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Entertainment conglomerate Viacom (NYSE: VIA), today reported Q1 numbers that beat analyst estimates but overall profit was reported down 36% due to restructuring costs ($56m at MTV) and increased expenses.

Wall Street consensus estimates were for profit of 31c a share, less the restructuring charges Viacom reported profits of 34c

First quarter revenue was up 16% over the same period last year to $2.75b. Consensus estimates were for revenue of $2.55b. Ad sales were up globally by 10%. Operating income was down 3%. Net income was reported at $202.9m, down from $317.2m.

For the Cable Networks (MTV, Nickelodeon, VH1, BET and Comedy Central, Spike, CMT etc), executives downplayed TV ratings and suggested their focus is on building Internet presence and online affiliate advertising. They noted Nickelodeon’s online project Nicktropolis had 3m registered users since January. For TV audiences, Comedy Central continued to do well but MTV visitors were watching the site less frequently. Overall, revenue for the TV properties was up 10% but operating income was down by 3%.

For the Paramount Studios component, sales were up 27%, but there was an operating loss. Filmed entertainment operating income showed a loss of $105.7 million, from net income of $51.1 million for the same period last year. That was attributed to increase in expenses related to higher print and advertising costs.

More detailed press coverage on Viacom’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch
Viacom Fact Sheet

Video on Demand (VOD) got a boost yesterday when the nations 3rd largest cable operator, Cox Communications, and Disney’s two leading TV properties, ESPN and ABC, inked a distribution deal.

Under the terms of the agreement, viewers using Cox’ digital cable services, and equipped for VOD, wil get free on-demand access to first run TV series and programming including hits like Lost and Desperate Housewives (and sports content from ESPN).   Programs will premier on-demand 12 hrs after their regularly scheduled broadcast.

Advertising will be added to the programs for on-demand broadcasts.  At least one 15 second commercial slot per episode will be allocated for Cox to use in the promotion of their products and services.  Other ad slots will be allocated to Disney-ABC-ESPN  or their local affiliates for resale.  The ads will also test a geographic targeting system that delivers region, or even zip-code, specific advertising.

One of the key components of the deal is a promise by Cox to disallow fast-forwarding through commercials by means of integrated digital-cable features during the broadcast.  Cox can’t, or won’t, however, attempt to disable fast-forwarding features on the DVR’s (Digital Video Recorders) its customers lease from them.    As a result, should a customer record an on-demand broadcast for later viewing (or any kind of time-deferred viewing), there’d be no recourse to prevent ad-skipping.

With approximately 20% of Television owning households in the United States owning a DVR and able to record, or watch, programming at times that suit their schedules already, the impact of the partnership will likely be limited from the start.  Still, it’s a notable, even if only as a small adjunct distribution channel, to test market a new concept and experiment with means of mitigating the threat posed to the networks from changes to TV distribution technologies.  It’s also not a bad effort to capture more of the $3.9b market that is estimated to exist for VOD by 2010.

Everyday seems to have at least a few headlines about Google.  Much of yesterday’s Google-related news centered on the announced release of Google’s redesigned web analytics platform, Google Analytics.  The improved user-interface and tools made with the added assistance of the folks brought on in the acquisition of Measure Map will no doubt be a help to web marketers and web masters from beginner to pro. 

The torrent of news drowned out a small, whisper of information: Google has ported its RSS reader/Feed Aggregator, Google Reader, to work with the Nintendo Wii and the Opera browser embedded in it.  The Google engineers even went so far as to insure that it works with the buttons and interface of the Wii’s innovative controller.   News of the effort was mentioned on the Google Reader’s official blog

The original Google Reader is technically still a Google Labs development project and not a fully functional, supported service/feature.  The Wii, for all its strengths and popularity, is for now (for most users) a gaming device and not a home-media PC/Device or a platform for web surfing.   Combined, those facts mean the unannounced side-project to join the two is well below the radar – probably less notable than hackers modding Apple TV to run non supported video formats as reported in March.  Still, the effort at Google might prove meaningful, or at least a glimpse of the future.

For one thing, Nintendo has been active in adding functionality to the Wii beyond its highly demanded gaming abilities and user interface.  Back in January, Nintendo partnered with the Associated Press and other news agencies to provide news through the Wii’s integrated Opera web browser.  (See the Metue article here  for more info on that announcement).

It’s also no secret that Google, like many companies, sees’s a convergence of technologies leading to some form of set-top appliance integrating the Internet, the Entertainment Computer and our Television.  (Note: I use the term appliance and set-top very loosely, it’s far to soon to know whether streaming technologies, hardware, set-top boxes, gaming platforms, DVR’s or the other potential competitors will bring the best-in breed solution for making all this happen).

Google’s first major recognition of the value of gaming, and PC-TV convergence came a few months back when they followed Microsoft’s lead and bough an In-game advertising company.  In Google’s case – Adscape Media (see here for more information)

Google’s application of its RSS Reader/Personal news aggregator to the Wii may be nothing more than a group of engineer’s “amusement-project.”  There’s no reason to insinuate it’s part of a master plan being implemented at Google.  I’m not reading much into it.  I definitely wouldn’t speculate on an upcoming Nintendo and Google partnership, but the development is fascinating.

I’d love to check it out, if only the Wii wasn’t so hard to get.

Today was a relatively busy day for earnings announcements.  Networking giant Cisco announced their numbers after the markets close.  In addition, in the Entertainment Industry, both Disney and leading game publisher Electronic Arts announced their quarterly results.

Electronic Arts:
For EA, it was a rough day.  EA Reported revenue down 4% to 4613m.  Even excluding a one time accounting charge, net income was off a whopping 56% to $19m.  For EA’s full fiscal year, which ended March 31, revenue was slightly up to $3.1b (up 5% over last year). 

The drop was partly attributed to increased costs associated with R&D and marketing associated with the fall/winter release of next generation platforms (Wii, PS3), and the transition of titles which effected the entire industry.

In guidance for the next quarter EA also was cautious. EA forecast revenue for the quarter ending June 30 will fall the range of $300 million to $360 million. Analysts were expecting $460.6 million.  The downward adjustment was attributed, in part, to changes in accounting for the way the company books some gaming revenue.

More detailed press coverage on EA’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Disney:
Disney’s reported numbers that analysts were characterizing as decent to good but not impressive.  Revenue was in at $8.1b, up 1% over the same period last year.  Operating income was reported up to $1.8b from $1.4b.

For the quarter, the film studio revenue (which owns about 1/5 of Disney’s gross income) was down 13% relative to last year to $1.55b on the quarter. But lower costs and fewer high profile titles to market during the quarter helped increase operating income by 60% to $235m.  The coming months, with the high profile release of several major titles will be a big test for the quality of the Studio Division’s year. (Pirates of the Caribbean 3 has been a huge earner (info on the earning history of many of this summers sequals can be found here)) is in theaters May 25th, and Pixar’s Ratatouille, comes out June 29th.)

The TV division reported solid returns.  Cable channels (ESPN, Disney etc) saw a 19% increase in operating income to $963m.  ABC showed solid returns with increased ad-rates in prime time and positive notes on syndication sales of its hits Lost, Desperate Housewives and Grey’s Anatomy.

More detailed press coverage on Disney’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Video sharing site YouTube is the 4th most visited website on the planet (According to Alexa Rankings).   It’s now going to give something back to some of the users who helped create that popularity (and who helped the company get the $1.65b purchase price Google paid to acquire the company last November).

Late last week, YouTube announced it was finally making good on a promise made in January to share advertising revenue with some of its more prolific and well known members.   The people behind such magazine-cover-spanning, pop-culture hits like Lonelygirl 15 (actress Jessica Rose was on the cover of Wired, etc) and LisaNova (star Lisa Donovan has been all over the press and is now appearing on MadTV) will be getting nearly the same benefits as commercial content partners who broadcast on the site.

Specific details have not been disclosed yet but at the heart of things, the benefits are suggested to include an approximately 40 to 50% share of revenue generated from ads wrapping the members individual broadcasts. 

Unlike smaller competitors Revver , which shares ad revenue with all its uploading members, or Guba, which pays affiliate fees for registrations referred by its users,  the revenue sharing agreements at YouTube will not extend to any (or arguably even many) YouTube users.  Only a small selective group will get the rewards, at least initially.

Until more information is revealed, any guesses about what this will actually entail, or what will follow, are largely pie-in-the-sky speculation.  Still, there is some small basis for believing that this is a measured first step towards a possible roll out to a wider portion of YouTube’s users.  Dating back months, and including a speech co-founder Chad Hurley gave in Switzerland, there has been talk around and inside YouTube about providing more incentive for users to create and present their original user-generated content.  Revenue sharing, mixed with the popularity of the site relative to competitors, makes an easy and obvious means for doing that.

While I have little basis other than intuition and guess work to justify the argument, I think YouTube may actually be contemplating (or trying to build) an Adsense-like platform to allow the administration of video-wrapping ads for a much wider pool of users within their site. Click to Read More

Sometimes I have to go with the tangent and see where it leads.  Every now and then, you have to go outside your range and push the boundaries.  Today, I’m off topic and off the cuff.  Consider that fair warning.

I grew up in a family of gadget-fiends.   If it had lights or buttons and required some form of power, chances are someone in the house lusted for it.  Today, I still like my tech-toys.  Gadget tech-toy websites like Engadget or Gizmodo remain a guilty pleasure but I like to think I’ve grown up some too (yes, some might argue that point).   Today, my pallet of interests is wider.  I build furniture with a style that borrows more from 100 years ago then 100 years from now.  I appreciate the new and the old (which I do recognize probably goes with not being so new myself anymore.)  I like originality.  I like things that have some battle scars just as much as things so futuristic that I can barely identify them.  My most recent find is a product that shares the DNA of both.  It’s a computer, but not like many others.

When two worlds collide the results can be breathtaking.  The resulting mutt can also be downright scary.  When the furniture maker’s art collided with computing in the Frankenstein labs of Canadian company Suissa Computers the result is striking.  The wood cased computers won’t suit every taste (not sure all the models suit mine) and they definitely won’t suit every budget.   The limited edition models are expensive.  They run at prices upwards of 2-4 times comparable components in an assembly line box.  Still, these products are a welcome retreat from the I-wanna-be-Bang-and-Olufsen-or-copy-Apple approach to product design that seems stamped on nearly every new gadget. 

Now, don’t get me wrong.  I love my iPod and other tech toys. I’m all for über-cool modern stylings but it’s nice to see a product with a little life to it.  In a world of increasingly A or B, organic vs. mass produced, form vs. function, it’s intriguing to see a marriage of different extremes. 

I’m of the school of thought that: simply because something is new or cutting edge, it doesn’t have to look that way.  Click to Read More

Spider-man 3, one of the most highly anticipated, and promoted, movies of the year opens in theaters today.   In a year of very-big-budget sequels,  Spidey may prove to be the costliest of them all.  Variety has reported production costs topped out around $260m before marketing and promotion.  Rumors have speculated that those numbers are sanitized and the actual cost broke the $300m barrier (making Spidey Part-3 the most expensive movie of all time – even with inflation adjustments).

Sony doesn’t have much reason to worry.  the first two movies took in more than $1.6b at the box office (see article from March for more info here).  That sum added to tremendous revenue from DVD sales, rentals and merchandising, not to mention gaming (Spider-man 3 games are due for several platforms) – Sony will probably see a solid return on investment, including marketing expenses, of even around $500m.

For Sony Pictures, Director Sam Raimi, Toby Maguire, Kirsten Dunst and the rest of the cast, this weekend will be a big indicator of how their work will be received.  While unlike its predecessor (Spider-man 2), this installment won’t show the skill of  a Pulitzer prize winning writer in its script, it does have the able assistance of a two-time academy award winning scriptwriter helping to guide it.  Ultimately, as Steven Spielberg is attributed to have said  “The important question is not whether a movie is worth $20m but whether it’s worth $10.”  I’d bet on a weekend gross between $75m and $110m. 

For the special effects team behind the movie-  the movie is already a hit based on the simple fact that it’s made it to the theaters.  One of the villains in the film, Sandman, relies tremendously on high level CG animation.  The character took a team of 30 f/x specialists two years to render and complete. Click to Read More