Blockbuster and Sonic Solutions Buddy Up for On Demand Movies

blockbuster on demandMovielink and CinemaNow were among the early entrants to pace digital movie delivery.  Investors ponied up tens of millions to the promise: movies beamed on demand straight to viewers over the Internet.  Movielink and CinemaNow both burned out; ideas ahead of the market opportunity.

Blockbuster and Sonic Solutions stepped in in each case to opportunistically take advantage of the early birds’ failures; each buying up the assets and content libraries for pennies on the dollar.  Blockbuster bought Movielink for $6.6m in 2007.   Sonic Solutions grabbed CinemaNow last month for about half of that.

Now, in a new alliance, Blockbuster and Sonic will pool their resources and strengths in a joint venture positioned to try and carry them both forward into the eventual digital delivery transition.

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Connected Devices: LG TVs to include built in Netflix Streaming Functionality

netflix lg small tv metueIn October of 2007, Netflix CEO Reed Hasting spoke to analysts about convergence and digital movie distribution.   In the remarks, he defined three long term goals for the company: “to expand the content [Netflix] offers online.”  “To make it inexpensive and easy for consumers to view that content on the television,” and lastly, “to understand what the financial model for the hybrid service will be in the long term.”  Throughout 2008, the company made progress on all three, especially one and two.  Heading into 2009, the company looks poised to keep pushing forward.

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Warner Music and YouTube Not Hearing the Same Tune

record-rights-issue-sm.jpgIf you missed the headlines, Warner Music Group, the first of the Big 4 record labels to partner with YouTube has pulled off the site.  Accounts and press releases differ over culpability – whether YouTube bailed or Warner Music punted – but the material fact is the same.  From Bad Company to the B-52’s, James Blunt to Jane’s Addiction, the videos are down.  The reason is simple: money.

For several months, the two companies have been trying to renegotiate their expired license agreement.   Under the prior terms, its reported that Warner received either a fraction of a cent per video play or a share of any ad revenue generated alongside their content, whichever was greater. 

Neither, it turns out, was great enough. According to the New York Times, in 2008 less than one percent of Warner’s $639m in digital revenues came from YouTube; that despite the fact that music videos are among the most watched content on the site. 

According to Ad Age “Forty-seven of the top 100 most-watched creators on YouTube are musicians or labels.”

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Redstone Defaults on Debt, Lenders Look the Other Way

movie debtThere’s an old saying that says if you owe a bank a thousand dollars they own you but if you owe them a billion, you own them.  While the numbers in the saying vary, today, media mogul Sumner Redstone seems to have validated the theory of the adage: if you owe enough, you’re in control. 

Redstone’s National Amusements, the controlling shareholder of CBS Corp and Viacom Inc, had $800m out of a total $1.6b  in debt obligations due to be repaid Friday.   The bill wasn’t paid.  Instead, the 15 lenders provided National Amusements an indefinite extension, the New York Post reported.

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Hack Watch: iPhone 3G Unlocked? BD+ Secured?

unlock iphone 3gWith 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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Paramount Lionsgate and MGM Pick a Name: Epix

epix name chosenLast 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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Pink Slip Watch: Viacom, AT&T and More

pink slip noticeThe deceleration of the economy and the utter implosion of both the banking and auto industries has officially tipped the dominoes of misfortune to the media industry.  The flow of advertising dollars has shrunk.  Car dealerships are spending less to promote their products.  Banks are buying fewer ads. Historically big spenders aren’t spending. Even celebrity endorsements are falling victim.   So…this year,  instead of holiday bonuses, many tech and media companies are handing out pink slips.  

It’s hard to say whether all the cash conservation and restructuring is truly necessary or if some is just opportunistically timed to squeeze the write-offs and one-time charges into 2008 fiscal year accounting.  For a lot of people, that’s irrelevant.  This season’s greetings are anything but cheery.

Today, it was  media giant Viacom that lowered the hatchet. The parent of MTV Networks, Paramount, BET and Nickelodeon, announced a workforce reduction of approximately 7%, or 850 jobs. Click to Read More

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