The Big Picture

Patrick Goldstein and James Rainey
on entertainment and media

Category: Web/Tech

Groupon IPO delayed but its exclusivity rules are probably legal


Speculation about Groupon Inc., the online coupon site, is spiraling this week with news that the company intends to delay its initial public stock offering.

Reuters quoted sources as saying Groupon's meetings with investors had been postponed because of market volatility, though the insiders still said the stock would go public before the end of the year.

Bubbling beneath the headlines about the viability and value of the discount site (estimated at up to $30 billion) are complaints from consumer advocates and competitors about how the fast-expanding operator treats customers and the competition.

I previously wrote about complaints regarding Groupon’s fuzzy rules about the expiration of coupons. In fact, various state laws prohibit such discount offers from losing all value on an expiration date. More recently, a businesswoman emailed the Big Picture to complain that the site is trying to elbow out other online discounters by requiring its business partners to sign six-month exclusivity agreements.

Under a provision in Groupon’s contracts, businesses that offer discounts via Groupon are not allowed to sign on with another discount promoter for three months before and three months after the Groupon deal. “It seems to me that there is no reason for Groupon to prevent businesses from offering similar promotions other than to squash competition,” said a Phoenix acupuncturist who used the site.

Speaking to the Kansas City Business Journal this spring, a Groupon spokeswoman answered similar complaints about the six-month blackout period. The rep said the exclusivity arrangement was not meant to shut out competition but to prevent “merchants from cannibalizing their own business.”

You would think the businesspeople themselves would be in the best position to judge what would, and wouldn’t, damage their operations. But, that said, at least one antitrust authority tends to agree that Groupon is not legally prohibited from requesting exclusivity from its business customers.

Georgetown University law professor Howard Shelanski said in an interview that it is very difficult for businesses to prove that rivals are unreasonably shutting them out of a market. “The barriers to entry appear to be not particularly high, because Groupon has a number of competitors,” Shelanski said. “This sort of arrangement could irritate competitors. But you would have to show a lot more -- really that there is an effect on competition” -- to constitute an antitrust violation.

Shelanski said that if the six-month blackout period for signing other online discount deals is truly onerous, competitors without the exclusivity requirement should arise and succeed. “If that alternative hasn’t entered or survived in the marketplace, it suggests the exclusivity is not such a bad thing to customers,” Shelanski said.

As imposing as it may look to competitors, some analysts have quite the opposite opinion about Groupon. They wonder how it can continue to grow and justify its high costs, with a growing number of competitors gnawing at its ankles.

The company has not commented on the delay in the initial stock offering.


Groupon files for a $750-million IPO

Groupon changes accounting method, reports losses

Groupon, Zynga reportedly delay IPOs

-- James Rainey
Twitter: latimesrainey

Photo: Groupon founder and Chief Executive Andrew Mason, whose group discount company has slowed an initial public offering of stock that had been estimated to value the company at up to $30 billion.  Credit: Anthony Bolante / Reuters

Groupon files for a $750-million IPO

Danielle Berrin on who controls Hollywood: It's money and talent, not the Jews



Danielle Berrin, who writes the Hollywood Jew blog for the Jewish Journal, is a natural-born provocateur. She got into a heated e-mail debate with Aaron Sorkin after she blasted “The Social Network” for its negative portrayal of Jewish women in a blog post titled “Who does Aaron Sorkin really hate?” When she  profiled film director Brett Ratner, Berrin opened the story by saying how Ratner hit on her during their interview, adding insult to injury by noting that he said he found her attractive because she looked like a WASP.

Berrin recently walloped a host of Jewish organizations, including the American Jewish Committee, which have condemned the supposedly one-sided portrayal of the Palestinian and Israeli conflict in Julian Schnabel’s new film, “Miral,” wondering if the older generation of American Jewry is mired in such a profound cultural malaise that it’s “impossible for Jews to empathize with anyone but each other.” When Charlie Sheen was finally dumped by CBS from “Two and a Half Men,” Berrin wrote: “Why is it that you can abuse women, terrorize hotels, openly do drugs, get busted and all is forgiven until you utter a little anti-Semitic slur?” And, well, don’t ask what she thinks about Mel Gibson.

Berrin is what I would call a tribal critic. She frequently challenges the work of popular Jewish filmmakers and entertainers, offering the sort of  blunt assessments of Jews in Hollywood that Catholic blogger Andrew Sullivan makes about Pope Benedict XVI and his opposition to gay rights or African American writer Stanley Crouch has voiced about Al Sharpton and a variety of hip-hop artists.

Berrin, 27, began writing the Hollywood Jew blog in 2008 at the behest of Jewish Journal editor Rob Eshman, who has helped turn the Journal, despite its small circulation, into a lightning rod for social commentary in the Los Angeles Jewish community. Eshman views Hollywood as a crucial element in that coverage, saying, “I really believe that the importance of Hollywood in shaping culture and values is an underreported story. After reading Neal Gabler’s ‘An Empire of Their Own,’ I started to see that the dreams and fantasies that begin in some, often Jewish writer’s head and become entertainment products through the efforts of often Jewish directors, producers, actors, agents and executives, end up shaping the lives and dreams of people around the world.”

Berrin’s mandate is to explore the values that shape those choices. As Eshman notes, part of her power comes from the way she initially subverts expectations. Of course,  this being Hollywood, much of the focus has been on Berrin looking more like an actress than a geeky Jewish Journal reporter. “People always think I’m a shiksa,” she told me at lunch the other day. “When I met Harvey Weinstein at Bryan Lourd’s Oscar party, he said, ‘No way she’s Jewish.’ They always expect someone who’s, well, whiny and all the other stereotypes.”

For Berrin, it’s especially depressing to see a showbiz landscape so full of young “va-va-voom Jewish actresses” like Natalie Portman, Scarlett Johansson and Rachel Weisz  who rarely get to play parts that are even in the smallest way recognizably Jewish. She points to a film like “Barney’s Version,”  based on the novel by Mordecai Richler, in which the title character, after being saddled with bad marriages with two stereotypically screechy Jewish women, finally finds bliss with an elegant, attractive woman, played by Rosamund Pike. She is, as Berrin puts it, “clearly not Jewish.” Ditto for Adam Sandler’s “Just Go With It,” in which Sandler’s Danny, after being subjected to a bunch of gossipy Long Island Jewish women,  is swept off his feet by Jennifer Aniston’s character.

“Hollywood is deeply mired in the stereotypes of Jewish women as either being the obnoxious Jewish Princess or the overbearing Jewish mother,” says Berrin, who was raised in Miami. “You just don’t see characters who are smart or attractive who just happen to be Jewish or actually have complex Jewish identities. I guess it offends me because Hollywood is supposed to be about creativity and open mindedness, but we don’t get to see that when it comes to Jewish women.”

There are limitations to being a tribal critic since, for all her critical assessments of the Jewish psyche, Berrin rarely delves into broader areas of concern for Hollywood, notably why a community so deeply steeped in liberal values doesn’t have even one African American or Latino  running a major studio, talent agency or management firm. But for her, pursuing a more focused view is a plus.

“Having a Jewish angle on Hollywood allows me to go deeper and find out where people’s values come from,” she says. “I’m looking for motivation, but I’m also holding Jewish Hollywood to account. If the next time Aaron Sorkin, when he’s writing a Jewish woman character, thinks for a minute about how much he shapes attitudes around the world, maybe he wouldn’t resort to such broad stereotypes. I mean, hello! Think twice about how you represent your people!”

Berrin quickly points out that many artists’ work benefits from a Jewish perspective. Perhaps the most compelling aspect of  Schnabel’s “Miral” is that it allows us to see the Israeli-Palestinian conflict through fresh eyes, the eyes of an orphaned Palestinian girl. “Schnabel says he felt a particular Jewish responsibility to see inside the life of a stranger who was so different from him,” says Berrin. “Well, that’s a real Jewish value — it comes right out of the Torah.”

Hollywood is heavily populated with Jews, but for Berrin there’s little evidence of the old canard that  Jews control Hollywood. “Money and talent control Hollywood, not the Jews,” she says. “There is a deeply Jewish sensibility to the storytelling we see in movies, but that’s largely because in Jewish culture we get very excited about our storytellers. I mean, who are the most gifted and successful rabbis, if not good storytellers?”

In many ways, Berrin remains an outsider in Hollywood. When she couldn’t get official access to cover publicist Ronni  Chasen’s funeral, she found out where the funeral was by calling up the rabbi doing the service.

Berrin has a long list of power brokers who have ignored her interview requests, including Amy Pascal, Ari Emanuel and Harvey Weinstein. She’s not surprised. “I’m not doing celebrity journalism. I’m asking people in Hollywood about something that often makes them profoundly uncomfortable — their Jewishness. But I’m lucky. I’m still more starstruck by rabbis than any Hollywood stars.”

--Patrick Goldstein


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Photo: Danielle Berrin, who writes the Hollywood Jew blog for the Jewish Journal

Credit: The Jewish Journal

Survey: Love of mobile news does not = pay for mobile news

IPhonePic A new survey finds that nearly half of all adult Americans say they use their cellphone or a tablet computer to get at least some of their local news -- particularly "news you can use," such as the weather and restaurant tips.

The increasingly mobile nature of the news audience is described in a report to be released Monday by the Project for Excellence in Journalism. Although the portability of news may be good for news outlets, the challenge remains: how to make money on the service.

Many information providers hope to charge for mobile "apps" to recoup the cost of news gathering and making a profit. But the project's survey of more than 2,200 Americans finds that only one in 10 mobile customers use apps to get their local information and only 10% of that smaller number pay for the news applications. The net: just one in 100 American adults pays for an app to access the news.

Although newspapers continue to provide most unique local news, the survey showed a minority of Americans willing to pay to keep that information coming online. Of survey respondents, 23% said they would pay $5 a month to get full access to local newspaper content online. That figure dropped to 18% if they would have to pay $10 per month, 18% of adults said yes -- although that's still considerably higher than the 5% of adults who now pay for online local news.

The mobile users plug in, tune in and turn on via a plethora of devices. Of those who use their mobile devices for news, 51% said they acquire information via six or more different sources or platforms per month. And 75% of the "mobile" group connect via social networks.

The survey is part of the Washington-based organization's 2011 State of the News Media Report.

For those of you keeping score at home: New Ways to Consume News = Infinite. New Ways to Pay for News = Elusive.

-- James Rainey

Twitter: latimesrainey

Photo: Nearly half of Americans use their mobile phones or tablets to get local news, especially weather and local dining and shopping tips. But few of them pay for the information, or want to pay in the future.

Credit: PRNewsFoto / MyLikes





Al Jazeera, Fox log biggest audience jumps during Egypt crisis

AlJazeera Al Jazeera English and Fox News appear to be the winners in terms of audience expansion during the recent crisis in Egypt. Other news  outlets that usually gain in such big international crises, like CNN, got a more modest bump as they covered the events leading to the overthrow of Hosni Mubarak's government.

In the week (ending Feb. 6) before Mubarak stepped down, Al logged 727,000 unique visitors in the United States, according to the Internet tracking outlet That's about five times more readers (and viewers, given the site's streaming video) than the cable outlet had in a similar week a year earlier, when it logged 154,000 uniques.

Readers/viewers of the site praised the immediacy it brought to the action in Tahrir Square in Cairo and its ability to sample opinions from the crowd, even when the security situation made it too dangerous for some Western-based news operations to be out among the crowds, which included a particularly violent element supporting the regime.

Fox News also got a bump in its prime-time ratings, with an average of nearly 2.4 million viewers watching from 8 to 11 p.m. the week ending Sunday, Feb. 13. (Mubarak resigned Feb. 11.) During a week in early January before the crisis, by way of comparison, Fox averaged a little under 2 million viewers during the same time slots.

Second-place cable news outlet MSNBC, by contrast, saw its audience decline slightly in the same comparison--from 985,000 to 929,000. And CNN got a slight boost--from 712,000 to 739,000. CNN has traditionally seen bigger increases in viewership during big breaking news events.

It's hard to compare those figures to the three broadcast networks--NBC, ABC and CBS--which draw the biggest audiences for any single regular news show. All three of the network evening news programs appeared to be down fractionally during the week the Egypt crisis culminated, compared to a week in early January.

Regular nightly leader NBC Nightly News, with Brian Williams, drew just under 10 million viewers on average for the week ending Feb. 13. (During the week ending Jan 16, for comparison, the Williams-anchored news had drawn 10.5 million a night.) The ABC World News Tonight with Diane Sawyer hit 8.8 million people that same week (down from the January week of more than 9.1 million) and the CBS Evening News with Katie Couric brought in 6.4 million (compared to more than 7.1 in the earlier week.)

--James Rainey


Photo: The logo of Qatar-based Al Jazeera satellite news channel is seen in Doha. The channel was launched 15 years ago by the Gulf Arab state's Emir Sheikh Hamad bin Khalifa al-Thani with the goal of providing the sort of independent news that the region's state-run broadcasters had long ignored. Al Jazeera first grasped the enormity of the Tunisia uprising and its implications for the region, which soon spread to Egypt and other countries. Credit: Fadi Al-Assaad /  REUTERS





AOL-Huffington Post marriage: Really, it's not political

AOLHuffington AOL's $315-million purchase of the Huffington Post has produced all sorts of commentary, including my "On the Media" column on the nature of this new media giant.

Some critiques have focused elsewhere, on how the onetime king of dial-up Internet access allegedly sold its soul to the queen of the  political left.

"This proves AOL News has lost its mind," raged right-wing media commentator Brent Bozell of the Media Research Center. "AOL News is fooling only itself in thinking there is no journalistic conflict in merging with a hate-filled, vicious, radically left-wing rag."

No one in their right (or is it left?) mind would question that HuffPo is a haven for lefties, witness the withering screed that screenwriter Aaron Sorkin offered up after Sarah Palin ("phony pioneer girl" was one of his milder rebukes) conducted her televised caribou hunt for cable's TLC. That one drew more than 700,000 readers.

But anyone who visits the site regularly realizes that it's driven much more by aggregation of features, video, gossip, sports, books, movies, reality TV and all sorts of other pop culture morsels.  

It's safe to bet that Google searches bring battalions of conservatives and moderates to the site to read about, say, Christina Aguilera botching the national anthem at the Super Bowl.

Speaking to a group of marketing and PR types in Los Angeles on Tuesday morning, Huffington and AOL Chief Executive Tim Armstrong stressed that just 15% of the Huffington Post revolves around politics. Armstrong called the charges of a left-wing media coup a "red herring."

"There is a bigger fact, which is the business fact, which is that Huffington Post is one of the fastest-growing large-scale content properties with a great brand on the Web," Armstrong said.

That does not mean, Huffington suggested, that AOL's myriad sites will be devoid of politics. She has argued for several years that the political debate has too often been characterized as right/left, when many issues don't break down that way.

She likes to note, for instance, that traditional conservatives such as Grover Norquist and George Will have questioned whether the high cost of the war in Afghanistan is worth paying.

What's more important than purging politics from AOL's websites is making it clear where writers are coming from, Huffington suggested. She noted that local editors for, AOL's hyper-local Web presence in more than 700 communities, post biographies on the sites that outline their political views.

"The important thing is transparency," Huffington said, "to be transparent about where you are coming from as a journalist.”

-- James Rainey
Twitter / latimesrainey

Photo: Tim Armstrong, chief executive officer of AOL Inc., and Arianna Huffington, co-founder of the Huffington Post, at AOL headquarters in New York on Monday. Credit: Jin Lee / Bloomberg



Huffington Post-AOL, a marriage made in SEOland

Jkimkardashian Arianna Huffington remade the media landscape this morning when she became content leader for AOL, which purchased her 5-year-old Huffington Post website for $315 million.

That may have been the top news story at Huffington Post. But the other headlines attracting bundles of clicks there Monday were: “Kim Kardashian Loves 'W Magazine' Nude Photos,”  “Christina Aguilera Totally Messes Up National Anthem” and “Jennifer Aniston Wears Bra Vibrator on 'The Ellen DeGeneres Show.' "

Those who know Huffington mostly from television will focus on her liberal politics, support of health care reform and opposition to America’s two wars. Conservative opinion makers quickly slammed AOL, saying its credibility as a news source would slip away thanks to its union with Huffington.

But as the previous headlines demonstrated, government and politics take a backseat at Huffington Post to the real traffic drivers -- features, celebrities, gossip and other "verticals" that are pieced together and presented with brilliant aggregation and search engine optimization (SEO).

As pioneering blogger and web designer Jason Kottke tweeted, "HuffPo sold to AOL for $315 million. Is that the biggest exit ever for an SEO company?"

Others who work in the online news and information space agreed that what AOL got, at a high premium, was an operation brilliant at creating a water hole and drawing the animals in to drink.

Huffington Post has led most other sites by smoothly incorporating social media so that friends can use Facebook and Twitter to find out what friends are reading. It’s not uncommon to find stories replayed on HuffPo getting far more traffic than they did at the originating site, though links connect back to the source.

“I watch the way they put it together and they are just way ahead of the pack,” said an executive at another Web operator, who asked not to be named because his owners prohibit talking about rivals.

It’s not uncommon for posts to draw thousands of comments. Screenwriter Aaron Sorkin’s withering takedown of Sarah Palin (who he dubbed a “phony pioneer girl”) and her TV hunting expedition lured in more than 700,000 readers, was "liked" more than 100,000 times on Facebook and drew 7,800 comments.

Other sites only dream about that kind of traffic. And much of the content comes from friends of Arianna. Like Sorkin, they don’t get paid.

The charming HuffPost doyenne is herself one of the most valuable assets AOL has acquired. At every one of her myriad media appearances, she’ll now be introduced as the guru of content for AOL and all its sites — which include TechCrunch, Engadget and many others.

That sort of buzz and relevance has escaped AOL in recent years. It will be invaluable to an operation that thrived in what now seems like a long-ago time — when most computer users relied on dial-up connection for Internet access.

But what about making money?

Huffington has made only a little so far. Her operation has mostly been propped up by venture capital. It reportedly brought in $30 million in revenue in 2010, breaking into profitability for the first time. In its announcement Monday, the company said it hopes to increase that to $50 million this year and to lure more premium advertising as the AOL-Huffington Post combo expects to attract 117 million unique visitors a month.

That may all happen. But there are many skeptics. Among the questions: Can Huffington, known as a storyteller and promotional whiz, manage a complicated business amalgam? Some of those who have worked for her question her organizational abilities.

Do ad “synergies” really emerge, or is this just another Web deal that is not greater than the sum of its parts? Steve Case, the former AOL chief executive involved in the famously unsuccessful merger with Time Warner, was among the immediate skeptics of the new deal.

 "Tim Armstrong says 1 + 1 will equal 11. Really? That wasn't my experience," Case tweeted.

-- James Rainey

Twitter: latimesrainey

Photo: The Huffington Post website draws a lot of traffic with celebrity titillation, such as a headline about nude photos of the pictured Kim Kardashian. AOL bought the website for $315 million, hoping to benefit from its aggregation and search engine optimization. Credit: Kevork Djansezian / Getty Images

Who were the media heroes of 2010? Nominations open

JoaoSilvaLandmine Big Picture casts its gaze back over 2010 and wonders who should make a list of the media heroes of the year gone by.

There seem to be a few obvious nominees, like Joao Silva, the photographer who lost both legs in a land mine explosion in Afghanistan.

The injury served as a terrible reminder of the heroism of Silva and other photographers, who have been quietly laboring to make sure the world doesn't forget suffering and human resilience in war zones, and beyond.

The oil disaster in the Gulf of Mexico and the Haitian earthquake produced phenomenal and dogged coverage. Who in the media showed their stuff as master of those disasters? And on what smaller, more routine stories did a reporter make his or her mark?

The media heroes of 2010 also might include the people who expanded technology or opened a new watering hole for our insatiable curiosity.

Make your recommendations over the next 24 hours and we'll highlight 2010's media heroes at the Big Picture and in my On the Media column on Saturday, Christmas Day.

--James Rainey

Photo: Britain's Princess Diana talked to amputees in this 1997 photo on the outskirts of Luanda, Angola. The photo of the princess and the landmine victims was taken by Joao Silva, who himself was severely injured by a landmine in October. Silva now works for the New York Times. Credit: Joao Silva / Associated Press  



Net neutrality: The sky is falling, or not, with new FCC rules

FCCJuliusG Only the barest outlines have begun to emerge of the new rules that could govern access to the Internet. But, predictably, a lot of people are spewing gigabytes of invective about the potential harm to our most democratic medium.

Tuesday’s 3-2 FCC vote approving new regulations was designed to assure equal access—for companies and individuals—to the Worldwide Web and whatever great innovations emerge in years to come. Years of litigation and, perhaps, legislation will follow--battles that will do a lot more to settle the future of “net neutrality” than the current rush of words.

But while several writers noted an inherent sadness over the end of the Internet’s wild and woolly days of laissez faire, or predicted a menacing government takeover, it seems safe to bet that the rules won’t bust up the free information party nearly that dramatically, or haphazardly.

Interpreting the rules can be a dicey proposition, at best, since they haven’t even been formally issued by the feds. And even the general outlines we know raise as many questions as they answer.

Take the concept of “paid prioritization.” That’s the notion that media and tech companies could pay broadband providers like Comcast and Qwest a fee to get their data transmitted faster than data from other companies that don't pay a premium.

The new rules do not explicitly outlaw "paid prioritization."  But the rules don’t approve paying for better access, either. Most observers took the lack of specificity to mean that the FCC, at least in some instances, would allow companies to pay to get a faster ride through the Internet “pipe.”

Internet purists and political liberals complain that this will mean the beginning of the end of the Internet’s egalitarian ideal. They have a point.

“I am fan of net neutrality in the classic sense,” said Andrew Lih, an associate professor of journalism at the USC Annenberg School for Communication & Journalism. “That means we all would have access to what’s called a ‘dumb pipe,’ where Google, Netflix and anything else have the right to the same access. That’s what makes the Internet great.”

What’s caused complications in recent times, however, is the massive surge in the amount of bandwidth being filled by video streaming services like Netflix. The all-created-equal ethos  is challenged when a small percentage of users (though growing rapidly every day) suck up a huge percentage of the capacity.

“In the real world, there is only so much bandwidth and there are real costs associated with building it and maintaining it,” said Lih, author of “The Wikipedia Revolution." Broadband operators want to recoup those costs and profit, by charging the companies that use an outsize share of broadband.

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