SAG negotiating committee considers seeking strike vote

Now that the studios have rebuffed an offer from the Screen Actors Guild to resume formal negotiations, expect things to get ugly fast.

The union's negotiating committee will decide Wednesday whether to seek strike authorization from members should SAG and the studios reach an official impasse -- or defer that decision to the national board. The board meets Oct. 18.

Strike referendums require approval by 75% of voting members. That may be hard to achieve given the dire economy. But a majority of negotiating-committee members believe SAG has few remaining options, short of capitulating on key demands over new-media pay, guild insiders say.

The national board already gave the negotiating committee authority to seek a strike vote. However, the board could still vote to disband the committee, given the election of new directors who challenged the guild's leadership.

-- Richard Verrier

KNBC-TV's GM out as local television market is battered

The Fritz Forecast: Searing temperatures in the Valley, topping 100 degrees, and another KNBC-TV Channel 4 general manager will soon land in the hot seat.

NBC Universal announced today that Linda Sullivan, general manager of Channel 4 in Los Angeles for a mere 16 months, was retiring. Sullivan had spent 32 years in the television business in such markets as Boston, Providence, R.I., Washington and the Bay Area.  She worked nearly 13 years for NBC and joined KNBC in May 2007, replacing longtime GM Paula Madison.

"When I first came to KNBC, someone from one of the employee groups told me that "the worst day here is still better than the best day anyplace else," Sullivan said in a brief phone interview late today. "This is a decision that I didn't reach lightly." She said plans for her retirement had been in the works for a while.

Sullivan plans to return to Boston, where her husband, Charles, lives.

NBC Universal immediately announced that Craig Robinson, KNBC's executive vice president for operations and digital strategy, would become acting GM "until a formal replacement for Sullivan is announced."

The weakening economy has clouded the financial outlook for TV stations, making businesses that were once described as licenses to print money much tougher to manage. Last week, NBC Universal Chief Executive Jeff Zucker said that revenue at TV stations, which are highly dependent on local auto and retail advertising, have been battered. National advertising so far has weathered the storm, Zucker added, but the economic downturn has had a "profound effect on our local television stations."

-- Meg James

Pictured: KNBC-TV Channel 4 anchors Colleen Williams, Fritz Coleman, Fred Roggin and Paul Moyer. Credit: NBC Universal

Congress gives Web radio some breathing room

It hasn't saved the economy yet, but Congress came a bit closer today to saving Internet radio.

The Senate passed the Webcaster Settlement Act — approved by the House over the weekend — to give webcasters more time to negotiate royalty rates that won't put them out of business. The bill sped through Congress after being introduced last week, and it now awaits President Bush's signature.

Webcasters — from major broadcast radio outlets like NPR to online-only operations like Pandora — have been searching for alternatives since the Copyright Royalty Board created a new royalty rate scheme last March. The board eliminated the option that small webcasters once had of paying a percentage of their revenue rather than a per-play rate, and instituted a minimum charge of $500 per channel. The board also raised the .08-cent-per-play rate so that it would more than double by 2010, amounting to a few cents per listener per hour, which advertising would be hard pressed to sustain. For some webcasters, the royalties they would owe total more than their revenues, notes BRS Media analyst George Bundy.

Since last year, webcasters have lobbied Congress, gone to court, and asked listeners to call their representatives to try to roll back the ruling. Some were sympathetic. Rep. Jay Inslee (D-Wash.), whose district includes Redmond, where Microsoft is based, and who introduced the bill that passed this weekend, offered a proposal that would have reversed the board’s ruling and decreased existing royalty rates, but it didn’t stick.

The bill isn’t quite the reversal some webcasters might have wanted, but it does give them a couple of extra months to negotiate a deal with SoundExchange, the nonprofit organization in charge of collecting fees for artists and record labels. SoundExchange joined with the Digital Media Association, NPR, and the Recording Industry Association of America to support the bill.

“We are very hopeful of reaching agreement soon, and thereby creating long-term stability that will re-energize the Internet radio business,” said DiMA Executive Director Jonathan Potter in a statement.

But Bundy wasn't entirely optimistic about the talks.

“It’s really difficult to tell whether the extension will allow enough time for both parties to realistically come to a deal,” Bundy says. “What we’ve seen in the past is that there isn’t much hope of getting something together without mediation.”

--Swati Pandey

Photo: Rep. Jay Inslee. Credit: Nathan Bilow / Associated Press

EMusic Chief David Pakman departs a believer

Former EMusic Chief Executive David Pakman has a response to critics of his indie music subscription download service: It’s not the model, stupid.

Pakman announced his resignation from EMusic yesterday and today blogged about his unflagging confidence in the business of subscription downloads, saying that “our success cannot be understated.” He notes that EMusic has increased its subscribers fivefold — to 400,000 — and its revenues tenfold, to $70 million, in the five years since Vivendi Universal sold it to New York-based investment firm Dimensional Associates Inc.  

The company has made those leaps without the benefit of deals with major labels — which avoided EMusic because it lets users download tracks in the universally usable mp3 format, even though the big labels have since teamed with Amazon and even iTunes to sell mp3s. Still, EMusic has managed to carve out a niche for avid indie music consumers, the kind who buy several albums a month and for whom paying a flat fee (as low as $11.99) is a steal.

And eMusic still sees strong potential for growth. Chairman Danny Stein said in a statement that the company expects its next chief — probably an outside hire recruited by the executive search firm Barlow Group with input from Pakman — to raise revenue to the several-hundred-million-dollar range.

While EMusic wouldn’t comment on how that would happen, the company has been giving its website a makeover, incorporating photos and information from sites like Wikipedia and Flickr. It’s also plotting to put out over coming months a new welcome page — its current one walls off content from nonsubscribers — and a recommendation engine.

Those changes should help the company burnish its image as a clearinghouse for all things indie, a specialization that may continue to pay off if — as the also CEO-less MySpace Music seems to be doing so far — other streaming, subscription and download sites stick to pushing mostly major label content.

--Swati Pandey

Logo courtesy EMusic

Hollywood on the Huron: Michigan now a film mecca

   

First it was Louisiana. Then it was New Mexico and New York. Now it’s Michigan’s turn as the latest hot spot for film production. Not since Michael Moore’s documentary “Roger and Me” has the Great Lakes state garnered so much attention from Hollywood.

Once considered a relative backwater as a film destination, Michigan has lured more than 60 features and made-for-TV movies this year, up from just three last year, according to the Michigan Film Office. The projects include upcoming films as well as recently-wrapped movies such as Clint Eastwood’s "Gran Torino,"  a drama about at Korean War vet who befriends his young neighbor; "Whip It!," a Drew Barrymore-directed comedy starring Ellen Page of "Juno" fame; and the sci-fi thriller "Butterfly Effect: Revelation" (pictured above). Twentieth Century Fox, Warner Bros. and Sony Pictures all have films lined up to shoot in Michigan this fall.

Under Michigan's program, producers get 40 cents back for every $1 they spend on filming (double the existing rebate) and qualify for an additional 2% spending rebate if the film is shot in designated "core communities," including Detroit and Flint.

The rebate covers salaries of crew members and above-the-line talent up to $2 million per person (so that wouldn't cover the typical fees commanded by the likes of a Brad Pitt or a George Clooney). Additionally, the new law provides a 25% tax credit for companies that invest in new film and digital media studios in the state and would cover 50% of on-the-job training expenses for Michigan residents working as crew members. 

Thanks to such incentives, Michigan expects to pull in nearly $400 million in film revenues this year, a welcome boost to a state that has been buffeted by the woes of the Big Three auto makers. “The response has been magnificent," says Anthony Wenson, chief operating officer for the Michigan Film Office. “We’ve not only brought dollars into the state, but we’ve created new jobs.”

How long Michigan enjoys its moment in the sun -- yes, there's sun in Michigan -- remains to be seen. The state doesn’t have the quantity of crews or the production facilities of more established locales such as Vancouver, Canada, and New York. And, of course, there's nothing to stop another state from coming along and cooking up even more generous incentives.

But for now, Michigan’s success is a stark reminder of California’s continued vulnerability to runaway production. Much to the lament of unions and industry officials, California does not have an incentive program to keep its signature industry at home. This, despite having a former movie star in Gov. Arnold Schwarzenegger.

-- Richard Verrier

Photo: On the set of "Butterfly Effect: Revelation." Credit; David McIlroy

SAG seeks to reopen talks, on day stock market plummets

UPDATE: The studios late Monday finally responded. In a statement, the Alliance of Motion Picture and Television Producers, rebuffed the offer. "We do not believe it would be productive to resume negotiations at this time given SAG's continued insistence in terms which the companies have repeatedly rejected."

Screen Actors Guild to the Alliance of Motion Picture and Television Producers: Let's talk

In an effort to jump-start stalled contract negotiations with the studios, SAG President Alan Rosenberg and Executive Director Doug Allen called on News Corp. President Peter Chernin and Walt Disney Co. President Bob Iger to revive formal bargaining.

It came on the same day that the stock market plummeted as the House of Representatives turned down the Bush administration's Wall Street bailout plan.

In their letter, which was also addressed to the studios' chief negotiator, J. Nicholas Counter III, the union leaders said it was futile to send the studios' "final offer" to members, and they alluded to a poll in which fewer than 10,000 members urged their leaders to reject the proposed contract and instead "fight" for a better deal.   

"It is our fervent hope that this news will encourage you and your colleagues to reengage in formal bargaining, with the exchange of proposals and compromise by both sides necessary to reach agreement."

They added: "We owe it to our constituencies and the thousands of others in this industry that depend on a productive, stable and uninterrupted relationship between the Screen Actors Guild and the networks and the studios. ... What do you say; when can our committees meet face-to-face?"

Actors have been without a contract since June 30. The two sides are sharply at odds over how actors are paid when their work is distributed over the Internet.

Although expressing a willingness to compromise, the SAG leaders also warned that "if your intransigence continues, however, our choices become harder and fewer."

There was no immediate response from the studio executives or the Alliance of Motion Picture and Television Producers.  Don't hold your breath. The AMPTP dismissed results of SAG's recent poll as unrepresentative because of the low response rate, and it has also accused guild leaders of misleading their members into thinking they were engaged in informal negotiations with the studios. The studios have shown little willingness to improve on a contract modeled on a similar deals already negotiated by writers, directors and the smaller actors union, the American Federation of Television and Radio Artists.

Sony just says no to cancer charity donation

As the producer of the highly profitable "Spider-Man" franchise, Laura Ziskin has helped make Sony Pictures zillions over the last six years from the three superhero movies that amassed $2.5 billion in worldwide ticket sales, not to mention tens of millions more in DVD, merchandising and television proceeds.

But when Ziskin asked Sony to contribute money to her Stand Up to Cancer fundraiser, her home studio turned down her pitch. If Major League Baseball could pitch in $10 million, surely Sony along with the other Hollywood studios could collectively match that, figured Ziskin, herself a breast cancer survivor.

"We hoped that because we were an entertainment industry endeavor that the studios would have made a big financial donation, but they didn't," says Ziskin, who worked for more than a year with a group of women that included CBS News anchor Katie Couric and former Paramount Pictures chief Sherry Lansing to pull off a star-studded one-hour prime-time telethon with Meryl Streep, Jack Black, James Taylor, Lance Armstrong and other celebs that was simultaneously broadcast Sept. 5 by ABC, NBC and CBS.

In the show's early planning stages, Ziskin met with Sony Pictures Entertainment Chairman Michael Lynton and movie boss Amy Pascal to ask if the studio could provide her with technical support and manpower. No problema, they said. But, when it came to her request for Sony to write a check to the charity -- problema.

"The studio chose not to give money, but we tried to be as helpful as we could by giving Laura office space and all the technical support she needed to make the event successful," Lynton said when asked about the incident.

So, let's get this straight. The studio that just announced that it hopes to make two more "Spider-Man" sequels, which will easily cost more than $500 million in production costs, can't spare a cool couple million for a worthy cause?

Though disappointed, Ziskin says she was very grateful that Sony "supported me totally in the endeavor," giving her not only offices, camera equipment and other in-kind contributions including support in helping build the charity's website, but also time off from making movies for a year to put the show together. "That was no small thing," she says.

Moonves defends CNET deal, claims CBS an Internet contender

Does flashing some cash turn a geriatric network into an Internet hipster?

Apparently, it does for Leslie Moonves (pictured), chief executive officer of CBS Corp. He told the Internet Advertising Bureau's annual conference that his company's $1.8-billion acquisition of CNET Networks instantly transformed the company into a "major player" in the digital realm.

The deal combined such CNET properties as GameSpot.com, TV.com and Search.com with CBS' other online holdings and catapulted CBS to a Top 10 Internet property, according to ComScore Media Metrics, which measures online audiences.

But if size were all that mattered online, behemoths like Time Warner's AOL -- the fourth-most popular website -- wouldn't be smearing on the lipstick and parading its assets for a sale.

Nor has "traffic" proved the winning formula for the Internet's second-most popular site, Yahoo, notes tech commentator Michael S. Malone, who said the crazy price paid for CNET should send other Internet companies on the hunt for some "East Coast sugar daddy."

"Scale is only half the equation, and arguably the half that doesn't matter," says Scott Ehrlich of DigWorks, a digital media consultancy. "More important is: Do you know how to take advantage of scale?"

Some, including popular venture capital blogger GigaOM's Om Malik, praises Moonves' acquisition as a big, bold bet.

"He's got table stakes now," said Mike McGuire, vice president of media research for Gartner. "The challenge comes in how you deploy and utilize those assets."

It'll take more than a merger-and-acquisition strategy, though, to realize Moonves' dream of turning CBS' scattered online assets into a one-stop shop for news and information. Moonves is already savoring that day, whose advantages would include "taking money away from the newspapers."

Or, he could have added, radio, local and network television: the core of CBS' businesses.

-- Dawn C. Chmielewski

Photo: John Paul Filo / CBS

Judge blocks move of "Project Runway" to Lifetime

Heidi is having a bad week. First William Shatner rips her clothes off, then Tom Bergeron drops her on the floor, and now this! 

A New York judge on Friday clipped the wings of "Project Runway," by issuing a temporary injunction that prevents the producers from moving the popular cable TV show to Lifetime Networks from Bravo. NBC claimed that Weinstein breached their contract by not giving it right of first refusal before jumping the show to another company.

Earlier this year, show producer Harvey Weinstein negotiated a deal to move the show, hosted by Heidi Klum, to Lifetime Networks. NBC Universal, which owns Bravo, and which has been home to the show for five seasons, immediately sued Weinstein to block the move.

"NBC Universal is pleased that the court granted our motion for a preliminary injunction against The Weinstein Company," said NBC in a statement. "The overwhelming evidence demonstrated that The Weinstein Company violated NBC Universal's right of first refusal to future cycles of 'Project Runway.'

Lifetime, in a statement, said it was "disappointed with the court's decision," noting that the show's "loyal fans" are the "people hurt most by this ongoing dispute." The cable network avers it will "pursue all measures to uphold its valid and binding agreements" with Weinstein.

-- Meg James

Photo: Richard Drew/AP

MySpace and independent labels: a messy divorce?

If MySpace Music represents a hopeful new marriage between major record companies and Web 2.0, consider independent labels the jilted first wives.

Artists on indie labels flocked to MySpace early on because it offered an easy and free alternative to slick personal websites built by major label Internet whizzes. Their participation made MySpace a destination for music lovers, who could listen to songs and check tour dates for artists even if they didn't have a MySpace profile.

The new MySpace Music offers a far vaster collection of songs for streaming and slapping on personalized playlists. The site, controlled by News Corp., is banking on that collection to draw more users and plays. In exchange for ponying up their stars' oeuvres, major record labels received ad-revenue sharing deals and equity stakes amounting to 40% of the MySpace venture, as The Times reported.

But indies -- whose artists are still attracting traffic to MySpace with their profiles and selection of streaming and embeddable songs -- received no equity. And, indies say, major labels will reap the benefits of MySpace's growth, even if it's driven in part by independents.

"Our lovers were cheating on us," says Tom Silverman, founder and chief executive of Tommy Boy Records. "Now we need to hire a great divorce lawyer."

In other words, negotiations to get indies their share are continuing.