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AT&T “Not Concerned at All” About Warner-Discovery Regulatory Review, CFO Says

BY GEORG SZALAI | HollywoodReporter.Com

Troy Warren #business-all

Although Pascal Desroches says about the process: “I’m not confident that we are going to be able to get something done very quickly through the DOJ.”

AT&T’s WarnerMedia merger with Discovery shouldn’t face any real challenges from regulators and could end up securing clearances before the companies’ mid-2022 closing target date, AT&T CFO Pascal Desroches signaled during an investor conference on Tuesday.

“Getting through the U.S. and international different market regulatory regimes just takes some time,” he said duringCredit Suisse’s virtual 23rd Annual Communications Conference. “We are hopeful that we are conservative in our outlook in terms of the time that it is going to take to get it approved, but we don’t know.”

Desroches also said about the Washington review process: “I’m not confident that we are going to be able to get something done very quickly through the DOJ (Department of Justice). That is why we gave the one-year timetable. We are not concerned at all that this could be challenged from a regulatory standpoint.”

In mid-May, AT&T unveiled a deal to spin off WarnerMedia, merge it with Discovery and get $43 billion, in the process creating a new global content powerhouse with scripted and unscripted programming. AT&T will use the sale of its entertainment unit to reduce debt and focus on its connectivity business.

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” AT&T CEO John Stankey had said in unveiling the deal. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want.”

For AT&T shareholders, he called it “an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity.”

HBO and the HBO Max streaming service ended March with 44.2 million domestic and 63.9 million global subscribers. AT&T did not break out the number of subscribers for HBO Max as it no longer reports “activations.”


 

 

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Justin Baldoni’s Wayfarer Studios to Launch ‘The Man Enough Podcast’ in Deal With Procter & Gamble (Exclusive)

BY J. CLARA CHAN | HollywoodReporter.Com

Troy Warren #business-all

As part of the deal, Procter & Gamble will also co-finance and co-produce other projects with Wayfarer across film, TV and new media.

Justin Baldoni’s Wayfarer Studios will launch The Man Enough Podcast next Monday as part of a major deal and partnership with Procter & Gamble.

In the podcast, inspired by the unscripted video series and book of the same name, Baldoni will be joined by co-hosts Jamey Heath and Liz Plank, a journalist and expert on masculinity, to engage in conversations with guests about topics like fatherhood, privilege, body image, intimacy, relationships and other issues that negatively impact men and women. Guests on the series will include Matthew McConaughey, Shawn Mendes, Karamo Brown, Glennon Doyle and Eugenio Derbez.

The deal will also see Procter & Gamble co-financing and co-producing other projects with Wayfarer across film, TV and new media. Financial terms of the deal were not disclosed.

“We are so excited to join forces, and hearts, with the incredible team at P&G on this first-of-its-kind partnership,” Baldoni, the co-founder of Wayfarer Studios, said. “As we continue to create media that amplifies the human spirit and serves as a catalyst for positive social change, we can’t think of a better way to kick off this partnership than by bringing The Man Enough Podcast to the world.”

“Wayfarer is creating authentic content and stories that bring much needed love, light and positive energy into the world,” Marc Pritchard, P&G’s chief brand officer, added. “P&G is committed to creating even more content for good through this unique first-look deal with a wonderful partner that shares our values.”

Baldoni’s Wayfarer Studios first launched the Man Enough talk show in 2017 that brought together figures like How to Get Away With Murder‘s Matt McGorry, Hamilton‘s Javier Muñoz, Dancing With the Star‘s Derek Hough, spoken word artist Prince Ea, comedian Bassem Youssef and activist Aydian Dowling to discuss provocative and intimate subjects over dinner. In April, Baldoni published Man Enough: Undefining My Masculinity to explore his own relationship with masculinity, identity and vulnerability.

The Man Enough Podcast is executive produced by Baldoni, Heath, Tarah Malhotra-Feinberg and P&G’s Pritchard and Carrie Rathod. The series will be broadcast in partnership with Audacy’s Cadence13 and distributed everywhere podcasts are available, while a video version of each episode will be available on YouTube and on the Man Enough website.


 

 

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Global, U.S. Ad Spending to Hit Records on COVID Rebound: Forecast

BY GEORG SZALAI | HollywoodReporter.Com

Troy Warren #business-all

Worldwide spending will reach $657 billion thanks to a record gain of 14 percent, while the U.S. will record its strongest growth rate in 40 years, according to Magna.

The economic recovery from the coronavirus pandemic will lead to a record 14 percent gain in global advertising spending this year to a record $657 billion, according to the latest forecast from media investment and intelligence company Magna.

That would be above the 12.5 percent gain recorded in 2000, and a significant increase from Magna’s previous forecast for an 8 percent increase.

“In the U.S., media companies’ net advertising revenues will reach a new all-time high of $259 billion in 2021,” growing 15 percent, the strongest growth rate in 40 years, the firm said in a summary of its projections.

The predicted global ad gain of $78 billion in 2021 follows a decline of 2.5 percent in 2020. “The marketplace will continue to grow in 2022,” Magna said, estimating a 7 percent gain. “Advertising activity is fueled by economic recovery (global GDP +6.4 percent) benefitting key ad-spending verticals severely hit by COVID-19 last year (automotive, travel, entertainment, restaurants),  stronger-than-ever organic drivers to digital marketing and international sports events (Tokyo Olympics, UEFA Euro).”

Digital ad formats will capture most of the growth with ad sales here expected to rise 20 percent to $419 billion, 64 percent of total ad sales, according to Magna’s report. “Linear ad sales are slower to recover but will stabilize full-year (+3 percent to $238 billion).”

All 70 ad markets it monitors will grow this year, with expected increases in China (16 percent) and the UK (17 percent) being among the largest, Magna said.

The U.S. ad gain of $34 billion this year will come as digital ad sales will grow 20 percent and non-political linear ad sales will rise 4 percent, Magna said. In 2022, it expects further U.S. growth of 8 percent to $280 billion,” thanks to continued economic growth (GDP growth between 3.5 and 4.3 percent) and more cyclical drivers (Winter Olympics in the first quarter, mid-term elections in the fourth quarter 2022).”

“As economic recovery is stronger and faster than anticipated in several of the world’s largest ad markets – U.S., U.K. and China, in particular – and consumption accelerates, brands need to reconnect with consumers,” explained Vincent Létang, executive vp, global market research at Magna. “At the same time, the acceleration in e-commerce and digital marketing adoption that started during COVID, continues full speed into 2021, fueling digital advertising spending from consumer brands as well as small and direct-to-consumer businesses. This unique combination of cyclical, organic and structural drivers will lead to the strongest advertising annual growth ever monitored by Magna.”

The firm also addressed recent media mega-mergers. “Linear ad sales still represent the bulk of ad revenues for traditional media owners and their continued stagnation will trigger a wave of consolidation in the media industry, aimed at competing with digital media players,” it said. “Traditional media companies have no choice but to grow in scale in order to compete with digital media giants and invest in cross-platform advertising solutions. Traditional media owners are moving now as they believe antitrust authorities are ready to consider market shares in the broader media market and thus approve horizontal consolidations that would have been unthinkable just five years ago.:

Added Magna: “The U.S. TV market remains relatively fragmented following the merger of Warner and Discovery: The top three TV ad vendors (currently NBC, ViacomCBS and Warner/Discovery) will control just 60 percent of the U.S. TV advertising market, compared to 90 percent-plus for the top three broadcasters in most other advanced markets. Moreover, they will control only 15 percent of the broader, cross-platform ad market compared to 30 percent for Google or 16 percent for Facebook. Media consolidation is global, and international markets remain a step ahead as the top two French broadcasters (combined market share 90 percent) just announced their own merger plans.”


 

 

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Apple Store in Historic Tower Theatre to Open Later This Month

BY J. CLARA CHAN | HollywoodReporter.Com

Troy Warren #business-all

The downtown L.A. building, which first opened in 1927, has appeared in films such as ‘Fight Club,’ ‘Mulholland Drive’ and ‘The Prestige.’

The long-awaited Apple Store in downtown Los Angeles’ historic Tower Theatre will open on June 24, an Apple spokesman confirmed to The Hollywood Reporter on Friday.

Apple originally announced plans to open its first DTLA store in Tower Theatre, located at 8th and Broadway, in 2018 and has since undergone an extensive restoration project to revive the the building. But as of this week, passersby noticed the store was near opening, with Apple products lining tabletops and walls lined with accessories underneath the building’s restored ceilings.

The Tower Theatre was commissioned by H. L. Gumbiner, an independent film exhibitor who also oversaw the creation of the Los Angeles Theatre. Designed by S. Charles Lee, the Tower Theatre’s interior was inspired by the Paris Opera House, while the exterior was done in a Renaissance Revival style, complete with French, Spanish, Moorish and Italian elements done in terra-cotta, according to the Los Angeles Conservancy.

Since the theatre’s opening in 1927, the DTLA building has become an L.A. landmark and has featured in a number of films, including Fight Club, Mulholland Drive, The Prestige and Coyote Ugly.

Once open, the Apple Tower Theatre store is expected to host a number of events, children’s programs and talks focused on film, TV and music.


 

 

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UPS zeroes in on most profitable packages to deliver

By Kelly Yamanouchi, The Atlanta Journal-Constitution

Troy Warren #business-all


 

With more goods being delivered to doorsteps by an increasing number of companies, shipping giant UPS is zeroing in on the most profitable types of deliveries and customers.

“UPS operates in a large and growing marketplace,” said CEO Carol Tomé said during an investor presentation Tuesday The company aims to bring in $98 billion to $102 billion in revenue in 2023, up from $84.6 billion last year. Meanwhile, the small package delivery industry worldwide is expected to bring in $600 billion a year by 2023, up from $452 billion in 2020.

“Our focus is on capturing value share, not volume share,” Tomé said. “Not all packages are equal. … Not all packages are attractive to us.”

In particular, UPS wants to attract more customers in health care and more small- and medium-sized companies that will pay more for a global network that offers logistics services, better tracking and can handle temperature- and time-sensitive packages.

To attract small and mid-size business owners, UPS chief marketing officer Kevin Warren said the company wants to revamp its stodgy image. Customers had complained that the company’s website, built for larger businesses with shipping departments, was cumbersome. The billing system also was seen as overly complicated.

He said shippers envision UPS as “a middle-aged man with a comb-over drinking a whiskey,” but that the company wants to be seen as “modern and moving forward.” It has added shipping via mobile app and launched a new billing system. Wednesday, the company pledged to become carbon neutral by 2050.

As part of its modernization, UPS plans to expand Saturday deliveries to 90% of the U.S. population by the end of October. “The world is running seven days a week,” said UPS president of U.S. operations Nando Cesarone.

Tomé said UPS has also reorganized to “create fewer but more impactful jobs.”

Another big area of investment is in temperature-controlled facilities and tracking systems for health care shipments, bolstered by the company’s track record of handling COVID-19 vaccines. UPS last month launched a unit called UPS Cold Chain Solutions.

Separately, Tomé expects that as more retail stores handle online orders, short-distance deliveries will grow rapidly.

She said UPS is looking at potential for same-day deliveries. “We’ve got a team of people looking at it,” she said. “We’ve got some pilots underway.”


 

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Veteran Advertising Executive Mike Densmore Joins UTA Marketing as Head of Growth and Innovation

BY CHRIS GARDNER | HollywoodReporter.Com

Troy Warren #business-all

Densmore joins from Forsman & Bodenfors and has a resume that boasts marketing initiatives for such companies as Amazon, Netflix, YouTube, Facebook, Google, Spotify, JetBlue, NBA, Microsoft, Diageo, Budweiser, Heineken and others.

Mike Densmore, a veteran advertising executive, has joined UTAMarketing in a newly created role as head of growth and innovation.

Based in the agency’s New York office, Densmore will be responsible for spearheading the agency’s new business efforts with brand clients globally and expanding relationships within the advertising industry.

Densmore most recently served as the CEO of Forsman & Bodenfors, where he launched new partnerships with Hyatt, Diageo, YouTube Music and Saucony, among others. Previously, he served as the global chief growth officer at Bartle Bogle Hegarty, where he led the “FU2016” campaign for Netflix’s House of Cards, which won the inaugural Integrated Grand Prix Award at Cannes Lions. He’s also held top positions at McKinney, Droga5, Modernista!, and Wieden + Kennedy, where he ran the North American Nike business.

UTA Marketing — established four years ago by co-heads David Anderson and Julian Jacobs — represents such clients as Delta Air Lines, General Mills, General Motors, Google, LinkedIn, Lyft, Petco and Piaggio, among others. In a joint statement, the duo dubbed Densmore “an invaluable asset” to the team as they expand the agency’s New York footprint. “Mike is extremely well-respected within the marketing and branding industries, and he has an unparalleled reputation for developing innovative, one-of-a-kind initiatives that leverage entertainment and media to appeal to consumers,” they added.

For his part, Densmore said he’s long-admired UTA and is thrilled to join Anderson and Jacobs. “UTA, its clients and partners are not just at the center of culture, they often are anticipating and bringing to life what comes next. This is deeply fulfilling creative work, and I can’t wait to utilize the broad scope of talent and resources across the agency to help build off the incredible momentum well underway.”

UTA Marketing most recently has been involved in several significant campaigns this year including the launch of LinkedIn’s #ConversationsForChange; partnering LinkedIn with RuPaul for Pride Month, Tyler Perry for Black History Month and Issa Rae for International Women’s Day; working with Google to support the company’s entertainment and creator partnerships efforts including the just-announced partnership with Ava DuVernay’s film collective ARRAY; the new storytelling fellowship with The Black List in support of emerging filmmakers; a collaboration with Powderkeg: Fuse, Paul Feig’s female director incubator; and a series of high-profile General Motors campaigns.


 

 

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Disney+ Hotstar to Launch in Thailand This Month

BY PATRICK BRZESKI | HollywoodReporter.Com

Troy Warren #business-all

The Thai launch continues Disney’s rapid rollout in the growing Southeast Asian market, with Malaysia, Indonesia and Singapore already activated and a Philippines unveiling coming later this year.

The Walt Disney Co.’s flagship direct-to-consumer service Disney+ Hotstar continues to expand its footprint in Asia, this month launching in Thailand.

The company held a press event in Bangkok Tuesday, featuring a collection of Thai celebrities, to introduce the service to the local market. The event was hosted by Thai media personality June Sawitri and featured appearances by models and actors including Aff Taksaorn Paksukcharern, Boy Pakorn Chatborirak, Tik Jesdaporn Pholdee and Mario Maurer.

As it has in other markets, Disney has closely aligned with a local telecom company, AIS 5G, to turbo charge the Thai launch. Disney+ Hotstar will go live in Thailand on June 30 and will be offered for 799 Thai baht ($26.20) per year. But AIS subscribers will be able to pick it up for as little as 35 baht ($1.15) per month.

Disney+ previously launched in nearby Malaysia on June 1, Singapore in February, and in Japan, Indonesia and India last year. Rollouts in other Asia markets like South Korea, Taiwan and the Philippines are expected later this year.

At launch, Disney+ Hotstar will have a pool of popular Thai content thanks to recently signed agreements with local studios GDH 559, Sahamongkolfilm, Kantana Group and One 31. Hit Thai series and films airing exclusively on Disney+ Hotstar will include God Bless The Trainees Too!, Extraordinary Siamese Story: Eng and Chang as well as local box office toppers Pee Mak, Friend Zone, Brother Of The Year, Laddaland and Tom Yum Goong. Drama aficionados will also will be able to watch anticipated upcoming titles like Love and Fortune (starring Panward Hemmanee, Pathompong Reonchaidee, Sireethorn Leearamwat and Thitipoom Techaapaikhun) and My Lucky Star (starring Thanapat Kawila and Anchasa Mongkhonsamai), with the shows airing simultaneously on Disney’s platform and local primetime TV.

“One of the most distinct hallmarks of Thai culture is a shared love for entertainment, and we are thrilled that the launch of Disney Plus Hotstar in Thailand will provide fans with even more viewing choices,” said David Shin, general manager of The Walt Disney Company in Taiwan, Hong Kong and Southeast Asia (excluding Indonesia).


 

 

 

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To tackle hours-long reservations phone waits, Delta hiring back agents

By Kelly Yamanouchi, The Atlanta Journal-Constitution

Troy Warren #business-all

As customers face hours-long phone waits for customer service, Delta Air Lines has called some former reservations employees back to work on a temporary basis to help handle the load.

Delta’s reservations lines are overloaded as travelers return to the skies and seek to use credits from flights canceled early in the pandemic. That means some customers faced phone waits of more than five and a half hours on Tuesday, for example.

Atlanta-based Delta cut about 18,000 people from its staff of 90,000 as travel dropped 60% in 2020 due to COVID-19, and had more than 40,000 employees take voluntary unpaid leaves of absence last year.

Today, the company has about 75,000 employees, but some are still on leave. According to the most recent federal statistics, Delta had 65,659 employees working in April, including full-time and part-time workers. That’s down 27% from a year earlier.

The airline is now increasing its staffing levels as the summer travel season ramps up, bringing back hundreds of reservations agents who have worked for the airline in the past because they have the skills to quickly begin handling calls again.

Delta has already seen a strong recovery in domestic leisure travel this month, driving more queries from travelers. The long waits mark a return to some of the frustrations from last year, when travelers waited for hours to cancel flights and seek credits or refunds as the coronavirus spread.

The company in a written statement Tuesday acknowledged that “our wait times are not currently where we’d like them to be,” and apologized to customers.

“We are seeing a higher call volume as more customers are beginning to travel, so we’re adding staffing through more scheduled hours and overtime for our specialists, hiring temporary summer contract workers and fast-tracking technology upgrades to reinforce existing self-service options to assist with travel needs,” Delta said. The airline also plans to hire 1,300 new employees this year to help handle the workload.

Delta recommends customers first try using the airline’s online tools to rebook or change flights or find out about travel requirements.


 

 

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Discovery CFO Talks WarnerMedia Merger Deal, Cost-Cutting

BY ETAN VLESSING | HollywoodReporter.Com

Troy Warren #business-all

“There’s so much structural efficiency potential in the combination,” Discovery chief financial officer Gunnar Wiedenfels told an investor conference.

Discovery CFO Gunnar Wiedenfels sees the merger of his company and AT&T’s WarnerMediaallowing for a big increase in content investment owing to cost-cutting synergies available to both sides of the deal.

“There’s so much structure efficiency potential in the combination that we can afford to make those content investments and get to a much more beneficial financial profile,” Wiedenfels told the virtual Evercore ISI Inaugural TMT Conference during a session that was webcast.

With the Discovery financial chief set to play a key role in the critical integration of the Discovery and WarnerMedia units, Wiedenfels was asked how both companies can best capture value creation from their mega-merger. The companies expect $3 billion in cost-saving synergies after two years.

“What we’re going to be able to create is a super deep and super broad library with content that has amazing consumer appeal and it’s going to be one of the most complete offerings in the direct to consumer space,” Weidenfel told the virtual Evercore conference.

The Discovery CFO added both partners were set to invest heavily in content for the joint venture, while the cost-cutting potential was high from eliminating duplication in technological and marketing expenses as examples in their respective business plans. “I have no doubt we’ll be able to come up with a very compelling product with super top line economics and with a margin profile that will benefit from the elimination of this duplication,” Weidenfels told the investors conference.

Under the terms of the deal, AT&T will spin off entertainment arm WarnerMedia and combine it with Discovery, creating a TV, film and streaming powerhouse to be led by Discovery CEO David Zaslav. AT&T’s WarnerMedia owns the likes of the Warner Bros. studio, HBO and streaming service HBO Max, as well as the Turner cable networks, including CNN, TNT and TBS. Discovery’s reality TV-heavy properties include Discovery Channel, HGTV, TLC, Food Network, OWN and Animal Planet.

Wiedenfels told the investors conference Discovery will invest at a record pace in content in the wake of the WarnerMedia merger deal. “We will be spending more on content this year than ever before in the history of Discovery … We are really investing heavily,” he said.


 

 

 

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EXPLAINER: Why ransomware is so dangerous and hard to stop

By FRANK BAJAK, Associated Press

Troy Warren #business-all

Recent high-profile “ransomware” attacks on the world’s largest meat-packing company and the biggest U.S. fuel pipeline have underscored how gangs of extortionist hackers can disrupt the economy and put lives and livelihoods at risk.

Last year alone in the U.S., ransomware gangs hit more than 100 federal, state and municipal agencies, upward of 500 health care centers, 1,680 educational institutions and untold thousands of businesses, according to the cybersecurity firm Emsisoft. Dollar losses are in the tens of billions.

More recent known targets include a Massachusetts ferry operator, the Irish health system and the Washington, D.C., police department. But the broadly disruptive hacks on Colonial Pipeline in the U.S. in May and Brazilian meat processor JBS SA this week have drawn close attention from the White House and other world leaders, along with heightened scrutiny of the foreign safe havens where cybercriminal mafias operate.

What is ransomware? How does it work?

Ransomware scrambles the target organization’s data with encryption. The criminals leave instructions on infected computers for negotiating ransom payments. Once paid, they provide decryption keys for unlocking those files.

Ransomware crooks have also expanded into data-theft blackmail. Before triggering encryption, they quietly copy sensitive files and threaten to post them publicly unless they get their ransom payments. That can present problems even for companies that diligently back up their networks as a hedge against ransomware, since refusing to pay can incur costs far greater than the ransoms they might have negotiated.

How do ransomware gangs operate?

The criminal syndicates that dominate the ransomware business are mostly Russian-speaking and operate with near impunity out of Russia and allied countries. Though barely a blip three years ago, the syndicates have grown in sophistication and skill. They leverage dark web forums to organize and recruit while hiding their identities and movements with sophisticated tools and cryptocurrencies like Bitcoin that make payments — and their laundering — harder to track.

Some top ransomware criminals fancy themselves software service professionals. They take pride in their “customer service,” providing “help desks” that assist paying victims in file decryption. And they tend to keep their word. They have brands to protect, after all.

The business is now highly specialized. An affiliate will identify, map out and infect targets using ransomware that is typically “rented” from a ransomware-as-a-service provider. The provider gets a cut of the payout; the affiliate normally takes more than three-quarters.

Why do ransoms keep climbing? How can they be stopped?

Colonial Pipeline confirmed that it paid $4.4 million to the gang of hackers who broke into its computer systems last month.

The FBI discourages paying ransoms, but a public-private task force including tech companies and U.S., British and Canadian crime agencies says it would be wrong to try to ban ransom payments altogether. That’s largely because “ransomware attackers continue to find sectors and elements of society that are woefully underprepared for this style of attack.”

The task force recognizes that paying up can be the only way for an afflicted business to avoid bankruptcy.

What’s being done about it?

President Joe Biden signed an executive order in May meant to strengthen U.S. cybersecurity defenses, mostly in response to Russia’s hacking of federal agencies and interference in U.S. politics. But headline-grabbing ransomware attacks on private companies have started to dominate the cybersecurity conversation as Biden prepares for a June 16 summit with his Russian counterpart Vladimir Putin.

White House principal deputy press secretary Karine Jean-Pierre said this week that the ransom demand of JBS meat came from a “criminal organization likely based in Russia.” She said the White House “is engaging directly with the Russian government” and “delivering the message that responsible states do not harbor ransomware criminals.”

The new industry task force set up to combat ransomware says it’s important to have concerted diplomatic, legal and law enforcement cooperation with key allies.

Ransomware developers and their affiliates should be named and shamed — though they’re not always easy to identify — and regimes that enable them punished with sanctions, its report urges.

It calls for mandatory disclosure of ransom payments and a federal “response fund” to provide financial assistance to victims in hopes that, in many cases, it will prevent them from paying ransoms. And it wants stricter regulation of cryptocurrency markets to make it more difficult for criminals to launder ransomware proceeds.