murdoch closes in on Newsday, and Viacom unveils its plans for a premium television offering. Big Media May Feel 'Real Pain' This Year Reuters U.S. media companies are expected to shrug off the economy's woes in the first quarter, but "growth will slow as the year progresses," analysts say. Media giants buoyed by strength in their "maturing" cable networks might find bigger pay-offs in faster-growing areas like the Internet. Time Warner Urged to Split Off Cable Unit Bloomberg Shareholders of Time Warner are urging CEO Jeff Bewkes to get rid of the cable-television unit and buy back shares after the stock fell 30% from a 2007 high. Bewkes could announce plans to unload the unit when Time Warner reports Q1 earnings on Wednesday. CBS Sees Profits Rise in 'Positive Surprise' Bloomberg CBS says its Q1 profit rose 14% as the company sold its "CSI" series abroad and a 100-day writers' strike temporarily lowered production costs. The radio division's operating profit fell 27%. Outdoor advertising may surpass radio as CBS's second-biggest profit center after TV. Blockbuster in Talks for Viacom TV Stake Wall Street Journal Blockbuster is said to be in talks about taking a stake in the new Viacom-led premium television channel that plans to compete with HBO, Showtime and Starz. Blockbuster, which used to be owned by Viacom, would get digital rights to the new channel's programming in the deal. McGraw-Hill Reports Profit Decline of 44% Bloomberg McGraw-Hill, the owner of BusinessWeek magazine and Standard & Poor's, says Q1 profit dropped 44% as slumping debt sales cut demand for credit ratings. The company's 2008 profit forecast fell short of analysts' estimates. Financial-services revenue is forecast to see a "steep drop." Oakstreet Media to Buy B-to-B Media Assets Folio Ex-Penton Media CEO Tom Kemp is leaving his post as managing director at Veronis Suhler Stevenson to launch a new company, Oakstreet Media, aiming to acquire b-to-b media businesses in partnership with private equity. Digital strategy will be critical to survival, he notes. Cox Acquires Adify for Online Ad Growth Associated Press Cox Enterprises, betting its future on Internet advertising as newspaper and television audiences shrink, plans to spend $300 million to buy Adify.com, a startup that helps Web sites pool their ad space. Says Cox exec John Dyer: "We're absolutely convinced that online revenue is continuing to grow." Comcast Joins Media Titans With New HQ Philadelphia Inquirer The Comcast Center in Philadelphia, the new headquarters of the U.S. cable giant, is almost finished. The 56-story skyscraper, at a cost of $750 million, is the tallest building between New York and Chicago. CEO Brian Roberts describes the building as "understated high-tech." Cablevision Set to Buy Sundance Channel New York Post Cablevision is believed to be the highest bidder to acquire Robert Redford's Sundance Channel but still faces competition from Time Warner and Viacom. "It's a tight race," says one source. Cablevision's stable of cable networks includes IFC, AMC and WE: Women's Entertainment. XM-Sirius Merger Opposed by Four States Bloomberg The proposed merger of satellite radio rivals Sirius and XM is being opposed by four states that say the combination of the only two pay radio companies poses a threat to competition. The states Connecticut, Maryland, Ohio and Washington want U.S. regulators to reject the deal. Emmis to Launch Interactive Subsidiary Mediaweek Emmis Communications will market its expertise in creating interactive Web services to other broadcasters and publishers, through Emmis Interactive, a new subsidiary. Emmis Interactive will design clients' Web sites and offer training and development services. Eisner Gets Hollywood Walk of Fame Star Associated Press Michael Eisner, the former CEO of Disney, is being honored with a star on the Hollywood Walk of Fame. "My success is tied to the people I worked with," he says. Eisner was ousted from Disney in 2005. He now runs Tornante, an investment firm he founded to invest in new media. Time Warner, Viacom Profits Seen Higher MarketWatch Analysts are anticipating higher profits at Time Warner, Comcast, CBS and Viacom when the companies announce quarterly results next week. But they will also be on the lookout for signs that a shaky U.S. economy is having an adverse effect on spending by advertisers and consumers. Media Companies to 'Earn Billions' Online Hollywood Reporter The leading 100 media companies will earn $20.7 billion in Internet revenue, with advertisers forecast to spend $2.9 billion annually on online video ads by 2010, according to a new report from the Screen Actors Guild. Some 9 billion videos are watched online every month, led by YouTube. Media Ownership Rejected by Senate Panel Bloomberg A U.S. Senate committee is voting to reverse a federal rule that lets media companies including News Corp. and Tribune own a broadcast station and daily newspaper in the 20 largest markets. Sen. Byron Dorgan, D-N.D., says the resolution aims to combat "galloping" media concentration. Murdoch Seen as 'Too Powerful' for Regulators Hollywood Reporter The "dirty little secret" about Rupert Murdoch's plan to acquire Newsday is that there's little anybody can do to stop him, writes Brooks Boliek. The U.S. Federal Communications Commission "doesn't have the power to review Murdoch's bid" in advance. Murdoch Jr: iPlayer Cramps Competition Times / Telegraph James Murdoch, the head of News Corp. in Europe and Asia, is accusing the BBC of crowding out competitors with its new iPlayer television-over-Internet service. Murdoch says he would prefer it "did not exist." Also: James Murdoch is the No. 1 "most powerful person in British media." Blockbuster Tests In-Store Entertainment UPI Blockbuster is experimenting with new formats for its U.S. movie-rental stores, moving toward in-store entertainment. Outlets in Dallas are testing gaming centers, play areas for kids, and coffee bars. Sony-provided fixtures will display the PlayStation3 as a movie platform. Starbucks Steps Back from Music Business Reuters Starbucks is taking a major step back from its music and book business by handing over management of its year-old music label to Concord Music, as it strives to rejuvenate its coffee-shop business. Paul McCartney is among the big-name artists attached to the Starbucks label. Planet Murdoch: Is His Empire Unstoppable? Independent / NYT While most democracies in the world recognize the dangers of concentrating media ownership in too few hands, Rupert Murdoch and News Corp. are "masters at exploiting loopholes in the law." Also: Murdoch's deal-making may not benefit his company's shareholders. News Corp Hired Me, Computer Hacker Says News.com.au Computer hacker Christopher Tarnovsky is testifying in court that News Corp. unit NDS Group hired him to develop pirating software. But he denies using it to penetrate the security system of rival satellite-TV service Dish Network. The trial could result in millions of dollars in damages. Disney Eyes Seattle For Internet Expansion Seattle P-I With Disney shifting more resources to the Web, the company plans to boost its Internet group in Seattle by hiring another 100 tech and advertising employees. A Disney spokesman calls Seattle the "epicenter" of Disney's Web push for ABC, ESPN and other company brands. Murdoch Taking On FCC Media Ownership Rule New York Times As he nears completion of a deal to acquire Newsday, Rupert Murdoch appears likely to pose the first challenge to the media ownership rule that the Federal Communications Commission recently adopted. Even without Newsday, Murdoch was in the process of seeking waivers. Marvel Picks Sony Exec For Digital Growth Reuters Marvel Entertainment is naming Ira Rubenstein, of Sony Pictures Digital, as head of its newly launched global digital media group. Rubenstein will be charged with increasing Marvel's reach of its comic characters -- such as Spider-Man and the X-Men -- across the Internet and other platforms. Disney's Sweeney Tops List of Iger Successors Portfolio Anne Sweeney, president of Disney-ABC Television, is credited with boosting Disney profits with smash-hit multiplatform tween products like Hannah Montana and "High School Musical." Sweeney is seen to hold the top spot on the list of those who might succeed Disney CEO Bob Iger. Murdoch: Should Google's Growth Be Stopped? Dow Jones Rupert Murdoch says he is concerned about Google's "tremendous momentum." While commenting on his company's possible acquisition of Newsday and involvement in a bid to buy Yahoo, the News Corp. chief ponders: "Is Google going to get control of the advertising world?" Viacom's Dauman Aims to Oust CBS' Moonves New York Post Viacom CEO Philippe Dauman is ending Paramount's deal with CBS pay channel Showtime to start a rival network with MGM and Lionsgate. His decision is said to be fueled by CBS boss Les Moonves' refusal to sweeten an offer on a renewal pact to run Paramount films on Showtime. Murdoch Firm Faces Trial For Tech Sabotage Wired Did a Rupert Murdoch company hire hackers to sabotage rivals and gain the top spot in the global pay-television war? News Corp.'s NDS Group, a U.K.-Israeli firm that makes smartcards for pay-TV systems, is going on trial in California, accused of cracking the encryption of rival NagraStar. Viacom CEO Dauman's Pay Bests Redstone's Bloomberg Viacom CEO Philippe Dauman, who has increased profit at the company with films like "Transformers" and reality shows on MTV, saw his salary rise in 2007 to $2 million from $653,846, says a regulatory filing. Chairman Sumner Redstone's salary dropped to $1 million from $3.05 million. Time Warner's AOL to Cut 100 Jobs in Ad Unit Reuters AOL will cut about 100 jobs in its Web advertising-selling unit Platform-A. The Time Warner Internet division's recent acquisitions of companies including Tacoda, Quigo and buy.at have resulted in jobs duplications. "At the end of the day, it's about consolidation," says a spokeswoman. News Corp Stock Turns 'Toxic' Over MySpace Bloomberg Rupert Murdoch's effort to turn his $580 million MySpace acquisition into an advertising powerhouse is turning News Corp. into a toxic stock. Fox Interactive Media says it will miss its $1 billion revenue goal for 2008. Marketers "don't know what their brands will be placed next to." Hollywood Studios In Web, Premium TV Deal Financial Times Viacom and its Hollywood studio Paramount Pictures, MGM and Lionsgate are forming a new television and Internet joint venture that will show new releases alongside original programming and classic movies. Paramount's output deal was with CBS' Showtime. Viacom Summer Movie to Battle Video Game New York Post Paramount Pictures' "Iron Man" is expected to be a summer blockbuster. But it may find its early box office take hindered a bit since it will be released the same week as "Grand Theft Auto IV," a much-anticipated video game from Take-Two Interactive. Both are aimed at young males. Sony Preps PlayStation 3 Online Video Service Los Angeles Times Sony is said to be preparing an online video service through its game console PlayStation 3 that could launch this summer. The initial version of the service will include movies and television shows flowing from the Internet to the PlayStation 3. Sony is reportedly in licensing talks with studios. Media Moguls Called to Save Hollywood Sign DHD The famous hillside Hollywood sign in Los Angeles is said to be endangered by a big land auction. "I'm calling on this town's movie and TV moguls to do something about it," writes Nikki Finke. Hollywood CEOs should team up to save the industry's "most recognizable promotional landmark." Time Warner's 'Apology' Rejected by China Bloomberg China wants CNN to make a "sincere" apology for remarks made by commentator Jack Cafferty, who called the nation's leaders "goons and thugs." China's Foreign Ministry says: "This despicable scheme will not dupe the Chinese people." A Web site has been set up called anti-cnn.com. News Corp: A Street Darling Faces Scrutiny Hollywood Reporter News Corp. shares have been Wall Street favorites in recent years, but in recent days a couple of analysts have cut their rating and/or price target on the media conglomerate's stock, citing growth concerns, particularly at its online assets, led by MySpace. Sony BMG Legend Clive Davis to Step Down New York Times Clive Davis, the renowned hitmaker, is giving up his corporate role as head of Sony's BMG division and control of its RCA Label Group, in a shake-up that reflects the new realities of the music business. Davis, 76, is making way for Barry Weiss, a younger exec known for controlling costs. Media Companies Need to Pick Up the Pace Wall Street Journal Media companies are scrambling to get their video content on the Internet. But they're not scrambling fast enough, says a study by online-content distributor Akamai Technologies. Within 72 hours, illegal file sharing can erode nearly 20% of the online audience for a primetime TV show. GE Faces Growing Pressure to Sell NBCU New York Times With General Electric's stock plunging to its lowest level in four years, once-isolated calls for at least a partial breakup of the conglomerate have become a chorus, with NBC Universal emerging as a prime candidate for a sale or spinoff. A breakup of GE "is looking more viable." Thomson Reuters Debuts With Job Cuts Reuters Thomson Reuters is debuting on Thursday as a top global information company, hoping a portfolio of products will help it ride out a financial industry downturn. The newly formed company has not said how many jobs it will cut, but chief Tom Glocer expects to reveal a number shortly. Disney to Join Ranks of Online Ad Networks Wall Street Journal Disney's soap-opera hub SOAPnet.com plans to announce that it has struck agreements with 45 Web sites that will allow it to distribute content on them and sell advertising on their behalf. However, the glut of online "ad networks" may lead to an inevitable shakeout. Media Giants May Combine AOL, MySpace Reuters If Time Warner and News Corp. lose Yahoo to Microsoft -- as widely expected on Wall Street -- analysts say the two media giants could explore merging their Internet properties, AOL and MySpace. Says Citigroup's Jason Bazinet: "We would not rule out the prospect of AOL/MySpace." Murdoch Could Face Annual Re-Election Hollywood Reporter News Corp.'s board proposes making chief Rupert Murdoch and other board members stand for re-election every year rather than every few years. The company also has eliminated the "poison pill" it had put in place in 2004 when Liberty Media acquired a sizable voting stake. Time Warner's CNN Apologizes to China Times of London CNN is apologizing after a news commentator Jack Cafferty called the Chinese as a "bunch of goons and thugs." The Chinese Foreign Ministry had demanded an apology for the "ignorance and hostility." In a statement, CNN says that it provides "robust opinions" as part of its coverage. Six Flags to Become a Media Company Associated Press Six Flags plans to become an entertainment company with its own characters to entice thrill-seekers to its theme parks much like Disney, says CEO Mark Shapiro, a former ESPN exec who took the helm of the company in 2005. Also, coming soon: a Six Flags theme park in Dubai. News Corp Hit by Google, Yahoo Concerns Los Angeles Times Shares of Rupert Murdoch's News Corp. fell the most in five years after Bernstein Research and UBS cut their outlook, citing growth concerns. "We are wary of News Corp.'s positioning in this intensely competitive business that features established players including Google and Yahoo." On Rupert's Speed Dial: Ailes, Chernin Independent Some 26 individuals have their numbers listed on the speed dial of Rupert Murdoch's personal office telephone, according to the Newseum, the new museum of the modern media, which opened last week in Washington, D.C. Among the lucky 26: Roger Ailes, Peter Chernin, Col Allan, Peter Levinsohn. Disney May Face Decline in 2008 Film Sales Bloomberg / Fortune Disney faces the steepest drop in movie revenue this year among the major U.S. studios, according to Citigroup. The media company has a "relatively weak slate" of releases. Also: Yahoo is "an interesting business but expensive for us," says Disney CEO Bob Iger. Time Warner to Cut 450 Jobs From New Line Reuters Time Warner will cut 450 jobs from New Line Cinema in a highly anticipated move following an earlier decision to fold the movie studio under the wing of Warner Bros. Entertainment. About 40 of New Line's employees will be offered new jobs at Warner Bros. GE CEO Immelt Under Pressure From Investors Bloomberg NBC Universal parent General Electric is predicting 2008 profit will increase no more than 5%, calling CEO Jeff Immelt's forecasting and strategy into question. Portfolio manager Peter Sorrentino says: "The board needs to ask, 'Are we really headed in the right direction?' " Blockbuster Bids $1B+ for Circuit City USA Today Blockbuster, the No. 1 U.S. video-rental company, wants to create a nationwide home entertainment power by offering more than $1 billion to acquire Circuit City, the No. 2 consumer electronics chain. Blockbuster describes the plan to blend entertainment hardware and software as "a game changer." Time Warner Mulls Weather Channel Buy Reuters A handful of media companies are gearing up to submit second round bids for the Weather Channel. Fewer than five companies are putting together the second-round bids. A source briefed on the matter says Time Warner is in talks to buy the channel from Landmark Communications. NBC Should Be Sold, GE Investors Say Fortune General Electric CEO Jeff Immelt is resisting calls to sell off NBC Universal. Investors' cries could grow louder if GE disappoints when it reports first-quarter earnings. Still, in the current financial environment, a sale of GE's media holdings is seen as unlikely. Viacom Service Sells Movie Clips for $1 New York Post Paramount Pictures, in a first, is selling movie clips for at least $1, as part of the launch of a new online clip service called VooZoo that aims to turn film snippets into a new source of revenue and Hollywood's answer to the ringtone. So far, VooZoo is available only on Facebook and There.com. Media, Tech Giants In Battle For Yahoo Reuters / NYT Yahoo is suddenly the target of two warring camps of tech and media titans. Yahoo and Time Warner are close to a deal to merge Yahoo with AOL, while News Corp. is in talks with Microsoft about joining its bid for Yahoo. One observer says: "The whole situation seems very unstable." Disney's Iger Talks About Biz In Digital Age Hollywood Reporter Disney CEO Bob Iger says he expects primetime TV shows to be simulcast online, runs ABC like a content studio given that its distribution brand value is diminished, and regards media concentration rules as "irrelevant" in the digital age. "I laugh at it. It's old world," he says. Time Warner Renames Charlotte Sports Arena News & Observer Time Warner Cable is entering a deal with the Charlotte Bobcats basketball team to rename the Charlotte Bobcats Arena as the Time Warner Cable Arena. The deal also will move Bobcats game telecasts from Time Warner's News 14 to Fox Sports Net South, which is available in more homes. Martha Paid $2M for '07 as Company Rebounds Associated Press Martha Stewart, founder of Martha Stewart Living Omnimedia, received $2.06 million in compensation for 2007 while company CEO Susan Lyne received about $1 million in the year the company returned to profitability. For 2007, Martha Stewart Living swung to a profit of $10.3 million. News Corp Buys Stake In Online Video Network Thomson Financial Fox Networks, an advertising network run by News Corp.'s Fox International Channels, is acquiring a majority stake in utarget, a European ad network specializing in online video. The unit will be rebranded utarget.Fox and is expected to boost News Corp.'s efforts in online advertising. Disney Game Arm to Buy Chinese Developer Associated Press Disney Interactive Studios plans to buy Chinese company Gamestar, as the U.S. entertainment giant expands in China. The acquisition will contribute to Disney's "global growth plans" and new products, says Graham Hopper, general manager for Disney Interactive. Big Media Shrink During Digital Transition MediaPost A study of big media companies from 2003 to 2007 suggests that they will end up smaller and that shrinkage may be here to stay. Behemoth Time Warner, from a combined market cap of $280 billion in 2000, has fallen to a meager $52 billion today and is under pressure to sell off assets. Analyst: New Media Profits a Long Way Off Radio Ink While new media and digital are still a focus for "old" media companies, "there is still no consensus on the appropriate revenue model," according to Wachovia analyst Marci Ryvicker. Digital opportunities won't have "any financial significance" for "at least five, if not 10, years." Time Warner Investors May Revolt if AOL Fails Bloomberg AOL's move to New York this month may signal the last chance for Time Warner's Internet division to convince investors it has a future in advertising. "I know we have work to do," admits AOL COO Ron Grant. If the ad strategy fails, Time Warner investors may revolt. Redstone Legacy Clouds Future of Viacom, CBS New York Times Chief Sumner Redstone's frayed relationship with his daughter, Shari, who is nonexecutive vice chairman of both Viacom and CBS, makes the issue of who will succeed him as controlling shareholder much more difficult. Shari was once regarded as the clear successor. Murdoch: Traditional Mass Media Will End Blue & Gray Rupert Murdoch foresees the end of traditional mass media with consumers receiving news and entertainment from limited sources. Media companies need to diversify to survive, which is one reason his company acquired MySpace, he says. "Technology is going to destroy all the old ways." Murdoch Son Media Buyout Deal Collapses Financial Times Lachlan Murdoch's $3 billion bid for Australia's Consolidated Media Holdings collapsed after members of his bidding consortium failed to agree to revised terms. The failure of the deal is a setback to Rupert Murdoch's eldest son and his ambition to resurrect his media career. News Corp Internet Division to Reorganize Reuters Fox Interactive Media could fall short of its fiscal 2008 revenue target of $1 billion, as it reorganizes to better exploit online advertising. The News Corp. division plans to launch its long-awaited online ad network, FIM Audience Network, consolidating its newly developed ad technologies. Media M&A Activity Strong Despite Economy BtoBOnline Despite the slowing economy, mergers and acquisitions in the media industry are keeping up a fairly strong pace, according to a report released by media investment bank Jordan, Edmiston Group. AOL's $850 million acquisition of Bebo helped lift the deal value in this year's first quarter. Tribune May Sell Stake in Food Network Bloomberg Tribune boss Sam Zell will have to sell assets besides the Chicago Cubs baseball team and its Newsday newspaper to pay off its $1.85 billion debt, according to bond research firm Gimme Credit. Tribune will need to look at selling other assets, such as its 31% stake in the Food Network. Lachlan Nears Media Deal with Providence Sydney Morning Herald Lachlan Murdoch is on the cusp of signing a deal with U.S. private equity firm Providence Equity Partners for his $3.3 billion takeover of Australian media giant Consolidated Media Holdings. The deal would be Providence's "maiden investment in Australia." Media Cross-Ownership Senate Panel Delayed Bloomberg A U.S. Senate committee plans to vote April 24 on a measure to reverse federal rules that let companies own a broadcast station and daily newspaper in the 20 largest markets. Current waivers benefiting Tribune, Gannett and Media General could be endangered. Murdoch's Daughter Hosts Obama Fundraiser New York Times Rupert Murdoch's daughter, Elisabeth, is hosting a fundraiser for U.S. presidential hopeful Barack Obama at her London home. A contribution of $2,300 offers access to the VIP reception; attendance to the main event requires $1,000. Her father's New York Post has endorsed Obama. Big Media Stocks Hit New 52-Week Lows Hollywood Reporter The stocks of major media companies tumbled during the first quarter, with nearly all sector biggies -- Time Warner, News Corp., CBS -- hitting new 52-week lows amid weaker overall markets and concerns about the advertising market outlook fueled by fear of a U.S. recession. Media Survey: Challenges, Opportunities PRWeek The prevalence of online news is forcing journalists to work more -- and faster, according to first-ever PRWeek/PR Newswire Media Survey. "I've become a blogger," says Scott Hensley, a reporter for the Wall Street Journal. "I didn't even know what that was a few years ago." The New Rules of Media: Evolve or Die PBS People's media habits are changing, as they go online more often and regularly, observes Mark Glaser. Among today's new rules of media: People Are in Control of Their Media Experience; Anyone Can Be a Media Creator or Remixer; and Traditional Media Must Evolve or Die. Disney Synergy at Work for Jonas Bros Los Angeles Times Disney, with its eye on a new potential franchise, is using its television, radio and Internet properties to boost exposure of the Jonas Brothers. Last week, the boy band appeared on ABC's "Dancing With the Stars" and Nickelodeon's Kids' Choice Awards. Coming soon: the Jonases' first movie. Time Warner to Redirect Focus to Content MP / Bloomberg Time Warner's expected separation of its cable holdings is likely to force management to pay closer attention to the conglomerate's content assets. Also: Time Warner must share control its Superman copyright with the heirs of the comic hero's creator, a judge says. Pellicano Trial |