It just might if it frightens them enough to accelerate their efforts to make people pay for broadband based on how much they use — the same way they pay for electricity or water. ”This isn’t just a side show,” independent analyst Craig Moffett says. “This is THE central issue defining the value of the cable industry going forward.” And the pricing model could rock streaming companies including Netflix or, perhaps, Sony. It would be “a material risk” to Netflix’s prospects if a Sony-Viacom agreement leads to usage-based pricing, Bernstein Research’s Carlos Kirjner says. READ MORE »
This could be a big breakthrough for tech companies that want to create an Internet-based alternative to traditional cable and satellite services. The Wall Street Journal reports that Sony has a preliminary agreement to carry Viacom‘s channels on a service it hopes to launch by year end. The programming would initially go to those with Sony devices including its PlayStation gaming console and Bravia HDTVs, with tablets and smartphones to follow according to “a person familiar with the matter.” If Sony and Viacom complete their deal it would be the first time a major programmer has agreed to provide its most popular pay TV channels to an online service. Intel and Google are among the other companies hoping to use the Internet to challenge cable and satellite video offerings. Sony’s talking with other programmers including Disney, Time Warner, and CBS.
Daniel Loeb In Retreat: Backs Off Sony For Now With Praise For CEO Kazuo Hirai And George Clooney; But Can He Be Trusted?
Nikki Finke who is on vacation will have a fuller Loeb vs Sony report soon.
Apparently, The Most Hated Man In Hollywood just wasn’t comfortable being labeled “The Most Dangerous Man To Our Industry” by George Clooney for all the world to read (via Mike Fleming’s exclusive Deadline interview and carried by Yahoo this past weekend). So now Third Point hedge fund CEO Daniel Loeb claims today he’s backing off Sony. But only after the putz created chaos and confusion inside a stable and successful studio, destabilized Michael Lynton’s and Amy Pascal’s and Jeff Blake’s management because two summer films After Earth and White House Down bombed at the domestic box office in what is a cyclical business, and imperiled many current jobs and future projects there. It’s disgusting. Not only does he seek to profit from the misfortunes of countries (Greece) and corporations (Sony after Howard Stringer crashed and burned the once great electronics giant), but in this case bullies a major entertainment company to the brink. Now Loeb will simply retreat to his East Coast dream homes and not give Hollywood another thought until the next time he feels the urge to kvetch. Kudos to Clooney for having the balls to hold up Loeb to public scorn. And congrats to Sony CEO Kazuo Hirai for not panicking or pressuring top executives to leave just to appease Loeb. Nice work, too, by producer Lynda Obst who gave a very forceful and cogent defense of SPE on CNBC yesterday. As for Ashton Kutcher and his worthless opinion, let’s see how his career careens when his Jobs indie flops and CBS/Warner Bros no longer pays him to make Two And A Half Men even more unwatchable.
Loeb today did an about-face and claimed to Variety he was backing off Lynton, Pascal, et al: “We support Hirai, and to the extent that he supports his management team and they can meet the board’s initiatives around transparency and profit margin improvement, I see no reason [the current executives] cannot do that. It is a decision for Mr. Hirai to make.” This is after Hirai sent a letter to Third Point (which owns 7% of Sony) and rejected Loeb’s unsolicited proposal to spinoff Sony’s entertainment unit. Suddenly Loeb was calling Hirai’s letter “thoughtfully written and detailed in its discussion of profitability and transparency. There was a lot there for shareholders to hang their hats on.” Loeb also admitted “it is probably unfair to focus on one or two bad movies, just in the way that Third Point from time to time can have one or two bad months or a bad year. … We’re really not focused on individual movies or their slate. I know I mentioned that in the last letter, but at this point it is more productive to support management and the goals advanced by Mr. Hirai in his letter.”
Loeb clearly never counted on being outed by Clooney for “knowing nothing about our business” and dissed so publicly and forcefully and publicly by the filmmaker. Loeb replied: “Notwithstanding the fact that the media likes to create a stir, I admire Mr. Clooney’s passion for Sony and his loyalty to Sony and his friends there.” But Loeb nervily suggested he and Clooney share a “common goal: a more disciplined company with better allocation of capital means less money spent on bureaucracy and more investment in motion pictures. We are all for intelligent investment in creative content. I believe our interests are aligned in a way he probably doesn’t realize.”
UPDATE: Third Point Responds Tonight After Sony Rejects Daniel Loeb’s Spinoff Proposal And Will Keep Entertainment Unit
UPDATE: The battling continues in this war of words. Daniel Loeb’s hedge fund Third Point tonight made clear it won’t stop destabilizing Sony and its entertainment division after the Japanese parent company rejected Daniel Loeb’s pressure to spinoff its showbiz unit. Third Point said it will “explore further options to create value for shareholders” and “welcomes Sony’s commitment to greater transparency and expects this will foster a culture of accountability. Sony has clearly recognized the performance issued we identified. In the new spirit of transparency, management should communicate more specific plans to improve entertainment results. A renewed focus on profitability and better margins should reduce bureaucracy and thus free up resources to invest in high quality motion pictures, filmed entertainment, networks and music, aligning shareholder interests, the creative community and consumers.”
Earlier today, Sony told Third Point CEO Daniel Loeb today it is rejecting his proposal to create a stock for its entertainment assets and then sell up to a 20% stake to the public. The board has “unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony’s strategy,” CEO Kazuo Hirai says in a letter to the hedge fund manager. “We do, however, expect to increase disclosure regarding Sony’s entertainment businesses.” Hirai adds that he’s “very focused on increasing margins at [Sony] Pictures.” That’s a particular sore point for Loeb, especially following the box office results for After Earth and White House Down, which he said last week “bombed spectacularly.” In response, actor George Clooney told my colleague Mike Fleming Jr. that Loeb is “a carpet bagger…who is trying to spread a climate of fear that pushes studios to want to make only tent poles.” Hirai says that he’ll cut costs while also “aggressively investing in our global television production business” and “building upon our diversified film slate strategy.” He notes that Sony has “instituted an even more exacting ‘green light’ process for film production, focusing more intensively on overall slate profitability as well as per film returns-on-investment.” Sony’s decisions were based on its belief that demand for premium content will grow “at unprecedented levels” as broadband and mobile devices become nearly ubiquitous. Shareholders “will benefit from owning all, rather than a part, of these valuable [content] assets.” Loeb is an investor in Variety with Deadline’s parent company, PMC.
The letter follows below:
The new report should provide more fodder for the campaign by hedge fund titan Daniel Loeb to revamp Sony’s entertainment operations. With disappointing results from After Earth and a drop in home video sales, Sony says …
Ross Lincoln contributes to Deadline’s Comic-Con coverage.
Andrew Garfield revealed today that the Spider-Man story he’d most like to see made into a film is one that is legally impossible, at least for the moment. “I’d love to see [Spider-Man] with The Avengers,” he said, to audible gasps, during the Sony Pictures panel discussion of The Amazing Spider-Man 2 at Comic-Con. “Wouldn’t that just be awesome? Just saying.”
Sadly for everyone drooling at the prospect of Spider-Man joining that Marvel superhero squad, it’s not going to happen as long as Sony retains the rights to the character. And judging by the presentation during tonight, the company expects to retain them for the foreseeable future. Sony clearly expects Amazing Spider-Man 2 to be a huge hit. During the first half of the discussion, the participants — co-stars Jamie Foxx, Dane DeHaan and, eventually, Garfield, along with director mark Webb and producers Ari Avad and Matt Tolmach — didn’t even attempt to sell the movie; instead, after a short film depicting him attempting to sneak into Hall H, Garfield appeared dressed and in character as Spider-Man, then spent 10 minutes wisecracking with the cast.
Investors who bet on media should have warm memories from Q2. The Dow Jones U.S. Media Index rose 6.0% in the quarter vs. the Standard and Poor’s 500 which was +2.4%. Sony led the Big Media pack …
Listen to (and share) Episode 40 of our audio podcast Deadline Big Media, With David Lieberman. Deadline’s executive editor talks with host David Bloom about Daniel Loeb‘s latest efforts to persuade Sony to partly spin off its entertainment units; whether it’s time to dump the FCC decency rules; DreamWorks Animation’s global TV play; and whither Liberty Media and Charter now that talks have cooled on a possible purchase of Time Warner Cable.
Earlier this week the CEO of hedge fund Third Point, Daniel Loeb, reiterated his desire for Sony to sell a minority interest in its entertainment assets. The fund now controls 6.9% of the conglomerate and Loeb believes CEO Kazuo Hirai should chair Sony, and a board specially created for the movie, TV, and music properties if the company follows Third Point’s proposal to sell as much as a 20% stake in them to the public. At Sony’s annual shareholders meeting in Tokyo on Thursday, Hirai said the company would “appropriately” consider Third Point’s proposal, but indicated a decision would not be imminent. “The entertainment business plays an important role in Sony’s future growth… This proposal strikes at the heart of what kind of company Sony ultimately will become in the future. We intend to take our time in discussing it,” he said, according to Dealbook. Some analysts are not so bullish on Sony spinning off the entertainment assets. In an open letter ahead of the meeting, Jefferies’ Atul Goyal suggested the company should spin off electronics instead.
David Bloom is a Deadline contributor.
Sony’s big annual pre-E3 media briefing Monday night set up a potentially brutal price competition with Microsoft’s next-gen game console this holiday season, with the PlayStation 4 costing $100 less than the Xbox One. As predicted, Sony also touted more of the PS4’s entertainment capabilities than it did in an initial unveiling event in February, even inviting Sony Entertainment Chairman Michael Lynton onstage for the first time. Lynton promised enhanced video and music programming on the PlayStation Network online service, with content tailored for gamer interests.
“Sony Pictures will do everything in our power to drive the success of the PlayStation 4 by developing programming with gamers in mind and providing access to incredible content,” Lynton said. The Video Unlimited and Music Unlimited services will launch the same day as the PS4. Sony also will add the Flixster online movie service to the PlayStation Network later this year, joining apps there for such streaming services as Netflix and Hulu.
David Bloom is a Deadline contributor.
It’s a huge question for the Electronic Entertainment Expo, which opens Tuesday after the Big Three makers of game consoles – Microsoft, Sony and Nintendo – each do their annual pre-show media extravaganzas by turns beginning Monday morning. Disney will unveil games tonight based on its movies The Lone Ranger and Monsters University, though it’s possible they may also talk about games based on their Marvel and Star Wars movie franchises, especially after recently laying off many of LucasArts game designers. Other big game publishers will also unveil titles in pre-show events Monday afternoon.
All the hoopla comprises something of a return to the game industry’s heyday, say 10 years ago, when the expo was a noisy, massive, overwhelming beast that consumed the Los Angeles Convention Center for a week. It attracted tens of thousands of media and industry insiders, who faced something of a death march through game company “booths” costing millions of dollars, with dozens of often outlandishly attired staffers, followed by evening parties for 10,000 people featuring performers such as Beck and India.Arie.
“It’s premature at this point in time to speculate one way or the other,” Sony president and CEO Kazuo Hirai told CNBC today when asked whether an investor proposal to sell off portions of the company’s entertainment assets will succeed. The Sony chief made his comments as the company hired Morgan Stanley and Citi to review the proposal from shareholder Daniel Loeb’s hedge fund Third Point. “The process really is, as was described earlier, a discussion that needs happen really at the board level of the organization and we want to make sure that we have a through discussion of the merits of the proposal before we come to any conclusion,” he told the business network. Any discussion of Third Point’s proposal will have to wait until the new Sony board is elected later this month.