Company Town

Opening day: 'Christmas Carol' debut not looking too jolly

Ben Fritz — Sat, 07 Nov 2009 08:45:48 -0800

Walt Disney Studios' big-budget holiday bet "A Christmas Carol" got off to a soft start Friday, selling a studio-estimated $9 million in the U.S. and Canada.

Based on the performance of similar films, that means the motion-capture-animated tale starring Jim Carrey should gross $30 million to $35 million through Sunday, a relatively weak debut given its production budget of nearly $200 million and Disney's substantial investment in marketing.

Pre-release surveys had indicated the movie would open to at least $40 million domestically over its first three days.

A soft launch at home won't necessarily be a lump of coal in Disney's stocking, however. Several other family movies have done huge business overseas this year, and the studio is surely hoping "A Christmas Carol" will do the same. In addition, family movies often play for a long time in theaters. Director Robert Zemeckis' previous motion-capture holiday tale, "The Polar Express," grossed $30.6 million in its first five days after debuting on a Wednesday and went on to collect a healthy $162.8 million.

"This Is It" had a strong hold for a concert movie. Sony's Michael Jackson film saw ticket sales drop 47% on Friday from a week earlier, putting it on track for a full weekend decline of closer to 40% and a three-day gross of about $14 million. Most concert movies decline more than 50% on their second weekends.

Overture's "The Men Who Stare at Goats" and Universal's release of Gold Circle's "The Fourth Kind" appear headed toward openings in the low- to mid-teens, while "The Box" from Warner Bros is on track to gross about $8 million by Sunday.

-- Ben Fritz

Photo: A scene from "A Christmas Carol." Credit: ImageMovers Digital

Former chief negotiator Nick Counter, 69, dies

Richard Verrier — Fri, 06 Nov 2009 18:13:46 -0800

Nick Counter, the longstanding former negotiator for the major studios who squared off against Hollywood's writers during a 100-day strike in 2008, has died. He was 69.

The former president of the Alliance of Motion Picture and Television Producers,
was taken to West Hills Hospital earlier this week after collapsing in his
Los Angeles home.

Counter was a fixture in Hollywood labor circles, having overseen some 400 labor
contracts with writers, actors, film crews, musicians and score of other
professions.

The former amateur boxer and University of Colorado halfback served as AMPTP's
president for 27 years and was the chief negotiator for 311 major labor pacts,
including six in 2008. He retired in February, marking the end of an era.

For most of his tenure, Counter presided over a period of relative labor quiet, except for two major strikes that rocked Hollywood, in 1988 and 2007-2008, both by Writers Guild of America.

--Richard Verrier

Photo of Nick Counter by Gary Friedman/LAT

Breaking up the boys' club in Hollywood labor negotiations

Richard Verrier — Fri, 06 Nov 2009 17:34:04 -0800

Carol Lombardini may have the toughest, if least glamorous, job in Hollywood. As the chief negotiator for the major studios, she must find consensus among a group of executives who often have conflicting interests and priorities.

But Lomabardini, the newly appointed president of the Alliance of Motion Picture and Television Producers, has had plenty of time to learn what she’s getting into. In selecting Lombardini for the job, the alliance’s board chose an ultimate insider. The onetime labor attorney has spent most of her career — 27 years — at the alliance, where she worked under her longtime mentor, Nick Counter, who retired earlier this year.

In a recent interview, Lombardini, 54, shared her thoughts on the new job, how she might do things differently and the challenges she faces to find common ground with Hollywood’s increasingly restless talent unions while pushing the agenda of her demanding bosses.

You were up until 3 a.m. the other night negotiating a contract with the American Federation of Musicians. Clearly, you don’t keep bankers’ hours.

It’s very hard to focus when you have 20 people in a room. It happens more often than I would like. There are days when I wish I had a 9-to-5 job.

So how many labor contracts have you been involved in during your career?

I think I’ve participated in more than 300 deals. This is probably one of the most heavily unionized industries in the U.S. When you step foot on a set in Hollywood, you’re automatically dealing with 25 unions. It’s very challenging because you have to know what’s in each contract. Even locals within the same union have different points of view on the same issues.

In some ways you have a thankless job: the nemesis of Hollywood labor.

There is a certain truth about it being thankless. As the chief negotiator, you are the target of negative attention from the other side. But the irony of the situation is that, in reality, I’m labor’s closest ally because if I can’t convince my bargaining committee to do something they are asking for, they are not going to get it.

You’re the first female negotiator for the major studios. Are you ready to break up the boys' club?

I think we have broken up the boys' club. When you look at our bargaining committee, I would say we’re 30% women. Women have done a really remarkable job in labor relations. When I first came to this job 27 years ago, there were many people on the management side who probably never would have considered a woman for the top position.

Your predecessor, Nick Counter, was known as a pugnacious negotiator. Will you adopt a similar approach?

It’s hard to compare. I’m a good listener at the bargaining table. I try to be. I’m still a representative of management. I represent major studios, each of whom has different businesses and in some cases different interests. All of that is the same as it was for Nick. I think the one area where we may really differ a lot is that I think getting out in front of negotiations, having regular communications with the guilds and unions with whom we bargain, so that we can share perceptions or disagree really about what the world looks like, is very important. I’ve already had discussions with representatives of the Writers Guild and the Screen Actors Guild about doing that. A lot of the contentiousness that we ran into was based upon our different views of the world.

In fact, during the (2007-2008) writers strike, it seemed that you were practically speaking different languages.

I think increased dialogue between the parties would have helped on some issues, particularly in new media, where the companies felt it was too early to negotiate a deal, and the writers guild felt they were going be left in the dust and have this whole market develop around them and them not be part of it. It may not have prevented a strike, but having discussions about that at an earlier stage might have been very helpful. There was a sense that a strike could not be avoided. We really didn’t have a functioning relationship.

And you have one now?

We’re working on it. I’ve made efforts to reach out to the WGA leadership to change that dynamic.

Looking ahead to 2011, when contracts for actors, writers and directors all expire, conditions would seem ripe for another showdown between studios and talent.

I hope not. Everybody endured some battle scars from the last round. The economy in L.A. County and elsewhere suffered tremendously as a result of the last strike. A lot of people lost their jobs. Nobody really wants to revisit those consequences, so I’m optimistic that people will say, "Let’s find a way to get this done."

Yet both sides have ample grievances. Actors and writers are having a tougher time earning a living, and media companies are facing their own economic issues.

This is an industry that is challenged by a number of things: by the introduction of new media that doesn’t have a workable business model yet. We’ve already seen a dip in consumer spending on the products that the industry produces. DVDs are down substantially. Box office is doing pretty well but we aren’t really increasing attendance any, we’re just charging higher prices. Piracy is obviously an enormous problem. Our whole television business model is very much challenged. Do advertisers want to continue to be part of this business? Virtually every television show produced by our member companies has been instructed to cut their budgets from 3% to 20%. We need to find a way to have our contracts reflect a more efficient system of production.

That sure sounds like you're going to be asking for rollbacks from talent.

I don’t necessarily mean wages will be cut, but maybe there are more efficient ways to produce. We have to look at whether on crews, for instance, we can assign work to a smaller group of people.

Critics have said the AMPTP is too large and unwieldy to effectively bargain on behalf of the studios. What do you say to that?

You have a certain number of companies who are signatories to those contacts and each of those companies needs to have a voice. I don’t think that this organization is incapable of negotiating contracts. I think the labor executives are a very strong group. They are in touch with their CEOs and aware of what their CEOs want them to achieve at the bargaining table. Unfortunately for me, they don’t all have identical agendas.

--Richard Verrier

Photo of Lobardini by Spencer Weiner / Los Angeles Times

The Morning Fix: Waiting for Oprah. Moonves is bullish! Walmart slashing prices. Littlefield to pen tell-all (or more likely, tell-some)

Joe Flint — Fri, 06 Nov 2009 07:48:39 -0800

After the coffee. Before getting depressed that "Sesame Street" turned 40.

Will she or won't she? It's that time of the decade again where everyone starts trying to figure out whether Oprah Winfrey will keep doing her daytime talk show or not when her deal is up in 2011. The newest round of speculation kicked off when the Los Angeles Times and others noted that the latest hire to work on OWN, the Oprah Winfrey/Discovery Communications-backed cable network in the works, was one of the talk queen's top producers. That was seen as a possible sign that perhaps Winfrey too would jettison the show to focus on OWN. Then Deadline took that speculation a step (or maybe a dozen steps) further and reported that Winfrey actually already had decided to move her daily show to OWN in 2011. That was quickly denied by both Winfrey's production company and CBS, which distributes the talk show. Both said no decision on the show has been made. Now today, the New York Times weighs in on the various options Winfrey has to choose from. Tired yet?

It's too soon to begin to look a lot like Christmas. But why should that stop Hollywood? This weekend, just one week after Halloween and three weeks before Thanksgiving, the Christmas movie season officially opens with Disney's "A Christmas Carol" remake. Forecasts and predictions from the Los Angeles Times and the Wrap.

Happy Birthday. "Sesame Street" turns 40 next week. The show, which has won a record 122 Emmys, still shoots in Queens, New York, and often gets as many big-name guests as "Saturday Night Live." Among those who have visited with Oscar and Big Bird and the rest lately include Adam Sandler, Ricky Gervais, Cameron Diaz and Jimmy Fallon. USA Today looks at the history and challenges of Sesame Street.

Stop the presses, CBS's Moonves is bullish! CBS Corp. swung to a profit in the third quarter and its ever-upbeat CEO Leslie Moonves said the company is seeing "strong evidence" of an economic recovery. The network's biggest boost came from reruns sales of its dramas including "Criminal Minds" and "Medium." Details from the Los Angeles Times. On that note, Variety reports that CBS has already sold reruns of its new hit "NCIS: Los Angeles" to USA Network for a walloping $2.5 million per episode.

Will must-see mean must-read? Warren Littlefield, the longtime NBC programmer who was one of the architects of entertainment during the Peacock's glory years, is writing a memoir on those days. Littlefield, who was known for (among other things) asking questions then answering them, told Variety that the book would be an "honest, accurate, fun-filled tour."

Want to get depressed? It's time for the Hollywood Reporter's annual "Next Generation" special in which the paper lists the top executives under the age of 35, which no doubt leads to screaming from those not on it and anxiety for those who are over the age limit. Between that and "Sesame Street" turning 40, it's not a good day for us boomers and aging Gen-Xers.

Inside the Los Angeles Times: Walmart Stores Inc. is cutting its DVD prices to $10, which will no doubt start a price war among retailers. Betsy Sharkey on the remake of "A Christmas Carol" and "Precious." John Horn on the perils of taking "Spider-Man" to Broadway.

-- Joe Flint

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CBS reports third-quarter profit; advertisers 'knocking down the doors,' Moonves says

Meg James — Thu, 05 Nov 2009 17:12:16 -0800

CBS Corp., which owns the most-watched TV network, released earnings this afternoon that revealed glimmers of hope that the recession's grip on the advertising market finally might be easing.

Higher syndicated rerun sales of its television shows, including "Criminal Minds," "Medium" and "Ghost Whisperer," and an increase in TV ad revenue helped the broadcaster swing to a profit for the quarter that ended Sept. 30. CBS reported net income of $207.6 million compared with a loss of $12.46 billion in the third quarter of 2008, when the company wrote down the value of its TV and radio stations.

Revenue of $3.35 billion for the quarter was flat compared with the year-earlier period.

"There is no question that we are seeing strong evidence of a recovery right now," CBS Chief Executive Leslie Moonves said during a conference call with analysts Thursday afternoon. "Obviously nothing going forward is certain, and we must be mindful that the economy is still somewhat volatile."

Still, the CBS chief was bullish, saying he expects CBS' TV advertising revenue to grow this quarter and into 2010. During the third quarter, however, the company's radio and billboard division generated lower sales, further demonstrating that among media companies, local advertising has been hardest hit by the recession.

The heart of the company, the CBS television network, has gotten off to a solid start for the new fall prime-time season, and that has helped drive demand for commercial time, Moonves said. Last summer, when CBS sold the bulk of its commercial inventory for this season, the economy was weak, consumers were wary and advertisers were holding back spending. Consequently, CBS did not sell as much network advertising time in advance of the season as it has done in previous years.

But holding back commercial inventory several months ago is now paying off. The company is commanding dramatically higher prices -- about 25% more -- for its commercial time than it did just a few months ago, Moonves said during the conference call. There is so much demand for commercial time, he noted, that CBS is jettisoning promotional spots to make way for paying customers.

"They are knocking down the doors," Moonves said. "There is a great deal of demand for our spots. Some of the other networks are not in the same position. So we are a very good buy."

CBS' total audience has grown 1% this season; it has been averaging 12 million viewers a night in prime-time. Although CBS' prime-time audience is down 6% among ages18 to 49 -- the demographic most prized by advertisers -- two other networks have seen even steeper declines. ABC's 18- to 49-year-old audience has fallen 9% this season and NBC's is off 13%. Fox, which has had the strongest start of the broadcast networks, is up 16%.

-- Meg James

Photo of Leslie Moonves by Justin Sullivan / Getty Images

Redbox revenue still booming, but growth is slowing

Ben Fritz — Thu, 05 Nov 2009 16:29:19 -0800

Good news for the three Hollywood studios lined up against Redbox: the $1-per-night DVD rental kiosk company's revenue growth slowed in the third quarter.

Good news for the four studios that have signed deals with Redbox: Its revenue was up 90% in the same three-month period that DVD and Blu-ray sales revenue plunged 13.9% and overall home entertainment revenue dropped 3.2%.

Redbox's parent company, Coinstar Inc., reported today that third-quarter revenue for its DVD rental subsidiary grew 90% to $198.1 million. In the second quarter, it grew by 110% and in the first quarter, it increased 155%.

A substantial part of that growth was driven by the increasing number of kiosks. Same-store sales were up a much less impressive but still healthy 26%, down from 33% in the second quarter and 35% in the first.

That raises the question of whether Redbox's growth curve will continue to bend down and eventually hit zero.

The company added 2,700 kiosks in the quarter, bringing its total to 20,600 as of Sept. 30, near its goal of between 21,000 and 22,000 by the end of the year.

20th Century Fox, Warner Bros. and Universal Pictures are in court with Redbox over their efforts to impose a window of several weeks during which the kiosk company wouldn't be allowed to offer their movies. The three studios believe that $1-per-night rentals undervalue their products and undermine more lucrative disc sales and video-on-demand.

Lions Gate Entertainment, Sony Pictures and Summit Entertainment have signed multiyear distribution deals to place their movies in Redbox kiosks. Paramount is in the midst of a test with Redbox that will last until the end of the year.

-- Ben Fritz

Photo: A Redbox kiosk at an Albertson's grocery store in Santa Monica. Credit: Lawrence K. Ho / Los Angeles Times.

Movie projector: Holiday season kicks off with Disney's pricey 'Christmas Carol'

Ben Fritz — Thu, 05 Nov 2009 14:48:56 -0800

We just got past Halloween. Thanksgiving is still three weeks away. You know what that means. Christmas baby!

Friday, Walt Disney Studios opens "A Christmas Carol," its nearly $200-million version of the classic holiday tale starring Jim Carrey, with the majority of theaters playing it in on digital 3-D screens that have higher ticket prices. Executives who follow pre-release polling say the movie will likely sell between $40 million and $45 million worth of tickets on its opening weekend. That's a decent start given the movie's huge budget and an aggressive marketing campaign by Disney.

A long life in theaters and a strong performance overseas will be key to the picture's ultimate success. "A Christmas Carol" debuts simultaneously this weekend in Australia, Britain, German-speaking Europe, Mexico, Brazil and Scandinavia. It will open in other countries by the end of November.

Family pictures often hold well at the box office and draw bigger international audiences. "The Polar Express," "Christmas Carol" director Robert Zemeckis' similar motion-capture holiday movie from 2004, opened to $30.6 million over its first five days and went on to gross $162.8 million (not including subsequent re-releases). It collected $124 million overseas, but Disney likely has even higher hopes for "A Christmas Carol." Several family movies this year, such as "Ice Age: Dawn of the Dinosaurs" and Disney's own "Up," have done huge business outside the U.S.

"A Christmas Carol" kicks off a holiday season with a number of big movies that could help boost what has already been a healthy year at domestic box office. On Nov. 13, Sony Pictures opens its big-budget disaster movie, "2012," which is tracking for a big $60-million-plus opening, followed by Summit's highly anticipated "Twilight" sequel.

Later in November and December come a number of pricey movies with big box-office potential, including Disney's animated feature "The Princess and the Frog," Paramount's Peter Jackson-directed drama "The Lovely Bones," Sony's romantic comedy "Did You Hear About the Morgans," Fox's "Alvin and the Chipmunks" sequel, Warner Bros.' "Sherlock Holmes" and the costliest picture of the year, Fox's James Cameron film "Avatar."

What will be the most successful movie released this holiday season?(opinion)

Studios have traditionally waited until closer to Thanksgiving to start opening the big holiday movies that they hope will play well until the new year. Last year, however, the schedule moved up as DreamWorks Animation debuted "Madagascar: Escape 2 Africa" on the first weekend of November to a very strong $63.1 million.

Three other movies with relatively modest budgets open this weekend. Given their costs, a debut in the teens would be good for any of them, though it's unlikely all will get there.

Overture Films is launching "The Men Who Stare at Goats," which is tracking best of the three. The independent studio paid a little under $5 million for domestic distribution rights to the political comedy starring George Clooney, which was co-financed by BBC Films and Winchester Capital Management at a cost of a little under $25 million.

The Richard Kelly-directed thriller "The Box," which Warner Bros. is distributing on behalf of co-financiers Media Rights Capital and Radar Pictures, is tracking best with adults, particularly women, but it may have the toughest time breaking past $10 million. The movie cost $25 million to produce.

Universal is releasing the low-budget horror flick "The Fourth Kind" for financier Gold Circle Films. It will likely compete with "The Box" to be third among the weekend's new pictures.

In limited release, Lionsgate launches its dark and strongly reviewed festival favorite "Precious" at 18 theaters in Los Angeles, New York, Chicago and Atlanta. As John Horn reported in today's Times, the studio is targeting a mix of upscale theaters and ones that draw heavily African American crowds.

More interesting than many of the new films, however, may be the second weekend performance of "This Is It." Sony Pictures' Michael Jackson movie has seen healthy weekday returns after a surprisingly strong Sunday, indicating it may decline modestly after its decent domestic opening and solid start overseas. Through Wednesday, the movie has sold $41.6 million worth of tickets domestically and $94.7 million in international markets.

-- Ben Fritz

Upper photo: "A Christmas Carol." Credit: ImageMovers.

Lower photo: Frank Langella and Cameron Diaz in "The Box." Credit: Dale Robinette / Warner Bros.

Wal-Mart slashes DVD prices to $10, potentially spurring price war

Ben Fritz — Thu, 05 Nov 2009 13:30:05 -0800

In an unprecedented discounting move that could signal a price war that would benefit the major movie studios and cash-strapped consumers, Wal-Mart has slashed the price of a number of the upcoming DVDs of big-budget summer movies to $10 on its website.

That appears to be the lowest price ever offered by a major retailer on highly anticipated new releases, according to people at studios' home entertainment divisions. Among the films on sale for $10 are "Star Trek," "Night at the Museum: Battle of the Smithsonian," "Harry Potter and the Half-Blood Prince" and "Terminator Salvation."

The big discounts are only for the top 10 pre-ordered movies on the site. Recently released hits like "Transformers: Revenge of the Fallen" and "Ice Age: Dawn of the Dinosaurs" cost $13.98 and up. In addition to the price cutting, Wal-Mart.com is also offering free shipping on all of its DVDs.

A link on its website indicates that Target is moving to match Wal-Mart's discounting. There isn't yet any indication whether Amazon.com will follow as well.

The price cuts are good news for movie studios, because they will spur demand in a year during which DVD sales are down more than 13% thus far. The wholesale price paid by Wal-Mart and its competitors remains unchanged at about $18, meaning studios will make the same profit on each disc.

It's normal for retailers like Wal-Mart to price DVDs below their wholesale cost at physical locations and online to draw customers who often spend more money on other items.

The deepest discounts usually go to about $14, however. $10 marks a big loss that Wal-Mart and Target will be taking on each movie, especially with free shipping.

The move comes as Wal-Mart.com and Amazon.com are in the midst of a book price war that has seen the price of some new-release hardcovers fall as low as $9. If Wal-Mart's discounting spurs a similar price war over movies, it could provide a significant boost to holiday movie sales and the studios' bottom lines.

-- Ben Fritz

Photo: A shot from the Wal-Mart.com website.

Yanks, Fox celebrate Series win

Joe Flint — Thu, 05 Nov 2009 11:29:17 -0800

Although a Game 7 would have been sweet for Fox, the network ended up getting its biggest audience for the Fall Classic in five years.

Some 22.3 million people tuned in last night to watch the New York Yankees defeat the defending champion Philadelphia Phillies in Game 6, according to Nielsen. That was up 30% from the Game 5 Monday night beat-down that the Phillies laid on the Yankees to push the Series back to New York for Wednesday night's match.

Game 6 was probably the difference between Fox and its parent News Corp. crying in their beer versus popping the champagne. The network will not lose money on the Series since it almost went the distance. Fox is amid a seven-year, $1.8-billion deal with Major League Baseball.

Overall, the Series averaged 19.4 million viewers per game, a 43% improvement over the 13.6 million that watched the Phillies beat the Tampa Bay Rays last fall. Among adults 18-49, the Series got a 6.2 rating. Each rating point in that demographic equals 1.3 million people.

For Fox, after years of disappointing ratings, a tight Series between two big-city teams was welcome relief. Now we'll see if those big numbers (for these days anyway) translate into bigger audiences for Fox' s entertainment lineup.

-- Joe Flint

Photo: Yanks celebrate their title. Credit: David J. Phillip/EPA

Scripps makes its travel plans, and they're not cheap

Joe Flint — Thu, 05 Nov 2009 07:36:17 -0800

Scripps Networks Interactive has bought a majority stake in the Travel Channel in a deal that values the cable network at $975 million.

That price tag is sure to raise eyebrows in the industry. When Travel Channel parent Cox Communications first put the network on the market, most analysts and industry experts thought it would fetch a price tag in the $600-million range. Though the channel has been growing in ratings in recent years and is in more than 90 million homes, it does not have any shows that regularly draw over 1 million viewers and is hardly a cash cow.

But you know what happened next. Rupert Murdoch's News Corp. jumped in and started kicking the tires and drove the price up. Then when it got too high for even them (which is a pretty good sign that something's out of whack here), they bailed. Under the terms of the deal, Scripps will have a 65% stake in the network. Cox will get $878 million in a cash payout and keep 35% of the network.

For Scripps, the channel makes sense because it already owns Home & Garden TV and a big chunk of the Food Network as well as other lifestyle channels. It will likely cut and merge a lot of the operations at Travel Channel to save on costs. Also, Scripps will probably be able to leverage its current channels to boost what cable and satellite operators pay to carry the Travel Channel.

-- Joe Flint

News Corp. cuts travel budget

News Corp. in lead for Travel Channel but it could be expensive bid

Cox's Travel Channel on road and searching for a buyer

The Morning Fix: Disney messes with Mickey! Christmas comes earlier. The agent to the toys! CNN's woes.

Joe Flint — Thu, 05 Nov 2009 07:19:20 -0800

After the coffee. Before throwing a fit that some stores are already in Christmas mode.

Makeover for Mickey. Apparently forgetting what happened when Warner Bros. messed with Bugs Bunny and gave him and other Looney Tunes characters a new look and attitude, Disney is working on a new version of its corporate mascot, Mickey Mouse. The new Mickey looks far from friendly and is designed to appeal to today's kids who don't have the same sentimental feelings about the mouse. But, as the New York Times warns, tinkering with Mickey could be akin to Coke making New Coke. Remember that one?

Get me Barbie's agent! If movies based on toys and games are the hottest thing in Hollywood, then it stands to reason that this is the growth business for agents as well. The Wall Street Journal looks at WME agent John Fogelman, whose biggest client today may just be Hasbro. Wonder how Whoopi Goldberg and Courteney Cox will feel when they get put on hold so he can take a call from a toy.

Oprah nearing finish line? Another major hire at OWN, the cable network being launched by Oprah Winfrey and Discovery, is setting off speculation that Winfrey is finally ready to give up her day job when her current contract expires. Of course, we've heard this before. Reading the tea leaves are the Los Angeles Times and the Wrap.

Remember when you didn't even think about Christmas until after Thanksgiving? Those days are long gone. It's not just your local mall that already has the trees and lights up; it's Hollywood as well. USA Today on the holiday rush at the box office.

Election night no longer a lock for CNN. Although it was an off-year election night, CNN's ratings drop was still eye-raising. A Fox News spokeswoman scoffed that CNN's ratings were better suited to the little-watched video game network G4 than a major international news channel. It's so great when they all play nice! Analysis on CNN's struggles from the Los Angeles Times.

Well, duh. Guess what? If you're selling diapers, buying ad time in a bloody crime show might not be such a hot idea. A study from the Alliance for Family Entertainment says family brands have a better chance of getting their message across by advertising in family-friendly shows, reports AdAge. However, if you are selling axes or knives, then definitely go to "CSI."

Don Cheadle: Mogul. Acclaimed actor Don Cheadle has set up a first-look TV deal with NBC and has projects in the works at ABC, FX and TNT. If this deal works, credit former NBC Entertainment topper Ben Silverman (yes, you read that right). Cheadle told Variety that it was Silverman who got the wheels in motion on a partnership.

Inside the Los Angeles Times: News Corp.'s earnings show a need to build a new space for MySpace. John Horn on the gritty "Precious" and how it will play during awards season. Mariah Carey's not-so-glam makeover for "Precious."

-- Joe Flint

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Studios and theaters clash over FCC waiver

Richard Verrier — Wed, 04 Nov 2009 18:22:50 -0800

The nation's theater owners and movie studios are once again at odds when it comes to the future distribution of movies.

In regulatory filing today, the Motion Picture Assn. of America, the chief lobbying group for the major studios, restated its support for a waiver of current Federal Communications Commission rules that would clear the way for a technology that would allow consumers to watch movies at home close to or during their theatrical release. The so-called selectable output control technology would prevent the illegal copying of movies, which has been a major stumbling block to delivering first-run movies directly to consumers.

"Many of us love movies, but we just can't make to the theater as often as we'd like. That is especially true for parents of young children, rural Americans who live far from the multiplex and people with disabilities that keep them close to the home,'' MPAA Chairman and CEO Dan Glickman said in a statement. "Having the option to enjoy movies in a more timely fashion at home would be a liberating new choice."

Theater owners, however, don't see it that way. The National Assn. of Theater Owners is opposed to the waiver and reiterated its opposition today. Theater owners are concerned that narrowing or collapsing the current window between when a movie hits theaters and when it comes on DVD or video-on-demand would cut into box office revenues and erode the quality of movies shown on the big screen. The current window is about four months.

"We don't argue against the use of anti-piracy technology if movies were to go to the home earlier,'' said John Fithian, president of the National Assn. of Theater Owners. "But they [the MPAA] aren't telling the FCC or anyone else how early they want to go, so there's no way of telling what the impact is on the cinema industry and our consumers."

Though the MPAA has been pushing this for some time, the issue has heated up again as various industry and public interest groups weigh in. Fithian himself said he would meet with the FCC on Thursday to state his group's views. Several other industry and consumer groups have opposed the waiver, including the consumer group Public Knowledge, which maintained that the technology would shut down the types of devices consumers could plug into their TV sets. The MPAA disputed that claim in its filing today.

-- Richard Verrier

Oprah channel OWN hires another creative executive

Meg James — Wed, 04 Nov 2009 15:11:03 -0800

The highly anticipated but delayed cable channel OWN: The Oprah Winfrey Network will soon have a new chief creative officer -- Lisa Erspamer. But unlike those who have gone before her, this executive has something that others at OWN have lacked: experience working with Winfrey.

Erspamer is currently co-executive producer of Winfrey's daytime talk show, a position she has held since 2006. According to OWN, Erspamer has produced hundreds of episodes of the syndicated show and overseen many memorable moments including this season’s kickoff “flash mob” dance party in the streets of Chicago and the now-famous Oprah car giveaway. Erspamer is a 15-year veteran of Harpo Productions; she joined Winfrey's company in 1994.

She will move from Chicago to Los Angeles in January to join the planned cable channel, a joint venture of Winfrey and Discovery Communications. The owners have yet to announce a launch date for the channel.

“Lisa has been a creative superstar. She’s brought fire and force to many of the incredible shows we’ve done over the years. I value her passion and sensibilities and trust her instincts and judgment. I know she’ll be a great fit with the OWN team,” Winfrey, who is chairwoman of OWN, said in a statement.

She will report to OWN Chief Executive Christina Norman, a former top MTV executive, who was brought in by Tom Freston, the ex-MTV and ex-Viacom chief who is working as an advisor to the channel.

The move appears to signal that Winfrey might be close to announcing an official end date for her syndicated talk show that runs on ABC. Winfrey is under contract to produce the show through May 2011, which will be at the completion of her 25th season. She has not said whether she will extend her run beyond that.

OWN has struggled in its nearly two-year gestation period finding the right executive team. The high-stakes venture has had plenty of behind-the-scenes drama. In the last six months, three top programmers, including OWN's original president, have exited the channel. Norman was hired this year, and in June, OWN named another head of programming, Jamila Hunter, who came from NBC Universal.

-- Meg James

Photo: Lisa Erspamer. Credit: OWN

'Ice Age' heats up News Corp.'s earnings, but overall revenues experience cooling

Dawn Chmielewski — Wed, 04 Nov 2009 14:04:14 -0800

A strong summer box office, a healthy cable business and strong book sales helped News Corp. report an 11% increase in net income, helping to offset decreases in the media conglomerate's broadcast television, newspaper and Internet businesses.

The company reported net income of $571 million, or 22 cents a share, in its fiscal first quarter, compared with $515 million, or 20 cents, a year earlier. News Corp. said the year-over-year gains reflected higher operating profit and equity contributions due to the absence of a a $422-million write-down of its investment in satellite broadcaster Sky Deutschland AG (formerly known as Premiere AG).

Revenue for the quarter ended Sept. 30 fell to $7.2 billion, down 4% from $7.5 billion.

Filmed entertainment posed an operating income of $391 million, compared with $251 million in the same period a year earlier, thanks to the box-office performance of "Ice Age: Dawn of the Dinosaurs," which it said is the highest international-grossing film of all time and generated more than $880 million in worldwide ticket sales. The results also include the home entertainment release of "X-Men Origins: Wolverine."

The television group reported a 26% drop in operating income to $38 million, from $45 million a year earlier, reflecting a drop in automotive, movie and political advertising. The cable networks, however, experienced a 41% jump in operating income to $495 million, from $350 million in the comparable period a year earlier. Fox News Channel achieved its highest quarterly profit and increased its operating income 79% compared with a year ago.

Strong sales of Maurice Sendak's classic illustrated children's book, "Where the Wild Things Are," and of L.J. Smith's "The Vampire Diaries" helped fuel HarperCollins' operating income, which rose to $20 million from $3 million a year earlier.

Update (8:25 AM, Nov. 5): For more on News Corp. earnings, including a shift in strategy at MySpace, see the story in today's Times.

-- Dawn C. Chmielewski

Networks preparing to battle cable and maybe their own affiliates over retransmission consent

Joe Flint — Wed, 04 Nov 2009 12:59:26 -0800

In the search for new revenue streams, the broadcast networks are going to their affiliates with their hands held out or their guns drawn, depending on one's viewpoint.

Specifically, if their affiliates are getting money from cable and satellite operators in return for carrying their signal, the networks want a cut. Today, the CEO of Belo Corp., which owns a handful of ABC affiliates, said that Walt Disney-owned network had approached them about receiving a portion of any revenue it is getting from cable and satellite operators. Belo CEO Dunia Shive declined to say how much ABC was asking for but said it wasn't "100%." Well that's nice of them. The news was first reported by TVNewsCheck, a well-regarded industry website. Belo currently gets more than $40 million annually from cable operators for their signals.

The industry lingo for payments from a cable or satellite operator for a broadcaster's TV signal is "retransmission consent." Yes, that phrase will make your eyes glaze over, but it's actually a very important issue for broadcasters and cable operators. In a nutshell, broadcasters want cable operators to pay them to carry their feeds just like they already pay cable channels such as ESPN and TNT. Cable operators have always argued that since broadcast signals are available free over the air, why should they pay.

But momentum seems to be swinging toward the broadcasters on this one. Whenever one of these battles reaches a stalemate and a cable operator stops carrying a broadcaster, the public outcry is usually vented toward the distributor, not the program supplier.

If broadcasters can actually start to get paid in real dollars (or nickels and dimes), then it can have that long-sought-after second revenue stream that cable networks already enjoy. News Corp., parent of Fox and owner of almost 30 TV stations, and CBS have been the most vocal about getting payments from cable operators.

We're not talking chump change here. Michael Nathanson, media analyst with Sanford C. Bernstein, says if News Corp. could get 50 cents per subscriber for its Fox stations and another 25 cents for its non-Fox stations, that would translate to more than $300 million in revenue and operating income. In the past, big media companies such as News Corp. and Disney have not gone after cash aggressively. Instead, they have usually opted to allow distributors to carry their stations for "free" in return for also carrying their cable networks for pay. This is how many channels including FX and ESPN2 were launched.

But not only do the networks want money for their own stations, they also want money from their affiliates as well. Their logic is that since it's network programming that attracts the most viewers, they should get a piece of the -- here comes those words again -- retransmission consent fees.

Of course, the affiliates already give the networks the bulk of their commercial inventory and in many cases are already paying them to carry programming, so one might understand if going after their retransmission consent causes some brows to furrow a little.

-- Joe Flint

Photos: Top left: Disney CEO Bob Iger. Credit: Peter Foley / EPA. Bottom right: CBS CEO Leslie Moonves. Credit: Nicholas Roberts / AFP/Getty Images

IATSE and AFI settle labor dispute

Richard Verrier — Wed, 04 Nov 2009 12:55:40 -0800

The AFI Fest won't have to worry about a "Norma Rae" scene playing out in Hollywood.

An ugly labor dispute between the union representing Hollywood's below-the-line workforce and the American Film Institute has been settled.

Last week, Matt Loeb, president of the International Alliance of Theatrical Stage Employees, issued an unusually blunt denunciation of AFI, accusing the nonprofit group's management of using scare tactics to discourage concession workers at its Silver Theater and Cultural Center in Silver Spring, Maryland from joining the union, which represents 110,000 workers in the film and theater industry.

The dispute threatened to to disrupt the AFI Fest in Los Angeles this week when Loeb called for a boycott of all AFI events, although he stopped short of calling for an actual work stoppage by the IATSE concession workers at the Grauman's Chinese Theatre where AFI films are screened.

But the spat ended on Wednesday when the union announced that it had negotiated an agreement with AFI to represent the Maryland theater workers. The agreement provided "significant wage, benefit and condition improvements," according to a statement from the guild, which touted how Loeb had "put pressure on the company by informing the public of the dispute."

The union added cryptically, that "President Loeb was in Los Angeles and had planned to be present for any necessary activities."

-Richard Verrier

Photo: IATSE President Matt Loeb. Credit: IATSE

Jeff Bewkes jumps to Warner Bros.' defense as Time Warner boosts outlook

Ben Fritz — Wed, 04 Nov 2009 12:55:01 -0800

When it comes to talking smack about the movie business, just leave Warner Bros. out of it.

That's the word from Time Warner Chief Executive Jeff Bewkes. On a conference call with analysts, Bewkes said Warner Bros. is marching toward its most profitable year ever.

There's a "perception that film is inherently a low-return or volatile business," Bewkes said, referring to widespread negativity about the movie industry this year amid wrenching changes in consumers' consumption habits and a rash of cost-cutting. "That’s certainly not true and hasn’t been true at Warner Bros.... In spite of softness in home video overall, this year Warners is on pace to report its highest profits ever."

In a preemptive strike before any questions were asked, Bewkes pointed to the studio's strong summer at the box office driven by hits including "The Hangover," "Harry Potter and the Half-Blood Prince" and "The Final Destination," as well as its television successes including "Two and a Half Men" and "The Big Bang Theory." Recent movie releases such as "Where the Wild Things Are" and "The Informant" have seen more modest results, although the studio has had no major flops of late.

Last year, Warner Bros. went through a major round of cost cutting, most notably by folding New Line into the main studio and shutting down its independent film division.

Bewkes told analysts that, outside of write-offs related to 2000's disastrous merger with AOL, Warner Bros. return is "certainly well above the cost of capital, that its level of profit "consistently surpasses its peers by far," and its operating income excluding certain costs will top $1 billion by the end of 2009.

Studio revenues were down 4% to $2.78 billion in the quarter ended Sept. 30, although Time Warner's chief financial officer, John K. Martin, said that was well above expectations given systemic problems in the home video business, a main driver of movie industry revenue, as well as a difficult comparison to 2008, when Warner Bros. released mega-hit "The Dark Knight." Operating income for Warner Bros. rose 6% to $291 million.

Total revenue for Time Warner was $7.14 billion, a decline of 6% from a year ago. Much of that was the result of continued weakness in the advertising market, as the company's ad revenue fell a more substantial 12%. Net income plunged 40% to $661 million.

Major drags on the company were AOL and magazines. At magazine publishing unit Time Inc., Time Warner announced that it will take a $100-million restructuring charge as it lays off more employees and cuts back the frequency of some of its publications at Time Inc. Despite the doom and gloom, the company reiterated it has no plans to unload or shut down Time Inc. Publishing unit revenue was down 18% to $914 million, with advertising off 22% and subscriptions down 13%. In a sign of what qualifies as good news these days in the publishing business, Martin noted that those numbers were actually an improvement over the first half of the year.

As for AOL, Bewkes emphasized that a planned spin-off of AOL is on track to be completed by the end of the year. During the quarter, AOL's revenues fell 23% to $777 million, driven by a 29% drop in subscription revenues and 18% drop in advertising.

Time Warner's networks group, which include HBO, TNT, TBS and other cable networks, saw revenues rise a healthy 5% to $2.87 billion, due primarily to jumps in subscription revenues. Ad revenue at domestic networks excluding commercial-free HBO were up a "low-single-digit" percentage, according to Martin, but CNN saw a drop compared to its election coverage last year, as did foreign channels. The network group's operating income before certain costs grew 9% to nearly $1.1 billion.

Reflecting confidence in its current quarter results despite the write-down at Time Inc., Time Warner increased its guidance for the full year, increasing expected adjusted earnings per share from $1.98 to $2.05. The company's stock was up a little less than 1% at $30.54 in late afternoon trading.

-- Ben Fritz

Photo: Time Warner CEO Jeff Bewkes. Credit: Daniel Acker / Bloomberg

ABC's 'V' lands with big bang

Joe Flint — Wed, 04 Nov 2009 10:24:26 -0800

They came. They saw. They sort of conquered.

ABC's remake of "V" got off to a strong start Tuesday night. The series, which will run through November and then return in March, came in second to CBS's juggernaut "NCIS" in viewers with 13.9 million tuning in, but easily won the 8-9 p.m. hour in the 18-49 demographic with a 5.0 rating, which translates to about 6.6 million people. (Each rating point in the 18-49 demographic equals 1.3 million people.)

The audience and the 18-49 demographic performance for "V" almost tripled from what ABC usually averages with the reality show "Shark Tank" in that time slot. The show, about aliens who seem friendly when they come to Earth seeking water but actually have ulterior motives, built its audience in the second half-hour, which is generally a good sign that interest in the show held throughout the episode.

There was not much of a trickle-down effect from "V" for the rest of ABC's lineup. "Dancing With the Stars" averaged 14.5 million viewers and finished third in adults 18-49 with a 3.1 rating, and "The Forgotten" was forgotten about, drawing 7.6 million viewers and tied NBC's "Jay Leno" with a 2.0 in adults 18-49.

Thanks to the "NCIS" franchise, CBS won the night in viewers with 15.6 million and 18-49 with a 3.4 rating. ABC was second with 12 million viewers and a 3.0 rating. NBC averaged 8 million viewers and a 3.0 rating, while a baseball-less Fox came crashing back down to Earth with 6 million viewers and 2.4 in adults 18-49.

For history buffs: We did a little digging (actually, we called ratings guru Tom Bierbaum at NBC) and found that the premiere episode of the original on NBC in 1983 scored a 25.4 rating, which translates to about 21.2 million households. That would, we're guessing probably translate to more than 40 million viewers but we're not scientists. Keep in mind, this was before people meters and demographic information and even cable. Ah, those were the days.

-- Joe Flint

Photo: ABC's "V." Credit: David Gray / ABC

The Morning Fix: Oscar's odd couple. TW profit down. Comcast profit up, mum on NBC. PTC doesn't like three.

Joe Flint — Wed, 04 Nov 2009 06:52:22 -0800

After the coffee. Before the numbers for the 'V' premiere roll in.

Oscar's odd couple. Steve Martin and Alec Baldwin, who between them have hosted "Saturday Night Live" something like 2,000 times, have been tapped to host the Oscars. The move was met with mostly positive reaction from critics. We can't help but wonder if it wasn't supposed to be a trio but Tina Fey turned them down. Coverage and scrutiny from the Los Angeles Times, Variety, Hollywood Reporter, Deadline and the Wrap.

Time Warner profit drops. Media giant Time Warner announced its third-quarter results early this morning (well, early for us West Coasters anyway) and said profit had fallen almost 40%, from $1.07 billion to $661 million. Time Warner's publishing group, which is going through big layoffs, saw its earnings drop 40%, and the company said it would take a $100-million restructuring charge. AOL revenue was also off by double-digits. Details from the Wall Street Journal.

Comcast profit up. Cable giant Comcast Corp., which is in negotiations to acquire a majority stake in General Electric Co.'s NBC Universal, also posted third-quarter earnings this morning. Profit was up 22% to $944 million. Ad revenue for Comcast was off 16%, but that's better than the 20% decline the cable company experienced in the third quarter of 2008. The numbers from the Wall Street Journal. On the call with analysts, Comcast kept their mouths zipped about NBC talks.

Chinese democracy, no. Chinese Disney, yes. Walt Disney Co. finally has the green light to build a theme park in Shanghai and will shell out about $3.5 billion to do it (bet that price tag goes up). China is a huge market (duh), and Disney hopes to be in business there by 2014. Analysis from the Los Angeles Times and New York Times.

PTC making a stink over "Gossip Girl" spreading the love. The Nov. 9 episode of the CW's rich-kid drama "Gossip Girl," which features three of the characters getting intimate with one another (I'm not sure if my editors will let me write "threesome" so just go with it), has put the media watchdog group Parents TV Council on red alert. The PTC, says the Wrap, is trying to get CW affiliates not to air the show and will likely target advertisers as well. If you are going to tune in, we've been told that the episode to watch is the one after the, uh, event because the flashbacks are racier than the real thing. Ah, just like in life.

Fox cruises as Yankees and Phillies battle. A tight World Series (Game 6 is tonight) gave Fox the momentum to easily win the week in key demographics and post the best 18-49 number for any network in five years, according to Variety. BTW, numbers keep falling for Jay Leno, and on Monday he hit a new low opposite football and baseball.

Inside the Los Angeles Times: Raleigh Studios is expanding to Eastern Europe. Jeff Dunham is cable's hot personality. Mary McNamara on the Oscar duo.

-- Joe Flint

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Chinese government approves Disney park in Shanghai

Dawn Chmielewski — Tue, 03 Nov 2009 17:42:35 -0800

The Beijing government has approved plans to build a Disney park in Shanghai, representing a major milestone in the more than decade-long effort by the Walt Disney Co. to build a theme park in mainland China.

Disney submitted plans in January that had been developed jointly with the Shanghai municipal government to build a $3.59-billion park to open as early as 2014. It would be the entertainment giant's fourth theme park location outside the U.S., after Paris, Tokyo and Hong Kong.

This framework agreement received formal approval from the central government, Disney said today. The central government's action clears the way for Disney to work out detailed plans to build and operate the park, a final plan that would address infrastructure issues such as subway and road access to the park, as well as finances.

"China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for the Walt Disney Company in mainland China,” said Disney President and Chief Executive Robert A. Iger.

Disney has been in on-again, off-again discussions with the government in China since 1995, when the Shanghai government first contacted the company to propose building a theme park in the city. Talks have ebbed and flowed since then, with discussions resuming in earnest about two years ago, according to people familiar with the matter who asked not to be identified because of the sensitivity of negotiations.

The new park would give Disney access to 300 million people who live within a day's travel of Shanghai, a sprawling, affluent and modern city of about 16 million people. The new Magic Kingdom-styled theme park would have amenities similar to other Disney destinations around the world, while nodding to its Shanghai region.

-- Dawn C. Chmielewski