Rock Band maker Harmonix sold by Viacom to private investment firm

Viacom Inc. has found an unlikely buyer for Harmonix Music Systems, creator of its Rock Band video games.

The media giant announced Thursday that it has sold Cambridge, Mass.-based Harmonix to Columbus Nova, a private investment firm based in New York.

Terms of the deal were not disclosed, and Columbus Nova did not reveal its plans for Harmonix.

"Columbus Nova is really excited about backing the world-class team that has consistently produced such great games and helping them grow the company and its brands," a spokesman said in a statement.

Viacom disclosed in November that it was trying to sell Harmonix, which it acquired in 2006. It had failed to make money on any of the studio's three Rock Band games release between 2007 and 2009 and was facing a rapid decline in consumer interest for music video games.

One person familiar with the matter said that Viacom told potential buyers it wanted to sell Harmonix by the end of this year for tax purposes.

Viacom paid $175 million to buy Harmonix and agreed to pay more based on the its financial performance in 2007 and 2008. After initially giving the development studio's former owners $150 million for 2007 performance, Viacom is now attempting to get some of that money back.

It is in the midst of a legal battle with the former Harmonix shareholders, who contend that they are owed hundreds of millions more in performance-based payments.

Financial analysts previously estimated Viacom would receive less than $100 million in a sale of Harmonix.

This year, Harmonix released Rock Band 3 and Dance Central, a well-received dancing game for Microsoft's motion-sensing Kinect device.

RELATED:

Viacom, former Harmonix shareholders in fight over Rock Band payments worth hundreds of millions

Viacom looks to sell Rock Band developer after years of losses

-- Ben Fritz

Lifetime and VH1 look for boost by borrowing from siblings

You'd be forgiven if you thought you were watching MTV or Spike and it turned out you were watching VH1 or if your TV said Lifetime but you could have sworn it was History Channel.

Both Lifetime, which is owned by Walt Disney Co., NBC Universal and Hearst Corp., and Viacom's VH1 have been borrowing shows from their sibling channels in an effort to juice their sagging ratings before the end of the year.

At Lifetime, repeats of History Channel's reality hit "Pawn Stars" have been popping up. Given that Lifetime's new chief -- Nancy Dubuc -- kept her job as head of History Channel as well, this move is hardly a surprise. "Pawn Stars" would not seem to be an ideal fit with Lifetime, but Dubuc wants to broaden the network's audience a little, and the hope is that viewers who might not normally check out Lifetime will stumble onto "Pawn Stars" and stick around. However, the risk is that Lifetime's core female audience will be alienated. Given the channel's ratings slump, however, that may be of little concern to the new team there.

VH1, meanwhile, has raided Spike and MTV's closet for reruns of "Entourage" and "Jersey Shore," respectively. Like Lifetime, VH1 has been in a prolonged ratings slump, and the hope is that borrowing those shows for a couple of weeks will get it some new viewers. A VH1 spokesman said it was a way to "test out show formats and formulas with our viewers and help drive promotion for the series back to our sister channel."

On the one hand, it is hard to argue with Lifetime and VH1 using programing from their siblings in an effort to jump-start themselves.

But the moves also continue the disturbing trend of cable channels being indistinguishable from one another. Shuttling shows from one network to another is different from when a cable network such as Spike shells out millions of dollars for reruns of a show such as HBO's "Entourage" or TBS does the same for "Big Bang Theory."

What Lifetime and VH1 are doing may have the cable operators who pay to carry them wondering why they are shelling out so much to be served leftovers.

-- Joe Flint

Photo: "Entourage." Credit: Claudette Barius/ HBO

MTV, after moving away from music, glances to the past to glimpse the future

Although it dropped the word “music” from its logo earlier this year, MTV is still searching for the right chord.

The main MTV channel hasn’t had a prominent series devoted to musical trends or artists for more than a year, instead riding such popular and rough-hewn reality shows as "Jersey Shore" and "Teen Mom." Distancing itself from music became something of a sore point among some viewers who worried that MTV was straying too far from its roots. 

Now the 29-year-old network has tweaked its management structure to place a higher priority on the development of shows that feature recording artists. Signaling the revived effort, the executive in charge of music and talent, Amy Doyle, was recently given additional responsibilties and now has a direct line to one of the network’s programming heads.

MTV hopes to duplicate the success of the reality series "The Osbournes," which was spun off from "MTV Cribs," the network's long-running series that showcases celebrities and athletes in their homes. Featuring befuddled heavy metal rock star Ozzy Osbourne being outmaneuvered by his family members, "The Osbournes," which launched in 2002, revitalized the English baby boomer rocker's career and became a cultural phenomenon.

“The history of our music development has sort of ebbed and flowed over the years,” Doyle said. “We’re always coming up with ways to express music across the channel’s different platforms. Recently we said, `Let’s figure out a way to do this more effectively.' This [structure] simply establishes a more formal process.” 
 
Doyle now reports to both Chris Linn, who was recently named MTV’s ranking New York-based programming executive, and the network's general manager, Stephen Friedman. Linn's expanded portfolio includes overseeing music development as well as reality shows on the East Coast. He's also been tasked with developing made-for-TV movies, including those that could morph into ongoing series. 

MTV divvies up programming, production duties to diversify lineup

MTV Networks on Tuesday elevated relatively recent hire David Janollari to be in charge of its programming and simultaneously tapped a 20-year MTV veteran, Chris Linn, to head up production and reality shows on the East Coast.  

The moves underscore the network's plans to wean itself from its indulgence of reality shows about glamorous and wealthy young adults that seemed out of step with the economic times and were not generating strong ratings. Eighteen months ago, network managers faced a sobering reality that its shows were not connecting with the so-called millennial generation, those younger than 30.

Since then, MTV has scored with its blockbuster hit "Jersey Shore" and "Teen Mom." Two shows that have an appeal beyond the rich and chic set. The network's ratings were up 27% for the recently ended quarter among its target demographic of viewers aged 12 to 34.  Now, the network wants to add a few scripted hits. It launched one high profile show this year — "The Hard Times of RJ Berger" — a comedy about a well-endowed high school student (think HBO's "Hung" meets "Napoleon Dynamite").

"Our mantra is diversification," Janollari said.  "A diversification of genres is something our audience wants and will embrace and something that we haven't served up in a number of years."

The MTV executive realignment has been in the works for more than a year.  In late 2009, MTV's programming chief, Tony DiSanto, told the network brass that he wanted to move on and become a producer when his contract expired in late 2010.  In January, the network hired Janollari, who has worked both as a TV executive and a producer, to build a pipeline of scripted shows.

Janollari was an executive producer of HBO's "Six Feet Under" and was president of entertainment for the young-skewing WB network, a job that ended when the network folded in 2006. He also spent many years at Warner Bros. TV.

Janollari becomes executive vice president and head of programming in charge of scripted programming, animation and reality shows developed by MTV's West Coast staff.  He will continue to be based in the network's Santa Monica offices. 

"MTV needs to shed its skin every three years.  We are placing big bets with our scripted franchises," said MTV's general manager Stephen Friedman.  He mentioned two prospects, "Skins" and "Teen Wolf."

Janollari also will work with Linn on reality shows based on the East Coast.  Linn will manage made-for-TV movies, news and specials, studio productions, music development and production management.

"We wanted to create a very clean structure where there were two people as leaders and not five different people out there competing with each other," Friedman said. He said Janollari and Linn "both have big lanes to run in, we see them working very well together."

— Meg James

Photos of David Janollari (top right) and Chris Linn (bottom left) courtesy of MTV

 

 

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

The Morning Fix: More McPherson drama at ABC! Swinging Sumner Redstone. Icahn takes one on the chin. ESPN playing soft with LeBron?

After the coffee. Before figuring out how to do this thing faster.

ABC Aftermath. With much of the television industry still reeling from the abrupt exit of ABC's entertainment chief, Steve McPherson, attention naturally turned to the overall health of Walt Disney Co.'s broadcast network as well as other possible reasons for the shakeup. Stories lurking in the background have proved difficult for journalists to get the old who, what, where, when and why pinned down. Some put vague suggestions in their coverage about personnel issues, while others went to town using anonymous sources. Then there are those who link to other stories that they may not be totally comfortable reporting themselves. Finally, we have your morning aggregator figuring out how to do this delicate dance at 5 a.m. Late Wednesday, McPherson's lawyer issued a vague denial-of-wrong-doing statement that seems to have opened the door for the dirt to fly. For a straight business story, here's the Los Angeles Times analysis of ABC's health and McPherson's track record. For a sense of what McPherson's lawyer was responding to, here's some coverage from the Hollywood Reporter, Variety and Deadline Hollywood.

What Paul Lee has to look forward to. ABC Family chief Paul Lee is the likely new head of ABC Entertainment. One of his first challenges will be getting up to speed about a bunch of shows he had nothing to do with but that he will inherit from McPherson. Lee has gotten raves for his stint as head of ABC Family, a once also-ran cable network that now has a strong lineup of original shows aimed at the tween and young-adult audience but not so hip that families steer clear. Weighing in on Lee are the Los Angeles Times and Wall Street Journal. 

Swinging Sumner. Viacom Inc. and CBS Corp. Chairman Sumner Redstone, already the subject of numerous stories over his interest in an all-female band getting a reality show on MTV and his generosity in giving stock to one of the members of said band, apparently has another young female friend working at the company. The Daily Beast's Peter Lauria, who broke the first Redstone story, has the tale of Redstone and club girl Rohini Singh, who landed an entry-level gig at Showtime. Meanwhile, the Hollywood Reporter hunted down Christine Peters, another Redstone friend who has had a production deal at Viacom's Paramount, to get her thoughts on all this. Hollywood is starting to make Detroit look pretty good.

Icahn takes one on the chin. Carl Icahn suffered a setback in his effort to take over movie and television studio Lions Gate. The investor had filed a couple of lawsuits to force Lions Gate to stop with a plan that would reduce Icahn's holdings in the company and make his takeover plans even more difficult. For the latest on the Lions Gate saga, here's the Los Angeles Times. 

ESPN playing favorites? Walt Disney Co.'s ESPN, which was heavily criticized for its special about basketball star LeBron James' decision to leave Cleveland for Miami, now is getting heat for taking a story about the James' nightlife off its website. The New York Observer reports that a story about a night James had in Vegas was yanked. ESPN told the Observer that the story was pulled because it was "published accidentally."

It's not TV, it's HBO. Rupert Murdoch's BSkyB, his British satellite broadcaster, has acquired the rights to pay cable channel HBO's entire library, according to the Guardian. Shows in the deal include "The Sopranos," "The Wire" and the new mob drama "Boardwalk Empire," which makes its debut in late September.

Inside the Los Angeles Times: Jeff Sagansky, who has run networks and studios, is now Mr. Digital Media Investor. CBS defends putting newscaster Julie Chen, who is also wife of CBS President Leslie Moonves, in a third show. The network also says it wants more gays on its shows and names some of the new undercover bosses for next season, a list that includes DirecTV CEO Mike White. Zac Efron is all grown up.

-- Joe Flint

Follow me on Twitter. I shouldn't have to tell you why. Twitter.com/JBFlint

MTV gets into social gaming, acquires Social Express

Marking another move for big media into video games, MTV Networks has acquired video game developer Social Express Inc.

The company, which focuses on games for social networks such as Facebook, was founded in December and has been in "stealth mode," meaning it has yet to launch any products. Its chief executive, Tony Espinoza, was a cofounder of SuperSecret.com, a virtual world aimed at tweens, and other top executives at Social Express have worked for social gaming company Zynga and Web portal Yahoo.

Social Express will be integrated into in Viacom Inc.-owned MTV's Nickelodeon Digital Group, which houses the company's online gaming assets such as AddictingGames.com and NeoPets. Espinoza has been named vice president of social gaming for MTV, while Social Express cofounder Neil Souza will be vice president of technology, social games.

They will help the company build small social games featuring MTV and Nickelodeon characters, as well as original properties.

Financial details were not disclosed.

The deal comes a week after Walt Disney Co. acquired Tapulous, a maker of iPhone games. With retail video game sales slowing at the same time that the online and mobile gaming businesses are heating up, some media conglomerates are seeking ways to get into the space.

-- Ben Fritz

E3 2010: MTV outsources Rock Band instruments, embraces dancing

MTV still loves Rock Band. It's making the instruments for Rock Band that is causing headaches.

That's why MTV has now signed a deal with a company called Mad Catz Inc. to produce the bulk of its instrument controllers. While Rock Band is very popular, the games have not been moneymakers for MTV parent Viacom in large part because of the cost of producing the fake instruments used in the game. The only instrument controller that Mad Catz won't be responsible for is a guitar controller that has six strings and actually works as a real guitar that is being produced by Fender, the iconic guitar manufacturer.

The new Rock Band 3 from MTV's developer, Harmonix Music Systems, will feature keyboards. That means that seven people can play the game simultaneously, including three singers, and it will likely require even better insulation in the basement. Harmonix has altered the game to make it easier for friends to jump in and start performing together while also adding new in-depth options for those who want to use the game to actually learn to play music.

MTV is also unveiling another game at E3 this week called Dance Central, which represents the first non-Rock Band game that MTV and Harmonix have produced. It uses Microsoft's new Kinect interface to track players' full body movements as they follow the moves of an on-screen instructor to mimic increasingly complex dance moves.

Harmonix has been looking to make a dancing game for several years, developers showing off Dance Central at E3 said, but could never devise a way to make one work until they saw a prototype of Kinect for the first time last year.

If Dance Central, which launches in November along with Kinect, is a success, it would add diversity to MTV's games business, which currently consists of only the Rock Band franchise.

--Ben Fritz

Related

Company Town's E3 coverage

Beatles: Rock Band sales slow over holidays as music video game genre bombs

Viacom hopes the Beatles: Rock Band game sets stage for rebound

Photo: Players trying Dance Central at E3. Credit: Lawrence K. Ho / Los Angeles Times.

The Morning Fix: Box office blues ... or not? Sumner's eye for talent. Versus wants soccer

After the coffee. Before wondering if Al Gore had just seen "Solitary Man" when he and Tipper decided to split.

Nielsen goes public. TV ratings service Nielsen has filed with the Securities and Exchange Commission to raise $1.75 billion in an initial public offering. Bloomberg says the company wants to use the proceeds to lower its $8.6-billion debt load. Nielsen is owned by several private equity firms including Blackstone Group, Carlyle Group and KKR. The filing will likely also detail Nielsen's revenue streams. The filing said Nielsen had earnings of about $1.3 billion on revenues of $4.8 billion in 2009.

The Conan factor. Turner Broadcasting is looking to get the same rate for commercials for Conan O'Brien that the broadcast networks get for their late-night shows. The New York Post says TBS wants rates that are 25% higher than the usual cable late-night rates. But many media buyers say TBS is dreaming. "He's a high-priced property that they clearly overpaid for," one buyer told the paper.

Box office fatigue. One bad holiday weekend and everyone starts analyzing what's wrong with the movie biz. Yeah, "Prince of Persia" disappointed, as did "Sex and the City 2." No, it didn't have anything to do with hockey or basketball. Is it a sign of tough times ahead? Probably not. As Hot Blog notes, there are already seven movies that made over $100 million in the U.S., two of which were sequels and one was a remake. Summer 2010, Hot Blog says, "always looked soft from a distance. Why? Because of a lack of sequels. No Spider-Man, Batman, Transformers, Bourne, or Harry Potter."

Sumner's eye for talent. The Daily Beast's Peter Lauria has a tawdry story about Viacom Chairman Sumner Redstone becoming smitten with a girl group called the "Electric Barbarellas" that he wants to see on MTV. Redstone, Lauria reports, is pressuring MTV chief Judy McGrath to put the program on, and she is resisting. All I know is what Sumner wants Sumner usually gets.

Whatever happened to going with your gut? OTX, an online test-screening service, is now going to start a "script evaluation division," according to Variety. OTX President Vincent Bruzzese told the paper that the company isn't claiming to be able to forecast box office based on a script, but "we can give an assessment of a script's potential. We know what people will respond to." Isn't that what the studios and producers are supposed to do?

Comcast thinkng goal! Comcast's sports channel, Versus, has had some exploratory talks with Major League Soccer about a TV deal. MLS currently has deals with ESPN and Fox Sports. Comcast, is, of course, in the process of trying to acquire NBC Universal, and part of the plan is to use its sports assets to help build Versus into a serious competitor to ESPN and Fox. Broadcasting & Cable chief and soccer nut Ben Grossman has the scoop.

New big man at the Beeb. Former Nickelodeon President and MTV Networks Vice Chairman Herb Scannell has been tapped to head BBC America, the U.S. arm of the BBC. BBC America has had something of a revolving door in its executive suite over the last decade or so. The channel, which is in about 70 million homes, primarily carries shows from the BBC and other British networks. Scannell told the New York Times that he wants to make the outfit "a more diversified producer of television” and hopes to create more original programming on the channel. Will the shows be set in the U.K., and will the actors have to use British accents?

Inside the Los Angeles Times: Sean Combs finds his funny. John Horn on Roadside Attraction's "Winter's Bone." Vevo's Rio Caraeff is the king of online music videos. 

-- Joe Flint

It's cloudy again. ... Bring the sunshine by following me on Twitter at: Twitter.com/JBFlint

MTV Networks executives wanted to buy YouTube, court documents show

There is much to behold in the 300-plus pages released Thursday morning in the $1-billion copyright infringement lawsuit that Viacom has lobbed against YouTube and its parent company, Google.

Among the more juicy tidbits is a set of internal Viacom documents from July 2006 showing that the New York media conglomerate had explored buying YouTube for as little as $1 million. The talks foundered, and YouTube was subsequently acquired by Google in October 2006 for $1.8 billion.

In one e-mail dated July 9, 2006, Adam Cahan, who at the time was MTV's executive vice president of strategy and business development, wrote "we all believe this is a transformative acquisition that we should pursue," citing YouTube's rising traffic and its value in "moving beyond social sharing of video into a utility for video search more broadly."

The next day, however, things seemed to turn sour. In an e-mail exchange between MTV Networks President Van Toffler and MTV President Judy McGrath, Toffler asked McGrath, "We buying YouTube?"

McGrath replied, "Probably not buying YouTube, if I had to wager." When Toffler asked why, she seemed to express frustration with Viacom's executive ranks and inability to strike quickly. "Because it's our ... company," she wrote. She then added that she was having dinner that night with Viacom Chief Executive Sumner Redstone and suggested that he should "stop running the company for wall street."

Toffler wrote back, "I do think some of it cuts to the bone. What happened to our what the ... ways. It takes 3 months and 58 meetings to get a 1 million dollar acquisition done at our company. We're fast becoming those we scorned."

-- Alex Pham

MTV Networks President Judy McGrath. Credit: Viacom.