Category: Business

EMI, Apple to sell DRM-free songs online
LONDON – Breaking from the rest of the recording industry, EMI Group said Monday it will begin selling songs online that are free of copy-protection technology through Apple Inc.’s iTunes Store. The deal, however, doesn’t include music from the label’s biggest act, The Beatles.
ITunes customers will soon be able to buy songs by the Rolling Stones, Norah Jones, Coldplay and other top-selling artists for $1.29, or 30 cents more than the copy-protected version. The premium tunes also will be offered in a higher quality than the 99-cent tracks.
EMI Chief Executive Eric Nicoli said The Beatles music catalog is excluded from the deal, but said the company was “working on it.” He declined to set a time frame for negotiations over the catalog.
The announcement followed calls by Apple Chief Executive Steve Jobs earlier this year for the world’s four major record companies, including EMI Group PLC, to start selling songs online without copy-protection software.
The technology, known as digital rights management, or DRM, is designed to combat piracy by preventing unauthorized copying or sharing, but it also can be a consumer headache. Some music players, for instance, support one type of DRM software but not others.
The DRM used by Apple does not work with competing services or devices, meaning that consumers can only download songs from iTunes to work on their computers or iPod music players. The lock between the download services and players has drawn criticism from European industry regulators, who argue that it limits buyer choice.
“Doing the right thing for the customer going forward is to tear down the walls that impede interoperability,” Jobs told a London news conference.
He has previously argued there was little benefit to record companies selling more than 90 percent of their music without DRM on compact discs, then selling the remaining percentage online with DRM.
Some analysts suggest that lifting the software restrictions could boost sales of online music, which currently account for around 10 percent of global music sales.
Jobs said that he planned to offer around half of all music in the iTunes store under the premium package by the end of the year, but declined to say whether the company was in discussions with other leading record companies.
“Consumers tell us overwhelmingly that they would be prepared to pay a higher price for digital music that they could use on any player,” Nicoli said. “It is key to unlocking and energizing the digital music business.”
The iTunes music store will begin offering EMI’s entire catalog ó apart from The Beatles ó without DRM software starting next month, he said.
EMI has acted as the distributor for The Beatles since the early 1960s, but The Beatles’ music holding company, Apple Corps Ltd., has so far declined to allow the Fab Four’s music on any Internet music services, including iTunes.
The situation was exacerbated by a long-running trademark dispute between Apple Inc. and Apple Corps. That legal feud was resolved in February when the two companies agreed on joint use of the apple logo and name, a deal many saw as paving the way for an agreement for online access to the Fab Four’s songs.
Apple Corps was founded by the Beatles in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.
Shares of Apple Inc. jumped 72 cents, to $93.63, in Monday trading on the Nasdaq Stock Market.

Apple, Beatles label plan announcement
LONDON – Record company EMI Group PLC said Sunday it planned to unveil “an exciting new digital offering” with computer company Apple Inc., raising expectations that The Beatles’ music catalog is about to be made available through Apple’s iTunes online music store.
EMI said it would hold a news conference Monday at its London headquarters with its chief executive, Eric Nicoli, and Apple boss Steve Jobs “and a special live performance.”
The company gave no further details.
EMI has been The Beatles’ record label since the early 1960s.
The Beatles have so far been the most prominent holdout from iTunes and other online music services, and Apple’s overtures to put the music online were stymied by a long-running trademark dispute with The Beatles’ commercial guardian, Apple Corps. Ltd.
In February, Apple Inc. and Apple Corps resolved their legal feud over use of the apple logo and name, paving the way for an agreement for online access to the Fab Four’s songs.
Apple Corps was founded by the Fab Four in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

McCartney To Anchor New Starbucks Label
After weeks of speculation, Paul McCartney is now officially the first artist signed to Hear Music, a new joint label formed by Starbucks and the Concord Music Group. The as-yet-untitled album is due in early June; its release on Hear Music marks the end of McCartney’s decades-long association with Capitol.
“This is something Iíve been working on for a little while now,” McCartney said of the David Kahne-produced album during a Webcast today (March 21). “A lot of itís very personal to me.Tthe songs are in some ways a little bit retrospective. Some of them are of now, some of them hark back to the past, but all of them are songs Iím very proud of.”
As previously reported, Starbucks will primarily handle A&R for the collaborative initiative, while Concord will head up marketing, promotion and distribution of the label’s product outside the coffee shops. The Hear Music name has been used since 1999 for compilations and co-releases at Starbucks; it will now apply exclusively to this partnership.
Starbucks’ profile as a music retail outlet has jumped significantly in the past few years, especially following the success of Ray Charles’ “Genius Loves Company,” a joint production with Concord that scored eight Grammy awards. The company has also struck deals to release exclusive albums by Bob Dylan and Alanis Morissette.
McCartney’s last studio album was 2005’s critical favorite “Chaos and Creation in the Backyard,” which has sold 533,000 copies in the United States, according to Nielsen SoundScan.

Movie Theaters To Sell Naming Rights
Borrowing a page from sports arenas and stadiums, movie theaters may be next to sell naming rights to advertisers.
Canada’s Cineplex Entertainment, the country’s largest exhibitor, announced Wednesday that it had sold naming rights to five theaters in Toronto, Montreal, Calgary, Edmonton and Vancouver to Scotiabank.
As part of the deal, movie patrons who use a specially branded Scotiabank debit card to make purchases at the theater will be able to earn free movie tickets and combos at concession stands.

CanWest, Goldman Sachs buy Alliance Atlantis for $2.3B
CanWest Global Communications Corp. and the private equity firm Goldman Sachs Capital Partners confirmed late Wednesday that they are buying Alliance Atlantis Communications Inc. ó one of Canada’s biggest entertainment companies.
The CanWest and Goldman Sachs groups will pay $53 for each Class A and Class B share of Alliance Atlantis. The companies say that values the deal at $2.3 billion.
The takeover offer is less than the price Alliance Atlantis stock closed at Wednesday. The Class A voting shares ended the trading day at $54.18, while the Class B non-voting shares closed at $53.61.
Shareholders owning 80 per cent of the Class A shares have committed to tender their shares to the offer, the companies said. Holders of the Class B shares will be asked to vote in favour of the deal at a meeting to be held in the spring.
“The combined expertise of CanWest and Alliance Atlantis will enable us to produce even better Canadian content, promote it more effectively, and provide greater access to more viewers across more platforms,” said CanWest CEO Leonard Asper in a release.
A CanWest company will be the controlling shareholder of Alliance Atlantis once the deal is finalized by mid-2007. CRTC approval will be required for the deal to proceed.
The companies say Alliance Atlantis’ specialty television business and CanWest’s Canadian television business will be combined, but not before 2011.
A Canadian partner of Goldman Sachs Capital Partners will ultimately control Alliance Atlantis’ Motion Picture Distribution business, which is a major distributor of motion pictures in Canada.
The GS group will also own Alliance Atlantis’ stake in the highly lucrative CSI television franchise. Alliance Atlantis now co-produces the various CSI dramas with CBS.
Confirmation of a deal came just hours after the companies acknowledged they were in exclusive takeover talks. That acknowledgement followed media reports earlier in the week that said CanWest and Goldman Sachs had teamed up to make a run at Alliance Atlantis.
Toronto-based Alliance Atlantis said on Dec. 20 that it was exploring its “strategic alternatives,” and said it had sought expressions of interest from selected potential buyers.
Alliance Atlantis owns 13 specialty television channels, including Showcase ó which airs the Trailer Park Boys series. It also owns Discovery Health, the Food Network, HGTV, History Television and the Life Network.

Canada actors talking one more time before strike
TORONTO (Hollywood Reporter) – Canada’s actors union and North American producers will return to the bargaining table Wednesday in a last-ditch attempt to forge a new labor deal and avert a planned industry shutdown next Monday.
On Friday, representatives for ACTRA, which represents 21,000 domestic performers, met informally with negotiators representing various producer groups, agreeing to resume talks Wednesday.
ACTRA (the Alliance of Canadian Cinema Television and Radio Artists) also agreed to delay plans for industrial action to back its demands. The current Independent Production Agreement expired Sunday, and the performers union is now in a legal position to strike in much of the country for the first time.
But Stephen Waddell, ACTRA’s chief negotiator, said the actors union agreed to more talks after receiving assurances from producers that an increased-wage proposal was possible.
“(It is) only on the basis that there had been some off-the-record discussions and that it appears the CFTPA (Canadian Film and Television Production Assn.) is willing to … put more money on the table, that we are agreeing to postpone the declaration of the strike,” he said Friday.
Waddell added that ACTRA will serve 72-hour strike notice Wednesday and will carry through on its threat Monday at midnight should no agreement on a new production agreement be reached in time.
John Barrack, the CFTPA’s chief negotiator, offered no details on the producers’ latest bargaining strategy, but welcomed ACTRA’s assurance that it will strike only if next week’s crunch talks broke down.
The most recent round of talks between ACTRA and the producers stalled after the performers rejected a proposed wage increase of 4 percent over three years, subject to certain deferrals. ACTRA is demanding a 15 percent wage increase over three years and new-media residuals, among other demands.

Weinsteins Wonder What Would Have Happened If…
Miramax founders Bob and Harvey Weinstein have suggested that they might have remained with the Disney Co. had Robert Iger been running it while they were there instead of Michael Eisner. In an interview with the Wall Street Journal, Bob Weinstein said that they now “have a very good relationship with Bob Iger … He’s set a fantastic tone. There’s no animosity. It’s actually been good. We’ve wondered if we’d still be there.” Weinstein said that what caused “friction” with the previous regime was that “we walked in every day with the attitude that we were running our own company.” The Weinsteins also told the newspaper that their recently acquired Genius video distribution unit has already produced a profits bonanza for their company, putting it ahead of analysts’ projections. “When people read Genius’s profit statement next year, and the size of the company that we’re building, I think they’ll weep,” Harvey Weinstein told the Journal.

Universal raises eyebrows with “Bruno” deal
LOS ANGELES (Hollywood Reporter) – Universal Pictures has won the intense bidding war for “Bruno,” Sacha Baron Cohen’s follow-up movie to “Borat.”
Sources said that Universal is paying $42.5 million for the worldwide rights to the film. The price includes the production budget of the film, rumored to be in the $20 million-$25 million range. Also included is a significant profit-participation component for the film’s participants, believed to be the 15% range.
The price has raised eyebrows in Hollywood because Baron Cohen’s much-hyped “Borat” does not open until November 3. Despite much advance praise for “Borat,” distributor Fox scaled back its Friday opening to about 800 theaters because it is concerned that the movie wasn’t registering high enough in audience-awareness tracking.
With “Bruno,” Baron Cohen is calling upon another of his comic alter egos, Bruno, a gay fashionista from Austria who fancies himself as “the voice of Austrian youth TV” and who sashayed from New York Fashion Week to Miami nightclubs in his previous appearance on HBO’s “Da Ali G Show,”on which Baron Cohen also first introduced Borat to American audiences.
As in the case of “Borat,” Jay Roach would produce with Baron Cohen. No director is on board, though it has been reported that Baron Cohen wants to shoot the movie during the summer.

Google buys YouTube for $1.65 billion US
Internet search leader Google Inc. made a giant leap Monday into the burgeoning online video industry by snatching up YouTube Inc. for $1.65 billion US.
The all-stock acquisition unites one of the internet’s marquee companies with one of its rapidly rising stars.
The price makes YouTube, a still-unprofitable startup, by far the most expensive purchase by Google during its eight-year history.
“We are natural partners to offer a compelling media entertainment service to users, content owners and advertisers,” said Eric Schmidt, Google’s chief executive officer.
YouTube will continue to retain its brand, as well as all 67 employees, including co-founders Chad Hurley and Steve Chen. The site was launched in February 2005, using Macromedia Flash technology to display video content submitted by a growing community of members.
CBS, Universal, Sony ink separate deals
The deal comes on the same day as YouTube, one of the top video-sharing websites in the world, announced agreements with CBS, Universal Music Group and Sony BMG Music Entertainment to allow video clips and music to be featured on the site.
“YouTube is committed to balancing the needs of the fan community with those of copyright holders,” YouTube CEO Chad Hurley said in a statement.
The arrangement with CBS allows for short videos from news, sports, primetime programs as well as Showtime to be shown. CBS said it will also offer brief clips from popular series such as Survivor and mini-previews for some of its new fall shows.
New technology
The network will also test new technology that will help it find copyrighted content on YouTube and remove it. CBS will retain the capability to keep the copyrighted material on the site and share revenue from advertising that appears alongside the content.
Universal Music Group confirmed that YouTube will have access to thousands of music videos, and artists will be compensated for any musical content that users decide to incorporate into their videos.
Sony BMG Music said it will also make video content available on the site and permit YouTube users to include some songs from its catalogue in their amateur videos.
Sony BMG Music will share ad revenue with YouTube for all videos that integrate any audio or video from the Sony library.
YouTube made a similar pact with Warner Music Group a month ago.

Paramount cuts ties with Cruise company
LOS ANGELES – It’s Tom Cruise vs. Sumner Redstone in a case of I quit-you’re fired at Hollywood’s highest level. On one side is the chairman of Viacom, Inc., which owns Paramount Pictures. On the other is the industry’s biggest and most bankable star, whose last seven films have each generated over $100 million.
Redstone said Tuesday that Paramount would sever its long and profitable relationship with Cruise/Wagner Productions, Cruise’s company with producing partner Paula Wagner. Redstone told the Wall Street Journal that Cruise’s “recent conduct has not been acceptable to Paramount.”
But Wagner told The Associated Press that agents for Cruise/Wagner Productions stopped negotiating with Paramount over a week ago and since secured independent financing, effectively taking any contract-renewal deal off the table.
“For some reason, Paramount has chosen to negotiate in the press,” Wagner said, calling Redstone’s announcement “surprising.”
“It’s not really the most businesslike approach,” she said. “We’ve had virtually no dealings with Mr. Redstone.”
Paramount referred all calls on the matter to Viacom. Viacom spokesman Carl Folta had no comment late Tuesday.
“As much as we like him personally,” Redstone is quoted as saying, “we thought it was wrong to renew his deal.” He then cited Cruise’s “recent conduct” as the reason.
In the past year or so, Cruise couch-hopped on Oprah Winfrey’s talk show while proclaiming his love for Katie Holmes, criticized the use of antidepressants and claimed that postpartum depression doesn’t exist. He also got into an angry exchange with Matt Lauer on the “Today” show while defending his opinions.
Cruise/Wagner Productions has been based on the Paramount lot since 1992.
“We viewed ourselves as partners with Paramount,” Wagner said, adding that the collaboration has produced $2.5 billion worth of business.
With “War of the Worlds” and “Mission: Impossible 3,” Cruise helped earn nearly $1 billion for Paramount this year alone, Wagner said. Cruise/Wagner Productions brought “M:I3” director J.J. Abrams to the studio, she said, which recently inked a five-year arrangement with Abrams.
She and Cruise had been considering independent financing for their company “for a long time,” she said.
“For us, this is a very new and exciting direction. We look forward to working with all the studios.”