Staffing Report: Changes at EMI and Red Octane

When Guy Hands stepped out of the CEO role and become Chief Investment Officer at Terra Firma last week, the private equity firm characterized the move as an operational decision that would allow Hands to get more involved with existing portfolio companies and new investments.   He’s apparently not wasting any time. 

It was revealed today, Douglas Merrill will step down from his roles overseeing the digital business at the Terra Firma owned record label, EMI.

According to an internal EMI memo snagged by All Things D, the former Google Chief Information Officer’s departure was a consequence of reorganization.

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NPD February: More Gaming Growth

Leading up to another month of retail statistics reflecting the health of the gaming industry, analysts were mixed on their forecasts. Some thought the video game sector would slip slightly in February while others predicted steady, but modest, growth. With data in, the bulls won the pool.

Based on NPD data released today, February video game sales showed sequential and year over year growth.  For the month, the total tally climbed from $1.33b in January to $1.47b in sales.  Year over year it was a ten percent gain.

All of the subcategories tracked in the sector saw comparable growth with percentage returns straddling the double digit mark.  The accessories category showed the highest percentage growth with a gain of 13% over 2008.  Software was the weakest category with a 9% improvement.

Breaking out results by category:
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Sony and Google Partner to Expand Digital Book Offering

sony google reader dealThe battle for e-book reader dominance isn’t the kind of consumer product war that’s likely to raise a big audience.  Despite Amazon’s high profile Kindle, the market for e-book devices is, for now, relatively small.  Still, that’s not stopping companies from asserting claims or taking shots.  Earlier this week Discovery Communications reached for its piece with a patent infringement suit levied at Amazon.  Today, Sony and Google took a subtle jab of their own at Kindle.

In a press release this morning, the companies announced they were partnering to make more than five hundred thousand public domain titles Google has digitally archived available to Sony reader owners at no charge.

These books, which include works ranging from Mark Twain to Leo Tolstoy and Jane Austen, are all clear of copyright restrictions.   Google’s digitized them as part of its book search program.

Making them available for Sony’s reader will expand Sony’s library catalog of available content to near 600k titles.  That will put the company well ahead of Amazon’s approximately 250k titles.

Indirectly emphasizing what’s been positioned as a major difference between Sony’s product and Amazon’s, Click to Read More

Guy Hands Steps out of Terra Firma CEO Role

boardroom montageFor seven years, since the inception of the firm (via a spinoff), Guy Hands has been Terra Firma’s outspoken leader.  Today, in a surprise announcement the fund founder ceded day to day control of the large European private equity firm. General Counsel Tim Pryce will become CEO and Hands will take the dual title of Group Chairman and Chief Investment Officer.

Terra Firma characterized the move as an operational decision necessitated by the growth of the company.  Since, 2002, staff numbers have nearly doubled and the company’s assets under management have swelled from €2 billion to more than €11 billion.

The company currently has more than 200 investor relationships spread across twenty six countries.

As Group Chairman and Chief Investment Officer Hands will be better positioned to focus on the company’s investments, investors and strategic development, the company says.

That perspective corresponds with a letter earlier this month in which Hands said the firm was “cautiously optimistic” about investment prospects for the coming year and that the deals it is “currently seeing are classic Terra Firma opportunities.”

At the same time, however, the reorganization also seems to be a conciliatory gesture  aimed at appeasing investors who have been concerned over both Terra Firma’s ownership of record label EMI and the €1.39 b loss Terra Forma posted for 2008, largely a result of that investment. 

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Legal Briefs: Discovery hits Amazon Kindle with Infringement Suit.

The teeth associated with Discovery Communications (“Discovery”) are usually those flashed on Animal Planet, during the company’s “Shark Week” TV programming on the Discovery Channel, or when host Bear Grylls eats something disgusting, but it turns out the company’s legal department has plenty of bite of its own.

Today, Discovery filed a suit against Amazon in Delaware US District Court claiming Amazon’s popular Kindle e-book platform willfully infringes on a patent granted Discovery on Nov. 20th, 2007.

Discovery is seeking damages, repayment of legal fees, and in lieu of an injunction blocking Kindle sales, an ongoing royalty.  Discovery has also requested “treble damages,” the legal term for punitive damages up to triple the compensatory finding if Amazon is found in the wrong.

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News Evolution: Seattle P-I Goes Digital and New Data from Pew

digital-news2-sm.jpgThe occasional journalist Mark Twain famously told a newspaper reporter that the report of his death was an exaggeration.  For the staff at Seattle’s daily Post-Intelligencer, reports of the paper’s death were anything but.  After weeks of rumor, failed efforts to sell the paper, and a last tortuous week of expectation, Hearst finally pulled the band aid off the wound and confirmed today that it’s stopping the presses at its Seattle property.

In place of the P-I, Hearst is set to launch a reworked, digital-only news service.  Hearst representatives explicitly avoided calling the new incarnation a newspaper, however.  The goal, Hearst CEO Frank Bennack, Jr., said in a statement, is to turn into “the leading news and information portal in the region.”

“ isn’t a newspaper online – it’s an effort to craft a new type of digital business with a robust, community news and information website at its core,” explained Hearst president Steven Swartz.

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Nielsen Quantifies 2008 Ad Spending Decline

ad-spending-2008.jpgThe overall ad industry was off in 2008. There’s no surprise there. With banks and “big auto” in trouble, there were fewer dollars passed around.  New data from Nielsen released Friday quantified the extent of the decline.  According to the preliminary data from Nielsen Monitor Plus, 2008  US ad spending was off 2.6 percent.   Total spending was down $3.7b to $136.8 billion.

Among Nielsen’s initial findings, by the numbers:

2008 sector ad spending• The bright spot for the year was Cable TV.  It showed 7.8% growth in 2008.  Hispanic Cable TV was also strong with a 9.6% gain.

• Ad supplements for Sunday newspapers were hit hard. Spending in the sector dropped 11%.  National papers were down 9.6%.  Local papers saw a 10.2% decline.  National Magazines fell 7.6%. Local Magazines dropped 3.7%.

• Internet display ads were off 6.4%.  (Pay for click ads, text, search and other performance based campaigns were not counted in the survey).

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