Technology: The business and culture of our digital lives, from the L.A. Times

William Morris digital chief to head Davie Brown Entertainment

Lewis Henderson
New Davie Brown Entertainment CEO Lewis Henderson. Credit: William Morris Agency.

The former head of William Morris Agency's digital practice has been named chief executive of Davie Brown Entertainment, an entertainment marketing firm.

Lewis Henderson, who built digital businesses on behalf of William Morris' clients in film, television, music and sports, will seek to expand the Davie Brown's offerings to include digital marketing and entertainment strategy.

He succeeds James Davie, who co-founded the agency in 1985 and retires later this year.

While at William Morris, Henderson consulted with tech companies looking to create relationships within Hollywood. He also helped William Morris' clients create online content.

He most recently worked with Habbo to bring "American Idol" and NBC's "Heroes" shows to the online virtual world for tweens. 

Before the launch of William Morris Digital in 2006, Henderson co-founded the agency's corporate consulting business, where he advised such brands as Nokia, Pfizer, 24 Hour Fitness and the U.S. Olympic Committee.

-- Dawn C. Chmielewski

Warner Music vs. YouTube casualties include a banjo-playing 'Star Wars' fan*

A couple of years ago in a galaxy very, very nearby (OK, it's this one), a Web developer who does contract work for the U.S. Air Force filmed himself playing the "Star Wars" theme song on his banjo.

The banjo player, Will Chatham, from Asheville, N.C., posted the video to YouTube. It amassed 1.5 million hits, 8,000 comments, numerous blog-post references and an offer to play a gig at Lucasfilm's 30th anniversary "Star Wars" party. Oh, plus one notice of copyright infringement.

The notice landed last week, making Chatham one of many casualties of the falling out between Warner Music Group and YouTube. It began last month with music videos from such major acts as Linkin Park and rapper T.I. disappearing from the video portal, then quickly escalated.

Warner, it appears, didn't even warn some of its own bands before pulling clips. Social news website Reddit pointed out that pop rockers Death Cab for Cutie were left with egg on their faces, when links on the band's website began pointing to copyright-infringement notices on YouTube instead of the music videos that once stood in their place. The band's webmaster has since removed the links.

Chatham, who plays in a bluegrass group called the Whappers (no, they're not signed to Warner), is fighting back. Since receiving the e-mail from YouTube regarding Warner's claim, Chatham has filled out copyright counterclaim papers. If Warner doesn't respond within 10 days, YouTube may put the banjo video back online, according to a YouTube support page.

He says he can't understand how the innocent clip of him playing his cover version on a couch -- a video that was once chosen by YouTube to be featured on its home page -- could be illegal.

"It's me just sitting there, playing on my banjo," he said. "If someone actually stopped and looked at it, they would be like, Oh, well, that's just some guy being silly."

Neither Warner, nor the company's lawyer, nor YouTube would ...

Read on »

Netflix attracting more subscribers through streaming video

Netflix Netflix showed little sign of the economic slowdown that's been nailing other companies this corporate earnings season. But it attributed its fourth-quarter jump in revenue, profit and subscribers to a surprising factor: surging popularity of its online video streaming service.

The movies-by-mail service said today it added 718,000 subscribers in the fourth quarter, far more than analysts had expected, bringing its subscriber base to nearly 9.4 million. Netflix expects the number to reach 10.6 million subscribers within the next three months, even as other parts of the entertainment business contract because of the recession.

"It's very clear that streaming is energizing our growth," Netflix Chief Executive Reed Hastings said on a call today with analysts.

Hastings said the company's streaming business was propelled by connection with devices from LG Electronics, Samsung and Microsoft that offer Netflix's "Watch Instantly" service. Subscribers can use the service to stream any of about 12,000 television shows and movies without waiting for the DVD to arrive by mail. The company "substantially" increased its investment in streaming video -- and plans to do the same in 2009, he said.

"We plan to spend as much money as we can with the studios, licensing as much content as we can -- and we are already one of the studios' largest Internet revenue sources," Hastings said. "Our spending is limited only by what content is available at reasonable costs."

DVDs remain the core of the company's business, and Netflix doesn't expect ...

Read on »

IPod sales fuel record quarterly earnings for Apple

Tim Cook and Steve Jobs Despite a bleak economy, Apple today reported record revenue and profit for its first quarter ended Dec. 27 -- propelled by surprisingly strong sales of its iPod.

The Cupertino, Calif., company reported a profit of $1.61 billion, or $1.78 a share, which beat analysts' consensus estimate of $1.39 a share. Revenue rose 6% to $10.2 billion.

Apple shares rose 6% to $82.83 in regular trading then leapt an additional 10% after hours.

Wall Street had worried that the recession and cutbacks in consumer spending would hit all three of Apple's major products: Mac computers, iPhones and iPods. The chill economic winds significantly slowed iPod sales in the first two months of the holiday quarter, which some analysts predicted would fall nearly 18% from a year ago.

But the portable media player exceeded expectations thanks to a last-minute surge in holiday buying that was spurred by retailers' decision to throw in sales sweeteners, such as iTunes cards. Apple said it sold a record 22.7 million iPods, which commands a 70% share of the U.S. market for music players.

"Even in these economically challenging times we are incredibly pleased to report our best quarterly revenue and earnings in Apple history -- surpassing $10 billion in quarterly revenue for the first time ever,” Apple Chief Executive Steve Jobs, who is on medical leave, said in a statement.

Analysts reported anecdotal evidence of declining demand for the iPhone since the September quarter, when the iPhone 3G was launched globally. Consumers purchased ...

Read on »

Live blogging Phil Schiller's Macworld keynote address

Apple's Phil Schiller shows off a new Mac at the Macworld keynote

11:44 a.m. Here's a more detailed post about the iTunes changes Apple announced today, including more variable pricing and DRM-free music.

11 a.m. Schiller received one enthusiastic round of applause as he concluded the Macworld keynote that lacked the usual electricity and showmanship of a Steve Jobs address. In years past, Jobs has whipped the crowd of Mac aficionados into a near frenzy (even for products as seemingly incremental as digital "post-it" notes). The only standing ovation of the morning went to Bennett.

10:35 a.m. A surprise guest appearance at Macworld -- and no, it's not Steve Jobs. Tony Bennett, the smooth crooner and winner of 15 Grammy awards, draws the curtain on Apple's participation in the trade show by singing his classic, "I Left My Heart (in San Francisco)."

10:30 a.m.:  Oh yeah, one more thing. After six years of offering music for 99 cents via the iTunes store, Apple now will offer music at a variety of prices -- something the music labels have been advocating for years. Songs will sell for 69 cents, 99 cents and $1.29 depending on demand. In another development, the entire iTunes music catalog will be offered DRM-free. Starting today, about 6 million tracks will be offered without the anti-copying software restrictions. By the end of the first quarter, Apple says, all 10 million songs in the catalog will be DRM-free.

10:20 a.m. The biggest applause of the day so far is reserved for the new type of battery in the MacBook Pro. Apple claims that it runs up to eight hours on a single charge and can be recharged 1,000 times -- that's three times the number of charges of a typical rechargeable laptop battery. Apple says it has accomplished this feat by providing a bigger battery that can't be replaced. (Apple says it gained real estate for the battery by dispensing with the hardware for removing a battery.) It also boasts new chemistry.

10:11 a.m. What Macworld would be complete without a hardware announcement?  Here it is: a new 17-inch MacBook Pro that's less than an inch thick. And at 6.6 pounds, it's the world's lightest 17-incher, or so Schiller says.

10:00 a.m. Apple creates its own version of Google Docs, allowing people to upload and share documents without clogging up e-mail. Upload a document to iWork.com and invite friends or colleagues to view and make changes. The document is viewed through any of the popular browsers.   

9:50 a.m. A new look for the iWork software, which includes word processing, spreadsheets and presentations, is unveiled. If you're into Keynote presentations, you'll discover new transitions. But the slickest feature allows you to use your iPhone as a remote control to move through the presentation.

9:40 a.m. IMovie, which was updated last year, gets its close-up at Macworld. It's added some editing tools that simplifies the process of incorporating audio from one video clip and placing it under another piece of footage. A stabilization feature takes the jiggle out of home video. And it'll also apply video effects, such as slowing down a shot or applying an effect that ages the footage, and does it all without rendering. The music application, Garage Band 9, offers music lessons now. It includes nine basic lessons for guitar and piano. Professional artists make cameo appearances. John Fogerty shows a simple way to play "Proud Mary." Sarah McLachlan is offering a simplified piano version of the song "Angel." These "pro" lessons are sold for $4.99 on iTunes.

9:25 a.m.: The new "places" feature in iPhoto does this interesting mapping trick. It uses the GPS tags embedded in photos to plot where they've been taken on a map, using stick pins. Schiller shows how all those photos taken from the City of Light event in Paris are placed along a map, with red stick pins marking where each photo was taken. Look at a picture of the Eiffel Tower, the stick pin turns "blue" on the map.

9:15 a.m.: Apple updates its iLife software, improving the photo editing application. One feature, called "faces," uses facial recognition to organize photos. It finds the face in a photo and allows you to label the photo with the person's name. The software then scans other photos in the library and organizes them under that person's name in the photo library. Another new wrinkle, called "places," uses the GPS location that some cameras (um, say, the iPhone) embed in pictures, and it uses the longitude and latitude to label the location. It'll automatically find all those photos taken at Yosemite National Park and organize them together in the photo library. Oh yeah, there are new slide show themes as well.

9:10 a.m: Schiller says Apple sold 9.7 million Macs, the biggest year in the company's history.

9:00 a.m. Please silence all cellphones. We're about to get started.

8:05 a.m. Welcome to Macworld with no Steve Jobs! (At least he's not expected to show up, but you never know with Apple.) It's drizzly here in San Francisco, but lines have already formed outside the Moscone Center to get into the hall for the keynote speech, which for the first time in 11 years will be delivered by someone other than Apple's chief executive. Phil Schiller, Apple's senior vice president of product marketing, is going to be running the show. Early buzz suggests there will be an emphasis on new software. We'll be posting regular updates once the show starts at 9 a.m.

-- Dawn C. Chmielewski

Photo: Apple Senior Vice President Phil Schiller shows off a new Mac laptop at the Macworld keynote. Credit: John G. Mabanglo / EPA

Steve Jobs disclosure won't quiet health worries

Steve Jobs photos

Apple Chief Executive Steve Jobs broke with his usual code of secrecy Monday to explain his health problems, but the disclosure that a hormone imbalance was causing his noticeable weight loss will probably do little to tamp down concerns.

Medical experts said a hormone imbalance in a pancreatic cancer survivor raises red flags about a possible recurrence. Jobs said in 2004 that he had undergone surgery to treat a rare form of the deadly disease.

Although Jobs is known as one of the nation's most intensely private corporate leaders, he issued an open letter Monday in which he tried to assure Apple investors and customers that he was healthy enough to lead the pioneering technology company he co-founded.

The 53-year-old CEO said his doctors discovered his condition had been "robbing" his body of proteins needed for good nutrition. He is undergoing treatment, which he described as simple and straightforward.

He did not mention cancer in his letter.

"I've said more than I wanted to say, and all that I am going to say, about this," Jobs wrote.

Several medical experts, who had no access to Jobs' health records, said problems other than cancer could have caused a hormone imbalance. For example, the surgery to remove his tumor could have left Jobs with a pancreas too small to produce the necessary enzymes.

Yet hormone imbalances are common in people who have an active neuroendocrine tumor, not in people who have been cured of the cancer, said Dr. Selwyn M. Vickers, chairman of the surgery department at the University of Minnesota.

An Apple spokesman declined to comment. The board said it would give Jobs its "complete and unwavering support" while he recovered.

Read the full story here.

-- Dawn C. Chmielewski and Jessica Guynn

Photo credit: Associated Press

Apple co-founder Steve Wozniak feels 'relief' about Steve Jobs' health

Steve Wozniak Apple co-founder Steve Wozniak said today that he was relieved that the news about Steve Jobs' health didn't appear to be worse.

After a year of speculation about his increasingly gaunt appearance, Jobs said he's suffering from a hormone imbalance that has caused his weight to drop through 2008. He said in a letter to the Apple community that the cause of his weight loss had been a "mystery" to him and his doctors, but that they had finally identified the problem and that he had begun treatment. "But, just like I didn’t lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this spring to regain it," Jobs wrote. "I will continue as Apple’s CEO during my recovery."

Wozniak created the original circuit board used for the Apple personal computer and teamed up with Jobs in 1976 to sell it. The resulting company, Apple Computer, of course went on to revolutionize the consumer electronics industry. After some time away from the company in the mid-1980s, Wozniak quit working full time at Apple in 1987 and has since worked on a variety of projects.

We were curious what Woz, as he's known, thought about Jobs' disclosure. So we sent him an e-mail asking if he was relieved. His reply:

Yes, this news is a relief, because it implies that Steve is not impeded from future accomplishments. It's not a surprise based on realistic analysis of news items and a short discussion with him recently.

I'm saddened that he has any such condition to contend with.

-- Dawn C. Chmielewski

Photo: Steve Wozniak in 2003. Credit: Marcio Jose Sanchez / Associated Press

YouTube dispute highlights music industry's new battleground: online videos

Akon The removal of Warner Music Group's videos from YouTube over the weekend highlights the growing tension between music labels and websites over what is becoming an important source of revenue for the beleaguered recorded-music industry: advertising and licensing fees from music videos, the foundation that built MTV but which has now largely migrated to the Internet.

The impasse comes at a time when all four major labels -- Warner, Universal Music Group, Sony BMG Music Entertainment and EMI Music -- are renegotiating their licensing deals with YouTube, the largest video site.

YouTube and social networks such as Last.fm pay for the rights to stream music videos. Typical licensing agreements pay either a minimum fee based on the number of times a video is viewed or, if the sum is greater, a share of the ad revenue, helping to make music videos a small but fast-growing source of revenue for the labels. One label executive estimates that music videos will generate about $300 million for the industry this year.

Record labels are eager to explore ancillary revenue to help offset free-falling CD sales. This year's album sales are down 45% from 2000, according to Nielsen SoundScan. A recent Forrester Research report projects that disc sales will continue to decline by an annual rate of about 9% over the next five years, as retailers reduce the shelf space allotted to CDs and music fans shift their purchases online.

As a result, music executives are increasingly pressing for what the industry calls 360 deals, in which the labels grab a share of revenue once reserved for the artist, such as concert ticket sales and proceeds from the sale of T-shirts and other merchandise.

Read the full story here.

-- Dawn C. Chmielewski

Photo: Akon, during the making of the "I'm So Paid" music video. Credit: Universal Music Group

Warner Music videos yanked from YouTube after contract dispute

Red Hot Chili Peppers Warner Music Group's videos began disappearing from YouTube this weekend, the casualty of a contract impasse between the music company and the Internet's dominant video site.

Negotiations broke down last week over licensing fees for Warner's music and videos, say people familiar with the discussions who were not authorized to speak publicly.

On its blog, YouTube alerted its audience to the collapse in talks, noting that professionally produced music videos and those that fans create using Warner songs would begin to disappear.

It remains unclear whether YouTube or Warner decided to pull the plug.

Read the full story here.

-- Dawn C. Chmielewski

Photo: Flea of the Red Hot Chili Peppers, a band on the Warner Music label. Credit: Between a Rock via Flickr

Electronic Arts outlines plan to cut 1,000 jobs, close at least 9 facilities

Madden NFL 09

Electronic Arts on Friday said it would cut more jobs and close at least nine facilities amid a weakening economy and disappointing sales in North America and Europe.

The publisher of the Madden NFL football franchise, the Sims and other video game titles said it would cut 1,000 jobs, or about 10% of its workforce, and shutter at least nine out of 50 facilities, including a development studio in Vancouver, Canada. The cost-cutting measures are expected to save $120 million a year.

EA would not identify the facilities intends to close, other than the Black Box Studio in Vancouver, which created the Need for Speed and Skate titles. It is unclear how the company’s California operations, with offices in Redwood City, Playa Vista, Westwood and Emeryville, would be affected by the cuts.

“It is going to impact every division of the company in every part of the world,” said EA spokesman Jeff Brown, adding that further details may be disclosed in the first week of February, when the company reports its third quarter results.

The world’s largest game publisher earlier this month said it would be forced to trim costs, cancel some game projects and make deeper cuts than the 6% workforce reduction it announced in October. EA said it would take a charge of $55 million to $65 million over several quarters to pay for the job cuts and facility closures.

“EA, and indeed the entire industry, needs to rationalize their product lineups,” Todd Mitchell, a New York-based analyst with Kaufman Bros., told the Associated Press. “There are just too many games. Not every publisher needs to be in every genre.”

Investors reacted positively to the news. EA’s shares climbed 63 cents Friday to close at $17.39.
The video game industry has long been considered immune to economic downturns, because games are perceived as delivering hours of entertainment. But as the economy slows, retailers have grown more cautious about the number of titles they stock, concentrating on top sellers. That’s impacting even major game publishers like EA.

EA had only a single title among the top 10 games for November, Left 4 Dead, according to market researcher NPD Group. The season’s sales were dominated by games developed by Nintendo for its Wii video game console, and two popular combat games, Microsoft’s Gears of War 2 and Activision’s Call of Duty: World at War.

-- Dawn Chmielewski and Alex Pham

Photo: A screen from Madden NFL 09. Credit: Electronic Arts


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