The country’s television regulators took a potentially big step in that direction on Friday — and it could reverberate in the U.S. where Big Media companies are determined to keep their lucrative pay TV packages intact. The Canadian Radio-Television and Telecommunications Commission said that Bell Media — the country’s largest owner of cable and satellite channels — has the right to unbundle its services: A household’s payments for each channel can be pegged to the number ordered. (For example, those who want just a few channels would pay more for each one than would someone else who orders lots of services.) The ruling doesn’t require pay TV distributors to break-apart their bundles, although that’s something the regulators clearly want. Bell Media President Kevin Crull acknowledged that the ruling could result in higher prices per channel. But he says the change — which would free consumers from having to pay for channels that they don’t want — will help Canada ”maintain its position as a world leader in providing consumers with both a wide array of programming choices as well as packaging flexibility, all at affordable rates.” All eyes will be on Canada’s experience: Programmers here vigorously oppose a la carte pricing. They say it could result in consumers paying more than they do now while potentially dozens of channels — especially those appealing to niche audiences — go out of business. A change also could trash the earnings of …
MPAA Lobbies Supreme Court Against Schwarzenegger’s Ban On Selling Or Renting Violent Video Games To Minors
The MPAA is leading the charge on behalf of showbiz guilds against California Governor Arnold Schwarzenegger’s 2005 California law banning the sale of violent video games to minors. The lobbying group for Hollywood studios is urging the Supreme Court to uphold a 9th Circuit Court of Appeals ruling that Schwarzenegger’s law is unconstitutional. The MPAA makes its case here:
WASHINGTON – A broad entertainment industry coalition today urged the U.S. Supreme Court to uphold a 9th Circuit Court of Appeals ruling that found unconstitutional the 2005 California law restricting the sale and rental to minors of computer and video games deemed to be overly violent.
The American Federation of Television and Radio Artists (AFTRA), Directors Guild of America, Inc. (DGA), Producers Guild of America (PGA), Screen Actors Guild (SAG), Writers Guild of America West, Inc. (WGAW), Independent Film and Television Alliance (IFTA), National Association of Theatre Owners (NATO) and Motion Picture Association of America, Inc. (MPAA) joined together to file an amicus brief in the case Schwarzenegger v. Entertainment Merchants Association, which is scheduled for oral arguments on November 2.
“The history of the motion picture industry serves as a vivid illustration of the threat to First Amendment rights from the impulse to control and censor new forms of media—a threat reflected in the statute at issue before the Court. From the advent of motion pictures, a variety of state and local governments sought to restrict their content for the asserted purpose of
Broadcasting & Cable just reported that the FCC says Comcast/NBCU returned incomplete answers and did not follow the directions in responding to a May FCC request for a bunch of information. Wanted was everything from organizational structure and channel lineups to copies of all programming agreements and detailed discussions of all deliberations in making content available online. “The commission sent letters to the two Thursday, informing them that the FCC would put the brakes on vetting the merger until such time as they had complied fully,” the trade says. This is Day 50 of the FCC’s 180-day vetting — and the 2nd time that the process was stopped. Comments — positive, negative, inbetween — were due Monday.
UPDATE: In connection with the summary judgment ruling today in its litigation against Google and YouTube, Viacom Inc made the following statement:
“We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions. We intend to seek to have these issues before the U.S. Court of Appeals for the Second Circuit as soon as possible. After years of delay, this decision gives us the opportunity to have the Appellate Court address these critical issues on an accelerated basis. We look forward to the next stage of the process.” In connection with the judgment, Viacom’s Executive Vice President, General Counsel and Secretary, Michael Fricklas, issued a statement about the decision that can be found at: http://news.viacom.com/news/Pages/summaryjudgment.aspx
Statement posted just now by Kent Walker, Vice President and General Counsel of Google:
Today, the court granted our motion for summary judgment in Viacom’s lawsuit with YouTube. This means that the court has decided that YouTube is protected by the safe harbor of the Digital Millenium Copyright Act (DMCA) against claims of copyright infringement. The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.
This is an important victory not just for us, but also for the
Robert Swagger, CEO of the Trend Exchange, gave a press conference detailing his progress — or lack of it — in swaying DC politicians to remove movie futures exchanges from the financial reform legislation that is expected to be signed into law later this year. After gaining approval last week to launch from the Commodity Futures Trade Commission, Swagger said he would head to Washington to either remove the futures trading from the legislation, or else grandfather Trend Exchange because it had been approved by the appropriate regulatory body. He said at the time he feared it would be an uphill battle. It was worse than he’d envisioned. With a vote looming later this week, Swagger not only had trouble swaying opinion, he had trouble even getting access to staffers of representatives weighing the legislation. While all the signatory studios and showbiz guilds lined up against trading futures based on box office performance, Swagger blamed the MPAA–and specifically interim head Bob Pisano–for being unable to launch his new business. He claimed Pisano is hiding behind anti-trust provisions and wielding tremendous lobbying clout to crush a small entrepreneur. Swagger left open the option of a legal battle over what he termed damaging misrepresentations made by Pisano. Then, Swagger took some shots of his own, claiming that DC pols were afraid go to against Pisano’s “Chicken Little” agenda. “The market should decide if these are valuable products or not, not the interim head of the MPAA,” Swagger said.
I asked Andrew Jay Schwartzman, the SVP and Policy Director of the Media Access Project in Washington DC (http://www.mediaaccess.org) to write up his thoughts on the proposed merger:
Why Hollywood Should Care About the Comcast/NBCU Deal
By Andrew Jay Schwartzman
Comcast’s proposed acquisition of NBCU is bad for Hollywood.
It is bad for America, too. There are lots of reasons why. Here are just a few:
– It will raise cable prices.
– It will reduce diversity in news and other programming, especially in the markets where Comcast would own TV stations and cable systems. (In Los Angeles, Comcast would own some cable systems and three TV stations.)
– It will make it much harder for telephone and satellite companies trying to compete with video offerings of their own.
Even if you don’t care about the future of democratic discourse in the age of the internet, if you’re reading this, you will probably care about the industry. And this transaction would have lasting and dangerous effect on Hollywood. It will further solidify cable’s bottleneck on the video distribution of TV and features and enable cable to pay less for such content. And, perhaps most importantly, it will kill off the emerging market for “over the top” distribution via the Internet, depriving producers of the opportunity to develop direct relationships with competing distributors and even with individual consumers.
Simply put, cable owns the customers, and it wants to keep it that way.
The Internet is making it possible to distribute programming directly to
Washington, DC – The Writers Guild of America, West called on regulators today to impose strict guidelines on the proposed merger of Comcast-NBCU in order to protect competition, ensure the value of creative product, and to promote broadcast and cable program diversity and independence.
In its filing to the Federal Communications Commission, the Guild noted:
“WGAW is concerned about the impact the proposed merger of NBC Universal (NBCU) and Comcast will have on content creators and consumers. The WGA has represented television and movie writers for more than 50 years and over that time, has witnessed the consolidation of the media industry into the hands of a few conglomerates. This consolidation has led to a decline in creative and economic opportunities for WGAW members, and has reduced the dissemination of diverse and independent viewpoints in the media, all to the detriment of consumers. If approved, the Comcast–NBCU entity will cause a further concentration of content sources.
“While the applicants have proposed voluntary public interest commitments and continue to pronounce the putative benefits of this merger, we fear that, unless substantial requirements are placed on Comcast and NBCU, they will be the only parties who truly benefit from this combination.
“This merger will compound the consolidated state of the entertainment industry and will likely lead to further consolidation as other companies merge to challenge the dominance of Comcast-NBCU, a vertically integrated entertainment company that will control content from its inception through the cable lines that
UPDATE WRITE-THRU: Last weekend, Karate Kid vastly outperformed estimates, proving that even though the plots of films are predictable this summer, the box office outcome certainly isn’t. It was in that climate that the creators of the new Media Derivatives box office futures business held its press conference after the Commodity Futures Trade Commission cleared the way for his company to hatch the first box office futures market based on the opening weekend performance of Hollywood films. This outcome is far from decided, though and while Trend Exchange CEO Robert Swagger offered gratitude to the CFTC for formalizing approval, he acknowledged the real battle comes later this week when he heads to DC. There, he will lobby lawmakers to drop language inserted into the Senate version of the pending financial reform law that would prevent the futures business from getting off the ground by making it illegal.
Swagger said he’s still formulating his plan of attack, but he previewed it to journalists. He will paint the MPAA as a behemoth and himself as the small entrepreneur in danger of being crushed by a fat cat special interest using its influence to get its way with lawmakers. Swagger will try to excise a provision was included in the bill by Arkansas Senator Blanche Lincoln outlawing the box office futures trading proposals by Media Derivatives and Cantor Fitzgerald.
“This is a David and Goliath story, where a large special interest group has rallied its friends in Congress to try and destroy a small business …
The Federal Communications Commission proposed a $25,000 fine against the Fox TV stations today for not providing requested information about sexually suggestive scenes in an episode of American Dad that had drawn more than 100,000 indecency complaints. The scenes from the January 3 episode of the animated Fox comedy suggest a character performed a sexual act on a horse.
In a statement, Fox said it was “puzzled” by the proposed fine “in light of the fact that we responded to all of the questions related to the substance of the (inquiry).
UPDATE AT 6:15 PM: More details have surfaced in the shocking indictment of Bonnie Hoxie– the administrative assistant to Disney corporate communications head Zenia Mucha—and Hoxie’s boyfriend Yonni Sebbeg for allegedly trying to peddle an early quarterly report to hedge funds for cash payment. In the annals of insider trading, this one has to fall under the category of Dumb and Dumber.
The SEC complaint is a riveting read, driven by the dialogue supplied by the duo as they tried to orchestrate the delivery of earnings information to FBI agents posing as hedge fund managers.The SEC listed both verbal conversations with the undercover agents, and email correspondence between the suspects.
After sending inside earnings info to Sebbag, Hoxie sent him an email about what she wanted in return. “Here is the bag that you are going to get for me…” she wrote, attaching a link to a picture of a $700 Stella McCartney designer handbag from Neiman Marcus. After Sebbag responded he might walk away with enough cash to buy two bags, she added: “In that case, I also love love these shoes,” attaching a link to a picture of pricey Stella McCartney shoes.
Sebbag’s phone correspondence with the undercover agents is also telling. After claiming he worked at Disney and that he could deliver earnings reports 3 to 4 days before release, he asked the hedge fund managers to “make an offer based on the capital gains from the trade and the risk I am taking delivering this information to you.” He …
MPAA URGES TOUGHER INTERNATIONAL ENFORCEMENT OF IP PROTECTIONS AS CONGRESS UNVEILS 2010 PRIORITY WATCH LIST
WASHINGTON—MPAA President and Interim CEO Bob Pisano joined lawmakers today in unveiling the five countries on the 2010 priority watch list of the Congressional International Anti-Piracy Caucus (IAPC), calling on governments around the world to develop and enforce remedies to deal with the mounting global problem of intellectual property theft. The five countries placed on the IAPC’s 2010 watch list are Canada, China, Mexico, Russia, and Spain.
“I sincerely appreciate the work of the Congressional International Anti-Piracy Caucus and its recognition of the problems posed by global piracy. These members’ efforts are essential to motivating governments to take action. I look forward to our continued work together to promote copyright protection and the enforcement of intellectual property rights,” Pisano said.
The bipartisan and bicameral IAPC, created in 2003 and now led by Senators Sheldon Whitehouse (D-RI) and Orrin Hatch (R-UT) and Representatives Adam Schiff (D-CA) and Bob Goodlatte (R-VA), is committed to protecting American intellectual property and reducing the scourge of piracy abroad.
“More than 2.4 million people work in the US motion picture and television industry all across the nation, earning over $41 billion in wages,” Pisano said. “These are creative, good-paying jobs — including costume designers, truck drivers, stage crews, actors, architects, directors and accountants, who face the relentless challenge to their livelihoods from IP theft. Overseas markets are vital to the motion picture industry’s continued strength and success. The industry has a
BREAKING NEWS! The studio just filed a 14D-9 a few minutes ago announcing that “settlement discussions” with Carl Icahn have begun. A sources tells me that the corporate raider/shareholder activist came to Lionsgate “and wanted to talk. LG has a fiduciary responsibility to listen. He is their second largest shareholder and they will listen. No guarantees that this will lead to an actual settlement.”
Icahn’s $7 a share offer is still out there until May 21st. Should it fail, and it probably will, Icahn has said he’ll “probably” wage a proxy fight for Lionsgate. That will be expensive for him, and destabilizing for the studio. On the other hand, Lionsgate toppers Jon Feltheimer and Michael Burns find their hands tied against Icahn’s hostile takeover attempt. Both a British Columbia regulatory commission as well as a British Columbia Appeals Court have ruled that the studio can’t use a poison pill defense. Nevertheless, Lionsgate called a special meeting of stockholders and went forward with ratification of its so-called “Shareholder Rights Plan” — no matter how meaningless.
CBS and Fox today rejoined the National Association of Broadcasters. Fox exited in 1999, CBS in 2001 over the issue of station ownership cap. Now all Big Four broadcast networks have returned to the lobbying organization, which is looking to pay a key role on such main issues for networks and stations as the future of the stations’ digital spectum and of compensation for retransmission consent. It also is a vote of confidence for recently appointed NAB president and CEO Gordon Smith. Here is the joined statement by Fox and CBS:
Today’s announcement includes the return of CBS’s 29 television stations and 130 radio stations into NAB membership, as well as the 27 owned-and-operated Fox Television Stations and the MyNetworkTV programming service Jack Abernethy, Chief Executive Officer of Fox Television Stations, commented: “The interests of our industry, our company and our viewers are best served by speaking with one voice on Capitol Hill, at the FCC and in the Courts.”
“As the media landscape evolves ever more rapidly, over-the-air broadcasting faces a number of clear opportunities and some significant challenges,” said Martin D. Franks, Executive Vice President for Planning, Policy and Government Affairs, CBS Corporation. “One of the very best ways to address these issues is through a resurgent NAB under Gordon Smith’s leadership.”
As part of today’s announcement, Franks and Abernethy will serve as CBS and FOX’s members of the NAB Board of Directors.
THE END OF MOVIE THEATERS? FCC Will Allow Studios To Send First-Run Films Directly To Consumers Over Secure TV
The MPAA, which is the Hollywood studios’ lobbying organization, just made this announcement about the FCC’s very bad decision. I’ve said it before, and I’ll say it again: once again, Big Media shows that it doesn’t want to share its profits with anyone else. Today’s action allows the major movie studios to undercut the entire process of theatrical release. It would put the struggling cinema chains virtually out of business. (Updates MPAA Asks FCC To Let Studios Transmit First-Run Films Directly To Consumers):
Washington, D.C. — The Federal Communications Commission (FCC), saying it was “in the public interest” today approved a request by the Motion Picture Association of America, Inc. (MPAA) to permit recent movies to be sent directly to American households over secure high definition transmission lines from their cable or satellite providers prior to their release on DVD or Blu-ray.
“This action is an important victory for consumers who will now have far greater access to see recent high definition movies in their homes. And it is a major step forward in the development of new business models by the motion picture industry to respond to growing consumer demand.” said Bob Pisano, President and Interim CEO of the MPAA. “We deeply appreciate the recognition by the FCC that recently released movies need special protection against content theft when they are distributed to home televisions.”
Specifically, the issue before the
UPDATE: Drama, drama, drama! (And fast drama.) First, the British Columbia Court of Appeals today granted Lionsgate’s request to reexamine the British Columbia Securities Commission’s decision to stop the studio from using a poison pill defense against Carl Icahn’s attempted hostile takeover. And then, with lightning speed, the appeals court immediately decided on the appeal — and said no. So now Lionsgate can’t use a poison pill defense against Icahn. Meanwhile, the corporate raider/shareholder activist has extended his $7-a-share tender offer after stockholders turned up their nose at it. But, as the stock market collapsed by the end of the week, erasing almost a year’s worth of gains, Icahn’s offer might look better.
Here’s the Lionsgate statement:
Lionsgate disagrees with the BCCA’s decision to decline to interfere with the BCSC’s cease trade order of Lionsgate’s Shareholder Rights Plan. Lionsgate believes that its shareholders’ right to vote and to determine for themselves whether the Shareholder Rights Plan is in their interests is paramount. Any decision on the Shareholder Rights Plan should have been withheld until the BCSC had an opportunity to review the results of Lionsgate shareholders’ vote on the Shareholder Rights Plan that will take place at the May 12, 2010 Special Meeting of Shareholders.
The Board continues to recommend that shareholders vote FOR the approval of the Shareholder Rights Plan at the Special Meeting of Shareholders that remains scheduled for May 12, 2010 at 10:00 a.m. ET, in order to protect their investment
The Writers Guild of America, East (WGAE) issued this statement today in response to a news report that FCC Chairman Genachowski is leaning toward not reclassifying broadband as a telecommunications service.
“The Writers Guild of America, East is deeply troubled by the report in the May 2 Washington Post suggesting that FCC Chair Julius Genachowski is ‘leaning toward’ a decision not to reclassify broadband as a ‘telecommunications service’ under Title II of the Communications Act. The FCC can and must act decisively to protect the Internet from those who would limit access for commercial or political gain. As the FCC itself has noted, the Internet is likely to become the preeminent method of distributing news, public affairs, and entertainment programs in the future. We would therefore remind the Commission and the White House of President Obama’s pledge to preserve ‘net neutrality’ – to keep the Internet open as a democratic and uncensored forum equally available to everyone.
Despite these rumors that the FCC might choose the path of inaction, we hope the Commission will fulfill its obligations to the American people – to consumers and content creators alike.”
UPDATE: Not surpisingly, Lionsgate said it was “disappointed” by today’s Canadian regulatory ruling. “The Board and its advisors are reviewing the decision of the BCSC and considering all of Lionsgate’s options, including applying for an appeal of the BCSC decision.
“The Board continues to recommend that shareholders vote FOR the approval of the Shareholder Rights Plan at the Special Meeting of Shareholders which is scheduled for May 4, 2010.
In addition, the Board continues to recommend that shareholders reject the Icahn Group’s unchanged, unsolicited offer to purchase up to all of the common shares of Lionsgate for U.S.$7.00 per share because it is financially inadequate, opportunistic and coercive, and is not in the best interests of Lionsgate, its shareholders and other stakeholders. The Board strongly recommends that shareholders protect the value of their investment by NOT tendering their shares into the Icahn Group’s offer.”
5:00 PM: You know that poison pill that looked like it could end Carl Icahn’s attempt to take over Lionsgate? Well, it’s null and void now thanks to a new ruling by the British Columbia Securities Commission, that province’s regulatory body. (Lionsgate is incorporated in Canada as well as the United States.) This clears the way for Lionsgate shareholders to consider Icahn’s $7 per share offer which expires Friday. What will LG management do now?
The non-profit, non-partisan social and public advocacy organization of the arts and entertainment community has upped its Executive Director since 1998, Robin Bronk, to CEO. The move comes a few days before its April 29th event at the Library of Congress in Washington DC hosting Capitol Hill members of the House and Senate to support American film preservation.
UPDATE: MPAA president and interim CEO Bob Pisano expressed optimism that Capitol Hill will squash the box office futures businesses after Commodity Futures Trading Commissions approved them. “We thank Chairman Lincoln and the Committee for seeking to put an end to plans that would allow wagering on box-office futures,” Pisano said. “We believe these plans are based on a faulty understanding of the film business and could case real financial harm to both the film industry and other Americans drawn in by an online gaming platform that could be easily manipulated.”
EARLIER: I’m not sure how this affects the over/under wagering vis a vis Media Derivatives and Cantor Fitzgerald selling futures contracts based on the box office grosses of films. But opponents of the programs were buoyed today by the Senate Agriculture Committee’s vote to approve a bill which contains the provision prohibiting placing wagers through online marketplaces on box office numbers. The bill by Senator Blanche Lincoln (D-Ark) is part of a package of financial reforms that will go before Congress shortly.