Viacom has admitted that its Rock Band series is still not making any cash - on the contrary, it's losing the company money. Viacom's chief financial officer, Tom Dooley, admitted in a quarterly earnings report that "Rock Band was a negative contributor to margins in the third quarter".

He added: "We expect it to break even or be slightly profitable in the fourth quarter from a margin point of view. It really depends on how many units we sell in the holiday season".

The big problem is that making the plastic guitars, drums and microphones is expensive. The company's plan, it seems, revolves around getting those controllers into as many into people's homes as possible, then selling them future games in the franchise that cost both the company and the consumer less.

To that end, both Rock Band 2 and Beatles: Rock Band are compatible with older controllers on the same platform, but it seems to be a pretty long-term strategy. Having said that, Beatles Rock Band is apparently doing reasonably well - "the economics of our Rock Band franchise are improving, though not as quickly as we'd like", said Viacom's CEO, Philippe Daumann.

?

Read

Tags: Gaming Rock Band Viacom MTV Biz

Rock Band is still not profitable, says Viacom originally appeared on http://www.pocket-lint.com on Thu, 05 Nov 2009 18:05:51 +0000

Google's CEO Eric Schmidt has admitted to paying a $1 billion premium on YouTube when Google bought the video service in 2007.

The move, which made sure that the fledgling company (at the time) didn't fall into the wrong hands (read Microsoft or Yahoo) has been uncovered following a request for court papers of the 2007 court case against Viacom over copyright material on YouTube.

"Leading up to the acquisition, Schmidt told Google's board of directors that his estimate of YouTube's worth was somewhere between $600 million and $700 million", reports CNET after seeing court records.

The court papers go on to reveal a fuller explanation from Schmidt to Stuart Jay Baskin, a Viacom attorney.

"This is a company with very little revenue, growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer--because of who Google was--paying much more than they were worth. In the deal dynamics, the price, remember, is not set by my judgement or by financial model or discounted cash flow. It's set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube".

Google has declined to comment on the story.

Read

Tags: Software Biz Google Viacom

Google paid $1 billion premium for YouTube originally appeared on http://www.pocket-lint.com on Wed, 07 Oct 2009 02:36:32 +0100