Flubbermantium! Disney-Marvel Merger Sets Internet Geeks Atwitter With Mash-Ups

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It’s official: according to the AP, Disney is buying Marvel for $4 billion, pending shareholder approval and antitrust review. Some of this surely has to do with so-called ‘corporate strategy’ and ’synergy’ and ‘making money.’ But all of this obscures the real reason for the merger: so comic book geeks on Twitter can make jokes about it.

According to the AP, Disney plans on buying Marvel’s 5000+ characters for $4 billion in cash and stock, or $50 per share. As the Wall Street Journal’s Deal Journal blog notes, this means Disney is putting a robust 29% premium on top of Marvel’s Friday closing price of $38.65 a share. But why?

In a word: synergy. Disney has said that they plan on incorporating Marvel characters into their theme parks; as Newsweek points out, this could put the squeeze on Universal Studios, whose popular Islands of Adventure currently licenses Marvel characters. More importantly, superhero movies have turned into a booming, highly profitable cottage industry. While other studios will hold onto the X-Men, Spider-Man, and Iron Man franchises for the time being, Disney could be reckoning that there are gold mines still untapped among the remaining 4,900 or so characters.

Also, the deal could help Disney ensnare young boys. But in a good way! Sez the New York Times:

Marvel’s intellectual property tends to be more popular with boys — an area where Disney could use the help. While the likes of “Hannah Montana” and the blockbuster Princesses merchandising line have solidified Disney’s hold on little girls, franchises for boys have recently been harder to come by. Disney XD, a new cable channel aimed at boys, could be an immediate home for Marvel characters.

Just as importantly: funny mash-up jokes. Right now, #disneymeetsmarvel and #disneymarvel are two popular topics on Twitter; as you might guess, they predict what will happen now that the Marvel and Disney universes have collided. Here are a few of our favorites:

*”Breaking news: Frank Miller to pen The Darkwing Duck Knight Returns.” (@Farcical)

*Hawkeye Montana (@justinbwilliams)

*Flubbermantium (@Unept)

*That’s So Ronan (@wadcity; +15 obscurity points)

*Dr. Doomlittle (@tanstaaflWDM)

and the best prediction of all:

*”Epcot remains fairly dull.” (@lawcomic)

CBSSports And Sports Illustrated Strike Print, Digital Content Deal

The difficult media landscape is encouraging more content companies to start sharing content. Today’s partnership comes from CBSSports.com and Sports Illustrated. The two will mix and distribute each other’s content across their online properties, as well as in Sports Illustrated magazine. The deal also includes CBS Interactive’s high school sports site MaxPreps, which will be prominently placed on SI.com’s High School section front. Unlike ESPN (NYSE: DIS), which can do this all vertically, CBS (NYSE: CBS) Sports lacks a magazine and SI can use the cross-pollination with a major sports TV site. While the sites will share content, for the most part, the ad revenue will stay with the respective sites, multiple sources told paidContent. The two companies may eventually consider building a more formal revenue structure to the partnership, a source familiar with the arrangement said, adding that the focus of this deal right now is more about driving traffic to each site.

MaxPreps replaces high school and college sports network Takkle as the power behind the magazine’s Faces in the Crowd franchise, which showcases up-and-coming sports stars, both in print and digital, Sports Business Journal noted (sub. req.). In turn, Sports Illustrated writers, including David Feherty and Seth Davis, will be syndicated across CBSSports.com. Release

As for Takkle, the partnership with Sports Illustrated was likely doomed after two strokes: the first was when the site was sold to Alloy Media back in February; the second was when it lost its main backer, Jeff Price, who resigned as SI Digital’s president in April.


The WMG Reinvention Continues…But Is Time Running Out?

Warner Music Group (NYSE: WMG) is continuing to dial back towards its content and marketing roots, a shift reiterated Friday by Atlantic Records GM & EVP of Marketing and Creative Media Livia Tortella.  “We’re an entertainment company, we’re about music.  We’re not a technology company,” Tortella commented during a keynote interview at the Bandwidth Conference in San Francisco on Friday.  That falls in line with an earlier shift by Warner away from investments in companies like Lala and Imeem, both of which resulted in serious write-downs.

Actually, at least one Wall Street analyst responded well to the dial-downs, simply because it represented a tilt towards more core competencies. “Based on the write-downs… we believe management has shifted into debt reduction mode and will no longer be allocating capital outside its core competencies,” analyst Richard Greenfield of Pali Capital stated in May, part of a sudden reversal in sentiment.

More recently, Warner expanded its outsourced technology relationship with Cisco (NSDQ: CSCO), a partnership that revolves around the Eos platform for creating artist sites, as well as networking and ecommerce functionality.  On that point, Tortella noted that anytime an artist jumps onto the Eos platform, traffic soon triples.

So what is happening here?  Most agree that without great music, labels have little to offer, though serious questions surround the ability to profit from even the greatest, hippest, and most scene-connected artists.  That has forced Warner - and other majors - to undergo some identity struggles and transitions, particularly given the massive thrust of music-related technology over the past ten years.  “The approach is not technology per se, but really figuring out how it relates to the artist point of view,” Tortella continued. 

According to Tortella, that means flowing with the widely-varying demands of the artist - whether Death Cab for Cutie or Kid Rock - a stance that makes normalization and uniformed processing extremely difficult.  Indeed, artists are often very strong-willed, and Rock was catered to from the beginning - regardless of profit or loss.  “He was very single-minded about his records not being available a-la-carte, that meant a lot to him,” Tortella indicated.  “We leave money on the table all the time, depending on whether or not the artist is comfortable with the position.”

Tortella seemed rather relaxed given the significant - and potentially life-threatening - financial challenges currently faced by WMG.  And sections of the interview were more spin than substance; fantasy rather than financial reality.  But some positives - however painful - are happening, and Tortella noted that CD sales declines are forcing labels to diversify, something they should have been doing all along.  “What the erosion of the CD has done, is actually stripped down what our function is.  [Which is], we’re here as artist branders, we’re here to market the experience, whether the experience is a CD, a digital experience, or a t-shirt,” Tortella explained.  “The CD had to fall apart in order for people to really realize what labels are supposed to do.” 

That means 360-degree deals, something labels are almost exclusively brokering on newer acts.  But roping premium artists into an all-encompassing deal remains a tough proposition, simply because artists are reluctant (smartly) to surrender a wider swath of rights.  Meanwhile, more established acts continue to go direct-to-fan, despite the huge initial investments by majors.  That was where Tortella started spinning heavily, pointing to a “great” and “healthy” level of freedom for artists - despite a swinging exit door that is draining MVPs. 

So, can developing acts and remaining superstars save the ship, or is time running out on this gamble?  Tortella etched a vision that focused on career-building, and tapped into marketing competencies.  The rest would require outsourcing, non-core expertise, and the hiring of experts to transition the company effectively - either for technology or for a variety of 360-degree disciplines.  “We’re going to be here… to develop careers, and not sell records.  There’s going to be a lot of pain to get there, and we’ll have to bring in a lot of knowledge from outside our world to understand it better.”

This story has been provided by our content partner Digital Music News.


Music Video JV Site Vevo Raising Money At $300 Million Valuation

Vevo, the Hulu-like site for music videos which for now is a JV between Universal Music, Sony Music and YouTube, is out raising money at a $300 million valuation, we have learned from multiple sources. The venture’s CEO Rio Caraeff has been criss crossing the country (and globe) pitching it to investors, though it is unclear if the venture will have the money locked in before the launch late this year. Also unclear: how much money it is trying to raise, though if Hulu is a guide, then one possibility is $30 million for 10 percent stake (Hulu raised $100 million from Providence, at a $1 billion valuation.

The JV, which is being run out of New York City (as its future HQ) and LA, has been hiring on the tech side over the last few months. It seems unlikely that the other two major labels—Warner and EMI—will join the venture as JV partners for now; Warner Music CEO Edgar Bronfman has publicly been talking against Vevo. EMI has been the slowest in any digital venture and lets others lead the way; besides, it is dealing with its own problems.

As to whether there’s enough there to justify the $300 million valuation for Vevo, foolish to bet against it this early, especially with a strong team and labels behind it. Besides, the inspiration for it, Hulu, certainly proved a lot of critics wrong. However, unlike Hulu, which proved that if you put up full-length videos and surround it with a simple and great experience, people—and advertisers—will come in droves, success for Vevo will mainly prove one thing: that music labels have finally succeeded in sucking the lifeblood out of music startups to feed their bastard child.

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