Yahoo CEO Marissa Mayer danced on a tightrope this morning as she tried to explain the logic behind her company’s $1.1B agreement to buy social network site Tumblr. She told analysts in a conference call that the companies will work together, but separately. They appeal to different audiences, but she says they can complement each other. And since Yahoo is “all about brands” and advertising, it can gin up sales on Tumblr even though it has a history of being ad averse — and tolerant of porn. “We need to have good tools for targeting” ad messages, Mayer says. While it’s important for Tumblr to be “true to their voice,” the companies can “monetize [it] in a way that’s tasteful” while showing advertisers “the benefits of [Tumblr's young] demographics and the huge volume of users and traffic.” Tumblr’s 26-year-old founder and CEO David Karp — who Mayer called “one of the most inspiring entrepreneurs I’ve ever met” — underscored the cultural differences in a blog post this morning. Promising that “We’re not turning purple,” he ended his brief news announcement saying “fuck yeah.” Mayer vowed to “let Tumblr be Tumblr” operating “under the Tumblr brand and David’s vision” from its base in New York. Yahoo will help with the infrastructure, but won’t put its brand on Tumblr’s site. The connection “will be largely invisible to users.” She says it shouldn’t be hard to gin up ad sales at the social network, which just began to accept them a year ago. “Of the top 10 Hollywood studios, all use Tumblr to promote movies,” she says. “Tumblr views itself as a home for brands.” For example, Yahoo could “work with [Tumblr] bloggers who want ads.” She acknowledges that the businesses have different psychographics — Yahoo audiences are older than those at Tumblr where the average user is 25. “I would expect any ad units that we create [there] would be native and follow the form and function” of the site, Mayer says.
Herzog & Company has brought Nicole Zien on board as Head of Development, Original Programming. The former CMT Senior Director of Development & Production has been charged with expanding the Killing Lincoln and Gettysburg production company’s further reach into nonscripted series and specials, across all platforms.
UPDATE (ADDS DETAIL): After Earth, The Lone Ranger, R.I.P.D., and World War Z are among the “most notable candidates” to join the ranks of “several high-profile failures” from the major studios that Cowen and Co’s Doug Creutz predicts this morning. He worries Summer 2013 has “the most crowded release slate in recent memory” and could produce at least eight underperformers. Creutz has been making these domestic predictions for five of the past seven years. Here are his latest studio-by-studio prognostications:
Disney is at risk, Creutz says. He agrees Iron Man 3 will be a hit and projects domestic box office of $350M, and Pixar’s Monsters University should do well to the tune of $250M, but if The Lone Ranger bombs it could “sustain the perception that Disney’s film studio has some serious problems away from the Marvel-Pixar axis.” He expects Lone Ranger to generate $120M domestically but says it’s “a strong contender for an early write-down.” Westerns typically don’t play well overseas, he notes, recalling how even Will Smith’s star power couldn’t save 1999′s Wild, Wild West.
The analyst also forecasts that Paramount is “likely to have a one-up-one-down summer” with Star Trek Into Darkness probably making $250M and World War Z nowhere near that. He predicts just $85M for World War Z, which “had a troubled production” forcing a delay from the original December 2012 release date. It’s also up against Man Of Steel, and he says ”buzz has been elusive for the film, as we think …
The film’s performance is a big deal for DreamWorks Animation investors following the $87M writedown the company took for its Christmas release Rise Of The Guardians. But Cowen and Co’s Doug Creutz this morning joins the growing ranks of company followers who say that they’re pleasantly surprised by the performance of The Croods, the comedy about a pre-historic family on a road trip. The analyst raised his international box office estimate nearly 44% to $308M. What’s more, he lifted his forecasts for the studio’s future films noting that DWA’s first release distributed by Fox provides “increased confidence” that the partnership “will meaningfully improve overseas performance.” Although Creutz continues flash a yellow light “neutral” for DreamWorks Animation as an investment, he lifted his earnings per share estimate for this year about 49% to 58 cents adding that his “bias on the stock is now leaning to the positive side.” The second-weekend performance of The Croods did a lot to reassure analysts. Janney Capital Markets’ Tony Wible raised his domestic box office estimate to $152M from $116M. Wells Fargo Securities’ Marci Ryvicker said that the weekend’s “low decay of 39.3%” from the opening weekend puts it “on track to beat our prior 6-week est. of $115.0M.”
It’s hard to recall the last time a studio had so much riding on the performance of a single film. Following the $87M writedown for Rise Of The Guardians, and other setbacks, DreamWorks Animation is “a very hated stock on Wall Street,” Janney Capital Markets’ Tony Wible says. Short-sellers control about 24% of the outstanding shares. Just one analyst rates it a strong buy while five rate it “hold” and five classify it as either “sell” or “underperform.” Investors question whether the company can thrive as the market for family fare becomes more competitive. Since DWA only releases about two films a year, there are few opportunities to shape the company’s story. That leads us to The Croods: The consensus among analysts is that the film will generate a little north of $40M at domestic box offices this weekend, ultimately leading to a gross of $160M domestically and $290M abroad. “If they do below $40M, then people will be disappointed,” Wible says. “And north of $50M will be really good for these guys.” The Street’s cautiously optimistic. DWA shares are up 9.8% over the last month. Here’s a sampling of analysts’ estimates and commentary while they wait for the results:
It appears so according to an intriguing report out today from Cowen & Co analyst Doug Creutz. His conclusion comes from a 12-year comparison he’s been making of the total number of tickets sold domestically each year vs the average scores that voters on Rotten Tomatoes give to the 50 most widely released films. He has found a consistent correlation — attendance was high in years when Rotten Tomatoes scores were high — for every year except 2011 and, now, 2012. The two years had the highest average Rotten Tomatoes scores in the period he studied, but below-average ticket sales. Although Creutz recognizes that’s not conclusive evidence of a trend, it leads him to suspect that “the domestic demand curve for movies has meaningfully shifted down since 2010.” That’s worrisome: In a year of less popular films “ticket sales could drop well below any level we have seen in the last 12 years….This would certainly represent a bit of a catastrophe for the industry (including exhibitors) and would certainly get the attention of Hollywood executives.” He estimates that theaters sold 1.38B tickets in 2012, down from 1.44B in 2009 and 1.41B in 2000. Although box office revenues have increased over the decade, to $10.8B last year, that “has been made possible entirely through increasing ticket prices.” What accounts for the apparent disconnect between movie quality and attendance? Creutz says it could reflect consumer resistance to rising ticket prices, and improvements in home entertainment …
Studio moguls always feel that they need their tentpole releases to succeed. But they rarely have as much riding on a single film as DreamWorks Animation CEO Jeffrey Katzenberg will on March 22 when he releases The Croods. His company’s dreary Q4 financial report yesterday, which included an $87M writedown on its Christmas release Rise Of The Guardians, set the stage. If The Croods is a success, then investor concerns about the company “will fade,” Lazard Capital Markets Barton Crockett says. But a miss “would amp concerns about a creative crisis, and the big cash drain that results when movies misfire.” Good box office sales may not be good enough. Barclays’ Chris Merwin says the company needs “an exceptional performance” — he expects Croods to generate $150M domestically, and $300M overseas. Forecasts like his are important for investors who are wondering whether this is a good time to buy DreamWorks shares — which are down 3.4% so far today, and -26% since November 2 when it hit a 52-week high of $21.99. In Wall Street terms, the company seemed to take a “bath” yesterday with its Q4 report. It took $165M in writedowns, resulting in a far bigger than expected loss.
National Geographic’s Killing Lincoln premiered to a network record-breaking 3.4 million viewers last night. Based on Fox News channel host Bill O’Reilly’s book of the same name, the show is the first original factual drama from the network.
(WASHINGTON, D.C. — February 18, 2013) National Geographic Channel’s Sunday night premiere of KILLING LINCOLN – the network’s first original factual drama – proved to be the perfect way to honor President’s Day Weekend with stellar ratings that averaged a whopping 2.6 HH rating – tied for the second highest HH in network history – and a 1.1 P25–54 on Sunday, February 17, at 8 p.m. ET/PT.
KILLING LINCOLN also averaged 3.4 million persons 2+ over the entire two-hour premiere, the highest total viewership in NGC’s history!
Furthermore, the 1.1 P25–54 is the highest rated P25-54 since the premiere of SEAL Team Six: The Raid on Osama bin Laden in November 2012 (1.4 P25-54), and is more than 175% higher than NGC’s Sunday 8–10 p.m average so far this year (.4 P25–54).
This is one of several findings out today from a survey of 50 ad buyers that Cowen & Co says helped it to update and expand its coverage of Internet and New Media stocks. The advertisers are upbeat about 2013, seeing overall U.S. spending grow 4.6% vs 2012. That’s pretty good considering how much the election and Olympics boosted this year’s sales. But the additional dollars will mostly go to digital media — and especially those that appeal to smartphone and tablet owners. Digital will account for 33.5% of next year’s spending, up from 28.7% this year, Cowen analyst John Blackledge says. Meanwhile, TV’s market share will fall to 39.3% from 41.4%. The company notes that “TV consumption has remained static at 12-13 hrs/week” from 2004 to 2010. “Only Internet consumption has increased, from under 6 hrs/week in 2004 to 13 hrs/week in 2010.” The big surprise, though, is how eager advertisers are to spend on mobile. Cowen projects that smartphones, tablets and other portable devices will account for 26% of digital ad sales in 2018, up from 9% this year. But the firm says its survey suggests that the forecast may be too conservative — and that mobile could account for more than half of all digital ad sales in six years. That should concern moguls because Cowen says that “mobile ad dollars come at the expense of traditional ad mediums (TV, print, radio, etc).” Google is …
Talk about scratching the Surface. Microsoft CEO Steve Ballmer inadvertently dinged his company’s launch campaign for its Surface tablet by telling France’s Le Parisian in an interview that sales are “starting modestly.” To be fair, he added that critics’ response to the device was “phenomenal” — and that initial sales were limited because the tablet is still just available online and at a few stores. Still, his tempered comment, along with his refusal to project potential sales, contributed to a 2% drop in Microsoft’s stock price this afternoon. The company has a lot riding on the tablet, which includes Microsoft Office programs and can be paired with a keyboard cover to function like a conventional laptop computer. Strong sales “would come as a positive surprise to investors and demonstrate [Microsoft's] relevance in this important market,” Cowen & Co analyst Gregg Moskowitz says today.
Wall Street’s Big Media bulls have had a great run. Stocks for the group of companies that includes Disney, News Corp, Time Warner, CBS, Viacom, and Discovery have outpaced the overall market for more than three years. And just this year, the Dow Jones U.S. Media Index has appreciated 35% while the benchmark Standard & Poor’s 500 rose 15%. Yet I’ve been struck lately by the growing number of reasons to suspect that the joy ride is about to end. They started to crystallize for me today when I read Cowen and Co analyst Doug Creutz’s “State Of Big Media” report making the case to remain “moderately positive” about the sector. Like most of his analyses, it’s smart and identifies the important questions that the Street will want CEOs to address in the upcoming Q3 earnings season. But Creutz’s case for remaining optimistic is so meek that you’d think it was prepared by the guy who coached President Obama for his first debate with Mitt Romney.
Creutz starts by cautioning investors that media stocks have become expensive. The big companies that he covers trade for 14 times earnings, ahead of the S&P 500′s 13.3 times. That’s quite a change from last year when the stocks traded for 11.5 times their earnings, in line with the overall market. As a result, he says, “we think outperformance over the next 12 months is likely to be more modest than that enjoyed over the last few years.” On top of that, the analyst notes that his upbeat case assumes that the economy can “muddle through” the next year. He says that the “#1 risk to Big Media stocks, by a wide margin” is the possibility of a global downturn — which could be triggered if a European country defaults on its debt, or there’s no resolution in the U.S. to the rush off the so-called “fiscal cliff.”
Investors weren’t feeling especially friendly toward the social network company after its first quarterly earnings report and analyst call last night. The stock closed Friday at $23.70, down 11.7% — the lowest it’s been since it went public in May at an IPO price of $38. The stock touched $22.28 during the day, the lowest it has ever been. Friday also was the third most active trading day for Facebook, with 168.2M shares changing hands. The sell off is notable because analysts for the most part took Facebook’s Q2 results in stride. RBC Capital Markets’ Andre Sequin says that he was “pleasantly surprised by the presence and significant involvement of CEO Mark Zuckerberg on the call. The company did not offer specific forward guidance, which investors had hoped for, but instead stuck to qualitatively highlighting nascent projects.” Needham & Co’s Laura Martin urged investors to see a drop in the stock price as a buying opportunity. Cowen & Co’s Kevin Kopelman was a little more cautious saying that although “ad growth was better than we expected in the quarter, we remain concerned about the company’s ability to replace desktop ad and social game revenues with mobile revenues near-term, especially given the lack of clarity on Q3 trends.” Yesterday the company reported a Q2 net loss of $157M vs a $240M profit last year on revenues of $1.2B, +32.3%. The loss is largely attributable to accounting for stock based compensation; …
DreamWorks’ War Horse, Paramount’s Hugo, The Adventures Of Tintin and Super 8, and Disney’s The Muppets were among the winnners at the Motion Picture Sound Editors’ Golden Reel Awards, which honor the year’s best work in the areas of sound editing for dialogue & ADR, effects & foley and music for film and TV. The group held its awards ceremony last night at the Westin Bonaventure, where producer Gale Anne Hurd was honored with the 2012 MPSE Filmmaker Award and sound editor George Watters II was tapped a MPSE Career Achievement Recipient. War Horse won Best Sound Effects and Foley In a Feature Film, while Hugo took best music; both are nominated for Sound Editing at the Oscars. On the TV side, Showtime’s Homeland, AMC’s The Walking Dead and HBO’s Game Of Thrones were among the winners. Here’s the complete list:
2011 Creative Arts Emmys: John Walsh, Gwyneth Paltrow, Justin Timberlake, Jeff Probst, ‘Deadliest Catch’, ‘Boardwalk Empire’
The first 2011 Primetime Emmy Awards were handed out this afternoon at the Creative Arts Emmy Awards ceremony at the Nokia Theatre L.A. Live in Los Angeles. Like last year, pairings of showrunners with talent from the shows they produce presented. They included Jon Cryer & Chuck Lorre (Two and a Half Men), Connie Britton & Jason Katims (Friday Night Lights), Phil Keoghan & Bertram Van Munster (The Amazing Race), Jeff Probst & Mark Burnett (Survivor) and Chris Colfer & Brad Falchuk (Glee). Among the categories awarded today were Outstanding Reality Series and Best Guest Actors/Actresses in both Drama and Comedy series. The ceremony will air September 17 on ReelzChannel. Deadline’s Diane Haithman and Karen Nicoletti were on the scene. Walking the Red Carpet leading to tonight’s awards, Robert Kirkman, the Executive Producer of Walking Dead, reminds us that the Creative Emmys are for categories that are “the heart and soul of the television shows.”
And the winners are:
Outstanding Guest Actor In A Drama Series
Harry’s Law • NBC • Bonanza Productions, Inc. in association with David E. Kelley Productions and Warner Bros. Television
Paul McCrane as Josh Peyton
Winning the evening’s final award, Paul McCrane dedicated it to the memory of his father, James J. McCrane. “He would do anything to make a living in this business,” he said, adding that any actor who can make a living at the craft is lucky. “Anything else is gravy, and this makes some awfully nice gravy.”
BACKSTAGE: “I would like to say [the award] really doesn’t matter that much, but the truth is the nomination meant a lot to me. It was a fun challenging character that David Kelley wrote. I worked really hard on it, and I was happy with the work. Some other people were too, and that was really gratifying.” McCrane said that these days he is directing a lot of episodic TV “and I act when they let me. On Monday I go back to work on Harry’s Law.” He recently helmed a Harry’s Law episode and has directed CSI, “the mothership,” and has another CSI directing gig coming up next month. He said that Ted Danson’s addition to the CSI cast “breathes all kind of new life into the show. But [as a director] you don’t reinvent the wheel over there. They know what they’re doing.”
Outstanding Guest Actress In A Drama Series
Grey’s Anatomy • ABC • ABC Studios
Loretta Devine as Adele Webber
This is her first Emmy nomination and first win. ”I’ve been on that show for seven years, and they always make it feel like I’m coming home.”
Backstage, Loretta Devine updated on her career. She will be back on Grey’s Anatomy: “They haven’t killed me yet.” Says work continues on her upcoming TV series State of Georgia, starring Raven Symone for ABC Family: “We are trying to wait to see what happens to that. ” Also in the works for her is the film sequel to Terry McMillan’s Waiting to Exhale called Getting to Be Happy.
Presenting team of Friday Night Lights executive producer Jason Katims and co-star Connie Britton gave a makeup award and joked about how little makeup there was on FNL, a show known for ”sweat and grittiness”.
Jason Katims: “Makeup aside, we are so proud to have made a show about human dignity.”
Connie Britton: “If I’d had a little more makeup, I would have had a little more human dignity.”
Outstanding Guest Actor In A Comedy Series
Saturday Night Live • NBC • SNL Studios in association with Universal Media Studios and Broadway Video
Justin Timberlake, Host
Outstanding Guest Actress In A Comedy Series
Glee • FOX • Ryan Murphy Productions in association with Twentieth Century Fox Television
Gwyneth Paltrow as Holly Holliday
After Gwyneth Paltrow’s Glee win for Outstanding Guest Actress, the presenters joked about her absence. Alison Brie: Gwyneth Paltrow is not here. She couldn’t make it because she is at Happy Hour at the Starlight Room. Dan Harmon: Snap!
Governors Award honoree John Walsh, backstage, talked about how continuing to do specials for Fox, which carried his show America’s Most Wanted for 23 years, is like “dating your ex.” The always-intense Walsh says he accepted the offer to move his program to Lifetime instead of accepting any of “tons” of other offers, including hosting other sorts of crime-related programs, because “all I really want to do is catch bad guys and find missing children.” He says he is still trying to get an international crime-busting program, The World’s Most Wanted, off the ground.
Outstanding Host For A Reality Or Reality-Competition Program
Survivor • CBS • SEG Inc.
Jeff Probst, Host
Outstanding Reality Program
Deadliest Catch • Discovery Channel • Produced by Original Productions, LLC for Discovery Communications
Thom Beers, Executive Producer
Jeff Conroy, Executive Producer
Paul Gasek, Executive Producer for Discovery Channel
Tracy Rudolph, Executive Producer for Discovery Channel
Matt Renner, Co-Executive Producer
Sheila McCormack, Supervising Producer
Ethan Prochnik, Series Producer
Steven Robillard, Senior Producer
Todd Stanley, Producer
Outstanding Children’s Program
A Child’s Garden Of Poetry • HBO • HBO Family in association with The Poetry Foundation
Sheila Nevins, Executive Producer
Jacqueline Glover, Supervising Producer
Amy Schatz, Produced By
Beth Aala, Producer
Beth Levison, Producer
Outstanding Children’s Nonfiction, Reality or Reality-Competition Program
Nick News With Linda Ellerbee: Under The Influence: Kids Of Alcoholics • Nickelodeon • Nickelodeon in association with Lucky Duck Productions
Linda Ellerbee, Executive Producer
Rolfe Tessem, Executive Producer
Wally Berger Supervising Producer
Mark Lyons, Producer
Martin Toub, Produced By
Matthew Weiner, presenting the children’s TV awards with Kiernan Shipka of Mad Men, joked about five different actors playing Bobby Draper in the series so far. “I’m the father of four boys, none of whom has ever been replaced — well, one. What was I supposed to do — he couldn’t take direction.” Joked Shipka, about what she has learned from being on the show: “If you don’t want to bruise the gin, stir gently.”
Outstanding Animated Program
Futurama • The Late Philip J. Fry • Comedy Central • The Curiosity Company in association with Twentieth Century Fox Television
Matt Groening, Executive Producer
David X. Cohen, Executive Producer
Ken Keeler, Executive Producer
Dan Vebber, Co-Executive Producer
Patric M. Verrone, Co-Executive Producer
Josh Weinstein, Co-Executive Producer
Eric Horsted, Co-Executive Producer
Michael Rowe, Co-Executive Producer
Lee Supercinski, Produced By
Claudia Katz, Produced By
Gregg Vanzo, Animation Executive Producer
Lewis Morton, Written by
Peter Avanzino, Supervising Director/Directed By
Scott Vanzo, Director of Computer Graphics
Ira Sherak, Assistant Director
David X. Cohen, accepting on behalf of the large Futurama animation team, said that if he had to describe the feeling of winning an Emmy in one word, “that word would be ‘blank space.’ That’s the part I didn’t write yet.”
Cowen & Co’s Doug Creutz shouldn’t expect Rupert Murdoch to call today and thank him for upgrading News Corp stock to the equivalent of “buy.” The analyst is optimistic because he sees a 25% chance that the UK phone hacking and police bribery scandals will end Murdoch’s reign — and lead the stock to pop. Creutz says that his main problem with News Corp is that with deals like the $5B acquisition of Dow Jones “the company has been run with an eye towards empire-building and with little regard to creation of shareholder value.” He’s also concerned about “the culture at News Corp which seems to encourage business practices that are close to, and have at some times crossed …the line of acceptable behavior, putting the company and share valuation at risk.” Murdoch’s effort to remain CEO reminds Creutz of Michael Eisner’s struggle in 2005 to stay at Disney. Although Murdoch controls 40% of News Corp’s voting shares, a power that Eisner didn’t enjoy, the former Disney chief didn’t face “the full power and wrath of a first-world government that is arguably fighting for its life.”
Still, Creutz still sees a 70% chance that the scandal will result in no change in control and no lasting damage to News Corp’s businesses. In that case he says the stock might recover from the 10% decline in July as the scandal unfolded. The analyst sees just a 5% chance of what he calls the “nightmare scenario” that would involve “a spread of the scandal’s toxicity …
The nominees for the 63rd Primetime Emmy Awards from the Academy Of Television Arts & Sciences were presented live this morning by celeb hosts Melissa McCarthy (Mike & Molly) and Joshua Jackson (Fringe). The ceremony took place at the Television Academy’s Leonard H. Goldenson Theatre in North Hollywood. The 63rd Primetime Emmy Awards will air live coast to coast on Sunday, September 18th (8 PM ET/ 5 PM PT) on Fox and will originate from the NOKIA Theatre L.A. LIVE in Los Angeles. The awards will be produced by Mark Burnett and hosted by Jane Lynch.
Nominations by network/channel: HBO – 104, CBS – 50, NBC – 46, PBS – 43, FOX – 42, ABC – 40, AMC – 29, Showtime – 21, Comedy Central – 11, ReelzChannel – 10, Starz – 9, History – 7, FX Networks, Nickelodeon, Cartoon Network – 6
Nominations by show: 21 Nominations, Mildred Pierce; 19 Nominations, Mad Men; 18 Nominations, Boardwalk Empire; 17 Nominations, Modern Family; 16 Nominations, Saturday Night Live; 13 Nominations, Game Of Thrones, 30 Rock; 12 Nominations, Glee; 11 Nominations, Downton Abbey (Masterpiece), Too Big To Fail; 10 Nominations, American Idol, The Kennedys; 9 Nominations, 83rd Annual Academy Awards, Cinema Verite, The Good Wife; 8 Nominations, So You Think You Can Dance; 7 Nominations, The Amazing Race, American Masters, Dancing With The Stars, Gettysburg, The Pillars Of The Earth; 6 Nominations, The Borgias, The Killing, Upstairs Downstairs (Masterpiece); 5 Nominations, The Big Bang Theory, Dexter, …
Investors are clearly concerned that News Corp doesn’t have the appetite anymore to pursue its BSkyB bid because it looks unable to get the regulatory approval necessary for the 100% takeover. Not only did News Corp shares plunge 7.1% on Monday, but also BSkyB shares dropped 7.5% in London as a result of the widening UK phone-hacking scandal. Many investors fear that there’s a lot more bad news to come for News Corp as investigators delve into News Of The World’s newsgathering practices. “We are highly troubled by the way this scandal has played out over the last several years,” Cowen & Co analyst Doug Creutz says. “At the least, senior News Corp management appears to have been guilty of severe ignorance of the extent of the unethical activity despite having had ample time to uncover the truth.” But some analysts see a silver lining in the scandal. If News Corp scraps the BSkyB acquisition, then it increases the chance that Rupert Murdoch will give cash to shareholders — probably by buying back News Corp stock. And if he is just delaying the deal, then he may end up paying less than he would now for the 60% of BSkyB that he doesn’t already own. “We think the deal will eventually be approved, but it may …