Lyor Cohen Resigns From Warner Music

September 24, 2012, 7:26 pm

By BEN SISARIO

Lyor Cohen, the dominant creative executive at the Warner Music Group for the last eight years, has resigned from the company, Warner announced on Monday. His departure adds another piece to the chess game of top music executives who are now free agents as the industry adjusts to changes in the wake of the Universal Music Group's absorption of most of EMI.

Mr. Cohen, 52, was chief executive of Warner's recorded music division, with authority over all its labels around the world, including Warner Brothers Records, Atlantic and Elektra. He reported to Stephen Cooper, the corporate turnaround expert who was installed as chief executive by Access Industries, the conglomerate that bought Warner in May 2011 for $3.3 billion.

In a characteristically non-corporate statement, Mr. Cohen left with a pep talk for his employees. “To all the artists and employees who live and die for the music every day,” he said in a statement, “and who personally sacrifice for the good of the creative process: ‘keep on keepin' on' in the tradition of a company that respects and honors the artistic community.”

His resignation is effective at the end of the month.

Mr. Cohen joined Warner in early 2004, shortly after Edgar M. Bronfman Jr. and a group of private equity investors bought the company from Time Warner, and since then has been the top figure on the company's recorded music side. (It also has a music publishing division, led by Cameron Strang.)

A former rap promoter who led Def Jam Records in its early days, Mr. Cohen is known for an indefatigable confidence and boldness that has made him something of a legend in the industry. I n “Fortune's Fool: Edgar Bronfman, Jr., Warner Music, and an Industry in Crisis,” a recent book by Fred Goodman, Mr. Cohen was described as “almost a fictional character” for his hard-charging persona.

No reason was given for Mr. Cohen's departure, but he was known to be negotiating for a new employment contract. Last year, Mr. Cohen earned nearly $11 million in total compensation, more than any other employee, including Mr. Bronfman, according to Warner's annual report.

A replacement was not named, and for the time being the leaders of Warner's labels will report directly to Mr. Cooper.

For months industry speculation has centered on Roger Faxon, EMI's chief executive, as a possible leader for Warner. On Friday, after Universal received regulatory clearance for its $1.9 billion takeover of EMI's labels, Mr. Faxon announced his resignation, also effective this week.

In $2 Million Ad Campaign, FreshDirect to Emphasize Food Quality

By STUART ELLIOTT

FreshDirect, the online home-delivery grocer, is preparing a new advertising approach as it seeks to, er, um, freshen its brand image.

A campaign scheduled to begin this week is to introduce a theme, “Grocery shopping perfected,” that is intended as a more engaging way to express the company's philosophy than current lines like “A new standard for grocery shopping.”

(Critics of FreshDirect who decry the tax breaks the company received to build a headquarters in the Bronx or complain about the traffic and fumes generated by its trucks may wince at seeing anything FreshDirect does described as “perfected.”)

The new theme is part of a revamped pitch aimed at busy consumers - primarily working mothers - who care enough about the quality and provenance of the food they buy to pay FreshDirect's prices.

The campaign is the first work from the DiMassimo Goldstein ad agency in New York, which won the Fr eshDirect creative account in a review. The company previously worked with another New York agency, Gotham, part of the Interpublic Group of Companies.

The campaign includes print advertisements, ads on the side of the seemingly ubiquitous FreshDirect trucks, direct mail, outdoor signs, online banner ads and a presence at events like food festivals.

The campaign takes a humorously light-hearted tack, presenting FreshDirect as the alternative to exaggerated, Herculean efforts to ensure that groceries meet the high standards of its target audience.

A direct-mail piece that shows a woman warring with a bear for salmon asks, “Why fight when you can have the best without breaking a sweat?”

In another ad, a woman is waiting on a servant to empty her private jet of all the fancy cheeses she just bought. FreshDirect is for you, the ad declares, “In case you have to cancel your European cheese shopping trip.”

The new campaign is intended to be a more evolved way to market FreshDirect than the previous method, “a very direct marketing approach, pounding out offers” in the forms of discount coupons, said John Leeman, chief marketing officer at FreshDirect. He joined the company last year after working at media and advertising agencies like Mindshare, Carat and Cliff Freeman & Partners.

The campaign comes after FreshDirect conducted research that suggested the company aim its pitches more directly at “busy people who care about the quality of the food,” Mr. Leeman said, to the point that whether the food is, say, locally produced, sustainably grown, organic or gluten free becomes “part of the value proposition, not just price.” (In other words, to paraphrase the old Hallmark slogan, they care enough about the very best to pay more.)

The focus on the food itself is also intended to counter whatever qualms potential customers may have from shopping at a Web site, wher e they do not get to pick out the merchandise themselves as they would at brick-and-mortar high-end supermarkets like Whole Foods or specialty stores like Zabar's.

“We needed to prove to them that just because they can't see our food on a shelf,” Mr. Leeman said, “the ‘direct' part of FreshDirect ensures that it gets to us directly and then back out to them directly much faster, and fresher, than it would in a store situation, where there are more middlemen and warehouses.”

DiMassimo Goldberg “nailed” that aspect of the campaign, Mr. Leeman said, by being able to “project the origin, the source of the food and romanticizing it.”

“We're trying to show people the ideal situation they wish they could attain but can't get there,” he added.

Mark DiMassimo, chief executive and chief creative officer at DiMassimo Goldstein, said the campaign seeks to portray FreshDirect as “this combination of premium quality and convenience.”

“But if you went out there with ‘premium quality and convenience' ” as the theme, “it wouldn't make anyone's mouth water,” he added, laughing. “This is what you need an ad agency for.”

The intended audience for the campaign, Mr. DiMassimo said, knows that “if you have the time to knock yourself out, there are a number of great stores to go to.”

So the ads suggest that “FreshDirect feeds your life,” he added, because “the food is fresher when we do the work for you.”

The budget for the campaign is hard to estimate because of the value of the ads that appear on the sides of the FreshDirect trucks, which serve as billboards that are hard to miss in many urban neighborhoods.

“If we had to pay for the truck sides,” Mr. Leeman said, the campaign would be valued at $5 million. The spending in media will total $2 million, he added.

FreshDirect is considering adding radio commercials to the campaign in 2013, Mr. Leeman said .

To address some of the complaints about FreshDirect, the company is expanding delivery service to neighborhoods that could be characterized as food deserts, he added, and testing deliveries in two ZIP codes in the Bronx to people who receive food stamps.

And FreshDirect is planning “its first steps toward a transition to an environmentally sustainable fleet of trucks,” Mr. Leeman said.

Stuart Elliott has been the advertising columnist at The New York Times since 1991. Follow @stuartenyt on Twitter and sign up for In Advertising, his weekly e-mail newsletter.

Willie Geist to Co-Host Third Hour of \'Today\'

September 24, 2012, 3:12 pm

By BRIAN STELTER

Willie Geist, a co-host of the rollicking MSNBC morning show “Morning Joe,” is moving over to NBC's flagship “Today” show as a co-host of the franchise's 9 a.m. hour.

The promotion is expected to be announced by NBC this week, according to people who described it on condition of anonymity because they were not authorized by the network to comment.

Along with the 9 a.m. co-hosting gig, Mr. Geist will be a backup for Matt Lauer, the longtime host of the 7 to 9 a.m. hours of “Today,” a profit center for NBC.

Earlier this year, Mr. Lauer renewed his deal with NBC, but because he has co-hosted for 15 years, there has been speculation in the TV industry about who could one day succeed him. Mr. Geist is one possibility, but so are a number of other men at NBC.

Mr. Geist will retain a role on “Morning Joe,” likely during the 6 a.m. hour, according to the people with knowledge of his new deal. He will stop hosting “Way Too Early,” the 5:30 a.m. newscast that has preceded “Morning Joe” for the last few years.

Mr. Geist's existing contract was set to expire at the end of the month. There was talk about his possibly jumping to the lower-rated morning shows on CBS or CNN. But he decided to stay within NBC, where he was hired seven years ago to produce Tucker Carlson's MSNBC talk show. Mr. Carlson frequently put him on the show, restarting a television career that had sputtered out at CNN years earlier.

Joe Scarborough, the inventor of “Morning Joe,” picked Mr. Geist to be a regular on the morning show he pitched to MSNBC executives in 2007. “One of MSNBC's rising stars, Willie will bring attitude and fun to the set of ‘Morning Joe,'” Mr. Scarborough wrote in the pitch.

Initially a sidekick of sorts on “Morning Joe,” Mr. Geist morphed into the straight man at the table of opinionated hosts and guests. He began filling in for Mr. Lauer and other members of the “Today” show cast in 2010.

As a 9 a.m. co-host, Mr. Geist will join Natalie Morales, Al Roker and his friend Savannah Guthrie, who replaced Ann Curry as the 7 to 9 a.m. co-host in July. Ms. Guthrie previously held the 9 a.m. co-host job that Mr. Geist will now hold.

CNN Managing Editor Defends Reporting Based on Ambassador\'s Journal

September 24, 2012, 2:47 pm

By THE EDITORS

Mark Whitaker, the managing editor of CNN Worldwide, appeared on the network Monday morning to defend its use of a journal kept by the United States ambassador to Libya, Christopher Stevens, in its reporting on the attack of the consulate at Benghazi that killed him and three others.

CNN on Saturday came under a withering attack by Philippe Reines, a department spokesman and senior adviser to Secretary of State Hillary Rodham Clinton, who called the network's actions “indefensible.” He said the network had agreed to abide “by the clear wishes of the Stevens family, and pledged not to use the diary or even allude to its existence until hearing back from the family,” according to a report by The Ass ociated Press.

But four days later, “they just went ahead and used it,” he said.

Mr. Whitaker - appearing on a panel that included Fran Townsend, a former Bush administration official who is a CNN national security contributor, and hosted by Soledad O'Brien - said CNN spoke with the Stevens family, whose main concerns were “that they wanted the physical copy of the journal back and that they didn't want personal details from the journal revealed.”

He said the network talked with the family about “what we could report because we thought that there were a lot of newsworthy issues that were raised, specifically on the issue of what the ambassador thought about possible terror threats and the fact that he might actually be a target of Al Qaeda.”

He said the issues were familiar to journalism:

How do you balance concerns from privacy against the public interest in learning information that is of vital national interest? And wh en you look at what we did at every step that is exactly the balance we tried to strike. We felt we had an obligation to the family not to talk about the journal or about personal details from the journal, on the other hand, as Fran said, we had not only the right but the obligation to continue to look into this issue of whether there were terror threats in advance, what not only Ambassador Stevens but Washington, the State Department, others in the administration might have known about it.

Safeguarding Social Security Checks as They Go Electronic

September 24, 2012, 1:56 pm

By ANN CARRNS

Consumer groups - along with paper-producing interests â€" -are urging the federal government to improve safeguards for Social Security recipients, as the government phases out paper checks for beneficiaries in favor of electronic deposits.

Beginning in March, all Social Security checks will be deposited electronically unless recipients apply for and receive a waiver to keep getting payments via paper checks.

Recipients must receive the payments by direct deposit to a bank account, or to a debit card, including the government's DirectExpress card. The debit cards allow beneficiaries to make retail purchases with the card or withdraw the funds from automatic teller machines. If current recipients don' t choose a deposit option by March 1, they'll automatically be sent a DirectExpress card to avoid any delay in receipt of benefits, the Social Security Administration says.

The move is part of an continuing effort by the federal government to reduce paper and cut costs by going electronic for all sorts of things, including savings bonds, unemployment benefits and Social Security benefit statements. Already, 94 percent of beneficiaries receive payments electronically, according to the Office of Inspector General for the Social Security Administration.

But in testimony before a congressional committee this month, consumer advocates urged the government to make sure that safeguards are in place to prevent fraud, like re-directing recipients' electronic payments, and that the waiver process for recipients who do not want electronic deposits is clear and straightforward.

Beneficiaries aged 92 and older are exempt from the electronic deposit requirement, and others who still want to get paper checks can apply for a waiver. But according to testimony from the National Consumer Law Center, the waiver process is so difficult that few waivers actually have been granted. The group urges the government to liberalize the waiver process, so people who are more comfortable getting paper checks may continue to do so.

While the vast majority of recipients already have voluntarily switched to electronic deposit, “the
population that has resisted doing so to date generally has a good reason,” according to testimony from Margot Freeman Saunders, a lawyer with the consumer law center. They include people who don't have a bank account; those who don't understand or feel comfortable with direct deposit; and people who already have workable and affordable methods of receiving their benefits.

Of the over 72,000 calls received by Treasury between May 1, 2011 and July 30, 2012 regarding a waiver, only ab out 14,000 were even sent a waiver packet with instructions, she said. Then, only 281 notarized responses were received back by Treasury. Those numbers, Ms. Freeman Saunders said, are a “clear illustration” that the need for the waiver far exceeds the number of people actually obtaining one.

Fraud is another concern. The Inspector General of the Social Security Administration said in testimony to Congress this month that it has received more than 19,000 reports about questionable or unauthorized changes to recipients' direct-deposit information, apparently as part of efforts to illegally re-direct monthly payments. “These reports have involved either an unauthorized change to direct deposit information, or a suspected attempt to make such a change,” according to testimony by Patrick P. O'Carroll Jr., the inspector general for the SSA.

The Inspector General has recommended Social Security make changes to prevent fraudulent redirection of deposits, like dev eloping an automatic notification system to alert recipients of any changes to their deposit information.

On a less dramatic level, consumer groups caution that debit cards may pose challenges for some senior citizens, who may not be used to using PINs and many not know how to properly safeguard them. The cards also carry fees that seniors may be unaccustomed to paying. Fees under DirectExpress are relatively limited; the card offers one free A.T.M. withdrawal after the funds are deposited, and subsequent withdrawals carry a 90-cent fee. Fees also apply for receiving a monthly paper statement (75 cents) and for transferring funds to a personal bank account ($1.50).

A new advocacy group, Consumers for Paper Options, argues that the move will present a hardship for many elderly check recipients. The group has asked the government to retain paper checks as the default option, with electronic delivery available if requested by recipients.

“We think people oug ht to have a choice for important financial information,” said John Runyan, executive director of Consumers for Paper Options. He said the non-profit is primarily backed by “paper-based communication interests,” like the Envelope Manufacturers Association, the American Forest Paper Association and various paper companies.

Do you or your relatives receive a paper Social Security check? Are you concerned about the move to electronic payments?

Times Completes Sale of About.com

September 24, 2012, 11:31 am

By CHRISTINE HAUGHNEY

The New York Times Company, which has been trying to shed its assets and focus on its newspaper and Web site, announced this morning it had completed the sale of About Group for $300 million in cash to IAC/InterActiveCorp. The About Group includes the internet sites About.com, ConsumerSearch.com and CalorieCount.com.

In a news release, the company said it plans to use the after-tax proceeds, which are worth about $290 million, for what it described as “general corporate purposes,” which means it could be used for anything. The sale of About was announced late last month.

The Times company originally bought About.com in 2005 for slightly more than $400 million. Through the worst years of the recession, as the newspaper made the transition to digital, the About Group helped increase the broader company's profits.

Earlier this summer, Alexia S. Quadrani, a media analyst at JPMorgan, said a sale of the About Group made financial sense because About.com no longer provided as much money to the Times Company. “I don't think it's a great strategic fit to the rest of the business,” she said at the time.

Your Hazy Future Is No Excuse for a Lack of Planning

September 24, 2012, 11:10 am

By CARL RICHARDS

Carl Richards is a certified financial planner in Park City, Utah, and is the director of investor education at BAM Advisor Services. His book, “The Behavior Gap,” was published this year. His sketches are archived on the Bucks blog.

Who do you think you'll be in a year? Five years? Twenty years?

One of the big problems with setting goals, especially financial ones, is that we're really bad at imaging our future selves. Just remember what you imagined you'd be as an adult when you were a kid. I'm guessing there are some gaps between the dream and the reality.

Earlier this year, Alina Tugend outlined some of the science behind this problem in The Times:

…many of us d on't have the incentive to eat healthy or save money or add to our retirement accounts because we think of ourselves in the future as someone different altogether. In fact, a future self can seem to be this annoying other person who wants to prevent you from having fun in the present.

The reality is that when we talk about financial goals we're often talking about long time frames. When we talk about retirement, it could be upward of 20 or 30 years. You can't even imagine yourself at that age, let alone plan for it. That's your parents, not you!

We do the same thing with our children. When my first daughter was born, college was the last thing on my mind. But by the time we had our fourth child, I had a good idea how fast 18 years would go by. When we start talking about our distant future selves, it's easy to rationalize the decision to not do anything.

But there's a problem, as Ms. Tugend explained. When the future arrives:

…we're still the same selves we were last week or last month. We don't want to drink the icky liquid, and we don't necessarily feel we can afford the time to do worthwhile, but time-consuming, deeds.

So what's the solution?

Start by getting really clear on your goals. Yes, nailing down the details may not happen right away, but don't pretend that 18 is a long way off for your first-grader. It's not.

You may feel like you're still 30, but if you just celebrated (or mourned) turning 40, it's time to get real. Our future selves will be here faster than we think. Remember all the stupid stuff you did as a teenager? Don't be the 60-year-old that wants to hit your 30-something self over the head for doing stupid adult stuff, like not getting clear on your financial goals.

I promise you that your future self will be happier the sooner you reconcile today with tomorrow.

 

The Breakfast Meeting: Cable Reigns at the Emmys, and Power Games Behind the \'Cloud\'

September 24, 2012, 9:57 am

By NOAM COHEN

The Emmys were awarded Sunday night, and there was an upset in the highly competitive drama category, as the newcomer “Homeland,” on Showtime, denied “Mad Men,” on AMC, an unprecedented fifth win, Brian Stelter reported. The ABC show “Modern Family,” however, increased its streak of Emmys as best comedy to three.

• Another notable award was the one won by Julianne Moore for her portrayal of Sarah Palin in the HBO movie “Game Change,” about the 2008 presidential election; she is the second actress to win an Emmy for playing Ms. Palin, after Tina Fey won in 2009 for her acclaimed parody on “Saturday Night Live.”
• The awards show, Alessandra Stanley writes, was “like a cable ec lipse of the networks.” For all the talk of a golden age of TV, she noted, the high-quality programming being praised was mainly on the cable networks. Even the networks' usual domination of the comedy awards was under threat: The comedian Louis C.K. won two Emmys for work he did on cable; and Julia Louis-Dreyfus won the Emmy for best actress in a comedy for “Veep,” a new HBO series.
• The notion of a fall season of new TV shows is a tradition more than 60 years old and originally tied to the start of the model year for new cars, Bill Carter writes. And for all the changes in the TV landscape - with cable channels introducing hit shows any time in the calendar - the idea still works, network executives say. Mr. Carter writes that “attention on the new network shows seems only to have increased, as more blogs and social media sites offer breakdowns of the lineups and predictions of successes and failures.”

The huge data centers - so called “serve r farms” - that store the information that can be quickly retrieved at Internet sites offer a contrast to the sleek, clean reputation of online businesses, James Glanz reports in a careful look at the experience of Quincy, Wash., a city with cheap, ample power due to the dams built on the Columbia River. These centers - which help support the computing “cloud” users are becoming reliant on - can raise similar pollution issues as old-fashioned factories; in Quincy, Microsoft built operations that, along with those for Yahoo, dwarf the local and small-commercial use of power for the city. Along with Microsoft's data centers came huge diesel generators to offer backup electrical power that in 2010 ran for more a combined 3,615 hours, he writes.

• A Foxconn factory in Taiyuan, China, was closed early Monday after a riot there said to involve more than 1,000 workers was broken up by the police, David Barboza and Keith Bradsher reported. The factory, part of a syste m that supplies the world's electronic giants, including Apple, employs about 79,000 workers. The Chinese government said 5,000 police officers were sent in to quell the riot, which it described as a fight among employees. An Foxconn employee reached by telephone said the riot started when workers brawled with security guards.

Verizon's $3.9 billion purchase of spectrum from cable companies will allow it to expand its fourth-generation wireless network, but another provision has great meaning as well, Amy Chozick writes. Under the terms of the deal, which was approved last month by the federal government, cable companies can now use Verizon's retail stores to sell cable TV packaged with phone and wireless service. It is a long way from the days when cable and wireless thought of themselves as competitors â€" with cable companies planning to sell wireless phone service, and wireless companies trying to compete in cable, she writes. Beginning next month, the stores will include displays that describe how you can use, say, your Verizon Samsung tablet to program your Comcast DVR.

Quartz, which is set to debut Monday, is the new digital-only business-news site from the publisher of The Atlantic Monthly magazine and it represents the lessons learned by David Bradley, Atlantic's owner. Among those lessons, Mr. Bradley tells David Carr: “It's become very, very clear to me that digital trumps print, and that pure digital, without any legacy costs, massively trumps print.” The site is free, built for mobile, and has a perspective on business that is intended for the swath of global-minded executives and investors who, Mr. Bradley says, have the same kinds of issues on their minds: the sudden abundance of energy, the role of the Chinese consumer, how to exploit low interest rates.

Monday Reading: How to Avoid Fee-Fleecing On Trips

September 24, 2012, 7:55 am

By ANN CARRNS

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

Havas Doubles Down on, Well, Havas

By STUART ELLIOTT

Anyone on Madison Avenue who set up Google alerts for Havas, the French agency holding group, has probably received far more links lately to articles about the young English singer and songwriter Lianne La Havas. That could well change as of Monday.

That is when Havas, controlled by its chairman, Vincent Bolloré, is formally to adopt a new structure. The centerpiece of the changes is the renaming of all the advertising agencies owned by Havas that bear the Euro RSCG Worldwide name as Havas Worldwide.

The renaming affects agencies like Euro RSCG Worldwide, Euro RSCG Life, Euro RSCG 4D and Euro RSCG Worldwide PR. To mark the name change, the New York operation of what is now Havas Worldwide is to announce it has landed two new accounts.

The Euro RSCG name, which will be retired, was adopted after a merger of Eurocom with an agency called RSCG after four French ad executives: Bernard Roux, Jacques Séguéla, Alain Cayzac and Jean-Michel Goudard.

Until now, Havas Worldwide had been the name of a division of Havas composed of agencies like Euro RSCG Worldwide, Arnold Worldwide and smaller shops that include Victors & Spoils. Under the reorganization, that division will now be known as Havas Creative.

The other Havas division, called Havas Media, will keep its name.

Another change involves the creation of the Havas Digital Group, an umbrella brand that, executives say, will operate across the Havas Creative and Havas Media divisions. It is being formed to underline the Havas commitment to digital advertising.

The changes are “part of a much bigger” initiative to create an agency holding group “for the future,” said David Jones, who has three titles: chief executive at Havas; chief executive at Havas Worldwide, now Havas Creative; and chief executive at Euro RSCG Worldwide, now Havas Worldwide.

The goal is for Havas to b e perceived by clients and potential clients as “more entrepreneurial and more agile,” Mr. Jones said, and to have “a much simpler structure.”

The renaming poses a risk in that some may confuse Havas, the parent, with Havas Worldwide, the agency. There would be precedent for any such confusion because another French agency holding group, the Publicis Groupe, named one of its agencies Publicis Worldwide.

“The good news is none of our clients thinks it's confusing,” Mr. Jones said of the redesignation of Euro RSCG Worldwide as Havas Worldwide. “Havas Worldwide is the agency and Havas is the publicly traded holding company; it's very easy to see the difference.”

“The only negative reaction,” he added, “was, ‘Why not do it sooner?'”

The name change was not inspired by the recent travails of the euro currency, Mr. Jones said.

Asked if innumerable headlines like “Euro in Crisis” and “Euro on the Brink” spurred the ren aming, he replied, “It didn't even factor in.”

Mr. Jones said it was “obviously disappointing” that Charles Schwab, a large client of what will now be known as Havas Worldwide New York, placed its creative account in review last week, days before the renaming.

The agency said it would take part in the review for the account, with spending estimated at more than $130 million. It is “an opportunity to demonstrate what we've done in the last seven or eight years” for Schwab, Mr. Jones said.

On the plus side of the ledger are the new two accounts Havas Worldwide New York is to announce on Monday.

The agency will be the creative agency of record for a new joint venture between DreamWorks Animation and Technicolor named M-Go, a planned entry in the field of digital storefronts for movies online.

And Havas Worldwide New York will serve as a strategic marketing consultant to Live Nation Entertainment, which owns companies like Ticketmaster.c om and Live Nation Concerts.

The newly named Havas Worldwide is making plans to move its headquarters early next year to 200 Hudson Street from its current location at 350 Hudson Street.

Stuart Elliott has been the advertising columnist at The New York Times since 1991. Follow @stuartenyt on Twitter and sign up for In Advertising, his weekly e-mail newsletter.