Movies and Theaters - Lets make the Customer King and make more money

Posted May 28, 2005, 1:11 PM ET

15 weeks in a row. Thats how many weeks in a row that it looks like admissions to theaters for movies will down. Thats not a streak that theater owners are happy about and rightfully so.

The question of course is why ? Is it the quality of the movies ? Is it the number of quality movies ? Is it the availability of alternatives ? Could it be due to a resurgence of broadcast TV with American Idol, CSI, Desperate Housewives, Lost and Greys Anatomy bringing in record numbers of aggregate viewers ? Could it be that its becoming too easy to watch what we want to watch  at home because of VOD and PVRs in the home ? Are kids, a prime movie going audience staying at home to play video games or hang out online ?

Or could it be that the movie industry has oversold the opening weekend of a movie as “must see ” event to the point that the movie itself is more often a disappointment than an enjoyable reward ?

I dont know. Yet.

But hey, at least its a pleasure to not hear theater owners and the movie industry blame piracy as the cause of the attendance slide.

Lets take a look at this weekend. Memorial Day Weekend.

Madagascar, < BlogBuzz> a family film, and The Longest Yard,< BlogBuzz> what I call a Top 40 Film. Then there are some limited release films like A League of Ordinary Gentleman (from Magpictures) and BombTheSystem, but neither was released on more than 2 screens. Put another way, there are only two English language films opening on more than 2 screens this weekend !  Thats not a lot of movies to choose from if  I want to have something cool to talk about at lunch or around the water cooler at work on Monday.

Of course there are continuing runs of movies, 10 or so expensive films, distributed by the Major studios, and another 20 or so shown in limited release. Of those 12, they are usually split up 1/4  (Madagascar, Kicking & Screaming, etc) or so are for family, 1/2 for Top 40 (Unleashed, Longest Yard, House of Wax, Star Wars,  Monster in Law) and the rest  typically fall in the “I want an Academy Award for Something” category (The Interpreter, Crash, Kingdom of Heaven ) for those of us who hope to find a little bit of intellectual stimulation to go with our entertainment.  

So on any given night, for whatever category you feel like putting yourself into for that night, you only have 3 or 4 major movies, and unless you live in NY or LA, only 6 or so limited release movies to choose from. Is that enough to always have something that the full range of movie going public wants to see ?

Thats not many choices. Not many choices for kids 12 -20 who make up the most active film goers. Not many choices for the rest of the population that goes 1x or less per month.

Then you add the battle you go through of not wanting to fight the crowds and lines and long walk from your parking spot against not wanting to wait so long that you are one of 4 people in the theater when you see the movie , or have listened to everyone at work talk about the movie and spoil it for you.

When there are 40k DVD titles, all the TV shows and Movies we can capture on our PVRs and VOD and PPV, you have to really want to go to the movies .

Which is a very good thing. People really do want to go to the movies. As Jack Valenti eloquently described in a speech to theater owners “what you offer consumers is an epic viewing experience and an alluring social adventure they cannot duplicate in their homes – stadium seating, huge screens ripe with luminance, the sensuality of digital sound, unknown but enthusiastic companions of a single night – all responding to the skills of cinema artists who can make you laugh or cry or hold you in suspense. Even if families in the future are equipped with the latest home-theater magic, it’s just not the same as the emotional alchemy in a theater. ”

He is absolutely right. Going to the theaters is something that will never be replicated at home. However, unless we give movie goers a reason to go, they wont.

There are about 175 movies per year that gross $5mm or more.  Thats a little more than 3 per week. That aint enough. In a world of choice, we have to provide more , and better choices to every demographic who could be a theatrical customer.

What will it take for movie producers to produce more good movies and drive more theater admissions ?

There are a couple of issues in trying to get there and they are very straight forward.

First, movie producers need to maximize  revenue in every means possible while a film is top of mind. That means being able to sell DVDs, PPV, Pay TV and however else we can generate revenues under the umbrella of a single advertising push.  In other words, after spending tens of millions of dollars to get their attention, why not allow consumers to buy the movie how they want it, when they want it, where they want it ? That will give movie producers more revenue visibility and return and that will increase the number of movies they make.

Second, movie producers need to do a better job of defining the value of the theatrical experience. Regardless of when a consumer can see a movie, we have already defined the perceived value of waiting 4-6 months for a movie.  Basically, its $29.95 retail, $ 20 dollars at Amazon or less at Best Buy.  Then after a couple more months, the price is dropped further to $14.95 or less and a new and enhanced version is released to grab a hgher retail price from hardcore fans.

Why not price a DVD or the PPV at a significant premium for day and date delivery ? Its $29.95 retail if you want to wait 4 to 6 months. If you want to see it the same day its released in theaters, its $39.95 retail. Plus, if we are smart, we will provide a $10 or $15 mail in rebate against that price if you provide a ticketstub for the movie and a receipt for the PPV or DVD.

Not only does it expand the number of customers who can and will see the movie on opening night, but more importantly, it enhances the perceived value of going to the theater. 10 bucks to get out of the house, 40 bucks to stay home. Of course this wont make everyone happy. Some people will still think that both options are too expensive. No solution will make everyone happy, but it will expand the number of customers and the revenue base upon release.

The 3rd option is one that movie producers might not like, but needs to happen. Theater owners need to share in the backend of DVD sales and rentals. If the goal is to expand the revenue pie for every film, then as key partners in this effort, theater owners should benefit as well.  DVD revenues have already surpassed box office receipts by 2x or more, but at the same time, the number of DVD sales and rental per movie release is dropping versus previous years. Rather than stonewalling each other, everyone will make more money if producers and theater groups work together to increase the pie.

How many DVDs of a title could be sold in theater to viewers who just saw the movie ?

How much marketing support could come from DVD retailers and rental outlets to promote both the movie in theaters and for day and date availablity in their stores ?

How big an order would retailers and renters place that could be used to expand the marketing for the theatrical release ?

How much money will be saved by not having to invest in a 2nd wave of advertising for the DVD release ?

Would the net value of all the above be more than 1 pct in incremental revenue and cost savings ? And if it is, what  would be wrong with sharing 1 pct of DVD sales and rentals with theaters ?

 If the current box office is $9Billion dollars, and theater owners are netting just a few percentage points of that, then distributing 1 % of the estimated $ 15 Billion dollars of current year movie sales and rentals could plow a quick $ 150 million to the bottom line of theater groups.

It would not only increase theatre level cash flow significantly, but also push up the price of stocks of publicly owned theater groups. As an example, if a group owned 6k out of 36k national screens, 1/6 of $150 million could amount to $25mm dollars.  Using Regal Entertainment Group as an example, thats an extra 18 cents per share or double their income from last quarter. Thats nothing to sneeze at.

Of course all of this is easier said then done. I dont expect the major studios to jump up and down to do this. Nor do I expect Regal or any major theatrical group to take the lead.

I do expect 2929 Entertainment and HDNet Films to take the lead. We will tailor the movies we develop to fit Landmark Theaters customer base. We will work with theater ownership groups, retailers and rental outlets who want to try this experiment to develop programs that expand the pie and create more cash flow for everyone.

Im sure mistakes will be made along the way. Im sure that there will be surprises. Im sure we will have to do quite a bit of adjusting to make the program a win win for all involved.

So what ?

If it works, everyone , particularly consumers benefit.

If it doesnt, everyone calls me a dumbass, and we go back to doing it the way it was always done.

I can handle that.

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Some Support for the RIAA — A Music Tax

Posted May 22, 2005, 9:40 PM ET

I’m often hard on the RIAA. I don’t like the amount of political power they have in DC and at the state level. That said, I do believe in their right to  protect the intellectual property of their members.

There are laws in place that allow them to sue in civil court for damages. There are laws on the books that allow the government to pursue criminal charges. I don’t agree with all the elements of these laws, and I am absolutely against the introduction of any new laws, but the laws in place  are there and as such, the RIAA has the right to see them applied.

Music has value. Absolutely no question about it. Music sales are a source of income that its creators have every right to earn. It’s because of this value and the income opportunity that the RIAA’s members pay it what amounts to millions of dollars per year. It’s that money that has allowed the RIAA to file about 10,300 lawsuits since September 2003.

I have no problem with that at all.

Unfortunately, the payments by the RIAA member labels don’t pay for the entire expense of enforcing copyright law and processing RIAA lawsuits. For every law passed, there is a cost to get from concept to adoption. For every lawsuit filed, there is a cost to the municipality, state or federal district where the lawsuit is filed. Tax monies, whether they are  local, state or federal pay for those costs. As they should.

The missing link here is the source of the tax money.

We pay property taxes. We pay use taxes. We pay sales tax. We pay income taxes. Beyond taxes, we pay fees. We pay a fee for our drivers license, our passport, and I don’t know how many other fees that go from our bank accounts to every level of government. In exchange we get some level of service that enable our public servants to protect, honor and serve and to support our system.

I don’t like the idea that my tax money goes to subsidize the 10,300 lawsuits the RIAA has filed since Sept of 2003. How much money does it take from taxpayers to pay for the courts side of the lawsuits? I’m guessing, but with all the administrative people and lawyers involved, judges, their clerks, overhead, and who knows what else is involved. Is 20,000 dollars per lawsuit too high or too low? Could it be 100k dollars each? I don’t know.

At 20k per lawsuit in top to bottom court costs, that’s more than 200 MILLION DOLLARS in taxpayer money paying for copyright enforcement.

Then there of course is all the cost associated with the international efforts the RIAA has pushed  the government to support and fulfill. Who knows how many millions that adds up to.

Why are every day taxpayers having to foot this huge bill? It’s not like our government is running at a surplus. In the big wish list of unfunded liabilities our lawmakers have undertaken, I can think of a whole lot of things that fall above protecting music copyrights.

Unless of course, music copyright holders pay for that unfunded liability.

Which is exactly what should happen.

If copyright holders, of which I am one, want our copyrights protected to the full extent that our government can offer, we should be taxed for each one of our copyrights.  We should pay for those hundreds of millions of dollars in costs since we directly benefit from those services.

Somewhere there will hopefully be a smart politician who reads this and quickly introduces a copyright tax.

From where I sit there are two types of copyrights: Commercial and Non-Commercial. Those copyrights you as a creator think will make money, and those you think won’t.

For non-commercial works, works the creator wants protected and wants to retain the right to use, the courts in case of an infringement, charge them $100 per year.  Because this could be a lot of money for many artists, the tax could be structured so that the song doesn’t have to be registered and paid for 18 months. Remember, if you don’t pay, the only thing you are giving up is the right to register the work in a nataional database and to sue in civil court. So you can own and exploit the copyright forever without paying anything.

For commercial copyrights, charge the copyright OWNER $750 per year (RIAA President Sherman says direct copyright infringement carries a minimum penalty of $750 per work infringed) to retain the right to use the courts in case of infringement and to fund the actions of the government in criminal charges and international actions for the various types of copyright infringement.

(A note here, I’m sure there are a ton of legal issues here, but I’m sure there are lawyers who will offer the solutions via comments)

Both could be registered in a database and tracked much like we do patents.

At any point in time, a copyright owner could switch from one status to the other.

The fee is annual.

In the event that the fee is not paid for a period of 1 year, the work can become part of the creative commons license, you can offer it to the public domain, or you can just keep it and do with it as you see fit, but the work is not registered in the national database. As such, you relinquish the rights associated with being in the list, starting with the right to sue in civil courts for copyright infringement.

This works because it is based on a very simple concept. The RIAA thinks that $750 is what their members songs are worth for direct copyright infringement. If as a music copyright owner, you don’t think its worth $750 bucks a year, then it’s probably not really a commercial work.

A key reason why this has a chance of becoming reality, is not only because it raises the money necessary to fund protections against copyright infringement, but also because this could be the best thing that ever happened to musicians whose work is being buried inside a label’s vaults.

More than a millions commercial works are not owned by individuals, they are owned by music labels and other corporate entities. Most RIAA members. Having a $750 annual tax on a song could create a movement that would force the label to either monetize the song quickly, or return those it can’t or won’t monetize to its originator, or their designee. They can then chose how to define the work and which tax to pay.

After all, if a song isn’t worth $750 bucks a year, why should it benefit from the hundreds of millions of dollars in taxpayer money being spent to protect it?

With the 500mm dollars or more that could be raised annually, the RIAA, and every single taxpaying copyright owner would have every right to expect and demand that they receive the fullest protection of the law, but it wouldn’t be at the expense of more important taxpayer funded services.

I understand that this could make music more expensive. I would rather have more expensive music then either higher taxes or tax money being spent on copyright protection rather than more essential services.

That’s my story, and I’m sticking to it — at least till someone comes up with a better idea.

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Some Thoughts….

Posted May 21, 2005, 9:36 PM ET

There is nothing tougher than being in the locker room after losing in the playoffs, particularly this year. Every man on the roster knew we were capable of playing better than we did. We knew we gave them 3 games that we had won. In the locker room after the game, it all hits you at the same time.

There is nothing you can say to players with tears welling in their eyes or rolling down their cheeks. You can put your arm around them. You can tell them how much you care about them.

The players know just how fragile every part of their careers are. You just don’t know where things will go from here. There are any number of outside elements that impact the physical and business side of basketball, which makes a lost opportunity all the harder to deal with.

It hurts. It hurts that night. You can’t sleep. It hurts the next day. The only feeling that can I compare it to is the one you get breaking up with a girlfriend. Your emotions are tied up for 8 months in the season and when it’s over. It hurts.

The only saving grace is that I love the team we have and the direction our coach will take us. It still astounds me that we did as well as we did given that we not only changed coaches with 18 games to go in the regular season, but we also did 180 degree change in philosophy. Hopefully we will have a full summer to develop our young players and a full training camp under AJ. AJ is a great teacher and motivator. Training Camp and a full season will make us far better than we were this year.

At this point last year, I was concerned. We lost in the first round. We had multiple players who were asking to be traded. We had taken some chances in bringing in players, and it didn’t work out. Guys had played for themselves rather than for the team. It was a team that was going no where fast.

Our first move was to trade Antawn Jameson to get Devin Harris and Jerry Stackhouse. Antawn wanted to be a started on a team where he could have an impact. He is a first class guy and when Washington called with the offer of the #5 pick and Stack, it was a chance to keep our word to AJ, reduce our logjam at the Power Forward position and pick up a backup point guard in training for Steve.

Of course, pretty much the next day Nash decided to leave. At that point I was very concerned. I was concerned as to what our team would have looked like had Steve stayed, but I was even more concerned about life without Steve because we now had no idea what our team would look like at the beginning of the year. It was bad enough that I thought we had made a mistake by not lottery protecting the draft pick we had traded to get Pavel.

We had always expected Steve to stay. I had also given the mandate to Donnie that other than draft picks, our committed payroll (the amount of money that we owe in total to all players) would have to come down. We were able to save some money when we traded Antawn.

Walk (Antoine Walker) had asked to be moved. I had promised him we would do our best to accommodate him. Walk was always very professional with me. We had talked through the summer to that point. I kept him up to speed on the discussions going on, but made it clear that I wasn’t going to take back more salary. That if we could do a deal that was salary neutral with him and any other players, and that would help the team, we would do the deal. Unfortunately, to that point, we hadn’t received any offers that would meet those criteria.

I also was trying to keep my options open in case the chance to trade for Shaq could become a reality. In talking to the Lakers however, they made it clear there was zero chance of a trade with us. Front door, back door, with one, two, three other teams, it wasn’t going to happen.

As of Draft Day, our starting lineup was looking to be the exact same lineup as the one we had ended the previous season with — Nash, Finley, Marquis or Josh, Dirk and Antoine Walker.  On the bench we would have Eddie Najera, Shawn Bradley, Devin Harris, Stack and we knew that Danny Fortson would be turned into Calvin Booth.

One of the reasons we traded our pick to get Pavel on Draft Day was that we knew we didn’t have a great team, and that a big part of this season was going to be developing young players. We could make the playoffs, maybe do some damage there, but our biggest upside from this season would be in developing our young guns around Dirk, Steve and Fin and seeing where they could take us in the future.

Then Steve left for Phoenix. If we had questions about our team before he left, we had more after he left. We started to scramble. Our first order of business was to re-sign Marquis. Nellie liked to use him as a point guard, so it gave us some stability there.

After that, Donnie went to work. His first deal got us Jason Terry and Hendu from the Hawks for Tony Delk and Walk.

That gave us a point guard with experience and that had had individual, if not team success in the league. At that point, we honestly didn’t expect Hindu to play at all. He hadn’t played the year before due to back problems, and we expected to be able to collect insurance money on his contract. (Obviously it didn’t turn out that way, and Hindu more than paid for himself with his contributions this year). So at that point in time, the economics of that deal actually saved us money.

With the money that we had saved when Steve left, I could have just put the money in my pocket, and I seriously considered doing that.

Around that same period in time, I started having conversations with Avery Johnson about coming back as a player and then at some point after he retired, becoming a coach. I really wanted AJ here. He was the unsung hero of our 2002-3 playoff run. He ran practices and got in people’s faces when it needed to happen. When Portland ran off 3 straight against us, he was the voice in the locker room pushing the guys and the guys loved him and responded well to him.

Avery still wanted to play at that point, so we signed him to a 1 year deal as a player. He also told us that we should be going after Erick Dampier if we could work out a sign and trade with the Warriors.

The thing about a sign and trade is that it’s just that — a trade. I told Donnie that as long as we gave up enough salaries, plus what we saved from Nash, to be less than or equal to what we guaranteed Damp in his deal, I would give it my blessing. It took what seemed like months to work out, but we were able to trade basically Laettner (who we got in the Stack/Devin deal) and Eddie Najera for Damp and Evan Eschmeyer. We had stuck to our financial parameters, saved money and got to a point where we felt we had the nucleus to have a very good team. In fact, it was the first time we had what looked like a traditional team, with a post up center and 3 young perimeter players who were good and could be great defenders.

I need to also mention that although I was upset when Steve left, that was tempered because I was mad at how his agent handled the entire situation. Steve is a first class guy. Someone I think is amazing in so many ways on and off the court. His agent I don’t feel the same way about. (And for those who care about trivia, I would rather get beat by Steve, someone I like then someone I don’t think much of) 

What hurt far worse than Steve leaving for more money, was having to trade Eddie Najera. Free Agents leave of their own accord. When we trade someone, it’s usually not their choice. Eddie didn’t want to leave. He loved it with the Mavs and we loved having him here. He would be in and out of Nellie’s doghouse, but he always had a smile on his face and picked up the energy and spirits of everyone around him. He not only was a crowd favorite, he was a locker room favorite as well. It was not a fun day when the trade went down.

So that was how the team of 2004-5 was put together.

Unlike last year, this year ended completely differently. I’m proud of what we accomplished, on and off the court. To a man, every new player came up to me, and thanked me for bringing them into the organization. Guys thanked each other for a great year. Our young players continued to develop and will be even better next year. I think our veterans will thrive as they get more comfortable with Avery’s system.

It doesn’t take the hurt away from losing this year. But it sure makes it easier to look forward to next year

I want to bring up one more thing that I am incredibly proud of this team for. Starting with the first game of this season, Michael Finley asked that every player on the team put his hand over his heart during the National Anthem. Although we have players from around the world, every player, coach, trainer and throughout the organization, followed his lead as a sign of team unity and as a way of saying thank you, and did so every single game of the year.

I thought that other teams might follow our lead. I thought that the media might pick up on it and maybe even give us a hard time about it since we had players from around the world. None of the above happened, which made it all the better. It was something that was uniquely our Dallas Mavericks.

I have to tell you, that as owner of the Dallas Mavericks, win or lose, I started every game, with my hand over my heart, grateful for the opportunity to live in this great country and incredibly proud of every single person representing the Mavs on that court.

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Yahoo forces RIAA staff cutbacks…

Posted May 17, 2005, 12:10 AM ET

Ok, not yet. But they are coming. I promise.

Not that I ever want to see anyone lose their jobs, but it will be nice for music label employees to have all the subsidies they are paying the RIAA go to their artists. (Yes you were supposed to laugh at that one.)

As Barry Ritholz smartly pointed out in his blog, the introduction of Yahoo’s Music Unlimited Service sets the new marketvalue for all the music you can download in a month…5 bucks.

The RIAA can no longer claim that students who are downloading music are costing them thousands of dollars each. They can’t claim much of anything actually. In essence, Yahoo just turned possession of a controlled music substance into a misdemeanor. Payable by a $5 per month fine.

Of course, RIAA staffers won’t go quietly into the night. They will continue to scream loud and hard about evils of illegal downloading. The question is, will they move the money they are currently spending on court cases and filing suit, towards promoting the new subscription services that are available. Particularly Yahoo’s dirt cheap service.

Will they have the sense to say…”Ok kid, you are about to get sued, which will mean we both spend money on lawyers, and then we kick your butt in court and you pay a multi-thousand dollar settlement, OR, you can sign up for any of the all you can eat music subscriptions, Rhapsody, Napster or Yahoo Music. Your choice. 5 bucks a month. Or thousands of bucks.

Will the RIAA mitigate circumstances and turn their efforts toward promoting legal downloads, or will they still get their jollies from suing their customers?

And what about our favorite back pocket politician, Orrin “but Im a songwriter too” Hatch. What will he get on his knees for in order to get money from the music industry?  Could he possibly still get worked up and spend our hard earned taxpayer money for crimes whose total economic value is 5 bucks per month. (yes, you were supposed to laugh again.) Will he try to induce people to spend the 5 bucks, or will he still think its necessary to destory users PCs?

How about this Orrin, why don’t you introduce a Utah Loves Music bill, that requires every citizen of the lovely state of Utah (dont laugh here, it really is pretty), to pay a $5 per month music tax? You could negotiate a statewide discounted deal with Yahoo Music Unlimited, grab a few bucks off the top for yourself and the state, and you would have completely rid the entire state of Utah of illegal downloading!

By offering music so economically, Yahoo has changed how the RIAA should and can spread Piraphobia around the country. It should also change the perspective our politicians have about the subject as well. How can the Attorney General divert resources to save the music biz 5 bucks a pop? How can bills be proposed that try to save the music industry 5 bucks a month?

Of course it won’t happen in a straight line. There are RIAA jobs and political contributions to protect. And although the Yahoo and other sub services are not perfect, they will get continuously better and support more and more devices and have increasing flexibility.

This is the low point for subscription services. Which is a good thing. It’s going to get better and better every year.

Anyone want to show RIAA lawyers how to use Craigslist?

—See what the blogosphere is saying about Yahoo Music Service

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Blog Spam

Posted May 5, 2005, 11:49 AM ET

Of all the topics I thought I might cover in my blog, I never imagined that blog etiquette would be one of them. Yet here I am…

One of the beautiful things about blogging is that I can present ideas, concepts, situations or hypotheticals about anything and then open it up to comments. Often I have found the comments offered by readers to provide more value and insight than what I originally wrote. Sometimes they prove me right, sometimes they prove me wrong. Either is a value add to the original blog post.

One of the nuisances of running a blog is having to delete extraneous comments and spam.  Every blogging service is fighting commercial spam in its comments. We are getting better at excluding them.

Even the spam from the juvenile, the “you suck” or “eat shit and die” variety is manageable because it doesnt take that long to delete it.

This week was the first time I had to deal with “babba booey” (sp ?) spam from a website. For those who arent fans of Howard Stern’s radio show, his fans would often call other talk shows or live events and spit out the now infamous line to the host. A nuisance for sure, but not much more.

This week on the ESPN.com Page 2 column, Eric Neel decided to do a parody of what a David Stern blog might contain. No question that it was a fun premise.  Unfortunately, part of his article suggested that the readers come over to blogmaverick.com and post the comment “nice hair” on every post.

And they did.

I spent hours deleting posts from the idiots that took what he wrote literally. Great threads were pushed aside and filled with this spam.

Collateral damage and just the cost of writing a blog? Sure. Avoidable, yes. Especially from a major media organization like ESPN.

I expect the Naked Short idiots to flame the site when I write something they don’t agree with. I expect Republican and Democratic swarms from zealot websites to spam the site when I write something they don’t agree with. Thats part of the deal. Cleaning them up is part of the expectation when I write the post.

What I never expected was that a Howard Stern moment would come from the Disney Company. That a call to spam would come from one of the largest media companies in the world. The last thing the blogosphere needs is one outlet trying to diminish the voice of another by initiating an avalanche of spam.

I don’t think Eric Neel was trying to do anything nefarious or intended to flood blogmaverick with spam, however that’s exactly what happened.

The lesson learned is that we as a medium need to  set some groundrules on comment spam.

For commercial blog hosting sites like weblogsinc, livejournal, blogspot , or other portal offered sites, one of the terms of service should preclude spamming or spam promotion.

For media or corporate websites, it should be an editorial common sense.

Otherwise, we might find ourselves sliding down a slippery slope that ends up silencing what some might think is the most valuable part of a blog — user comments.

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1 Point for Sports Media

Posted May 3, 2005, 7:18 PM ET

It’s no shock to anyone who reads this blog that I’m not a big fan of some in sports media. I have a particular aversion to those who just make things up and try to pass them off as “factpinions” — knowingly wrong information presented by columnists hiding behind the facade of it “just being opinion”.

Sam Smith is the all time worse offender, but there was a recent new addition to the list Mike Celizic of MSNBC.com

Celizic wrote a column saying I turned down a deal for Shaq. Anyone who listened to any of the 100 interviews I did on the topic this summer knew that we tried, but there never was a deal discussed — Ever. I asked if they would consider trading Shaq to us, the Lakers  said they didn’t have an interest. End of story.

I wrote an email to Celizic and we had a back and forth where he said it was purely opinion on his part . It certainly didn’t read like opinion and there were plenty of people emailing me who thought it was a factual report rather than opinion, so I wasn’t the only one who thought it could be misleading.

So, I wrote an email to Celizics editor, and wonder of wonder he responded. Not only did he respond, but he told Celizic to run verbatim the email thread that occured between us in his blog and that they would publicize the correction as much as the original article.

A big thumbs up to Danny an editor at MSNBC.com for recognizing what happened and using  internet media the way it should be used.

Thanks Danny. I’m so impressed, I’m linking to MSNBC.com and what’s his names blog and article rather than reposting it all here!

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Enron - The Smartest Guys In the Room - Here we go!

Posted Apr 27, 2005, 8:28 PM ET

Im proud to say that HDNet Film’s first effort, Enron - The Smartest Guys in the Room expands around the country starting this friday, April 29th.

If you have missed the reviews, they have been amazing.

  “Should be essential viewing.”— John Anderson, NEWSDAY

  “The picture it paints is scarier than anything offered by any of Hollywood’s recycled gore-fests.”— James Berardinelli, REELVIEWS

  “A thorough­ly fascinating — and horrifying — documentary about the giant corporate house of cards that came crashing down on the heads of all the little people while the big guys cashed out for mega-millions­, smirking all the way.”— Jami Bernard, NEW YORK DAILY NEWS

  “The Smartest Guys in the Room lays bare, in funny and shocking video clips, the culture of arrogance at Enron.”— Owen Gleiberman, ENTERTAINMENT WEEKLY

  “Enron: The Smartest Guys in the Room is not only a great cautionary tale, it’s a civics lesson that should be seen by every concerned citizen.”— James Greenberg, HOLLYWOOD REPORTER

”Less corporate noir than capitalist disaster film.”— J. Hoberman, VILLAGE VOICE

”By turns amazing, amusing and appalling.”— Joe Leydon, VARIETY

  “This cinematic scrutiny of runaway corporate greed reveals the nightmarish rapaciousness of those who engineered the fraud.”— Claudia Puig, USA TODAY

  “This is a brilliantly executed, brutally entertaining dissection of what one observer called the greatest corporate fraud in American history.”— Richard Roeper, EBERT & ROEPER

  “This sober, informative chronicle of the biggest business scandal of the decade is almost indecently entertaining.”— A.O. Scott, NEW YORK TIMES

  “The story is fascinating, infuriating and even laugh-out-loud funny at times.” — Russell Scott Smith, NEW YORK POST

  “Alex Gibney’s riveting documentary is a rape story, with the public trust as the victim.”
— Peter Travers, ROLLING STONE

The buzz continues to build. The blogosphere has been talking it up as well. As is the case in the blogworld, they are even starting to create a little bit of controversy. In a Q^A  session this week at the San Fran Film Festival, Alex Gibney the Director of the film said  that CNBC claimed to have erased all of their footage involving Enron. It will be interesting to find out if everyone is on the same page there.

For those outside of Houston and NY, the movie opens comes to a theater near you starting April 29th. In Houston, it continues at the River Oaks and in NYC at the Sunshine and Lincoln Plaza.

April 29th… Please check it out and let me know what you think about it!

Finally, here is a note from Director Alex Gibney about the movie:

Even though the story of Enron is a great human tragedy, I hope it makes you laugh.

The fact is that, from a distant perspective, the events are funny. An executive addicted to strippers, accountants making up the numbers, our most prestigious banks handing out deals to criminals that they would never consider giving to honest working people, a body-builder taking charge of California - the world’s 7th largest economy - because his political allies shut the lights off all over the state.  There are skits - skits! - by Enron execs about the scams they pulled. And while the company is going down the tubes, the CEO stresses over fabric swatches for the G5 jet.

Yet, as the music makes clear, this is a black comedy, where every laugh has an undertow of moral outrage.  As Tom Waits sings in the final song: “Who are the ones we kept in charge? Killers, thieves and lawyers. God’s away…God’s away…God’s away… on business!”

At the end of the day, I hope that watching the film makes you as angry as it made me when I was making it. This is the cinema vérité version of the Titanic: a few people sailed off in gilt-edged lifeboats while everyone else drowned.  (Again, Tom Waits - and his co-writer Kathleen Brennan: “There’s a leak, there’s a leak in the boiler room…”) But unlike the Titanic, the fault for Enron’s collapse is not limited to a few executives. As the film shows, our major investment banks, our accounting firms, our lawyers - indeed the very government that is supposed to protect us - all aided and abetted Enron in doing what it did.

Enron’s slogan on its surrealistic ads was “Ask Why.” It was supposed to suggest that Enron was an innovative company because it questioned conventional wisdom. Looking back, I think “ask why” was one of those clues that master criminals leave for detectives. “Ask why,” Enron’s earnings were so good when so little cash was coming in the door.  But now, way beyond that, we should all “ask why” such a thing could have happened.

I hope you enjoy the film. I hope you laugh and I hope it makes you mad as hell.

—Alex Gibney 

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Shutting off Analog TV, The transition to Digital - It’s Time

Posted Apr 24, 2005, 2:35 PM ET

I have a vested interested in seeing HDTV take off. Every new HDTV set sold is another reason for someone to subscribe to HDNet and HDNet Movies. But sales of HDTVs don’t really need much help. They are flying off the shelves. The CEA says that digital TVs account for more than 25 pct of TVs sold this year and that percentage is growing.  Some are even predicting that digital will outsell analog in 2005! As prices decline further and further, analog TVs will continue to disappear from retail shelves and HDTV sales will continue to boom.  So on this end I’m covered.

I also have a vested interested in seeing the adoption of HDTV not happening too quickly. The fact that it has taken all these years to get this far is a beautiful thing. The conventional wisdom among cable networks is that the market of HDTV consumers is still too small for them to cost justify investing in new content, equipment and distribution, which for the biggest network conglomerates will reach hundreds of millions of dollars in conversion costs, incremental equipment and distribution costs. The bigger the perceived cost for them, the slower they move,  the less the competition for HDNet and HDNet Movies.

This headstart has allowed, and will continue to allow us to release groundbreaking programs and events like the day and date premiere of Enron The Smartest Guys in the Room  on HDNet Movies and in theaters. (we are ramping up to do this quarterly, then monthly!)

To take chances like broadcasting live from the Iraq Elections, The Vatican and The Middle East.  To be way ahead of the curve with our sports, news and entertainment programming. The more time, the further ahead we will be when the transition finally takes place.

However, I also have a vested interest as an American citizen to see the analog spectrum occupied by regular TV returned to the government so that it may be resold. Heck, our budge deficit needs every penny it can get, and billions from an analog spectrum sale can’t hurt .

The spectrum can also be used for far better applications than regular analog TV. From military to high speed data applications, it won’t take much to accomplish more. Plus, its not like free over the air TV is going away, it’s just being replaced by over the air free digital TV signals.

The argument against replaceing the over the air  analog TV signal with an over the air, free digital signal, to return the spectrum has been two fold.

First, there are 10s of millions of TV sets that still get TV from over the air analog signals. Most are 2nd, 3rd, 4th sets in homes. In some places however, like here in Dallas, the percentage of homes that receive their primary TV signal over the air in analog, can be as high as 40 pct. The question is, how are these people made happy when their over the air analog signal is turned off and they are forced to get some form of equipment that enables their TVs to receive an over the air digital signal. After all, in the USA, TV is as much a right as the First Amendment.

Which leads to the 2nd argument against.

Politicians want to be re-elected. If mom and dad, or grandma and grandpa can’t get their TV, or are confused about how the whole thing will work, then they will be up in arms and we will see more political activism against candidates than we have seen since the 1960s…

So of course politicians are afraid of the entire issue with just a few exceptions. Rep Barton of Texas has attempted to take the lead on forcing this issue forward. Rep Barton wants to set a date of Dec 31st 2006 as the cutoff date.  And he is right. That should be the date.

That cut off date provides plenty of time for everything that is going to happen to enable the transition to happen. From reading and hearing all the debate, and I won’t rehash all the issues here, I think there are several points that will ease the transition that have not been discussed.

Here they are:

1. The minute a date is set, everyone and anyone who can make money selling their product and service to the estimated 20 pct of the American population who gets their analog TV over the air is going to start selling like it was their last chance.

a. There will be a price war between cable, satellite and telco video providers to reach those 20mm homes. I would expect that  we will see deals like ”$1 to get your entire home ready for the digital conversion”. Instead of a free DVR, they will bundle in STBs for everyhome in the house. No video provider wants to lose out on the chance to convert  those 20mm to customers.

b. The explosion in subs for all the video providers will also provide for an explosion in stock prices for all of them. Sure their customer acquisition costs will go up, but they will also see an explosion in digital subs. The stock market will ignore the costs as 1 time and extrapolate the digital opportunities per new sub and stock prices will rocket up.

c. There will also be a price war among TV manufacturers. This will be a once in a lifetime opportunity for them to blow product out the door. They won’t miss out on the chance. Like the video providers, they will advertise unbelieveable pricing specials and instead of offering promotion dollars for things like sound systems and recliners that we often see at retail, we can expect to see trade in programs for analog sets and even bundling of analog to digital convertors.

If there is a risk to the 12/31/06 date, its that manufacturers can’t ramp up fast enough to handle the demand and to gain volume efficiencies on sets. If they do have enough time, look for this to be the push that sends Plasma and LCD sets far below 1k dollars for a 42”HDTV set.

d. From a government perspective, there won’t be near the need for subsidies that most fear. The subsidies will come from the video and TV providers in the form of customer acquisition investments in set top boxes and promotional bundles of analog to digitial convertors.

e. The biggest winner in the transition will be anyone who sells advertising. The amount of money spent by interested parties to educate, confuse, market, brand and gain customers could dwarf what is spent on a Presidential election because the stakes are higher. There arent many situations where 20mm new customers are pushed to buy something by a deadline.

If the big media companies want to see their stocks go up in 2006, seeing that this bill passes is the one way to do it.

2. Finally, the last big gain from the analog to digital transition will be the bandwidth freed up on cable networks. Once MSOs don’t have to provide bandwidth for analog cable tv networks at 38mbs each, that bandwidth can be freed up and used for other services, from HDTV to VOD to High Speed data. It could be the impetus for download speeds to finally get far higher than where they are now.

It’s time for the analog to digital transition. Let’s support Rep Barton in his plans. We all stand to gain.

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The Naked Shorts Get Some Clothes

Posted Apr 16, 2005, 8:46 PM ET

I’ve had a blast watching all the commentaries from the “Naked Shorts are the end of the world” cult. Bob ‘O Brien and his buddies have done an admirable job of bringing attention to a problem that doesn’t exist by continually shouting the same slogans over and over again. Loud enough that I, along with others, opened our windows to see what the racket was.

As I have written in previous blog entries, the racket was about a whole lot of nothing. Well, apparently, the SEC heard the racket as well. This past week the SEC issued an FAQ about Reg Sho, Short Sales and Fails to Deliver.

It does a good job of explaining what Reg Sho is and isn’t, how short sales and fail to delivers are handled, and most interesting to me, and previously unbeknowst to me, lets us all know that Long Sales that are not delivered also qualify for the list.

How could that work? Let’s say you are a long in Overstock.com and you decide that you don’t want to own the stock anymore. You give your broker a sell order. It’s quite possible, and even likely that there are already short sellers who have borrowed that stock and shorted it. As a result, your broker doesn’t currently have a locate on shares of stock to sell. If enough people are selling Overstock.com shares, it could create a situation where the long sales cause Overstock.com to appear on the Reg Sho list.

This is completely the opposite of what the Naked Short cult would have you believe.

Hopefully this will shut them all of up.

And remember, rule of thumb #1 — If the CEO of a company that you own stock of screams about short sellers hurting the price of the stock. Sell the stock. Fast.

And give serious consideration to shorting the stock.

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The end of an era - The Desktop PC

Posted Apr 13, 2005, 3:10 PM ET

Back in the day, it was all about the desktop PC. Starting with the Altair in the 70s and accelerating with the IBM PC in 1981, the desktop PC was the focus of personal computing innovation.

Used to be all the good stuff started as an add on for the PC and found its way on to the motherboard. It was an all too predictable obsolesence curve. Remember the AST 6 Pack, Hercules Graphics Cards, 3com Network Cards, US Robotics Modems? When you bought a PC, you used to have to buy all these cards to make it get where you wanted it to go. How many slots the PC had was actually an issue because any power or corporate user expected to add features via cards.  There was even a time when it seemed like a good idea to try to upgrade the CPU.

All those features migrated from seperate cards down to the motherboard. Hercules Graphics. Gone. AST. Gone. There is a long list of casualties over the years of companies who made good money for a short period of time selling products that soon would become part of the PC Motherboard.

The PC Desktop used to be a happening place. It was fun to read PC Week, PC Mag, Computer Reseller News, Infoworld and other publications that would speculate about the latest and greatest products coming to a PC near you.

Not any more. Could the PC desktop be any more boring these days? Could it be any more emblematic of a mature product?

Sure, HP, Dell, IBM, Gateway are trying to liven it up. The hard drives are bigger and faster. THere is more memory. The graphics cards can do more. The industry tried to juice the PC by coming up with a faster, better express slot on the motherboard, but next to nobody is even using it!

About the only thing even resembling anything fun is coming from Modders.  Typically gamers who are putting flames on funky case designs and bumping processor speeds.  The PC desktop has gotten to the point where kids turbocharge the old family PC rather than throw it away like kids used to turbocharge the old car in the garage.

The desktop is boring.

All the fun is happening with portable devices. Phones, Ipods, gaming consoles, PDAs, digital cameras, even hard drives and flash drives. All the good stuff is coming in small packages.

Remember the frustration of shopping for a PC in the 90s. Every couple months the PC would have something new and cool in it, and the price would drop. It was tough to know what to buy and whether you should do it now or wait.

That’s exactly what is happening in the portable.mobile device market. My Ipod, My Sidekick, my hard drives,my PSP, my Xbox even my laptop all have overlapping features. Each is getting closer to each other in feature set every day.

Which means that the war for my pocket is on. Which is going to allow me to only fill one pocket rather than the 2, or 1 plus beltclip that I’m filling now.

It’s a fun time for portable.mobile devices. It’s the 80s and 90s for desktops all over again. Every time I go into CompUSA or Best Buy to see what new stuff is on the shelves that I can play with, every phone has a new feature. Every hard drive is smaller, cheaper, faster. Every PDA has new features and software.

The implications of this transition are huge. Particularly for the retail world. Right now most new technology is sold in big stores. Lots of room for monitors. Lots of room for desktops. But those are the stagnant products.

All the good stuff is small. All the traffic generators are small. Which means that we could see big changes in how retail stores are merchandised and in the size of future retail stores.

It won’t take much square footage to show every possible cellphone, PDA, console, portable hard drive and attachable device. About the only ”big” product that will need to be there are HDTVs.

Better yet, all of those devices, including the HDTVs are purely digital and consume and store or playback digital content. For under 20k dollars in storage (and falling in price every day), it’s feasible to store EVERY digital product and offer it for sale.

Even more interesting is the fact that we are used to buying service agreements with these devices. Our phones, our PDAs, we want phone service and more and more often, broadband service with it as well.  We don’t buy them, we subscribe to them.

That can be a problem in a world where new features are appearing every 3 to 6 months, but we can’t trade out our devices for 12 to 24 months. Service Contracts will have to be more flexible, or they can impact the success of the very products and services they are trying to sell

We are entering a golden age of features in portable devices that will far exceed the fun we had with desktop PCs.  The quick rate of change in these products and how they are sold, will completelty alter both how the products are sold, and how we expect to buy them.

Finally, if you are expecting new and exciting features from your PC Desktop…forgettaboutit!

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Previous Entries

 » Blog Searching on IceRocket.com
    Apr 9, 2005, 3:43 PM ET
 » The countdown for the extinction of CDs is about to begin
    Apr 4, 2005, 3:56 PM ET
 » Let’s test the RIAA logic…
    Mar 29, 2005, 9:18 PM ET
 » Let the truth be told…MGM vs Grokster
    Mar 26, 2005, 7:29 PM ET
 » I support Mike Davis
    Mar 18, 2005, 1:49 PM ET
 » An NBA fun Fact
    Mar 15, 2005, 11:32 AM ET
 » The Sport of Business
    Mar 12, 2005, 12:58 PM ET
 » Naked Shorting - Is a politician being used?
    Mar 10, 2005, 12:43 PM ET
 » My positions in the Market
    Mar 9, 2005, 11:48 AM ET
 » ABC should suspend Jim Gray until he apologizes
    Mar 7, 2005, 3:42 PM ET
 » I think I have a favorite Sportswriter
    Mar 2, 2005, 2:17 PM ET
 » Naked Shorts… What I have learned
    Mar 2, 2005, 1:00 AM ET
 » Nake Shorts… Part 2many
    Feb 28, 2005, 4:39 PM ET
 » I feel so dirty…Naked Shorts
    Feb 26, 2005, 4:12 PM ET
 » A Note to the FCC - Call their bluff…
    Feb 22, 2005, 3:09 PM ET
 » How to Lose 1 Billion Dollars
    Feb 18, 2005, 9:50 AM ET
 » Political Bloggers - the new paparazzi
    Feb 14, 2005, 11:14 PM ET
 » It all equals out in the end…Not
    Feb 12, 2005, 5:45 PM ET
 » MGM Grokster Thoughts Part 2 - Tech, SCUSA & Rock n Roll
    Feb 2, 2005, 11:59 AM ET
 » Need a Job?
    Feb 2, 2005, 2:23 AM ET
 » Grokster and the financial future of America
    Jan 31, 2005, 12:37 AM ET