What's next for Hulu?

News Corp., Walt Disney Co. and NBCUniversal have been wrestling for more than a year over what to do with their unruly online progeny Hulu.

The answer emerged this week: sell the popular and problematic Internet video site.

But why now?

Analysts said the media owners couldn't help but notice Wall Street's enthusiasm for the initial stock offerings of social media site LinkedIn and the anticipated public offerings of Facebook and couponing service Groupon.

“The capital markets are wide open, there is asset value in Hulu today, and it will last as long as the distribution rights are extended," said Jordan Rohan, a media analyst with Stifel Nicolaus & Co.  In addition, he noted, "Yahoo and other major companies have discovered that the high-end online video space is incredibly valuable, and it always will be."

There could be another explanation too.  For months, Hulu's chief architect, Chief Executive Jason Kilar, has been lobbying for greater autonomy to operate Hulu as a fast-moving Internet venture, independent of the entertainment conglomerates that are beholden to their traditional businesses.

The media companies' priority has been to preserve their lucrative relationships with cable, satellite and telecommunications companies, which pay $30 billion annually for the right to distribute TV shows to subscribers. That sum dwarfs the $500 million in revenue that Hulu is projecting to bring in this year.

In addition, Providence Equity Partners, which initially contributed $100 million to seed Hulu, probably is looking for a way to recoup its investment.

Comcast chief Brian Roberts unveils next generation Xfinity TV system

Comcast Chief Executive Brian Roberts is linking TVs to the cloud.

On Thursday, at the National Cable & Telecommunications Assn. conference in Chicago, Roberts unveiled the latest generation of the Philadelphia cable giant's Xfinity TV system. The upgrade boasts a less complicated remote control and a souped-up "Xcaliber" program guide, which is currently being tested in a few homes in Augusta, Ga.  

The system includes applications to connect viewers via the cloud to their Facebook page, traffic and weather reports and Pandora Internet radio. The term "cloud" refers to computer storage via any Internet-connected device. Think of it as a file cabinet in the sky. For example, consumers can store their iTunes library or photo connections on a "cloud" and not use up valuable space on their computers. 

Roberts differentiated the Comcast cloud from traditional clouds.

"This is cloud computing, not necessarily cloud storage," Roberts said. "The cloud allows you to have faster innovation to be able to take all the brains of the [program] guide -- the search, personalization and recommendations -- and pull it out of the cable box."

Cable companies have invested billions of dollars into the manufacture and distribution of cable boxes -- that soon become outdated as technology advances. "That doesn't happen in the cloud," Roberts said.

The system is faster than those that the company currently deploys in its approximately 23 million homes that have Comcast cable service. Roberts played a video that showed a cable modem downloading TV shows at speeds exceeding 1 gigabyte per second.

The service allows viewers to customize their offerings, including the ability to post on Facebook what they like or if they are watching a TV show or movie. Viewers also can use a search function that quickly identifies programs available on TV that feature a favorite actor like Tom Hanks, a particular program like "CSI" or a baseball team.

"So I'm interested in the Cubs," Roberts said as he demonstrated the feature for a large audience in Chicago. Then one of Philadelphia's favorite sons paused and said, "By the way, not really."

-- Meg James

Photo: Comcast Chief Executive Brian Roberts. Credit: George Widman / Associated Press.

Zynga unleashes Empire & Allies game ahead of impending IPO

Zynga, the San Francisco-based social gaming juggernaut, on Tuesday released its latest title, Empires & Allies, a combat strategy version of toy soldiers adapted for the Facebook generation. 

The title, developed by Zynga's 1-year-old game studio near Marina del Rey, goes live as the San Francisco company is reportedly preparing to announce its plans for an initial public offering of its stock.

Empires & Allies represents the company's latest vision for how it sees the burgeoning market of simplistic social games evolving into a legitimate gaming genre that's more complex and nuanced. Our story in the Business section of The Times goes into more detail on the company's overall strategy for the game. 

Social games in general have come under heavy criticism among traditional game developers, who see the pithy titles as shallow attempts to hook unsuspecting Facebook users into an addicting cycle of empty quests.

A panel at February's Game Developer Conference entitled "Are Social Games Legitimate?" was jokingly renamed "Are Social Games Evil?" by one of the panelists after they were compared to high-fructose corn syrup of games by another panelist, Ian Bogost, a game theorist who teaches at the Georgia Institute of Technology.

Empires & Allies in some ways is Zynga's rebuttal to critics of social games. Designed by developers who worked on the much-revered military strategy game Command & Conquer, Empires & Allies features more nuanced game play and more meaningful interaction with "allies," who can not only harvest their neighbor's crops as in FarmVille but also ride to their rescue and repel invaders.

As for whether Empires & Allies, as with many of Zynga's games, is optimized for addiction, Bing Gordon, a partner in the Silicon Valley venture firm Kleiner Perkins Caufield & Byers, which has invested in Zynga, responded, "Passion is just another way of having an addiction on a schedule." 

Gordon, who logs into his Zynga games multiple times a day, said, "By any measure that I have about evil, I don’t think games qualify. Are they pernicious? Social games are behavior modification systems with entertainment value. So are diet systems." 

-- Alex Pham 

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Morning Fix: 'Social Network' scores. Rupert Murdoch tilts right again. Sanchez adds to CNN's woes. Quick hook in new TV season. CAA gets an infusion.

After the coffee.  Before seeing if I had the Kansas City Chiefs going undefeated this season.

The Skinny. In Monday's roundup: Sony's "The Social Network" takes the top spot at the box office, but don't look for Facebook co-founder Mark Zuckerberg to buy the DVD. CAA has landed a big investment from TPG, a private equity firm, that the talent agency hopes will position it for a bright future in an uncertain world. No new hits so far in the TV season. Legendary producer Stephen Cannell, who died late last week, not only created great TV, he stood up for independent producers against the networks.

Sony likes this! "The Social Network," Sony Pictures' attempt to tell the behind-the-scenes story of the creation of Facebook and the legal battles that followed its co-founder Mark Zuckerberg, finished first at the box office, taking in $23 million. That is just a little off from what industry analysts had projected, and the movie easily beat the other two major releases that opened -- "Case 39" and "Let Me In." The real challenge for "The Social Network" will be to avoid being the MySpace or Friendster of movies, starting out hot and then vanishing from the zeitgeist. Box-office analysis from the Los Angeles Times and Movie City News. 

Zuckerberg's thumb is down. Although the box office was good, Facebook and Zuckerberg are not fans of "The Social Network," which people close the company claim is a very distorted look at the history of the social-networking site. Hollywood take creative liberties? Shocking. David Kirkpatrick, who wrote a book on Facebook with the cooperation of Zuckerberg, talks about what he thinks the movie got wrong in the Daily Beast. After reading his article and seeing the movie, I was more surprised by how much Kirkpatrick said the movie got right versus what he said the movie got wrong. OK, so Zuckberberg didn't have sex in a bathroom as implied with the movie; I think he can survive that hit to his reputation.  In the meantime, Zuckerberg is trying to improve his own profile, making a big donation to public schools in Newark, N.J., and appearing on both Oprah Winfrey's show and Sunday's episode of "The Simpsons."

Disney's new new media duo. Walt Disney Co.'s digital aspirations are so big that it takes two executives to run its interactive unit. Over the weekend, the company announced that John Pleasants, chief executive of Playdom, a social gaming site that Disney bought earlier this year, and James Pitaro, who oversees Yahoo Inc.'s media operations, will be co-presidents of Disney Interactive. They replace Steve Wadsworth, who left a few weeks ago. Details from Bloomberg.

CAA's new look. On Friday, Creative Artists Agency announced TPG Group, a firm whose investments include Burger King and Metro-Goldwyn-Mayer, bought a 35% stake in the talent agency whose clients include Steven Spielberg, James Cameron, George Clooney and Oprah Winfrey. The deal will also see CAA and TPG create a $500-million fund for future investments. The move comes as the movie and television industries struggle to adjust to the shifting digital landscape. Analysis from the Los Angeles Times, Wall Street Journal and Deadline Hollywood.

CNN's struggles. It is a cash cow with a brand known the world over, but Time Warner Inc.'s CNN has seen its ratings plummet in the U.S. over the last decade as Fox News has raced to the top and MSNBC has made big inroads. New York magazine looks at the unsuccessful efforts of recently ousted CNN U.S. President Jon Klein to shakeup the network and turn it around, and how its competitors have managed to steal the spotlight. CNN's headaches only got worse on Friday when one of its hosts, Rick Sanchez, was canned for calling Jon Stewart of Comedy Central's "The Daily Show" a bigot and for taking some shots at CNN management as well. The Washington Post on how Sanchez imploded.

Rupert leans right. Once again, News Corp. Chairman Rupert Murdoch has made a big donation that has people talking about the influence of his media company -- whose holdings include Fox News -- on the country's political climate. Murdoch wrote a $1-million check to the U.S. Chamber of Commerce, which is working primarily on behalf of Republican candidates. The New York Times takes a look at Murdoch's spending and what it has people saying about his company.

Quick trigger. The TV season is only a couple of weeks old and already two shows -- Fox's "Lone Star" and ABC's "My Generation" -- have been canceled. So much for having patience when, with so many shows launching at the same time, it's hard to get the attention of viewers. Of course, some shows just are not good, and all the marketing in the world won't make a difference. Variety has a look at the quick hook of the networks.

Inside the Los Angeles Times: Scott Collins looks at the lack of success for most of the TV season's new shows. Legendary producer Stephen Cannell, who died on Friday, not only made a lot of great shows ("The Rockford Files," "Wise Guy"), he was a strong voice for independent producers.

-- Joe Flint

Follow me on Twitter because it will make Monday go by faster. Twitter.com/JBFlint

Digital Chocolate's Trip Hawkins dials into iPhone, Facebook social games

Trip Hawkins, who founded the video game giant Electronic Arts in 1982, got a busy signal with players on his first try with Digital Chocolate, a mobile game company that he founded in 2003.

Until last year, Hawkins' San Mateo start-up struggled to grow. Now, with dozens of games on Facebook and iPhones, Digital Chocolate has connected with players in a big way. The company launched 100 apps on Apple's iTunes last year, garnering more than 50 million downloads. Six of those titles were, at different times, the top-selling app.

On Facebook, the company's seven games attract more than 2 million players a day. Its top game, Millionaire City, gets about 1.8 million players a day, according to AppData, a site that tracks traffic of Facebook apps.

That's still a far cry from Zynga's Farmville, which gets 17 million players a day and is the No. 1 game on Facebook. But for Digital Chocolate, those numbers are translating into real money -- Hawkins is projecting $50 million in revenue this year for the privately held developer, much of it from selling virtual items used in the company's games.

And he's hoping to supercharge that even more by dialing into Hollywood brands that want to use his company's expertise to launch their own properties on social networks and mobile appplications.

Hawkins made the pitch to Hollywood executives Tuesday morning at the OnHollywood Entertainment Venture Summit at the University of Southern California, where his company was selected as one of the conference's top 100 private companies.

"We're entering an era where you need to have content on all the platforms out there," Hawkins told the audience.

-- Alex Pham

Photo: Digital Chocolate Chief Executive Trip Hawkins. Credit: Alex Pham / Los Angeles Times.

 

 

The Morning Fix: TV's manic Monday and Fox's fizzling 'Lone Star'! DC moves to L.A. Blockbuster nears bankruptcy. Another MySpace remake.

After the coffee. Before wondering if the Oscar talk for "The Town" isn't just a tad premature.
 

Here we go again. Monday night marked the official start of the new TV season, but it was an old show -- ABC's "Dancing with the Stars" -- that ran away with the viewers. Still, CBS can crow about the launches of "Hawaii Five-0" and "Mike & Molly," NBC can breathe a little easier about its big-budget drama, "The Event," and Fox can ... never mind. Poor Fox might have to adopt the Boomtown Rats song "I Don't Like Mondays" as its new marketing song if things don't improve. "Lone Star," its critically acclaimed drama about a Texas con man failed to hustle up much of an audience. The 9 p.m. show barely broke the 4-million-viewer mark as more than half of the audience from its "House" lead-in fled. There is already talk that "Lone Star" might join that small list of shows canceled after just one episode. HBO's "Boardwalk Empire," which played in less than one-third of the homes of "Lone Star," got a bigger audience and was already renewed for a second season. Ratings analysis on night one of the season from the Los Angeles Times, Variety, Hollywood Reporter and Deadline Hollywood.

No rush on returning that DVD. Blockbuster Inc., once the king of the home-entertainment business, is expected to finally file for bankruptcy later this week. The chain has been shuttering stores for years as it has struggled to keep up with Netflix and Redbox and has a $900-million debt load it is struggling to pay off. Hard to believe that Viacom once paid more than $8 billion for Blockbuster. Then again, it's hard to believe I used to go there all the time and even its heyday didn't like the way the stores were run. Details on Blockbuster's late-fee issues from the Wall Street Journal.

Heard this before. News Corp. is once again promising a "dramatic remake" of MySpace, that other social-networking site that Hollywood isn't making a big movie about. Speaking at a conference sponsored by the Wrap, Jon Miller, the digital czar of News Corp. said the new MySpace will take the site "back to its roots of music, discovery and self-expression" and will "jar some people and excite others." As long as it excites boss Rupert Murdoch, Miller can jar as many people he wants. More on the latest do-over for MySpace from Bloomberg. For more on the other sessions at the Wrap's daylong conference, here is the roundup.

DC moves to L.A. No, not Washington, D.C., DC Comics. Warner Bros. has wrapped up its yearlong reorganization of its DC Entertainment division, otherwise known as DC Comics. The bulk of DC's New York-based operations are headed West, and about 50 people will be let go. Details on the moves from the Los Angeles Times.

Amy on the move. Amy Banse, who has been running much of cable giant Comcast Corp.'s digital operations, is exiting that post, and her job was so big it will be filled by two people, reports Peter Kafka at All Things Digital. Banse isn't expected to leave the company and, in fact, has a very close relationship with Comcast Chief Executive Brian Roberts and his family and could end up with a very senior position in the new Comcast after the NBC Universal deal closes.

Ready for his closeup. John Gotti Jr., son of the late New York mobster John Gotti, is participating in an effort to bring his life and relationship with his father to the big screen. Gotti told Variety, "The story's about redemption. ... My father had a hard time accepting that I ultimately didn't want to follow his path." No word on who will play Curtis Silwa, the Guardian Angel founder, radio personality and target of a shooting that Gotti Jr. was accused but not convicted of arranging.

Inside the Los Angeles Times: James Rainey on tabloid gossip and how even good things are said without attribution. Patrick Goldstein on the premature Oscar hype for "The Town." Will there be enough hooting from audiences to make "Legend of the Guardians: The Owls of Ga'Hoole" a hit? A former assistant to a top Disney executive pleaded guilty to charges related to insider trading. Ex-"SNL" star Norm MacDonald is developing a new show for Comedy Central.

-- Joe Flint

Follow me on Twitter and at least the day won't be a total loss. Twitter.com/JBFlint

EA looks to Madden NFL Superstars to move the ball forward in crowded field of Facebook games

Electronic Arts on Tuesday kicked off Madden NFL Superstars, its latest Facebook game aimed at expanding the company's highly profitable social gaming business.

EA jumped into the space in November when it purchased game developer Playfish for $275 million in cash. The deal instantly made EA the second-largest developer of social games on Facebook after Zynga, the creator of FarmVille.

With Madden NFL Superstars, EA is looking to find new fans by tapping into the hundreds of millions of Facebook users who play games on the social networking site every day. The title comes on the heels of its FIFA Superstars, which debuted on Facebook in May.

While the Madden and FIFA franchises have generated billions of dollars in revenue for EA over the years, the games appeal to a core group of fans who revel over the games' graphic realism and faithful recreation of the sports' real-world nuances.

Madden NFL Superstars is the opposite. The game sessions are quick hits, requiring just a handful of clicks to complete rather than the hours of complex button mashing required for a typical Madden console game. The object is to collect players from a roster of more than 1,500 current NFL players to build team that will go up against those of your Facebook friends. Think Mafia Wars, but with pigskin instead of bullets.

Like most of Playfish's other games, players can advance by spending "practice" time in the game to improve their teams or spending money, between $1.20 and $12, to acquire high-scoring athletes.

"Our goal is to reach past the audience that we already have and expand the franchise into new platforms," said Mike Taramykin, vice president of EA Sports in Orlando, Fla.

It's also part of a plan by EA's Playfish to stand out in a densely packed field of 75,000 Facebook applications, many of which are games.

"The first phase of social games was about exponential growth," said Sebastien de Halleux, a Playfish co-founder and now vice president at EA Interactive. "Consumers love novelty, but the novelty wears off. Now we're in the second phase, the growing up phase. It signals that social games is not only about farming, but about connecting real-life passions like football with an online interaction."

-- Alex Pham

Photo: A screenshot of Madden NFL Superstars on Facebook. Credit: EA Sports

Nine out of 10 tweens play online games, research shows

 

Parents who are unsettled by how much time their children spend playing games online may be comforted to know they're probably not alone.

Nine out of 10 kids ages 8 to 11 play games online, according to a report by M2 Research, a market research firm in Encinitas, Calif. That goes for boys (91%) as well as girls (93%).

Other findings of the study, which surveyed 5,000 children nationwide:

• Social networks play a big role in looping kids into games. Facebook is the favorite website among boys ages 8 to 11 and girls ages 12 to 15.

• Among portable handheld gaming, Nintendo dominates with its DualScreen consoles. Four out of 10 girls ages 12 to 15 say they play games on the DS. But Apple is also making inroads with its iPad, iPod and iPhone, especially among girls. One-third of girls ages 12 to 15 reported playing games on iPod Touch players; 16% play on iPhones and 6% play on iPads.

• Sony's PlayStation Portable is preferred by boys -- 44% of teen boys reported playing PSP games, compared with just 18% of teen girls.

• What are they playing? Girls gravitate to Nintendo's Mario games, with 20% choosing it as their favorite franchise. Teen boys like Activision Blizzard's Call of Duty: Modern Warfare, with 36% picking it as their favorite game.

But as any parent knows, what's hot Monday can be out of favor by Tuesday. "Kids tend to play a wide variety of games, and their favorite games and gaming sites change often," M2 analyst Louise Curcio said.

-- Alex Pham

Photo: Connor McPherson, 8, plays Free Realms, a game developed by Sony Online Entertainment. Credit: Christine Cotter / Los Angeles Times

The Morning Fix: Steven Tyler to scream for 'American Idol'! Spyglass chiefs near deal to run MGM. HBO might add an X.

After the coffee. Before readjusting to heat and humidity.

Walk this way! Looks like Steven Tyler, the lead singer for Aerosmith (they were a big band in the 1970s and then made Alicia Silverstone's career, for you kids who don't know), has sealed his deal to be a judge on Fox's "American Idol" next season. The show, which lost Simon Cowell and Ellen DeGeneres, still has to find at least one more judge and talks with Jennifer Lopez have hit a standstill. Although "American Idol" has definitely lost some power over the last few years, it remains the most-watched television show in the industry and a cash cow. One trusts that even if ratings take a bigger than usual slide without Cowell, the cost savings from his exit will balance out with any advertising decline. In other words, hope Fox and the producers, 19 Entertainment and Fremantle, are not breaking the bank on unproven judges who happen to have once been big names. The latest from Ted Casablanca and Taryn Rider at E! Online.

Spyglass brass gets closer to taking reigns of MGM. Gary Barber and Roger Birnbaum, the chiefs of Spyglass Entertainment, are putting the final touches on a deal to run the troubled MGM studio. Earlier this week, MGM's debtors and Barber and Birnbaum reached an agreement that would have the two Spyglass toppers take over a shrunken MGM. Details from the Los Angeles Times and Variety.

But I already saw "Boogie Nights." HBO is working on a series about the adult entertainment business. Makes sense -- after all, they already have porn star Sasha Grey on the payroll for "Entourage" and maybe she's up for double duty. The show is from Dirk Diggler himself -- Mark Wahlberg. He's already in bed with HBO, as his production company makes "Entourage" and "How to Make It in America" for the pay cable channel. Just to make sure everyone knows it's a fictional show, author James Frey has been tapped to write the pilot. More from the New York Post.

Stop calling me Shirley! This week, "Vampires Suck," the latest spoof movie of a popular genre opened, but are these joke flicks getting tired? The Hollywood Reporter looks at whether "Vampires Suck" will draw blood at the box office.

Location, location, location. Facebook has unveiled its location service, which will allow its users to let people know where they are at. Of course, most Facebook users already take glee in telling their friends when they are at the gym, hiking, on vacation or just sitting around in the backyard. I've never quite understood why one would never put a sign on their door saying, "going away, feel free to ran shackle" yet people have no problem telling Facebook where they are at all times. What, none of my friends are thieves? I'm not taking that chance. Oh, and there will be the usual griping from privacy advocates about what Facebook is doing; although I'm as pro-privacy as anyone, if you truly want privacy, don't put your life online. Oh, and if you are curious, Thursday morning's roundup is being done from a Starbucks on Broadway and 103rd Street. Details on Facebook's latest move from the Wall Street Journal.

"Business Report" sold. "Nightly Business Report, a stable of public broadcasting that for years has been owned and produced by WPBT-TV, a public television station in Miami, has been sold to a private company. According to the New York Times, Mykalai Kontilai, who distributes television programs and used to manage mixed martial artists, has acquired the show. No terms were disclosed. The show, which is over 3 decades old, will continue to be produced out of WPBT. 

Guess Betty White wasn't available. Chelsea Handler, host of E!'s late-night talk show "Chelsea Lately," will be the host of MTV's Music Video Awards, which return to Los Angeles next month. Handler, best known for her love of vodka and single men, is something of an unusual choice for the show. Get ready for lots of Snooki jokes. More on Chelsea's big gig from MTV News.

Inside the Los Angeles Times: John Horn on the odds of a big win for "Lottery Ticket." Why "The Switch" isn't a chick flick. 

-- Joe Flint

What? You mean you don't follow me on Twitter: Twitter.com/JBFlint

Former Facebook rainmaker Owen Van Natta joins Zynga

Owen Van Natta, who unexpectedly stepped down in February as chief executive of News Corp.'s MySpace, has resurfaced at Zynga, a social gaming company, as its executive vice president.

Van Natta, 41, has also been appointed to Zynga's board, becoming the fifth member alongside Zynga CEO Marc Pincus; LinkedIn founder Reid Hoffman; Kleiner Perkins Caufield & Byers partner Bing Gordon; and Brad Feld, managing director of the Foundry Group.

Founded in 2007, Zynga has become one of the biggest developers of social games on Facebook. Its games, including Farmville and Mafia Wars, attract 65 million players a day.

Van Natta was on vacation Friday and not available for an interview.

His 10-month stint at MySpace came to an end after he clashed with News Corp.'s digital media chief Jon Miller. Van Natta had been chief executive of Project Playlist, a music-sharing website, when News Corp.'s Rupert Murdoch recruited him to help revitalize MySpace.

Prior to Project Playlist, Van Natta was in charge of operations at Facebook, where he helped build the company's advertising deals and forged an investment deal under which Microsoft Corp. paid $240 million for a 1.6% stake in the social network, giving Facebook a $15-billion valuation.

Zynga is no doubt hoping that Van Natta will apply his Midas touch at the social gaming company, where his responsibilities when he comes to work Monday will be nearly identical to his job at Facebook: namely, "revenue strategy, corporate development, international expansion and brand."

-- Alex Pham

Photo: Owen Van Natta. Credit: Zynga