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Media Decoder Blog: The Breakfast Meeting: NBC Ratings Tumble and Twitter Hacking Can Undermine Brands

February 26, 2013 by Leave a Comment

NBC’s ratings have plummeted since a great prime-time run last autumn, Bill Carter reports. NBC’s viewership has dissipated to numbers never before seen by any broadcast network — certainly not during sweeps month. In February NBC was not only well behind its competitors but also the Spanish-language channel Univision. The numbers are so bad that NBC may have to offer “make-goods,” or free advertising time, to cover shortfalls of ratings guarantees. Audiences for once-promising sitcoms like “Go On” have disappeared; new shows like “1600 Penn” have drawn little notice; and “Do No Harm” became the lowest-rated network drama on record before being canceled after two episodes. “Saturday Night Live,” the network’s highest-rated show even though it is 38 years old, was the only silver lining.

It is every brand manager’s nightmare: hackers breaking into a product’s social media accounts, an occurrence that is happening more often, Tanzina Vega and Nicole Perlroth write. It happens frequently on Twitter, where security measures for both personal and branded accounts amounts to nothing more than a username and password. Burger King’s Twitter feed was recently hacked — its logo was replaced by the McDonald’s arches and its tweets ranged from unprintable to incomprehensible — but Burger King is hardly alone. Social media accounts for NBC News, USA Today, Donald J. Trump, the Westboro Baptist Church and even the “hacktivist” group Anonymous have been victims. The hacking has led to calls for stronger security measures, and means more business for social media management companies like HootSuite.

“Argo” won best picture at a very musical Academy Awards Sunday night, Brooks Barnes and Michael Cieply report. But in a field with many promising candidates the awards managed to take in a wider variety of films than in some years, with Ang Lee’s “Life of Pi” winning four awards, including best director; “Les Misérables,” which won three; and “Django Unchained,” which won two, including best original screenplay for Quentin Tarantino. The evening was filled with surprises and contradictions, Alessandra Stanley writes, more because of host Seth MacFarlane than the awards themselves. Mr. MacFarlane, the creator of “Family Guy” and other animated television shows, crooned standards and carried himself like Fred Astaire while delivering crude jokes about Jews in Hollywood, women and even President Lincoln. Combined with too many fatuous award presentations, the broadcast became one of the longest and most self-conscious Oscar ceremonies ever. Dress choices were a bit more daring than usual, Eric Wilson reports. Sleeves were in short supply and straps might as well have been illegal. Anne Hathaway’s Miuccia Prada dress, which she chose at the last minute, stole the show.

Netflix’s new series, “House of Cards,” proves that the company is getting better at seeing the future, David Carr writes. Netflix’s streaming media service collects a huge amount of nuanced data from its 33 million customers, which helps shape its choice of television shows to license and which first-run programming to create. Data has always been crucial in creating programming, but some television executives worry that focusing too much on it will keep networks from pushing for innovative new content.

Barnes Noble’s e-reader the Nook may not be long for the increasingly-packed tablet market, Leslie Kaufman writes. The company announced that losses from its Nook media division in the third quarter of fiscal year 2013 will be greater than the year before, and that the unit’s revenue for all of 2013 would be far below projections of $3 billion. A person familiar with Barnes Noble’s strategy said that the quarter convinced the company to move away from manufacturing its own devices and bolster its online library. The pity is that the some of the latest Nooks were great e-readers, as this article by David Pogue shows.

The new food magazine Delish, published by Hearst and available only at Walmart stores, has proved a bright spot in the otherwise bleak retail magazine market, Stuart Elliott writes. While food magazines in general are performing better than many other categories, Delish’s success might be because of an interesting marketing scheme. Walmart customers who buy another Hearst magazine, like Country Living or Good Housekeeping, get a free copy of Delish.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/25/the-breakfast-meeting-nbc-ratings-tumble-and-twitter-hacking-can-undermine-brands/?partner=rss&emc=rss

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BP Earnings Fall on Lower Production and Higher Costs

February 5, 2013 by Leave a Comment

The British oil giant posted operating earnings, adjusted for one-time items and inventory changes, of $4 billion for the three months through December, down from $5 billion a year earlier but ahead of analysts’ prediction of $3.3 billion.

Net income profit for the full year was $17.6 billion, down 19 percent from $21.7 billion in 2011.

The results reflect the extensive restructuring of the company that was forced by the 2010 Gulf of Mexico disaster. On October 22, BP agreed to sell its 50 percent stake in its Russian affiliate, TNK-BP, for about $27.5 billion in cash and shares to the Russian oil company Rosneft. As a result, BP’s fourth-quarter results include only 21 days of earnings from TNK-BP, which accounted for about 25 percent of BP’s output.

BP also took $4.1 billion in additional write-offs for the Gulf spill in the quarter, bringing the total provisions taken by year-end to $42.2 billion. The write-offs mostly reflect a settlement of criminal charges with the U.S. Department of Justice in connection with the spill.

Bob Dudley, who succeeded Tony Hayward as chief executive in the summer of 2010, has been trying to use the need to raise cash to pay for the after-effects of the spill as an opportunity to create a leaner, more profitable company. Including the TNK-BP sale, BP has agreed to roughly $65 billion in asset sales since 2010.

Mr. Dudley said last autumn, before the TNK-BP sale, that BP had sold half of its producing upstream platforms and a third of its wells, while trimming production only about 9 percent and reserves 10 percent.

“We will continue to see the impact of this reshaping work in our reported results in 2013,” Mr. Dudley said in a statement Tuesday.

Stuart Joyner, an analyst at Investec in London, said it would “take awhile” for Mr. Dudley’s strategy to work. Mr. Dudley is “selling assets and investing in new assets,” Mr. Joyner said, and the new acquisitions will not have an immediate payoff.

Despite Mr. Dudley’s efforts, uncertainty from the aftermath of the oil spill lingers. BP still faces a civil trial in New Orleans in late February that could result in penalties of more than $20 billion, according to analysts estimates.

BP’s stock remains down about 30 percent from where it was before the April 2010 oil spill, though it has risen 9 percent this year.

On January 16 militants attacked a gas field part-owned by BP in Algeria. Four BP employees were killed in the deadly attack on the In Amenas gas plant. The company says it “remains committed to operating in Algeria.”

Article source: http://www.nytimes.com/2013/02/06/business/global/bp-earnings-fall-on-lower-production-and-higher-costs.html?partner=rss&emc=rss

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The Move Online Is Hurting Europe’s Music Retailers

January 21, 2013 by Leave a Comment

Employees of two HMV record stores in Limerick, Ireland, started sit-ins last week, demanding unpaid wages after the chain, based in Britain, filed for bankruptcy protection.

In France, workers at Virgin Megastore music and video shops went on strike this month after that chain, too, was declared insolvent and placed under a court-appointed administrator, threatening the stores with closure.

In Italy, workers at Fnac, which sells compact discs, DVDs, books and consumer electronics, took similar action last autumn after the Italian division of the French chain was sold to private equity investors, who are expected to shut stores and cut jobs.

Faced with the possible demise of a broad swath of its retail infrastructure for music, movies and other media, Europe is, in some ways, merely catching up with the United States — and with the technological and economic forces that have swept through the entertainment industry. Tower Records, the U.S. equivalent of HMV or Virgin Megastore, shut down in 2006, unable to compete with online retailers like Amazon.com and iTunes, from Apple, as well as digital pirates. Tower Records in Japan, which split from the U.S. company about 10 years ago, continues to operate.

But the threat to bricks-and-mortar shops selling music and movies is being seen as a broader economic and cultural calamity for Europe. Not only are thousands of jobs at stake; these chains, European owned, also play important roles in disseminating locally produced media. Waiting in the wings to replace them are mostly American-owned Internet giants, whose growing presence and smaller contributions to European fiscal coffers worry policy makers.

“The physical cultural businesses are threatened today because of the emergence of large online sites that completely avoid fair competition, since they do not pay the same taxes as others, being based outside France,” the French culture minister, Aurélie Filippetti, said in a radio interview with Europe 1.

In addition to the potential economic fallout, there is nostalgia. HMV, for example, is an iconic British retailer, in business since 1921, when the composer Edward Elgar attended the opening of the first shop in London. HMV stands for “His Master’s Voice,” the title of a painting by Francis Barraud that became the basis for a widely used music industry trademark, in which a dog is mesmerized by the sound emanating from a phonograph.

The owner of that first store, called the Gramophone Co., was a precursor to the British record company EMI, which recently passed into foreign hands when it was sold to Universal Music Group, controlled by the French media conglomerate Vivendi.

“People feel very emotional about all this. They feel very sad about it,” said Neil Saunders, an analyst at Conlumino, a retail consulting firm in London. “They say, ‘HMV is a part of my youth.’ And then you ask them when they last went into an HMV store, and they say, ‘Um, three years ago?”’

Digital music is making significant inroads in Europe, several years after it did so in the United States, where it already accounts for more than half the market. In Britain, digital outlets accounted for 32 percent of music industry revenue of $1.4 billion in 2011, according to the International Federation of the Phonographic Industry, up from 19 percent two years earlier.

Counting compact discs sold by Internet mail-order businesses like Amazon.com, as well as digital services like iTunes, online distribution accounted for 73.5 percent of music and video sales in Britain last year, according to Conlumino. That could rise to 90 percent by the end of 2015, the firm forecasts.

The problems at HMV, Virgin and Fnac have heightened the scrutiny of online retailers like Amazon, with politicians in France and Britain accusing the company of unfair competition because of the strategies it employs to reduce its taxes in Europe. Amazon routes its European sales through Luxembourg, where corporate taxes are lower than in France or Britain.

Article source: http://www.nytimes.com/2013/01/21/business/global/hitting-the-mute-switch-on-europes-music-retailers.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Regulators Provide $14 Billion Bailout for Bank of Moscow

July 2, 2011 by Leave a Comment

MOSCOW — Russian regulators said on Friday that they had averted the collapse of one of the largest Russian banks by providing a bailout package of 395 billion rubles to Bank of Moscow, suggesting the bank’s problems with bad loans were more severe than previously acknowledged.

The bailout, worth $14.15 billion, raised the specter of balance sheet problems at other Russian banks, which had a tendency during the recession to roll over loans to struggling companies, rather than force them into bankruptcy courts.

Officials, though, have tried to characterize Bank of Moscow’s portfolio of bad loans for real estate projects in the capital as a unique problem created by the former mayor of Moscow as he tried to keep politically connected developers afloat during the downturn.

The bailout, announced in a statement on the Russian central bank’s Web site, will provide Bank of Moscow a 10-year loan of 295 billion rubles from a government deposit insurance program at an interest rate of 0.51 percent. The plan calls for a state bank, VTB, which recently bought equity in Bank of Moscow, to contribute an additional 100 billion rubles.

“The following measures aim to achieve stability of Bank of Moscow operations,” the statement said.

Problems at Bank of Moscow are closely entangled with a power struggle in city government after President Dmitri A. Medvedev fired the long-serving mayor, Yuri M. Luzhkov, last autumn. The city government had owned 46.5 percent of the bank’s stock, while the bank was also a significant lender to a development company, Inteko, that was owned by Mr. Luzhkov’s wife, Yelena Baturina.

After Mr. Luzhkov’s removal, the authorities have been untangling those and other business relationships in the city’s highly lucrative real estate market. Until last year, Moscow had more retail real estate under development than any other city in Europe, trailed distantly by Paris.

The bank’s former chief executive, Andrey Borodin, is wanted by the Russian authorities for approving a $460 million loan that the police say ended up in the personal accounts of Ms. Baturina.

Ms. Baturina and Mr. Borodin are both living outside of Russia now, though Ms. Baturina has said her months-long absence is not out of concern about possible criminal prosecution.

VTB, which is majority-owned by the national government, bought the city government’s stake in Bank of Moscow for $3.5 billion in February. It is not clear why the state bank was not aware of the balance sheet problems at Bank of Moscow before the purchase.

Article source: http://www.nytimes.com/2011/07/02/business/global/02ruble.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,