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August 2002
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TOP 5 U.S.
DISTRIBUTORS

Top 5 domestic distributors as of the end of July are as follows
(Dollar figures in millions.):

1.) SONY (EXCL. CLASSICS)
19.51%
Gross: $1,053,178,274

2.) 20TH CENTURY FOX (EXCL. SEARCHLIGHT)
14.58%
Gross: $787,116,039

3.) WARNER BROS.
11.21%
Gross: $605,111,246

4.) UNIVERSAL (INCL. FOCUS)
11.04%
Gross: $596,051,678

5.) BUENA VISTA
10.83%
Gross: $584,535,048


VIVENDI UNIVERSAL IN $$$ TROUBLE

Struggling to deal with short term financial problems, Vivendi Universal announced it would be reaching an agreement with creditor banks "very shortly." The French media giant is negotiating with its main credit banks: France's Societe Generale, BNP Paribas and Credit Lyonnais, as well as Germany's Deutsche Bank AG. Last month, Moody's downgraded Vivendi's long-term debt to junk bond status and placed the company under review for further possible downgrade. Vivendi said that it owed payments of around $1.75 billion at the end of July, but only had $1.16 billion in cash and $1.56 billion in unused credit lines with which to pay the bills. Ousted Vivendi Universal head Jean-Marie Messier, expressed concern over his former empire being quartered and then some. "I hear, I see the predators prowling, the advisers putting together breakup plans," Messier told the French daily Le Figaro.



NETWORK TV MOVIE WATCHERS MAY HAVE TO PAY

The AP reported that television viewers could face paying for channels they now receive free if digital video recorders kill commercials, said Jamie Kellner, chairman of Turner Broadcasting System. The wider use of systems like TiVo and ReplayTV, which allow viewers to skip through ads, would force a change in how broadcast and basic cable TV is supported, Kellner said. "Don't think for a moment there's a free lunch involved in this," Kellner told the Television Critics Association. He added that viewers could end up paying about $250 a year above any cable or satellite fees, based on his calculations. A recent survey showed that about 70 percent of DVR users skip past commercials, Kellner said. Although only about 1 percent of TV homes have the devices, their use could proliferate if they become routinely included in cable and satellite systems. Movie trailers were among the least tuned-out spots, though they were edged out by ads for beer and pharmaceuticals, according to study from CNW Marketing Research. So called "upcoming program" spots were also among the most skipped spots by viewers.

If viewers continue to skip the regular commercials, networks are likely to begin to rely on product placements, 10-second pop-up ads, and other ad models to deliver pitches to viewers, experts told the Atlanta Journal-Constitution. "I don't think the 30-second commercial is going to disappear, but I think we will be seeing a lot more innovative ways of presenting products to the public," Debbie Solomon, a senior partner for media buyers MindShare U.S., told the newspaper. However, CBS Television President Les Moonves told TV writers at the annual media Winter Tour in Pasadena Monday, "We are fighting [product placement] because it takes away from the purity of certain shows." He maintained that thus far personal video recorders like TiVo, which allow viewers to skip commercials, have not had "any negative impact on our bottom line. ... I don't think [PVRs] will mean the death of broadcast television."


ONLINE MOVIE-TICKET SALES UP

Nielsen/NetRatings figures appear to indicate that moviegoers are increasingly buying tickets online when faced with the likelihood of sold-out screenings,. The audience-measurement service observed that during the week ending July 7, which included the Independence Day holiday, traffic on the Fandango ticket-buying site increased by 86 percent to more than 381,000 visitors, versus 205,000 the previous week. Moviefone remained the most-used online ticket-buying service with 1.2 million visitors during the holiday week.



MIB2 WOWS OVERSEAS MARKETS

As if MIB2's record setting North American opening wasn't good enough, it got off to a strong start overseas, too. It brought in an estimated $12.2 million from 1,195 screens. The biggest opening was in Japan, which did $6 million in business.


URBAN WORKS INKS DEAL WITH BET

Urban Works Entertainment and Black Entertainment Television have inked an exclusive North American deal to distribute programming owned by BET. BET will release, through Urban Works Entertainment, a selected number of BET's specialty titles. This will include DVD and VHS rollouts of Arabesque Films, "Walk of Fame," and "Journeys in Black." The launch will begin on August 20, 2002 with two Arabesque releases: "Fire & Ice" and "Commitments."


BREAK-UP IN STORE FOR AOL TIME WARNER?

Analysts are predicting that AOL Time Warner will be broken up into three stand-alone companies, one of which would include Time Inc. and the Warner Bros./New Line movie and TV companies; another of which would include the cable distribution firms and the Turner cable networks; and the third of which would include the AOL Internet division. The New York Daily News reported that the company's books division would be sold off in order to reduce debt. "The damned AOL name should be dropped altogether from the company's title," one fund manager told the New York Post. Analysts say the cause of the company's fall from grace has been AOL's loss of subscribers and advertisers and its blurred bookkeeping. Veteran analyst Hal Vogel of Vogel Capital Management added: "These companies never should have been merged in the first place."


AMC SHARES NOSE DIVE

Exhibitors AMC Entertainment became the latest media company to admit to some uncustomary accounting procedures. The company said it had forgiven $19.8 million in loans to Peter Brown, its chairman and CEO, and Craig Ramsey, its CFO. It also said that its first-quarter loss was wider than originally estimated. Commenting on the revelation, Daily Variety observed: "It wasn't quite like yelling 'fire' in a crowded theater, but almost." Shares in the company dropped by 25-30 percent with the announcement.