Hollywood Connection: Bruckheimer Games Moves Ahead

You don’t have to look far to see the overlap between Hollywood and the video game industry.  Game companies have bought movie effects shops and traditional movie studios have expanded into game development.  Tomb Raider and Resident Evil started as games and had box office (and DVD) success.  Star Wars and other series started in theaters and found added success in  gaming.    Famed directors from Spielberg and Peter Jackson to up and comers like Zack Snyder have signed game development deals.  Game studios even have Hollywood agents.  These days, whether it’s animated, family friendly, action driven or effects laden – chances are there is crossover or could be.

It’s not exactly a mouth opening surprise.  All the synergy, marketing efficiency and business buzzwords aside there is much common ground. Both mediums share a foundation in their methods of visual story telling.   Both share costly and long development processes.  Both market (often) to similar audiences. Both need blockbusters to offset the lost causes of bombs. In a way, interactive video games are the choose your own adventure equivalent of Hollywood’s visual story telling tradition.

But just in case all the references and obvious points of confluence aren’t enough evidence of the increasing convergence between the two, add Jerry Bruckheimer to the list. The mega producer whose credits include films from Top Gun, to Beverly Hills Cop, and Black Hawk Down or Pirates of the Caribbean announced a partnership with MTV Games in December of 2007.  And now after 18 months of silence, that gaming adventure is officially moving ahead.

Jerry Bruckheimer Games announced Tuesday that it hired two industry veterans to lead its organization and chaperon the company’s entry into the marketplace. 

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Entertainent Earnings: Marvel and Disney, Quick Looks

Leading a busy week of entertainment industry earnings reports that also includes News Corp and CBS, both Marvel Entertainment and Disney reported today. The quick facts, by the numbers:

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Disney and Hulu Make Pact

hulu disAfter 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.

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Disney and YouTube Reach Content Deal for TV Programming

disney espn youtube smallDisney’s castle has been locked down tightly when it comes to distributing its video programming online but that now appears to be changing. Last week, word leaked that the company was discussing a possible content partnership and equity stake in News Corp’s and NBC / Universal’s joint venture, Hulu. This week, today, the Disney Media Group announced a content deal with YouTube.

The new arrangement will lead to the launch of several ad-supported YouTube channels featuring short-form programming from Disney’s ESPN, ABC, and SOAPnet brands. 

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Jumping to Conclusions? Report Leads to Blockbuster Sell Off

spread-sell-danger.jpgTuesday 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

Sony Joins Reorganization Parade

sony reorgIn a February 2007 interview for the PBS series CEO Exchange (PDF) Sony’s CEO Sir Howard Stringer said one of the first jobs he had to do at Sony was “reach out and get people to collaborate with each other.”  Sony was too vertically integrated, he said. He had to break up the vertical “silos” to better serve the increasingly digital world.  It’s two years removed from those remarks but Stringer is finally getting some of the changes he sought.

Following Yahoo’s restructuring announcement yesterday, Sony announced a major reorganization of its own today.    Effective April 1st,  there will be two new business groups and a reworked organization chart. 

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