December 2, 2013
Disney: Will Cyber Monday make up for a Disappointing Black Friday?
Today, Disney Cyber Monday sales event has begun, which entails 15% off online orders over $50, as well as free shipping for those who spend $75 or more and use the code CYBER on the website. In addition, many products have been discounted. The Disney Store is even offering the option for online customers to send personalized video messages with email notifications to gift recipients. Like most other companies, Disney is attempting to catch those who missed out on their “Magical Week” Black Friday sales.
Despite what the long lines and traffic suggest, this year’s weekend sales results actually failed to impress most industries. Shoppers spent an estimated $407 over the holiday weekend, on average, down from $423 last year. Even though Black Friday may not have gone as planned, the box office certainly held its ground for Disney over the Thanksgiving holiday. The huge opening of Frozen grossed at $66.7 million in its debut. Frozen is not a Pixar film, but an in-house animation. Since Pixar will not be releasing a movie next year, it is good for Disney to see that this type of movie can succeed instead.
November 26, 2013
Electronic Arts: Damage Control
Earlier this year, Electronic Arts gained the dubious title of the “Worst Company in America” for the second time in a row. Since then, CEO Andrew Wilson has attempted to respond to criticisms openly and fix problems as quickly as possible. Unfortunately, this has not been easy, as numerous problems have arisen related to the company’s launch line-up on Xbox One and PlayStation 4. For example, there was an error with corrupted files and deletion of data in the new Battlefield 4 that led many users to believe EA had shipped a broken game for the PS4. To make matters worse, Chief Operating Officer Peter Moore replied to Twitter feedback by simply denying all errors with the game. Now enacting damage control, CEO Wilson announces that EA hopes to accelerate game updates, some of which will improve the way that new gameplay controls are taught.
Besides criticisms from gaming fans, EA is facing a fresh lawsuit from the National Collegiate Athletic Association (NCAA). Back in the summer, the NCAA had announced it would no longer license video games, leaving it to members to decide whether or not they would continue to appear in EA Sports’ college football series. Now, the NCAA is claiming that EA only compensated college athletes for the legal claims made by them. The entire situation became even more complicated when students disputed with the NCAA over shares of the revenue from use of their images in the games. Due to obvious risks, developers have decided to cancel NCAA Football 2015 and EA hopes to keep the strength of their portfolio with other popular items, such as Madden NFL and FIFA 14.
November 26, 2013
TWX: Breaking from Magazines, Merging with Comcast?
Time Warner, Inc. has received a lot of publicity lately, especially after CEO Jeff Bewkes filed on November 22, 2013 to split from its Time, Inc. division beginning in 2014, though he did not specify dates for the spin-off. Time, Inc. has reportedly performed worst in sales for TWX. Indeed, their debt has cost the company three times the annual operating income of TWX (about $1.2 billion), making it the biggest laggard among Time Warner’s divisions. The fall in sales for Time, Inc. began as far back as seven years and the unit’s revenue has continually fallen in a total of five years since then. According to Bewkes, separating the magazine unit from Time Warner, Inc. will help protect the company’s assets against difficulties it has faced with transitioning in publicity both to the Internet and lower advertising rates.
Despite the decline in sales from Time, Inc., TWX posted higher earnings on continued growth in broadband services and a higher average revenue per user this past quarter. However, the company is still struggling to gain (or keep) video subscribers, similar to almost any cable company in the current media landscape. In order to break the trend away from cable, John Malone (head of the cable industry) has recently proposed an elaborate consolidation of companies. To begin, he has gained support from Comcast to buy Time Warner Cable (its biggest rival). While this seems like an incredible idea since the resulting massive cable operator would greatly outnumber the next largest cable service provider in customers, Comcast and TWX would actually only control 28% of the TV service market together and smaller operators would definitely keep the cable industry alive if the merger fails.
November 11, 2013
Sirius Attempts to Gain Greater Revenue Via the Auto Industry and Popular Celebrities
Sirius XM Radio has had a busy week. On November 7, the company broadcast its new deal with Chrysler, whereby for each of their 2014-model vehicles (Chrysler, Jeep, Dodge, Ram, SRT, Fiat, or Mopar) that is equipped with satellite-radio Uconnect infotainment systems, Sirius will provide more than 150 of their radio stations, as well as Web-based Internet service, free for a year. Additionally, Sirius has recently completed its purchase of Agero’s Connected Vehicles Services Division, which should accelerate the company’s move towards vehicle telematics (dealing with GPS navigation, integrated hands-free cell phones, or other driving assistance systems). Since Sirius has already benefitted from rising automotive sales, so their continued effort to offer security and convenience for new auto buyers should produce more business for them.
Last Friday, Sirius hosted an exclusive interview with Lady Gaga about the new app she is launching with the release (today) of her new studio album, Artpop. Furthermore, the company announced that it would be holding a birthday bash for its most popular on-air celebrity, Howard Stern, sometime in January, even though he most likely will not return and will undoubtedly take some subscriptions along with him. Although this continent only contributes 50% of the global radio revenues, Sirius is the leading radio broadcasting company in North America, and also operates in Canada. Both regions are improving to help improve revenue in the future. Overall, Sirius has underperformed the S&P 500 in the previous three trading sessions, but advanced on Friday.