Marvel Enterprises said Thurs. that “based on preliminary figures” it now expected to report 3rd-quarter results exceeded “the high end” of previous forecast. Improved estimate, it said, was “based partly on assumptions for expected fees from motion picture studios and licensees.” Marvel licenses videogame publishers, film studios and other companies to make products based on its comic books and characters. Company said it now expected to report 37-41? profit per share for quarter instead of 25-30? estimated earlier. Marvel posted profit of 17? per share in same quarter year ago. It said it now expected to report sales of $84-$87 million for quarter, up from $60-$65 million predicted previously and profit of $29-$32 million, up from $19- $24 million. It reported revenue of $84.4 million and income of $6.7 million in same quarter year ago. Company plans to announce actual results Nov. 4.
GE and Vivendi Universal on Wed. signed a formal agreement creating NBC Universal, merging the French company’s Hollywood studio, cable networks and theme parks with NBC TV business. The new venture is expected to generate roughly $13 billion in annual revenue. The terms of the final deal were largely unchanged from a preliminary agreement reached in September, when the company entered into exclusive negotiations. It gives NBC more clout to compete with bigger rivals Viacom, Disney and Time Warner, the firms said. Vivendi shareholders benefit from reduced debt while keeping a 20% of the new company. GE will control 80% of the company, which will be led by Bob Wright, vice-chmn of GE and CEO of NBC. NBC will pay $3.8 billion cash for the Vivendi Universal assets, and assume $1.7 billion of Vivendi’s debt. The deal is subject to regulatory approvals in Washington, D.C., and Brussels, but GE and Vivendi said they expect the deal to be complete by the beginning of 2004.
Business and deregulation advocates looked hopefully to Cal. Gov.-elect Arnold Schwarzenegger (R) to support light- handed, anti-tax policies favorable to the Internet and telecom industries. But they said they couldn’t be certain about his direction after replacing recalled Gov. Gray Davis (D) because Schwarzenegger and his campaign hadn’t mentioned the issues. Before he turns to the Internet and telecom, the new gov. should have his hands full for some time with the state’s huge budget shortfall and a push for major changes in worker’s compensation, observers agreed.
Macrovision won temporary injunction in Germany against device sold there to circumvent company’s video copy protection. Macrovision said injunction was obtained without oral hearing in Frankfurt Dist. Court on basis of newly enacted German Copyright Directive that prohibits copy protection circumvention devices in that country. Action was taken against Frankfurt outlet of retailer Media Markt TV-Hifi-Elektro, and temporary injunction prohibits sale of Macro 2000 copy protection circumvention device that strips off copy protection from protected DVDs and allows perfect video copies to be made from such content, Macrovision said. Legal action against copy-protection hacking could presage more to come from Macrovision, we're told. Company said Tues. that it was pleased with court’s preliminary ruling, that it wouldn’t tolerate circumvention of its technology and that it would prosecute violators in European countries that had implemented Copyright Directive. Company said it was noteworthy that court granted decision to Macrovision as owner of circumvented copy protection technology. In past, suits for copyright infringement had to be filed by content owners, but new law lets companies such as Macrovision take action in their own right against “sale, distribution and possession for commercial purposes of circumvention devices.”
One day after Nintendo of America (NOA) said $50 price cut on GameCube had led to significant sales boost for its struggling console (CED Oct 3 p4), company said it planned to make similar moves in Europe and Japan to stimulate demand.
Columbia TriStar’s Anger Management was top-rented DVD in U.S. in week ended Sept. 28, VSDA said preliminary data showed. VSDA said title earned additional $5.84 million in week for $12.17 million total rental earnings to date. Only 2 new DVDs in week were Columbia TriStar’s Daddy Day Care at #2, which VSDA said earned $5.07 million in its first full week of availability (and $5.19 million to date), and Disney’s Holes at #3 ($2.53 million in week and $2.60 million to date).
PS2 again dominated top 10 videogame rentals in U.S. in week ended Sept. 28, VSDA preliminary data showed. This time, 7 games for Sony Computer Entertainment’s console were in top 10, which again was led by PS2 version of Madden NFL 2004 from Electronic Arts (EA). VSDA said PS2 version of hit football game earned additional $280,000 in week for total rental earnings of $2.15 million to date. Only new videogame in top 10 was PS2 version of Activision’s Cabela’s Deer Hunt 2004 Season, which VSDA said moved up 2 notches to #9, earning additional $70,000 in week for total of $290,000 to date. Other PS2 games in top 10 were: Namco’s Soul Calibur II at #2 again (additional $150,000 in week and $1.04 million to date), EA’s NCAA Football 2004 at #3 again ($130,000 and $2.61 million), Atari’s Enter the Matrix -- up 4 notches at #8 ($90,000 and $9.02 million), Take-Two Interactive’s Midnight Club II -- up one to #5 ($90,000 and $6.77 million), Sega’s ESPN NFL Football 2K4 at #7 again ($80,000 and $340,000). No GameCube titles made top 10 but 3 Xbox titles did: Madden NFL 2004 -- up 4 steps to #6 ($90,000 in week and $740,000 to date), Soul Calibur II -- down 4 to #8 ($70,000 and $530,000), LucasArts’s Star Wars: Knights of the Old Republic -- down one to #10 ($70,000 and $1.44 million).
Finding that the city of San Jose’s cable franchise renewal requirements, including providing up to 10 public, educational and governmental (PEG) access channels, were content-neutral and serving important govt. interests, the U.S. Dist. Court, San Jose, denied Comcast’s motion for a preliminary injunction to halt the formal renewal process instituted by the city before a designated hearing officer. Comcast had challenged the proceeding on the grounds that it violated its constitutional right to free speech and process as well as provisions of the Cable Act. Besides arguing that its process adequately safeguarded all of Comcast’s constitutional rights, the city contended that the company’s request for relief under the Act wasn’t ripe since the statute permitted judicial review only after final denial of a renewal application or where a cable operator had been affected adversely by the failure of the local franchising authority to follow the procedural requirements. Comcast said the city’s renewal proposal was illegal because it “demands goods and services which exceed the scope and purpose” of the Act. It said the city had “improperly” demanded 10 PEG channels, noncable services such as Internet access, a full-service telecom network, specific fiber transmission technology and a parental control device at no charge to the subscriber. Comcast contended the city’s requirements on the number, use, location, management of and trigger for the PEG channels violated the First Amendment. The court said those requirements didn’t violate Comcast’s First Amendment rights or “seriously infringe or curtail” its expressive rights. It held that a review of the city’s administrative procedures showed that Comcast’s due process rights were protected.
Spec for “HDV” format that would enable HD digital recording on existing Mini DV camcorder tapes has been completed and will be published today (Wed.). Announcement came Tues. from 4- company consortium that proposed goals and preliminary HDV specs in summer (CED July 14 p1) and included digital camcorder heavies Canon, JVC, Sharp and Sony -- with Panasonic being notable absentee.
Take-Two Interactive said in preliminary proxy statement filed with SEC Fri. that it planned to hold special stockholders meeting Nov. 17 at its N.Y.C. hq. Take-Two said main item on meeting agenda was to consider amendment to company’s certificate of incorporation to increase the authorized common stock from 50 million to 100 million shares. Company said that as of Fri., financial services company FMR (Fidelity Investments held largest stake -- 10.7%, with 4.65 million shares. In recent 10-Q SEC filing, Take-Two also provided more details of its recent purchase of San Francisco developer Frog City. It had disclosed only sketchy details of deal to analysts in May at E3 Expo (CED May 19 p6). But it said in 10-Q that in quarter ended July 31, it had “acquired all of the outstanding capital stock of Frog City, the developer of Tropico 2: Pirate Cove, and Cat Daddy Games LLC, another development studio.” It had made no mention of Cat Daddy in May meeting or in recent conference call discussing 3rd-quarter results (CED Sept 4 p4). In latter conference call, Take-Two announced plan to buy competitor TDK Mediactive -- no doubt most significant purchase of 3 companies. Take-Two said “the total purchase price for both studios” -- Frog City and Cat Daddy -- “consisted of [$757,000] in cash and [$319,000] of prepaid royalties previously advanced to Frog City.” Take-Two said it “also agreed to make additional payments of up to [$2.5 million] to the former owners of Cat Daddy, based on a percentage of Cat Daddy’s future profits, which will be recorded as compensation expense if the targets are met. In connection with the acquisitions, the company recorded goodwill of [$1.27 million] on a preliminary basis.” Take-Two also said that in 2003 it “entered into an agreement with Destineer Publishing, a publisher of PC games, under which Destineer granted the company exclusive distribution rights to 8 PC games to be published by Destineer.” Take-Two said it “agreed to make recoupable advances to Destineer of approximately [$6.7 million]… In addition, the company agreed to make a loan to Destineer of [$1 million].” In return, it said, “Destineer granted the company an immediately exercisable option to purchase a 19.9% interest in Destineer and a 2nd option to purchase the remaining interest for a price equal to a multiple of Destineer’s EBIT, exercisable during a period following April 2005.”