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With Digital Rights Management (DRM) there’s a constant cat and mouse game at play.  Companies spend money to restrict their product’s use, hackers spend time trying to set it free.   Recently, in two different battles from the same war – both sides scored victories.   For the hackers, a group called the iPhone Dev-Team is reporting they’ve unlocked the iPhone 3G. For the content industry, the Blu Ray DRM standard BD+ has taken back some ground.

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Last April, in a surprise announcement, Lions Gate, Viacom (Paramount) and MGM announced plans to launch their own, then unnamed, premium cable channel and video on demand service.  Soon after, Business Week reported former Showtime exec Mark Greenberg was set to take the helm.  Besides those two tidbits of information, there’s been speculation (including talk of Blockbuster joining the group) but limited detail.  In November, a 10Q filing revealed the first small peek into project, specifically, detail on some of its costs.  Now, another tiny piece of info has snuck out: its name.

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Despite sickness in the economy and with individual companies in the sector like EA and Midway (more here), the broader video game industry’s retail heartbeat is pulsing strong and steady. For the second month in a row, NPD Group’s retail survey shows above average health.

Year over year, total sales for November were up 10% to $2.91b.  Hardware and software categories saw near equal growth with software up 11% and hardware up 10%.

The sales results were easily good enough to best analyst projections predicting sales gains in the range of 5% to 7%.  Impressively, if adjusted to normalize for the different number of post-Thanksgiving sales days between the two years (Thanksgiving was Nov. 22, in 2007, and Nov. 27 this year), they’d have been even better.

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Google’s library is growing.  In addition to serving as the card catalog for the ever-changing mass of digital content on the net, the search giant’s archived rare books and snagged Life Magazine’s photo catalog. They’re also now playing host to a collection of magazine back issues – full spreads, not just links.  

So far, Google has quietly made copies of more than one million articles.    According to a company blog, this is part of a broader initiative to bring more magazine archives and current stock online.  According to Google financials, it may serve another purpose too.

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The November NPD gaming statistics are due within the week but even without the register receipt detail, it’s clear the economy is having an impact on the industry.  While some companies are thriving, others are falling apart.

Nintendo’s president Satoru Iwata recently told Reuters that Wii sales more than doubled over the Thanksgiving holiday to nearly 800k units.  Microsoft similarly reported a positive initial surge.  Xbox sales were up 25% the Black Friday weekend.

Closer to the other pole, fortunes (or shoppers) aren’t being as kind to Electronic Arts.   In light of weaker than expected sales, EA announced today that they are lowering their fiscal year 2009 guidance for both earnings per share and net revenue. (The year ends in March).

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Last March, the Newspaper Association of America singled out 2007 as the worst downturn in the newspaper print ad business in over 50 years. That was three months into 2008, well before the continued deterioration of the economy this summer and fall, before the banking and automotive industries imploded. 2008 is guaranteed to register as worse.

Newsprint costs have been up. Income down. (Newspaper ad sales were off 18% in Q3(Bloomberg)). Classified ads have further migrated to the Internet. Consumption habits are changing. Traditional local ad buyers (like car dealers) are spending much less.

Punctuating how bad it’s become, the history books will record 2008 as home to the first substantial newspaper bankruptcy in years, decades.

Monday, hindered with debt from last year’s leveraged buyout, the Tribune Company, parent to the Chicago Tribune, The LA Times and the Baltimore Sun, made truths out of early rumors and sought the protection of the Delaware court.

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Earlier this week, Sumner Redstone sold his majority stake in Midway Games at a substantial loss.  He took $100,000 and the assumption of debt in trade for an investment he spent more than $500m accumulating.  The decision, many believe, was made in part to help with ongoing negotiations to restructure an $800m loan held by his National Amusements company.  Turns out, however, his sales decision may force Midway’s management to renegotiate some debt of their own too.

The Chicago area game company is currently carrying more than $150m in senior convertible debt due in 2025 and 2026.  The contractual agreements for these loans, according to SEC filings, included repurchase obligations that are triggered by a material change of control.  Redstone’s sale of his 87%  stake is just such an event. 

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