Disney and Hulu Make Pact
After months of rumors, it’s official. Disney has hopped on the Hulu bandwagon. Subject to regulatory approval, Disney will take an equity stake in the video aggregrator/distributor alongside News Corp, NBC/Universal and Providence Equity Partners (which bought its stake in 2007).
In exchange for the equity, Disney will give Hulu the rights to broadcast full length programs from ABC’s catalog including Prime Time hits, and classics. Access will span the ABC Family, SoapNet, ABC and Disney Channel brands.
The deal will put three major networks (NBC, ABC and Fox) side by side in a joint video distribution platform. When it comes to online distribution of feature length TV content, the deal will make Hulu, “Network 1.”
That may not bode well for YouTube Click to Read More
Netflix Q1 Earnings: The Quick Look
Netflix earnings came in Thursday straddling expectations. Analysts had called for 41 cents a share on revenues of $390m. The company delivered 37 cents on revenue of $394m. Despite the differences, Netflix first quarter profit was up 68% compared to Q1 of 2008. Revenue was up 21%.
Weak ad markets and growing consumer appetite for entertainment helped the company deliver impressive subscriber growth and reduced subscriber acquisition costs. Netflix closed the quarter with 10.31m subscribers, a 25% year over year expansion. Subscriber acquisition costs were $25.79 per subscriber compared to $29.48 last year and $26.67 in Q4 2008.
Gross margin for Q1 was 34.2% compared to 31.7% in Q1 2008, and 35.2% in Q4 2008. Free cash flow for the first quarter came in at $15.1 compared to $4.8m for the same period a year ago.
Jumping to Conclusions? Report Leads to Blockbuster Sell Off
Tuesday was a bad day for Blockbuster shareholders. Open to close, the company’s stock crashed 77%, dropping from 96 cents to 22 cents a share. The massive sell-off was triggered after reports circulated saying the company hired Chicago law firm Kirkland & Ellis to explore a possible bankruptcy filing.
In rebuttal, Blockbuster told a different tale about its intentions for the retainer. The company says it hired counsel to help with restructuring and not to prepare for court protection.
Did the reports get it wrong? Or did traders rush to action too fast, misinterpreting the news along the way?
Karen Raskopf, Blockbuster’s spokeswoman, said the company hired Kirkland & Ellis “for assistance with our ongoing finance and capital-raising initiative." Regarding Blockbuster’s plans, she said, “We do not intend to file for bankruptcy."
Blockbuster’s “ongoing financing” issues aren’t anything new. Click to Read More
How Long is the Blu-ray Runway
A year removed from vanquishing HD DVD, Blu-ray DVDs are finally getting some retail respect. At least, so says a forecast from market research firm FutureSource Consulting. The UK based firm released a prediction (PDF) this week saying consumers will buy more than 100m high definition Blu-ray discs across the U.S., Western Europe and Japan in 2009. The company expects 80 million units to sell in the U.S. alone.
A large part of the growth is attributed to decreasing prices for both Blu-ray hardware and the discs themselves. Another lesser reason, FutureSource explains, was preparatory overproduction in 2008. To “fill the channel” and “enable retailers to build their in-store displays,” the industry produced more than 200m discs in 2008 despite only selling 36m. Retailers are now ready for a more aggressive sales push.
Blu-ray “has moved from early adopter phase through to early majority” in the U.S., said Mai Hoang, a sr. analyst at FutureSource. The company predicts by 2012, 50% of U.S. DVD sales will be Blu-ray.
Some critics are skeptical of these near term numbers. They think the economy – both by pinching consumer spending and by restraining the funds available for big budget movie production – will slow Blu-ray’s adoption.
EA Snaps Up License for Ludlum Library
They say one person’s trash is another’s treasure. Case in point: Robert Ludlum licensing rights. Not that it is fitting to call the gaming rights for the book catalog of a bestselling author trash, far from it, but when Activision Blizzard decided to cast the rights off, rival Electronic Arts was all too happy to pick them up instead.
EA announced today that they’ve reached a multi-year exclusive license for all of Ludlum’s written works, including the Jason Bourne series.
Vivendi Games previously held the rights. Activision Blizzard, the company that resulted from the merger of Vivendi Games and Activision, decided to orphan its license in July.
New TV Channel Epix to Debut Online in May
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, former Showtime executive Mark Greenberg took the helm and the joint venture, dubbed Studio 3 Networks, began to roll toward a planned Q4 2009 launch.
Little by little, details have trickled out about what’s planned. In November, it was regulatory filings that revealed some of the initial cost data. Last month, it was the brand name for the channel, Epix, discovered. This month, it’s more info on launch plans.
