Debmar-Mercury has named Karen Bonck new SVP Branded Partnerships. Based in New York City, she will report to Debmar-Mercury co-presidents Ira Bernstein and Mort Marcus, and will create and execute branded content and advertiser partnerships for the company’s first-run series, including The Wendy Williams Show (produced and distributed by Debmar-Mercury) and fall 2014 entry Celebrity Name Game (co-produced and co-financed by Debmar-Mercury and FremantleMedia North America, and distributed domestically by Debmar-Mercury).
If you thought that the legal dispute between Aereo and the broadcasters was combative, it paled compared with today’s one-hour hearing at the Supreme Court. In oral arguments before the nine Justices, both sides took some heavy blows, but the Barry Diller-backed streaming service definitely took one to the jaw from Chief Justice John Roberts. “Your technological model is based solely on circumventing legal prohibitions that you don’t want to comply with,” Roberts told Aereo attorney David Frederick during the presentation before a packed chamber. “There’s no reason for you to have 10,000 dime-sized antennas except to get around the Copyright Act,” he said. Added Justice Ruth Bader Ginsburg: ”You are the only player so far that pays no royalties whatsoever.”
Coming after arguments from the broadcasters by former Solicitor General Paul Clement and current Deputy Solicitor General Malcolm Stewart, Frederick started off his presentation by saying “this is a reproduction rights issue masquerading as a public performance case.” The Justices didn’t seem to buy it.
Despite Roberts’ comments, Justices Sonia Sotomayor and Stephen Breyer were by far the most inquisitive during the presentation with concerns over cloud computing taking up almost as much time as the copyright issue at the heart of the lawsuit filed by an armada of Big Media companies — including CBS, Disney, Fox, and Comcast’s NBCUniversal — as well as the federal government. “I don’t understand if the decision I write for or against you will affect other technologies,” Breyer told Frederick. ”It’s not your problem — but it might be,” Breyer deadpanned to a big laugh from the courtroom.
“I think the cloud was the winner today,” MPAA boss Christopher Dodd said after the hearing. “But I think the Justices see Aereo as gimmicky and want to address that.” Dodd’s comments mirrored remarks made by Clement during the presentation.
During Clement’s three-minute rebuttal at the end of the hearing, Sotomayor directly asked the lawyer about the consequences of a potential ruling. “If it’s just a gimmick, then they deserve to go out of business and no one should shed a tear,” Clement said of Aereo’s prospects should it lose at the high court. The lawyer added that if Aereo’s technology was innovative, it would persevere in one form or another regardless.
Said Frederick in a statement after the presentation: “We’re confident, cautiously optimistic, based on the way the hearing went today that the Court understood that a person watching over-the-air broadcast television in his or her home is engaging in a private performance and not a public performance that would implicate the Copyright Act.”
Originally scheduled to start at 11 AM ET, today’s hearing was pushed back 30 minutes because of readings of other opinions from the bench. In the sundrenched chamber with its strategically lit red velvet drapes and engraved marble walls, almost all of the nine Justices asked questions from their high-backed chairs. As is common, the only Justice not to ask a question was Clarence Thomas, though he did take time during the presentation to whisper asides to Justice Antonin Scalia.
The court likely will rule by late June.
Universal Pictures president of domestic distribution Nikki Rocco is stepping down from the post at the end of the year after 47 years at the studio, it was announced this morning. She was the first woman to be named the head of a major studio’s theatrical distribution operations when she took the job in 1996 and is one of Universal’s longest-serving employees, having joined up at age 17 and surviving seemingly countless regime changes. This move had been in the wind and as late as a month ago she denied to Deadline she was going anywhere. >Now Rocco — who counted Lew Wasserman among her most coveted industry relationships — will become a consultant. Her No. 2, co-president of distribution Nicholas Carpou, likely will take over the role though the studio did not say so in its release this morning.
In 2013, Universal had its best year ever at the domestic box office, with total grosses of $1.42 billion. It also crossed the $1 billion marker faster than any other time in its history.
“Monetization gap” is the clunky term NBCU chief Steve Burke frequently uses when he laments the low ad rates his company commands after years of flailing in the TV ratings wars. But with NBC poised to end the prime time season No. 1 in its target 18-to-49 demo, he tells analysts today that he’s going into the upfront sales market “with our best position in a decade” and “it’s going to be worth a lot.” He knows better than to offer specific numbers, but notes that “we can’t find any network that’s swung as much in a year.” CFO Michael Angelakis also said that this will be “a very meaningful correction year.” This was one reason CEO Brian Roberts says NBCU “has real momentum and we believe this is sustainable throughout 2014.”
The Sochi Olympics generated more than $1.1B in revenue which enabled NBCUniversal to propel the cable giant’s strong financial results. Comcast generated $1.87B in net income attributable to the company, +30.2% vs the first three months of 2013, on revenues of $17.4B, +13.7%. The top-line number beat the $17.04B that analysts expected. Earnings not including one-time items came in at 68 cents a share, ahead of the consensus forecast of 64 cents. With the Olympics dough, NBCU revenues increased 28.8% to $6.88B with operating cash flow +37.6% to $1.31B. The broadcast operation led the way with a 72.8% boost in revenues to $2.6B — but still would have been up 17% without the Games due to a 15.8% increase in ad sales from NBC’s improved ratings. Cable network revenue increased 12.6% to $2.5B, but would have been up just 1% without the Olympics. due to a 1.4% drop in ad sales.
At the smaller Universal filmed entertainment operation, revenues increased 11.1% to $1.4B with help from Ride Along and Lone Survivor and overseas sales for The Wolf Of Wall Street. And theme park revenues increased 5.4% to $487M as per capita spending increased while attendance remained stable. The core cable business also did well — even with video subscriptions, up by 24,000 to 22.6M. Revenues for all of the cable systems offerings including broadband increased 5.3% to $10.8B due to rate hikes, upselling, and customer growth.
SiriusXM and NBC News this morning announced the launch of Today Show Radio Channel, on which the long-running morning infotainment program will be broadcast on radio for the first time, featuring daily live feeds from both coasts — and, yes, including Kathie Lee Gifford and Hoda Kotb’s slice of the franchise. SiriusXM will be the exclusive audio home of Today. From today’s announcement:
The Japan branch of Universal Studios Parks & Resorts and Warner Bros’ Wizarding World of Harry Potter attraction was originally unveiled in May 2012 with a target late-2014 opening date. They made it: The opening day will be July 15. The announcement was made today in Osaka during a ceremony that included Japan Prime Minister Shinzo Abe, U.S Ambassador to Japan Caroline Kennedy and Harry Potter production designer Stuart Craig, who helped plan and build the themed land. The new attraction will be similar to the one in Florida and will include Hogwarts castle — the first of the new attractions to be unveiled today — Hogsmeade and multiple attractions. This will be the second Wizarding World franchise to get up and running following a lucrative launch at Universal Studios Orlando in June 2010 that revitalized that park. Last April, the LA County Board of Supervisors ended a seven-year process that cleared the way to begin construction on NBCUniversal’s 25-year Evolution Plan, which allowed work to begin on Wizarding World of Harry Potter at Universal Studios Hollywood last summer.
Ryan Seacrest will split his allegiances on May 1 when Fox‘s American Idol, which he hosts, airs against NBC‘s iHeartRadio Music Awards, which his company produces with Clear Channel. The programs involve all three of Seacrest’s major employers: Fox, where he has been making $15 million a year hosting Idol; NBCUniversal, where he has a wide-ranging deal spanning Today, the Olympics and E!; and Clear Channel, where he has his radio show and has been involved in the iHeartRadio franchise as host and producer. Two of the three deals — the Fox and NBCU ones — are coming up in the next few weeks, while the Clear Channel radio pact has another year on it. It seems neither Fox nor NBC has objections to Seacrest promoting programs that compete against each other as both companies are looking to extend their relationship with him. Seacrest is near a deal with Fox to continue on Idol, which is set to return for a 14th season next year despite its ratings slide. He also is expected to reach a new agreement with NBCU, though its scope is still in flux. Seacrest has a long history at both places, which launched his TV career, and loyalty has marked a lot of his business decisions so far.
The ABCs Of Aereo: Future of TV & Internet At Stake In Battle With Broadcasters, Says Aereo CEO Chet Kanojia
Editors Note: This is the last of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: An interview with Aereo CEO Chet Kanojia.
Previous ABCs Of Aereo Reports:
What Is Aereo And Why Are Broadcasters Taking It To Supreme Court?
Aereo Wants “Something For Nothing”, Former U.S. Lawyer Says
Broadcasters challenged Aereo‘s legality almost from the moment in early 2012 when it launched in NYC. It is a David and Goliath contest: the tiny, Barry Diller-backed streaming service defending itself against attacks from CBS, Disney, Fox, and Comcast’s NBCUniversal among other companies as well as the federal government’s Office of the Solicitor General. The plaintiffs say Aereo steals their property by selling their over-the-air programming without paying them. They liken it to a cable or satellite distributor and say that it packages channels and then redistributes them — in legal terms creating a public performance that, since it isn’t authorized by the broadcasters, violates the “transmit clause” of the Copyright Act of 1976. But Aereo CEO and founder Chet Kanojia says there’s no violation. He simply leases to consumers the antennas and technologies they need to privately exercise their right to watch broadcast signals for free. He sees next week’s Supreme Court hearing as a fight for his company, as well as a struggle to protect public control of the airwaves, and consumers’ ability to harness the power of the Internet.
DEADLINE: Barry Diller has said that if you guys lose at the Supreme Court, it’s basically game over. Are you turning off the lights if the Supreme Court rules against you?
KANOJIA: It’s going to depend on what the nature of the scope of the conclusions from the Supreme Court happens to be. If it’s a straight up, wipeout loss — and the Supreme Court shows the 2nd Circuit’s analysis of the transmit laws and, as a result, the idea was private performance is incorrect — then it will be very difficult for Aereo to be in business. For us, along with a lot of other companies that buy DVRs or cloud solutions, it will be a very difficult climate for sure. One result may very well be that we cease to operate.
DEADLINE: What if it goes in your favor?
KANOJIA: It’ll mean business as usual for everybody. I think the broadcasters will continue to grow and succeed. I think Aereo will continue to sell to consumers who don’t consume broadcast TV from cable or satellite but use antennas or are not part of the system. Then I think overall the pie will continue to grow.
DEADLINE: What do you think the broadcasters will do if they lose?
KANOJIA: Oh, they’re going to come back for a Round 2. They may go to Congress. The strategy of this industry is, “Let’s litigate, legislate. And if you can’t figure that out, then see how to make money from basic knowledge.”
Editors Note: This is the second of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: An interview with former Acting Solicitor General Neal Katyal, who is serving as an adviser to the broadcasters in their case against the streaming service.
On April 22, Aereo and major broadcasters will have their day in the Supreme Court. Broadcasters will say Aereo is stealing their copyrighted material, end of story. The Barry Diller-backed streaming service that launched in early 2012 will say it merely rents antennas to consumers so they can watch TV that’s already available for free over the public airwaves. Both sides will be represented by lawyers who know the Supreme Court well. David Frederick of D.C. firm Kellog Huber Hansen Todd Evans & Figel LLP has more than 40 SCOTUS appearances notched on his belt and will handle defendant Aereo’s arguments. Former Solicitor General Paul Clement, who has argued more 70 cases before the high court, will represent Disney, CBS, NBCUniversal, Fox and the other plaintiffs. He will have a half hour to make his points, unless the Justices give 10 minutes to the current Solicitor General’s office to argue on behalf of the plaintiffs.
Here’s the broadcasters’ argument from Neal Katyal, now a partner at international firm Hogan Lovells, who was picked by President Obama to serve as Acting Solicitor General from May 2010-June 9, 2011.
DEADLINE: So, let’s cut to the chase — what is this case really about?
KATYAL: I certainly think that streaming of the broadcasters’ signals is retransmission and blatantly violates the Copyright Law. Our case is can a company come along and yank broadcast signals out of the air and then package them and sell them to individual subscribers for a fee when the producers of that content aren’t compensated for it? The networks each year spend billions of dollars creating, producing, acquiring and distributing and marketing their content. Aereo is yanking the signals out of the air and selling them to people. So that’s what the case is about.
DEADLINE: Aereo would say that it complies with the Copyright Act and that broadcasters are trying to stem the use of innovative technology and stop the future from happening.
KATYAL: I think this idea that Aereo has some innovative new technology is an absolute red herring. The only thing innovative about Aereo is its legal strategy. It’s not people capturing the signal, its Aereo capturing the signal through antenna and then selling it to the entire American public and it’s Aereo who’s violating the Copyright Law by doing that. What Aereo is doing is grabbing the broadcasters’ signal from the air and then they’re retransmitting it. In 1976 Congress expressly said any device or process that retransmits a broadcast signal without the copyright holder’s permission is unlawful. So to me this is one of the easiest cases the Supreme Court is going to decide this year because it’s something that Congress settled. There maybe a number of interesting policy arguments about how we should have a different Copyright Law, but with respect to the Copyright Law we do have, it’s a very hard argument for Aereo.
With just days to go before they meet their Aereo foes face-to-face at the Supreme Court, the broadcasters this week took one last swipe at what they claim is the “blatant and unapologetic copyright infringement” by the Barry Diller-backed streaming service. “Aereo is in the business of retransmitting performances of the copyrighted works of others to the public for a profit,” said bluntly in a final reply brief filed by Disney, CBS, NBC, Fox and the other plaintiffs on April 14 with the SCOTUS (read it here). Aereo and the broadcasters are set to present their respective oral arguments in a 1-hour hearing before the High Court on April 22. In their March 26 response to the broadcasters’ February 24 filing, Aereo insisted that they are not engaged in public performance of copyrighted works. The company also said “this Court should not rewrite the Copyright Act in an effort to protect petitioners from lawful and logical advancements in technology or from the economic consequences of their transmitting works for free over the public airwaves.”
With the previously recused Judge Samuel Alito now joining the case the court docket revealed today, the stakes have gotten higher for all concerned, as it is impossible for the SCOTUS to have a tie on …
NBCU’s Wilshire Studios Inks Overall Deals With Producers Stephanie Bloch Chambers & C. Russell Muth
NBCUniversal Cable Entertainment’s Wilshire Studios is ramping up its unscripted development slate, inking new overall deals with Stephanie Bloch Chambers (Chrisley Knows Best, Married To Jonas) and C. Russell Muth (DEA, Bordertown Laredo). Chambers worked on Bravo’s Toned Up, It’s A Brad Brad World and three seasons of Bethenny Ever After. Muth produced shows for Discovery Channel and TruTV such as American Chopper, American Casino, Tiger Team, and America’s Toughest Bars. He also produced Coast Guard Alaska for the Weather Channel and Big Easy Justice for Spike. Wilshire Studios also is growing its internal development team, hiring reality vet Benny Reuven as VP Development and Programming. Reuven previously served as a development executive at OWN and produced shows including Chef Wanted for Food Network.
Back in February, word began to spread that longtime frenemies John Malone and Rupert Murdoch were eyeing a joint acquisition of the UK’s Channel 5. Malone-backed Discovery Communications and BSkyB, majority owned by Murdoch’s 21st Century Fox, have now reportedly gone ahead and sewn up a deal. Broadcast reported that Discovery and BskyB are nearing an announcement they have acquired the broadcaster in a deal valued at £350M, which would give the former a 70% stake and the latter 30%. But media entrepreneur Richard Desmond’s Northern & Shell, owner of Channel 5, has said it received several bids and was still evaluating them, according to Bloomberg. The free-to-air broadcaster was thought to be seeking a buyer with about £700M to spend, but many were skeptical it would fetch such a price; Desmond paid about £103.5M for it in 2010. Other companies that have been said to have shown interest include Viacom, Turner Broadcasting, BT, NBCUniversal and Saban Capital.
Channel 5 is notably the home of Big Brother, although its contract for the show expires in 2015. The net also airs U.S. dramas like Under The Dome, CSI and Person Of Interest; weekly average ratings hover around 4%.
Editors Note: The first of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: A primer about Aereo and what’s at stake in the dispute with broadcasters.
U.S. Supreme Court justices are so mistrustful of technology that they bar TV cameras from their proceedings and require visitors to check their smartphones at the door. But on April 22 they will take an hour to hear arguments in a case that could re-shape television and the Internet. All of the major broadcast companies are challenging the legality of an upstart streaming service: Aereo, a company backed by IAC chief Barry Diller that began to sign up subscribers in New York City in February 2012. The issues both sides will raise are complicated. But the controversy boils down to an important question: What rights do broadcasters and citizens have to content on the publicly owned airwaves?
Q: How does Aereo work?
A: Subscribers in the cities Aereo serves pay a minimum of $8 a month. That gives them exclusive access to one of its thousands of dime-sized antennas that pick up free, local, over-the-air broadcasts. The company then streams the live programming in the same local market to subscribers’ Web-connected TVs, computers, or mobile devices.
Q: Does it just stream live TV?
A: Aereo also offers a remote storage DVR. Just like with a home DVR, each customer can choose programs to record, and then watch later with the same fast-forward and rewind capabilities. The difference is that the digital files are kept on Aereo’s servers, not on a hard drive in the home. Those who pay $8 per month get 20 hours of DVR storage each month and access to one antenna, while those paying $12 get 60 hours and access to two antennas.
Q: Where can people subscribe?
A: Aereo began in New York, and now also is available in Boston, Atlanta, Detroit, Cincinnati, Baltimore, Dallas, Austin, Houston, Miami, and San Antonio. It plans to launch in cities including Washington, DC, Philadelphia, Pittsburgh, Cleveland, Chicago, Indianapolis, Minneapolis, and Kansas City.
Q: Why does that bother broadcasters?
A: Aereo doesn’t pay local TV stations when it streams their programming. Broadcasters say that infringes on their copyrights.
The original video programming initiative will debut first on NBCUniversal’s various digital platforms, including channel websites, Hulu and VOD, NBCU said today in a statement. Promos for the digital series will appear during various programs on NBCU TV networks. In some cases, development of the digital series will be in collaboration with advertising partners. “This original, digital-first programming, scaled with the unmatched resources of our company and our production partners, underscores the unparalleled opportunities we can create,” said Linda Yaccarino, President, Advertising Sales, NBCUniversal. “The combination of digital video alongside television content is extremely powerful and becoming an increasingly important part of the connection advertisers make with consumers. We want to offer our partners the unique ability to harness the power of our creative assets along with our distribution capabilities including the video-on-demand platform like no other company can do.”’
Among the digital projects slated to come from Universal Cable Prods include new series Tesla And Twain and Last Single Girl. UCP is also developing additional original series in collaboration with 72 and Sunny Productions. Tesla And Twain is a comedic series loosely based on the real friendship between the great author and the great inventor… if they were suddenly transported to modern day Los Angeles. Last Single Girl tells the story of a single, over-educated and under-employed young woman who is coming to terms with being a grown-up while all of her best friends are getting married.
BREAKING: Thomas Tull’s Legendary East said that China Film Co Ltd. has made an eight-figure equity investment in two Legendary Entertainment pics: the Jeff Bridges starrer Seventh Son and Warcraft, the pic based on the Blizzard online game that Duncan Jones is writing and directing. It marks the first time China Film Co has taken a stake in Hollywood films, and if the pics are approved by China‘s government it will distribute them in the booming movie market with support via Legendary East and global distribution partner Universal.
China Film Co is majority-owned by China Film Group and is the largest producer and distributor of Chinese content — CFG has an exclusive grip on Mainland revenue-share releasing. There has been talk that a new government-approved distributor could emerge, but a number of China-watchers are skeptical. Today’s deal stems from the multi-year agreement Legendary East and CFC inked in May 2013 to together produce tentpole-scale films for the global market. As part of the investment structure, CFC will be credited on these films, and its equity recouped, on a worldwide basis, the companies said. Today’s announcement was made by China Film Co chairman La Peikang and Legendary East CEO Peter Loehr.
It’s the end of the road for thriller, suspense and horror-themed FEARnet. Comcast has bought out its partners in the joint venture — Sony Pictures Entertainment and Lionsgate Entertainment — to take 100% ownership. Following the transaction, which closed this morning, FEARnet will no longer be a stand-alone brand but will be folded into Comcast’s NBCUniversal Cable Entertainment division. “NBCUniversal Cable Entertainment has acquired all remaining interests in FEARnet from its productive venture with Lionsgate and Sony,” the company said in a statement to Deadline through a spokesman. “FEARnet, along with its popular content, will be integrated into NBCU Cable Entertainment. This process will take place over a yet to be determined period of time.”
FEARnet is expected to be folded mainly into Comcast/NBCU Cable Entertainment’s similarly thriller, suspense and horror-focused Chiller, though some content could also migrate to Syfy. I’ve learned that 10 of FEARnet’s 25 employees will stay on through the transition. The other 15 are being let go today. NBCU would try to find job opportunities for some of them across the company. FEARnet president Peter Block will stay at least through the transition.
The company that owns the largest collection of cable systems plus NBCUniversal has about 3.6 times the market value of CBS — yet CEO Brian Roberts made less than half of what CBS paid Les Moonves in 2013? No need to shed any tears: After all, Roberts’ family controls Comcast, and it gave him his best pay day in years for a period when the stock value appreciated 39.1%. The package consists of $2.8M salary, $5.3M stock awards, $5.3M option awards, $9.2M in non-equity incentives, $5.1M change in pension value and $3.7M in other compensation. NBCU chief Steve Burke came close to his boss with an 18.1% raise that brought him to $31.1M. Roberts’ take includes $192,177 for personal use of the company jet; Burke’s aircraft use came to $390,994. The board says that Roberts “continued to demonstrate strong leadership” and adds that Burke “successfully managed NBCUniversal.” In a letter to shareholders Roberts talks up Comcast’s planned $45.2B acquisition of Time Warner Cable noting that “once again” he has called on his government affairs consigliere David Cohen “to help guide us through the government approval process so we can achieve a timely close.” The EVP, who is becoming a celeb in his own right from his appearances to defend the controversial deal, made $14M last year, down 12.1%. Comcast will hold its annual meeting on …
UPDATED: The Senate Judiciary Committee hearing into Comcast’s $45.2B acquisition of Time Warner Cable wrapped after three hours today. And Comcast EVP David Cohen upheld his reputation as a lobbying Jedi Master, although critics of the deal scored by pointing out how it could lead to higher prices and problems for independent programmers. Cohen started off strong in his opening statement: He cast his company as the embodiment of the American Dream — and announced that it has more than 1M WiFi hot spots with plans to boost their transmission speeds. “This is the 13th time we’ve increased Internet speeds in 12 years,” he says. Public Knowledge’s Gene Kimmelman — a former Justice Department antitrust lawyer — hit back. He charged that it would be “anathema to Comcast” if programmers want to offer content directly to consumers via the Internet for a low cost. The cable giant is committed to “charging top dollar” and, as owner of NBCUniversal, would be like an octopus with tentacles “each capable of squeezing innovation.”
In regard to pricing, Cohen said, in response to a question from committee Chairman Patrick Leahy (D-Vt.), that “there is nothing in this transaction that will make anyone’s bills go up….Consumers today are in the driver’s seat.” He added later that programming costs have appreciated 98% over the last decade. Later he told Sen. Al Franken (D-Minn.) — who wanted to know whether shareholders would demand higher prices — that “we have made it a point of significant discussion about our need to continue to invest to compete better with national and global competitors.” Kimmelman responded that Comcast is in the driver’s seat in the highly concentrated video and broadband markets. “The squeeze will come from Comcast,” he says. “It’s logical. They want to save money….and it could lead to significant price increases for others.”
Franken had Cohen against the ropes in a discussion about Comcast’s efforts to push customers to buy multiple or upgraded products. “When you train [sales]people to upsell, you’re not training them to sell the stand-alone product.” Cohen said that “we are allowed to train people to upsell,” but sales reps also “have to be aware of the stand-alone product” and provide it on request.