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Apple’s IPad Attracts Crowds as First Day of Sales Rivals IPhone’s Frenzy

April 4, 2010

By Connie Guglielmo and Mina Kawai April 4 (Bloomberg) — Apple Inc. ’s iPad tablet computer went on sale yesterday, drawing crowds to stores across the U.S. and rivaling the frenzy seen when the iPhone went on sale in 2007. Hundreds of shoppers lined up to wait for stores to open at 9 a.m., though crowds didn’t camp out for days this time, as they did when the iPhone debuted. Many of the buyers identified themselves as early adopters and Apple enthusiasts, making it harder to tell if the iPad will win over mainstream customers. “I love it,” said Jacob Arentoft, a 37-year-old digital business developer from Copenhagen. After exiting Apple’s Fifth Avenue store in Manhattan, he unpacked the brand-new silver gadget and waved it at the crowd. “The size fits, the design fits, everything fits.” The iPad is Apple’s bid to turn tablet computers into popular consumer devices, something rivals such as Microsoft Corp. have failed to do. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. It starts at $499. “It’s ridiculously expensive, way overpriced,” said Josh Klenert, a 36-year-old graphic designer, who still went ahead and bought one. Klenert, whose one-bedroom apartment in Tribeca has “more Macs than people,” pre-ordered the iPad as soon as it was available and came down to Apple’s SoHo store in New York to be one of the first to buy it. ‘Sofa-Based Device’ “You may call it a dumb computer or a smart telephone — it’s in between,” said Klenert, who plans to use it for reading newspapers and magazines. “It’s a unique, sexier device. More like a sofa-based device.” Apple retail chief Ron Johnson , who was at the Fifth Avenue store and addressed employees before it opened, said having added two more stores in New York City since the iPhone’s introduction helped spread out crowds of shoppers. Gene Munster , an analyst at Piper Jaffray & Co., expects Apple to sell 200,000 to 300,000 iPads this weekend. The full- year sales may reach 7.1 million globally, according to ISuppli Corp. Apple declined to comment, said Natalie Kerris , a spokeswoman for the Cupertino, California-based company. Apple fans began lining up Friday at Chief Executive Officer Steve Jobs’s hometown store in Palo Alto, California. More than 200 people were waiting before the store opened, and employees handed out Krispy Kreme doughnuts and coffee. The shoppers included tech blogger Robert Scoble , who was one of the first in line, and Bill Atkinson, author of Apple’s MacPaint and MacWrite software programs for the first Macintosh computers. Executive Help Scott Forstall , Apple’s executive in charge of iPhone and iPad software, stood on the street filming the crowd as store employees counted down from 10 to the store’s opening. He then helped out at the customer service desk, answering questions and mingling with the early iPad buyers. Jobs showed up later in the morning. “It’s very exciting,” Forstall said after declining to be interviewed. Users can surf the Internet, peruse digital books, watch video and play games on the iPad. What it lacks is a built-in camera or support for Adobe Systems Inc. ’s Flash software, which runs much of the video on the Web. The device also doesn’t let users carry out multiple tasks at once. ‘Just Another Toy’ Courtney Shedden, who went to the Freehold Raceway Mall in New Jersey to buy an iPad for her boyfriend, says she wouldn’t get one for herself. “It’s just another toy and he HAS to have it,” said Shedden, 24. It wouldn’t help her as a student working toward a master’s degree at Villanova University, she said. She uses Microsoft’s Excel and there would be “a lot of compatibility issues.” The iPad’s first wave of reviews praised its ability to deliver digital books and video quickly, saying it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” TV Shows Tablets have been available in one form or another since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. The iPad’s success will depend partly on the attractiveness of applications that run on it. CBS Corp., the most-watched U.S. TV network, announced plans last week to offer episodes of shows such as “Survivor” and “CSI” on the iPad. Walt Disney Co . will release iPad applications for ABC shows and ESPN games. And Netflix Inc. , the movie-rental company, will let subscribers watch programming streamed to the iPad. Leo Mitchell, a 14-year-old shopper at an Apple store in St. Louis, will use his new iPad to replace his Nook, an e- reader sold by Barnes & Noble Inc. “I probably will bring it to school occasionally where I have a book report and the book is on my iPad,” he said. Mitchell used babysitting money to pay for the iPad, he said. “I save most of my money,” he said. “I don’t spend it frivolously.” New Markets At the Fair Oaks Shopping Center in Fairfax, Virginia, Bill Daniels was buying the computer primarily for his five-year-old son. “I think there will eventually be one in every school classroom one day,” he said. Daniels, a 48-year-old marketing consultant from Vienna, Virginia, said he owns three other Apple products. “I was a PC guy,” he said. “Just converted to Apple last year.” Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed April 2 for the Good Friday holiday. Like the iPhone, the iPad will test Apple’s ability to conquer new markets. Since returning to the company in 1997, Jobs revived the Macintosh computer business, reshaped digital music with the iPod and pushed Apple into the mobile-phone field. Adding those products propelled revenue and profit to record levels . Sales Estimates When the iPhone debuted, Apple struggled to keep it in stock. Most of its stores quickly sold out, and resellers on EBay and Craigslist hawked the device to desperate shoppers for as much as $12,000. Even if the iPad fails to repeat that kind of frenzy, its initial sales could be higher than the iPhone’s, says Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. He projects sales of 300,000 to 400,000 iPads this weekend. That compares with the 270,000 iPhones sold in its 2007 debut. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. At the outset, iPads will connect to the Web through localized hot spots that use Wi-Fi technology. Some shoppers may wait for a version with 3G, which lets the iPad connect to mobile-phone networks. It’s due later this month. Luis Martinez, a 30-year-old from Brooklyn who repairs computers, bought a Wi-Fi iPad yesterday and already put in an order for the 3G version. “People who criticize iPad are basically saying it doesn’t fit their lifestyle. It fits mine,” Martinez said. “Overall, I’m sold.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Mina Kawai in New York at minkawai@bloomberg.net

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Apple’s IPad Attracts Crowds as First Day of Sales Rivals IPhone Hysteria

April 3, 2010

By Connie Guglielmo and Mina Kawai April 3 (Bloomberg) — Apple Inc. ’s iPad tablet computer went on sale this morning, drawing crowds to stores across the country, and rivaling the frenzy seen when the iPhone went on sale in 2007. Hundreds of shoppers lined up to wait for stores to open at 9 a.m., though crowds didn’t camp out for days this time, as they did when the iPhone debuted. Many of the buyers identified themselves as early adopters and Apple enthusiasts, making it harder to tell if the iPad will win over mainstream customers. “I love it,” said Jacob Arentoft, a 37-year-old digital business developer from Copenhagen. After exiting Apple’s Fifth Avenue store in Manhattan, he unpacked the brand-new silver gadget and waved it at the crowd. “The size fits, the design fits, everything fits.” The iPad is Apple’s bid to turn tablet computers into popular consumer devices, something rivals such as Microsoft Corp. have failed to do. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. It starts at $499. “It’s ridiculously expensive, way overpriced,” said Josh Klenert, a 36-year-old graphic designer, who still went ahead and bought one. Klenert, whose one-bedroom apartment in Tribeca has “more Macs than people,” pre-ordered the iPad as soon as it was available and came down to Apple’s SoHo store in New York to be one of the first to buy it. ‘Sofa-Based Device’ “You may call it a dumb computer or a smart telephone — it’s in between,” said Klenert, who plans to use it for reading newspapers and magazines. “It’s a unique, sexier device. More like a sofa-based device.” Gene Munster , an analyst at Piper Jaffray & Co., expects Apple to sell 200,000 to 300,000 iPads this weekend. The full- year sales may reach 7.1 million globally, according to ISuppli Corp. Apple declined to comment, said Natalie Kerris , a spokeswoman for the Cupertino, California-based company. Apple fans began lining up yesterday at Chief Executive Officer Steve Jobs’s hometown store in Palo Alto, California. More than 200 people were waiting before the store opened, and employees handed out Krispy Kreme doughnuts and coffee. The shoppers included tech blogger Robert Scoble , who was one of the first in line, and Bill Atkinson, author of Apple’s MacPaint and MacWrite software programs for the first Macintosh computers. Executive Help Scott Forstall , Apple’s executive in charge of iPhone and iPad software, stood on the street filming the crowd as store employees counted down from 10 to the store’s opening. He then helped out at the customer service desk, answering questions and mingling with the early iPad buyers. Jobs showed up later in the morning, with Apple pushing reporters out of the store so he could mingle with the crowd. “It’s very exciting,” Forstall said after declining to be interviewed. Users can surf the Internet, peruse digital books, watch video and play games on the iPad. What it lacks is a built-in camera or support for Adobe Systems Inc. ’s Flash software, which runs much of the video on the Web. The device also doesn’t let users carry out multiple tasks at once. Courtney Shedden, who went to the Freehold Raceway Mall in New Jersey to buy an iPad for her boyfriend, says she wouldn’t get one for herself. ‘Just Another Toy’ “It’s just another toy and he HAS to have it,” said Shedden, 24. It wouldn’t help her as a student working toward a master’s degree at Villanova University, she said. She uses Microsoft’s Excel and there would be “a lot of compatibility issues,” Shedden said. The iPad’s first wave of reviews praised its ability to deliver digital books and video quickly, saying it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Tablets have been available in one form or another since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. TV Shows The iPad’s success will depend partly on the attractiveness of applications that run on it. CBS Corp., the most-watched U.S. TV network, announced plans this week to offer episodes of shows such as “Survivor” and “CSI” on the iPad. Walt Disney Co . will release iPad applications for ABC shows and ESPN games. And Netflix Inc. , the movie-rental company, will let subscribers watch programming streamed to the iPad. Leo Mitchell, a 14-year-old shopper at an Apple store in St. Louis, will use his new iPad to replace his Nook, an e- reader sold by Barnes & Noble Inc. “I probably will bring it to school occasionally where I have a book report and the book is on my iPad,” he said. Mitchell used babysitting money to pay for the iPad, he said. “I save most of my money,” he said. “I don’t spend it frivolously.” New Markets At the Fair Oaks Shopping Center in Fairfax, Virginia, Bill Daniels was buying the computer for his five-year-old son. “I think there will eventually be one in every school classroom one day,” he said. Daniels, a 48-year-old marketing consultant from Vienna, Virginia, said he owns three other Apple products. “I was a PC guy,” he said. “Just converted to Apple last year.” Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed yesterday for Good Friday. Like the iPhone, the iPad will test Apple’s ability to conquer new markets. Since returning to the company in 1997, Jobs revived the Macintosh computer business, reshaped digital music with the iPod and pushed Apple into the mobile-phone field. Adding those products propelled revenue and profit to record levels . Sales Estimates When the iPhone debuted, Apple struggled to keep it in stock. Most of its stores quickly sold out, and resellers on EBay and Craigslist hawked the device to desperate shoppers for as much as $12,000. Even if the iPad fails to repeat that kind of frenzy, its initial sales could be higher than the iPhone’s, says Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. He projects sales of 300,000 to 400,000 iPads this weekend. That compares with the 270,000 iPhones sold in its 2007 debut. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. At the outset, iPads will connect to the Web through localized hot spots that use Wi-Fi technology. Some shoppers may wait for a version with 3G, which lets the iPad connect to mobile-phone networks. It’s due later this month. Luis Martinez, a 30-year-old from Brooklyn who repairs computers, bought a Wi-Fi iPad today and already put in an order for the 3G version. “People who criticize iPad are basically saying it doesn’t fit their lifestyle. It fits mine,” Martinez said. “Overall, I’m sold.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Mina Kawai in New York at minkawai@bloomberg.net

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Apple’s IPad Holds Appeal for Some Consumers, Leaves Others Wanting More

April 3, 2010

By Arik Hesseldahl and Connie Guglielmo April 3 (Bloomberg) — Lucas Paraskeva traveled to New York from Nicosia, Cyprus, to be one of the first consumers to get his hands on an iPad, the tablet-style computer from Apple Inc. that goes on sale at 9 a.m. in New York today. “It will be the gadget of the year,” Paraskeva, 29, a computer programmer, said yesterday outside the Apple store on Fifth Avenue in Manhattan, as employees set up barriers to control crowds expected to line up for the $499 device. Paraskeva and his girlfriend Maria Agroti will be among the consumers who are projected by Piper Jaffray & Co. analyst Gene Munster to buy 200,000 to 300,000 iPads this weekend. With the iPad, Apple bets it can succeed where rivals such as Microsoft Corp. failed: building a following for a device that’s bigger than a mobile phone, yet has fewer features than a laptop. Analysts at iSuppli Corp. say Cupertino, California-based Apple may sell 7.1 million iPads globally this year, driven in part by “early adopters.” Users can surf the Internet, peruse digital books, watch video and play games on the iPad. It doesn’t have a built-in camera or support Adobe Systems Inc. ’s Flash software, used to watch much of the video on the Web. The device also lacks features that let users carry out multiple tasks at once. “The iPad’s attractive design, compelling applications and multitouch capability, key components of Apple Inc. ’s past successes, will help to offset the initial omission of Adobe Flash from the device,” El Segundo, California-based iSuppli said yesterday in a statement. ‘Going to Wait’ Jason Herbert, a restaurant owner from Rochester, New York, is eager to buy one. “It will be really cool,” Herbert, 39, said yesterday outside the Fifth Avenue store . His friend, Dan Bresnan, has yet to be won over. “The first version doesn’t have things that I might want, like the ability to multitask,” said Bresnan, 40, a car salesman in Rochester. “I’m going to wait.” Reviewers who tested the iPad praised its ability to deliver digital books and video quickly and said it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Apple is trying to remake the tablet — a thin, handheld computer that’s essentially a big screen without a physical keyboard. Also known as slate computers, tablets have been available since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. Apps The iPad’s success will depend partly on the attractiveness of applications that run on it. As consumers weighed whether to brave crowds at stores or awaited home delivery of iPads ordered ahead of time, television networks, game makers, and newspaper publishers unveiled iPad friendly versions of their products. CBS Corp., owner of the most-watched U.S. TV network, said April 1 it will offer episodes of shows such as “Survivor” and “CSI.” Walt Disney Co . will release iPad applications for ABC TV shows and ESPN games. Netflix Inc. , the movie-rental company, said yesterday that members will be able to instantly watch programming streamed to the iPad. Apple declined to comment, said Natalie Kerris , a spokeswoman for the company. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed yesterday for Good Friday. IPhone Redux? The iPad will again test Apple’s ability to conquer new markets. Since returning to the company in 1997, Chief Executive Officer Steve Jobs revived the Macintosh computer business, reshaped digital music with the iPod and used the iPhone to push Apple into mobile telephony. Gains in those areas have propelled Apple revenue and profit to records . First weekend sales will give an early sign whether the iPad can replicate previous hits. Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York, projects sales of 300,000 to 400,000 iPads for today and tomorrow combined. That compares with the 270,000 iPhones sold in the first weekend after its 2007 debut. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. At the outset, iPads will connect to the Web though localized hot spots that feature Wi-Fi technology. Yisrael Frenkel, a business analyst, said he will wait until later this month, when Apple starts selling a version that runs on AT&T Inc. ’s third-generation wireless network. “I’ll use it for e-mail and for graphics and photos,” said Frenkel, 33. With the 3G version, “wherever you are you can get on the Net, and get e-mail and get things done.” To contact the reporter on this story: Arik Hesseldahl in New York at arik_hesseldahl@businessweek.com Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net Amy Thomson in New York at athomson6@bloomberg.net

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Apple’s IPad Sales to Begin, With Some Wanting More From `Gadget of Year’

April 2, 2010

By Arik Hesseldahl and Connie Guglielmo April 2 (Bloomberg) — Lucas Paraskeva traveled to New York from Nicosia, Cyprus, to be one of the first consumers to get his hands on an iPad, the tablet-style computer from Apple Inc. that goes on sale tomorrow. “It will be the gadget of the year,” Paraskeva, 29, a computer programmer, said outside the Apple store on Fifth Avenue in New York, where employees were setting up barriers to control the throngs expected to line up for the $499 device. Paraskeva and his girlfriend Maria Agroti will be among the 200,000 to 300,000 consumers projected by Piper Jaffray & Co. analyst Gene Munster to buy an iPad this weekend. With the iPad, Apple bets it can succeed where rivals such as Microsoft Corp. failed: building a following for a device that’s bigger than a mobile phone, yet has fewer features than a laptop. Analysts at iSuppli Corp. say Cupertino, California-based Apple may sell 7.1 million iPads globally this year, driven by “early adopters” and users drawn by its “touch-screen-based interface.” Users can surf the Web, peruse digital books, watch video and play games on the iPad. It doesn’t have a built-in camera or support Adobe Systems Inc. ’s Flash software, used to watch much of the video on the Web. It also lacks features that let users carry out multiple tasks at once. “The iPad’s attractive design, compelling applications and multitouch capability, key components of Apple Inc. ’s past successes, will help to offset the initial omission of Adobe Flash from the device,” El Segundo, California-based iSuppli said today in a statement. ‘Going to Wait’ Jason Herbert, a restaurant owner from Rochester, New York, is eager to buy an iPad. “It will be really cool,” Herbert, 39, said outside the Fifth Avenue store . His friend, Dan Bresnan, has yet to be won over. “The first version doesn’t have things that I might want, like the ability to multitask,” said Bresnan, 40, a car salesman in Rochester. “I’m going to wait.” Reviewers who tested the iPad praised its ability to deliver digital books and video quickly and said it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Apple is trying to remake the tablet — a thin, handheld computer that’s essentially a big screen without a physical keyboard. Also known as slate computers, tablets have been available since the 1990s, without ever catching on. They currently account for less than 1 percent of the personal- computer market, according to research firm Gartner Inc. Apps The iPad’s success will depend partly on the attractiveness of applications that run on it. As consumers weighed whether to brave crowds at stores or awaited home delivery of iPads ordered ahead of time, television networks, game makers, and newspaper publishers unveiled iPad friendly versions of their products. CBS Corp., owner of the most-watched U.S. TV network, will offer episodes of shows such as “Survivor” and “CSI.” Walt Disney Co . will release iPad applications for ABC TV shows and ESPN games. Netflix Inc. , the movie-rental company, said today that members will be able to instantly watch programming streamed to the iPad. The Wall Street Journal and Discovery Communications’ MythBusters also announced versions of their programs tailored for the new device. Apple declined to comment, said Natalie Kerris , a spokeswoman for the company. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 yesterday in Nasdaq Stock Market trading. U.S. markets are closed today for Good Friday. To contact the reporter on this story: Arik Hesseldahl in New York at arik_hesseldahl@businessweek.com Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net Amy Thomson in New York at athomson6@bloomberg.net

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Lions Gate Seeks To Rebuff Icahn Bid

March 27, 2010

Lions Gate Entertainment has urged shareholders to reject Carl Icahns hostile bid to buy the movie studio

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Bill Swadley: Back to the Futures

March 25, 2010

An article in the New York Time s yesterday revealed that the MPAA (Motion Picture Association of America) is up in arms at the prospect that the Commodity Futures Trading Commission might approve the creation of a futures market that would deal in movie box office receipts. I say, let ‘em try! Futures markets have traditionally been reserved for raw goods. In futures trading sugar is a commodity that is traded through futures contracts, but not salt water taffy. Sugar is the raw ingredient, candy is the resultant product after manufacture. Same with oil. Crude oil futures are traded, not gasoline. Why is that? Mainly because there is an inherent standardization to a raw commodity, but also a question mark as to how much that commodity will bring once it’s brought to market. It’s that question mark that becomes the gain or loss for the futures trader. Once the raw commodity becomes its final product, price fluctuation is severely limited so there’s not much to bet on. Perhaps this is what fooled the Einsteins at Cantor Fitzgerald and Veriana Networks (the two groups proposing the exchanges) to think that trading box office futures could work. The complete unpredictability of a film’s performance. But it’s an entirely different manner of unpredictability, and I wonder if they understand that. To further disconnect this idea from true futures trading: while it’s true that the value of futures contracts fluctuates according to many factors depending on the commodity, there’s a best/worse case scenario that can be estimated as a basis, barring unforeseen events like a natural disaster, unexpected blight, economic crisis, etc. In any given contract period the trader calculates the risk involved going in and may gamble that a certain crop’s yield will do well or poorly based on what’s known about that commodity, interest rates, weather patterns, even political climate for less stable countries. The “gamble” is a calculated one. Being a gambler and investor and having worked in entertainment finance for over 15 years, the last thing I would ever advise anyone to bet on or invest in is film box office grosses. Why? Oh, I don’t know, let’s ask renowned screenwriter/playwright/author William Goldman: “Nobody knows anything.” You said it, Bill. Mr. Goldman’s statement, which has been quoted ad nauseum (including by me with great frequency) and attributed to all manner of people about pretty much anything that’s unpredictable in life, was in fact a statement about show business, Hollywood in particular, and the unlimited surprises (both good and bad) awaiting any individual or company venturing into the entertainment industry. Yes the rewards can be great, but they’re so sporadic and impossible to predict that even big movie studios often lose their nerve in the face of an expensive, potential flop. Entertainment finance people spend untold hours and sleepless nights trying to figure out the monetary potential of any given film and the closest anyone in this business ever comes is to approximate a best-guess based on a virtual house-of-cards of assumptions. When something hits a mark we set or, thank the heavens, exceeds it, you never hear the words, “I told you so.” No, the wise man or woman who made that prediction is too busy worrying that the other 10-15 films in that year’s slate will miss the target. Like good ol’ Charlie Brown, one minute you’re the hero, the next you’re the goat. Here’s the thing, people with a lot of money and/or people with access to a lot of money almost never have the slightest understanding of how the movie business works, especially from a finance point of view. But they almost always find out. The hard way. But go for it, boys, and don’t worry. As long as you hit that wire with the connecting hook at precisely 88mph the instant the lightning strikes the tower… everything will be fine.

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Mindich Hedge Fund Counts on Film Department IPO to Recover Defaulted Debt

March 24, 2010

By Miles Weiss March 24 (Bloomberg) — Hedge-fund manager Eric Mindich has as much as $36 million riding on the initial public offering of Film Department Holdings Inc., the movie-studio startup that defaulted on debt held by his Eton Park Capital Management LP. Film Department said in December it wanted to raise $85 million from an IPO as part of an agreement to repay notes held by New York-based Eton Park. The filmmaker, based in West Hollywood, California, delayed the deal last week after cutting it to $60 million earlier this month. Eton Park, which oversees about $13 billion, is seeking to avoid the losses that befell hedge funds after they poured cash into Hollywood during the past decade. The funds participated in more than $11 billion of film financings since 2004, according to Clear Scope Partners, a Los Angeles-based entertainment advisory firm, only to begin withdrawing from the business during the past several years. “The influx of hedge-fund money caused an abundance of films to get made, which artificially increased competition and hurt film performance,” said P. Clark Hallren, Clear Scope’s managing director and a former executive in the entertainment industries group at JPMorgan Chase & Co.’s securities unit. “The combination of the financial crisis and the relatively negative performance of the film funds caused hedge funds to retreat.” Capital Shortage As a result, the film industry faced a capital shortage that cut the number of movies being produced and forced companies such as Film Department to seek alternative funding sources. Because independent film studios have traditionally relied on private financing, there are only a few that are publicly traded, including Lions Gate Entertainment Corp. and DreamWorks Animation SKG. Mark Gill , 47, who co-founded Film Department with Neil Sacker , 48, after establishing and running Warner Independent Pictures from 2003 to 2006, declined to comment. Mary Beth Grover , a spokeswoman for Eton Park, also declined to comment. Film Department started in June 2007, the same month it issued $30 million of notes as part of an effort to raise about $200 million through private stock sales and loans. Eton Park, founded in 2004 by Mindich, a 42-year-old former partner at Goldman Sachs Group Inc., holds all of the notes, which have a second lien on Film Department’s assets, according to an amended IPO prospectus filed March 22 with the U.S. Securities and Exchange Commission. Including accrued interest, Eton Park is owed $36 million. Debt Default After failing to meet film-production targets last year, Film Department defaulted on the notes in August and reported a $10 million net loss for 2009. Outside auditor BDO Seidman LLP said on March 2 that there was “substantial doubt” about the company’s ability to continue as a going concern. Film Department agreed in a November recapitalization plan to use proceeds from a private or public stock sale to repay the Eton Park notes, whose annual interest rate jumped to 16 percent from 12 percent when the company defaulted on the debt, its SEC filing shows. The company’s financial picture has improved since last year, partly because its first release, a thriller called “Law Abiding Citizen” starring Gerard Butler and Jamie Foxx , has reaped $120 million in worldwide box-office receipts and has had higher DVD and Blu-Ray sales than expected. That reduced the amount of cash Film Department needed to raise in an IPO, said Richard Woltman, chairman of Girard Securities Inc., the San Diego-based brokerage that is underwriting the stock offering. ‘Improved’ Cash Flow “As this thing has evolved, the cash flow has been much improved from the distribution of ‘Law Abiding Citizen,’” said Woltman, who added that other underwriting firms have shown a “terrific” interest in participating in the stock sale. Film Department currently plans to sell 4.6 million shares through the IPO at $13 each, according to the March 22 filing. The company expects to repay about $12 million of second-lien notes by the time the IPO takes place, and will need about $22.5 million of the IPO proceeds to repay the remainder of the money owed Eton Park as of March 19. Eton Park will also receive $1.5 million of shares as partial payment. The IPO, which was scheduled to take place last week, may be further delayed because many people are taking breaks for Easter and Passover, Woltman said. Should Film Department fail to complete the IPO and repay Eton Park by April 1, Mindich’s firm will be entitled to an 8.6 percent stake in the box-office receipts from “Earthbound,” a romantic comedy starring Kate Hudson that finished production in New Orleans earlier this month, according to the March 22 filing. As president of Warner Independent Pictures, Gill purchased the documentary “March of the Penguins” at the 2005 Sundance Film Festival and turned it into a blockbuster that grossed $129 million at the box office worldwide. He also ran the Los Angeles office of Harvey Weinstein ’s Miramax Films Corp., where Gill worked from 1994 until 2002, helping to develop movies such as “The English Patient” and “Shakespeare in Love.” To contact the reporter responsible for this story: Miles Weiss in Washington at mweiss@bloomberg.net

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Video: Paramount, Theater Owners Clash Over 3-D Movie Options: Video

March 19, 2010

March 19 (Bloomberg) — Movie theater owners are claiming that Paramount Pictures is refusing to release “How to Train Your Dragon” in 2-D unless theaters also agree to show the 3-D version. Bloomberg’s Cali Carlin reports. (Source: Bloomberg)

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Video: `The Blind Side’ Brings New Popularity to Sports Movies: Video

March 19, 2010

March 19 (Bloomberg) — Bloomberg’s Michele Steele reports on the outlook for sports-themed movies, which have seen new popularity since the success of the movie “The Blind Side,” based on the book by Michael Lewis. (Source: Bloomberg)

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Disney’s `Alice’ Is Top Film for Second Weekend, Followed by `Green Zone’

March 14, 2010

By Esmé E. Deprez and Dan Hart March 14 (Bloomberg) — “Alice in Wonderland,” the Lewis Carroll tale re-imagined in 3-D by director Tim Burton , was the top film in the U.S. and Canada for a second straight weekend, bringing in $62 million in ticket sales for Walt Disney Co. “Green Zone” opened in second place with $14.5 million for General Electric Co. ’s NBC Universal, Hollywood.com Box- Office said today in an e-mailed statement. “Alice,” which stars Johnny Depp as the Mad Hatter, has earned $208.6 million in its first two weeks of release. It set a handful of records in its opening weekend: the sixth-biggest opening ever, the biggest debut for March and for a 3-D film, the largest opening weekend for the year, and the best-ever Imax opening. This weekend’s “Alice” sales “would be a great number for an opening weekend,” said Paul Dergarabedian , film analyst for Hollywood.com Box-Office in Los Angeles. “And for this to happen in the first quarter, it has never been done before. It has to be word-of-mouth that’s driving this.” Dergarabedian said the movie, which also features Helena Bonham Carter and Anne Hathaway , is Burton’s highest-grossing film to date, bypassing 2005’s “Charlie and the Chocolate Factory,” with $206.5 million. ‘She’s Out of My League’ In “Green Zone,” Matt Damon plays a U.S. Army officer investigating an Iraq war conspiracy. Weaving together fiction with fact, such as the Bush administration’s real-life failure to find weapons of mass destruction, the thriller was partly inspired by Rajiv Chandrasekaran ’s book, “Imperial Life in the Emerald City: Inside Iraq’s Green Zone.” Paul Greengrass , of “The Bourne Supremacy” and “The Bourne Ultimatum” fame, directs, and Greg Kinnear and Amy Ryan also star. “A film with the pedigree of Matt Damon and Paul Greengrass of the ‘Bourne’ films, I’m sure they expected much more,” said Dergarabedian. Viacom Inc. ’s “She’s Out of My League” debuted in third with $9.6 million for Paramount Pictures. Jay Baruchel plays an average Joe who becomes perplexed after finding himself dating a beautiful blond woman. “Remember Me” opened in fourth place with $8.28 million for Summit Entertainment LLC. The romantic drama follows two characters, played by Robert Pattinson and Emilie de Ravin, who fall in love while struggling with family tragedies. Pierce Brosnan and Chris Cooper play their fathers. ‘Our Family Wedding’ Pattinson last appeared on the big screen as a teenage vampire in the “Twilight” series from Summit, which also distributed “The Hurt Locker,” the winner of six Oscars including best picture. “Shutter Island,” slid to fifth from third with sales of $8.14 million for Paramount. The movie stars Leonardo DiCaprio as a detective investigating an insane asylum, and has taken in $108 million since its Feb. 19 release. News Corp. ’s “Our Family Wedding” opened in sixth place with $7.6 million for the studio’s Fox Searchlight Pictures. The film features America Ferrera , Forest Whitaker and Carlos Mencia and chronicles the adventures of an interracial couple’s wedding uniting black and Hispanic families. “Avatar” finished in seventh place with $6.6 million. The sci-fi adventure, the highest grossing film ever, has made $730.3 million domestically for News Corp.’s Fox Studio since its Dec. 18 release. To contact the reporters on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net ; Dan Hart in Washington at dahart@bloomberg.net .

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Brain-Eating Zombies Invade Disney in Iger Spending Spree to Win Boy Fans

February 24, 2010

By Seth Lubove and Andy Fixmer Feb. 24 (Bloomberg) — When Walt Disney Co. asked publisher Dan Vado to make a series of comic books based on its Haunted Mansion theme-park ride, he worried that the empire built on the likes of Snow White and Tinker Bell would reject his brand of creepy humor. Vado gave Disney skeletons dangling from nooses, scattered corpses and a ghostly poodle that says “crap.” To his surprise, Disney signed off on his vision. “Everything we did was really strange,” says Vado, founder of San Jose, California-based SLG Publishing , as in Slave Labor Graphics. “The interesting thing about Disney is, for a company perceived as being stodgy, they do a good job of reinventing themselves.” Disney Chief Executive Officer Robert Iger , 59, is on a spending spree at the world’s biggest media company to transform his film studio, amusement parks and stores. In fiscal 2009 , net income at Disney fell 25 percent to $3.3 billion — the worst annual performance in Iger’s five-year reign — and was almost flat in the first quarter of 2010 compared with a year earlier. The global recession has hammered the company’s 11 theme parks, which are offering promotions and discounts. The Burbank, California-based company’s studio is also struggling: In 2009, it churned out box office flops such as “G-Force,” which featured wisecracking guinea pigs. Iger is pouring billions into attracting a new generation of kids — boys especially — raised on violent video games and reality shows. Buying Marvel In December, Disney completed its $4.3 billion purchase of Marvel Entertainment Inc., home of Iron Man, Spider-Man and the X-Men, paying a 40 percent premium over the stock price. The company is now building two additional cruise ships, one of which includes an AquaDuck water coaster that plunges four decks. Park guests will see more-complex, life-size electronic robots made to look like U.S. presidents and Disney characters. And with input from Apple Inc. CEO Steve Jobs , Disney’s largest shareholder , Iger is giving his 350 retail stores a high-tech makeover and opening a new one in New York’s Times Square in the fall. The total price tag for all of the upgrades through 2014: more than $12.3 billion, according to New York-based Soleil Securities Corp. analyst Alan Gould , a 59 percent increase over the prior five years. Investors give mixed reviews of Iger’s moves to refresh the entertainment giant, which was founded as a cartoon studio by Walt Disney and his brother Roy Disney in 1923. Beating S&P After Iger took over in October 2005, the stock rose 53 percent to a seven-year peak of $36.30 in May 2007 before crashing in 2009 during the credit crisis to a low of $15.59. From that bottom last March through Feb. 23, the shares jumped 98 percent to $30.92, beating the Standard & Poor’s 500 Index gain of 62 percent but lagging behind rival News Corp.’s 164 percent rise . “What we look for is a company that is constantly refreshing its operations, improving and continuing to build a business, and that’s true of Disney,” says Michael Cuggino , president of San Francisco-based Permanent Portfolio Family of Funds Inc., which owns 720,000 Disney shares. In December, S&P affirmed its earlier revised outlook on Disney’s debt to negative from stable, citing concerns about the company’s recovery, the growth in spending and threats from deep-pocketed rivals. “Disney is going to be basically doubling what they are spending,” says James Tarkenton , a managing director at Lateef Investment Management. Greenbrae, California-based Lateef has sold all of the 149,984 Disney shares it held in April 2009. Disney spokeswoman Zenia Mucha declined a request for an interview with Iger. Iger’s Deals Iger, who came to Disney in 1996 as part of the company’s $19 billion purchase of Capital Cities/ABC Inc., has proved to be a serial acquirer. Three months after taking the helm as CEO, he agreed to pay $7.4 billion for Pixar, which was co-founded by Jobs, to improve Disney’s flagging animation pipeline. In all, the CEO has snapped up 28 companies in whole or part, according to data compiled by Bloomberg. When announcing the deal for Marvel and its cast of superheroes in August, Iger said they would add to Disney’s stable of characters and attract more boys to its cable cartoon offerings. While some Disney entertainment such as Pixar’s “Cars” and the “Pirates of the Caribbean” action films may be popular with boys, most of its movies, cable shows and characters appeal to young children and adolescent girls, says UBS AG analyst Michael Morris in New York. ‘High School Musical’ The Disney Channel is the leading cable network in reaching girls age 6 to 14 with hits such as “Hannah Montana,” about a teenage pop singer, Disney has said. “Content and products for boys have been less consistent for Disney than those for girls,” Morris says. “When Disney looks for growth opportunities, it sees big potential with boys.” Last year, Disney also bought Wideload Games Inc. , maker of the violent video game “ Stubbs the Zombie in Rebel Without a Pulse ,” featuring brain-eating zombies. And the company rebranded its Toon Disney cable cartoon channel into Disney XD. The channel’s new programming features shows such as “Kick Buttowski” aimed at boys age 6 to 14, the company said. When Disney creates a franchise — such as “High School Musical,” which features teen heartthrob Zac Efron — Iger tries to exploit it across the company’s empire. The Disney Channel movie also found life in theaters, a stage musical, CDs, DVDs, video games, an ice-skating show and at parks. ‘Up’ “When they get a hit, they can really leverage that for big profits,” says Cuggino. “But when they miss, they miss on many levels. That makes for a rough and volatile business.” While Pixar’s “Toy Story” and “Finding Nemo” films have produced some synergy, the Academy Award-nominated “Up” has not. The lead character, a grumpy old man, would be unappealing in other venues, analysts say. Iger said in July that while he was satisfied with the movie’s box office sales, he didn’t consider it a franchise. “Disney needs to figure out how to develop those properties,” says Janna Sampson , co-chief investment officer of Lisle, Illinois-based OakBrook Investments LLC, which has 300,000 Disney shares. “That’s why I thought they paid all that money for Pixar.” Iger took over from Michael Eisner, who in 2004 was stripped of his chairmanship by Disney’s board while he was embroiled in feuds, including one with Jobs over a Pixar distribution deal. Eisner, 67, retired the following year, after Walt Disney’s nephew, Roy Disney, led a shareholder revolt, claiming Eisner was a micromanager who had caused a creative brain drain. ‘Most Enthusiastic’ Eisner’s strategic planning division applied so much scrutiny to business proposals that managers were reluctant to pitch ideas, Iger said in a 2005 analyst meeting after disbanding the group. “Where Eisner micromanaged, Iger gives his managers much more freedom,” says Soleil Securities’ Gould. “The strategic planning division was really disliked under Eisner.” Born in Brooklyn and raised on Long Island, New York, Iger honed his diplomacy on the student council at Oceanside High School, where he was voted the “most enthusiastic” member of the class of 1969. At ABC, he ascended in rank as the entertainment industry consolidated: In 1987, the one-time studio supervisor became vice president of programming at ABC Sports. After the Disney deal, he rose to chairman of ABC Group, president of Walt Disney International and president of Disney in 2000. Dick Cook Resigns “Iger manages people extraordinarily well,” says Laura Martin , an analyst at Needham & Co. in Pasadena, California. As CEO, Iger named Pixar creative director John Lasseter the chief creative officer of both Walt Disney and Pixar Animation studios. Lasseter also offers advice to executives involved with theme parks, video games and merchandising. And he appears in corporate videos expounding on changes he has made, such as creating realistic Pixar toys by using digital data from movies to craft the face of Woody from the “Toy Story” films, for example. After years of executive turnover under Eisner, Iger’s top lieutenants have mostly stayed put — until recently. During a conference call in May, Iger criticized his studio, led by 40- year Disney veteran Dick Cook, which had produced clunkers such as “Bedtime Stories” about a hotel handyman. “It’s about choice of films and the execution of the films that have been chosen for production, and we’ve had a rough year in terms of the performance,” Iger said. Four months later, Cook resigned, replaced by Rich Ross , then president of Disney Channels Worldwide. Captain America Soon after, Ross named new heads of studio production and distribution. “Everyone liked Dick Cook, but the results weren’t coming through,” Gould says. In 2009, Disney finished No. 5 in box office sales among the six major studios, according to Box Office Mojo . The studio’s operating income dropped 84 percent in fiscal 2009, its worst showing in a decade, before rebounding in the first quarter, which ended on Jan. 2. To fill theaters, Ross, 48, can’t yet rely on several of Marvel’s most popular comic-book characters. They’re tied up in licensing deals: News Corp. has the rights to the X-Men, Sony Corp. controls Spider-Man and Universal Studios Inc. claims several Marvel characters for exclusive use in its Orlando theme parks. Ross has to mine the likes of Captain America, Thor and lesser-known figures like Ant-Man until the bigger superhero licenses expire beginning in 2013. The licensing deals soured some analysts on the Marvel purchase. ESPN “Over the long run, we suspect this will be viewed as Mr. Iger’s first major mistake as CEO,” Citigroup Inc. analyst Jason Bazinet wrote in September. Iger’s best-performing business is the one that bears no resemblance to Disney’s iconic brands: ESPN . Disney picked up ESPN, the No. 1 U.S. sports network by ratings, in the Capital Cities/ABC deal. ESPN has become the workhorse in the company’s media division , its largest, composed of broadcast and cable networks. Buoyed by growing subscriber fees, cable generated 29 percent of Disney’s revenues in 2009, up from 23 percent three years earlier, and produced 64 percent of the company’s total operating profit in fiscal 2009. “Disney should be called ESPN Co.,” Gould says. ABC’s Decline ABC , the third-ranked broadcast network, according to Nielsen Co., is dwarfed by cable. Gould estimates that ABC, including its local stations and production operations, is worth about $5.3 billion, or about 14 percent of ESPN’s value. Iger may consider selling the 66-year-old broadcaster, says analyst Michael Nathanson of New York-based Sanford C. Bernstein & Co. “ABC is a good question,” Nathanson says. “I would ask the company if ABC fits in.” As ABC’s advertising revenue falls, Iger is demanding an increased share of the fees paid by cable and satellite companies to the broadcaster’s independent affiliate stations that carry its programming. “We should get paid for the value we deliver,” Iger said in December. Nexstar Broadcasting Group Inc. , an Austin, Texas-based affiliate of ABC and other networks, plans to resist Iger’s demand for a bigger slice of fees. CEO Perry Sook says he needs the fees — $22.5 million in the first nine months of 2009 — to subsidize the decline in ad sales from the 63 local stations Nexstar owns and works with. Theme Parks “I have a company car. Do the networks also feel they’re entitled to drive that for two days a week?” Sook asks. Iger’s biggest financial bet is on his theme park, resort and cruise ship business, which in fiscal 2009 posted its steepest decline in operating income since the 2001 terrorist attacks in the U.S. Disney has used discounts , including as much as 45 percent off hotel rates at Walt Disney World in Florida, to lure visitors. In keeping with the CEO’s edict to apply technology wherever possible, new rides at Epcot in Florida include a motion simulator called the “Sum of All Thrills.” Using a touchscreen monitor, kids customize their ride by programming simulated corkscrews, inversions and hills. At Disneyland in California and Walt Disney World, the “Star Tours” rides, using scenes based on the original “Star Wars” movies, will be updated next year with 3-D versions of the more-recent trilogy of movies. Walt Disney World will have to work harder for visitors after the nearby Universal Studios Florida park opens a new “Wizarding World of Harry Potter” area this spring. It will feature a replica of Hogwarts School of Witchcraft and Wizardry. Executive Shuffle “Look out, Cinderella Castle, here comes Hogwarts castle,” says Dennis Speigel , president of Cincinnati-based consulting firm International Theme Park Services Inc. Even in Asia, Disney is finding it hard to make a buck. Five years ago, the company and the local government in Hong Kong formed a joint venture to open a Disneyland in the region, where Ocean Park , a sea-themed venue, has proven tough competition. Disney’s venture is still losing money. “They missed the mark in Hong Kong in underestimating the competition,” Speigel says. Disney is now moving into Shanghai after the Chinese government in November gave its approval to build an amusement park. In leaving his mark on the Magic Kingdom, Iger is also shuffling his top managers. In November, he switched Chief Financial Officer Thomas Staggs , 49, with James Rasulo , 54, head of the theme parks. Bloodthirsty Zombies Iger said he was handing them new challenges, not preparing for succession. But Gould says Staggs, a former Morgan Stanley & Co. investment banker, is likely being given operational experience to groom him for the top job. Cuggino, the Disney investor, praises Iger’s moves. “I like companies that invest in their business when economic times are tough,” Cuggino says. “That means they’ll be stronger when the economy improves.” If Iger gets a fairy tale ending to his tenure as CEO, it will at least partly come from muscle-bound superheroes and bloodthirsty zombies — a far cry from the characters Walt Disney made famous at Disneyland, the Happiest Place on Earth. To contact the reporters on this story: Seth Lubove in Los Angeles at slubove@bloomberg.net ; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

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Lula Loses to `Chipmunks’ as Brazilians Reject Election-Year `Propaganda’

February 17, 2010

By Jonathan J. Levin and Maria Luiza Rabello Feb. 17 (Bloomberg) — A new movie about Luiz Inacio Lula da Silva , one of the most expensive ever produced in Brazil, is falling short of its blockbuster expectations as the president’s record popularity fails to bring box-office profits. Ticket sales for “Lula: the Son of Brazil ” totaled 6.93 million reais ($3.7 million), representing 818,337 spectators, from its Jan. 1 debut through Feb. 7, according to Filme B , which tracks movie sales. That trails the 5 million viewers the film’s producers said they hoped to attract and the 4.4 million spectators who paid 34 million reais to see Twentieth Century Fox’s “Alvin and the Chipmunks: The Squeakquel ” since Jan. 8. Brazilians are staying away because the movie is political propaganda they are too sophisticated to fall for 25 years after the military dictatorship ended, said Agripino Maia , Senate leader for the opposition Democrats Party. The movie depicts Lula’s progression from poverty in Brazil’s countryside to the slums of Sao Paulo while glossing over events that may be seen as unflattering. “One thing is to approve of his government as something that is going reasonably well, and another thing is to worship a personality,” said Bolivar Lamounier , a risk analyst and partner with Sao Paulo-based Augurium Consultoria. “That’s something Brazilians don’t take very well.” Opposition leaders such as Maia say the film portrays Lula in an excessively flattering manner, intended to bolster the candidacy of Cabinet Chief Dilma Rousseff , who the president hopes will succeed him after October’s election. Film’s Timing A spokesman for the president’s office, who cannot be identified under its policy, said the government has no involvement of any kind with the film and won’t comment. Paula Barreto, whose family runs the Rio de Janeiro-based LC Barreto production company behind the film, said the movie wasn’t meant to provide an electoral boost to Lula or his allies. She rejected suggestions its release was timed to provide maximum support for Rousseff, saying a financing shortage caused by the global credit crisis, not politics, delayed its debut by several months into the start of the election year. Lagging sales show how Brazilian politics under Lula remain divided along class lines, according to Barreto. “The Brazilian elite doesn’t like Lula, but the majority of his supporters can’t afford to buy the admission tickets,” she wrote in a Jan. 14 e-mail interview. Polls have Rousseff in second place before the vote. Last month, she narrowed the gap with Sao Paulo Governor Jose Serra in a runoff to 7 percentage points from 19 points in November, according to a poll by Sensus released Feb. 1. The CNT/Sensus poll surveyed 2,000 people from Jan. 25 to Jan. 29 and had a margin of error of 3 percentage points. Political ‘Propaganda’ The movie’s publicity tells viewers “You know the man, but not his story.” It covers the years 1945 to 1980, when the union leader was arrested under orders from the military dictatorship, ending before his first run for government office in 1982 and his successful bid for Brazil’s presidency in 2002. In an early scene, an adolescent Lula stands up to his violent, alcoholic father, foreshadowing the adult Lula’s speaking out against Brazil’s dictatorship as head of the nation’s largest steel workers’ union. At another point, as a union leader, Lula gives a speech without a microphone as a stadium of enraptured spectators repeat his discourse word-by- word so that the people in the back rows can understand their working-class hero. The movie tells the side of Lula’s story that most Brazilians already know, according to film critic Marcelo Janot, a contributor to Rio de Janeiro-based O Globo newspaper. There’s no mention of Lula fathering his first daughter, born in 1974, out of wedlock before leaving the mother for another woman. ‘City of God’ “Lula: the Son of Brazil,” which debuted at 350 theatres nationwide, cost almost twice as much to make as Brazil’s 2002 Academy Award-nominated “ City of God .” The biographical film cost 12 million reais to produce, tying a record set in 2003 by “Carandiru” without considering inflation. The producers spent an additional 3.5 million reais on publicity. The budget seemed justified given Lula’s status as the most popular president since Brazil became a republic in 1889, says David Fleischer , a political scientist at the Federal University of Brasilia. A constitutional ban on three consecutive terms means Lula, who had 72 percent approval rating in a poll published Dec. 18 by Datafolha , won’t be on the ballot in October for the first time since democracy was restored in 1985. Rousseff has never run for elected office. To broaden her appeal, she’s looking to wrap herself in Lula’s accomplishments, Fleischer said. Lula’s Accomplishments Lula, 64, has more than doubled the minimum wage to 510 reais from 200 reais since taking office in January 2003 and through cash handouts has helped lift 19 million Brazilians out of poverty. Economic growth has averaged 3.4 percent a year, according to International Monetary Fund data . The film opens at theaters in Argentina and Chile next month, and will reach Colombia, Venezuela and Mexico in July, said Eduardo Costantini, whose Costa Films company bought the distribution rights for Latin America. In Brazil, Lula’s fame and domination of politics are secure regardless of the film’s performance, says producer Barreto. “He already has enough popularity,” Barreto said. “He doesn’t need the movie for that.” To contact the reporter on this story: Jonathan J. Levin in La Paz at JLevin20@bloomberg.net ; Maria Luiza Rabello in Brasilia at mrabello@bloomberg.net

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River Cafe, Chez Bruce to Open Pop-Up Eateries for Haiti Relief: Food Buzz

February 9, 2010

By Richard Vines Feb. 9 (Bloomberg) — The River Cafe, Chez Bruce and other leading London restaurants are planning to create a series of one-day, pop-up eateries next month to raise money for Haiti. Behind the project is restaurateur Rebecca Mascarenhas, who will host the dinners at her Putney venue, the Phoenix, which is closed for refurbishment. Diners will pay 60 pounds ($94) for three courses and may bring wines at 10 pounds corkage or buy bottles from suppliers at near cost price. “We’re doing this for Action Against Hunger because they support indigenous farmers, which is key for the long-term recovery of the country,” Mascarenhas said yesterday in an interview. “You can’t rely on aid for long-term stability.” Mascarenhas is hoping to get a dozen or so restaurants on board. Restaurateurs who have committed include her business partner Phil Howard of the Square and Rowley Leigh of Le Cafe Anglais. Restaurant staff will work without payment, and at least one well-known television chef is close to committing, said Mascarenhas, whose London venues include Kitchen W8. Details of the event will appear on the site http://www.putneypopup.co.uk/ when it’s up and running. Fans of Colin Firth get the chance to meet the actor at the inaugural event of Le Cafe Anglais’s cinema club, on Feb. 23. He’ll take part in a discussion of “A Month in the Country,” along with director Pat O’Connor. The scriptwriter on the movie was the late Simon Gray, who was a regular at the restaurant, where he held a party for the third volume of his “The Smoking Diaries.” Tickets for Le Cine Anglais cost 50 pounds and include dinner with wine. For tickets or information, call Nicky Lynskey on +44-20-7221-1415 or e-mail nicky@lecafeanglais.co.uk . Tristan Welch at Launceston Place has introduced a two- person chef’s table in his kitchen. He’s not publicizing it — well, apart from here — so if you are interested, you need to call the restaurant and ask nicely. Tel. +44-20-7937-6912. Gordon Ramsay has found an unlikely guide as he explores the etiquette of Twitter : restaurant critic Giles Coren. The shouty chef, who signed up on Feb. 1, gained more than 8,500 followers within days. Coren — known for his own expletive- packed Tweets — has advised Ramsay to follow a few people so as not to appear narcissistic. Heaven forbid. Ramsay took the advice and now looks at the Tweets of just four people: Jamie Oliver , Jonathan Ross , Chris Moyles … and Coren. Ramsay is roasted in an interview in the Australian newspaper with chef Michel Roux Sr ., who says Ramsay spent more than two years with the Roux family at Le Gavroche. What does he make of the TV chef? “I find (Ramsay’s behaviour) appalling; totally out of place and totally unacceptable,” the paper quotes Roux as saying. Does he rate Ramsay as a chef? “That guy is not better than anyone else.” And Marco Pierre White ? “He is a good cook, one of the best I’ve seen; he’s got palate, he’s got flair; {he is on} another scale to Gordon Ramsay.” I went along to Starbucks Coffee College, in Chiswick, west London, to learn about ethical sourcing and — more important for me — how to get that thick froth on top of my latte. The key is to froth the milk gently, allow a little air in by pulling away from the wand and not overheat. The last person who taught me said I should bang the jug up and down, so now I am confused, but the latest way appears to work. Freggo, the Argentine ice cream and coffee bar on Swallow Street, will be giving away a Dulce de Leche pancake with every coffee on Pancake Day, Feb. 16. Pierre Herme conducted a tasting of his macaroons and chocolates at Pied a Terre last week and was asked about wine matches. It can’t be done, he said, rejecting sweet wines as confusing and Champagne with a simple, “Non.” Having tried his creations — on sale at Selfridges — I’m almost inclined to agree. But I’m not sure if a gift of a box with a bottle of mineral water will quite do the trick on Valentine’s Day. ( Richard Vines is the chief food critic for Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: Richard Vines in London at rvines@bloomberg.net .

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CoStar’s Retail News Roundup: Feb. 7-13, 2010

February 7, 2010

This week in the Retail Roundup, CoStar reports on expansions or new concepts at Casual Male, Coach, Subway and Chick-fil-A; closings, cutbacks, bankruptcy, default, receivership or foreclosure news at Disney Store, Movie Gallery, Car Dealerships, Walking…

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Movie Gallery Files Bankruptcy, Closing 800+ Stores

February 2, 2010

Late Tuesday night, the country’s second largest movie rental chain, Movie Gallery, brought to fruition circulating rumors that it would file Chapter 11. Like most retailers, Movie Gallery was hit hard from lack of consumer demand during the recession…

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News Corp. Said to Offer Cash, Debt Assistance to Keep MGM Studio Running

January 30, 2010

By Sarah Rabil and Michael White Jan. 30 (Bloomberg) — News Corp. has expressed interest in providing Metro-Goldwyn-Mayer Inc. with cash and assistance in restructuring debt to keep the studio independent, according to a person with knowledge of the situation. The non-binding offer from News Corp. , owner of the Twentieth Century Fox film studio, was outlined in a letter this week, said the person, who declined to be identified because the talks are private. The person wouldn’t disclose other terms. MGM, maker of the “James Bond” movies, is evaluating preliminary bids from possible buyers as it struggles with $3.7 billion in debt. News Corp.’s Fox studio distributes DVDs for Los Angeles-based MGM. Chris Petrikin , a Fox spokesman, declined to comment. The media investment firm Qualia Capital LLC is separately offering MGM $500 million to fund operations as part of a plan that also seeks to convert some debt to equity, another person with knowledge of the situation said yesterday. In return, Qualia would receive an equity stake in MGM, said the person, who wasn’t authorized to speak publicly. Susie Arons , an MGM spokeswoman, declined to comment. News Corp., the owner of Fox television, signed a non- disclosure agreement with MGM on Jan. 15, overcoming a monthlong impasse and allowing it to proceed with an offer, according to a person familiar with the decision. News Corp., based in New York, gained 9 cents to $12.61 yesterday in Nasdaq Stock Market trading . Class A shares of the company, controlled by Chairman and Chief Executive Officer Rupert Murdoch , gained 51 percent last year. Interest Respite MGM said yesterday its lenders extended a respite on interest payments covering the debt until March 31 to give the movie studio time to restructure or find a buyer. MGM will spend “several weeks” evaluating preliminary bids. Lenders agreed in October to let MGM skip interest payments. The studio has since put itself up for sale. “Fame” was MGM’s sole theatrical release in 2009, collecting $69.8 million in worldwide ticket sales, according to Box Office Mojo. The movie, a remake of a 1980 film, cost $18 million to produce, according to the Sherman Oaks, California- based researcher. MGM plans three theatrical releases this year, starting with “Hot Tub Time Machine” on March 26. MGM, created in 1924, made films including “The Wizard of Oz” and “Ben Hur.” The company, owner of a 4,100-film library with titles including “Rocky,” sold many of its early movies prior to its 2005 buyout by a group led by private equity firms Providence Equity Partners and TPG. It has a co-production deal with Warner Bros. on the planned film “The Hobbit.” Time Warner Inc. , owner of the Warner Bros. film studio, was among the first-round bidders, a person familiar with the offers said last week. Lions Gate Entertainment Corp. , the independent film studio run from Santa Monica, California, is also involved in the auction. Time Warner, based in New York, rose 64 cents to $27.45 today in New York Stock Exchange composite trading . The shares gained 40 percent in 2009. Lions Gate fell 2 cents to $5.20 after rising 5.6 percent last year. To contact the reporters on this story: Sarah Rabil in New York at srabil@bloomberg.net ; Michael White in Los Angeles at mwhite8@bloomberg.net

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Rob Kall: Real Vampires, Their Human Cattle and Supreme Court Capos: Time to Declare War on Corporate Personhood

January 25, 2010

Are there vampires that “farm” humans for profit? I say that we have them living among us, and the five Supreme Court Justices who just reversed decades of election spending reform are some of their “capos” enabling their evil. Daybreakers , starring Daniel Day Lewis and Ethan Hawke, portrays a world where vampires have taken over. Humans are hunted, captured, then stored in facilities, unconscious, to be “farmed” for blood. A corporation supplies the blood to the vampire population… for a profit. To vampires, humans are sources of food. To the corporation, humans are sources of profit, with zero consideration for their humanity. Sound familiar? How far are we from the time when corporations will become more aggressive, more overt in making profits from humans, regardless of the damage done to them? This week’s Supreme Court decision reminds me of how, in concentration camps, “capos” were prisoners who were well treated, in response for betraying their fellow prisoners. Capos were despised traitors. The five conservative, activist members of the Supreme Court who revoked decades of campaign finance reform are like capos, betraying America, betraying democracy. Like vampire enablers, they have handed the keys to the USA’s democracy to blood-sucking corporations. Without spoiling the movie, I can say that a lot of vampires are killed. In the real world, corporations are the vampires — the monsters that suck on human blood, metaphorically. Spoiler alert. In the movie, Daybreakers , Ethan Hawke discovers a way to cure the vampires, to turn them human again. There are ways that this can be done with corporations too. First, enact the legislation Bernie Sanders is calling for, to identify corporations that are too big to fail — not just financial ones, all of them. Then, take away corporate personhood. Enact laws that enable people to accuse corporations of crimes — fraud, theft, murder, conspiracy to commit crimes — and provide harsh punishments, including the death penalty for the corporations and severe penalties, including incarceration, for executives and employees of the corporations. The vampire theme on television and in books and movies has exploded as of late. It is a meme that is now common in our culture. One has to wonder if underlying that meme, if we dig deep, we’ll find corporate blood-sucking as the inspiration, or the base in reality for the flourishing of the idea.

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Obama’s Bank Limits: Week in Review

January 22, 2010

Jan. 22 (Bloomberg) — President Barack Obama’s proposal to restrict commercial banks leads a selection of the week’s top stories on Bloomberg.com. Click here for a special report on Obama’s plan, which aims to make banks more secure by forcing them to minimize trading for their own account and give up stakes in hedge funds and private-equity firms. The video pick of the week is an interview with billionaire investor Warren Buffett. Click on the VIDEO tab above to watch. The accompanying story “ Buffett Says He Can’t See Rationale for Bank Levy ,” was the most-read item on Bloomberg.com in the past week. Bloomberg BusinessWeek’s cover story is “ King of the World (Again) ,” the inside story of how Avatar director James Cameron became the most powerful commercial force in the movie business — twice. Following is a selection of stories from the past week, chosen by senior editors at Bloomberg News. Wall Street Seeing Goldman in Rare Reversal With Morgan Stanley Jan. 19 (Bloomberg) — Goldman Sachs Group Inc., whose record earnings in the first nine months of last year fueled public outrage, will probably hit a profit plateau in 2010, just as Morgan Stanley rebounds from its worst year ever. AIG 100-Cents Fed Deal Driven by France Belied by French Banks Jan. 20 (Bloomberg) — The Federal Reserve Bank of New York paid French banks 100 cents on the dollar to settle trades with American International Group Inc. in November 2008, the same month an AIG competitor negotiated payments of less than a third of that to retire similar bets. FARC’s Cocaine Sales to Mexico Cartels Prove Too Rich to Subdue Jan. 20 (Bloomberg) — Mexican drug cartels are getting cocaine from Colombia’s biggest guerrilla group in a deal that increases the security threat to both nations, according to a document captured by Colombian military intelligence and to a government official in that country. Apple Said to Talk With Microsoft to Replace Google on IPhone Jan. 20 (Bloomberg) — Apple Inc. is in talks with Microsoft Corp. to replace Google Inc. as the default search engine on the iPhone, according to two people familiar with the matter. Carbon Falls as Climate Failure Is Boon for Oil Polluters Jan. 19 (Bloomberg) — The inability of government leaders to agree on stricter pollution controls at meetings in Copenhagen last month is showing up in commodity markets, where it’s getting cheaper to emit greenhouse gasses. Who in Malaysia Knows Oakland Raiders Becomes AirAsia Strategy Jan. 20 (Bloomberg) — On a sultry June night, Kuala Lumpur’s rooftop Luna Bar is throbbing with dance music as an overflow crowd takes in the view of the Malaysian capital’s Petronas Twin Towers. Champagne corks pop as men in suits mingle with women in little black dresses, joined by American football players and cheerleaders. U.K. Traders May Face ‘Skittish’ Markets on Delayed Vote Count Jan. 20 (Bloomberg) — Adam McCormack worked through election night in 1992, selling U.K. government bonds as markets rallied on an unexpected win by the Conservatives. Billionaire Abramovich Buys Art for Yacht With Helipads, Lasers Jan. 19 (Bloomberg) — Russian billionaire Roman Abramovich bought 35 contemporary artworks for his luxury yacht, “Eclipse,” an art dealer revealed. The top 10 most-read stories on Bloomberg.com for the past week (excluding daily market coverage): 1. Buffett Says He Can’t See Rationale for Bank Levy 2. Obama Calls for Limiting Size, Risk-Taking of Financial Firms 3. Health Bill Can Pass Senate With 51 Votes, Van Hollen Says 4. Democrats Face Loss of Kennedy Seat, Health-Care Vote 5. Obama to Propose New Rules on Banks’ Size, Trading 6. Pelosi Says House Lacks Votes for Senate Health Plan 7. Wall Street Seeing Goldman in Rare Reversal With Morgan Stanley 8. China’s GDP Growth Accelerates to Fastest Since 2007 9. Citigroup Posts Second Annual Loss on Costs to Repay the U.S. 10. Hedge Funds Hold Investors ‘Hostage’ After Rebound # # -0- Jan/22/2010 17:47 GMT

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Cameron’s $1.7 Billion Blue Aliens Have Studios Renting His 3-D Cameras

January 22, 2010

By Ronald Grover, Tom Lowry and Michael White Jan. 22 (Bloomberg) — Reasonable people can debate the artistic merits of James Cameron ’s work. Anyone for whom Arnold Schwarzenegger is a muse isn’t likely to specialize in observing the human condition, unless it’s in the aftermath of an exploding building or a run-in with a mercenary robot from the future. What’s indisputable is that the “Avatar” director’s influence extends beyond his movie credits. More than George Lucas or Steven Spielberg , Michael Bay or Pixar , Cameron is the most important commercial force in modern film, and his vision for the movie business is demolishing anything that gets in its way. There are 1.69 billion reasons that Cameron is Hollywood’s director of the moment — that figure being the worldwide gross through Jan.20 of “Avatar,” the blue-aliened, 3-D extravaganza that earned Golden Globes for best director and best dramatic picture. “Avatar” is approaching the $1.84 billion mark set by 1997’s “Titanic,” Cameron’s previous feature and current holder of the title Highest-Grossing Film of All Time. The money, while impressive, only hints at Cameron’s impact. “Titanic” took several months to reach $1 billion worldwide at the box office. “Avatar” hit that milestone in 17 days. How? Because cinema operators say they can charge at least 30% more per ticket if a movie is in 3-D. By persuading filmgoers to put on the 3-D glasses and pay more for the privilege, Cameron has changed the economics of the movie business. ‘Change People’s Minds’ “Films can change people’s minds, and the aim with ‘Avatar’ was to introduce the industry to the possibilities of 3-D,” Cameron told Bloomberg BusinessWeek. “I decided, let’s go make a movie that they can’t ignore.” At 55, the man who declared himself king of the world at the 1998 Oscars has mellowed some. Cameron accepted his 2010 Golden Globes with a mix of humility and amazement. No one knows better than he how close “Avatar” came to not being made. Cameron’s track record for delivering large profits on big budgets didn’t stop Twentieth Century Fox, which co-financed “Titanic,” from hesitating to make an even riskier film that required the creation of a three-dimensional alien world. “I knew that if this failed my name would be dirt, but that’s the nature of this business,” says Cameron. “Every director knows that you can flame and burn like the Hindenburg, and do it very publicly.” Souped-Up Camera With the studio balking, Cameron had to turn himself into an inventor-entrepreneur. Using his own funds, he says he developed the technology to bring “Avatar” to the screen, betting that what he saw in his head would be so visually persuasive that, ultimately, he could sell his souped-up camera rigs back to Hollywood at a profit. Until “Avatar” came along, 3-D movies — even such recent efforts as 2008’s “Journey to the Center of the Earth” and 2005’s “Chicken Little” — had the stigma of novelty. Now fellow directors, convinced their movies will attract a wider audience in 3-D, are willing to pay Cameron to use his gear. “Avatar’s” technological wizardry also coincides with a push by Sony Corp ., Panasonic Corp. and other consumer electronics companies to bring 3-D into the home with a new generation of TVs and DVD players. “This is a game-changer,” says Rupert Murdoch , chairman and chief executive officer of New York-based News Corp. , which owns Fox. “If you create a film of this quality and make it an event, it shows that people will pay to come see it. We will see more [3-D in] films and TV.” Blue-Hued Humanoids Cameron wrote the original script for “Avatar” in the mid-1990s. Set 150 years in the future, it told the story of a paraplegic ex-Marine who travels to a moon called Pandora where he inhabits the body of a Na’vi, the 10-foot-tall, blue-hued humanoids who inhabit the world’s jungles. The Marine falls in love with a Na’vi princess (think John Smith and Pocahontas) and ends up defending her people against Earthlings eager to exploit Pandora’s resources. Even 15 years ago, Cameron says he had a fully formed vision of Pandora — right down to the blue aliens, six-legged mammalian predators and floating mountains. He put any plans to film his “Avatar” script on indefinite hold, knowing that the existing technology couldn’t do justice to his ambitions. In 2000 Cameron contacted Vincent Pace, an entrepreneur who helped design and manufacture the underwater lighting system for Cameron’s 1989 movie, “The Abyss.” Through his eponymous company, which develops and rents cameras for use in hazardous conditions, Pace agreed to work with Cameron on a camera rig that could capture 2D and 3-D images simultaneously. Cameron says the project cost about $12 million, much of it his money. Incentive to Upgrade It’s a rule as old as Hollywood: Never sink your own money into a movie. Ultimately, Cameron says he felt his investment would be justified not only because it would allow him to make “Avatar” but also because the new technology would accelerate the rollout of 3-D, giving theater chains an incentive to upgrade their projectors and screens and moviegoers an incentive to leave their increasingly well-equipped living rooms. Developing the technology was one massive project. Cameron also had to persuade Fox to finance “Avatar.” Although the studio had backed and distributed several Cameron films, the “Titanic” experience had made Fox executives cautious. Originally budgeted at $110 million, the film’s production costs ballooned to $200 million when special effects and the cost of constructing the ship delayed filming. There were also months of rumors preceding the film’s release that it would prove to be one of the worst business decisions in the history of the movies. Given all that scary background, says Fox film-unit Co- Chairman Tom Rothman , “‘Avatar’ couldn’t be rushed.” In 2005 the studio placed a small wager on Cameron — $10 million so he could show proof of concept. Spruce Goose With the Fox money, Cameron repaired to the 280,000-square- foot hangar he leases in Playa Vista, California — where in the 1940s Howard Hughes built the Spruce Goose — and began working on a 3-D film clip that he could use to persuade Fox brass to make the movie. Jeffrey Katzenberg , CEO of DreamWorks Animation SKG Inc. , says he and Cameron were in touch frequently during the experimentation phase and that Cameron visited the DreamWorks facility in Glendale, California, to learn more about animation software. “We create our own world in animation,” Katzenberg says. “But this was the first time a director could take real characters and put them into a world he had created, in real time.” Jump-Start the Revolution Katzenberg says he is one of Hollywood’s leading cheerleaders for 3-D moviemaking — higher-priced tickets and bigger audiences mean more money for his studio. He says he was hoping Cameron’s movie would jump-start the revolution. “Everyone,” he says, “was waiting for ‘Avatar.’” In October 2005, Cameron screened his 3-D segment for four Fox executives at the offices of his production company, Lightstorm Entertainment, in Santa Monica, California. “Their eyes kind of lit up,” Cameron says. “They could see what I had been talking about for months.” “Avatar” producer and Cameron business partner Jon Landau says Fox still wanted a shorter script and a more reasonable budget. In response, says Landau, Cameron combined several characters to trim expenses. Cameron says he also agreed to cut his usual fee in half and take a lower percentage of the film’s revenue if “Avatar” wasn’t profitable. “Luckily,” says Cameron, “we’re at such a stratospheric level now that we’re not worried about that.” Too Much Money By mid-2006, according to a person involved in the negotiations, Fox was still concerned that making “Avatar” would cost too much money. “They told us in no uncertain terms that they were passing on this film,” Cameron says. Cameron tried to persuade another studio to get involved. Walt Disney Co. had produced two of the director’s 3-D underwater documentaries, so Cameron invited Dick Cook , then Disney’s studio chief, to watch the clip. “We loved Jim and would have liked to have worked with him,” says Cook. “He has an infectious love of 3-D that impressed us. Unfortunately, we never got that far.” The reason: Fox had the first right of refusal. “We were never going to let this one get away,” says Fox film Co-Chairman Jim Gianopulos . To get the deal done, the studio brought in partners to share the financial burden. Fox already had a deal with Dune Entertainment, part of a New York private equity fund that since 2006 has contributed financing for Fox movies. To further reduce its risk, Fox began talking to London-based Ingenious Media Holdings Plc , which since 1998 has raised $8 billion to invest in such films as “Shaun of the Dead,” “Night at the Museum” and “Live Free or Die Hard.” Persuasion Taking a stake in “Avatar,” however, required some persuasion. James Clayton, who oversees Ingenious’s movie investments, recalls multiple meetings with Cameron and Landau in Playa Vista before deciding to invest an undisclosed sum. “I was really impressed by their understanding of the business, that there is so much competition these days for people’s leisure time that you have to create something you won’t find on TV, on computer games, the Internet, to draw audiences into the theater,” Clayton says. “This wasn’t purely a creative process for them, like it is with some producers. Jon and Jim absolutely understood the need to cater to audience tastes.” With Ingenious on board, Fox had lowered its exposure to less than half of “Avatar’s” $237 million budget. ‘More Money Than Them’ “We consider all filmmaking a dangerous game,” says Murdoch. “And we always lay off [risk] to the film funds when we can. This time we laid off more than usual. But we own much of the distribution and other rights. In the end, we will make much more money than them.” In October 2006, Fox agreed to make “Avatar.” Cameron says he recalls studio executives saying, “We don’t get the giant blue guys with the tails, but we believe in you and want to do this movie with you.” Months earlier, Cameron had put a traffic light outside Landau’s office. After Fox said yes, they switched it from amber to green. Production began, and word soon leaked out that something extraordinary was going on in Cameron’s airplane hangar. The director had rigged the ceiling of the cavernous space with cameras that tracked his actors, who were wearing versions of the motion-capture suits made famous by the character Gollum in Peter Jackson ’s “Lord of the Rings” trilogy. Headsets rigged with tiny cameras captured actors’ facial expressions and eye movements, a jolt of reality that Cameron deemed crucial if he was going to make the film. Using software developed in-house, the crew imported the actors into Pandora’s digital world while Cameron was shooting. Pilgrimages to Playa Vista Before long, other directors began making pilgrimages to Playa Vista. Landau recalls visits from Spielberg, Ridley Scott and “Pirates of the Caribbean” director Gore Verbinski . Landau says he even set up a screening room near the set so visiting filmmakers could watch on a monitor what Cameron was seeing in real time through the lens of his camera. In December producer John Davis (“I, Robot”; “AVP: Alien vs. Predator”) screened “Avatar” at a special VIP showing in Hollywood. “I saw how 3-D could improve a film,” Davis says. Davis says he hopes to persuade Fox to shoot a remake of the 1963 movie “Jason and the Argonauts” in 3-D. “Transformers” director Michael Bay and “Star Trek” director J.J. Abrams have said they would like to convert their franchises to 3-D, too, though Paramount hasn’t yet agreed. Steady Stream Not every movie will warrant the investment that 3-D demands. For the foreseeable future it will remain a high-risk, high-reward medium that excludes Woody Allen movies, and Sandra Bullock ones, too. For directors and producers of action and fantasy films, 3-D has to be a consideration. “What ‘Avatar’ showed is that there is still a reward in taking the risk to make a large-budget film that will bring people out of their homes,” says former Fox studio chief Bill Mechanic , who produced the 3-D “Coraline” in 2009. Vincent Pace, the camera-technology entrepreneur, has had a steady stream of inquiries since “Avatar” was released. His company rents out its 3-D cameras and associated gear to other directors at a rate of $1.4 million to $3 million per film, depending on the difficulty of the shoot. Director Joseph Kosinski is using one for “Tron Legacy,” which is due out in December. Pace says advertising agencies have also expressed interest in using the camera rigs for commercials, and networks are eyeing it for 3-D TV sports broadcasts. ‘Perfect Storm’ “The perfect storm has kind of swept by,” says Pace. “We’re quite excited that what we embarked on 10 years ago is being accepted in a very commercial way.” Pace says he and Cameron own the patents on the gear and that, given the buzz generated by “Avatar” and the coming wave of 3-D TVs, it won’t be long before they recoup their initial investment and start to reap a profit. As Cameron anticipated, “Avatar” has theater owners rushing to equip more of their cinemas with 3-D technology. “‘Avatar’ has put an exclamation point on what we have done and what we are going to do,” says Michael V. Lewis , CEO of RealD, a Beverly Hills, California-based company that supplies 3-D screens, projectors and glasses to theaters. Of the 38,000 screens in the U.S., only about 3,600 are currently ready for 3-D. Lewis says RealD plans to add an additional 5,000 screens in the next 18 months. Cameron has emerged from his 12-year odyssey far more powerful than after his previous box-office record-breaker. Even with credit still tight, money almost certainly will flood his way. And like any good businessman, the director will put his development costs to work with brand extensions. In other words, look out for that “Avatar” sequel. To contact the reporters on this story: Ronald Grover in Los Angeles at Ron_Grover@businessweek.com ; To contact the reporter on this story: Tom Lowry in New York at Tom_Lowry@businessweek.com ; Michael White in Los Angeles at mwhite8@bloomberg.net .

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Megan Carpentier: Democracy, Now Brought To You By Coke And Pepsi

January 21, 2010

The newly-activist Supreme Court ruled today in Citizens United v. Federal Election Commission that corporations in the United States have an absolute right to free speech that includes the right to run multi-million dollar advertising campaigns for or against candidates, just as Mark Green predicted after oral arguments last December. The decision overturns nearly 100 years of precedent and Congressional action against such spending on the basis of an earlier ruling that corporations are citizens (though they aren’t yet accorded the right to vote.) In an interesting twist, the actual case the Supreme Court was asked to decide had absolutely nothing to do with whether corporations were allowed to fund campaign advertisements. Rather, Citizens United asked the Supreme Court to rule that its anti-Hillary Clinton movie, creatively called “Hillary:The Movie,” was not political speech under the law and thus not subject to donor-disclosure requirements and didn’t need to end its television advertisements with disclosures that they had funded the movie. The Supreme Court categorically rejected Citizens United’s arguments, ruling that such disclosures were required for Citizens United and constitutional. How did the Supreme Court end up ruling on corporate candidate commercials over a movie made by a non-profit? They called the litigants back into court last December and asked them about it, even though the issue wasn’t part of the suit, thus making the question of corporate advertising part of the case. Apparently, the Supreme Court’s conservatives are only concerned about judicial activism when it involves actual Americans’ rights. What the Supreme Court’s decision today means is that corporations can run their own advertisements for or against political candidates, as long as they are branded by the corporations and are not coordinated with the candidates themselves. In the decision, the Court strongly hinted that they hadn’t decided to allow corporations to contribute directly to or coordinate with candidates only because they couldn’t come up with some relevant question to ask to allow them to do so–so that might not be too far off. The ruling is based on a 19th century Supreme Court footnote that says corporations are entitled to the 14th Amendment protection of equal treatment under the law, and a more recent one that accords campaign spending–money–the same status as speech. On the basis of these two rulings, the Court threw out the ban on direct corporate (and, by extension, union) spending to support candidates. The midterm election can now be brought to you by Pepsi and Coke–or any other company with the money to spend to elect candidates they think will be better for their bottom line. The Supreme Court’s conservative majority rejected arguments that spending shareholder money on political advertisements could violate the rights of shareholders; it rejected arguments that overseas investments in or by American corporations could encourage them to support candidates who don’t have only America’s interests in mind; and it rejected arguments and long-standing American sentiment that elections should be, as much as possible, influenced and decided by the people who can vote in those elections. And, in the end, it told the plaintiff exactly what the lower courts said: that the FEC was correct in its interpretation of how the law pertains to “Hillary:The Movie.” But no one–let alone Citizens United or the Supreme Court–cares about a crappy movie. They apparently only took the case to be able to throw out laws that keep corporations from spending millions–if not billions–to influence the American electoral process in the name of free speech. The only thing that might keep corporations like Exxon from spending some small percentage of its multi-billion dollar yearly profits to support a Drill-Baby-Drill candidate is the fear that some percentage of Americans might choose to boycott Mobil stations over that support. But if every oil company supports the same candidate, from whom will anyone get the gas they need to feed our collective fossil fuel addiction? If Pepsi and Coke support Sarah Palin in 2012, are liberals going to switch en masse to generic cola? If every company supports candidates you hate in order to support anti-regulatory, anti-tax agendas that will negatively impact the environment, our schools and everything else our government spends its tax revenues on, where else will consumers go? Corporations will, in effect, be able to advertise for their preferred candidates with virtual impunity and no one knows better than corporations how effective advertising can be. Short of waiting for another case to wend its way to a differently-constituted Court, there is only one real way to get around this decision, or any of the worse ones — like corporate electoral rights or corporate direct donation rights — telegraphed by some of the specific holdings of the Roberts Court. Either we take the significant time and effort to amend the Constitution to overrule the Supreme Court decision that corporations are entitled to equal protection under the law, or we accept that, as shareholders, customers and employees, our dividends, purchases and raises will be spent to convince us to elect officials who will do what’s best for the company’s bottom line and the CEO’s bonus.

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Massachusetts Vote, Message of Change Brings Threat to President’s Agenda

January 20, 2010

By James Rowley and Julianna Goldman Jan. 20 (Bloomberg) — The calls for change that rallied independents to Barack Obama in 2008 and propelled him to the White House reverberated again in Massachusetts last night, now threatening the president’s agenda. With Republican Scott Brown ’s victory in a special election to fill the Senate seat that had been long held by the late Edward M. Kennedy , a Democrat, the president may have to scale back his second-year agenda, which includes overhauling immigration laws and financial regulations, analysts said. Brown’s defeat of Democrat Martha Coakley is “a body blow to Obama and other Democrats,” said Larry Jacobs , director of the Hubert Humphrey Institute of Public Affairs at the University of Minnesota in Minneapolis. “It’s a resounding message of rejection, disappointment and the loss of hope.” The White House is likely to focus now on salvaging health-care legislation and reclaiming populist ground on the economy and jobs. Obama’s advisers said the president is already moving to focus on those issues, along with deficit reduction, in his State of the Union address on Jan. 27 and the budget he submits to Congress Feb. 1. He’ll also keep up criticism of Wall Street and executive bonuses as he presses for new regulations. “What you will really see the Democratic leadership do is to pivot to job creation and deficit control,” Arizona’s Jon Kyl , the second-ranking Republican in the Senate, said yesterday. “They can read the polls, too.” Bigger Struggle Even with 60 seats in the Senate and 256 seats in the House, Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi struggled to steer the president’s agenda through Congress. That will become even more difficult with one less Senate vote and with lawmakers facing close re-election fights in November hearing echoes from the Massachusetts race. Some of Obama’s most ambitious initiatives, from climate- change legislation to closing the U.S. prison camp at Guantanamo Bay, Cuba, — already imperiled because of lukewarm support from Democrats — may have to be shelved, analysts and lawmakers said. “Normally, a junior senator winning doesn’t have a great effect,” said Robert Blendon , a professor of health policy and director of the Harvard Opinion Research Program. Brown’s victory will “dramatically alter President Obama’s domestic agenda for the rest of his term, or at least through 2010.” Connecticut Democratic Representative Joe Courtney said his party’s defeat in Massachusetts is reminiscent of Republican congressional gains during Bill Clinton ’s first term as president. Curtailed Agenda “We’ve sort of seen this movie before in the 1990s,” Courtney said. “It seems inevitable” that Obama’s “agenda will be curtailed or reduced.” Brown’s win in a state that gave Obama 62 percent of the vote in 2008 follows Democratic losses of governorships in Virginia and New Jersey last year. Obama won both those states as well. Before the Massachusetts results were in, White House press secretary Robert Gibbs described Obama as “surprised and frustrated” that Brown was able to overcome the lead Coakley had at the start of the campaign to replace Kennedy, who died of brain cancer in August. Gibbs yesterday declined to address questions about how the Massachusetts election would affect Obama’s agenda. He previewed how the administration would frame the results, saying the race reflected the “tremendous amount of upset and anger in this country about where we are economically.” Anger and Frustration That sentiment predates Obama taking office and “in many ways, we’re here because of that upset and anger,” Gibbs said. “The president understands there’s a lot of economic frustration out there,” he said. That means work on bringing down the unemployment rate , which stood at 10 percent last month, and boosting the economy, which is still pulling out from a recession that began in December 2007. “If we are not successful in establishing job growth and economic growth soundly we will not achieve any of our other objectives,” National Economic Council Director Lawrence Summers told reporters last week. “Priority number one has to be assuring rapid job growth.” The debate over financial regulation and Obama’s proposal to tax banks such as Citigroup Inc . and Bank of America Corp . that received government assistance after last year’s financial crisis, will give Obama a chance to focus public anger. Banks a Target Obama can “go down a very, very aggressive populist route,” said Ross Baker , a political scientist at Rutgers University in New Brunswick, New Jersey. “There is a preexisting attitude toward banking which he can tap into for sure.” David Plouffe , who was Obama’s campaign manager in the 2008 election and still serves as an outside adviser, said Obama will remain focused on moving his agenda forward. “That’s not going to be easy,” Plouffe said. Democrats still retain “big majorities” in both chambers, and advancing health-care legislation will be pivotal for the party’s efforts to keep control of Congress after the November election, he said. If Democrats step away, Plouffe said, “We’re going to have the worst of both worlds, which is you supported a bunch of stuff that has been demonized, you don’t have the opportunity to pass it and not just sell it but have voters experience the reality of it.” That may not be an easy task. Some Democrats last night already began backing away from Obama’s top legislative priority New York Democratic Representative Anthony Weiner said his party should suspend its push to pass health-care legislation and come back to it later. “We’ve got to recognize we’ve got a completely different situation.” To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net ; Julianna Goldman in Washington at jgoldman6@bloomberg.net

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For Obama, Message of Change in Massachusetts Vote Brings Threat to Agenda

January 19, 2010

By James Rowley and Julianna Goldman Jan. 20 (Bloomberg) — The calls for change that rallied independents to Barack Obama in 2008 and propelled him to the White House reverberated again in Massachusetts last night, now threatening the president’s agenda. With Republican Scott Brown ’s victory in a special election to fill the Senate seat that had been long held by the late Edward M. Kennedy , a Democrat, the president may have to scale back his second-year agenda, which includes overhauling immigration laws and financial regulations, analysts said. Brown’s defeat of Democrat Martha Coakley is “a body blow to Obama and other Democrats,” said Larry Jacobs , director of the Hubert Humphrey Institute of Public Affairs at the University of Minnesota in Minneapolis. “It’s a resounding message of rejection, disappointment and the loss of hope.” The White House is likely to focus now on salvaging health-care legislation and reclaiming populist ground on the economy and jobs. Obama’s advisers said the president is already moving to focus on those issues, along with deficit reduction, in his State of the Union address on Jan. 27 and the budget he submits to Congress Feb. 1. He’ll also keep up criticism of Wall Street and executive bonuses as he presses for new regulations. “What you will really see the Democratic leadership do is to pivot to job creation and deficit control,” Arizona’s Jon Kyl , the second-ranking Republican in the Senate, said yesterday. “They can read the polls, too.” Bigger Struggle Even with 60 seats in the Senate and 256 seats in the House, Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi struggled to steer the president’s agenda through Congress. That will become even more difficult with one less Senate vote and with lawmakers facing close re-election fights in November hearing echoes from the Massachusetts race. Some of Obama’s most ambitious initiatives, from climate- change legislation to closing the U.S. prison camp at Guantanamo Bay, Cuba, — already imperiled because of lukewarm support from Democrats — may have to be shelved, analysts and lawmakers said. “Normally, a junior senator winning doesn’t have a great effect,” said Robert Blendon , a professor of health policy and director of the Harvard Opinion Research Program. Brown’s victory will “dramatically alter President Obama’s domestic agenda for the rest of his term, or at least through 2010.” Connecticut Democratic Representative Joe Courtney said his party’s defeat in Massachusetts is reminiscent of Republican congressional gains during Bill Clinton ’s first term as president. Curtailed Agenda “We’ve sort of seen this movie before in the 1990s,” Courtney said. “It seems inevitable” that Obama’s “agenda will be curtailed or reduced.” Brown’s win in a state that gave Obama 62 percent of the vote in 2008 follows Democratic losses of governorships in Virginia and New Jersey last year. Obama won both those states as well. Before the Massachusetts results were in, White House press secretary Robert Gibbs described Obama as “surprised and frustrated” that Brown was able to overcome the lead Coakley had at the start of the campaign to replace Kennedy, who died of brain cancer in August. Gibbs yesterday declined to address questions about how the Massachusetts election would affect Obama’s agenda. He previewed how the administration would frame the results, saying the race reflected the “tremendous amount of upset and anger in this country about where we are economically.” Anger and Frustration That sentiment predates Obama taking office and “in many ways, we’re here because of that upset and anger,” Gibbs said. “The president understands there’s a lot of economic frustration out there,” he said. That means work on bringing down the unemployment rate , which stood at 10 percent last month, and boosting the economy, which is still pulling out from a recession that began in December 2007. “If we are not successful in establishing job growth and economic growth soundly we will not achieve any of our other objectives,” National Economic Council Director Lawrence Summers told reporters last week. “Priority number one has to be assuring rapid job growth.” The debate over financial regulation and Obama’s proposal to tax banks such as Citigroup Inc . and Bank of America Corp . that received government assistance after last year’s financial crisis, will give Obama a chance to focus public anger. Banks a Target Obama can “go down a very, very aggressive populist route,” said Ross Baker , a political scientist at Rutgers University in New Brunswick, New Jersey. “There is a preexisting attitude toward banking which he can tap into for sure.” David Plouffe , who was Obama’s campaign manager in the 2008 election and still serves as an outside adviser, said Obama will remain focused on moving his agenda forward. “That’s not going to be easy,” Plouffe said. Democrats still retain “big majorities” in both chambers, and advancing health-care legislation will be pivotal for the party’s efforts to keep control of Congress after the November election, he said. If Democrats step away, Plouffe said, “We’re going to have the worst of both worlds, which is you supported a bunch of stuff that has been demonized, you don’t have the opportunity to pass it and not just sell it but have voters experience the reality of it.” That may not be an easy task. Some Democrats last night already began backing away from Obama’s top legislative priority New York Democratic Representative Anthony Weiner said his party should suspend its push to pass health-care legislation and come back to it later. “We’ve got to recognize we’ve got a completely different situation.” To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net ; Julianna Goldman in Washington at jgoldman6@bloomberg.net

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Nose-Biting Traders in Chicago Give Way to Geeks in Documentary `Floored’

January 15, 2010

By Tony C. Dreibus Jan. 15 (Bloomberg) — Doug Pringle saw punches thrown, blood spilled and fortunes lost during his 17-year career at the Chicago Board of Trade . He misses it, every day. “The biting of the nose and the fights, sure, when you’re throwing around that kind of money, people tend to lose it sometimes,” said Pringle, 42, who traded corn, soybeans, 10- year Treasury notes and 30-year bonds. “I miss the excitement.” Chicago’s open-outcry nostalgists can now watch their slow- motion obituary on film. “Floored,” a documentary that premieres in the city tonight, captures the fading swagger of its exchange pits as electronic trading takes over. Traders and former traders in the film recount drug-fueled road trips with prostitutes, living in mansions, and a crash that included divorce and having to take a $400-a-week job. The numbers in Chicago’s pits peaked in 1997, with about 10,000 traders flailing their arms with buy and sell signals in a daily scrum of sweating and shouting, said Steve Prosniewski, a trader who’s one of the film’s producers. Less than 10 percent of those remain, he said. ‘Alive and Kicking’ “You were jammed like sardines, but alive and kicking,” said Prosniewski, 43. “Sometimes you’d drop all your trading cards and your pen on the floor, and you’d leave them there till the end of the day because you’d get crushed trying to bend over and get them.” Chris Felix left the floor several years ago after electronic trading became more common and open outcry started dying out. Felix said he still misses trading, and after watching the documentary on an advance DVD, he had a hard time sleeping. “I was so wound up, I couldn’t sleep for five hours,” said Felix, 37, who went on to start the Web site gizmohealth.com. “It was more like a flashback. I don’t miss the floor I left, but I miss the way it was.” CME Group Inc. allowed the filmmakers to shoot inside the Chicago Mercantile Exchange in 2007 and the CBOT in 2008. This month, it refused to let the film’s director return to the trading floor to be interviewed. Allan Schoenberg , a CME spokesman, declined to comment. ‘Unfortunate Realities’ James Allen Smith, the director, declined to speculate on why CME officials are no longer cooperating. Felix said he thinks it’s because “Floored” shows some “unfortunate realities of the business.” “The exchange, because it’s a multinational corporation, wants a marketing piece and to grow the business,” Felix said. “It isn’t in the CME Group’s best interest to address” certain questions. Another producer, Joe Gibbons, is also a trader and appears in the film. In an interview at the Gene Siskel Film Center , where “Floored” will be shown tonight, Gibbons recalled the mix of competition and camaraderie that marked life in the pits. “They’d rip your heart out,” said Gibbons, 49, who traded from 1985 to 2004 in the stock-index futures pits and now trades electronically. “Afterwards, the guy who just ripped your heart would go, ‘Can you give me a ride home?’” “Floored” documents the shift from open outcry to the electronic trading that has drained the pits of thousands of traders in the past decade. The CME doesn’t track the decline in how many people work on the floor, said Mary Haffenberg , a spokeswoman. No Degree Required Many pit traders who never went to college took pride in the fact that they could make more money than the guy next to them who had a business degree, Gibbons said. The electronic- trading firms are filled with engineers and computer scientists who anonymously trade with the click of a mouse, not off fear in the eyes of traders in the pits, he said. Making the switch could be difficult for people who have spent their entire careers trading on the floor, said Wesley Harr, 30, who trades on his own behalf. “For a lot of these guys, the transition from the pit to the computer screen is really a difficult hurdle to overcome,” Harr said by telephone from Philadelphia. “I was raised with a computer, so it’s not a big leap for me, but people who grew up doing it that way may have a harder time.” Michael Krueger, an equity derivatives trader at Timber Hill LLC in Greenwich, Connecticut, still misses the 10 years he spent on the floor of the Chicago Mercantile Exchange . “It was the greatest job you can hope to have,” said Krueger, who earned an advanced degree in computer science after leaving the pits. “I knew all types at the exchange who clawed and spit and bit their way to the top.” The Siskel center will have special screenings at 4 p.m. on Jan. 19 and 21 for traders leaving the pits. Smith, the director, made the movie to show future generations a disappearing world. “I hope it can be sort of a time capsule,” he said. “People have been predicting the end of the floor for 20-plus years. I wanted to say ‘Let’s look at this before it’s gone.’” To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net .

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Alcott’s Potboilers Featured Drug Addicts, Cross-Dressers: Dave Shiflett

December 28, 2009

Review by Dave Shiflett Dec. 28 (Bloomberg) — Louisa May Alcott did a lot more than write “Little Women.” She was an abolitionist and a crusader for women’s rights. She wrote pulp fiction under a pseudonym. She chopped firewood. You’ll learn all about this fascinating woman in “Louisa May Alcott: The Woman Behind ‘Little Women,’” an engrossing docudrama airing tonight on PBS at 9 p.m. New York time. If you thought that Alcott was nothing but a prudish writer of family novels and children’s stories, think again. Starring Elizabeth Marvel as Alcott and Jane Alexander as her first biographer, Ednah Dow Cheney, the program reveals the many sides of the author of “Little Women,” an 1868 novel based on her childhood in Concord, Massachusetts. Alcott is portrayed as a wry, attractive free-thinker who was ahead of her time. Marvel often addresses the camera directly, delivering memorable lines from Alcott’s writings along with lively accounts of her conversations. For non-Alcott scholars, one of the surprising revelations is her authorship of crime fiction under the pen name A.M. Barnard. Those books featured drug addicts, cross-dressers and killers, a far cry from the stories for young readers that made her famous. Fruitlands Commune Alcott was no desperate housewife. She never married and made no apologies for her independence. “I’d rather be a free spinster and paddle my own canoe,” she quips in the movie, though she does mention a short-term relationship with a younger Polish lad. “We had a fine time for a fortnight,” Alcott observes, without providing salacious details. More interesting, to me at least, is her relationship with her father, Amos Bronson Alcott, a transcendentalist pal of Ralph Waldo Emerson and Henry David Thoreau . He is portrayed as a man with massive sideburns and a propensity for melancholy who let the women in his life do most of the heavy lifting. After a harrowing stint at the utopian Fruitlands community in northern Massachusetts, Louisa May’s family moved dozens of times, including a stay in one of Boston’s worst slums. ‘Moral Pap’ Dad could talk up a storm but he put few beans in the pot for his wife and four daughters. Louisa May toiled as a seamstress, laundress, teacher and wood-splitter. She never forgot those hard times, even after becoming wealthy from the publication of “Little Women” and its sequels, “Good Wives” and “Little Men.” “Though an Alcott I can support myself,” she says in a bit of understatement. She was brutally honest about her reasons for writing her best-known books. “I don’t enjoy writing moral pap for the young,” she notes, but “do it because it pays well.” The film, directed by Nancy Porter and written by Harriet Reisen, also explores Alcott’s dedication to progressive causes. “I was an abolitionist at the age of three,” she says. During the Civil War she worked at a Union hospital in Washington, where she contracted typhoid fever. She was treated with a compound called calomel, which contains mercury. Alcott thought the treatment caused chronic health problems, though the movie speculates that she may have also suffered from bipolar disorder and lupus. Like many writers, Alcott was prone to self-medication, which in her case included opium and hashish. She died on March 6, 1888, outliving her father by two days. This docudrama, part of PBS’s “American Masters” series, should spur fresh interest in Alcott, whose artistic and personal dexterity deserve wider appreciation. “Little Women” may never seem so prim again. ( Dave Shiflett is a critic for Bloomberg News. The opinions expressed are his own.) To contact the writer of this story: Dave Shiflett at dshifl@aol.com .

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Jim Randel: Influence: The Psychology of Persuasion

December 28, 2009

I’ve just added a new favorite book to my top ten list: Influence: The Psychology of Persuasion by Robert Cialdini, PhD. The premise of this book is that in our increasingly complex and pressured world, we often make decisions by falling back on instinctive patterns. Cialdini has identified six such categories of these bedrocks: 1. Reciprocity – when someone does something for us, we are inclined to want to do something in return. 2. Consistency – we tend to stay within the perimeters of prior decisions or commitments we have made. 3. Social Proof – we are inclined to follow the crowd. 4. Likeability – we make decisions in favor of people we like or feel a bond with. 5. Authority – we bend toward the views and instructions of those who on face value warrant our respect. 6. Scarcity – we want what we can’t have. The fact is that most of the time, we are right to use the above shortcuts in making choices. When you hear tons of people talking about a great movie, it is likely that you too will enjoy the movie. When you feel connected to a person, you are usually safe in following his or her lead. When a person of authority or presumed respect suggests a course of action, it is most often logical to follow that advice. And so on. The problem arises when persuaders and marketers manipulate our instincts to induce decisions that are not necessarily in our best interest. Before I read Cialdini’s book, I would have said that does not happen to me very often. I would have said (pre-book) I am a level-headed person who understands the why of Path A over Path B. After reading the book, I am not so sure. Cialdini’s many examples and studies make a powerful case for paths we all take – simply because we do not have the time, information or energy to assess all factors. I intend to use future e-letters to flesh out some of the points in Cialdini’s book. For now, let me leave you with an excerpt from Cialdini’s concluding chapter: ( F)or the sake of efficiency, we must sometimes retreat from a time-consuming, sophisticated, fully-informed brand of decision making to a more automatic, primitive, single-featured type of responding. … We are likely to use these lone cues when we don’t have the inclination, time, energy, or cognitive resources to undertake a complete analysis of the situation. … All this leads to a jarring insight: With the sophisticated mental apparatus we have used to build world eminence as a species, we have created an environment so complex, fast-paced, and information-laden that we must increasingly deal with it in the fashion of the animals we long ago transcended.

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John Perkins: The True Meaning of 2012

December 7, 2009

The movie 2012 has generated a tsunami of controversy over an ancient Mayan prophecy. We can thank Hollywood for stirring up our interest. Perhaps we needed a film loaded with global destruction and special effects to awaken our collective consciousness to this time of transformation. However, the theater version misses the true meaning of the message those great mathematicians and visionaries intended us to hear all those many centuries ago. As I head off this week into the Mayalands of Central America, co-leading (with Llyn Roberts) a couple dozen people on an expedition that will delve deep into the significance of this ancient legend, I am struck by the signs that we are indeed poised to experience events foretold by the Mayan prophecy. But do not expect them to resemble the mayhem displayed in the movie. Although there are many different interpretations of this prophecy, the one most widely accepted by the Maya teachers I know is taken from the Popul Vuh, the Mayan creation myth. Far from predicting a Hollywood-style doomsday, it holds out the possibility of positive transformation. In its simplest form, the people overthrow an egotistical regime characterized by exploitation and deception and replace it with an enlightened and compassionate one. In the process, the people have to surrender their own egos and endure material and environmental hardships. December 21, 2012 was identified by the Mayans as the time when this transformation will become most obvious. It was an auspicious date for them because their astrologers predicted that at that moment the sun would move into alignment with the center of the Milky Way. Modern scientists, not the Mayans, offer theories that are the basis for the film’s thesis that the earth’s climate and magnetic poles may be changing. My book Hoodwinked explores the deep underlying causes of the events that have now sent the U.S. and the entire planet spiraling toward the very things the Mayans foretold — economic and environmental collapse — and what we must do to reverse this process. The real cause of our current meltdown is predatory capitalism — the mutant form of an economic system that encourages widespread exploitation to benefit a small number of already very wealthy people. A new geo-political system has emerged; today the CEOs of big corporations, rather than governments, control human and natural resources around the globe, as well as politicians and the media. Their arrogance, gluttony, and mismanagement have brought us to the perilous edge. In their relentless drive to amass ever greater fortunes, they have polluted our air, water, and earth, relegated countless numbers to the ranks of the unemployed, and doubled the gap between the few who live in mansions and the many who are malnourished or starving. They exemplify that egotistical regime described in the Popul Vuh. When I wrote Hoodwinked I was not thinking about the 2012 prophecy. Yet, now, as I prepare to visit the incredible cities these ancient people built, I realize that in an odd sort of way my writing is part of a tradition that stretches back to those Mayan visionaries. We have indeed entered a critical time in human history. A tsunami is rapidly building on the horizon. Every person on earth is connected like never before, through the Internet and cell phones. Most of us have come to understand that we are perched on a shore that is threatened by a mounting wave of economic and environmental disaster. We have only three years left until December 21, 2012. Whether or not you believe in this Mayan prophecy, we can all agree that we must turn things around. We must abandon our gluttonous, exploitative ways in favor of lifestyles and systems that will bequeath to our children and grandchildren a world they will want to inhabit. By definition, we simply must become sustainable. You may want to take a moment, next time you pass by 2012 on a theater marquee, to reflect on the true message symbolized by those numbers. The real message is a call to action based on the knowledge that we can transform ourselves. It echoes down through the centuries from a people who built the magnificent pyramids that continue to enthrall and mystify visitors to the Yucatan Peninsula and who also created one of history’s most accurate calendars — the one that ends in 2012. John Perkins is former chief economist at a major international consulting firm. He is the New York Times bestselling author of Confessions of an Economic Hit Man and Hoodwiniked and has written many books about the Maya and other indigenous cultures, including Shapeshifting, The World Is As You Dream It, and Psychonavigation. His website is www.johnperkins.org .

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Hollywood Bid to Expand Oscars May Help `Precious’ Instead of `Star Trek’

December 7, 2009

By Michael White Dec. 7 (Bloomberg) — Hollywood’s expansion of the Academy Awards best-picture nominations to 10 has opened the door wider for independents, creating even more competition for big-budget films that have been squeezed out in recent years. The awards buzz picks up on Dec. 15 when the Hollywood Foreign Press Association announces its Golden Globe nominations, followed by the Screen Actors Guild on Dec. 17. Critic favorites like “Precious,” about an abused inner-city teen, and the Iraq war thriller “The Hurt Locker” dominate early predictions for the Feb. 2 Oscar finalists. Box-office hits including Viacom Inc. ’s “Star Trek” are lower on lists. “It’s the best thing that’s ever happened for independent film at the Oscars,” said Tom Bernard , co-president of Sony Pictures Classics, distributor of “An Education,” a small- budget film cited as an Oscar contender. It had taken in $6.27 million in ticket sales as of Dec. 6, according to Box Office Mojo , a film industry researcher. The Oscars, produced by the Academy of Motion Picture Arts & Sciences and televised by Walt Disney Co. ’s ABC since 1976, give studios an extra chance to shower attention on nominated films. Movies that win, such as Fox’s “Slumdog Millionaire,” get a marketing push and possibly an extended run in theaters. The academy expanded the best-picture category from five in June so popular films might get more nominations and the telecast would draw more viewers and ads. The 2009 TV audience rose 13 percent as the late Heath Ledger won a supporting-actor award for the Joker in “The Dark Knight.” The film, with $1 billion in global ticket sales, wasn’t a best-picture nominee. ‘Broaden the Audience’ Bill Condon and Larry Mark , producers of last year’s Oscars show, recommended the change after the last telecast, said Tom Sherak, president of the Beverly Hills, California-based academy. “We all looked at each other and said, ‘Wow,’” Sherak said in an interview. “They said it would be good for the show, that it might broaden the audience.” Independent films may still garner the lion’s share of best-picture nods, stealing attention from box-office leaders that could attract more viewers. “It could backfire,” said David Ansen , a Newsweek film critic and artistic director of the Los Angeles Film Festival. “How many of those big popular movies are contenders? Not many.” At the Los Angeles Times’ The Envelope , “Up in the Air,” from Viacom’s Paramount, “Hurt Locker,” distributed by Summit Entertainment, and “Precious: Based on the Novel ‘Push’ by Sapphire” lead Oscar predictions. ‘Dark Knight’ Disney’s “Up,” with $293 million in U.S. and Canadian receipts, is the only movie among the site’s 10 leading contenders that is also Top 10 in ticket sales this year. “Star Trek” is in a seven-way tie for 16th at The Envelope. James Cameron’s “Avatar,” which opens Dec. 18, is No. 11. “Precious” has taken in $36.3 million domestically for Lions Gate Entertainment Corp. , run from Santa Monica, California. “Hurt Locker” has made $12.7 million, according to Box Office Mojo. “Up in the Air” earned $1.19 million in limited release its first weekend and is set to expand. The Oscars drew their biggest audience in 1998, attracting 55.2 million viewers when Cameron’s “Titanic,” the all-time box-office leader, won best picture, according to ratings data from Nielsen Co. Sherak said he didn’t know how close “The Dark Knight” came to getting a nomination. The film and critically praised comedy “Tropic Thunder” deserved consideration, he said. ‘Broad, Popular Movies’ “Those were broad, popular movies that had great reviews,” Sherak said. Smaller-budget films have won best picture in four of the past five years, according to the academy Web site . “Slumdog Millionaire,” the $15 million movie from New York-based News Corp. ’s Fox Searchlight, played in limited release for six weeks in 2008 and went on to collect $377.4 million worldwide, according to Box Office Mojo , based in Sherman Oaks, California. “Up,” Burbank, California-based Disney’s animated tale of an elderly man who realizes his dream of world travel, is in the hunt, said Christine Birch , head of marketing at DreamWorks Studios, co-founded by Steven Spielberg . The movie has taken in $507 million worldwide, according to Box Office Mojo. “Star Trek,” from New York-based Viacom Inc. ’s Paramount Pictures, and the Time Warner Inc. comedy “The Hangover,” which collected $459.4 million in ticket sales, may have a chance, Birch said. Cameron’s ‘Avatar’ “Up in the Air” and News Corp.’s “Avatar,” a 3-D science-fiction film, are possibilities, said James D. Stern , chief executive officer of Endgame Entertainment, a Beverly Hills, California-based independent production company. Disney rose 51 cents to $30.84 on Dec. 4 in New York Stock Exchange composite trading . New York-based Time Warner climbed 31 cents to $31.42, and Viacom gained 20 cents to $29.71. Tokyo- based Sony Corp. ’s U.S. shares added 54 cents to $28.52, while News Corp. advanced 33 cents to $12.03 on the Nasdaq Stock Market. Stern was an executive producer of “An Education,” which has taken in $6.55 million worldwide. He also directed “Every Little Step,” on the academy’s list of 15 documentaries being considered. “Up in the Air,” a George Clooney comedy, blurs the line between independent and studio films, Bernard said. The movie, a co-production of Paramount and director Jason Reitman’s Right of Way Films, was made for about $30 million, according to the Internet Movie Database , a Web site on the film industry. ‘From the Shadows’ Stern’s “An Education” was tied for seventh in The Envelope’s survey of critics asked to pick the most likely nominees. That gives the producer a reason to cheer the expansion. “You could argue that it’s good for my film,” Stern said. “If you were going to be one of the five and you knew it, you would rather not have 10.” To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net .

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Have Fewer Headaches, More Sex: Tips From the Armchair Economist: Books

November 25, 2009

Review by James Pressley Nov. 25 (Bloomberg) — Steven E. Landsburg’s latest book of economic brain teasers resembles one of those Hanayama metal puzzles that you’re supposed to pull apart: They drive me crazy, yet I can’t put them down. Landsburg is the University of Rochester professor who brought us “The Armchair Economist” and “More Sex Is Safer Sex.” He put the pop in popular economics long before “Freakonomics” came along. In “ The Big Questions ,” he attempts something more ambitious and slightly less flip: to sum up his ideas about “the nature of reality, the basis of knowledge and the foundations of ethics.” Be prepared for a diverting journey into the maze of one man’s mind, a supply-and-demand version of the movie “Being John Malkovich .” Written as a chain of essays, the book dips into physics, mathematics and economics to answer the eternal questions of philosophy: Where did the universe come from? How do we know right from wrong? Why does my computer hate me? (Answer: “Your computer doesn’t hate you; it just seems that way when you run Microsoft products.”) The alpha and the omega of existence for this homo economicus all boils down to mathematics. I count, therefore I am? No, Landsburg means something much more fundamental. “I believe that everything — you, your consciousness, and the Universe that you and I inhabit — exists because everything is a mathematical structure,” he writes. Peano’s Axioms This assertion leads by degrees into discussions about Intelligent Design, Giuseppe Peano’s axioms, Kurt Goedel’s incompleteness theorem , and all manner of stuff that Landsburg can’t explain “without more mathematics than you want to see.” Landsburg can get a tad supercilious for a guy who’s often just rambling on, as he puts it, “not to make any particular point but because it seemed to fit in and I think it’s interesting.” Yet he kept me coming back for more, thanks to his wit and crisp explanations of why we see color, how to identify a spy, and what he calls the Economist’s Golden Rule, which bases decisions on costs and benefits. “Like more traditional versions of the Golden Rule, it enjoins you to love your neighbor as yourself,” he explains. “A cost is a cost and a benefit is a benefit, whether they’re felt by you, your neighbor, or a stranger in Timbuktu.” Quantum Mechanics Along the way, he explains quantum mechanics and reminds us of why “more sex is safer sex.” When the promiscuous few dominate the market for one-night stands, it raises the risk of infection for everyone, the argument goes. So if relatively chaste people would just loosen up and have a few more sexual partners, HIV would spread more slowly, Landsburg says, drawing on research by economist Michael Kremer. Whoever goes home with the relative prude is “destined for a night of safe sex,” Landsburg writes. “They’re getting even luckier than they realize.” Landsburg is an atheist, and he goes to great lengths to argue that believers are deluded. He doesn’t really define what he means by the word “God,” though his remarks suggest that he views deity as an anthropomorphic Zeus with a William Blake beard slinging thunderbolts from the heavens. If so, I have news for him: Many devout people see God as a Principle, not a Person. In that sense, his belief in the primacy of mathematics makes him more religious than he thinks. Headache Cure The convenient thing about being irreligious is that it frees you to think the unthinkable. Hence, Landsburg revels in discussing a paper in which a philosopher posed this scenario: “The Headache Problem: A billion people are experiencing fairly minor headaches, which will continue for another hour unless an innocent person is killed, in which case they will cease immediately. Is it okay to kill that innocent person?” The obvious answer is yes, Landsburg says. Here’s why: Virtually no one will pay $1 to avoid a one-in-a-billion chance of death. Yet most people would pay $1 to cure a headache. Ergo, most people “think a headache is worse than a one-in-a-billion chance of death,” he says. Killing one person would “replace your headache with a one-in-a-billion chance of death.” Sophistry is the word that comes to mind. Unless, of course, Landsburg is willing to sacrifice his first-born child on the altar of headaches. “The Big Questions: Tackling the Problems of Philosophy With Ideas From Mathematics, Economics and Physics” is from Free Press (267 pages, $26). To buy this book in North America, click here . ( James Pressley writes for Bloomberg News. The opinions expressed are his own.) To contact the writer on the story: James Pressley in Brussels at jpressley@bloomberg.net .

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CoStar’s Retail News Roundup: Nov. 1 – 7, 2009

November 2, 2009

This week in the Retail Roundup, CoStar reports on expansions or new concepts at Prime Retail and Edible Arrangements; closings, cutbacks, defaults, or bankruptcy news at Movie Gallery and more; acquisition, merger, loan, sale, or IPO activity at USAA…

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Video: Garrahan Says Disney Better Placed for Digital Sales: Video

October 26, 2009

Oct. 26 (Bloomberg) — Financial Times reporter Matthew Garrahan talks with Bloomberg’s Julie Hyman about Walt Disney Co.’s digital film delivery system “Keychest” and the outlook for the movie industry. Disney Chief Executive Officer Bob Iger, in an interview with the newspaper, warned Hollywood film executives they must adapt to changes in the industry as DVD sales decline. (Source: Bloomberg)

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Video: Still The King Of Pop

October 26, 2009

Analysts say the movie and cd may generate up to $400 million in worldwide sales. (Bloomberg News)

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Nelson Davis: Capitalism: What Love Story?

October 6, 2009

Being a capitalist at heart, I simply couldn’t resist going to see Michael Moore’s latest film production, “Capitalism: A Love Story.” My lady loved it so much that before sunset she was sending e-mails to everyone on her list recommending they go see it right away. For me, it was something a bit less than a love story and not very representative of what I feel that capitalism truly represents in America. Mr. Moore has been a compelling media figure since his 1989 documentary, “Roger and Me,” which poked exorbitant fun at Roger Smith, then Chairman of General Motors. That film did foretell some of the marketplace plague that would settle over what was then America’s largest corporation. Like any good documentarian, Michael Moore brings a clear point of view to his work and holds to at least a modicum of truth in its execution. For example, I agree with him that it was unfettered greed that drove us to the brink of economic disaster. Every parent knows that the difference between a good child and a monster is some form of discipline and there just wasn’t enough of that along Wall Street. We are living in truly interesting times. Many Americans are confused and angry yet don’t seem to be sure who or what truly deserves their ire so the more rapacious forms of capitalism make a convenient target. It is easy to forget that the capitalist drive was behind the creation of some of the country’s most revered mechanisms, protocols, institutions, and freedoms. In that regard, the Moore film is preachy without being “teachy”. It ignores the kind of capitalist community contributions made by people such as Andrew Carnegie, Henry J. Kaiser, Bill Gates, Ewing Marion Kauffman, and even Michael Bloomberg. One of Moore’s voiceovers in his movie says, “Capitalism is an evil, and you cannot regulate evil. You have to eliminate it and replace it with something that’s good for all people, and that something is called democracy.” I’ve known too many people who started with next to nothing and built substantial enterprises to believe that the entrepreneurial spirit is anything other than positive and democratic. My family history includes a grandfather who was the child of slaves but became a merchant in southern Alabama at the dawn of the 20th Century. He probably didn’t even know the words entrepreneur or capitalist but simply wanted self sufficiency and independence for his family. I do however believe that there is one facet of business today in America that I think promotes the “evil” perception. When you look at the entrepreneur capitalists that I mentioned above, you’ll quickly notice that they were the founders of the businesses that made them wealthy and known to the public. They weren’t hired hands with newly minted MBA degrees who just wanted a job to make their mark and a pile of loot in ten years or less. My theory is that founders largely cared about their communities and employees in ways that that a hired gun, who is focused primarily on getting the best stock price, could never do. If it is just about the money, there will be acts that support the perception of evil. Sam Walton had to be a heck of a hard nosed businessman to build Wal-Mart, but he was also a strong and caring patriarch figure to his thousands of employees. The current phase of American business that we are living is amazingly transitional. Some legendary enterprises that helped create America are disappearing and the crop of men and women that will become the titans of the 21st century aren’t yet fully visible. Though we talk endlessly about the Googles, Facebooks, and Twitters at the moment, only time will tell if their founders have the smart sense of their predecessors and the drive it takes to go the distance. Let me tell you the story of Ewing Marion Kauffman to illustrate what I mean about persistence, durability, and a consciousness of greater good. Philanthropist, Ewing Marion Kauffman, was born in 1916 and died in 1993. He was an American pharmaceutical mogul and Major League baseball team owner. Kauffman grew up in Kansas City, Missouri and was bedridden for a year at age 11 with a heart ailment, during which he read as many as 40 books a month. After serving in the U.S. Navy during World War II, Kauffman worked as a pharmaceutical salesman until 1950, when he formed Marion Laboratories with a $5,000 investment, operating it initially out of the basement of his home. The story goes that he chose to use his middle name rather than his last name in order to not appear to be a one-man operation. Marion Laboratories had revenues of $930 million the year before it merged with Merrell Dow Pharmaceuticals back in1989. The sale of the company created more than 300 millionaires, and Mr. Kauffman continued on with what I consider his greatest achievement. He had established the Ewing Marion Kauffman Foundation in the mid-1960s with the same set of convictions and sense of opportunity he brought to his business enterprises. Kauffman wanted his foundation to be innovative–to dig deep and get at the roots of issues to fundamentally change people’s lives. Today, it is often referred to as the “foundation of entrepreneurship.” He wanted to help young people, especially those from disadvantaged backgrounds, get a quality education that would enable them to reach their full potential. He felt that building business enterprises is one of the most effective ways to realize individual promise and spur the economy. I’ve spent time at their headquarters in Kansas City and seen some of what a multi-billion dollar endowment can do if managed well. It is the result of what I call “conscious capitalism.” Michael Moore needs to know more about the great capitalists whose names grace libraries, concert halls, and universities across the country. He should remember that democracy can only work if the business climate is healthy. Moore must acknowledge that he is now in an entrepreneurial business making a product for sale and that he couldn’t do it without the capitalism that he rails about. I just want him to give them some well earned love. For more small business resources and to view past blogs, visit www.MakingItTV.com .

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New York’s Tavern on the Green Plays Emerald City for Wizard of Oz Gala

September 24, 2009

By Patrick Cole Sept. 24 (Bloomberg) — As the granddaughter of “ The Wizard of Oz” producer Mervyn LeRoy, Jennifer Oz LeRoy got a strange middle name and the inside scoop on the film’s lore and visual effects. “My favorite scene was the tornado because my father said it was made out of a sock,” LeRoy said in a phone interview. “When I look at the tornado in the movie now, I say to myself, ‘That’s a sock!’” Of the family’s two interests, she chose not film but food, becoming owner of Tavern on the Green , the New York restaurant where her father, Warner LeRoy , had famously served as proprietor. In the family since 1974, the Tavern filed for bankruptcy this month. Tonight Jennifer LeRoy will combine her family’s interests by turning the Manhattan landmark into an Oz-themed party venue to celebrate the 70th anniversary of the classic film. About 500 feet of winding yellow brick road lined with fields of poppy flowers with Swarovski crystal elements will be installed outside the Tavern to welcome some 1,000 guests. “Running a restaurant is like a film,” LeRoy said. “It’s very theatrical.” “The Wizard of Oz,” released in 1939, starred Judy Garland as Dorothy Gale, the girl from Kansas who traveled to the Emerald City in a dream. It was chosen as the most-watched film in history by the Library of Congress. Warner Bros. Entertainment organized the Emerald Gala tonight and will give guests a sneak peak of “The Wizard of Oz 70th Anniversary Ultimate Collector’s Edition,” which Warner Home Video will release Sept. 29. Original Munchkins Lorna Luft , a daughter of Judy Garland, and rhythm-and- blues singer Ashanti are scheduled to sing, and five of the original munchkins will attend. The invitation-only event will also host one of the last stops of “The Ruby Slipper Collection,” featuring shoes inspired by Dorothy’s red slippers in the movie. The shoes, original sketches for them and some pieces from Warner Bros.’ “The Inspirations of Oz Fine Art Collection” will be auctioned at the gala. Bids for the shoes can be made online through tonight at rubyslipperauction.com . The proceeds will go to the Elizabeth Glaser Pediatric AIDS Foundation . The charity was set up to honor Elizabeth Glaser, who contracted AIDS through a blood transfusion in 1981. The wife of actor Paul Glaser , she unknowingly passed it to her daughter Ariel through breastfeeding and to her son, Jake, in utero. To sweep the guests into the aura of Oz, other props outside the Tavern will include: a purple horse; a Wizard of Oz hot-air balloon almost eight stories high; and audio speakers pumping out renditions of “Over the Rainbow.” Once inside, guests will roam the Tavern’s hallways and rooms while dining on roasted turkey, filet of beef, rack of lamb, Viennese desserts and crepes to order. “Someone once said if Oz had a restaurant, Tavern on the Green would be it,” LeRoy said. To contact the writer on this story: Patrick Cole in New York at pcole3@.bloomberg.net .

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Lamborghini, BMW Use Alphabet Soup in Name-Game Battle: Jason H. Harper

September 24, 2009

Review by Jason H. Harper Sept. 24 (Bloomberg) — This is an open letter to car manufacturers — a request, even a plea. Stop with all the numbers. I’m not talking about 0-to-60 times or horsepower ratings. I’m speaking of the gobbledygook, alphanumeric model names that more and more carmakers are using. Consider this month’s Frankfurt Auto Show , where we got a first look at new models and concept cars. For every cool, easily recognizable name like the Aston Martin Rapide, we saw many more like the Audi A3 1.2 TFSI and Lexus LF-Ch. Are these cars or alphabet soup? I feel like John Nash, the character in the movie “ A Beautiful Mind ,” trying to ferret out hidden meanings in the wash of code. What is behind such encryption-worthy Frankfurt monikers as the RCZ HYbrid4, L1, BB1 or DS3? Traditionally, upmarket European brands like Jaguar, Mercedes-Benz and BMW relied on combinations of numerals and letters. But there was generally an internal, if hoary, logic behind the numbers, reflecting the size of the car or its engine. The new Ferrari 458 Italia follows this thinking. Its 4.5- liter, eight-cylinder engine makes for the 458 designation. Inside baseball, but fair play. The logic can get squirrelly. Lamborghini’s Gallardo coupe is named after a bull, but the company prefers that the latest iteration be referred to as the LP 560-4. Posterior Placing The reason, clearly, is that the V-10 engine is placed longitudinally in the posterior (LP), and puts out 560 metric horsepower — which is 552 horsepower the way we Americans measure it. The “4” stands for the number of driven wheels, an all-wheel drive. Duh? To stir the murky waters, other brands have joined the alphanumeric game, including Lexus, Infiniti, Acura and now even Cadillac and Lincoln. Their naming conventions often aren’t even tangentially connected to the engineering. “The letters don’t actually mean anything,” said John Watts, senior manager of product planning at Acura, which makes the RDX. Acura once had models like the Integra and Legend, but dropped the names in favor of the more “upmarket” letter system in the mid-1990s. “Studies showed that the Legend name was more highly recognized than the Acura brand itself,” Watts said. “We wanted to change that, and over the years it has definitely worked. We’re now in-line with the other luxury brands.” Acura sells the RDX, MDX, TSX, TL and RL. The ZDX crossover is up next. Spectacular Clunkers “It can be confusing,” Watts admitted. “The older generation still struggles with it.” Once upon a time, American brands were known for the naming bravura of their big-block cars. Consider the Thunderbird, Barracuda, Charger and Firebird, not to mention keen alliterations like the Mercury Marauder and Hudson Hornet. The Lincoln MKT doesn’t roll off the tongue quite the same. There were spectacular clunkers. I half blame the death of conventional names on the Ford Aspire, a tin-can economy car with an unwittingly truthful name — any consumer in their right mind would aspire for something better. Other unfortunates included the Dodge St. Regis (spiffy!), Renault Le Car (yes, it’s a car), Daihatsu Charade (ouch), Dodge Swinger Special (hey, it was the ‘70s) and Kia Optima (not so much). Entire marketing teams must have been fired. “There have been some great cars with crappy names and crappy cars with great names,” said Matt DeLorenzo , editor-in- chief of Road & Track magazine . “These days, companies prefer to stress their brand name rather than individual car lines. I’d like to see the names come back. We’re poorer for their loss.” Alphanumeric Soup Meanwhile, the fight for alphanumeric soup has become intense. “You have to register them far in advance,” said Watts. “Most of the good-sounding combinations have been taken.” Clearly, or maybe we wouldn’t have wacky pilings-on like the RCZ HYbrid4, a concept car from Peugeot , or BMW’s X6 xDrive50i and the Mercedes-Benz GL320 BlueTEC SUV. (Note the random capitalizations and deliberate misspellings — cues perhaps from the world of hip-hop.) At the Frankfurt show, the onset of electric and hybrid concept cars put some manufacturers in a playful mood. See the Citroen REVOLTE, Hyundai ix-Metro, VW E-Up! and Audi e-tron. (If any of these cars make production, the names probably won’t.) Isn’t there a better way? “The truly high-end cars still use names,” DeLorenzo said. “Look at Bugatti and Bentley. Rolls-Royce is showing the Ghost at Frankfurt, and that’s a great name. So maybe there’s a chance we’ll swing the other way.” One can hope, because the alphanumeric system is beginning to feel like a nuclear confrontation — a showdown where all models end up sounding the same. So let me make a suggestion. Gentlemen, the next time you’re looking to name a new model, consider this one: eNUFF. ( Jason H. Harper writes about autos for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: Jason H. Harper at Jason@JasonHharper.com .

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Lamborghini, BMW Use Alphabet Soup in Name-Game Battle: Jason H. Harper

September 24, 2009

Review by Jason H. Harper Sept. 24 (Bloomberg) — This is an open letter to car manufacturers — a request, even a plea. Stop with all the numbers. I’m not talking about 0-to-60 times or horsepower ratings. I’m speaking of the gobbledygook, alphanumeric model names that more and more carmakers are using. Consider this month’s Frankfurt Auto Show , where we got a first look at new models and concept cars. For every cool, easily recognizable name like the Aston Martin Rapide, we saw many more like the Audi A3 1.2 TFSI and Lexus LF-Ch. Are these cars or alphabet soup? I feel like John Nash, the character in the movie “ A Beautiful Mind ,” trying to ferret out hidden meanings in the wash of code. What is behind such encryption-worthy Frankfurt monikers as the RCZ HYbrid4, L1, BB1 or DS3? Traditionally, upmarket European brands like Jaguar, Mercedes-Benz and BMW relied on combinations of numerals and letters. But there was generally an internal, if hoary, logic behind the numbers, reflecting the size of the car or its engine. The new Ferrari 458 Italia follows this thinking. Its 4.5- liter, eight-cylinder engine makes for the 458 designation. Inside baseball, but fair play. The logic can get squirrelly. Lamborghini’s Gallardo coupe is named after a bull, but the company prefers that the latest iteration be referred to as the LP 560-4. Posterior Placing The reason, clearly, is that the V-10 engine is placed longitudinally in the posterior (LP), and puts out 560 metric horsepower — which is 552 horsepower the way we Americans measure it. The “4” stands for the number of driven wheels, an all-wheel drive. Duh? To stir the murky waters, other brands have joined the alphanumeric game, including Lexus, Infiniti, Acura and now even Cadillac and Lincoln. Their naming conventions often aren’t even tangentially connected to the engineering. “The letters don’t actually mean anything,” said John Watts, senior manager of product planning at Acura, which makes the RDX. Acura once had models like the Integra and Legend, but dropped the names in favor of the more “upmarket” letter system in the mid-1990s. “Studies showed that the Legend name was more highly recognized than the Acura brand itself,” Watts said. “We wanted to change that, and over the years it has definitely worked. We’re now in-line with the other luxury brands.” Acura sells the RDX, MDX, TSX, TL and RL. The ZDX crossover is up next. Spectacular Clunkers “It can be confusing,” Watts admitted. “The older generation still struggles with it.” Once upon a time, American brands were known for the naming bravura of their big-block cars. Consider the Thunderbird, Barracuda, Charger and Firebird, not to mention keen alliterations like the Mercury Marauder and Hudson Hornet. The Lincoln MKT doesn’t roll off the tongue quite the same. There were spectacular clunkers. I half blame the death of conventional names on the Ford Aspire, a tin-can economy car with an unwittingly truthful name — any consumer in their right mind would aspire for something better. Other unfortunates included the Dodge St. Regis (spiffy!), Renault Le Car (yes, it’s a car), Daihatsu Charade (ouch), Dodge Swinger Special (hey, it was the ‘70s) and Kia Optima (not so much). Entire marketing teams must have been fired. “There have been some great cars with crappy names and crappy cars with great names,” said Matt DeLorenzo , editor-in- chief of Road & Track magazine . “These days, companies prefer to stress their brand name rather than individual car lines. I’d like to see the names come back. We’re poorer for their loss.” Alphanumeric Soup Meanwhile, the fight for alphanumeric soup has become intense. “You have to register them far in advance,” said Watts. “Most of the good-sounding combinations have been taken.” Clearly, or maybe we wouldn’t have wacky pilings-on like the RCZ HYbrid4, a concept car from Peugeot , or BMW’s X6 xDrive50i and the Mercedes-Benz GL320 BlueTEC SUV. (Note the random capitalizations and deliberate misspellings — cues perhaps from the world of hip-hop.) At the Frankfurt show, the onset of electric and hybrid concept cars put some manufacturers in a playful mood. See the Citroen REVOLTE, Hyundai ix-Metro, VW E-Up! and Audi e-tron. (If any of these cars make production, the names probably won’t.) Isn’t there a better way? “The truly high-end cars still use names,” DeLorenzo said. “Look at Bugatti and Bentley. Rolls-Royce is showing the Ghost at Frankfurt, and that’s a great name. So maybe there’s a chance we’ll swing the other way.” One can hope, because the alphanumeric system is beginning to feel like a nuclear confrontation — a showdown where all models end up sounding the same. So let me make a suggestion. Gentlemen, the next time you’re looking to name a new model, consider this one: eNUFF. ( Jason H. Harper writes about autos for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: Jason H. Harper at Jason@JasonHharper.com .

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Michael Moore’s NYC "Capitalism" Premiere: Unintentional Branding From Bailed-Out Banks

September 22, 2009

Though you’d never know from the title, the New York premiere of Michael Moore’s “Capitalism: A Love Story” did have some notable brands associated with it (hat tip to Daily Intel ). Though Moore’s film is a critique of unchecked free market fervor — check HuffPost’s big news page on Moore’s film — the NYC showing did, as the New York Times put it , “draw a large number of women in Chanel dresses and men with Rolex watches.” Interestingly, Lincoln Center, which hosted the event, has some unintentionally hilarious branding from some notorious bailed-out banks. Here’s the NYT: Also at Monday’s premiere was a family featured in the film being evicted from their home in Peoria, Ill., by representatives of Citigroup. The family patriarch yelled to Mr. Moore from the audience that he thought the film was “great.” He may not have realized he was yelling from a seat in the ‘Citi Balcony.’ Here’s how the WSJ described the premiere: Before the film, the crowd sipped champagne and cocktails in the “Morgan Stanley Lobby” and then headed to their seats in the “Citi Balcony.” Movie tickets were available at the “Bank of New York Box Office” and there’s outdoor seating at the “Credit Suisse Information Grandstand. Get HuffPost Business On Facebook and Twitter !

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Uighur Activist Kadeer’s Film to Be Shown Before Taiwan Kaohsiung Festival

September 19, 2009

By Tim Culpan Sept. 20 (Bloomberg) — Taiwan’s second-largest city will screen a movie about an exiled Uighur activist who’s been criticized by China, before its local film festival starts. “The 10 Conditions of Love,” a film about Rebiya Kadeer , who China has called “an ironclad separatist,” will be shown in four sessions on Sept. 22 and Sept. 23, instead of during the Kaohsiung Film Festival which begins Oct. 16, Liu Hsiu-ying, director of the Kaohsiung Film Library, the event’s organizer, said by phone yesterday. The compromise comes after tourism groups urged the local government in Kaohsiung not to show the film on concerns it may provoke China, the largest source of tourists to Taiwan. Kaohsiung, a city in southern Taiwan controlled by the opposition Democratic Progressive Party, drew criticism from China earlier this month for hosting the Dalai Lama . “Tourism in Kaohsiung is already hurting” from a deadly typhoon, swine flu and Chinese opposition to the Dalai Lama’s visit, and “we don’t need to aggravate the situation by screening the movie and further provoking China,” Lin Shang- Chih, president of the Kaohsiung Travel Agency Association , said earlier in a telephone interview. Typhoon Morakot, which left more than 600 dead in southern Taiwan last month, triggered criticism of President Ma Ying- jeou , who was accused of not doing enough to save lives. Ma consented to the Kaohsiung city and county’s proposal to allow the Dalai Lama to visit after the typhoon. ‘Political Turmoil’ “The government information office noted the different views, including those from city councilors, the tourism industry, film and artist groups, and respects each of those standpoints,” the Kaohsiung city government said in a faxed statement last night. The government “faced political turmoil caused by mainland China’s Taiwan Affairs Office,” it said in the statement. Taiwan Affairs Office spokesman Yang Yi said at a press conference in Beijing on Sept. 16 that Taiwan wants to avoid “any repeat of incidents that might disturb the peaceful development of cross-Strait relations.” “10 Conditions” is an Australian-made film about Rebiya Kadeer , who China has accused of instigating clashes between Muslim Uighurs and Han Chinese in Xinjiang in July that left 192 people dead. Chinese officials tried to stop the Australian premiere of the film at the Melbourne International Film Festival in August. More than 80,000 mainland Chinese visited Taiwan last month, compared with 29,281 a year earlier, according to the Taiwan tourism bureau. To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net .

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Citigroup’s Pandit Said to Mimic Marty McFly in `Bank of the Future’ Push

September 11, 2009

By Bradley Keoun Sept. 11 (Bloomberg) — Citigroup Inc. Chief Executive Officer Vikram Pandit may be the Marty McFly of banking. Executives at Citigroup’s U.S. retail-banking unit have huddled for seven months to conceive a “Bank of the Future” offering rejuvenated Internet and cell-phone portals alongside branches, people familiar with the matter said. Citigroup hired 37-year-old Michelle Peluso , who helped modernize airline reservations as CEO of Travelocity.com , to lead the sessions. Like McFly, the character played by Michael J. Fox in the movie “Back to the Future,” Citigroup is reaching to the past to reinvent itself. In 1997, under then-CEO John Reed , the bank unveiled a short-lived plan to do away with branches wherever possible by pushing more customers to personal computers, telephones and automated teller machines, a technology that Reed helped proliferate. Pandit, unlike Reed, doesn’t plan to get rid of branches. Bankers have long assumed that “people who like online banking have no money, and people with money don’t like online banking,” said Seamus McMahon , a former regional president for HSBC Holdings Plc’s U.S. banking unit. Now, “there is a group of people who were in their 20s and are now in their 30s, and actually have some money.” Citigroup, which got a $45 billion federal bailout last year, is trying to swell U.S. deposits prized as a source of funding amid the global credit crunch. Wells Fargo & Co. and Bank of America Corp. have more than 6,000 domestic branches each, compared with Citigroup’s 1,001, and at least three times Citigroup’s U.S. retail deposits. Failed Wachovia Bid Pandit tried to bolster deposits last year by buying the failing bank Wachovia Corp., only to have the bid trumped by San Francisco-based Wells Fargo. As of June 30, Citigroup had $135.7 billion of retail-banking deposits in the U.S. and Canada. “They don’t have nearly the branch presence in the United States as their competitors,” said Edward Najarian , an analyst at institutional brokerage International Strategy & Investment Group in New York. “So they have to come up with something innovative.” Citigroup’s strategy-planning project, initially known as “Bank of the Future” and later given the official name, “Citi Forward,” is overseen by Teresa “Terri” Dial , 59, a former Wells Fargo executive who was hired by Pandit in March 2008 to run the U.S. consumer division. The unit had $1.76 billion of revenue in the second quarter, down 17 percent from a year earlier. ‘Project Harmony’ In an Aug. 27 memo to staff, Dial wrote that there’s a “significant and immediate opportunity to embrace a more client- and customer-centric approach across our product lines and delivery channels.” Key elements of the “service model” include “technology, the Internet and mobile,” Dial wrote. Liza Landsman, 40, a former International Business Machines Corp. executive who has worked at Citigroup for nine years, was named to head the Internet and mobile-banking team, according to the memo, which was confirmed by Citigroup spokeswoman Susan Thomson . Peter Knitzer , 51, a 13-year veteran who previously oversaw marketing along with Citibank Online and other duties, will leave the company later this year, Dial said in a separate memo on Aug. 26. Thomson declined to discuss specific products or services being developed under Citi Forward. A related effort, known internally as “Project Harmony,” aims to consolidate Web portals for personal banking and credit cards, so customers don’t have to log in separately, people familiar with the matter said. Some other banks, including JPMorgan Chase & Co. and Bank of America, already offer single sign-ons. Supported by Parsons Earlier this year, Dial hired Peluso, who was Travelocity’s CEO from 2003 through January, as a part-time consultant. Peluso previously had worked at Boston Consulting Group and served as a White House fellow in the late 1990s. Employees tapped for the project were told in February to gather for lunch in an executive dining room at Citigroup’s Park Avenue headquarters, the people familiar with the matter said. Peluso opened the meeting by saying she had just bumped into board Chairman Richard Parsons , who told her he was excited about the project and that it was important to the bank’s future, according to two people who attended. Parsons, 61, didn’t respond to a request for comment. Dial arrived later in the meeting and said she wanted to prove that having a smaller branch network than rivals could be a competitive advantage, two people familiar with the matter said. Dial wasn’t available to comment. Marketing Officer Sought The Citi Forward group has been meeting about twice a week, one person involved in the process said. In the Aug. 27 memo to staff, Dial wrote that she was searching for a new chief marketing officer to play a “critical role in helping us define the future for North American consumer banking and earn the right to our customers’ lifetime business.” Peluso, working under a consulting agreement, was appointed to the role on an interim basis, according to the memo. To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net

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Michael Moore: This Is It! World Premiere of Capitalism: A Love Story Tonight

September 5, 2009

Friends, Well, this is it! Tonight, at the Venice Film Festival, I will premiere my new movie, Capitalism: A Love Story . After 16 months of production, I am proud to present this work of mine to you. It is unlike anything you’ll see on the silver screen this year. Twenty years ago this week I premiered my first film, Roger & Me . Tonight, my new film will premiere at the oldest film festival in the world, the Venice Film Festival in Venice, Italy. It is an incredible honor they’ve bestowed on us, and we feel very privileged to be able to present Capitalism: A Love Story tonight in Venice. The director of the festival said that our movie was “incredibly symphonic” and that he was moved by its epic nature. Jeez, these Italians! Everything’s an opera to them! But seriously, I do believe we’ve made something that will knock your socks off. I showed it to a friend of mine last week and he said, “It’s your most dangerous film yet.” (But I assure you, you’ll be completely safe watching it in your local theater.) I’ve kept a pretty tight lid on what we’ve been up to while making this movie and you’re about to see exactly what that means. It isn’t easy, in the age of YouTube and the internet, to keep something like this under wraps, but we’ve pulled it off and I can’t wait to show you this latest effort of mine. So wish us well tonight. We’ll be home soon to open the movie all across the country (September 23rd in New York and L.A., October 2nd everywhere else). I’ll leave you with a quote from Thomas Jefferson: “Banking establishments are more dangerous than standing armies.” Yours, Michael Moore MMFlint@aol.com MichaelMoore.com P.S. If you haven’t seen the new trailer for the movie, check it out . Join Mike’s Mailing List | Follow Mike on Twitter | Join Mike’s Facebook Group | Become Mike’s MySpace Friend

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Steve Parker: "Clunker" program over, but private versions sprout

August 27, 2009

Washington’s CARS Program (the clunker law) is officially over, after moving somewhere between 700,0000 and 750,000 new cars and trucks off showroom floors. Considering your point-of-view, the program has been either a wild success or just another step on the way towards Obama Socialism (when will your neighborhood’s Clunker Panel show up at your front door and demand you get rid of your old car and buy a new one, and with the law on their side, too?). But something we predicted here weeks ago seems to be coming true: on their own, dealers are offering their own versions of the clunker program. I saw one TV ad yesterday in southern California for a local dealership offering up to $2,500 for a traded-in “clunker” (here’s a pertinent story we found: http://www.wkyc.com/news/news_article.aspx?storyid=120481 ). The parameters for these private programs will certainly be different from the federal program, so check carefully before getting involved in any deal you may not fully understand. These programs won’t be based on a 136-page law, as was CARS, but a much more casual way for buyers to feel better about their purchase. As of today (Thursday), no car-maker has yet jumped into the “private clunker” pool, but it won’t be a surprise when it happens (and we say it will). And any dealer or car-maker considering starting their own clunker operation must make their mind up to do so fast … the public has a way of forgetting what happened yesterday, much less last week, and jumping-in now will allow the dealer or manufacturer to take advantage of the great momentum the fed program has created. There’s no argument about this: CARS brought millions of people into dealerships who wouldn’t otherwise have been considering a new-car buy, and, consumer confidence has taken a jump in the past month, something analysts credit to the program putting a lot of us in the mood to buy. What these private programs really will be are enhanced rebate deals. There won’t be any rules about having to junk your old car, disable the engine, etc. The dealer (possibly with help from the car-maker) will just be tossing some more money on the hood of the old car you’re trading in. Let’s take a moment and quietly praise Lee Iacocca for his creation of the “buy a car, get a check” rebate … the industry’s first. He’d just been fired from his position as President of Ford Motor Company and quickly went cross-town to ailing Chrysler (for a salary of $1 a year), where a radical program like rebates turned out to be just what the doctor ordered. If you’re a car company or dealer exec, you might not feel so warm and fuzzy about Iacocca’s invention, which has become common in every retail industry worldwide. Consumers sure responded in a big way. And like rebate junkies, none of us expects to pay anything near the sticker price for a new car or truck anymore. Or just about anything else, for that matter. Which brings up one of the most closely-guarded secrets in all of industry and government: what it really costs to build a new car. For example, rumors said that once Ford had paid-off the development and tooling of the original Explorer SUV, which probably took between the initial two and three years of sales, the company was clearing something in the neighborhood of $15,000 on each unit sold. And at its height, Ford was selling more than 1,200 Explorers a day. Yep, a day. Even with my lousy math skills, I know that’s a hell of a lot of money coming into Ford’s coffers. As we’re located in southern California, it seems right to compare the car industry with the movie business with their arcane complications and methodologies of determining a product’s costs and profits (and losses and taxes and write-offs). Both businesses take years of “pre-production” and by the time a car makes it to the showroom or a film to your local screen, thousands of people and hundreds of companies may have been working full-time for years on it — and often after all that work and time and money the project either never gets off the ground or is a bomb. Keep in mind, also, that car dealers buy their cars and trucks from their respective factories; they have to get financing and pay back those loans just like we do. And dealers and car-makers have at least as many rebate and other money-saving deals and bonuses between them as dealers offer the public. Our point is that by the time the customer sees the Monroney sticker on the new car with the MSRP, the Manufacturer’s Suggested Retail Price, that number has little to do with the actual cost of the car or even what the dealer intends to sell it for. The all-important number is what the dealer will ultimately pay the factory for that vehicle. Even with the incredible amount of information about new and used car-buying and -selling on the Web, the actual cost of shepherding a car along from an idea to a concept and prototyping then to showroom floor and the garages of America remains a true mystery. Just be assured that even with all the clunker programs and rebates and 0% down and free regular maintenance and roadside service and all the other deals, a lot of people are still making a lot of money in the auto industry. With every new deal, every new “financial product,” every new price adjustment in the consumer’s favor and adding what were formerly expensive options as standard features, we might actually be paying closer than ever to the actual cost of the car. Some of you might think that how the price of cars has far out-stripped the cost of inflation is also something the industry needs to deal with, too. Let us know what you think about what dealers and car-makers should be doing “post-clunker” — we know for a fact that top industry people stop by here almost daily and my opinions pale in importance to what you, the sophisticated and educated car-buyer, has to say. So let them have it. How should we be buying cars in the 21st century? Should the car-makers be allowed to own their own dealerships? Should new cars and trucks be bought outright on the Web, delivered by flatbed truck to your home or office, using a system which means you never have to set-foot in a dealership? Should groups of dealers be allowed to band together and create “service supercenters” outside of town, a place where warranty and repair work is done, but a place which the customer never needs to see? Even with GM’s revolutionary use of eBay, allowing customers in California to bid online for various GM makes and models, that customer still has to take delivery of the car or truck at a brick-and-mortar dealership. In future posts, we’ll take a look at how Nissan, through their Infiniti luxury “channel,” and Mazda, with their proposed luxury division code-named Amati, both had great opportunities to change the landscape of auto dealing (and servicing) in the US, but choose instead to stick with the status quo. The auto industry is leaving its exuberant teenage years. Now it needs guidance from you, the adults.

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Google Inserts Movie Previews Into Internet Search Ads to Counter Slowdown

August 14, 2009

By Brian Womack Aug. 14 (Bloomberg) — Google Inc. , seeking new ways to make money from Internet-search advertising, is dressing up its plain-text search ads with movie and TV previews. After starting to test videos in its ads last year, Google is considering adding product-demonstration clips to the experiment, said Nick Fox, a director of business product management working on the project. The advertisements look similar to traditional ads, except for a small box with a plus sign. With a click of a mouse, the box opens a video player. “It’s clear that this is something that users want,” Fox said this week in an interview. “It ties back to trying to understand what a user is doing on Google , what an advertiser is trying to sell — and matching those up.” Google , facing a slowdown in Internet ad spending, may use video to squeeze more revenue from its search engine, said David Hallerman , an analyst with EMarketer Inc. in New York. Video will make up 4.3 percent of the online ad market in the U.S. this year, growing to 11 percent by 2013, he estimates. “Video is becoming more and more a common language,” Hallerman said. “The marketers want to be able to place marketing videos in front of an interested audience.” Advertisers have used the video ads to promote the movie “Extract,” starring Jason Bateman , and VH1’s “The T.O. Show,” which features Terrell Owens , the National Football League player. Getting Paid With traditional search ads, users have to click through to another site before Google earns a fee. With the new movie- preview ads, customers pay the company if a user watches the video for a certain length of time, or clicks on the link. The appeal of video is demonstrated by Google’s YouTube , the most popular video-sharing site in the U.S., Fox said. The company already provides video ads on YouTube and on other businesses’ sites, which use Google ’s AdSense service. Google, which makes most of its money from search advertising, has to be careful not to add too many videos to ads, Fox said. Users don’t want to be distracted with extra information that isn’t helpful, he said. “We don’t want to just show videos from the perspective of: Here’s something flashy on the page,” he said. “From a user perspective, when you’re looking for a movie, the absolute most useful piece of information you want is the trailer.” Product Clips Product-demonstration videos could help Google users quickly understand what an advertiser is offering, Fox said. Many advertisers, such as wireless carriers, already have product videos. So it’s not hard to put them in their current ads, he said. “Things like pictures and prices are useful, but for more complex products, a video can actually capture that quite well,” Fox said. “You want a video that shows all the functionality.” The Mountain View, California-based company also is adding other features, such as maps, to search ads. That’s helping local businesses quickly show their locations. Google dominates the search market, accounting for 65 percent of U.S. queries in June, according to ComScore Inc. , a research firm in Reston, Virginia. Yahoo! Inc. was second with 19.6 percent, while Microsoft Corp. had 8.4 percent. Google fell $3.91 to $458.37 at 10:51 a.m. New York time on the Nasdaq Stock Market. The shares had climbed 50 percent this year before today. To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net

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Google Inserts Movie Previews Into Internet Search Ads to Counter Slowdown

August 14, 2009

By Brian Womack Aug. 14 (Bloomberg) — Google Inc. , seeking new ways to make money from Internet-search advertising, is dressing up its plain-text search ads with movie and TV previews. After starting to test videos in its ads last year, Google is considering adding product-demonstration clips to the experiment, said Nick Fox, a director of business product management working on the project. The advertisements look similar to traditional ads, except for a small box with a plus sign. With a click of a mouse, the box opens a video player. “It’s clear that this is something that users want,” Fox said this week in an interview. “It ties back to trying to understand what a user is doing on Google , what an advertiser is trying to sell — and matching those up.” Google , facing a slowdown in Internet ad spending, may use video to squeeze more revenue from its search engine, said David Hallerman , an analyst with EMarketer Inc. in New York. Video will make up 4.3 percent of the online ad market in the U.S. this year, growing to 11 percent by 2013, he estimates. “Video is becoming more and more a common language,” Hallerman said. “The marketers want to be able to place marketing videos in front of an interested audience.” Advertisers have used the video ads to promote the movie “Extract,” starring Jason Bateman , and VH1’s “The T.O. Show,” which features Terrell Owens , the National Football League player. Getting Paid With traditional search ads, users have to click through to another site before Google earns a fee. With the new movie- preview ads, customers pay the company if a user watches the video for a certain length of time, or clicks on the link. The appeal of video is demonstrated by Google’s YouTube , the most popular video-sharing site in the U.S., Fox said. The company already provides video ads on YouTube and on other businesses’ sites, which use Google ’s AdSense service. Google, which makes most of its money from search advertising, has to be careful not to add too many videos to ads, Fox said. Users don’t want to be distracted with extra information that isn’t helpful, he said. “We don’t want to just show videos from the perspective of: Here’s something flashy on the page,” he said. “From a user perspective, when you’re looking for a movie, the absolute most useful piece of information you want is the trailer.” Product Clips Product-demonstration videos could help Google users quickly understand what an advertiser is offering, Fox said. Many advertisers, such as wireless carriers, already have product videos. So it’s not hard to put them in their current ads, he said. “Things like pictures and prices are useful, but for more complex products, a video can actually capture that quite well,” Fox said. “You want a video that shows all the functionality.” The Mountain View, California-based company also is adding other features, such as maps, to search ads. That’s helping local businesses quickly show their locations. Google dominates the search market, accounting for 65 percent of U.S. queries in June, according to ComScore Inc. , a research firm in Reston, Virginia. Yahoo! Inc. was second with 19.6 percent, while Microsoft Corp. had 8.4 percent. Google fell $3.91 to $458.37 at 10:51 a.m. New York time on the Nasdaq Stock Market. The shares had climbed 50 percent this year before today. To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net

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Google Inserts Movie Previews Into Internet Search Ads to Counter Slowdow

August 14, 2009

By Brian Womack Aug. 14 (Bloomberg) — Google Inc. , seeking new ways to make money from Internet-search advertising, is dressing up its plain-text search ads with movie and TV previews. After starting to test videos in its ads last year, Google is considering adding product-demonstration clips to the experiment, said Nick Fox, a director of business product management working on the project. The advertisements look similar to traditional ads, except for a small box with a plus sign. With a click of a mouse, the box opens a video player. “It’s clear that this is something that users want,” Fox said this week in an interview. “It ties back to trying to understand what a user is doing on Google , what an advertiser is trying to sell — and matching those up.” Google , facing a slowdown in Internet ad spending, may use video to squeeze more revenue from its search engine, said David Hallerman , an analyst with EMarketer Inc. in New York. Video will make up 4.3 percent of the online ad market in the U.S. this year, growing to 11 percent by 2013, he estimates. “Video is becoming more and more a common language,” Hallerman said. “The marketers want to be able to place marketing videos in front of an interested audience.” Advertisers have used the video ads to promote the movie “Extract,” starring Jason Bateman , and VH1’s “The T.O. Show,” which features Terrell Owens , the National Football League player. Getting Paid With traditional search ads, users have to click through to another site before Google earns a fee. With the new movie- preview ads, customers pay the company if a user watches the video for a certain length of time, or clicks on the link. The appeal of video is demonstrated by Google’s YouTube , the most popular video-sharing site in the U.S., Fox said. The company already provides video ads on YouTube and on other businesses’ sites, which use Google ’s AdSense service. Google, which makes most of its money from search advertising, has to be careful not to add too many videos to ads, Fox said. Users don’t want to be distracted with extra information that isn’t helpful, he said. “We don’t want to just show videos from the perspective of: Here’s something flashy on the page,” he said. “From a user perspective, when you’re looking for a movie, the absolute most useful piece of information you want is the trailer.” Product Clips Product-demonstration videos could help Google users quickly understand what an advertiser is offering, Fox said. Many advertisers, such as wireless carriers, already have product videos. So it’s not hard to put them in their current ads, he said. “Things like pictures and prices are useful, but for more complex products, a video can actually capture that quite well,” Fox said. “You want a video that shows all the functionality.” The Mountain View, California-based company also is adding other features, such as maps, to search ads. That’s helping local businesses quickly show their locations. Google dominates the search market, accounting for 65 percent of U.S. queries in June, according to ComScore Inc. , a research firm in Reston, Virginia. Yahoo! Inc. was second with 19.6 percent, while Microsoft Corp. had 8.4 percent. Google fell $3.91 to $458.37 at 10:51 a.m. New York time on the Nasdaq Stock Market. The shares had climbed 50 percent this year before today. To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net

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Video: Interview with NY Mets Hall of Famer Tom Seaver

July 31, 2009

Seaver Hosts BofA’s Military Family Movie Night; Also Talks Baseball and Winemaking (Bloomberg News)

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Dreier’s Luxe Lifestyle Revealed as New York Condo Sells for $8.2 Million

July 21, 2009

By Oshrat Carmiel and Alex Kowalski July 21 (Bloomberg) — Con man Marc Dreier ’s luxury Manhattan condominium sold today for $8.2 million, 21 percent less than what he paid two years ago, in an auction that attracted more than 40 bidders. The buyer at the auction at U.S

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