[Analysis]'Entertainment industry is recession-proof'

http://economictimes.indiatimes.com/entertainment-industry-is-recession-proof/articleshow/3856935.cms

Entertainment business generally does well during a downturn. Even this time, the so-called recession-proof industry appears to be doing just fine. Ajay Bijli, chairman and managing director of PVR Ltd, discusses with ET the impact of economic slowdown and credit crunch on the multiplex industry. 

What is the impact of the slowdown on the entertainment industry? 

I, like some of my peers in the industry, hold the view that the entertainment industry is largely recession proof. It is mostly dependent on the supply of good content. At the beginning of the year, during the Indian Premier League (IPL), production houses delayed releasing their movies, that was when footfalls in multiplexes witnessed a drop. Again during the terror attacks in different cities, movie buffs didn't feel safe enough to go to multiplexes. But in the last few months it has become clear that whenever good movies have been released, movie buffs have come to the multiplexes. The recent release Rab Ne Bana De Jodi is a case in point. 

I think it's not economic slowdown that has affected sales of tickets, it is the quality of content which governs footfalls generated in the multiplex. Fortunately, India is still a growth story and to a certain extent the slowdown is more psychological than real. Hence, I do not see the slowdown, as I would like to call it, having any impact on the entertainment industry. I believe that the Indian entertainment industry will continue to grow in healthy double digits. 

But has the slowdown affected the multiplex growth plans and the deals that are struck between real estate developers and multiplex operators? 

There have been instances in recent times where some multiplex players have walked out of deals that they struck with real estate players for an amount which was not economically feasible for them anymore. This has, in fact, led to a correction in rentals. As far as PVR is concerned, we have accelerated our pace and are now seriously looking at markets and opportunities, which were unaffordable earlier. Newer formats such as revenue-sharing with developers are also in the offing. I'm sure if mall construction is delayed, multiplex expansion plans could be delayed as well. So it all depends on how adversely affected the real estate developer is with whom one has an agreement. 

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[News-THR] Hollywood Conglomerates Gear Up for Quarterly Earnings Reports

With big entertainment stocks having declined early in 2014, investors are looking for fourth-quarter earnings season for Hollywood conglomerates to help shed a light on the state of TV advertising trends, which underperformed for some big sector players late last year.

And companies' outlook for 2014 will also be in the spotlight early in the year, with some analysts also expecting conference call questions about possible pay TV consolidation amid continued chatter about a possible combination of Charter Communications and Time Warner Cable.

"The first time in recent memory, some media executives, blaming softer scatter and weak ratings trends, publicly talked down fourth-quarter advertising expectations," MoffettNathanson analyst Michael Nathanson said in a recent preview. "While these comments were made back at an investor conference in December, it seems the market only started paying attention when the calendars turned to 2014…Year-to-date, we have seen sharp losses at many of the mostly cable-network centric names that are impacted by both poor ratings and weak scatter demand."

PHOTOS: Sun Valley Scene: Rupert Murdoch, Brian Roberts, Brian Grazer Arrive at Allen & Co. Retreat

Among other big Hollywood stocks, CBS Corp.'s stock closed 2013 at $63.74, but finished Monday's trading session at $58.18. Time Warner shares are down from $69.72 to $62.88. And Walt Disney's stock over the same period went from $76.40 to $72.25.

UBS analyst John Janedis recently lowered his fourth-quarter TV network unit ad forecasts for the likes of 21st Century Fox, Time Warner and Viacom.

"Early first-quarter scatter volumes appear to have picked up, with [ad prices] unchanged, up in the mid single digits versus the upfront," Janedis said in his earnings season preview. "The tone feels better, but we expect the Olympics to have a…drag on first-quarter ad growth."

Nathanson echoed that, suggesting big entertainment stocks may remain under pressure near-term. "We think that first-quarter advertising and ratings trends could be negatively impacted by the Winter Olympics on NBC, which should gain share of viewers and dollars," he wrote. "As such, the near-term downward slide in media valuations could likely continue until earnings revision trends improve. Fourth-quarter results will likely not provide that relief."

Here is a quick look at key trends expected to shape the latest earnings reports of big Hollywood companies.

NBCUniversal
NBCUniversal owner Comcast on Tuesday morning will open the quarterly earnings season for Hollywood conglomerates.

Macquarie Securities analyst Amy Yong predicts quarterly broadcast and cable networks operating cash flow to rise slightly. But USA and Syfy ratings declined 23 percent and 4 percent year-over-year, respectively.

Meanwhile, film should see higher revenue, but lower cash flow. Lone Survivorand The Best Man Holiday have been among the unit's key recent releases.

Viacom
MTV and Paramount Pictures owner Viacom will report its latest quarterly financials on Thursday.

Guggenheim Securities analyst Michael Morris recently lowered his U.S. ad revenue growth forecast for the company's latest quarter to 4 percent from 5 percent "due to modestly lower demand and weaker ratings, primarily at MTV." But he raised his international ad forecast to 8 percent from 5 percent, saying he believes that "ad demand at European networks continues to improve."

Overall, that will allow the company to post results in line with Wall Street expectations and its own guidance.

Morris also raised his film unit revenue forecast for the latest quarter "to reflect the solid theatrical results of Anchorman 2 and The Wolf of Wall Street."

Time Warner
Time Warner will continue earnings season for big entertainment companies early on Feb. 5.

The firm's film unit results are expected to be strong thanks to the box-office performance of Gravity and The Hobbit: The Desolation of Smaug.

A new Batman video game will also boost the quarterly profit at the film unit, which is expected to post one of its biggest quarters ever. That could also have boosted Warner Bros. to have its most profitable year ever, management has said.

"We see a combination of a softer scatter market and weaker ratings – CNN down as expected given political comps, but TNT, Cartoon, and TruTV also down," Morris predicted for the fourth-quarter TV networks unit. He recently lowered his TV networks U.S. ad growth forecast for the latest quarter from 5 percent to 2 percent.

"Management’s 2014 outlook will be key to the fourth-quarter earnings call," said Morris. "With the Time Inc. spin-off still on track for 2014, we anticipate an outlook to focus on networks (we expect high-single-digit affiliate revenue and program cost growth) and film (2014 operating profit similar to 2013)."

Walt Disney
Walt Disney's latest earnings report is scheduled to take place after the market close on Feb. 5.

And film results are expected to be strong. Cowen analyst Doug Creutz on Monday increased his film unit profit forecast for the latest quarter, "primarily reflecting an upward revision to our studio entertainment segment estimates, driven by the strong box office performances turned in by Frozen and Thor: The Dark World."

Echoed Morris: "We expect the studio to be strong, while networks could see a timing benefit from lower revenue deferral."

Stifel, Nicolaus analyst Drew Crum predicts that cable networks revenue growth and unchanged broadcast unit revenue along with the shutdown of ESPN UK will help drive overall media networks higher for the quarter.

21st Century Fox
Rupert Murdoch's 21st Century Fox is set to unveil its latest financials on Feb. 6.

Higher programming spending for new cable networks, such as Fox Sports 1 and FXX, will be a drag on cable networks unit profitability growth, according to Nathanson. That will mean a gain of only 1 percent despite solid advertising and affiliate fee revenue growth.

Higher expenses will also mostly offset advertising revenue growth in the broadcast TV segment, with the analyst now projecting a bigger film unit drop than previously.

Said Nathanson in a recent report: "We are reducing our film profits given the disappointing performance from Walking With Dinosaurs and The Secret Life of Walter Mitty."

CBS Corp. 
Quarterly earnings season for entertainment conglomerates will wrap up with CBS Corp. on Feb. 12.

Evercore Partners analyst Alan Gould recently reduced his quarterly earnings forecast, raising his corporate expense estimate due to the upcoming separation of the CBS Outdoor business IPO costs and reducing his entertainment and cable networks profit expectations.

"We expect fourth-quarter network advertising revenue growth of 4.4 percent, with local TV station advertising revenue down 10 percent due to tough political comparisons," predicts ISI Media analyst Vijay Jayant.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai

［news-Vancuversun]Spielberg was wrong: Hollywood comes back from the dead

Spielberg was wrong: Hollywood comes back from the dead

When Steven Spielberg warned in June that Hollywood was facing a “meltdown” amid a series of major flops, it looked like 2013 would be a dismal year for the movie industry and its biggest stars.

Speaking to students at the University of Southern California, the director of Jaws, Raiders of the Lost Ark and Schindler’s List spoke somewhat apocalyptically about an impending “implosion” with “mega-budget movies crashing into the ground”.

But it seems the man who in many ways shaped the modern blockbuster may have been too hasty. Six months later, Hollywood expects a record year at the box office.

“The summer had a lot of high-profile big-budget flops that didn’t live up to expectations, but when you look at the bottom line it’s still a record breaker,” said Paul Dergarabedian, a Hollywood box office analyst.

“The Hobbit: The Desolation of Smaug was an important one. There was really bad weather on the east coast, but it still did over $70 million in its opening weekend.”

When Spielberg spoke, Hollywood was in the midst of an unprecedented crisis as six films each with a production budget of over $100 million fell flat in as many weeks.

The highest profile casualty was The Lone Ranger which cost $250 million to make, plus a huge marketing budget. It lost the Disney studio up to $190 million and critics savaged the performance of Johnny Depp, the previously bankable actor. Another A-list star, Will Smith, also failed with the science fiction epic After Earth, prompting the Wall Street Journal to ask if the actor had “undergone a radical charisma-ectomy”.

The disastrous reception appeared to undermine Hollywood studios’ “tent pole” strategy of pouring most of their resources into a small number of would-be summer blockbusters.

“There was a lot of attention this summer given to blockbusters failing and pulling Hollywood down,” said Patrick Corcoran, the director of media and research at the National Association of Theater Owners.

“There were movies not playing well. But while that was happening we had five straight weeks taking over $300 million, which has never happened before.”

That was down to unheralded films such as The Conjuring, a horror story, which cost $20 million and had no big name stars, but gained popularity through word of mouth and social networking.

Corcoran said: “It showed people are willing to go to the movies if you give them something good to see.”

He added that November had been “huge” with two films — The Hunger Games: Catching Fire and the animated Frozen, becoming the two biggest Thanksgiving releases ever.

The annual box office record in North America, set last year, was $10.772 billion. It may fall to the Christmas release, Saving Mr. Banks, starring Emma Thompson as P L Travers, author of Mary Poppins, to push Hollywood to new heights.

Dergarabedian said: “We’re in a horse race but I think we’re going to wind up exceeding $10.8 billion. There’s so many cool movies out there - 12 Years a Slave, Dallas Buyers Club, American Hustle, Saving Mr. Banks — that’s why you get great box office.”

[News-The Economists] Cinema economics: Bigger on the inside

慘慘慘，電影院持續衰退，終至轉型（這裡說是變成電玩間或餐廳），應該很快就會被看到了。

http://www.economist.com/news/business/21590931-now-showing-your-local-cinema-operas-circuses-and-television-shows-bigger-inside

Cinema economics: Bigger on the inside

Nov 30th 2013 | NEW YORK | From the print edition

“WHOVIANS” habitually sit on the sofa—or hide behind it—to watch their favourite time-traveller battle Daleks, Cybermen, Zygons and other monsters. But on November 23rd thousands of them, all around the world, settled into cinema seats to see “Doctor Who” in 3D. The 50th-anniversary episode of the British television show was screened on 800 big screens in 20 countries at the same time as being broadcast on the BBC’s channels.

[News] 紐西蘭退稅迎阿凡達

紐西蘭政府以退稅招來Fox Entertainment和J. Cameron，條件是簽署長期合作與本地製作投資協定。

New 'Avatar' Trilogy to Be Filmed in New Zealand
5:22 PM PST 12/15/2013 by Pip Bulbeck

New Zealand is set to move from being the "home of Middle-earth," as it has become known with The Hobbit and Lord of the Rings films, to "the place where Pandora was brought to life."

[News-THR] Music Industry Contributes $5.7 Billion to U.K. Economy, Report Finds

按英國材料，音樂唱片業的經濟貢獻，第一是工作者（詞曲創作、歌手、製作人…），第二是現場演出，第三是唱片，第四是音樂出版。

然而相關統計是首次揭露？

Homegrown stars, such as Adele and Emeli Sande, enhance Britain's brand and reputation abroad by an estimated $118 million, according to industry group UK Music.

[News-THR] Film London Recruits Executive to Attract Investment

The U.K. government agency, led by Adrian Wootton, has brought in David Shepheard to head up efforts to entice productions from Hollywood and beyond to shoot in the British capital.