On Media - BusinessWeek

Byrne Leaving BusinessWeek to Start Digital Media Company

Tom Lowry — Tue, 24 Nov 2009 16:25:38 -0500

John A. Byrne, for years one of BusinessWeek's most prolific writers and later one its most admired editors, is leaving the magazine to launch his own digital media company.

Byrne, 56, an executive editor and editor-in-chief of BusinessWeek.com, said he will officially step down when the sale of the magazine to Bloomberg is completed, as expected, on Dec. 1. (see Byrne's full memo to staff below). In two separate stints, Byrne spent 22 years at the magazine. In between, he served as editor-in-chief of Fast Company magazine from 2003 to 2005.

He will be re-locating to the San Francisco area. Byrne was recently married to Kate Rodler, who resides in Marin County. Byrne did not elaborate on what kind of media company he was interested in launching, or whether he had any financial backers.

During his tenure as a writer at BusinessWeek, Byrne penned a record 58 cover stories while also authoring eight books. His last book was a collaboration with GE Chairman Jack Welch, Jack: Straight From The Gut. Former BusinessWeek Editor-in-Chief Steve Shepard once jokingly referred to Byrne as Johann Sebastian Byrne because of the substantive body of work he created while at the magazine. Byrne also earned a reputation as a patient mentor over the years to lots of young BusinessWeek staffers.

Byrne was instrumental in launching BusinessWeek's Best Business Schools rankings, and as executive editor, he and his team created three additional annual franchises, including the highly successful Customer Service Champions and the Best Places to Launch a Career. In addition, Byrne recruited to the magazine such weekly columnists as Jack and Suzy Welch, Maria Bartiromo, and renowned wine critic Robert Parker.

Under his leadership of BusinessWeek's web operations, which he assumed in 2007, traffic and user engagement, with monthly unique visitors has risen by 40% to 10.4 million (more than twice the size of the magazine’s audience). Under his leadership, BW.com has won two consecutive National Magazine Awards. What's more, Byrne was inducted last year by Media Industry News into the Digital Hall of Fame and this year min named him one of 21 “Superstars of Social Media.” Byrne has nearly 18,000 followers on Twitter, under the handle JOHNABYRNE.

“John brought his prodigious energy, credibility, and creativity to BusinessWeek.com after a stellar, award-winning career in print and truly outdid himself," says Stephen J. Adler, editor-in-chief of BusinessWeek who will be leaving the magazine as well on Dec. 1. "He leaves as one of the most exciting innovators in the entire digital world, and I’m eagerly awaiting his next venture.”

Not to be overlooked is Byrne's tireless support of the BusinessWeek softball team, which has appeared in all three championship games of the New York Media Softball League, which was formed in 2007. BW captured the crown in 2008 after a record-breaking undefeated streak.

First Bids in MGM Auction Expected Soon

Ron Grover — Mon, 23 Nov 2009 18:24:47 -0500

How’s the modern day “data room” work? Forget the locked conference room in a law firm, where the dealmakers of old used to pour over reams of facts, figures and assumptions while contemplating whether to bid for a company. MGM, the fabled but debt-hobbled studio, has set up an online site with its data and is parceling out access as it prepares to launch an auction pressed by its debt holders.

A first round of bids are expected shortly after Thanksgiving from companies that have been given access to the online site – so far that’s Warner Brothers(TWX) and Fox (NWS), according to a source with knowledge of the bidding. But even if Warner and Fox submit bids, those bids aren’t likely to be the end of the MGM drama. Instead, holders of the studio’s $3.7 billion in debt are expected to use what are expected to be all-cash bids from those studios as the starting point in their decision as to the “strategic alternatives” they choose to take. An MGM spokeswoman did not return requests for comment.

MGM said on Nov. 13 that it was “beginning a process to explore various strategic alternatives, including operating as a standalone entity, forming strategic partnerships and evaluating a potential sale of the company.” It also said that it had received an extension from Dec. 15 to Jan. 31 of the forbearance agreement from its lenders that has allowed MGM to postpone debt payment that threatens to throw the studio into bankruptcy. Sources with knowledge of the online data room say that MGM and its investment bankers haven’t as yet opened access to the wide range of parties that might consider bidding on the company, instead choosing to see how high competing studios might value the company. The studios are expected to value the company on the basis of its 4,100 film library and the rights to the James Bond, Pink Panther and other franchises.

Getting a potential price tag for the studio would enable the 140-odd debtor group to determine whether they might hang onto the studio or launch a formal auction process.
At least one private equity fund, Qualia Capital, is said to be interested in joining the bidding but would do so with a structured plan that would include injecting some capital into MGM, converting some of its debt into equity and operating the company as a standalone venture n hopes of increasing its value for a sale further down the road. Another studio, Lions Gate(LGF) is also said to be interested in taking a look at MGM’s financials and might try to structure a bid. Lions Gate declined comment. Media dealmaker John Malone(LMBIA) has said he’d like to look at the data. But the Liberty Media chairman says he isn’t likely to bid on the entire studio.

A Chat With BusinessWeek's Editor-To-Be

Tom Lowry — Tue, 17 Nov 2009 14:05:29 -0500

Josh Tyrangiel, who was named this morning to be editor of a Bloomberg-owned BusinessWeek, says it's too early to lay out specific plans for the magazine but his goal is to create "a great indispensable business weekly."

In a brief interview, Tyrangiel, 37, says he plans to meet soon with BW staffers as a group and individually to gather their input so "we can formulate a strategy for the magazine together." Tyrangiel has been serving as a deputy managing editor of Time magazine and as the top editor of its online operations.

While he earned kudos for his work online at Time, Tyrangiel says he is committed to long-form journalism in print. "Listen, the big mistake magazines made was trying to imitate the Web," he said. "Magazines are read reclining, and that lends itself to longer, more in-depth stories."

Tryangiel has edited business stories in the past but he acknowledged that he is not a traditional business journalist. He says his background is an "opportunity" for the magazine. "I need help," he said, "and I am going to rely on the staff. I want the staff to stay in their lanes and be experts on their subjects."

He believes a big reason that Bloomberg LP Chief Content Officer Norman Pearlstine and Bloomberg Editor-in-Chief Matthew Winkler recruited him is that "I am a good person at bringing people together. We are going to work on this as a team."

Top Time Editor To Become BusinessWeek's New Editor

Tom Lowry — Tue, 17 Nov 2009 08:26:53 -0500

Josh Tyrangiel, a deputy managing editor at Time magazine and the top editor of its online operations, will become the first editor of a Bloomberg-owned BusinessWeek. The acquisition, announced Oct. 13, is expected to close in early December.

By selecting the 37-year-old Tyrangiel who is not a business journalist per se, Bloomberg clearly wants a leader for BusinessWeek who is not only a highly-regarded editor but someone who has demonstrated he knows how to reach a wider array of readers in both print and online. A major reason Bloomberg LP executives pursued BusinessWeek was to reach a broader audience beyond Wall Street and the professional investor communities.

“I saw Josh in a number of leadership positions as he took on increasing responsibilities at TIME," says Norman Pearlstine, Bloomberg's chief content officer and a former editor-in-chief of Time Inc., Time's parent. "Working closely with him .... I came to appreciate his intelligence, curiosity, energy, and integrity. Josh is recognized within Time Inc. and its parent, Time Warner Inc., as an ‘editor’s editor’ and a natural leader. His understanding of the ways in which print and online publications can work together will serve Bloomberg well as we expand our consumer media offerings.”

In some media circles, Tyrangiel was considered a leading candidate to succeed Time managing editor Richard Stengel. According to sources, Time Warner CEO Jeff Bewkes was so impressed with Tyrangiel that he tried to recruit him to be come the editor of CNN.com, the online arm of the 24-hour cable news channel, but Time Inc.'s current editor-in-chief John Huey intervened and convinced Tyrangiel to stay at Time with the promise that he might one day succeed Stengel.

During his tenure at Time.com, Tyrangiel boosted the Web site's traffic from 400 million page views in 2006 to what could be an estimated 1.8 billion page views this year. Previous to Time, Tyrangiel worked at Rolling Stone and Vibe magazines and served as a news producer at MTV.

“Josh Tyrangiel will be a tremendous asset as we build the market presence of BusinessWeek backed by Bloomberg’s global multimedia news organization, to create the most compelling business news for the most sought-after readers.,” said Bloomberg L.P. President Daniel Doctoroff.

Tyrangiel will report to Pearlstine, who in turn will report on editorial matters to Matthew Winkler, Bloomberg's editor-in-chief. "Norm and Josh are the ideal team to deliver a terrific business magazine that brings the most trusted, most influential and most important news to a global audience of thought leaders,” said Winkler.

Tyrangiel will work alongside BusinessWeek executive editors Ellen Pollock and John Byrne and managing editor Ciro Scotti. Pearlstine announced earlier that they would continue in their roles at the magazine. Tyrangiel succeeds Stephen J. Adler, who announced his resignation as editor-in-chief on Oct. 20.

Iger Plays Musical Chairs At Disney

Tom Lowry — Fri, 13 Nov 2009 16:10:30 -0500

Walt Disney CFO Tom Staggs may soon get some on-the-job experience in another corner of the Mouse House. Disney’s top financial executive is expected to swap jobs with Disney theme park chief Jay Rasulo, according to knowledgeable sources. The swap comes at a crucial time for Disney, which is planning to build a theme park in Shanghai.

No announcement has been made yet, but Disney CEO Bob Iger is expected to describe the swap as a new policy by which he moves longstanding executives into new roles to expand their knowledge of the company.

However, longtime Disney observers say this could buttress Staggs’ chances to contend for a more senior role later on. The 19-year Disney veteran is believed to have wanted for some to become Disney’s chief operating officer, a position that currently doesn’t exist. Disney insiders say Staggs has been keen on that job ever since Iger was elevated to CEO in 2005. Rasulo, who has run the theme parks since 2002, was a highly-regarded strategic planner for Disney and then oversaw the Disney-managed theme park outside Paris before being elevated to his current role. The move is reminiscent of efforts by former Disney CFO Richard Nanula, who switched jobs to run Disney theme parks in the mid-1990s in order to bolster his own bid for a more senior job.

This post is from my colleague Ron Grover who is stuck in Los Angeles traffic

MGM Creditors May Press for an Auction

Ron Grover — Wed, 11 Nov 2009 02:19:54 -0500

It may not be long before the troubled MGM studio is forced by its creditors to seek a buyer. That’s the word coming out of a Nov. 4 meeting between MGM CEO Stephen Cooper and the debt-hobbled film company’s 140-member creditor committee. According to one source with knowledge of the meeting, the creditor group turned thumbs down on a proposal by Cooper to convert the studio’s $3.7 billion debt into equity as part of a restructuring plan to keep the studio out of bankruptcy.

Taking equity in MGM seems dicey given that the studio’s current equity owners, which include several private equity firms, Sony (SNE) and Comcast (CMCSA), have already written down their investments from their $5 billion purchase of the studio in 2004. But Cooper, who has previously been brought in to help resurrect the fortunes of Krispy Kreme and Enron, wanted the creditors to allow allow him to raise as much as $1.2 billion in fresh debt to help jumpstart MGM’s film production. That prompted the debt holders, which could push the studio into bankruptcy, to question Cooper instead about seeking a buyer. That discussion came at a Nov. 6 meeting.

The creditors have great leverage over Cooper. In October, the committee gave MGM until Dec. 15 to forgo paying interest on the studio’s debt and to keep the company out of bankruptcy court. In return, however, the creditors insisted upon a major restructuring. Now, their patience seems to be wearing thin, according to a source with knowledge of the meeting. Cooper is said to have told the creditors that it’s unlikely he can get more than $1.5 billion for the studio, which is roughly what MGM’s rights to the James Bond franchise alone might be worth. An MGM spokeswoman would not comment.

The creditors apparently are getting close to taking the haircut just to be rid of the troublesome studio, according to the source. Among those who have been mentioned as potential candidates to buy MGM are studios Warner Brothers (TWX), Fox (NWS)and Lions Gate (LGF)and private equity fund Qualia Capital, whose principals Amir Malin and Ken Schapiro are industry veterans who have a successful record at turning around wobbly entertainment companies. The studios are said to be primarily interested in getting their hands on MGM’s 4,000-title film library, the Bond franchise and MGM’s rights (along with Warner) to make the Lord of the Rings prequel The Hobbit.

Other potentially interested buyers could be former News Corp. president Peter Chernin and one-time Yahoo CEO Terry Semel, a former Warner Brothers studio chairman. Neither man could be reached for comment.

Spielberg: Have Movies Will Travel

Ron Grover — Fri, 06 Nov 2009 14:06:14 -0500

Even before Steven Spielberg's newly reformulated Dreamworks SKG makes its first film, his studio is moving – well, sort of. BusinessWeek has learned that movies made by Dreamworks, headed by Spielberg and producing partner Stacey Snider, will be moving from the Starz pay TVLMDIAto Showtime (CBS).

The move, which has yet to be announced, is being driven by the Walt Disney Co.(DIS), which signed on to distribute Spielberg and Co.'s films in February. That deal included a provision by which Starz would distribute Disney's films under an existing agreement by which Starz distributes all of Disney's films to its pay TV customers. Now, it appears that Starz doesn't want to distribute Dreamworks movies to its cable and satellite viewers, and is pressuing Disney to find someone else to do it instead. Enter Showtime.

Why wouldn't Starz want to show films from the hitmakers at Dreamworks or, more importantly, give up a shot at Spielberg flick? Starz, Dreamworks and Showtime aren't commenting. But try to follow Starz' reasoning, if you can: pay channels like Starz get a piece of the annual $10-12 a month that a cable operation collects from customers who get the channel. So, let’s say that Starz has 18 million subscribers, the last number Liberty reported to the SEC. If it gets, say $5 a month from each of those subscribers, it generates revenues of $90 million a month or about $1.1 billion a year. The problem comes in the payout to Disney. Pay channels pay studios a fee on the number of films they get from the studio, but the fee escalates as the film does better at the box office.

BusinessWeek's Top Online Executive To Leave Magazine

Tom Lowry — Thu, 05 Nov 2009 12:09:25 -0500

Roger Neal, the general manager of BusinessWeek’s online operations, is the third top executive to resign from his post following the announced sale of the magazine to Bloomberg LP in mid-October.

BusinessWeek staffers learned of Neal’s departure through a memo sent out by Norman Pearlstine, Bloomberg’s chief content officer. “We are grateful for the tremendous foundation that he has built for the digital properties,” Pearlstine said. “Roger’s digital team will report to Bloomberg’s Kevin Krim.”

Earlier, BusinessWeek President Keith Fox and Editor-in-Chief Stephen J. Adler announced they would be leaving the magazine. Fox will remain at BusinessWeek’s parent, McGraw-Hill Cos.

Neal was recruited to BusinessWeek from eBay in 2006 where he served as director of strategic partnerships. During his tenure at BusinessWeek, traffic to the magazine’s website grew from 6.4 million average monthly unique visitors to more than 10 million. Among Neal’s other initiatives was to create the Business Exchange, a social networking site for the business community in which McGraw-Hill invested more than $20 million. While accounting for 16% of digital revenues so far in 2009, BX has yet to meet online traffic and revenue goals.

"I'm enormously proud of the great strides we've made growing Businessweek.com, launching Business Exchange, and finding a great home for the franchise at Bloomberg," said Neal, who was directly involved in presentations during the sales processs. "There is enormous potential in the continuing evolution of digital media and I'm very excited to pursue new opportunities in this arena."

In other personnel news, Pearlstine said BusinessWeek publisher Jessica Sibley would remain in her job following the transition to Bloomberg, as will Carl Fischer as head of marketing and communications. Tania Secor, BusinessWeek’s vice president of finance, will also be retained and fill a larger finance role with Bloomberg News, including at BusinessWeek and at Bloomberg Markets magazine.

Pearlstine said executive editors Ellen Pollock and John Byrne and managing editor Ciro Scotti would continue in their roles. He also reassured the staff that the majority of BusinessWeek employees would be hired by Bloomberg.

The search for a new editor-in-chief of BusinessWeek continues, said Pearlstine.

John Malone Deals Himself Out At DirecTV

Ron Grover — Tue, 03 Nov 2009 17:12:34 -0500

Sometimes even a wheeler-dealer like John Malone outsmarts himself. That’s seems to be the situation at DirectTV. (DTV), where the razor sharp media baron seems to have dealt himself out of installing his own choice as CEO of the satellite TV giant despite once owning 57% of the company’s stock. Instead, he controls 24% of the company’s votes, but seems to have been bottled up by a very independent DirecTV board.

Those are the details that are emerging from a recent SEC filing by DirecTV. The satellite company clearly wanted to stop Malone, who buys and sells companies faster than most people change socks, from exerting too much control over the company. So in what has to have been a wing ding of negotiations, the DirecTV board swapped the DirecTV stake that Malone’s Liberty Media (LMDIA) once held for shares in DirecTV that Liberty will distribute to its shareholders. In addition, DirecTV took a $2 billion loan off Liberty’s hands that it used to buy those shares in the first place, but took Liberty’s 65% stake in the Game Show network and three Fox Sports regional networks. Malone got super-voting shares that are capped at 24% of the company’s voting shares.

What motivated DirecTV’s board to do the deal? They were angling for “the elimination of a single shareholder …with the ability to veto change of control provisions,” the company said in its SEC filing. More important, the board wanted to “reduce the level of influence that Malone could exert,” they added. Anyone need more of a roadmap than that?

Why’d Malone do the deal? Mostly for tax reasons, which seem to drive much of what the media baron does. The stock-for-stock swap allows him to avoid a ton of taxes on the appreciation in DirecTV’s stock in 2006. DirecTV sweetened the deal by giving Liberty shareholders a 5.6% premium on top of that tax-free treatment. DirecTV’s shareholders will vote on the transaction on Nov. 12.

Media Deals: Why They Fail

Tom Lowry — Tue, 03 Nov 2009 16:19:09 -0500

On Monday night, 150 or so of the media elite gathered at the Thomson Reuters headquarters in New York’s Times Square to listen to a panel discussion focused on one basic notion: how badly they’ve all screwed up.

The panel was assembled to help promote a new book, “The Curse Of The Mogul, What’s Wrong With the World’s Leading Media Companies,” in which the co-authors skewer media executives for their companies’ poor financial performance over the years and for propagating a “myth” about the necessity to do mergers. Needless to say, there was no shortage of opinion on Monday night.

Lead panelist and co-author of the book, investment banker Jonathan Knee, kicked it off by saying that media executives have essentially tried to merge their way to excellence by “convincing the world there is something special and magical about media.” To hear more from Knee, click here

Universal Music CEO Morris To Bring in Successor

Ron Grover — Mon, 02 Nov 2009 15:31:20 -0500

Universal Music Group CEO Doug Morris is quietly making plans to bring in a successor to help run the world’s largest music company , BusinessWeek has been told. Sometime this summer, Universal intends to elevate its international chief Lucian Grainge to take over Morris’s CEO slot for the company whose artists include U2, Elton John and Mariah Carey. Morris, who will be 71 in November, is expected to remain as chairman and has told intimates that he does not intend to retire.

Details are still be worked out, according to those with knowledge of the arrangement, but it is being portrayed internally as a promotion for the 49-year old Grainge, who is highly regarded by executives at Universal’s Vivendi parent company. When they signed Morris to a four-year contract extension last year, Vivendi top executives encouraged their long-time Universal chief to bring in a successor, BusinessWeek has been told. Morris will continue to work on key projects for Universal, but will turn over day-to-day operations. Morris expects to maintain his seat on the Vivendi management board, which includes top executives from the French conglomerate’s business units.

Morris, a one-time songwriter with wrote the 1966 Chiffon’s hit “Sweet Talking Guy,” was a record producer before becoming president of Atlantic Records in 1980 and president of Warner Music (WMG) in 1994. In 1995, he moved over to Universal Music’s predecessor, MCA Records, as its chairman and CEO. The company was renamed Universal the next year, and acquired Polygram in 1998. That deal gave Universal labels like Motown and A&M Records. Universal currently sells more than one-third the music sold in the U.S..

BusinessWeek President Keith Fox to Stay With McGraw-Hill

Tom Lowry — Fri, 30 Oct 2009 14:34:22 -0500

BusinessWeek President Keith Fox is stepping down from the magazine but will remain at the parent company, McGraw-Hill Cos.

Fox, 44, informed colleagues of his decision in a staff memo Friday afternoon, less than three weeks after McGraw-Hill announced it had reached an agreement to sell BusinessWeek to Bloomberg LP.

"I am proud that I played a role in ensuring that BusinessWeek has a new home at Bloomberg, where it will thrive under the leadership of Norman Pearlstine," Fox told staffers (see full memo below). "I am committed to the transition and helping in any way that I can." A veteran of McGraw-Hill, Fox did not specify the new role he will play at the company. He said he will take on new responsibilities in 2010, after assisting the BusinessWeek team with the transition to Bloomberg. The sale is expected to close in early December.

Norman Pearlstine, Bloomberg's chief content officer, who will serve as chairman of BusinessWeek, said: "I got to know Keith during the weeks we were doing due diligence prior to agreeing to acquire BusinessWeek. In the weeks since the acquisition was announced, my admiration for Keith and the team of senior managers he assembled
-- many of whom will continue in leadership roles after BusinessWeek is acquired by Bloomberg -- has only grown. McGraw-Hill is fortunate to have Keith in the company. We wish him and McGraw-Hill all the best."

Fox's resignation from his post follows a similar announcement from BusinessWeek editor-in-chief Stephen J. Adler, who told staff on Oct. 22 that he was stepping down. “Keith has been an extraordinary leader in the most difficult of times. He built a stellar business team, created a culture that combined high performance with exceptional collegiality, and won the respect and affection of the entire staff," Adler said of Fox on Friday. "To me, he was the ideal collaborator and the most generous of colleagues.”

Wall Street Journal Says So Long To Beantown

Tom Lowry — Thu, 29 Oct 2009 11:31:36 -0500

Following on recent news of staff reductions at The New York Times and Forbes, The Wall Street Journal announced today that it is shuttering its Boston bureau, long a hub of education, mutual fund and investigative reporting. Nine reporters will be affected, according to a memo to staff from Journal editor-in-chief Robert Thomson. They will be able to apply for jobs elsewhere at the company. An investigative function will remain in Boston, suggesting that bureau chief Gary Putka and investigative reporters Steve Stecklow and Mark Maremont will remain. But the education and mutual fund reporting duties will shift to the Journal's New York headquarters. "We remain in the midst of a profound downturn in advertising revenue and thus must think the unthinkable," Thomson said.

The Journal's newsroom has been abuzz for several weeks about possible layoffs. This comes as the period to accept attractive severance offers, made to senior staffers following News Corp.'s acquisition of Dow Jones at the deal's close two years ago, is set to expire in December. That could prompt additional resignations from editors not wanting to miss out on a lucrative buyout deal.

Since late 2007, The Journal has laid off about 50 people, mostly due to the closing of the news desk in South Brunswick, N.J. and its fashion industry reporting bureau. Earlier this week, three people were let go from the color lab within The Journal's art department.

Forbes announced this week it would be cutting staff, perhaps by as many as 50 positions. And The Times is looking to reduce its newsroom by 100, first by offering voluntary buyouts and then through layoffs.

CBS Digital Guru To Leave And Start Own Shop

Ron Grover — Wed, 28 Oct 2009 12:59:01 -0500

Quincy Smith, the one-time investment banker turned digital guru, is leaving his job as CEO of CBS (CBS) Interactive, BusinessWeek has been told. Since joining CBS in early 2006, Smith has been CBS CEO Leslie Moonves' top new media advisor and was a key architect of the media giant's $1.8 billion acquisition last year of online company CNET. That acquisition jump started Moonves' efforts to add online distribution to the company's broadcast networks, pay TV, and publishing units.

Smith will continue to provide consulting services to CBS on its various interactive ventures, but is leaving in January to start his own consulting firm. A one-time venture capitalist and investment banker with media firm Allen and Company, Smith had advised Comcast (CMCSA), Google (GOOG) and CBS in his prior life. At CBS, he is CEO of the unit that included CNET sites like CNET.com, Chow.com, and BNET.com as well as the cbs.com and cbsports.com that distribute shows from CBS's existing businesses.

Smith was also a key driver behind CBS's efforts to stream high-end sporting events, including the annual March Madness college basketball tournament games, which had grown greatly in popularity. Under Smith, CBS had kept its distance from Hulu.com, the online site that currently streams shows from NBC, Fox, and ABC. The company was instead building its own TV distribution arm through its TV.com site.

Current interactive president Neil Ash will continue as president of the interactive unit.

Paramount Goes Online to Boost its DVD Sales

Ron Grover — Tue, 27 Oct 2009 15:43:18 -0500

For an industry that makes its money catering to the tastes of the media-loving public, you have to wonder why Hollywood sometimes has such a tin ear when it comes to its DVD policy. If you’re a subscriber to DVD mail order pioneer Netflix (NFLX) or get your DVDs by plunking down $1 from RedBox (CSTR) vending machines at your local grocery store, life may change fairly soon. That’s because the studio brass is getting mighty worried that too many folks are renting DVDs (which are up this year) and bypassing the more lucrative (and tanking) market of buying DVDs at $15 or $20 a pop.

In hope of attacking that situation, and maybe of keeping dive-bombing DVD sales from falling even faster, Hollywood is contemplating all kinds of course changes. They include charging more to RedBox and Netflix, selling their DVDs to those companies later than they sell them to retailers like Wal-Mart, and making the companies destroy old DVDs rather than putting them in a cheapie bin somewhere. What’s the common theme? They want the consumer to pay more to rent, or better yet, to buy their discs.

Which is why I loved today’s announcement that Paramount Pictures (VIAB) has found a different way to generate more revenues from its films and the DVD market. Quite simply, they’ve made a fairly inexpensive film called Circle of Eight and are premiering it online with MySpace (NWS). The idea is to create buzz, and then rent or sell it through Blockbuster (BBI) and, I have to assume, other retailers down the road.