Category: Business

Hard-up EMI seeks buyer for Abbey Road studios
LONDON ñ Cash-strapped music company EMI Group Ltd. is seeking a buyer for Abbey Road studios, where The Beatles recorded some of their most famous songs, a person familiar with the situation said Tuesday.
The person said talks had been going on for several months, but a buyer had not yet been found. The individual spoke on condition of anonymity because the talks are private.
A spokesman for EMI refused to comment on the sale bid, which could raise tens of millions of dollars for the label.
EMI, whose artists include Coldplay, Lily Allen and Robbie Williams, has struggled financially since it was bought in 2007 for 2.4 billion pounds by private equity firm Terra Firma Capital Partners.
Several big-name acts, including Radiohead and the Rolling Stones, quit the label amid the cutbacks and restructuring that followed Terra Firma’s takeover.
An audited report released last week revealed that Terra Firma needs a huge cash infusion by June to avoid defaulting on its loans from Citigroup Inc. and may require more than $165 million to last through this year.
If funds can’t be raised and the loan goes into default, Citigroup could seize EMI and cause it to be sold or broken up.
Abbey Road is one of the company’s most high-profile assets, as both a recording studio and a tourist attraction for Beatles fans.
EMI bought the Georgian town house in London’s residential St. John’s Wood neighborhood in 1929 and turned it into one of the world’s most sophisticated recording studios.
Since the 1960s, it has been one of the world’s most famous rock music studios. Albums recorded there include Pink Floyd’s “Dark Side of the Moon,” Wings’ “Band on the Run” and Radiohead’s “OK Computer.”
It is most closely associated with The Beatles, who recorded most of their albums there. The crosswalk in front of the north London studio was immortalized on the cover The Beatles’ final studio album, 1969’s “Abbey Road.”
Potential buyers beware: The famous black-and-white crossing is not included in the deal.

RIP Miramax
It sprang to life in 1979 as the brainchild of bullish movie producers Harvey and Bob Weinstein, and was named after their parents, but after a slow death from thousands of cuts, Miramax was officially closed today by Disney.
During its early years, the Weinsteins scrappily kept the ship afloat, shoved boundaries and helped bring the world the likes of Sex, Lies And Videotape, Clerks, The Piano, Reservoir Dogs, The Crying Game and The English Patient.
Rumours of the Weinsteins’ bullying tactics and hard demeanor were rife, but they certainly seemed to have a keen eye for talent and an understanding of how to channel that into success.
Though it was bought for $70 million by Disney in 1993, the brothers continued to run Miramax with an enviable level of creative control, and pushed their already legendary Oscar-hunting style to new heights with the expanded funding offered by the Mouse House. Among the successes as winners or nominees were Shakespeare In Love, Chicago and The Talented Mr Ripley.
But money was also a constant problem, and the Weinsteins began to clash with Michael Eisner. In 2005, Bob and Harvey left the company, forced to let go of the Miramax named and formed The Weinstein Company, which currently struggles with financing issues.
“Miramax wasn’t just a bad-boy clubhouse, it was a 20th century Olympus: throw a can of Diet Coke and you hit a modern-day deity,” recalls Kevin Smith at The Wrap. “And for one brief, shining moment, it was an age of magic and wonders. I’m crushed to see it pass into history, because I owe everything I have to Miramax. Without them, I’d still be a New Jersey convenience store register jockey. In practice, not just in my head.”
“I’m feeling very nostalgic right now,” Harvey tells the site. “I know the movies made on my and my brother Bob’s watch will live on as well as the fantastic films made under the direction of Daniel Battsek. Miramax has some brilliant people working within the organization and I know they will go on to do great things in the industry.”
All that remains now is to think of the children – along with 80 people losing their jobs in New York and LA, the six movies still under the banner, including The Tempest and The Debt, face an uncertain future.
Miramax, thenÖ Gone, but not forgotten.

NBC: Conan O’Brien reaches $45M exit deal
NEW YORK ñ NBC said Thursday it has reached a $45 million deal with Conan O’Brien for his exit from the “Tonight” show, allowing Jay Leno to return to the late-night program he hosted for 17 years.
Under the deal, which came seven months after O’Brien took the reins from Leno, O’Brien will get more than $33 million, NBC said. The rest will go to his staff in severance, the network said in an announcement on the “Today” show.
His final show will be Friday, and Leno will return to “Tonight” on March 1.
“In the end, Conan was appreciative of the steps NBC made to take care of his staff and crew, and decided to supplement the severance they were getting out of his own pocket,” his manager, Gavin Polone, told The Wall Street Journal. “Now he just wants to get back on the air as quickly as possible.”
O’Brien will be free to begin another TV job as soon as September, NBC said. There has been speculation on where he might go next. ABC (which airs “Nightline” and “Jimmy Kimmel Live!”) has said it wasn’t interested, while Fox, which lacks a network late-night show, expressed appreciation for his show ó but nothing more.
O’Brien landed the “Tonight” show after successfully hosting “Late Night,” which airs an hour later, since 1993. But he quickly stumbled in the ratings race against his CBS rival, David Letterman.
Under Leno, the “Tonight” show was the ratings champ at 11:35 p.m. Eastern, but he proved an instant flop with his experiment in prime time.
Last week NBC announced that the five-hour vacancy in prime time left by Leno will be filled by scripted and reality fare calculated to bring NBC affiliates a more robust lead-in audience for their local news than Leno had been delivering. A provisional slate of shows will include new and veteran NBC dramas, a comedy panel series produced by Jerry Seinfeld and “Dateline NBC.”
It had been no secret that the 46-year-old O’Brien was scoring puny ratings numbers on “Tonight,” averaging 2.5 million nightly viewers, compared with 4.2 million for Letterman’s “Late Show,” according to Nielsen figures.
It was even more obvious that “The Jay Leno Show,” airing weeknights at 10 p.m. Eastern, was a disaster. Mostly justified by the network for its bargain-basement production budget, it not only was critically slammed, but also found a disappointing popular reaction. It has averaged 5.3 million nightly viewers since its fall debut ó about the same number that watched Leno’s final “Tonight” season, in a time slot when far fewer viewers are available. By comparison, the season’s top-rated 10 p.m. network drama, CBS’ “The Mentalist,” has an average audience of 17 million.
But few observers expected the abrupt upheaval that erupted publicly just two weeks ago, when two Web sites posted unsourced stories that the 59-year-old Leno’s show would soon be canceled or moved into O’Brien’s late-night domain.
Days later, NBC executives unveiled a plan to restore Leno to 11:35 p.m. with a half-hour program, then slide O’Brien’s “Tonight Show” to 12:05 a.m., followed by “Late Night With Jimmy Fallon,” also pushed back a half-hour.
Disgruntled affiliate stations, which have lost viewers and advertising revenue for their late local newscasts since “The Jay Leno Show” premiered, appeared to spur NBC’s sudden changes. The 210 local NBC stations saw their late news audience drop, on average, by 25 percent in November compared with the previous year among desirable 25- to 54-year-old viewers, with the Leno experiment costing the stations collectively $22 million over a three-month period, according to the research firm Harmelin Media.
In a clear vote of no confidence, some rebellious stations were threatening to drop “The Jay Leno Show” and air their own programming.
The network had been counting on O’Brien’s cooperation, and wanted an answer quickly, so it could have the configured lineup ready to launch after the Winter Olympics, which will dominate NBC’s schedule from Feb. 12-28. But O’Brien threw a wrench into NBC’s plans, and triggered a public relations firestorm for the network, when he issued a statement rejecting the offer to delay his show to make room for Leno’s return.
O’Brien said that shifting “Tonight” would “seriously damage what I consider to be the greatest franchise in the history of broadcasting,” and he declared his disappointment that NBC had given him less than a year to establish himself as host at 11:35 p.m.
The escalating mess furnished plenty of material for jokes by competitors of Leno and O’Brien, as well as the two NBC hosts at its center, who bashed their network and each other.
In one monologue, Leno took note of O’Brien’s complaint that NBC brass provided only seven months to establish himself at “The Tonight Show.”
“Seven months!” Leno cackled. “How did he get THAT deal? We only got four!”
Returning volley in his own monologue, O’Brien said hosting “Tonight” has been the fulfillment of a lifelong dream and reminded all the kids in the audience, “You can do anything you want in life. Unless Jay Leno wants to do it, too.”
Online, many leaped to O’Brien’s defense and applauded his stand against NBC. “Team Conan” became a popular Twitter topic for viewers who pledged their allegiance to O’Brien.
An O’Brien portrait also circulated as a badge of support. Referring to the “Tonight” show host’s playful nickname, it read, “I’m With Coco,” and featured a black-and-white picture of a regal-looking O’Brien standing in front of an American flag. The only color: his shock of orange hair.
For many observers, this clash of talk-show hosts recalled the late-night follies played out by NBC in the early 1990s as the network wavered confoundingly over who ó Letterman or Leno ó should inherit “The Tonight Show” from Johnny Carson.
The current revival of the late-night follies was set in motion nearly six years ago, in what was hatched by NBC executives as a farsighted strategy to ensure an orderly transition.
In the fall of 2004, the network announced that O’Brien would take over for Leno in 2009. That move by NBC ó and endorsed by Leno, despite his clear aversion to leaving “Tonight” ó was designed to keep O’Brien from jumping ship when his contract expired. “Tonight” was the prize O’Brien felt he had earned. He joked that he was looking forward to being on an hour earlier, “at a time when people can see me.”
As years passed and Leno strengthened his grip as the late-night ratings champ, NBC anguished over how to keep him usefully occupied on the network somewhere other than “Tonight,” and safely out of reach of rival networks who were courting him.
In late 2008, the network caught the public and the industry by surprise with its virtually unprecedented scheme: a new Leno hour “stripped” in prime time from Monday through Friday.
“A lot of people were shocked,” Leno joked to reporters when the plan was announced. “They didn’t know NBC still had a prime time.”

Film box office overtakes 2009 DVD, Blu-ray sales
LOS ANGELES (Reuters) ñ For the first time since 2002, U.S. consumers spent more to see Hollywood movies in theaters last year than buy them on DVD and Blu-ray discs, industry figures showed on Monday, and that trend is expected to continue.
In recent years, Hollywood has come to rely on the high profit margin from DVD sales to underwrite the large cost of producing and marketing films, but with DVD sales dwindling, the movie industry is reexamining its business models.
Adams Media Research reported on Monday that U.S. box office receipts boomed to $9.87 billion in 2009 and overtook DVD and Blu-ray sales of $8.73 billion.
Overall DVD and Blu-ray sales including films, television shows, concert videos and other content declined about 10 percent to $13 billion in 2009, Adams Media said.
The movie disc business peaked in 2004 with U.S. sales of $12.1 billion. With the film industry increasingly relying on the small but growing sectors of on-demand television and online distribution, movie disc sales are not expected to rebound to those peak figures from six years ago.
“It’s going to be a more diverse marketplace with more ways of getting movies, therefore packaged sales aren’t going to see the kind of growth that we saw with DVD,” said Tom Adams, president of Adams Media Research.
The $8.73 billion consumers spent in 2009 to buy movies on DVD and Blu-ray was down 13 percent from the year before, Adams Media said. U.S. box office receipts for 2009 were up nearly 10 percent from the year before.
The last time U.S. box office receipts eclipsed disc sales was in 2002, Adams said.
Adams said the figures for 2009 are still preliminary, as late December sales had to be projected.
Hollywood would like to see Blu-ray sales pick up the slack from slumping DVD business, but that has been hampered by the recession and changing consumer patterns. Blu-ray uses advanced digital technology to produce a sharper picture than DVDs.
About $1.1 billion of the movie discs bought in 2009 were on Blu-ray, and the number of homes with Blu-ray players grew from 3 million to 8 million.
But even as Blu-ray has seen growth, sales of movies on discs have been undercut by the rise of low-cost rental options, such as Coinstar Inc’s kiosk chain Redbox, which rents DVDs for $1 a day, and online subscription services such as Netflix Inc.
“Those two sectors of rental have really been growing, and causing people to hesitate about how many discs they’re going to buy,” Adams said.
Movie disc rentals in 2009 grew to $8.15 billion from $8.11 billion in 2008.
In 2009, the domestic box office reached a record high $10.6 billion, but that includes Canadian ticket sales that were taken out of the numbers compiled by Adams Media.

Doyle’s executors threaten Holmes sequel
The executors of Sir Arthur Conan Doyle’s literary estate have threatened to withdraw Guy Ritchie’s rights to the Sherlock Holmes story if the director hints at a homosexual relationship between the lead characters in his sequel.
Robert Downey, Jr., who plays the supersleuth in Ritchie’s new movie adaption, recently appeared on David Letterman’s U.S. talk show and hinted at a homoerotic subtext in the relationship between his character and Jude Law’s Dr. Watson.
During the interview the actor also asked the audience to decide whether Holmes is “a very butch homosexual.”
But Downey, Jr.’s comments have infuriated Andrea Plunket, who controls the remaining U.S. copyrights to the Holmes story, and she’s threatened to withdraw permission for a follow-up if Ritchie suggests the detective is more than just friends with his sidekick.
She says, “I hope this is just an example of Mr Downey’s black sense of humour. It would be drastic, but I would withdraw permission for more films to be made if they feel that is a theme they wish to bring out in the future. I am not hostile to homosexuals, but I am to anyone who is not true to the spirit of the books.

Marvel shareholders approve acquisition by Disney
NEW YORK ñ Shareholders of Marvel Entertainment Inc., home of Spider-Man and the Hulk, on Thursday approved the company’s acquisition by The Walt Disney Co., as expected.
Marvel said the $4.3 billion acquisition will close at the end of the day, bringing Spider-Man, Iron Man, and 5,000 other comic-book characters under the same roof as Mickey Mouse and Donald Duck.
Approval of the deal was expected. Marvel Chief Executive Isaac “Ike” Perlmutter, who owns 37 percent of Marvel stock, supported it. He will be overseeing the Marvel business after the acquisition.
Marvel shareholders will receive $30 per share in cash, plus 0.745 Disney shares for every Marvel share they own. Disney shares traded midday Thursday at $32.53, up 25 cents on the day. That values Marvel shares at $54.25, just above their trading price of $54.23.
The deal is Disney’s largest since it purchased Pixar Animation Studios Inc., the maker of “Up” and “Cars,” for $7.4 billion in stock in 2006.

Hollywood eyes record $10 bln box office for 2009
LOS ANGELES (Reuters) ñ Film box offices were poised on Wednesday to eclipse 2007’s record $9.68 billion in U.S. and Canadian ticket sales with Hollywood eyeing more than $10 billion this year as audiences flocked to theaters during the recession.
Movie studios began the year with January crossing the $1 billion mark for the first time ever, and box offices this month are counting on help from highly anticipated films such as “Avatar,” “Sherlock Holmes” and “It’s Complicated.”
So far, moviegoers had snapped up $9.67 billion worth of tickets at domestic — U.S. and Canadian — box offices through Tuesday, said tracking firm Hollywood.com Box Office.
The firm said 2007’s record was expected to be surpassed on Wednesday, as Hollywood reaps returns during a recession that, as in past downturns, has seen consumers showing up in theaters for relatively cheap entertainment.
Last year’s domestic box office came in at $9.63 billion.
“The global economy is taking a major hit, and when these conglomerates that own movie studios are having a tough time, it’s at least one bright spot in the equation,” said Paul Dergarabedian, president of Hollywood.com Box Office.
“People are still, in 2009, going to the movies in big numbers.”
For the entire year, Hollywood.com Box Office expects movie ticket spending in the United States and Canada to hit $10.6 billion.
The year has been helped by major releases such as “Transformers: Revenge of the Fallen,” the year’s biggest hit with $402 million in domestic ticket sales, according to tracking firm Box Office Mojo.
At No. 2, so far, was “Harry Potter and the Half-Blood Prince,” which made $301 million. Also, vampire romance “The Twilight Saga: New Moon” had the third biggest movie opening of all time for the United States and Canada.
Surprise hits have included Paramount Pictures’ “Paranormal Activity” raking in $107 million. Warner Bros. put out two unexpected smashes, “The Hangover” ($277 million) and “The Blind Side” ($131 million and still counting.)
The 2009 total was aided by a 28 cent increase in ticket prices from the year before to an average $7.46.
The total number of tickets sold, or admissions, is expected to reach 1.4 billion, up from 1.34 billion in 2008. Still, that figure is not expected to break the record 1.6 billion tickets sold in 2002, said Hollywood.com Box Office.
The United States and Canada account for about 35 percent of the global box office total, making it the largest film market in the world, Hollywood.com Box Office said.
International figures were not available.

Sony offers `Cloudy’ early to people with its TVs
In a bid to sell living room electronics and spur buzz for “Cloudy with A Chance of Meatballs,” Sony Corp. is offering the movie for free to U.S. buyers of its Internet-connected TVs and Blu-ray players starting Monday.
People who buy that equipment will be able to watch the movie in any 24-hour window from Dec. 8 until it is released on DVD and Blu-ray disc on Jan. 5.
Sony’s move highlights the way that movies are increasingly becoming available on TVs that connect directly to the Internet as the entertainment industry strives to come up with new business models.
Amazon.com Inc. and Blockbuster Inc. offer movies for rental or purchase on certain Internet-connected TVs, while Netflix Inc. will make its streaming catalog available to its subscribers with Sony Bravia TVs.
Those services, however, don’t provide the early-release jump Sony is trying with “Cloudy with A Chance of Meatballs,” which comes from the Sony Pictures movie studio.
“What we’re doing is game-changing for TV,” said Robert Jacobs, senior business development manager for Sony Electronics Inc.
Existing owners of Internet-connected Bravia TVs will have to pay $24.95 for the early rental, which will stream in 720p ó a lower resolution than full high-definition 1080p on Blu-ray discs. Viewers will be able to fast-forward, rewind and pause but not record the movie.
Last year, Sony streamed “Hancock” to Bravia TV owners for two weeks before its home video release. The promotion created a “halo effect” helping electronics sales and the movie’s DVD purchases and rentals, Jacobs said.
For now Sony’s focus is on TVs and Blu-ray players, although the early home-release window eventually could come to owners of PlayStation 3 video game consoles, he said.

Blockbuster planning to close stores
SAN FRANCISCO – Blockbuster Inc. may close as many as 960 stores by the end of next year, shedding more dead weight as the struggling video rental chain tries to reverse its losses and fend off rapidly growing rivals Netflix Inc. and Redbox.
The cuts outlined in documents filed Tuesday would leave Blockbuster with about 20 per cent fewer U.S. stores. The previously confidential documents didn’t identify the locations of the endangered stores.
Blockbuster hasn’t made any final decisions on the possible store closures, Chief Executive James Keyes said in an interview Tuesday.
Keyes described the closures as something that Blockbuster is considering as it sets up more DVD-rental kiosks in the stores of other merchants. It’s a concept that has been popularized by Coinstar Inc.’s Redbox.
By the middle of next year, Blockbuster hopes to have 10,000 kiosks scattered around the country. It had just 500 kiosks at the end of August.
“We could have fewer physical stores and still have more rental points for our customers,” Keyes said.
Blockbuster’s shift serves as another reminder of video stores’ waning appeal as consumers buy and rent movies through the mail, on the Internet and through cable connections and standalone kiosks.
The shift has threatened to turn once-mighty Blockbuster into a dinosaur. The Dallas-based company has been trying to evolve by embracing kiosks and expanding into rentals delivered through the mail and the Internet.
But it hasn’t been enough to justify keeping so many stores open, prompting management to consider cutting much deeper than it anticipated to save money and keep its lenders happy. About 18 per cent of Blockbuster’s stores aren’t making money, according to the documents filed with the Securities and Exchange Commission.
Blockbuster is thinking about closing between 810 and 960 of its U.S. stores before 2011, up from the 380 to 425 stores that normally would be closed during that time span, according to Tuesday’s filing.
As of mid-August, Blockbuster had closed 276 stores so far this year.
Besides closing stores, Blockbuster indicated that it will convert at least 250 stores into smaller outlets.
If Blockbuster hits the high end of the new target for store closures, it will represent 22 per cent of its 4,356 stores in the United States.
Netflix’s DVD-by-mail service, launched a decade ago, has hit Blockbuster particularly hard as more households have embraced the concept of picking out their rental choices online before the DVDs are delivered through the mail for a monthly subscription fee that usually runs from $9 to $17. In the last two years, Netflix lured even more customers by building up its library of movies available for instant viewing over high-speed Internet connections.
Netflix now has 10.6 million subscribers and, unlike Blockbuster, is becoming more profitable. The Los Gatos-based company earned $55 million through the first half of this year while Blockbuster lost $15 million.
Redbox also has been hurting Blockbuster with its red kiosks that rent DVDs for just a $1 per night. That low price has proven particularly compelling during the recession as more people pinched pennies.
In a Tuesday research note, Barclays Capital analyst Douglas Anmuth said Blockbuster’s accelerated store closures should bolster Netflix. Investors seemed to agree as Netflix shares surged $1.69, or 3.9 per cent, to close Tuesday at $44.97.
Blockbuster’s cost-cutting plans also pleased Wall Street as its shares gained 7 cents, or 5.2 per cent, to $1.40.

Royalty rates may silence bars
TORONTO – Canadian restaurants, bars and clubs are warning they may have to turn down the music if a proposed royalty increase becomes a reality, but the non-profit organization seeking the raise for performers says it’s time they paid up.
The Neighbouring Rights Collective of Canada wants to increase its royalty fee for background music by more than triple the current rate, a move it says will properly compensate performers and engineers.
It also has a proposal before the Copyright Board of Canada that would change how venues pay to play music that customers dance to.
“It’s about ascribing the proper values to music,” said collective president Ian MacKay, who argues that songwriters and publishers have been getting paid better royalties for decades while performers and producers have been given short shrift.
“It’s to compensate the performers for the use of their music. Imagine a dance club without music being played, people want music to dance to and that certainly adds value to the business of running a night club.”
But the Canadian Restaurant and Foodservices Association says the proposals would force many business owners to reconsider whether playing music is worth the cost.
In particular, the association is highlighting the implications of higher fees for venues that feature dancing, which could result in annual fee increases between $6,000 and $30,000.
“It’s exorbitant in the extreme and it will force many operators to consider dropping music altogether, or at least have them rethink the use of dance music,” said association spokesman David Harris.
The proposed tariff is going before the Copyright Board of Canada and Harris said he will “vigorously argue that this proposal is unfair and that it is financially devastating.”
But MacKay claims those figures are at the high end of the range and would only apply to mega-clubs, while smaller establishments would have fees in the hundreds, not thousands.
Businesses pay similar fees to the Society of Composers Authors and Music Publishers of Canada, which collects about $1.4 million in royalties every year for background music from around 31,000 businesses, including restaurants, hotels, shopping malls, banks, retail stores, factories and professional offices.
In releasing its reasons for certifying SOCAN’s most recent set of tariff rules, the Copyright Board of Canada stated “background music touches practically every aspect of our daily lives, from the tunes we hear in the elevator, to the jazz we listen to over dinner at a restaurant.”
An expert who testified as the proposed tariff was being debated said research suggests background music “favourably impacts customers’ mood and perception of their environment.”
“As a result, they are likely to stay longer in a store, to buy more and to have a positively enhanced perception of merchandise and customer service,” said Prof. Richard Michon of the Ted Rogers School of Retail Management at Ryerson University in Toronto.
“The right background music can even foster a stronger sense of customer loyalty.”
MacKay said businesses should be budgeting for music just as they budget for other expenditures.
“A restaurant has many suppliers of food, flowers, decor – all these things that go into the dining establishment,” he said.
“Well one of the things that definitely goes into the value of a dining establishment is the music they’re playing in the background, which sets the mood as much as the decor.”