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from the L.A. Times

Category: Ben Fritz

Hulu is up for sale

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Hulu is putting itself up for sale after all, The Times has learned.

Yahoo recently approached Hulu about the prospect of a purchase deal, but as Times reporters Dawn C. Chmielewski and Ben Fritz noted earlier, there was some question as to whether the Internet TV- and movie-streaming service wanted to be bought.

Now there's an answer, as Chmielewski, Fritz and their colleague Meg James reported on our sister blog Company Town, Hulu is putting itself up for sale and has gone as far as to retain investment banks to get a deal done.

From Company Town:

The popular online television site, which has been the cause of much consternation in Hollywood, has retained investment banks Guggenheim Partners and Morgan Stanley to facilitate a potential sale, according to people familiar with the matter. Prospective bidders have received notice that the sales process would begin in about two weeks.

The news comes a day after it was revealed that Hulu had received an unsolicited acquisition offer and that Web portal Yahoo has expressed interest in potentially acquiring it. Yahoo has not yet made a formal bid, said a person with knowledge of the situation.

By signing up the investment banks, however, Hulu is making clear that it is not just on the receiving end of interest. Rather, its owners -- News Corp., Walt Disney Co., NBCUniversal parent Comcast Corp. and Providence Equity  -- are seeking to exit the company three years after it launched.

One matter still unclear would be just how much Hulu would be willing to be sold for. The company, which is on the path to running as an independent entity despite being a joint venture between the major media firms named above, is an attempt by TV makers to tap into the value of their content on the Web -- and a bit of a Netflix challenger.

For more on this development in Hulu's business, and what's known of interested bidders so far, read the full Company Town report.

RELATED:

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Yahoo buys IntoNow, maker of TV "check-in" app for iOS devices

Amazon adds streaming video to Prime subscriptions in a bid to rival Netflix, Hulu

-- Nathan Olivarez-Giles
Twitter.com/nateog

Image: A screenshot of Hulu's iPad app. Credit: Hulu /Apple

Yahoo looks into buying Hulu, but is Hulu for sale?

Hulu on iPad

Yahoo recently approached Hulu about possibly buying the online TV and movie service, according to reports.

The potential takeover talks were unsolicited by Hulu and it isn't clear whether the streaming video service is looking to be bought, The Times' Dawn C. Chmielewski and Ben Fritz said in a report on our sister blog, Company Town.

From Chmielewski and Fritz:

The company, whose owners include media giants News Corp., Walt Disney Co. and Comcast Corp., has been struggling to find a balance between the desires of consumers to watch shows free online and its owners' interest in protecting the value of their programming. Late last year, it launched a paid subscription service to complement its free offerings.

Although there has been interest in the company, it remains unclear whether its owners have any desire to sell. Hulu has not taken any traditional steps associated with a sale such as retaining an investment bank to field offers. However, it is currently undergoing a restructuring that would give Chief Executive Jason Kilar and his executive team greater autonomy while imposing new rules on the availability of television content.

Word of the talks spread on Tuesday afternoon and was confirmed to Company Town by people close to the companies.

To read more about the talks between the two tech companies, head over to Chmielewski and Fritz's report, "Yahoo approaches Hulu about possible acquisition."

RELATED:

Google buys SageTV in move to beef up Google TV

Yahoo buys IntoNow, maker of TV 'check-in' app for iOS devices

Amazon adds streaming video to Prime subscriptions in a bid to rival Netflix, Hulu

-- Nathan Olivarez-Giles

Twitter.com/nateog

Image: The Hulu Plus app for the Apple iPad. Credit: Hulu / Apple

Amazon working on subscription Web video service to take on Netflix [Updated]

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Amazon.com is said to be in talks with movie studios about getting the rights to libraries of movies so it can offer a streaming video subscription service to combat Netflix.

The Seattle company already offers the Amazon Video on Demand service, which allows users to pay a few dollars to watch a movie or TV show once on a computer or on a TV equipped with an app for the service.

But so far, Netflix is the clear leader in terms of services that charge a monthly fee to watch unlimited movies and TV shows on smart phones, tablets, computers and TVs. Netflix charges $7.99 a month for its service.

Video can be streamed through Netflix on Apple's iPod Touch, the iPhone, the iPad, Microsoft's Windows Phone 7 handsets, the Nintendo Wii, Xbox 360 and PlayStation 3 gaming consoles, and many TVs and Blu-ray players on the market in the U.S. and Canada.

Our sister blog, Company Town, has more details on what Amazon has in the works, as reported by the Los Angeles Times' Ben Fritz.

Fritz reports:

The Web's biggest retailer has held talks with the Hollywood studios and several independent companies about acquiring library content for a subscription movie streaming service similar to Netflix, according to people familiar with the matter.

The online retail giant has already scooped up rights to some independently produced movies but has yet to strike a deal with any of Hollywood's big six studios, those people said.

Amazon has told studio executives that the company wanted to launch the service in early to mid-February but has delayed those plans until at least later in the month to deal with some technical glitches and to acquire more content. It is still unclear when the service will go live.

Head over to Fritz's report on the Company Town blog to read the rest of the story.

[Updated 11:32 p.m.: An earlier version of this post incorrectly stated that Netflix streaming was available on Android devices. Netflix is set to launch an Android app this year. Thanks goes out to Technology blog commenters for pointing this error out.]

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-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: Netflix CEO Reed Hastings demonstrates how various gaming devices can be used to stream video via Netflix during the launch of its streaming Internet subscription service for movies and television in September. The Canadian introduction marked the first time the Netflix service was made available outside the U.S. Credit: Mike Cassese/Reuters

CES: Ultraviolet digital movie downloads to launch in mid-2011

A consortium of Hollywood studios and technology companies will discuss Thursday at the Consumer Electronics Show (CES) plans to launch an initiative called Ultraviolet that's intended to jumpstart the nascent business of selling films and television shows on the Internet.

After more than four years in the works, Ultraviolet will launch by the middle of this year, with participating retailers and studios allowing consumers to purchase digital copies of movies that can be stored online or transferred between devices without an added cost.

It's the first time that Ultraviolet, backed by every major Hollywood studio except Walt Disney Studios, and a number of consumer electronics companies and retailers that sell entertainment products, with the notable exception of Apple Inc., has detailed plans to put its technology in the hands of consumers.

Disney has it own similar, competing technology initiative called Keychest. Apple, whose CEO, Steve Jobs, is Disney's largest individual shareholder, rarely takes part in cross-industry consortiums, instead pursuing its own strategy.

People who buy content from Ultraviolet digital retailers, which include Best Buy, Comcast, Microsoft, Panasonic, Sony and Toshiba, will be able to share it with up to six friends or family members, transfer or stream the movie on up to 12 devices and create copies on DVDs and portable flash drives. It's intended to alleviate one of the major impediments to the sales of digital copies of movies: that files are typically limited to a single device and thus are less usable than a DVD.

"The most highly skilled users are already downloading content, making copies and watching on any device they want," said Mitch Singer, the chief technology officer of Sony Pictures, who has been the key executive behind Ultraviolet. "We're trying to build a business model for everyone around that behavior."

Consumers were expected to rent 37.7 million movies by way of the Internet last year, according to Screen Digest, nearly double the number they purchased. Studios generate much bigger profits from sales than rentals, however, and are hoping to encourage consumers to buy more as the market transitions from physical media to digital, particularly because sales of DVDs have plummeted in recent years.

Though studios will decide where and how to sell their content with Ultraviolet technology and retailers will set prices, Singer said consumers will be able to buy digital copies of movies and TV shows by way of  computers, Internet-connected televisions, and also along with Blu-ray discs.

Based on research the consortium collected, Singer said most consumers value a digital copy of a movie at $11 or $12, less than the typical $15 to $20 price of a DVD.

When Ultraviolet first launches this summer, there may not be many devices compatible with its file-transfer technology. But Singer said later in the year many phones, video-game consoles, tablets and computers would start getting software upgrades to make them work with it. In 2012, devices with built-in Ultraviolet will start to be sold.

However, unless and until Apple decides to join Ultraviolet, its popular iPod, iPad and Apple TV will make for notable absences from the technology's "ecosystem."

Singer said he's optimistic that Apple will open up to Ultraviolet, noting that the company has allowed access to Netflix's video streaming service on its devices.

After a long time spent recruiting participating companies and creating the technology that makes Ultraviolet possible, Singer said he's relieved that this year the question of how and where consumers can get it will not be his responsibility.

"What we're announcing at CES is that we're now open for business," he said. "This is our handoff to the retail guys saying, 'OK, it's up to you now.' "

Related:

More people are watching movies online, but few are buying them

-- Ben Fritz

Gaming news: Modern Warfare 2 hits $1 billion; Nintendo jumps on Netflix bandwagon

Activision today said its latest game in the Call of Duty franchise, Modern Warfare 2, surpassed the $1- billion sales mark. The Santa Monica game publisher raked in more than half that amount in the first week of release (in November) alone. You can read more here in a post by Ben Fritz.

The announcement was a sliver of good news in what's likely to be a grim week for the console game industry. French video game company Ubisoft Entertainment today warned investors that revenue for the holiday quarter would be 8% less than previously projected, and that it would likely swing from a projected profit to a loss.

On Thursday, the NPD Group is releasing 2009 U.S. sales figures for console games, which are widely expected to show a decline from 2008.

Meanwhile, Nintendo today jumped the shark and announced it will add Netflix streaming service to its Wii console. Details of the announcement are here in the Times' Company Town blog, along with comments from wary analysts.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Rock Band abandoning hardware, Guitar Hero focusing on new audiences

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A screenshot from The Beatles: Rock Band. Credit: MTV Games.

The music video game genre has been in a profound slump this year, with sales down 46% so far, according to the NPD Group.

Part of that is due to the recession, of course, but part of it may be waning consumer interest in Guitar Hero and Rock Band. The games' publishers, Activision Blizzard and MTV Networks (owned by Viacom) have seen the impact on their bottom lines and are taking big steps to shake up their businesses as a result.

As a story in today's Times explains, the biggest change comes in the form of The Beatles: Rock Band, a risky bet worth tens of millions of dollars in royalties alone.

But as MTV launches the game with its distribution partner, it's also implementing a new strategy: Flee the hardware business. Sure, there's a limited-edition, $250 hardware package, but quantities are limited. And there's a $160 "value bundle" featuring original Rock Band hardware that MTV is eager to get rid of.

If you're new to music video games and want controllers for The Beatles: Rock Band, MTV has a preferred solution: Buy Guitar Hero.

“The opportunities around hardware are really limited,” said Scott Guthrie, general manager of MTV Games. “We are getting into a focus on software and [downloadable song] revenue streams.”

MTV Games senior vice president of electronic games and music Paul DeGooyer puts it even more abruptly: “Let others take on the burden of getting those super-tight margin instruments out there."

The "others," of course, is really one company, Activision Blizzard. And its CEO Bobby Kotick admits it's time for a change as well.

Continue reading »

Activision and Double Fine settle lawsuit over Brutal Legend game [Updated]

Brutal Legend
Activision and Double Fine have buried the hatchet over Brutal Legend. Credit: Double Fine

Activision Blizzard this afternoon confirmed it had settled with Bay Area game developer Double Fine over the release of a highly anticipated heavy-metal music title, Brutal Legend, featuring actor Jack Black.


FOR THE RECORD:
Video game settlement: An earlier version of this blog post and an Aug. 7 article in the Business section about Activision Blizzard Inc. reaching a Superior Court settlement with Double Fine Productions Inc. over Electronic Arts Inc.’s planned release of Double Fine’s video game Brutal Legend said that Activision probably received little or no compensation and may have settled to avoid losing in open court. The Times had no knowledge of the settlement terms and should not have speculated on the amount paid or the motivation for settling.


"We have settled the lawsuit," said Activision spokeswoman Maryanne Lataif. "However, the terms are confidential."

The two companies have been embroiled in litigation since June, when Activision filed a lawsuit to prevent Double Fine from releasing the game in October. The title had originally been part of the games portfolio of Vivendi Games, which last year merged with Activision.

Believing that as part of the deal Activision had declined to publish Brutal Legend, Double Fine partnered with Electronic Arts to complete and publish the game. Activision's lawsuit threw a monkey wrench in those plans with the contention that Activision still had the publishing rights to the game. An EA spokesman likened the situation to "a husband abandoning his family and then suing after his wife meets a better-looking guy."

But tensions seemed to subside when a court hearing, set for this morning in Santa Monica, was canceled. Now it appears the Brutal Legend show will go on as scheduled.

[Updated at 6:30 p.m.: A person familiar with the settlement, who requested not to be identified because the details are being kept confidential, confirmed that Brutal Legend would be released in October, as Electronic Arts had previously planned. The settlement ends all litigation involving Double Fine, EA and Activision over the game.]

-- Alex Pham and Ben Fritz

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Electronic Arts' Visceral studio loses leaders; unit is making Jack the Ripper game

Mitre Square London
Mitre Square, London, where one of Jack the Ripper's victims was found. Credit: Whistling in the Dark via Flickr.

The two top game creators at Electronics Arts Inc.'s studio in Redwood Shores, Calif., which was recently named Visceral Games, have bolted to competitor Activision Blizzard Inc.

Glen Schofield, the head of Visceral who also served as creative director on last fall's Dead Space, and Michael Condry, the studio's chief operating officer, will head up a new Northern California studio that Activision is opening in San Mateo, Calif.

An EA spokeswoman confirmed the departure, which was first reported on GameSpot. She added that the team at Visceral, which specializes in third-person action-adventure games, will continue work on upcoming titles Dante's Inferno and Dead Space: Extraction, as well as new unannounced titles.

Although she declined to elaborate, two sources close to EA told The Times that Visceral's next game would be Jack the Ripper, based on the 19th century British serial killer. It's not clear what the game would involve, but it's a natural follow-up of sorts to Dante's Inferno, which is also based on copyright-free historical material.

Dante's Inferno is scheduled to come out in the winter, meaning Jack the Ripper probably won't be released until late 2010 or 2011.

EA needn't worry about the departing developers ripping off Jack the Ripper. An Activision representative told GameSpot that its new studio would be working on a game based on one of the publisher's existing franchises.

-- Ben Fritz

Microsoft, Ubisoft creating short films based on Halo and Assassin's Creed

Assassin3 Who needs Hollywood? At Comic-Con today, video game companies are scheduled to reveal in two separate panels extensive details on their plans to produce short films based on their top franchises -- with no help from big shot movie studios.

As a story in today's Times explains, this portends a significant shift in the relationship between video game publishers and movie studios, which until now has primarily involved game companies licensing movie franchises from Hollywood studios.

On the Company Town blog, there's more details on just what these projects are. Microsoft, for example, is producing seven anime shorts set in the universe of Halo, its massively popular science-fiction shooter game. And Ubisoft is making three live action films that serve as prequels to its upcoming Assassin's Creed II game.

--Ben Fritz

Photo: On the set of "Assassin's Creed II: Lineage." Credit: Ubisoft.

Ghostbusters game sales ahead of Transformers and Up

Ghostbusters
Screen shot of Ghostbusters game, featuring the Stay Puft Marshmallow Man. Credit: Atari.

Ghostbusters, the game, has outpaced its blockbuster-movie-cum-game rivals. The title sold 440,000 copies in June, the month it released, according to a post in The Times' Company Town. Transformers: Revenge of the Fallen sold 296,000 copies, and THQ's Up, based on the Pixar Animation Studios film, sold 270,000.

Here's what Times entertainment writer Ben Fritz said:

Given that all those games were helped by tens of millions of dollars in marketing for their companion movies, whereas "Ghostbusters" hasn't had a theatrical presence since 1989, that's a notable accomplishment. It's also a much-needed boost for struggling publisher Atari and should benefit Sony Pictures, which licensed the rights.

There's some irony in the fact that Activision, publisher of the Transformers game, dropped Ghostbusters when it merged with the game's original publisher, Vivendi Games. 

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

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