Entertainment

The internet industry scored a tactical victory this week with Wednesday’s blackout of sites such as Wikipedia and Reddit, and the White House’s decision to oppose parts of two bills intended to curb the file-sharing of films and copyrighted material. “Piracy rules,” tweeted Rupert Murdoch angrily.

Spider-Man at last opened on Tuesday night on Broadway, having already been playing to audiences for six months of “previews” that produced disastrously bad notices, injuries to five actors who fell off the set or crashed from the hanging wires, and the eventual firing of Julie Taymor, its original director.

When creative stars explode, they do so with a more spectacular bang than the average sufferer from a midlife crisis.

Christian Dior this week fired John Galliano, its 50-year-old chief designer, for allegedly making anti-Semitic remarks to a couple in a bar. He denied the claims but it seems that he told others in the same bar: “I love Hitler” and that their forefathers would have been “gassed” – a video of Mr Galliano slurring those words was published by The Sun.

Dan Bogler

Avatar has been declared the “future of movies” and it may be – though perhaps not quite in the way Hollywood thinks. Barely a month after launch it has generated more than $2bn in ticket sales, becoming the top-grossing film of all time. Its popularity is almost entirely down to the amazing 3-D special effects rather than a compelling plot or a roster of bankable stars, since it has neither of those. Is this the point where, once-and-for-all, technology overtakes talent as the driver of box office success? Pixar’s animated features, after all, have already shown the way. And since technology tends to get cheaper every year, while movie stars don’t, perhaps this signals a shift in the industry that puts power and profits back into the hands of the studios. This is not true of Avatar itself, of course. Reputedly, director James Cameron stands to make even more ($400m) than News Corp’s Fox ($300m), as shown in yesterday’s results. But as 3-D effects become commonplace, studio’s won’t need a James Cameron behind the camera every time.

John Gapper

Good luck to the search committee of General Motors in finding a new chief executive.

The abrupt departure of Fritz Henderson from the job this afternoon under pressure from Ed Whitacre, GM’s chairman (and temporary replacement as chief executive) leaves the company looking for someone to take his place.

The first question any candidate is going to ask himself or herself, however, is: what will it be like working under an impatient, strong-willed and sometimes abrasive chairman who made little secret of his lack of belief in Mr Henderson?

The job of non-executive chairman has never really caught on in the US, although it is commonplace in the UK, and Mr Whitacre, the former chairman and chief executive of AT&T, has not given the impression since arriving at GM that he believes in the notion.

Mr Henderson’s position was undermined by the GM board’s decision to over-rule him on the sale of Opel, its European subsidiary, last month and Mr Whitacre’s open disagreement on issues such as the timing of GM’s initial public offering and the speed of internal change.

There was no doubt plenty in GM’s slow-moving and inwardly-focused culture to concern Mr Whitacre, but it will not make it easy to find a replacement.

The model is probably Ford, which managed to attract Alan Mulally from Boeing in 2006, although Bill Ford remained as executive chairman. Mr Mulally judged, apparently correctly, that Mr Ford would given him freedom of manoevre at the company.

That parallel occurred to Steve Rattner, the former head of the US government’s auto task force, when he was considering whether Mr Henderson should take over from Rick Wagoner as GM’s chief executive in March.

As Mr Rattner wrote in Fortune magazine in October:

“The question for us was whether GM would be better off with Fritz or with an outsider, as Ford had done in bringing in [Mr Mulally]. While nervous about whether Fritz could bring the change GM desperately needed, I was considerably more nervous about the likelihood of recruiting a thoroughbred CEO in the midst of the turmoil.”

GM now has its work cut out to persuade candidates that there is a job for a thoroughbred CEO under a chairman who likes to run things.

Update: Last March, I gave Mr Henderson a 50-50 chance of surviving at the helm of GM on the grounds that he was “a tough and talented executive but indubitably an insider” who might have “damaged his long-term chances by pinning his colours so firmly to Mr Wagoner’s mast.”

John Gapper

The Companies & Markets section of the US edition of the FT has the following headlines today:

Apple leaps ahead with 47 per cent surge in profits

Options-driven rally likely if oil prices move above $80

Dutch bank DSB left to fail after run (because regulators were confident it was safe to do so)

Henderson says GM on track for public offering

Daimler accelerates to 470m profit in surprise bounce-back

Sands chief back in the money after $1bn punt

Fed tests tools for draining liquidity

UK’s rebound sparks fears of overheating (the UK commercial property market, that is)

Investors take rosy view in big week for earnings

Bullish climate sees S&P sweep through 1,100 level

All this may be coincidental but it indicates a strikingly bullish mood not only in markets but also among big businesses that suffered badly in the financial crisis. How long it lasts may be another matter but it is worth noting.

Of these stories, I was most struck by Matthew Garrahan’s interview with Sheldon Adelson, chief executive of Las Vegas Sands, recounting Mr Adelson’s near-financial death experience.

He denies ever fearing that the group risked bankruptcy. “Never,” he growls. “Not for a moment. I wasn’t going to cap my career of 64 years with a loss.”

However, he admits the year had some low points. “I bit the bullet and I sold equity. That was the lowest point . . . because I felt that my job was to enhance shareholder value and here I had diluted it, including [my own stake].

“But I paid the price. I put up $1bn to save the company. We were down as low as [a market capitalisation of] $1bn and we’re back to $12bn today.”

The equity sale diluted his stake from 69 per cent to 52 per cent. But the recent revival in the company’s shares has lifted the value of his holding up to $6bn from about $500m at the low point this year.

I imagine there are a few similar stories out there of companies that looked like they might be about to founder last year but pulled themselves back from the brink.

John Gapper

I went to see Bolt, the new Walt Disney film, this weekend (along with my target audience). I watched it in 3D with the help of a pair of Elvis Costello-like spectacles given out at the door.

Bolt is one of the new wave of 3D films now pouring out of Hollywood in an effort to give the technology another chance. The 3D films of the 1950s initially caused great enthusiasm and talk of a revolution but the excitement faded.

I should think the technology has a better chance this time. Instead of those funny red and green cardboard specs that used to give people headaches, the new digital 3D technology is subtler.

The glasses are Polaroid-like filters that look like light sunglasses (although when you hold them up to the light in reverse, both lenses turn green). Although the film itself looks blurred without glasses on, it is less so than before.

The big question is whether 3D adds much. As ever, it is initially a thrill to see objects in perspective and various things poking out of the screen towards one. But that thrill may wear off as 3D becomes routine for children’s films.

Although the Bolt 3D was fun, I was more intrigued by its use in two trailers – one for the film of the spooky children’s book Coraline and another for the forthcoming Pixar film, Up.

Coraline is very stylised, which allows the 3D effects to be used in inventive and playful ways, while the scenes in Up looking down from a house held aloft in the sky by thousands of balloons were admirably vertiginous.

Clearly, if it does work, 3D could provide Hollywood with protection against its audience staying at home to watch high-definition Blu-Ray discs on large flat-screen televisions (which are getting cheap).

My two-member jury was favourably impressed and is looking forward to Coraline, but we shall see.

John Gapper

I was reminded the other day that it currently costs £13 to enter Kew Gardens as a visitor. Since I grew up in Kew, I happen to be an expert on the history of the entrance fee to Kew Gardens and it is mind-bogglingly high compared with the past.

Forgive the middle-aged reminiscence but, when I was a child, it cost three pence (yes, a thrupenny bit)  to get into Kew Gardens. Upon decimalisation in February 1971, they put the price down to one new penny, or 2.4 old pence.

This was the high point in terms of Kew Gardens’ cheapness. As public subsidies were cut and the gardens were forced to become financially self-sufficient, the entrance price steadily rose over the years to its current level.

Applying the Bank of England’s calculator of retail price inflation, the pound in 1971 was worth about £10 in today’s money, which makes the 1971 entrance fee the equivalent of 10p.

Thus, according to my calculations, it is currently 130 times more expensive to get into Kew than it was when I was a child.

I do not mean to suggest that the current entrance fee is too high. Kew Gardens would clearly not be as well kept-up and have such a high global reputation if it still cost 10p to get in. The other day, for example, I found Kew-branded seeds on sale in the Brooklyn Botanic Garden (a bargain $8 to enter).

Still, fings ain’t what they used t’be. I wonder if anyone can think of a product or service that has escalated in price to quite such a degree?

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This blog is mainly about business and strategy and how and why people who run companies take the decisions that they do.

Most of the time, John Gapper is in New York and Andrew Hill is in London. We occasionally debate business issues between us, but your comments and criticism are welcome.




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About John and Andrew

John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.

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