Wednesday, April 25, 2012
Feds take interests in studio-China relations for international trade violations.Viewers going on-line in record numbers. Rupert Murdock takes the stand. "SMASH" excutive producer steps down.
AOL set to change the intenet with lifestyle channels. Pledging to "change the way the Internet looks and feels," AOL Chairman and Chief Executive Tim Armstrong used the high-profile platform of the Digital NewFront presentation to advertisers to launch an online network for showcasing digital video.
The new network, dubbed AOL On, is designed as a one-stop online destination where viewers can find 14 channels programmed -- as cable television channels are -- around interests such as food, business, entertainment, health and technology. The short-form video could be viewed on four dominant screens -- computers, tablets, mobile phones and Internet-connected TVs.
"Consumer adoption of the Internet is going to continue to explode," Armstrong told a group of more than 450 marketers, ad agency representatives and media buyers at a presentation Tuesday. "Every single human being on the planet is going to be walking around with a screen on them -- and we believe that content is the most important thing that's going to touch those screens."
AOL Senior Vice President Ran Harnevo portrayed AOL On as the next wave in video entertainment, following the broadcast television era and the emergence of cable TV -- which introduced channels programmed around various passions, including music, food, sports and entertainment. Internet video democratized the creation and distribution of content, he said, but in this era of "broadcast yourself (a reference to the dominant Internet video site, YouTube) ... we got flooded with dogs on skateboards."
"It's frustrating both for consumers and for advertisers," Harnevo said. "We as an industry have a problem -- and we've been thinking a lot about this problem for the last 18 months."
Harnevo said AOL On seeks to borrow the best of TV -- namely, its programming -- and apply it to the fragmented Internet video experience. AOL plans to select from among some 300,000 short-form videos to bring the most relevant to the new channels. It also has enlisted celebrities, including supermodel Heidi Klum, "Project Runway" judge Nina Garcia and former Bravo TV "Top Chef" semifinalist Sam Talbot to help curate content selections.
"I spent my life curating as a fashion editor. I've traveled the world looking for fashion and really selecting what is most relevant for our readers," said Garcia, who is fashion director at Marie Claire magazine. "In this digital era, there is a lot of information.... Having a point of view, an expert's point of view, is so important."
AOL's approach is reminiscent of YouTube's premium content strategy, in which the Google Inc.-owned site devoted some $100 million to underwrite the cost of creating new channels that address entertainment niches.
Armstrong said that before he decided to pursue this content strategy, the former Google executive sought the advice of Walt Disney Co.'s former chairman and chief executive, Michael Eisner.
Eisner, who subsequently founded Vuguru, an independent studio to create content for digital and emerging platforms, also took the stage Tuesday to talk about a theme he returns to frequently: the importance of story-driven content.
"I keep coming back to this one point of view," Eisner said. "I read two scripts that [Vuguru CEO] Larry Tanz and [Vuguru Chief Creative Officer] Kristin Jones sent me. It was like reading any two scripts at a movie company or TV company. These were really high-quality, very high-concept movies."
One new Vuguru digital series that premieres June 18 on AOL, "Fetching," was created by "Sex and the City" producer Amy Harris and stars Collette Wolfe of the 2010 feature film comedy "Hot Tub Time Machine" and the ABC television series "Cougar Town." The comedy revolves around the exploits of a lawyer who quits her job, breaks off her engagement and pursues her dream of opening her own business -- a doggie day-care store called "Fetching."
Another Vuguru series, "Little Women Big Cars," debuts May 7. Set in Southern California, it centers around four devoted soccer moms who struggle to balance their schedules and family lives while striving to retain their sanity. Its ensemble cast includes Amy Yasbeck ("Wings"), Julie Warner ("Crash" and "Nip/Tuck"), Kristy Swanson ("Psych") and Romy Rosemont ("Glee").
The Skinny: It's only Wednesday? Let's move it along people. Our headlines include Rupert Murdoch's turn to take the hot seat in a British inquiry into media ethics, the Securities and Exchange Commission's curiosity about business relationships between Hollywood studios and China, and NBC's "Smash" finding a new executive producer for next season.
Did Bloomberg lie to the FCC about NBC/Universal? Comcast Corp. has accused Bloomberg LP of lying to the government in the latest twist in the battle between the two media behemoths.
Last month, Bloomberg said in a filing with the Federal Communications Commission that Comcast was ignoring the conditions that the regulatory agency put on the cable giant as part of approving its acquisition of NBCUniversal. Comcast told the FCC on Tuesday that the charge was "demonstrably false."
The specific issue is where Bloomberg TV is placed on the cable dial in relation to Comcast's CNBC. Bloomberg has argued that as part of the FCC's approval of the deal, Comcast is required to put Bloomberg TV near CNBC and other news channels. Comcast has countered that it only has to do that if it were to start placing similar channels next to each other on the dial, a practice known in the industry as "neighborhooding."
In April, Bloomberg sent a letter to the FCC charging that Comcast in fact had created new neighborhoods for news channels on cable systems it owns in Crescent City, Fla., and Claxton, Ga., without moving Bloomberg TV. "Comcast is favoring its own programming content and discriminating against competitors," Bloomberg told the FCC.
On Tuesday, Comcast said neither of the accusations were accurate. In its response to Bloomberg, Comcast included a declaration from Michael Davies, an area vice president for the cable company's southeastern holdings. He denied Bloomberg's claims that between 2011 and 2012 it created a neighborhood of news channels that included Comcast's CNBC and MSNBC along with CNN and Fox News channels. Those channels, he said, had been together prior to the Comcast-NBCUniversal deal closing.
In Crescent City, Fla., Comcast said not only did it not create a news neighborhood, but that some of the channel's Bloomberg said were held by news networks were actually held by other entertainment channels.
"Bloomberg’s continued presentation of erroneous facts should further call into question the basis for its complaint," Comcast told the FCC.
In its response, Bloomberg said it had used Comcast’s own reporting of its channel positions to Tribune Media Services, which produces television listings and on-screen programming guides as the basis for its accusations.
Daily Dose: Usually networks wait until their new shows are successful before actually promoting them as hits. But the CW Network doesn't bother with such formalities. Tuesday night, the network premiered its new show "L.A. Complex" and in the end credits a voice came on to tease next week's episode by calling the drama a "new hit series." If you didn't hear it, there was also a graphic on the screen saying the same thing. Can't we at least wait for the ratings to come out before we start exaggerating?
New director. "Smash," the NBC musical drama about the struggles of putting on a Broadway show about Marilyn Monroe, has found a new show runner for next season. Earlier this spring, NBC announced the show would be coming back but that its creator and executive producer Theresa Rebeck would not be in charge. Now "Gossip Girl" executive producer Josh Safran is expected to take over, according to Entertainment Weekly. "Smash" started out strong but, as anyone who saw this week's Bollywood number can attest, it has lost its way creatively.
Photo: Dancers perform "A Dream in the Forbidden City" during the opening of the Beijing International Film Festival in Beijing on Monday. Credit: How Hwee Young / EPA.
SEC investigating studio deals with China for unfair trade practices. The Securities and Exchange Commission has sent letters to at least four major Hollywood studios, including Walt Disney Studios and DreamWorks Animation, over dealings in China, a person familiar with the matter but not authorized to speak publicly confirmed Tuesday. The SEC asks about what deals the studios may have cut with the Chinese government to boost their businesses there. The SEC wants to see if the studios may have crossed the line of the Foreign Corrupt Practices Act, which forbids payoffs to foreign officials for business interests. That would be bad. More from Reuters, the New York Times and Los Angeles Times.
The letters center on the studios' dealings with China Film Group, the state-run company whose responsibilities include determining which foreign movies get access to a limited number of slots each year for revenue-sharing deals in the red hot Chinese movie market, now the second-largest movie market in the world behind the United States.
The SEC letters were confidential, meaning the studios are not supposed to discuss them publicly or disclose their existence to investors, another knowledgeable person said. Both the SEC and the Motion Picture Assn. of America declined to comment.
China has until recently permitted the import of only 20 foreign movies each year, most from Hollywood, under terms that allowed the studios to collect up to 17.5% of the box-office revenue. In February, China agreed to start letting in an additional 14 foreign movies per year, and increase their box-office revenue share to a maximum of 25%.
Foreign films that don't land one of the quota spots either receive a small fee to play in China -- typically less than $1 million -- or aren't seen in the country at all. As a result, getting into China under the quota can translate into tens of millions of dollars more in revenue.
The SEC letters may be related to the Foreign Corrupt Practices Act, which makes it a violation of U.S. law to make improper payments to foreign officials for business purposes. The letters’ existence was first reported by Reuters.
Despite widespread piracy, China last year generated more than $2 billion in box-office revenue. Among the top performing movies there in the last few years have been “Avatar,” which grossed $207 million, and “Transformers: Dark of the Moon,” which generated $159 million. This year, the current re-release “Titanic 3-D” has taken in $105 million.
The number of Chinese screens doubled in five years to 10,700 at the end of last year, and is expected to rise to 13,000 by the end of 2012, according to the MPAA.
China Film Group's chairman, Han Sanping, recently visited Los Angeles and met with several prominent Hollywood executives, including top officials at Universal and Sony. Han was accompanied in some of the meetings by Dan Mintz, chief executive of Beijing-based DMG Entertainment, a Chinese-American media company involved in film co-productions and distribution in China.
A spokeswoman for DreamWorks Animation declined to comment on the SEC letter. The Glendale studio has had great success in China with movies such as “Kung Fu Panda 2,” which grossed more than $100 million in the country. In February it unveiled plans to build a studio in Shanghai under a joint venture with two state-owned firms.
A spokeswoman for Disney did not respond to a request for comment. The Burbank entertainment giant recently signed a partnership with a Chinese firm to co-finance the super-hero sequel “Iron Man 3” and film part of the movie in the Communist country. Disney is building a $4.4-billion theme park in Shanghai, and has a smaller one already open in Hong Kong.
Spokespeople for other studios, including Warner Bros., Universal Pictures, 20th Century Fox and Sony Pictures, declined to comment.
Photo:HBO's film "Hemingway and Gellhorn," chronicling the romantic relationship between the writer and journalist, was filmed entirely in the Bay area, which stood in for 9 different countries. The Chinatown neighborhood of San Francisco stood in for Shanghai in the 1930s. Credit: Karen Ballard/HBO
Globe trotting film about Hemmingway short entirely in San Francisco. It can be done. The US can be used once again as an international location with a world wide location scope.
In the upcoming HBO movie “Hemingway & Gellhorn,” actors Clive Owen and Nicole Kidman bring to life the passionate and stormy relationship between Ernest Hemingway and World War II correspondent Martha Gellhorn — the inspiration for the writer's classic novel “For Whom the Bell Tolls.”
But the real star of the cable network's film, which premieres May 28, is the city of San Francisco and the Bay Area. Though the movie's story takes place in nine countries, it was shot over 40 days last spring entirely on location within about 20 miles of the Northern California city.
Filmmakers usually come to San Francisco because they want to capture the city’s unique look and historical landmarks, such as the Golden Gate Bridge or the Fisherman’s Wharf. In this case, the city and surrounding communities stood in for Spain, Finland, Cuba, New York, Shanghai, Key West, even Ketchem, Idaho, where the famous author took his life in 1961.
PHOTOS: Bay Area as a stand-in for the world
Producers relied not only on the area’s diverse locations but on state and local film incentives as well as advanced green-screen technology combined with actual historical footage from the period.
“We literally shot for every place, except for San Francisco," said Trish Hofmann, the film’s executive producer who will share her experiences on the HBO movie at an annual industry breakfast Friday in Los Angeles sponsored by the California Film Commission.
Typically, a film with so many foreign locations would have been shot overseas. But with a tight budget — less than $20 million — producers ruled out shooting in Europe.
They considered Puerto Rico but settled on San Francisco, partly as a practical matter. Director Phil Kaufman (“The Right Stuff” and “The Unbearable Lightness of Being”) lives in the city, as do many of the actors, including Joan Chen, who plays Madame Chiang Kai-shek.
Local and state incentives also helped make the decision easier. “Hemingway & Gellhorn” received a $3-million tax credit from California's film program, which awards credits based on a lottery system.
“We set up a little shrine to pray for the tax rebate, with a candle, a bottle of Vodka, a picture of Hemingway and Gellhorn and a copy of ‘For Whom the Bell Tolls,' " Hofmann said. “When we got it, we celebrated — Hemingway style.”
The project received $600,000 more in rebates from the city for police expenses and the cost of renting a warehouse at the port for production offices and sound-stage space.
A rickety pier and wooden houses in China Camp State Park east of the Golden Gate Bridge provided the backdrop for scenes set in Key West and Cuba, with the help of a few palm tree props. The salt flats in the South Bay represented the rice paddies of China in the 1930s.
An old railway station in Oakland covered in graffiti and bird droppings was cleaned up to look like a hotel in Madrid, while Spanish Civil War scenes were filmed in an arid, flat area of Livermore east of the city that bears a remarkable resemblance to the Spanish countryside.
Shanghai of the 1930s was re-created in the back alleys of Chinatown, while Finland was represented by an actual Finnish church in Pacific Heights.
“If you challenge me, I can find you within 20 miles of San Francisco, 40 feet from anywhere in the world," said Patrick Ranahan, the film’s location manager.
Borrowing a technique Kaufman employed for his 1983 movie, “The Right Stuff,” producers also made extensive use of archival footage from the Library of Congress and other sources. And they used advanced green-screen technology to insert actors into actual footage from late 1930s Spain, World War II and other periods.
“We spent a year before principal photography going through a 100 hours of archival footage," said Chris Morley, visual effects supervisor at Tippett Studio in Berkeley. “It’s the only way it could have been done.”
Photo: Pandora co-founder Tim Westergren. Credit: Ryan Anson / Bloomberg.
The number one radio station in Los Angeles is PANDORA! Pandora, the Internet streaming radio service, is the No. 1 radio station in Los Angeles by audience size, according to a poll released Tuesday by the Media Audit.
Pandora beat out local stations such as KIIS-FM, KNX-AM4, KROQ-FM5 and KOST-FM in the survey of 54,000 adults who were asked in the biennial phone poll, in October, what stations they had listened to in the previous week.
The research group estimated that 1.9-million people in Los Angeles listened to Pandora between September and October of 2011. The No. 2 station, KIIS-FM, garnered 1.4-million listeners in the same time frame, according to the survey.
The results dovetailed with Pandora's current efforts to launch advertising sales teams in local markets, including one this week in Los Angeles.
The Oakland-based company has come under heavy criticism from investors in recent months for not growing its advertising revenue quickly enough to make up for rising costs. In the last fiscal year Pandora paid $148.7 million — about 54% of its total revenue — in music royalties, contributing to a $16-million loss.
Ad revenue is widely seen by Wall Street as a way for the company to get ahead of its costs and turn a profit. But marketers have not paid as handsomely for Internet ads as they have for traditional media, including radio. Pandora is hoping surveys like the one from Media Audit will help persuade Madison Avenue that a listener of Internet radio is just as valuable as one who is tuning in to broadcast radio.
For now, Wall Street isn't turning up the dial on Pandora's stock. Its shares closed down 3 cents at $8.53, from an initial public offering price in June of $16 and a high of $20 in July.
Photo below: Lloyd Braun. Credit: Yahoo
TV's changing habits impacting viewers, advertisers, distribution and production. The prime-time television ratings drop took center stage at the Digital Content NewFront presentations in New York, with former ABC Entertainment Chairman Lloyd Braun seizing on the numbers as an opportunity to talk about changing viewing habits -- and the rise of digital media.
In an onstage conversation with MediaLink Chairman and digital guru Michael E. Kassan, introductions had barely been concluded before the topic was broached: The four broadcast networks have lost viewers in recent weeks. And, unlike in years past, audiences aren't gravitating to the cable networks.
Braun, who joined the world of digital media after being forced out in 2004 as the top programming executive at ABC, referred to a trend reported in the New York Times as evidence that viewers are moving away from watching television shows live, when they initially air.
Viewers increasingly are using online services, such as Netflix Inc., to get caught up on past seasons of award-winning shows, such as the PBS series "Downton Abbey" or AMC's "Mad Men," and watch current episodes through digital on-demand offerings, he said.
"There is no reason anymore -- for most of this kind of programming -- to watch it live," Braun told a group of advertising buyers attending Microsoft Corp.'s digital advertising presentation Tuesday.
The trend has been on the horizon for years, Braun noted, adding with obvious frustration that advertisers continue to pay higher rates to air commercials during prime-time TV, despite the gradual erosion of the audience. He said he expects the trend to continue, as buyers attend next month's presentations by the major networks of new fall shows and commit billions of advertising dollars for the upcoming season.
This year's ad sales season, known as the upfront market, is expected to raise nearly $9.2 billion in commitments from advertisers.
"What I think has been driving people crazy on the digital side, we've all seen these charts which show time spent on the Internet versus where the [ad] spend is going," said Braun, co-founder of BermanBraun, an independent media company that develops television, feature film and digital programs. "There's this huge gap where the audience is spending time online and with tablets and smartphones, and the ad dollars are not commensurate with that."
The desire to grab advertisers' attention -- and dollars -- is behind the Digital Content NewFronts, during which five major online distributors will highlight their new shows for buyers.
Microsoft brought out some star power -- including U.S. Olympic gymnast and gold medalist Dominique Dawes, now a Fox Sports analyst, actress Felicia Day of "The Guild" and Kate Snow, NBC News correspondent with "Rock Center With Brian Williams" -- to promote the content available through its MSN portal and through the Xbox Live service offered via its game console.
Ross Honey, Xbox Live general manager of entertainment and advertising, sought to portray the Xbox 360 as a broad-based home entertainment device that offers more than video game play. It has struck some 50 content deals in recent months, including agreements with cable giant Comcast Corp. and Time Warner Inc.'s premium cable network, HBO, that offer subscribers access to TV shows via the game console.
The Xbox Live service has grown 30% in the last year to 40 million members, Honey said. Indeed, Xbox 360 consoles outsold other individual devices that connect the TV to the Internet, including Blu-ray disc players.
Entertainment usage on the Xbox Live has more than doubled, year over year, Honey said.
"In the U.S., entertainment usage has surpassed multiplayer gaming on Xbox Live," Honey said, referring to the video game industry term for players who connect via the Internet to oppose one another. "That's a profound event. When Xbox Live started 10 years ago, what it was all about was mutliplayer gaming. Now, Xbox Live really is an all-in-one entertainment platform."
What, me worry? News Corp. chairman Rupert Murdoch downplayed the influence of his newspapers in Britain on Wednesday during a judicial inquiry into media ethics that was launched as part of the probe into phone hacking at the media giant's tabloids. Murdoch said he's never used his newspapers there to advance his commercial interests. If Murdoch is ever asked that question here, I hope someone digs out all the negative stories the New York Post did about Nielsen after a change it made in the way it measures ratings had a negative effect on News Corp.-owned TV stations. Early details on the hearing from the Los Angeles Times and the Guardian.
Touchdown! NBC is looking to get $1 million for commercials in its Thanksgiving night football game between the New York Jets and New England Patriots, according to Advertising Age. That would likely be a record price for a commercial during a regular season football game.
Two jobs. Not only is Katie Couric launching an afternoon talk show this fall, she's also going to have a presence on Yahoo as part of ABC News' programming venture with the Web portal. According to AdWeek, Couric will host a weekly Web show on Yahoo. Food giant Nestle has signed up to sponsor the program.
-- Joe Flint and others
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