Vivendi Universal Publishing’s (VUP) Games Div. said it expected to report 22% sales growth in 3rd quarter ended Sept. 30. VUP said growth came “primarily” from “the Warcraft III launch on PC in July 2002 and the success of The Thing and Crash Bandicoot on console.” But VUP said it expected to report overall revenue of 1.211 billion euros in quarter -- down 1% from 1.218 billion euros year ago. Result doesn’t include B&B and Health divisions sold in June, it said. Company has been looking to sell all of VUP with exception of Games division. Results reported by Vivendi Universal were only preliminary, unaudited sales figures for quarter and it plans to announce actual results later this month. Vivendi Universal also said it expected to report 9% drop in revenue in its Universal Music Group (UMG) -- to 1.3 billion euros from 1.5 billion euros year earlier. Company said: “Sales of recorded music increased slightly in constant currency terms but were offset by higher provisions for returns and lower manufacturing revenue.” It said it “increased its global market share in a difficult period for the music industry.” While U.S. -- world’s largest music market -- saw industry decline 12.4% in quarter, according to SoundScan data, company said UMG’s share of current albums “increased to an unprecedented 31.4%.” For its Vivendi Universal Entertainment (VUE), which includes company’s film and home video divisions, it expects to report 7% revenue growth in quarter to 1.3 billion euros from 1.2 billion euros in year. Not including USA Networks acquired in May, company said it expected revenue to decline 24% primarily due to fewer theatrical releases.
WorldCom announced Tues. that additional restatement of earnings was likely, raising total to $9 billion. WorldCom already had announced 2 restatements for total of $7 billion. Company said it had advised SEC during settlement discussions that it expected additional restatement “based on very preliminary past accounting.” Company said it still was completing its review and once it had final figure it would make it public.
Vivendi Universal said it was cooperating with U.S. Attorney’s Office, Manhattan, which is conducting criminal investigation involving Vivendi and its accounting practices under former CEO Jean Marie Messier. Company also is under similar scrutiny in its home country of France. SEC’s office in Miami, which has been conducting informal inquiry, will be coordinating its activities with U.S. Attorney’s investigation, company said: “Vivendi Universal intends to cooperate fully with those preliminary investigations.”
Federal judge adopted in full injunction language proposed by music industry against Madster, requiring file-sharing system formerly known as Aimster to shut down if it couldn’t totally stop duplication of copyrighted works. Dist. Judge Marvin Aspen issued preliminary injunction last week after Aimster operator John Deep declined judge’s invitation to join plaintiffs in submitting suggested language for order. Aspen also ruled Madster must take technical measures to ensure protected works weren’t copied and to monitor system to exclude protected works, and must report monthly to court on compliance. “This is another clear-cut legal victory for copyright owners and everyone who wants to see the legitimate online market grow,” RIAA Pres. Cary Sherman said.
Consumer intentions on buying TV sets rose slightly in Oct. from Sept., according to preliminary data in Conference Board monthly survey. Of 5,000 households polled, 7.1% said they planned to buy TV set in next 6 months, compared with 6.6% in Sept., 7.3% in Aug., 6.8% in Oct. 2001 . Consumer Confidence Index reached its lowest level since Nov. 1993, Conference Board said: “The outlook for the holiday retail season is now fairly bleak. Without the likelihood of a pickup in consumer spending, an already weak economic recovery could weaken further.”
SBC/Ameritech told FCC that state court in Mich. had set hearing for Dec. 16 to make final ruling on preliminary injunction that ordered company not to file tariff connected with Enhanced 911 services. In meantime, Ameritech plans to offer “interim contract” to public safety answering points (PSAPs). SBC/Ameritech recently told FCC that 5th Judicial Circuit Court in Mich. had issued temporary restraining order that barred carrier from filing wireless E911 tariff. Company said it planned to file tariff in Mich. that would let it recover costs from PSAPs for Phase 2 of E911. Ameritech previously told FCC it had to ask Mich. PSC for authority to charge local 911 dispatch centers for every 911 call placed from cellphone. Company planned to use fee to recoup costs of implementing wireless E911 location capability. Mich. Communications Dirs. Assn. and local dispatch authority filed complaint and motion for temporary restraining order against Ameritech in Aug. Mich. Circuit Court recently entered preliminary injunction that ordered company not to file its retail tariff or carrier-to-carrier tariff with state PSC, Ameritech told FCC. “SBC Ameritech expects the judge to allow SBC Ameritech to recover its costs either through the current Michigan E911 fund or through a tariff,” filing said.
Charter, which said last week it had placed COO David Barford on paid leave in federal probe into accounting practices, estimated 3rd-quarter revenue rose 12.6% and operating cash flow 8.7% from 2001 pro forma results. Charter said it had provided preliminary information on 3rd- quarter revenue, cash flow and revenue-generating unit (RGU) growth in confidential conference call with its credit facility lenders, but because some media representatives obtained information, it was making information public. Company said it added 215,000 RGUs, with 150,000 digital customers and 150,000 of high-speed, partly offset by net loss of 85,000 basic customers. Revenue and operating cash flow growth resulted primarily from increased digital and high-speed data customers. Decline in analog customers was laid to competition from satellite providers, customer reaction to increased prices in rebuilt markets, and continued tight credit polices, company said. Charter said 4th-quarter 2002 guidance and finalized 3rd-quarter results would be announced in 3rd quarter earnings report Nov. 5.
After adding 101 Game Crazy (GC) departments at its video rental stores in 3rd quarter of year, Hollywood Entertainment (HE) now is looking to accelerate GC rollout significantly in many of chain’s more than 1,800 locations. In conference call with financial analysts Thurs., HE CEO Mark Wattles said company was preparing to add 100 additional GC departments in 4th quarter and 300 more in its next fiscal year after seeing increasingly strong results with new format that were above expectations. As of Sept. 30, HE had 169 GC departments up and running in select markets and now plans to have 569 in place by Dec. 31, 2003, Wattles said.
Preliminary DVD Forum standard for Internet-enhanced DVD players (CED Sept 26 p3) should be approved by year-end as Version 0.9, spokeswoman for Toshiba’s DVD Forum representative Hisashi Yamada told us. First products that enable DVD-ROM-like interactivity without PC should reach market year after DVD Forum’s approval of standard, she said.
Plasma display panel (PDP) prices will plunge as much as 30% next year as factories increase production and yields in enabling 42W to hit $2,000-$2,500 and 50W to drop to $3,000-$3,500, Pro AV Product Mktg. Dir. Alan Brawn said. New prices would be down substantially from current benchmarks for 42W and 50W PDPs of $4,999 and $9,499, respectively. In addition, Samsung’s 63W, which has shipped in limited quantities this fall, is likely drop to $9,000-$11,000 from current $18,000 street price, Brawn said. Specter of lower pricing in 2003 follows year in which PDP retail tags dropped sharply but appeared to stabilize for fall selling season. “When you initially start production, you're not operating at capacity so the cost of the product is pretty high, but that changes as the yields improve and production increases,” he said.