Audio Video News

The cable industry isn't a happy one these days. Charter Communications, the fourth-largest cable provider in the US, is under investigation by federal prosecutors for possible accounting irregularities. Owned by Microsoft co-founder Paul Allen, Charter was on the receiving end of a grand jury subpoena delivered Thursday, August 15 by the US Attorney's office in St. Louis, MO, Charter's home city. The cable service has more than 6.8 million customers in 40 states.

The subpoena seeks information regarding the company's accounting methods for current and former subscribers. Charter had issued a "get-tough" policy in February, intended to prompt delinquent customers to pay up or face disconnection. Approximately 145,000 subscribers were cut off from the service this year. The company is also facing a class-action lawsuit by filed by shareholders that accuses the company of making false and misleading statements to the market from 1999 through July of this year—including artificially inflating its subscriber count by listing Internet-only subscribers as cable customers.

Vivendi Universal's massive debt may force the French media conglomerate to unload many of its US operations, including Universal theme parks, Universal Studios, and Universal Music. On August 15, the company reported staggering losses of €12.3 billion ($12.2 billion) for the first half of the year. Vivendi's new management, under the leadership of Jean-Rene Fourtou, has promised to spin off at least €10 billion ($9.8 billion) in assets to move the company out of the red. Many analysts have expressed doubts about the firm's ability to meet its obligations even if the first asset sales take place soon. VU has asked its banks to renew a €1.6 billion ($1.57 billion) loan to Vivendi Universal Entertainment unit while it seeks to increase its a €1 billion ($980 million) credit line to €3 billion ($2.94 billion). To stay afloat, VU will "have to sell businesses," Fourtou said. That mission may be extremely difficult in the current market. One likely sale is VU's 10% stake in US satellite broadcaster EchoStar.

Some Universal Studios films will run on the Internet for the first time, thanks to a deal announced August 13 by Universal's pay-per-view unit and online entertainment company Intertainer, a video-on-demand service. Universal wants to test the service to see how big the demand is for full-length feature films on the Internet. Titles to be used in the trail include Spy Game, K-Pax, and Mulholland Drive.

Rupert Murdoch's News Corp. recorded a fourth-quarter profit of $114 million, down 21% from the $145 million in the same period last year. The company's Fox unit posted a profit of $66 million, compared with a loss of $18 million in 2001. Fox's film division, cable networks and TV stations were all strong performers, but poor results from the Fox broadcast network dragged down overall results. TV operating income fell 3% to $179 million despite revenue gains of more than 10% to $1.07 billion. Fox's cable networks (Fox News Channel and FX) reached a profit of $34 million, compared with a year-earlier loss of $1 million, with revenue rising 30% to $564 million.

Hollywood could become a city unto itself if secessionists in Southern California have their way. A substantial number of people in Hollywood and the San Fernando Valley are campaigning for the communities to unite as a city separate from greater Los Angeles. Those in favor of creating a separate city of Hollywood—the ultimate "company town"—hope to create a more studio-friendly business environment. Supporters of a unified Los Angeles believe the film industry could become the victim of the breakaway movement. In June, the International Alliance of Theatrical Stage Employees was the first trade organization to express opposition to the breakaway movement. Universal Studios and Paramount Pictures, which would both be affected by the secession, have declined to comment. So has the Alliance of Motion Picture and Television Producers. The entertainment industry—TV, film, and music—is a dominant component of the LA economy.

A study of more than 1400 consumers released August 5 by the by the Cable & Telecommunications Association for Marketing (CTAM) indicates that 60.3% of them are aware of high-definition television, but 49.8% of them don't know how HDTV signals are delivered. The remainder claimed to know. Of those who knew, 21.3% said that to the best of their knowledge, HDTV signals are delivered to the home from a cable TV provider; 21.4% said by a satellite provider; and 7% said by over-the-air antennas. The study said that a majority of consumers, 52.7% believe that high-definition television sets cost under $2000, but only 11.6% say they are "very" or "somewhat likely" to buy an HDTV set in the coming year.