Geek Biz Report, week ending 30 May 2010
Lead Story: “FUNimation Entertainment’s strategy and capital requirements are distinctly different from those of the Company’s core business. While FUNimation’s recent results have generally met expectations, the strategies required to grow the business include co-productions of original anime content, social networks and digital broadcasting. The Company anticipates that those plans are best executed with ownership that has assets or expertise in those areas.”
That’s from Navarre’s Official Press Release — and word that Navarre is looking to maybe sell FUNimation isn’t bad news. They’ve highlighted that this is a business that could grow, with more capital and the right ownership. They’ve noted that FUNi’s day-to-day operations (production of localized DVDs) is outside of their other, core business lines. They aren’t making any rash moves: the PR, in fact, merely says that they’ve hired expert help to look at the situation.
The last time I remember something like this, B&N spun off GameStop — and we all remember what has happened since then: store closings, drop in stock value, sliding market share, looming bankrup…
What’s that? GameStop now operates 6,450 outlets in 18 countries — and even in a recession has been opening new stores and growing revenue and is the market leader? All because someone made the choice to let GME stand on it’s own, and seek new money in the market: GameStop raised $325 Million in it’s initial public offering back in 2002, and they’ve used it well.
Navarre is looking to sell FUNimation, as a unit, outright (I bought a lottery ticket today, just in case) rather than spin it off — but the fact that they are looking to grow their brands through considered investment (& perhaps, careful divestment) rather than kicking FUNi to the curb (or having a fire-sale) should be considered, with a few tiny reservations, as good news.
Media Conglomerates
► So, did you know General Electric bought Universal from French conglomerate Vivendi SA and merged it with NBC into a new standalone company, not surprisingly called NBC Universal? That’s old news, happened in ’04; But were you aware Comcast, cable operator of note, was buying controlling interest (51%) of NBCU from GE for $30 Billion Dollars?
This one kind of slipped past me because it was announced back in December, when I was a tad busy running a retail store during the holidays. It’s also been a slow simmering process, not a lightning strike, not least because of the anti-trust issues this raises. If approved & completed, Comcast takes ownership of NBC in about a year, no sooner.
Related: Universal rebuilds & improves their back lot
► TV Sucks. That’s why I don’t own one. [oh, fine, the actual headline is “CBS Cancels 7 Shows”]
Related: …CBS may lag in the ratings but they’ll have to pry it from Redstone’s cold, dead fingers: He’ll Never Sell CBS or Viacom
Book Retail
► Amazon reconciles with Penguin
► Borders may have new investment, and a new chairman, but the man behind the curtain is still Bill Ackman if he exercises all the warrants he ‘bought’ by loaning BGP money during the depths of the credit crunch. If he felt the (additional) investment was worth it, Ackman’s Pershing Square could end up owning 36% of the company.
Related: Ackman also buying major holding in Citigroup and is the focus of a new book, Confidence Game: How A Hedge Fund Manager Called Wall Street’s Bluff
► It happened in Canada, so you likely never heard and don’t care, but a mistake by Penguin CA compounded by some seemingly preferrential shipping terms meant Chapters had copies of the year’s most anticipated book in stock and for sale up to 11 days before smaller independent retailers even saw the book. This has many otherwise polite Canadian bookstore owners pissed.
In the U.S. there was an embargo on the book (The Girl Who Kicked the Hornet’s Nest in English translation, isbn 9780307269997) until the official release date, 25 May.
This is standard operating procedure; there are at least two major releases with strict on-sale dates each and every Tuesday that I, as a retailer, have to observe else I face fines [per contractual agreements] — or worse, delayed or even cancelled shipments of future hot new releases. How Penguin CA missed this is odd (though oversights do occasionally happen) and I hope, at the least, they can offer additional discounts on Stieg Larssen titles for the affected Canadian booksellers.
DVDs
► Coinstar drops electronic payments division to focus on their RedBox self-serve DVD kiosks. This seems to be where the DVD rental business is heading, at least as a stop gap for a decade or so, until even Grandma streams all her video from the net.
► Speaking of which, Blockbuster is failing, hard, and I’m not sure what, if anything, is proping the comapany up. — yeah, Blockbuster has kiosks too, but those are built and run by NCR [an ATM manufacturer, among other things] and I get the feeling Blockbuster only gets a licensing fee for the name. NCR won’t step in to bail out BB, if it turns south; if anything they’re likely salivating at the chance to buy the brand on the cheap.
Video Games
► Electronic Arts filed their Annual Report this week – highlights: while 2010 wasn’t as big a year for EA as 2009, they still reported net revenue of $3.6 Billion (down from $4.6 Billion in 2009, & about what they did in 2008). Billions. So, how much of that ended up as profits? Ah, um, well, they actually reported a loss of $677 Million. Video Games: not recession proof. The good news is that losses were less than what the company dropped in 2009; last year they reported losses of $1 Billion.
aside: Doesn’t this EA map of operations look like a Bond Villain’s?
“Number 2, have the data and agents for the next operation in our Singapore office by Tuesday.”
Digital/Hardware
► Tivo also reports losses, now into a sixth straight quarter
► Apple is getting some pushback from NBC and Time Warner on lack of Flash for iPad
► Acer, the laptop manufacturer, announces new slates in both an e-reader and tablet form factor
► Missed it last week, but the headline is too good not to post — CNN: “What’s the bug up Apple’s @$$?”
► Sony partners up to launch e-books in Japan.
Editorial
Not much in the way of commentary this week, past what I posted above in the lead. Added some section headers to make the breakdown (and potential relevance) of links a little clearer. That’s all folks. Now, let’s run the numbers:
RBGSX
Aggregate prices on the Rocket Bomber Geek Stock Index rose 31.86 points (3.38%) to 974.93. As you can see from the graph below, we’re yo-yoing right now and I couldn’t begin to tell you why.
Charted: 22-week RBGSX Aggregate Price
[past 22 weeks, starting from 12/31/09]
& the 25 stocks: CBS Corporation (NYSE:CBS), The Walt Disney Company (NYSE:DIS), News Corporation (NASDAQ:NWSA), Sony Corporation (NYSE:SNE), Time Warner Inc. (NYSE:TWX), Viacom, Inc. (NYSE:VIA), Wiley John & Sons Inc. (NYSE:JW.A), The McGraw-Hill Companies, Inc. (NYSE:MHP), Lagardere SCA (EPA:MMB), Pearson PLC (NYSE:PSO), Scholastic Corporation (NASDAQ:SCHL), Amazon.com, Inc. (NASDAQ:AMZN), Books-A-Million, Inc. (NASDAQ:BAMM), Borders Group, Inc. (NYSE:BGP), Barnes & Noble, Inc. (NYSE:BKS), Hastings Entertainment, Inc (NASDAQ:HAST), Indigo Books & Music Inc. (TSE:IDG), Best Buy Co., Inc. (NYSE:BBY), Netflix, Inc. (NASDAQ:NFLX), Navarre Corporation (NASDAQ:NAVR), Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:ERTS), GameStop Corp. (NYSE:GME), Nintendo Co., Ltd (OTC:NTDOY), and Apple Inc. (NASDAQ:AAPL)
Please note: nothing here is investment advice. full disclaimer
