After a multi-billion dollar failed experiment, Time Warner has made moves to rid itself of the still profitable, but quickly dying AOL dial-up internet division.
The company plans to keep AOL’s Web-portal and advertising sectors and only sell its dial up internet access division which has been losing subscribers at an exponential rate. Time Warner’s new CEO Jeff Bewkes had this to say at a recent conference call. “This should significantly increase AOL’s strategic options,” he said. It is notable to mention that at its peak in 2002 AOL had 30 million paying subscribers. It now has 10 million.
AOL has now been ramping up its advertising business but it still lagging behind the industry. For the Q4 2007, ad revenue for the company grew 18 percent while the industry averaged propelled ahead by 25 percent.
The separation of AOL from Time Warner’s growing content business should allow the company to focus on stronger, more profitable businesses. A rival executive noted that Time Warner has wasted billions of dollars trying to find the Right business model for AOL. “Follow the money. Platforms, not content businesses, are where the money has been made on the internet,” he added.
I’m sure Time Warner share holders can vouch for that last statement.
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Dreamworks Studios has announced that they are still “locked” into an exclusivity deal with Toshiba to distribute their movies on HD DVD only and would continue to do so until Toshiba tells them differently.
“We have a partnership with Toshiba and have an obligation to see this through,” DreamWorks Chief Executive Jeffrey Katzenberg said.
“As you know, we have been well-compensated for our support. It really is in their court at this point to really declare what the next step will be. We’re poised either way to jump into the marketplace when the conditions are right to do so,” he added.
Katzenberg’s comments seem to imply that all the past rumors were indeed correct and Dreamworks and Paramount were paid over $150 million USD to go HD DVD-exclusive for 18 months. It seems however that Paramount had a different clause in there contract because they recently dropped HD DVD in favor of Blu-ray.
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Richard Craig Lissaman of Calgary has become the first Canadian convicted under new movie pirating legislation for his decision to film the movie “Sweeney Todd” at a local movie theater last year.
Lissaman pleaded guilty on Friday and was sentenced to 12 months probation and a large fine of $1500 CAD.
The guilty party is now also banned from going to any movie theater as well as from owning video recording equipment (including a cell phone with the capability) while he is on probation.
Judge Skene said that Lissman’s crime was comparable to someone shoplifitng a cart of meat knowing that they will resell it for a profit.
“You can say he and his pals will watch the movie, but he has an item that is more supportive of taking something to be used to make a profit,” said the judge.
“It’s not a simple theft of an item for personal consumption.”
The motion picture industry was delighted by the ruling and admitted they spent six months investigating before having the authorities arrest Lissaman.
“Canada is a hotbed of movie pirating, which is a billion-dollar loss to the movie industry,” Mark Christiansen, executive vice-president of operations for Paramount Picture’s motion picture distribution.
“The perception is that Hollywood stars are the only ones hurt by this, but it affects everybody who works in theatres.”
Virginia Jones, director of policy and legal affairs for the Canadian Motion Picture Distributors Association, added, “We would have liked to see jail time, sending a stronger message. We hope this is just a starting point.”
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