MULTIMEDIA UPDATE: REACTION TO MURDOCH-MCI ALLIANCE
Published May 16, 1995
The announcement last week that MCI would invest $2B in Rupert Murdoch's News Corp. "stunned the communications world," according to the current BUSINESS WEEK. The alliance with Murdoch "has the potential to take MCI much further along the I- Way" than any of its previous interactive ventures. TCI Chair John Malone: "MCI doesn't bother me. But Murdoch scares me to death" (Lewyn, Grover & Dwyer, BUSINESS WEEK, 5/22 issue). The cash from the MCI deal has Murdoch reportedly eyeing several other media properties, including Italy's Finnivest, Time Warner's stake in Turner, or Seagram's stake in Time Warner. Murdoch may also launch a BSkyB-style satellite service in Latin America or expand News Corp.'s 63% stake in Star TV in Asia (ADVERTISING AGE, 5/15 issue). Michael Milken "played an advisory role" in the MCI-Murdoch deal (L.A. TIMES, 5/16). NEXT MERGER? AT&T and Time Warner Cable are discussing "teaming up to offer local and long-distance telephone service to millions of consumers in a direct strike at local phone companies" (WALL STREET JOURNAL, 5/16). CABLE'S FUTURE: The NCTA convention in Dallas last week "was about cable -- but not necessarily television," according to Jessell & Berniker of BROADCASTING & CABLE. Talk of the future "was more likely to be about telephony and high-speed data communications than about more program networks or interactive TV." In another piece, Discovery Commun. President & COO Greg Moyer says that in the current environment, "More channels alone may not be the only answer" (B&C, 5/15). ELECTRONIC MEDIA's Wayne Walley reports that the industry "is slowly shaking off its malaise -- but what's behind the better mood isn't necessarily good news for programmers" (ADVERTISING AGE, 5/15 issue). DIFFERENT VIEWS OF CD-ROM INDUSTRY: Reviewing the Electronic Entertainment Expo (E3) staged in L.A. over the past week, the L.A. TIMES' David Colker reports that the CD-ROM medium "is at long last catching up with its hype." Colker calls several of the upcoming home games "are surprisingly fresh and promising." Of the hot new titles he lists, none are sports- related (L.A. TIMES, 5/14). But in Washington, Kara Swisher writes that a "shakeout" is due for the CD-ROM industry. Still, the Software Publishers Assoc. reports that sales of CD-ROM software in '94 rose 229% to $640M, compared with '93 (WASHINGTON POST, 5/14). VIDEO GAMERS GET UGLY: The battle between video game makers at E3 "was not a pretty sight," according to TIME's Philip Elmer- DeWitt. Five manufacturers -- Nintendo, Sega, Sony, 3DO and Atari -- "are battling for one of the top spots in a market that most analysts believe has room for no more than two or three" (TIME, 5/22 issue). Software developers at E3 "expressed anxiety about which of the technologies will emerge victorious." Nintendo plans to employ a cartridge system, while the others use CD-ROM (Swisher & Pegoraro, WASHINGTON POST, 5/13). Sega will spend $50m marketing its new $399 Saturn system, released last week (Bradley Johnson, ADVERTISING AGE, 5/15 issue).