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The TV Guide saga continues ... Macrovision (NSDQ: MVSN) has a new buyer for its TV Guide Network and TV Guide Online properties—Lionsgate Entertainment. The TV and movie studio is slated to buy the properties from Macrovision for $255 million, the same price Macrovision had agreed to sell it to Allen Shapiro and One Equity Partners for (plus a $45 million earnout payable for the next three years) less than a month ago. That deal was expected to close on April 1, 2009.
Macrovision's CFO James Budge told the WSJ that the company went with the new deal because it seemed more certain to close: "At the end of the day, overall deal considerations were superior with the Lionsgate deal in all circumstances." This new deal is slated to close in February.
It's the latest development in Macrovision's push to shore up financially after its acquisition of TV Guide's parent company Gemstar: the company sold the print version of TV Guide to PE firm OpenCapital for $1 (and agreed to loan the firm up to $9.5 million to help continue publishing) in October. As for Lionsgate, the Journal notes that this deal just broadens the studio's cable TV footprint: it currently produces award-winning shows like Mad Men and Weeds and has a premium movie channel in the works (a JV with Viacom, MGM and Paramount).
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A year since HD DVD conceded defeat at last CES, Blu-Ray and its backers will be touting their so-called success at this year's CES, but the reality is far from it. As numbers point out, very few consumers know about Blu-Ray, and those who do still do not see enough value for the premium. As NYT points out in this story, "Going from the whirring VCRs of yore to a DVD player was a big leap in picture quality and convenience, while the jump from DVD to Blu-ray is subtler, at least for those who do not have the latest and largest high-definition televisions." With the economy being what it is, the march towards HDTVs has also slowed down. Plus the inevitable march towards HD downloads online put the future of physical media, HD or not, in jeopardy. You can argue about when that future will arrive, but it surely will..case in point, read the previous Netflix-LG story about broadband TVs.
What the Blu-Ray backers are banking on is merging these new discs with online content: the story says the group will support for a feature called BD Live (as in Blu-ray disc live), which lets people download additional material from the Internet and interact with friends in text chats that appear on the TV while playing a movie. But again, where did we hear that before…
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 In the march towards getting "rid of the box" as the going-forward philosophy in the evolving digital home, Netflix has extended its partnership with LG Electronics (SEO: 066570) and embedding its online video service directly into the new HDTVs from the Korean electronics company. LG's new LCD and plasma "Broadband HDTVs" will allow current Netflix members to stream the videos from its service; these TVs have to be connected to a broadband connection, of course.
The TVs will be available this spring, and join LG BD300 Network Blu-ray disc p[layer which can also stream movies instantly from Netflix (NSDQ: NFLX). The two companies announced their first partnership last CES. Netflix's online library of videos is now at around 12,000, still puny compared to over 100K DVDs that the service has. The slightly cumbersome part: Netflix members will have to use the Netflix website queue the movies, which they can then play through their LG TVs. No direct access to the Netflix service on LG.
Even though this may not move the needle on Netflix subscribers, or even LG's retail numbers, it does mean that Netflix is trying harder than any other player in the digital home market, including Apple, Microsoft, Amazon and others.
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The Screen Actors Guild (SAG) has delayed voting on a potential strike until at least January 14, THR says. The actors' union had planned to send strike authorization ballots to its members on January 2—though it had already started asking members to approve a strike vote when talks with the Alliance of Motion Picture and Television Producers (AMPTP) ultimately broke down in late November.
The two parties struggled to hammer out compensation terms for Web content, as well as residuals for new media and DVD sales, among other details. The report says the move to delay the vote came after a NY faction of the union spoke out against a possible strike, citing the poor economy as a whole, but SAG spokesperson Pamela Greenwalt would not comment. An AMPTP spokesperson said he knew the vote had been delayed but declined to comment further.
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 No financial Armageddon today for Sumner Redstone, who gets an indefinite reprieve on either paying—not gonna happen—or restructuring some $800 million in debt coming due for National Amusements. The total debt is about $1.6 billion. Redstone owns 80 percent of the company, which owns movie theaters and controls Viacom (NYSE: VIA) and CBS (NYSE: CBS). (Redstone is chairman of both media company boards.) The reason for the extension: National Amusements is gaining time to finesse a plan that's already been presented to creditors, it's current on payments and the deadline was more of a target than anything.
One reason the plan isn't completely ready: the NY Times says Redstone's daughter Shari opposes it. Shari Redstone is president of National Amusements; the plan includes selling off much of her movie theater operation. Her dissent could cost her representation on the Viacom and CBS boards—and her chance to succeed her father as head of those companies. She had been designated as chairwoman in the event of his death; despite his claim since then that each board should chose its own chairman, that appears to remain in effect unless he removes her from the boards. The two have been feuding for years despite the display of solidarity this fall when the National Amusements situation sparked a sell off of some Viacom and CBS shares.
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 The percentage of internet users who bought a CD in Q3 fell to 22 percent from 25 percent last year, according to an online survey by market researcher NPD. Oddly enough, that's still better than the 15 percent of web users who paid for a music download last quarter. Both figures show why overall demand for music by internet users was down 2 percent in Q3.
—Online grows, albeit slowly: To be fair, online is at least still growing, while physical purchases are still tanking. The slightly wider use of online music stores like iTunes and Amazon's provided a small boost to the category over last year In Q307, 13 percent of the internet population bought music from a download store, meaning a 2 percent increase in the growth rate. In general legal music download volumes grew by 29 percent in Q3.
—P2P still a favorite: The number of Internet users sharing music on P2P sites held steady at 14 percent in Q3. However the volume of music shared via P2P sites grew by 23 percent, as P2P users reported downloading more files. Teens purchased 34 percent more paid digital downloads compared with year-ago. The growth in P2P file downloading was acute among 13- to 17-year-olds—up 46 percent. NPD pointed out that sharing files by burning music to a CD fell 25 percent among teens, suggesting that physical discs hold little appeal even when it's being given away for free.
—Thanks to Rock Band: NPD's survey of 4,400 online users in Q3 also found that 22 percent of music buyers (including CDs, digital or mobile) overall played a music-related video game, such as Rock Band or Guitar Hero, indicating that video gaming may be the one hope for the music to try to make some money from a deeply troubled business. Release
Photo Credit: Neeku
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IMDB, the online movie information and community site owned by Amazon (NSDQ: AMZN), has done another acquisition: it has bought popular movie data site Box Office Mojo, for an undisclosed sum. The acquisition was completed earlier this summer, and with this, IMDB will add to its relatively sparse box office data figures, and Amazon may also integrate some of IMDB's film and TV credits data on BOM.
BOM, founded in 1999, is a small three person operation HQed in Burbank, and will remain here. IMDB, meanwhile, has been bulking up of late: it bought an indie film movie site last year, and has been adding more video to its site since this summer.
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 Move over ABC. Harpo Films, the original film division of Oprah Winfrey's Harpo Productions, has found an edgier, less commercially-cluttered platform for its movies: HBO. The AP says Harpo Films and HBO have brokered a three-year deal to make movies, documentaries and TV series. Financial terms were not disclosed, but Karen Forte, president and executive producer of Harpo Films said the decision was influenced by two key points:
-- The company wanted to do a more "eclectic" mix of programming than was available on broadcast TV
-- Harpo Films wanted to work without the constraints of traditional commercial interruptions
LA-based Harpo Films has released a number of films under the "Oprah Winfrey Presents" banner, including an adaptation of Zora Neale Hurston's novel Their Eyes Were Watching God, starring Halle Berry, as well as the Emmy and Golden Globe-winning Jack Lemmon flick Tuesdays with Morrie. ABC wanted to extend the deal, but Forte said the company felt HBO was a better choice. The new deal may signal a shift toward product placement or other sponsorship models, as well as less family-friendly fare. It's Oprah's second large-scale deal with a cable network: OWN—the Oprah Winfrey Network—is slated to replace Discovery (NSDQ: DISAB) Communications' Discovery Health network next year.
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 DVD kiosk retailer Redbox, which filed for an IPO in June (and likely won't do it anytime soon with the market conditions) is in a scuffle with Universal Studios, where the NBCU-owned company has threatened to cut off Redbox's supplies of movies from its stable, reports WSJ. Redbox has been able to get content from other channels, though (but didn't disclose how, something that would be an issue for sure if the lawsuit pans out), and did file a lawsuit in U.S. District Court in Delaware in October, alleging the studio was violating antitrust laws and misusing copyright. Universal asked the court to dismiss the lawsuit last Friday.
At the heart of the issue is that Universal dislikes Redbox pricing, saying they are too low (sometime as low as 99 cents for a day) and are hurting other DVD retailers. It also doesn't give a cut of the rental price back to the studios. And it stocks a limited selection of movies, the one it wants, instead of taking diktats from the studios. Reasons enough, you would think. Redbox is one of the biggest kiosk operators, and has been increasingly popping up in supermarkets around where I live here in LA.
Universal also wants Redbox to not stock more than eight copies of a movie per kiosk, compared with the four dozen or so it does not, for popular releases. Also, it wants Redbox to stock its DVDs no earlier than 45 days after they hit traditional retailers like Blockbuster (NYSE: BBI), though that would hurt Redbox rentals as most of them occur in the immediate weeks after the DVD release.
Blockbuster, meanwhile, is also testing these vending machines, and will likely be renting them out higher than 99 cents (despite its recent efforts on lower price), and give a bigger cut to studios.
Download court documents (via PDF):
-- The Redbox lawsuit
-- Evidence of Universal's demands
-- Motion to dismiss from Universal, and its reasoning on defending its distribution right
Photo Credit: Adam Melancon
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Tinselvision, an online video-on-demand service targeting South Asian communities in the US, UK and Canada which closed about $6 million in funding last year, has closed down, we have learned and confirmed. The company, based in Washington DC, has one investor: Innovative Entertainment Limited, a Geneva based subsidiary of Innovate Energy Group, and did two round of $3 million each, and boldly claimed that it had a "pre-launch, post-money valuation at nearly $20 million". They had struck online distribution deals for television content with STAR TV, Zee TV, Zoom TV (BCCL group co) and Bollywood film content from Yash Raj Films, but the market conditions and some troubles with its investor led to the closure of the company in September this year, our sources say.
The company also tried to expand into India, but of course the competition there is tough, and online audience is still small.
Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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 In a move to attract cost-conscious consumers, Blockbuster (NYSE: BBI) will offer 99-cent DVD rentals for the first time, Reuters reports. Full details—like which titles renters will pay a buck for and how long they can keep them—are still being worked out, but it's the latest sign that the once-mighty movie retailer is struggling in the fight against rivals like Netflix (NSDQ: NFLX) (and even companies like Redbox that operate DVD rental kiosks in supermarkets).
Blockbuster has worked to diversify its in-store DVD rental business: it bought online movie-rental service Movielink in 2007, partnered with NCR to test its own kiosk service, and most recently rolled out a set-top box—but the efforts haven't been that fruitful: it still posted losses (and declining revenues) in Q3. There's also the image problem. While Blockbuster's business as a whole may dwarf its competitors' (a factor CEO Jim Keyes preached to us in an interview) the company is still largely perceived as a stodgy lame duck besieged by nimble, innovative upstarts.
To top it off, Blockbuster is saddled with debt, and the credit crisis has hampered its plans to secure a new credit facility in 2009. While Keyes said the company will continue to pursue the funds, it's turning to another method to help trim $100 million to $150 million worth of debt from its books: renegotiating its store leases. Keyes told Reuters that the company pays about $450 million a year to lease space for its more than 7,000 stores in the U.S., and its trying to renegotiate pricing on about a third of them. While Blockbuster wouldn't say exactly how much savings could result from the new lease terms, industry estimates point to a savings of as much as $67.5 million.
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 Earlier this year in June, Fandango, the online movie tickets service which is part of Comcast (NSDQ: CMCSA), bought out movies info site Movies.com from Disney (NYSE: DIS), for an undisclosed sum at that time. Now the amount has come out, in Disney's latest annual 10-K filing with SEC: The movies.com business was sold for $17 million on June 18, 2008, resulting in a pre-tax gain of $14 million.
Movies.com, under its previous name MrShowbiz.com, was one of first online movie news and info sites. Then, after it morphed into Movies.com, Disney partnered with Fox to turn it into an online movies-on-demand site, but it didn't go past planning stages. Since Comcast bought it, not much extra has been done with the site, which now serves as a feeder info site to Fandango.
Some other details in the filing:
-- Disney had a $91 million loan receivable from Lehman Brothers, the bank that went under. The company says it is pursuing collection of this amount, but has fully reserved the amount. Unlikely it will recover it.
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 Blockbuster's newest gimmick is out of the gate: the MediaPoint digital media player by 2Wire can be ordered online or bought in some stores. Well, not exactly bought—the launch deal swaps the box for $99 in pre-paid rentals, 25 to be exact. Subsequent rentals start at $1.99. Blockbuster chairman and CEO Jim Keyes announced in the Q3 call the new box, which stores the video, a reversal from previous statements that the movie rental chain would avoid the hardware game. The model differs from competitor Netflix (NSDQ: NFLX), which, in addition to its own streaming device, has streaming deals with multiple set-top manufacturers. Netflix offers some 12,000 titles, while Blockbuster (NYSE: BBI) starts with only 2,000.
Home Video Magazine: 2Wire VP Jonathan Symonds said Blockbuster's a-la-carte approach to movie streams and the MediaPoint player's two USB ports and SD card slot did not suggest an apples-to-apples comparison with the Netflix box. He added that launching the player in the midst of a severe economic downturn necessitated the introductory pricing plan: "I think there is more risk at the higher end of the [consumer electronics] market than there is for a consumable impulse buy such as this."
AP: "… Keyes promises the movies will be of more recent vintage than Netflix's instant-watching service. "We are emphasizing quality over quantity because we think quality is most important for our customers," he said. Blockbuster's on-demand service is starting out with recently released DVD titles such as Get Smart, Forgetting Sarah Marshall and Sisterhood of the Traveling Pants 2 — none of which are available through Netflix's instant-watching channel."
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After two days of mediated talks failed, the Screen Actors Guild (SAG) is asking members to approve a strike authorization. The Alliance of Motion Picture and Television Producers (AMPTP), representing some 350 studios and production companies, and the actors guild met face-to-face this past week for the first time in four months. But the talks broke down abruptly Saturday morning, putting the upcoming awards season and film lineup for 2010 into jeopardy. The guild wants jurisdiction over all shows created for the web and a better residual payment structure for new media and DVD sales. But the union, which is 120,000 members strong, is far from a monolithic group. Factions are already calling the union's leadership into question and suggest more could have been done to move negotiations along. The studios, for their part, have held firm and say they're only willing to make a deal that matches agreements recently made with writers and directors—nothing more.
All this comes while just earlier this week the writers union reported that gains made in last year's strike have yet to bear fruit. The Writers Guild of America (WGA) alleged that studios and producers are failing to make good on payments for writers' work being reused in new media – exactly the sticking point that brought the industry to its knees for four months last winter. The studios claim that their deal with WGA isn't retroactive, and only applies to films that are initially released in new media after the new contract was signed in February.
LAT: Before the latest talks broke down, the actors guild hinted it would compromise on new media payment terms if the studios agreed to pay actors more for DVD sales. The studios then made some changes to their final offer from four months ago, but the union's negotiating committee rejected the new proposal in an 11-6 vote. Internal conflict within the union and typically low voter turnout could make it difficult for SAG to get 75 percent to approve a strike if negotiations fail. Moderates recently elected to the guild's board are also unlikely to call for a strike without an overwhelming mandate from members.
Variety: The federal mediator abandoned negotiations after neither side budged significantly during almost 27 hours of talks at the end of the week. Negotiators spent most of their time reiterating previous positions. When SAG sought approval from its members to hold out for a better deal in September, little more than 10,000 (or just one-twelfth) of its members chimed in, but it got backing from 87 percent. Still, the worsening economy puts into question whether members would give union leadership the same level of support for a strike.
SAG: "We remain committed to avoiding a strike but now more than ever we cannot allow our employers to experiment with our careers. The WGA has already learned that the new media terms they agreed to with the AMPTP are not being honored. We cannot allow our employers to undermine the futures of our members and their families."
AMPTP: "SAG is the only major Hollywood guild that has failed to negotiate a labor deal in 2008. Now, SAG is bizarrely asking its members to bail out the failed negotiating strategy with a strike vote – at a time of historic economic crisis. The tone deafness of SAG is stunning."
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Now it's Hollywood's turn to feel the financial crunch, and it comes in the form of an even deeper slump in DVD sales. Stats compiled from studios themselves and independent media tracking services reflect a downward trend, NYT reports. And it has insiders like Amir Malin, a partner at media-focused investment firm Qualia Capital, on edge: "Every studio is claiming, 'We're O.K. so far,' but we've looked at the overall competitive sales data and we have some concerns."
—Sales down both for the quarter and the year : According to Nielsen VideoScan, overall DVD sales were down 9 percent from Q2, and sales of higher-priced new releases were down 22 percent. Meanwhile, Warner Bros., the largest distributor of DVDs in the U.S., says sales are down 4 percent for the year. Since global DVD sales can now account for as much of 70 percent of revenue for a new film, any industry-wide decline is cause for alarm.
—Blu-Ray is fledgling: Warner Bros. also says sales of more expensive Blu-Ray DVDs will miss projections by at least 25 percent this year. It's partly because consumers are still in a "wait and see mode"—in a recent survey, 57 percent of regular DVD buyers said they wanted to make sure that Blu-Ray was the format Hollywood was going to stick with. So while the Sony-backed technology may have beat out rival HD-DVD, some execs say success in the 2008 holiday season is critical. "We think this is a do-or-die time for Blu-ray. We must get it established as a favorite holiday item," said Ron Sanders, president of Warner Home Video.
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