The Economy

Good Week/Bad Week: Invasion of the Latte Snatchers

Media moguls gather in scenic Idaho to discuss box-office slump, loafers with no socks; analysts say statewide lack of Starbucks may hinder progres...
John GoffJuly 8, 2005

The following column, while based on actual items, cannot be counted on as a reliable source of news, information, or fiber. Any resemblance between this article and actual articles you might read in real magazines and newspapers is purely coincidental.

Please, no lawsuits.

Good Week

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Hollywood Moguls

History is full of great gatherings. The Diet of Worms. The Constitutional Convention. The Potsdam Conference. Yanni’s Fiftieth.

Hence, historians (and people with a knack for knowing what time it is even though they don’t wear a watch) are quick to point out that, despite what Cindy Addams says, this week’s convergence of media moguls in Sun Valley does not rank up there with the truly important get-togethers in recorded history. Nevertheless, several major publications hailed the five-day gathering of Hollywood CEOs as an epic event. Forbes called the gathering a “High Powered Summit of Media Masterminds.” Fortune dubbed it “The Ultimate Power Lunch.” Highlights called it a “sleepover.”

The powerful chief executives, including News Corp’s Rupert Murdoch and Walt Disney Co.’s Michael Eisner, began arriving in Sun Valley on Wednesday. In case you don’t know, Sun Valley is a lovely resort town set in the rugged Bitterroot Mountains, the same hills Lewis and Clark had such difficulty crossing on their famous journey to the Pacific in 1803. The Nez Perce tribe of Shahaptian-speaking Indians befriended Lewis and Clark, saving the lives of the exhausted explorers and their starving men. The Nez Perce then promised to always be at peace with Americans, to treat the strangers with dignity and respect, and to honor their customs. As a token of friendship, the white man later returned to Idaho, stole the Nez Perce’s land, then hunted them down, killing women and children as they went. You’ll find better friends.

Others bits of Idaho esoterica: They have famous potatoes in Idaho. No, really. It says so right on their license plates, and if you can’t trust your license plate, who can you trust? Also, Idaho is one of the most conservative, right-wing states in the union. Indeed, the only left-leaning town in Idaho is Moscow, a fact which violates at least three basic tenets of believable storytelling.

Anyway, at this week’s gathering in Sun Valley, the media moguls discussed several pressing concerns, including ways to boost box-office sales, what to do to thwart digital pirates, and how to break the news to Jessica Simpson that talking in a high nasal tone does not constitute singing.

At a press conference, Sydney Pollack, director of such movies as The Yakuza and Three Days of the Condor, told reporters that box-office earnings were hurting for several reasons — more people watching DVDs at home, and an increasingly “loud and rude” environment for enjoying movies in theaters, particularly with customers talking on their cell phones during a show. When a reporter asked if it was possible that graphic, desensitizing movies such as The Yakuza and Three Days of the Condor might contribute to rude behavior in public venues, Pollack cleared his throat, then took a call on his cell phone.

Another source of worry for media CEOs: signs that the current boom in DVD sales, a windfall for major Hollywood studios, could be slowing down. Indeed, last week, Pixar Animation Studios lowered its expectations for second-quarter earnings, saying sales of DVDs for its animated film The Incredibles were coming in below expectations. According to sources, the disappointing sales may force Pixar to shelve its planned My Dinner with Frozone sequel, a follow-on effort which one industry insider says “had Oscar written all over it.”

Elwood Dobbs, a media analyst at Myrtle, May & Sons, called the announcement by Pixar “clearly disappointing” in a note to investors. The analyst indicated he was also troubled by several recent developments in the motion picture industry, including the ongoing turmoil at Disney, the impact of the peer-to-peer sharing on revenues, and the continued use of the word “arc” by pretentious puffballs when discussing movie plots.

Most industry watchers believe large Hollywood studios will ultimately benefit from broadband delivery of movies to home viewers. But studio heads appear divided over the impact of the Internet on the motion picture business. So far, many feel the technology is simply not advanced enough to warrant huge investments in the approach.

But at the conference, chip-maker Intel announced it has made an investment in a company backed by actor Morgan Freeman (Glory, The Shawshank Redemption, The Electric Company) to deliver movies to homes via the Internet. Executives did not disclose the size of the investment in the new company, which will be called ClickStar Inc.

In a press release, Intel management indicated ClickStar will also develop its own awards ceremony. According to a company filing with the Securities and Exchange Commission, the ceremony is intended “to fill the yawning seven-day void between the People’s Choice Awards and the Golden Globes.” Added an Intel executive, “As a technology company, and more specifically, as engineers who spend all day cramming silicon wafers into miniaturized integrated circuits, we thought the time was right to get into show business.”

In the SEC filing, Intel’s management indicated that the company felt confident ClickStar would have little trouble finding participants for its planned awards show. As proof, management cited a recently completed survey of Screen Actors Guild members. The poll revealed that, by a margin of 8085 to 1, “actors feel they simply do not have enough ways to celebrate themselves.” Complained one survey participant and SAG member: “Like, I’m not totally sure, but I think you can only win a lifetime achievement award every so often. What’s up with that?”

This Is Only a Test

Presenting, our semi-regular, semi-literate quiz on the events, happenings, and bullet points that shaped the world over the last five days. Medical research indicates that reading “This Is Only a Test” is 100 percent guaranteed to sharpen reflexes and improve posture — or your money back. (Answers at end of column.)

1. 1,200 pharmacists at Chicago-area Walgreen stores walked off the job on Thursday. The employees union claimed the strike was triggered by:

a) anger over understaffing at stores
b) resentment about cutbacks in company benefits
c) confusion surrounding a new bonus plan
d) disbelief anyone would actually name a golf tournament after an erectile-dysfunction medication

2. On Thursday, Applebee’s International Inc. lowered its earnings estimates for 2005. Analysts blamed the expected decline in profits on the company’s:

a) introduction of new Weight Watchers items on its diet menu
b) introduction of sugar-free sauces in pasta dishes
c) introduction of low-calorie mayonnaise in sandwiches
d) introduction of index fingers in salads

3. This week, reports began circulating that the National Hockey League players’ union and team owners were close to ending their year-and-a-half-old lockout. The last sticking point on the new agreement was said to be:

a) owners’ insistence that a hard salary cap be linked to revenues
b) players’ insistence that pension plans be bumped up for retired athletes
c) advertisers’ insistence that time between periods be shortened
d) league president’s insistence that two grown men beating each other to a bloody pulp is “wholesome family entertainment”

4. On Wednesday, prosecutors said it would take months to complete an ongoing bribery investigation at Volkswagen AG. The probe is looking into:

a) possible kickbacks from suppliers
b) possible collusion between union leaders and management
c) possible misuse of company funds
d) possible explanations for the whole farfegnugen thing

5. This week, General Motors reported that its sales in China were up 18.9 percent in the first half of the year. Industry watchers believe GM’s one big stumbling block in China will be:

a) government favoritism toward local automakers
b) currency exchange rates
c) overpriced vehicles
d) consumer confusion over cars named after slow-moving objects like glaciers and canyons

Answers: a, a, a, a, and a