(TechCrunch) AT&T’s new streaming service, DirecTV Now, just got a lot more inte

AT&T’s new streaming service, DirecTV Now, just got a lot more interesting

AT&T’s soon-to-launch live streaming service, DirecTV Now, just got a lot more interesting following AT&T’s acquisition of Time Warner. Announced earlier this year, DirectTV Now was already an anticipated new arrival on the cord-cutting scene, thanks to its plans to stream more than 100 live channels over the Internet without having to agree to traditional pay TV contract. More of a rival to Dish’s Sling TV or Hulu’s forthcoming live TV offering, than something like Netflix, the acquisition will give AT&T access to Time Warner’s formidable media properties for its video service at the best possible terms.
That could translate into better packages and pricing for DirecTV Now subscribers. That is, more of the quality pay TV channels could be offered under one low price point, instead of breaking up the available channels into “skinny bundles” – something AT&T and DirecTV haven’t been keen on, saying that these smaller packages aren’t scalable.
Instead, when AT&T in March announced its plans to launch its own streaming service, DirecTV Now, it said the idea would be to offer all the content you’d typically find in a regular pay TV bundle, but un-tether it from the set-top box. The company had described it as “pay TV as an app.”
With Time Warner’s content coming in-house, AT&T has gained access to wealth of TV and movie properties, including HBO, CNN, TBS, TNT, Cartoon Network, and the Warner Bros. film studio, home to the Harry Potter and DC Comics franchises. Through Turner, its has the rights to the NBA, March Madness and MLB. That will help with its channel lineup and selection.
And with HBO under its wing, AT&T can take advantage of the technical learnings HBO has acquired by running its own, successful over-the-top streaming service, HBO NOW.
As any Sling TV subscriber can tell you, there’s still plenty of room to compete in this area by offering a streaming TV service focused on cable-like programming, but with fewer glitches and a better user experience. Sling TV still has an awful interface, despite its upgrades, and has struggled in the past under peak usage, as with the season premiere of “Game of Thrones,” for example. HBO, meanwhile, has seemed to better figure out how to handle massive loads of viewers.

Then there’s the fact that, as a carrier, AT&T has will offer better deals to DirecTV subscribers who are also AT&T customers. The company already said that the data require to stream it on mobile, would be incorporated into the content cost.
This could help AT&T better compete with T-Mobile, which has been marketing its “Binge On” services as a way to stream music and video from over 100 top services without counting towards your data plan.
For AT&T, the deal, of course, means the carrier has a way to make money from mobile video, which is also what it’s betting on as the future of TV. More people today aren’t just cutting the cord, they’re forgoing a pay TV subscription altogether, opting for over-the-top subscription services like Netflix, or even just free video content like YouTube. That has put AT&T, like other mobile operators, into the position of being a ‘dumb pipe’ – something all are loath to do. With a mobile-optimized streaming TV service, sold as an add-on to its cellular service, that changes.
But while there are advantages to the deal from AT&T’s perspective, consolidation like this could be bad for competition. AT&T will own some of the best video content around, and could then deny it to rivals, raise the licensing costs or use it as a bargaining chip in rights negotiations. These concerns, however, are likely to be the focus of regulators, who could require certain concessions for deal approval – like not withholding HBO from rival streaming services, for example – or not discriminating against competitors’ content on its service – something Comcast had to agree to with its own NBCUniversal deal.

(TechCrunch) Driverless cars will be widespread by 2020

Driverless cars will be widespread by 2020

Rahul Sonnad is CEO of Tesloop, a Los Angeles-based transportation start-up offering zero-emission ride-sharing in Southern California through its fleet of Tesla vehicles.
But while Sonnad, like most of us, is very involved as a citizen in the 2016 election, he’s less engaged as an entrepreneur. Whether Clinton or Trump is elected won’t make much of an immediate difference to transportation policy, he suspects.
That said, however, he is very impressed with Obama’s transportation policy, particularly the recently announced guidelines on autonomous cars. He’s also a big supporter of California’s electronic car incentives which, he sees, as having a much bigger impact than most Federal government initiatives.
By the 2020 election, however, Sonnad believes that driverless cars will have become ubiquitous. The impact will be “completely transformative”, he said.

And while it’s hard to imagine the kind of issues that will dominate the 2020 election, Sonnad suggests that the autonomous car might well have become a more relevant political issue by then.
If Sonnad is correct, we should also expect the ubiquity of driverless cars to have an impact on the increasingly angry debate around technological unemployment, especially given the broader impact of AI on traditional industrial jobs.
As always, many thanks to CALinnovates for their support in the production of this interview.

Re/Code.net :The ghost of AOL will haunt the Time Warner-AT&T deal

The ghost of AOL will haunt the Time Warner-AT&T deal
The 2000 merger with AOL made Time Warner CEO Jeff Bewkes nauseated, so what’s different now?

In the end, I guess you could finally say Steve Case was right.
Case led AOL to great power in the 1990s, and he then presided over what has become known as one of the worst mergers of all time, when he combined his high-flying internet giant with Time Warner, back at the turn of the century.
It was a truly epic move, all predicated on the very big idea that distribution and content had to marry in the digital age and that whoever did that successfully would rule the next era of media and more.
It was also an epic failure, brought down by a toxic combination of timing and execution.

Which is to say that the body of Time Warner — made up of the mandarins of media whose power was waning, although they did not know it at the time — rejected the deal almost immediately and made sure it would never succeed. Even as the fast-and-loose slicksters of AOL did everything possible to seem as lightweight as they still were at the time.
You could write books on what went wrong — and I did — which begs the question of what Time Warner now thinks will go right in the deal it just struck with telecom giant AT&T to be taken out for $85 billion.
As expected, the media has gone wild, dragged along breathlessly as they are for any holy-god deal, nearly forgetting that some of its current principals were the very same people that had been the biggest critics of the match-up of Time Warner and AOL.

On Monday, those very same execs will be the ones telling the world that this time it’s different, that this time is the right time, that this time the union of a phone company and the maker of “Game of Thrones” is just what this era of convergence requires.
Convergence — yes, that word. It was in the very first line of the deal press release, describing a “new company with complementary strengths to lead the next wave of innovation in converging media and communications industry.”
But I will never never forget the mock retching sounds that both Time Warner CEO Jeff Bewkes and HBO head Richard Plepler made when I uttered it in an interview with them, way back when AOL was being foisted on them with the very same written-by-a-banker premise.

At the time, the pair were lesser beings at Time Warner — Bewkes ran HBO and Plepler ran PR for HBO. Unlike most other Time Warner execs who said nothing publicly about the merger with AOL, both Bewkes and Plepler were adamantly and vocally opposed to it.
In interview after interview I did with them — especially as the combination started turning south, which it did pretty quickly — the pair could not be any more in lock-step about how the digital distribution skills of AOL would do nothing for Time Warner.
It’s not that the two did not understand what was coming — they could see the internet marching into the heart of their business, and decimating everything in its path. But they were adamant that the creation of great content would always prevail, that it was still king and that the questionable stock valuation of AOL was a fake that had allowed it to sully the pristine beauty of Time Warner.
This week, I dug up many old quotes from Bewkes I had gotten at the time in which he talked about all this and more — most of Plepler’s thoughts on the AOL invaders were too expletive-laden to use then and now — and one really struck a chord of the time.
“The question is, are people really going to watch what we make on a computer screen or not,” said Bewkes. “I think an awful lot rides on whether that happens or not.”
Well, it happened and more, although I don't fault Bewkes at all for not seeing any of it. Back in 2000, Google was not much of search company, Amazon pretty much only sold books, Facebook founder Mark Zuckerberg was in high school and the Apple iPod was not coming out for a year.
And the most critical event, the introduction of the iPhone in 2007, which kicked off the mobile future that ultimately gets us to AT&T + Time Warner, was not even a thought in the head of Steve Jobs.
Yes, mobile, mobile, mobile, which is why you got this quote out of Bewkes today:
“Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multiplatform basis and to capitalize on the tremendous opportunities created by the growing demand for video content.”
It’s one of those digital bromides that would have made Bewkes of yore vomit, of course. Which is why back then, he and others rejected a number of ideas that perhaps would have made things different had they been pushed through at the time.
Among them: Not integrating AOL’s access business with its cable access efforts called RoadRunner; not pushing the boundaries of digital advertising, such as putting movie ads from Warner Bros. films on AOL and other digital properties; not experimenting aggressively in streaming online, both in video and music, due to vexing copyright issues.
And, crucially, indulging in the urge to discount everything the AOLers pushed.
To my mind, that attitude is really what scotched that AOL-Time Warner deal: The wholesale scoffing at these questionable messengers — to be clear, some of them were pretty questionable — without listening to message itself. Which was that change was coming, so you better get busy moving fast and breaking things.
I am guessing this kind of doubt will seep again this merger, as the penny drops with the media types at Time Warner that they are now working for a phone company.
As everyone sorts out whether AT&T can really help Time Warner move into the already-here digital future and truly add to its offerings, one of the biggest dangers of a deal such as this is that those at Time Warner see it as a final defeat of a war that began a long time ago.
But resistance to digital was futile back then as it is now. Which is why I pinged Steve Case for his thoughts on this deal this weekend, which might be the ultimate irony for the longtime entrepreneur.
And here’s what he wrote in its entirety:
“While back in 2000, some didn’t believe in the internet and/or didn’t believe in convergence, of course those concepts now seem obvious. So it’s not surprising to me that we are again seeing attempts to marry communications and content. I just hope the merged company will have the kind of culture that will enable it to drive synergies and create value.”
“As I explained in ‘The Third Wave’, and as we discussed on your podcast, the idea of the AOL/Time Warner merger made sense, both strategically and, at least for AOL, financially. What was flawed was the execution. But, as Thomas Edison said more than a century ago, vision without execution is hallucination. And execution is all about the right people focused on the right priorities, working together in the right way.”
“Maybe I should send a copy of my book to the boards and senior teams at both companies?”
Maybe, Steve. Maybe. That is, if anyone reads books these day — but that’s another story.

>>> Atlante urged by ECB to speed up Veneto Banca/BPV merger

Atlante urged by ECB to speed up Veneto Banca/BPV merger – report (translated)

Atlante, the Italian bank rescue fund, has been urged by the European Central Bank (ECB) to speed up the merger of Veneto Banca and Banca Popolare di Vicenza (BPV), Italian language daily Il Messaggero reported. The unsourced report said that the request was made at a meeting in Frankfurt on 18 October to Alessandro Penati, the chairman of Quaestio, the company that manages Atlante.
The request could be discussed on 28 October by the management of Veneto Banca and BPV, the report said.

The report noted that Atlante controls over 90% of both Italian lenders.

WSJ : Rockwell Collins to Buy B/E Aerospace for $6.4 Billion--2nd Update

Rockwell Collins to Buy B/E Aerospace for $6.4 Billion--2nd Update

Rockwell Collins Inc. said Sunday that it had agreed to pay $6.4 billion to buy B/E Aerospace Inc. in a deal that would unite two of the global aerospace industry's biggest suppliers.
The proposed deal values B/E Aerospace at $62 a share in cash and stock, a 22.5% premium to Friday's closing share price. The agreement continues a slew of deals in the aerospace industry as suppliers adjust to pressures from Airbus Group SE and Boeing Co. to cut costs as they work through a backlog of more than 10,000 jets valued at over $1.5 trillion.
The Wall Street Journal reported Saturday that the companies were in advanced talks.

Rockwell Collins has long been viewed by analysts as a potential takeover target, and bulking up would provide Chief Executive Kelly Ortberg with a bigger vehicle to drive deals with airlines and plane makers.
For Rockwell, based in Cedar Rapids, Iowa, the deal would add to a portfolio focused on cockpit and cabin systems and other electronics for passenger, business and military jets. The company could provide a broader offering of passenger cabin products alongside its range of entertainment systems with in-flight connectivity becoming increasingly important to airlines.
B/E Aerospace, based in Wellington, Fla., is one of the world's largest makers of aircraft seats and other interior fittings such as galleys. It already has an installed base of $12 billion, providing opportunities to sell upgraded equipment to airlines, as well as a backlog of almost $9 billion.
Rockwell plans to create an interiors division headed by B/E Aerospace CEO Werner Lieberherr. The company also said it plans to retain its investment-grade credit rating.
Airlines and leasing companies typically order seats and other fittings direct from the manufacturer and B/E Aerospace has benefited from production problems at French rival Zodiac Aerospace SA that have helped the U.S. company win market share over the past year.
The proposed deal also comes as investors in the aerospace sector have become concerned that the prolonged rise in aircraft production will start to slow because of cooling economic conditions.
A number of aerospace and defense companies and assets have changed hands recently. Last year, Lockheed Martin Corp. bought the Sikorsky helicopter unit from United Technologies Corp. for $9 billion. Earlier this month, CIT Group Inc. agreed to sell its commercial-airline leasing business to Chinese conglomerate HNA Group for about $4 billion.
Earlier this year, Honeywell International Inc. aborted its $90 billion bid for United Technologies. The two companies had big overlap in their business units, especially in aerospace, and a transaction would have faces steep regulatory hurdles.
B/E Aerospace shares closed Friday at $50.61, valuing the company at $5.1 billion after a nearly 20% rise this year. Rockwell is more than twice the size, with a $10.9 billion market value.

Citigroup and Goldman Sachs served as financial advisers to B/E Aerospace and Shearman and Sterling LLP served as legal counsel. J.P. Morgan Chase & Co. and Skadden, Arps, Slate, Meagher & Flom advised Rockwell Collins on the deal.
Both companies also reported their quarterly results in connection with the deal announcement. Rockwell said its earnings increased 13%, while its sales rose 4.4% driven by improvement in the government systems division. Its sales projection for the recently started business year was short of Wall Street estimates.
As for B/E Aerospace, earnings surged 82% from a year-earlier period that was hit by restructuring charges. Revenue, meanwhile, grew 7.8%, buoyed by the commercial aircraft segment. The company also raised its guidance for the year.

>>> Barron's Week-End Update

Barrons weekend update: positive on UHAL 

* Cover story: The growing combination of semiconductors and miniature engines stands to transform tasks as basic as charging a smartphone or cooking an egg, or as complex as scanning for colon cancer or powering flying drones on long journeys; Companies that stand to benefit from the trend include AMAT, WATT, IDTI, and NXPI. 

* Features: 1) Positive on UHAL: Company's chief executive pays no attention to Wall Street, doesn't manage earnings, rarely meets with investors, and gets paid modestly, part of a thrifty corporate culture that has helped U-Haul dominate the industry; 2) Picks from the Barron's Art of Successful Investing conference participants include CCL, SHPG, CLS, LIOX (Scott Black); MSFT, GOOGL, PIC, V (William Priest); SNE, HRI, HRS, MSG (Mario Gabelli); NOMD, EVTC, COMM, ANIP (Oscar Schafer); WHR, LNC, MSCC, GT (Andrew Wellington); and WFC (Jerome Dodson); 3) Cautious on TWX: Shares are up on a possible T merger, but while not overpriced they don't have much upside, and could slide if the deal falls through or is priced below what investors expect.

* Trader: The "Dogs of the Dow" strategy-in which investors put equal dollar amounts in the 10 highest-yielding Dow stocks at year-end and hold them for 12 months-has returned an average of 10.6% annually over the past 10 years; Positive on AGN: The market's concerns about the maker of Botox are more related to industry issues than company problems, and shares could have 20-30% upside over the next year or two. 

* Profile: Scott DiMaggio and Doug Peebles, co-managers of AB Global Bond fund, use fundamental and quantitative analysis teams to form distinct views, after which investment decisions are made.

* Small Caps: Positive on Lanxess: German chemical company's acquisition of Philadelphia-based CHMT will make it a less-cyclical and higher-margin company, and shares currently look cheap.

* Follow-Up: Positive on CAT: New chief Jim Umpleby, a company veteran, will probably cut costs as he tries to get the company back on track, and investors should hold shares until next year to see if he sparks a rebound.

* European Trader: Positive on Danone: The company's new focus on sustainable, profitable growth could translate into double-digit earnings growth in 2017 through 2019. 

* Asian Trader: A study from MS found that investors in Asia are increasingly looking for companies that score high on socially and environmentally responsible metrics, such as Astra International, SM Investments, City Development, and Unilever Indonesia. 

* Emerging Markets: Investors should expect more bond issues from Saudi Arabia, where a war with Yemen is putting pressure on a budget that is already supporting major economic reforms.

* Commodities: Gold, which rose by 29% during the first seven months of 2016, making it one of the year's best performers, is losing its glitter amid concerns about a Fed interest rate hike. 

* Streetwise: Gluskin Sheff's David Rosenberg says the ability to borrow money at lower interest rates has added five percentage points annually to profit growth, though that doesn't mean the S&P 500 is destined to lose nearly 20% of its value with a rate hike.

Barron's : Turnaround at Danone Could Boost Stock 25%

Turnaround at Danone Could Boost Stock 25%
A shift toward profitable, sustained growth and its acquisition of WhiteWave Foods could drive double-digit profit gains through 2019.

A new culture could pay off at dairy-foods giant Danone. The French company’s focus on sustainable, profitable growth marks a significant shift from its prior policy of top-line growth at any price. It could translate into double-digit earnings growth in 2017 through 2019.
As an example of its new approach, Danone (ticker: BN.France), which claims a 26% share of the global market for fresh dairy products, in July strengthened its position in the U.S. with the $10.4 billion acquisition of organic dairy and food producer WhiteWave Foods (WWAV). The deal, which may close by the end of the year, could be immediately accretive to earnings.
Even without WhiteWave, Danone shares look like a good value. At Friday’s close of 63.47 euros, they trade for 18.9 times next year’s estimated earnings. That seems expensive compared with the Stoxx Europe 600 index average of 15 times, but it is better value when compared with consumer-goods peers at 21.6 times.

At the sector multiple, Danone could be worth more than €73 a share, or about 15% more than its latest price. However, its superior growth prospects mean the shares could rise 25% or more, to €80, in the next 12 months. The shares yield 2.5%.
Danone, which has a market value of about €41.6 billion ($45.2 billion), also has American depositary receipts that trade in New York under the symbol DANOY. They were trading on Friday at $13.90. Five ADRs are equivalent to one ordinary share.
In the past two years, the Paris-listed shares are up 27%, outperforming a 6% rise in the Stoxx Europe 600.
That said, the company has been plagued by execution issues. In 2007, it overpaid for baby-food and health-care nutrition company Numico. Two years later, it carried out a rights issue (issuing new shares to raise capital) that was hugely dilutive. And, six months after that, Danone started to buy back shares.
That isn’t all. The company endured a collapse of growth in its fresh dairy business in Europe after it was forced to remove inaccurate health claims from products like Activia and Actimel. In China, it suffered a damaging health scare involving its powdered-milk formula for infants, which ultimately was unjustified but has had a lasting impact. These problems, combined with inflation in milk prices, contributed to the erosion of profit margins. Operating margin tumbled from 15.3% in 2009 to 12.6% in 2014.
Little wonder investors remain wary. In a research note, Bernstein analyst Andrew Wood cites an unnamed investor as saying, “We have all made the mistake of owning Danone once…the skill is to avoid making the same mistake twice.”
Emmanuel Faber, an insider who was promoted to CEO in 2014, has stirred things up. He has introduced a more disciplined approach to capital and investment, and a focus on the bottom line.
“IT IS A REALLY BIG DEAL for Danone,” says Liberum analyst Robert Waldschmidt, who rates the stock at Buy with a target price of €80, or 26% above the current quote.
Danone’s new perspective suggests that the purchase of WhiteWave could be a good deal for Danone, whose products in the U.S. include Stonyfield yogurts, Evian bottled water, and Neocate infant formula. It bulks up Danone’s presence in the U.S., which accounted for 11% of the €22.41 billion in group sales last year. The company currently earns about 54% of sales from emerging markets, but the integration of WhiteWave will take that figure below 50%.
Importantly, WhiteWave, which operates in fast-growing categories like organic plant-based food and beverages with brands like Silk dairy alternatives, could boost earnings by 10% in 2017 and 3% in 2018, according to Bernstein analysts. Consensus estimates currently don’t appear to include the WhiteWave deal.
Regardless, Danone’s prospects appear to be improving. Milk prices are easing, and its loss of market share in fresh dairy in Europe is subsiding. It is relaunching Activia and Actimel with lifestyle-related messages, and could see flat growth in Europe in 2016, an improvement on the past few years.
The company could hit its target like-for-like sales growth of 3% to 5% this year, and group margin could hit 13.9%, up from 12.9% last year.
In 2016, Danone is forecast to earn net income of €1.87 billion, or €3.07 a share, rising to €2.07 billion, or €3.39 a share, next year.
Some analysts worry about the impact of the WhiteWave acquisition on Danone’s balance sheet, but it should be able to absorb the cost without too much pain. Its ratio of net debt to earnings before interest, tax, depreciation, and amortization will rise to 3.5 times next year before falling back to three in 2018 and 2.5 in 2019. After the Numico deal in 2007, it ballooned to 4.5.
Danone could turn out to be a healthy alternative for investors.

Reuters - Piech, Porsche families say united behind VW management: Spiegel

Piech, Porsche families say united behind VW management: Spiegel

The Piech and Porsche families that control more than 52 percent of Volkswagen (VOWG_p.DE) have vowed to back senior management, setting aside past disputes as the carmaker struggles to overcome an emissions scandal, Der Spiegel reported on Saturday.
In a rare interview, Hans Michel Piech and Wolfgang Porsche pledged support for VW chairman Hans Dieter Poetsch and chief executive Matthias Mueller, and said they would stay out of daily operational affairs at Germany's biggest carmaker.
The two families had clashed when Ferdinand Piech was his family's representative on Volkswagen's supervisory board, a post he resigned from last year, clearing the way for his brother, Hans Michel.
Some investors feared bickering between the two families would hamper decision-making as the company works to cut costs and adapt to new industry trends such as electronic and autonomous driving.
"We are different and we see our task as representatives of the families different," Hans Michel Piech was quoted as saying, but he and Wolfgang Porsche both emphasized their ability to find consensus.
Porsche said that would remain the case despite a recent decision to increase the number of family members with voting power to 34.
"Not all 34 will become supervisory board members, or have a say in discussions, and not all of them want to. What is important is that the next generation of suitable family members have an interest in the matter and do not simply wait for the dividend to arrive," he said.
Volkswagen has suffered its worst-ever crisis since admitting in September 2015 it used sophisticated secret software in its cars to cheat exhaust emissions tests, with millions of vehicles worldwide affected.
The company has set aside 17.8 billion euros (15.83 billion pounds)to pay for costs related to the scandal.

FT : Spinal Tap star turns it up to 11 in fight for royalties (Vivendi)

Spinal Tap star turns it up to 11 in fight for royalties
The artist’s law suit comes at a time of deepening suspicion of platform owners

There can only be one winner in the case of the actor Harry Shearer v Vivendi, the French media group, over royalties from the 1984 film, This is Spinal Tap. And it’s bad news, I’m afraid, for the French.

Mr Shearer, who plays pipe-smoking bassist Derek Smalls in the spoof rock documentary, alleges he earned $81 over 22 years on merchandising income and $98 between 1989 and 2006 for his contributions to This is Spinal Tap’s soundtrack, the rights to which are owned by Vivendi.
These sums seem, as noted by the film’s director Rob Reiner, “impossible” given its enduring popularity. They suggest the very worst of “Hollywood accounting” — that baffling process by which profits from successful movies somehow vanish long before they reach the accounts of their creators.
Mr Shearer is no starving artist. He can afford a legal fight, having made millions voicing 23 characters in The Simpsons. He wants $125m in damages. If I were Vincent Bolloré, Vivendi’s chairman and its major shareholder, I would be advising my lawyers to settle.
Mr Bolloré has the thick hide of a man who has found fortune in everything from west African trade to paper manufacturing to advertising. But never has he taken on a man loved by millions for playing the part of a demented rock star (one so desperate to advertise his virility that at airport security he is found to have a cucumber wrapped in tinfoil stuffed down his trousers).
Vivendi may have perfectly good legal reasons why This is Spinal Tap has yielded desultory returns for one of its stars. But it is absurd on the face of it that a film so influential, adored and quoted can have paid out so little. The court documents allege that the original production agreement called for Mr Shearer, Mr Reiner and co-stars Michael McKean and Christopher Guest to receive 40 per cent of net receipts.

Mr Shearer must feel like David St Hubbins, Spinal Tap’s lead singer, whose bandmate Nigel Tufnel designs a giant replica of Stonehenge to descend on stage, only to mislabel his sketch. The resulting monument is 18in high instead of 18ft. As St Hubbins complains, this tends to “understate the hugeness of the object”.
The original producer of This is Spinal Tap was the long-forgotten Embassy Pictures. Over time, Embassy’s catalogue of films was resold again and again until it reached Vivendi. In the process, Mr Shearer alleges in the court documents, This is Spinal Tap was bundled in with lossmaking flops for accounting purposes. This process of “cross-collaterisation” led to a dramatic understating of the hugeness of the film’s profits.
This process continued as the rights to the film were sold repeatedly as part of larger transactions before ending up with Vivendi. Mr Shearer claims that the accounting was fraudulent enough to justify the compensatory and punitive damages he is demanding.
The stories of suits roughing up talent in the music industry are legion. Colonel Tom Parker turned Elvis Presley from a dashing young GI into a Las Vegas freak show, but made millions along the way. The Rolling Stones spent years trying to get out of their contracts with former manager Allen Klein. A few months before he died, Prince compared record contracts to “slavery” and advised young artists against signing them.
Announcing his lawsuit, Mr Shearer said: “I think it’s important to challenge the status quo, not just for myself but for all my fellow artists, musicians and creators. After all, they depend for their livelihoods on a fair return for their hard work.” His suit will probably ripple beyond the world of music and film: it comes at a time of deepening suspicion of digital services and platform owners.
The EU and Google are locked in a fight over what can and cannot be uploaded to YouTube. The EU is asking for greater respect for copyright, while Google is standing by what it calls the “principles of linking, sharing and creativity on which the web’s success is built”. Facebook argues for similar principles as it ramps up its own video service. But, as you use either service, it’s hard to avoid a sense they consider content a source of advertising dollars and copyright something to be ignored until absolutely necessary.
Beyond content and copyright, new platforms in everything from apps to taxis to food delivery are provoking tussles over splitting the spoils. The platform owners are developing the kind of monopoly power once wielded by Hollywood studios and television networks — a lock on both the suppliers and consumers of their service.
When Mr Shearer talks about ensuring a “fair return for their hard work” he could be talking as easily about the gig economy workers who find their terms of work unexpectedly rewritten as about musicians feeding on scraps from their labels. They, too, are getting the Derek Smalls treatment.
A trial would be circus enough. But perhaps Mr Shearer could reunite Spinal Tap for a concert outside Vivendi’s chic headquarters on the Avenue de Friedland in Paris. A sea of seething spandex looping around the Arc de
Triomphe would do wonders to focus corporate minds.