Amid mounting advertising pain in the TV business, CBS took a $12.5 billion third-quarter loss yesterday, and Disney is reportedly preparing cost-cutting measures that could include job cuts.

CBS’ loss came after it took a $14.1 billion charge to reflect the lower value of advertising-supported media assets.  According to the Los Angeles Times, Disney executives have been meeting this week to prepare belt-tightening measures.

The news comes two weeks after NBC Universal said it would cut $500 million in spending, or 3% of its budget, because of “unprecedented economic challenges.”

Posted under Michael's Blog

Will soft money be the next casualty of the recession?

Wisconsin legislators hyping their tax credits for film and TV production

Studios rely on tax incentives from more than 40 states (and other countries) to help cover the cost of production. There’s even an open market for those credits — similar to the derivatives that caused such a mess on Wall Street.

States like New York, Pennsylvania, Louisiana and New Mexico refund as much as 40% of the money studios spend on below-the-line workers for a movie or TV production. The money means producers can be comfortable with a lot more short-term debt, knowing they’ll be repaid.

Now the executives at big studios (and presumably indies) who take advantage of this so-called soft money are feverishly reworking their risk assessments to take into account the probability that some of that rebate money will dry up — a casualty of state governments trying to stay solvent themselves.

“There are forces within each state that are against (soft money) because they look at it as a big giveaway,” said a studio executive. “That’s only going to intensify in the current economic environment.”

Studios worry that shows already in production may see their tax credits revoked, forcing them to be moved to another location, she said. New York, hard hit by the financial meltdown is particularly worrisome since many shows are produced there, and the state has one of the most generous soft money programs. Right now, the state has committed its soft money through 2011.

“It’s all about risk assessment,” she said. “No one knows what’s going to happen.”

Posted under Michael's Blog

The conventional wisdom that Hollywood never suffers in a recession may prove false this time.

Even if consumers flock to movie theaters, production appears likely to take a hit – especially for independents. Like elsewhere in the financial world, banks and other traditional funders of movie and TV production are cutting back on their investments until they see how the economy fares.

“Production will fall significantly,” said D. Jeffrey Andrick, Managing Director of Continental Entertainment Capital, which arranged co-financing in September for independent film

Indie "Give 'Em Hell Malone" was lucky it got funded in September, not October

starring Thomas Jane and Ving Rhimes. “Deals that looked like they might come together a certain way, that relied on a certain equity source, have been paralyzed.”

Hedge funds, a popular source of film financing recently,  are also struggling; and foreign distributors – which often help finance films by pre-committing to it – are also sitting on the sidelines, Andrick said.

Big studios aren’t likely to dramatically cut films they’ve already committed to. But look for a lot more caution if the recession deepens. And indie filmmakers, whose financing prospects are shaky at the best of times, are going to have more trouble getting films made.

So even if more consumers chill at the movies, they’ll likely have a lot less product to choose from.

Posted under Michael's Blog

If you think mobile social video is a no-go in the U.S., you might consider Itsmy.com, which claims 2.5 million users of its personal broadcasting service worldwide, with half of them American.

The site ((http://m.itsmy.com on
your mobile phone) lets anyone with a video-enabled mobile phone create
their own mobile “TV show” for free and share it with other friends,
family or love prospects.

The company’s fixed Internet site is bare-bones and unapologetically devoid of uploading capabilities.

“We are convinced that we don’t need an Internet site for our users,” says Sabine Irrgang, COO of Munich-based GoFresh, which owns Itsmy.com. “Many are not interested, or they don’t even have a computer.”       MORE

Posted under Michael's Blog

MobiTV unveiled Mobi4Biz at the CTIA conference in San Francisco this week, the first in a planned series of TV channel mashups that will allow the mobile television company to repurpose mainstream TV for specific vertical markets. The new “channel of channels” — set to launch initially in late October exclusively on AT&T’s forthcoming BlackBerry Bold – will include video-on-demand, customizable stock tickers, andbreaking news from Fox Business, CNBC, Bloomberg and TheStreet.com.  MORE

Posted under Michael's Blog

Nokia is rolling out a new “all-you-can-eat” music service this week in the U.K. that’s a prototype for a service it plans to roll out worldwide.  “Comes with Music”, currently marketed only by U.K. retailer Carphone Warehouse,  lets users download as much music for one year on their Nokia phones as they want –and port it to their computers –, but there’s  a catch: they can’t move the music from their devices or their computers. If they want to add more songs after the year, they have to buy a new device.

Nokia will cover the royalties it’s paying to three of the four major labels by adding a surcharge to the phones, according to officials at the CTIA wireless show in San Francisco. They insisted the service is not an experiment, but a prelude to what will soon be offered in the U.S. They didn’t specify a time frame.

Any expansion of the service could be problematic for Nokia’s relationship with wireless carriers, who are rolling out their own competitive music services.

Posted under Michael's Blog

It’s a measure of how Real Networks’ fortunes have changed in Hollywood that it would be willing to introduce a product today almost certain to attract the legal wrath of the biggest studios.

RealDVD, a $30 software program, allows users to download an exact copy of a DVD directly to their hard drives. While the company insists its program is completely legal, the jury is literally still out on whether copying DVDs is legal. The studios literally sued  321 Studios, which marketed its own DVD-copying software, out of existence; and the DVD Copy Control Association is appealing a ruling in favor of Kaleidescape, a Silicon Valley startup that enables servers to rip and stream DVDs.

Real Networks is evidently calculating that its Rhapsody music service, which depends upon record companies to sell their copyrighted material, won’t be hurt by hot-headed movie studios concerned about piracy of their copyrighted material. Nothing like irony in Hollywood.

Posted under Michael's Blog

We are in the process of relaunching iHollywood News using Wordpress, so please expect some rough edges over the next few weeks as we transition from our old provider. For the moment, you will find all posts at www.ihollywoodforum.com/news, but I hope to move back to news.ihollywoodforum.com in the weeks ahead. In the meantime, you will likely find some broken links in Google searches and other irregularities, so please bear with us as we make the change! If you notice any problems during our “beta”, please feel free to comment here, or email me at michael@ihollywoodforum.com.

Posted under Michael's Blog

To most entertainment executives, Google’s introduction of “Chrome” this week probably seems too inside baseball to care about. But actually, it’s all related to something that keeps studio heads up at night:  control  of distribution.

That’s one way to look at all the consolidation in Hollywood over the last 20 years: Sony       bought Columbia and TriStar because it wanted “content” for its electronics. Disney bought ABC because Michael Eisner worried the TV networks could squeeze any fees they wanted for his TV shows and movies. Winning Paramount gave Sumner Redstone films to fill his National Amusements theater chain and pipe to Viacom’s cable channels.

Google is clearly concerned that Microsoft could make Internet Explorer unfriendly to Google applications. This is not paranoia. Much of Microsoft’s explosive growth came from its leveraging its monopoly in computer operating systems to decimate smaller rivals. Netscape was done away with by making IE the first thing that showed up on every new computer desktop. Microsoft Word worked better with Windows than Wordperfect.

So Google wants to make sure it has secured its own route from the consumer’s desktop to the Internet. And from the mobile phone to the Internet as well, when Android is introduced toward the end of this year.

An interesting twist: Google is making the code for Chrome available to anybody, including its competitors. Not exactly akin to giving away the copyrights to all your movies, but its certainly a shift from the monopolistic ways of Microsoft.

Posted under Michael's Blog

Veoh CEO Dmitry Shapiro joined USA Today journalist Jefferson Graham at iHollywood Forum’s first iHollywood Mixer last month in Culver City. Excerpts:

Posted under Michael's Blog, Video