Archive for category Fraud

Whats the Verdict: Is Binge Watching the New Normal? NBC takes the plunge!

Once reserved strictly for online content streaming platforms like Amazon, Hulu, and Netflix, binge watching seems to have gone mainstream, with big networks beginning to release whole seasons online. The adoption of the binge model by big networks comes precisely at the same time that platforms like Netflix are moving away from it.

Tomorrow NBC will release the the first season of David Duchovny’s new period drama, Aquarius in its entirety online, while at the same time airing one episode a week on TV. In a Hollywood reporter article, NBC Entertainment Chairman, Bob Greenblatt proclaimed this decisions would push new boundaries, while also giving the consumer what they want.

NBC’s jump into the binge party comes at the same time as other’s are begining to question its merit. On May 21, Netflix began airing its new show, Between on a week to week basis. Hulu is also questioning the model and is looking at non binge options for its lineup, and Yahoo’s sixth season of Community is also being released over several weeks.

At the root of this shift is the need to create buzz. Content creators want to be able to build buzz around their shows, that continue over a period of time. The binge model allows for much of this build up. However, once the show is released the hype plummets. Serial releasing of content, on a week by week basis allows for hype to be built throughout a season.

As big networks like NBC move to catch up to online content providers like Netflix, more and more shows will be released on the binge model. The implications of this for the industry could be huge. Networks will have to create more and more content. This means that season story lines will become much longer. This also means that Networks will have to green light more shows. If they no longer have to worry about the physical confines of airtime, networks will be able to produce more shows for online viewers.

The real question is wether or not this is what the consumer wants. Will weekly entertainment transition into becoming fourteen hour obligations to watch an entire season in one weekend? What implications will this have on hiring patterns? What does this trend mean for payouts in the industry?

What do you think the verdict will be?

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What’s The Verdict: The Weinstein Company Using Genius Products as a Personal Bank Account?

What’s The Verdict: The Weinstein Company Using Genius Products as a Personal Bank Account?

This past Thursday, a trustee for a bankrupt home video company, Genius Products, has filed a multi-million dollar multi-claim lawsuit against The Weinstein Company, with accusations of perpetrating a fraud scheme and demanding the return of more than $130 million!  It was in 2011 that Genius Products, LLC was forced into involuntary bankruptcy by World Wrestling Entertainment and two other companies over $8.5 mill in debt. According to the newest complaint from Chapter 7 trustee Alfred Siegel, by 2011 Genius Products was already in debt thanks to “onerous and one-sided” agreements forced upon it by The Weinstein Company.  Essentially, The Weinstein Company is being accused of treating Genius as its personal bank account and transforming ESPN, Discovery and Genius’ other licensors into unsecured creditors.

The attorney for The Weinstein Company says his client lists tens of millions on Genius and that Genius’ story does not align with the real story.  So, what is the story?

Weinstein formed Genius in 2005 gaining the exclusive rights to distribute Weinstein home videos in the US.  The following year, 2006, Genius would become an independent company and in accordance with an operating agreement, TWC held onto 70 percent.  Supposedly, becoming an independent company was a sham to mislead third parties, where Weinstein would have full control over Genius and distribution agreements that made it impossible for Genius to operate profitably. Another way in which Genius was allegedly disadvantaged by TWC is the requirement that it keep about 40 employees exclusively working on Weinstein titles at a cost of $2 mill per year.  Despite an exclusive right to distribute, Genius was not permitted to distribute in Blu-Ray and other new formats.

All in all, it looks like The Weinstein Company dictated the agreement terms in a way that pretty much all the revenue from the home video distribution was transferred to Weinstein and all expenses were paid the ‘Debtor’ or Genius Products. This is all said to have gone on for about 2 years, up until 2008 when Genius was seriously running out of money.   What happened next is that Weinstein transferred its majority ownership to an investment firm, Quadrant Management, Inc. as a means of removing itself from the relationship as a minimal cost.

While Genius Products claims this was a major fraud scheme, TWC claims that they were actually the victim in this whole series of events.  As litigation proceeds, there will be more to come, so, stay tuned on What’s The Verdict for updates!

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