Why Netflix’s future is in “House of Cards,” “Arrested Development” – not Disney

LOS ANGELES/NEW YORK (TheWrap.com) – Netflix hailed as a “game-changer” its landmark deal last week to bring Disney movies to the streaming service. But while that deal may be significant, it pales in importance next to another looming development – the February debut of its original series “House of Cards.”

The economic benefits of the Disney deal, which gives the company streaming rights to much of Disney‘s catalog and straight-to-DVD movies as well as the exclusive rights to the studio’s new movies from 2016 to 2018, won’t be felt for years.

But the rollout of new, made-for-Netflix shows, which moves the company into a game owned by broadcast and cable – and follows a model set by everyone from HBO to AMC – will be a near-term bellwether of the company’s future success, analysts and observers say.

“You don’t identify a movie you watch on TV with a channel, but you definitely identify an original series with a channel,” Michael Pachter, an analyst with Wedbush Securities, told TheWrap. “What Netflix is doing with its original series is getting something exclusive that makes you have to go to Netflix if you want to see it. It’s branding.”

They include the long-awaited rebirth of cult favorite “Arrested Development” and original pieces like Eli Roth’s “Hemlock Grove,” Jenji Kohan’s “Orange Is the New Black” and “House of Cards,” from director David Fincher and starring Kevin Spacey.

Like “Lilyhammer,” all episodes of the shows’ first seasons will be released at once, allowing for binge viewing by Netflix subscribers.

The Disney deal is momentous in that it marks the first time a digital pay-TV distributor has earned exclusive rights to a major studio’s new releases. Both analysts and studio executives say Netflix will pay more than $ 300 million a year for those rights, a startling sum for a company that has minimized the importance of films. Netflix has declined to discuss any figures.

Some analysts argue the Disney deal is a positive development, but one that will not move the needle when it comes to attracting new members.

“Netflix customers will like it when Disney movies show up, but not many people will want to sign up for Netflix because they have 15 new movies a year I want to see,” Pachter said.

That’s why Netflix bankrolled “Arrested Development,” a show canceled by Fox in 2006 that still has a small but loyal audience, one that will assuredly watch the new season on Netflix. That’s also why it has invested in so many new shows from established artists like Kohan, who created “Weeds,” and Roth, a successful horror filmmaker.

While the company’s first foray into original programming – Steven Van Zandt’s “Lilyhammer” – didn’t make much of a splash, the new shows debuting next year look far more promising.

It also has committed a reported $ 100 million for two seasons of “House of Cards,” as well as offering complete creative freedom to Fincher and his team.

The money the streaming service spends on its own shows is a pittance compared to what it shells out in licensing deals, but that original content will distinguish Netflix from competitors in broadcast, like HBO, and in digital, like Amazon.

“Everybody is trying to get their brand to the top of people’s minds, and sometimes that requires a substantial expenditure and doing something different, like original production,” Bill Carroll, vice president and director of programming at Katz Television Group, told TheWrap.

More than any of its competitors in the streaming-video market, Netflix is attempting to transform itself into a digitized form of HBO, which began by airing studio movies.

HBO later added lower-cost programming, such as stand-up comedy shows, and eventually original series and films. Showtime, Starz and others soon followed.

Because it is not locked into a schedule, Netflix can host an unlimited amount of programming and owns a wealth of information about its subscribers to tailor its offerings to specific viewers and track their success.

Figuring out just what constitutes a “hit,” however, will be difficult. As it has with previous original shows like “Lilyhammer,” Netflix will not release viewing numbers for its upcoming shows. The company stresses that immediate viewing is less important than developing a loyal following over time.

As for the Disney deal, Netflix already had rights to films from that studio and Sony under an agreement with Starz, which in September 2011 opted not to renew its deal.

“They got something they used to have and had to pay a lot more money for it,” Seth Willenson, a library-valuation expert, producer and former studio executive told TheWrap.

So what changed? Exclusivity.

Disney’s new releases will appear on Netflix during the same window when they would have been showing on an HBO or another pay channel. It also means that new rivals, such as Amazon and Hulu Plus, won’t be getting the latest “Avengers” sequel at the same time – or the upcoming series of new “Star Wars” films.

“The argument is that what they are getting now from Disney will only be on Netflix,” Vasily Karasyov, an analyst with Susquehanna told TheWrap. “What they were getting before was only on Starz. It’s more exclusive. They are trying to do what Starz did in the ’90s and buy up rights and put it on the map.”

At the UBS conference last week in New York, Chief Creative Officer Ted Sarandos teased the possibility of pursuing exclusive deals with more studios as well.

This new attraction to movies represents a change of tune for the Los Altos, Calif.-based company. After all, Netflix has been publicly dismissive in recent months of film’s importance to its service, stressing its viewers’ penchant for binge-watching television shows, like AMC’s “Breaking Bad” and “Mad Men.”

About 60 percent of Netflix viewing time is spent on TV, a number that has only grown in recent years. Exclusivity increasingly motivates its decision-making on the TV side as well, which is one reason it allowed its deal with A&E Networks to expire in September, taking shows like “Storage Wars” and “Hoarders” off Netflix.

And nothing is more exclusive than content you fund yourself.

“It wants content unique to its platform,” Karasyov said. “No one says, ‘Come to my website because we have the same stuff everyone else does.’”

TV News Headlines – Yahoo! News

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The New Old Age: The Gift of Reading

This is the year of the tablet, David Pogue of The Times has told us, and that may be good news for seniors who open holiday wrappings to find one tucked inside. They see better with tablets’ adjustable type size, new research shows. Reading becomes easier again.

This may seem obvious — find me someone over 40 who doesn’t see better when fonts are larger — but it’s the business of science to test our assumptions.

Dr. Daniel Roth, an eye specialist and clinical associate professor at the Robert Wood Johnson Medical School in New Brunswick, N.J., offered new evidence of tablets’ potential benefits last month at the annual meeting of the American Academy of Ophthalmology.

His findings, based on tests conducted with 66 adults age 50 and over: older people read faster (a mean reading speed of 128 words per minute) when using an iPad, compared to a newspaper with the same 10-point font size (114 words per minute).

When the font was increased to 18 points — easy to do on an iPad — reading speed increased to 137 words per minute.

“If you read more slowly, it’s tedious,” Dr. Roth said, explaining why reading speed is important. “If you can read more fluidly, it’s more comfortable.”

What makes the real difference, Dr. Roth theorizes, is tablets’ illuminated screen, which heightens contrast between words and the background on which they sit.

Contrast sensitivity — the visual ability to differentiate between foreground and background information — becomes poorer as we age, as does the ability to discriminate fine visual detail, notes Dr. Kevin Paterson, a psychologist at the University of Leicester, who recently published a separate study on why older people struggle to read fine print.

“There are several explanations for the loss of sensitivity to fine detail that occurs with older age,” Dr. Paterson explained in an e-mail. “This may be due to greater opacity of the fluid in the eye, which will scatter incoming light and reduce the quality of the projection of light onto the retina. It’s also hypothesized that changes in neural transmission affect the processing of fine visual detail.”

Combine these changes with a greater prevalence of eye conditions like macular degeneration and diabetic retinopathy in older adults, and you get millions of people who cannot easily do what they have done all their lives — read and stay connected to the world of ideas, imagination and human experience.

“The No. 1 complaint I get from older patients is that they love to read but can’t, and this really bothers them,” Dr. Roth said. The main option has been magnifying glasses, which many people find cumbersome and inconvenient.

Some words of caution are in order. First, Dr. Roth’s study has not been published yet; it was presented as a poster at the scientific meeting and publicized by the academy, but it has not yet gone through comprehensive, rigorous peer review.

Second, Dr. Roth’s study was completed before the newest wave of tablets from Microsoft, Google, Samsung and others became available. The doctor made no attempt to compare different products, with one exception. In the second part of his study, he compared results for the iPad with those for a Kindle. But it was not an apples to apples comparison, because the Kindle did not have a back-lit screen.

This section of his study involved 100 adults age 50 and older who read materials in a book, on an iPad and on the Kindle. Book readers recorded a mean reading speed of 187 words per minute when the font size was set at 12; Kindle readers clocked in at 196 words per minute and iPad readers at 224 words per minute at the same type size. Reading speed improved even more drastically for a subset of adults with the poorest vision.

Again, Apple’s product came out on top, but that should not be taken as evidence that it is superior to other tablets with back-lit screens and adjustable font sizes. Both the eye academy and Dr. Roth assert that they have no financial relationship with Apple. My attempts to get in touch with the company were not successful.

A final cautionary note should be sounded. Some older adults find digital technology baffling and simply do not feel comfortable using it. For them, a tablet may sit on a shelf and get little if any use.

Others, however, find the technology fascinating. If you want to see an example that went viral on YouTube, watch this video from 2010 of Virginia Campbell, then 99 years old, and today still going strong at the Mary’s Woods Retirement Community in Lake Oswego, Ore.

Ms. Campbell’s glaucoma made it difficult for her to read, and for her the iPad was a blessing, as she wrote in this tribute quoted in an article in The Oregonian newspaper:

To this technology-ninny it’s clear
In my compromised 100th year,
That to read and to write
Are again within sight
Of this Apple iPad pioneer

Caregivers might be delighted — as Ms. Campbell’s daughter was — by older relatives’ response to this new technology, a potential source of entertainment and engagement for those who can negotiate its demands. Or, they might find that old habits die hard and that their relatives continue to prefer a book or newspaper they can hold in their hands to one that appears on a screen.

Which reading enhancement products have you used, and what experiences have you had?

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HSBC to pay record $1.9B fine

British-owned bank HSBC is paying $1.9B to settle a US money-laundering probe. The bank was investigated for involvement in the transfer of funds from Mexican drug cartels and sanctioned nations like Iran. (Dec. 11)

HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by U.S. prosecutors, who accused Europe's biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.

The U.S. Justice Department on Tuesday charged the bank with failing to maintain an effective program against money laundering and conduct due diligence on certain accounts.

In documents filed in federal court in Brooklyn, it also charged the bank with violating sanctions laws by doing business with Iran, Libya, Sudan, Burma and Cuba.

HSBC Holdings Plc admitted to a breakdown of controls and apologised for its conduct.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," said Chief Executive Stuart Gulliver.

"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."

The bank agreed to forfeit $1.256 billion and retain a compliance monitor to resolve the charges through a deferred-prosecution agreement.

The settlement offers new information about failures at HSBC to police transactions linked to Mexico, details of which were reported this summer in a sweeping U.S. Senate probe.

The Senate panel alleged that HSBC failed to maintain controls designed to prevent money laundering by drug cartels, terrorists and tax cheats, when acting as a financier to clients routing funds from places including Mexico, Iran and Syria.

The bank was unable to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, the Senate panel's July report said.

HSBC on Tuesday said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment.

U.S. and European banks have now agreed to settlements with U.S. regulators totalling some $5 billion in recent years on charges they violated U.S. sanctions and failed to police potentially illicit transactions.

No bank or bank executives, however, have been indicted, as prosecutors have instead used deferred prosecutions - under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing behaviour.

HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three U.S. Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.

HSBC said it would pay $1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures. U.S. prosecutors have agreed to defer or forego prosecution.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by U.S. authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010.

Last month, HSBC told investors it had set aside $1.5 billion to cover fines or penalties stemming from the inquiry and warned that costs could be significantly higher.

Analyst Jim Antos of Mizuho Securities said the settlement costs were "trivial" in terms of the company's book value.

"But in terms of real cash terms, that's a huge fine to pay," said Antos, who rates HSBC a "buy".

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Court strikes down Illinois' concealed-carry weapons ban

Chicago Tribune reporter Ray Long provides details on the U.S. appeals court ruling regarding concealed weapons in Illinois.

The state of Illinois would have to allow ordinary citizens to carry weapons under a federal appeals court ruling issued today, but the judges also gave lawmakers 180 days to put their own version of the law in place.

In a 2-1 decision that is a major victory for the National Rifle Association, the U.S. Seventh Circuit Court of Appeals said the state's ban on carrying a weapon in public is unconstitutional.

"We are disinclined to engage in another round of historical analysis to determine whether eighteenth-century America understood the Second Amendment to include a right to bear guns outside the home. The Supreme Court has decided that the amendment confers a right to bear arms for self-defense, which is as important outside the home as inside," the judges ruled.

"The theoretical and empirical evidence (which overall is inconclusive) is consistent with concluding that a right to carry firearms in public may promote self-defense. Illinois had to provide us with more than merely a rational basis for believing that its uniquely sweeping ban is justified by an increase in public safety. It has failed to meet this burden.

"The Supreme Court’s interpretation of the Second Amendment compelled the appeals court to rule the ban unconstitutional, the judges said. But the court gave 180 days to "allow the Illinois legislature to craft a new gun law that will impose reasonable limitations, consistent with the public safety and the Second Amendment as interpreted in this opinion, on the carrying of guns in public."

David Sigale, an attorney who represented the Second Amendment Foundation in the lawsuit, called the decision by the appeals court in Chicago “historic.”

“What we are most pleased about is how the court has recognized that the Second Amendment is just as, if not at times more, important in public as it is in the home,” he said. “The right of self-defense doesn’t end at your front door.”

In the opinion, Posner wrote that “a Chicagoan is a good deal more likely to be attacked on a sidewalk in a rough neighborhood than in his apartment on the 35th floor of the Park Tower.”

Illinois Attorney General Lisa Madigan, a Democrat, is giving itself time to examine the ruling before deciding whether to appeal to the U.S. Supreme Court.

"The court gave 180 days before its decision will be returned to the lower court to be implemented,” said Natalie Bauer, Madigan’s spokeswoman. “That time period allows our office to review what legal steps can be taken and enables the legislature to consider whether it wants to take action." 

Illinois is the only state in the nation not to have some form of conceal carry after Wisconsin recently approved law.

"The (Illinois) legislature, in the new session, will be forced to take up a statewide carry law," said NRA lobbyist Todd Vandermyde.

The lobbyist said prior attempts to reach a middle ground with opponents will no longer be necessary because "those compromises are going out the window."

House Majority Leader Barbara Flynn Currie, a longtime gun control advocate, said she hoped the state would appeal the ruling. But Currie also said lawmakers must “get cracking” on how to respond to the ruling and begin parsing its key points.

Currie, D-Chicago, said that “justices surely do not mean that we would have to have wide-open” laws in Illinois. She said Illinois must now look at what other states are doing, such as disallowing guns in day-care centers and other locations.

“If we need to change the law, let us at least craft a law that is very severely constrained and narrowly tailored so that we don’t invite guns out of control on each of our city’s streets,” Currie said. “I don’t want people out of control wandering the streets with guns that are out of control.”

Rep. Brandon Phelps, who has repeatedly sponsored concealed weapons legislation, hailed the measure as a “mandate."

“The justices more or less said Illinois has a mandate to get something passed within 180 days… to pass a concealed-carry law in the state of Illinois,” said Phelps, a Democrat from Downstate Harrisburg.

“I never thought we’d get a victory of that magnitude,” Phelps said.

Phelps fought unsuccessfully in the House to pass concealed weapons legislation with a long set of restrictions, but he warned opponents of his legislation may regret they had not supported it when they had a chance. Now, he said, he “can’t see us” going forward with legislation that has as many restrictions as the bill that failed.

The prior bill largely limited carrying weapons to when a person was in a car, walking into a house and out on a sidewalk, and it specifically disallowed guns to be carried in churches, schools, gymnasiums, sporting events, bars and businesses, Phelps said.

He said no decision has been made on which restrictions in his previous legislation would be removed in a new bill.

Phelps warned that gun control groups who might want to appeal the issue to the U.S. Supreme Court might put strict laws in other states in jeopardy. He said he would consult with the National Rifle Association and the Illinois State Rifle Association.

A spokeswoman for Gov. Pat Quinn said the administration is reviewing the decision. The governor has previously said he was firmly opposed to any law allowing citizens to carry loaded guns in public. He threatened to veto previous attempts by lawmakers to pass legislation allowing concealed carry in Illinois.

Mayor Rahm Emanuel said through a spokesman that he was “disappointed with the court’s decision.” The city is reviewing the opinion and will work with others “to best protect the residents of Chicago and still meet constitutional restrictions,” Bill McCaffrey added.

“As the mayor has said all along, the City of Chicago is committed to maintaining the fullest degree of lawful handgun restrictions possible while still respecting the Second Amendment rights of law abiding citizens, because maintaining common-sense restrictions is an issue of public safety.”

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Web host Go Daddy appoints former Yahoo executive as CEO

(Reuters) – Go Daddy, one of the world’s biggest Internet hosting firms, appointed Yahoo Inc‘s former Chief Product Officer Blake Irving as chief executive.

He will take over from interim CEO Scott Wagner on January 7. Irving left Yahoo, where he headed a centralized products group that straddled several client types, on April 27.

“Blake Irving’s deep technology experience and his history of developing new cutting-edge products and leading large global teams make him a … compelling choice to drive Go Daddy to the next level of its … growth,” said Bob Parsons, Go Daddy’s executive chairman and founder.

Irving also served in various positions at Microsoft Corp from 1992 to 2007.

Go Daddy, which describes itself as the top provider of domain names, filed to go public in 2006 but withdrew its IPO due to poor market conditions.

(Reporting by Neha Alawadhi in Bangalore; Editing by Joyjeet Das, Maju Samuel)

Internet News Headlines – Yahoo! News

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FX orders “Tyrant” from “Homeland” producers

NEW YORK (TheWrap.com) – FX has ordered the Middle Eastern drama pilot “Tyrant” from “Homeland” producers Howard Gordon and Gideon Raff, as well as “Six Feet Under” and “Lost” producer Craig Wright.

The pilot follows an American family drawn into the troubles of a turbulent Middle Eastern nation. The series, written and created by Raff, was developed by Gordon and Wright. The pilot comes from Gordon’s shingle at 20th Century Fox Television, Teakwood Lane.

Gordon, Raff and Wright are executive producers in association with Keshet Broadcasting. If “Tyrant” becomes a series, Wright will serve as showrunner.

“We are thrilled to bring ‘Tyrant’ to FX,” said Nick Grad, FX’s executive vice president of original programming. “The brilliant and wholly original concept just blew us all away. It’s pretty amazing when you read a script and can instantly imagine it becoming one of the best shows on television. We’re grateful to the producers for choosing to bring it to FX and look forward to continuing our partnership with our friends at Fox 21.”

“‘Tyrant’ is exactly the type of project we aim to do at Fox 21 – working with extremely talented writer/creators to create provocative material with big, breakout characters and themes,” said Bert Salke, president of Fox 21. “This script has excited everyone who’s read it and it’s particularly gratifying to be back working with FX, with whom we have had such a successful partnership on the fantastic ‘Sons of Anarchy.’”

Production is tentatively slated to begin in the spring.

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Global Update: Hand-Held Device Locates Hot Spots of Lead Contamination

Using a hand-held scanner to map hot spots where the soil is full of lead could protect children in mining towns against brain damage, scientists at Columbia University concluded in a new study.

Touched to the ground, the device, an X-ray fluorescence scanner, can measure the soil’s lead content in less than a minute, said Alexander van Geen, a geochemist at Columbia’s Lamont-Doherty Earth Observatory and an author of the study, which is in the current issue of the Bulletin of the World Health Organization. The “XRF guns,” which are often used by scrap-metal sorters, cost between $15,000 and $40,000.

His team tested the scanners in Cerro de Pasco, Peru, a town in the high Andes with mines dating back 1,400 years. Samples as close as 100 yards apart showed widely variable lead levels, so it is possible to find and mark off the areas most dangerous to young children, who get fine lead dust on their hands while playing and then put their fingers in their mouths.

“People assume the contamination is everywhere, and it’s not,” Dr. van Geen said. “It could be in one backyard and not in another.” Or, he said, in an untested playground, schoolyard, or any place where children gather.

The technology could be useful anywhere families live close to mines or smelters, which is common in Latin America and Africa, he said. Lead is a byproduct not just of lead mines, but of mining for gold, silver, copper and other metals.

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McDonald's sales rebound in November

McDonald’s took Wall Street by surprise Monday morning, with a November same store sales report that beat expectations and showed particular strength in the U.S. business.

The news follows a weak performance in October that had some investors speculating about the future of the world’s largest restaurant company.

The Oak Brook-based burger giant reported U.S. same store sales up 2.5 percent on the strength of its breakfast business, value offerings, beverages and limited-time offers like the cheddar bacon onion sandwich. In Europe, same store sales grew 1.4 percent, and 0.6 percent in the chain’s Asia/Pacific, Middle East and Africa division.

Overall, same store sales increased 2.4 percent, beating expectations of a roughly flat performance. Company stock rose nearly 1 percent in early morning trading, to $89.35.

"We are strengthening our focus on the global priorities that are most impactful to our customers -- optimizing our menu, modernizing the customer experience and broadening accessibility to our brand to move our business forward," McDonald's CEO Don Thompson said in a statement.

While the sales report is likely to be a boon for the burger giant, investors don’t expect company performance to return to normal levels until early 2013. Winter is typically the slow period for fast food chains, with summer typically being the busiest season.

Baird analyst David Tarantino raised his fourth quarter earnings estimate by a penny Monday morning following the sales announcement. He wrote that while company performance "could remain soft" through the first quarter of 2013, "the November sales report supports our thesis that McDonald's can achieve better performance in 2013 as a whole, with results aided by planned initiatives (including increased emphasis on value plus premium offerings across markets), fewer cost pressures, and less negative currency translation."

The chain has taken a tough stance on slipping U.S. sales. The company’s October sales, which slipped 2.2 percent, marked the first decline in more than nine years. Days later, McDonald’s said U.S. president Jan Fields had resigned and would be replaced by Jeff Stratton.

eyork@tribune.com | Twitter: @emilyyork

MCD data by YCharts

MCD data by YCharts

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Daley nephew pleads not guilty in 2004 beating death

Chicago Tribune criminal courts reporter Jason Meisner discusses the case of Richard Vanecko, who pleaded not guilty this morning to a charge of involuntary manslaughter. (Posted on: Dec. 10, 2012)

Richard Vanecko, the nephew of former Mayor Richard Daley, pleaded not guilty this morning to a charge of involuntary manslaughter in connection with the 2004 death of David Koschman.

The case was randomly assigned today to Judge Arthur Hill, a former prosecutor when Daley was state’s attorney.

When Vanecko appeared before the judge this morning, Hill noted he had also been appointed to the board of the Chicago Transit Authority by Daley when he was mayor. He also held the No. 2 post under State’s Attorney Dick Devine, who has strong ties to Daley.

Hill told lawyers in the case that he won’t voluntarily remove himself from presiding over the case but would understood if special prosecutor Dan Webb, who charged Vanecko, asked for another judge.

“This court believes I can be fair and impartial in this case,” Hill said.

The case will be back in court next Monday to give to give time to Webb’s team to weigh whether they will seek another judge other than Hill.

As Vanecko walked out of the courthouse flanked by his attorneys, they made no comment.

Earlier, Vanecko strode into the Leighton Criminal Court Building at 26^th Street and California just after 9 a.m. dressed in a gray suit and tie and charcoal overcoat accompanied by three of his attorneys.

A crowd of TV cameramen, photographers and reporters followed him inside, shouting questions that Vanecko did not answer.

Vanecko went through the security line and into presiding Judge Paul Biebel's first-floor courtroom.

Both sides have the option to ask for a different judge if there are conflicts of interest, something that could arise since Vanecko is such a high-profile defendant and there have been allegations of police and prosecutorial misconduct surrounding the case.

Vanecko, who currently resides in Costa Mesa, Calif., turned himself in to authorities in Chicago on Friday afternoon and later posed for a mug shot in a jacket and tie.

Last week, a special grand jury found that Vanecko, who is the son of former Mayor Richard M. Daley’s sister, Mary, “recklessly performed acts which were likely to cause great bodily harm to another.”

Koschman, 21, of Mount Prospect, had been drinking in the Rush Street nightlife district early on April 24, 2004, when he and his friends quarreled with a group that included Vanecko. During the altercation, Koschman was knocked to the street, hitting the back of his head on the pavement. He died 11 days later.

Police at the time said Koschman was the aggressor and closed the case without charges. In announcing the indictment, Webb, a former U.S. attorney, noted that at 6-foot-3 and 230 pounds, Vanecko towered over Koschman, who was 5-foot-5 and 125 pounds.

Webb also said the grand jury is still probing how the original investigation was conducted.

Vanecko’s attorneys issued a statement last week saying they were disappointed by the indictment and noted that at the time of the confrontation, Koschman’s blood-alcohol content was three times the legal limit for a motorist.

Koschman “was clearly acting in an unprovoked, physically aggressive manner,” Vanecko’s legal team said. “We are confident that when all the facts are aired in a court of law, the trier of fact will find Mr. Vanecko not guilty.”

If convicted of involuntary manslaughter, Vanecko faces from probation up to 5 years in prison. 

jmeisner@tribune.com

gknue@tribune.com

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Mind: A Compromise on Defining and Diagnosing Mental Disorders

They plotted a revolution, fell to debating among themselves, and in the end overturned very little except their own expectations.

But the effort itself was a valuable guide for anyone who has received a psychiatric diagnosis, or anyone who might get one.

This month, the American Psychiatric Association announced that its board of trustees had approved the fifth edition of the association’s influential diagnostic manual — the so-called bible of mental disorders — ending more than five years of sometimes acrimonious, and often very public, controversy.

The committee of doctors appointed by the psychiatric association had attempted to execute a paradigm shift, changing how mental disorders are conceived and posting its proposals online for the public to comment. And comment it did: Patient advocacy groups sounded off, objecting to proposed changes in the definitions of depression and Asperger syndrome, among other diagnoses. Outside academic researchers did, too. A few committee members quit in protest.

The final text, which won’t be fully available until publication this spring, has already gotten predictably mixed reviews. “Given the challenges in a field where objective lines are hard to draw, they did a solid job,” said Dr. Michael First, a psychiatrist at Columbia who edited a previous version of the manual and was a consultant on this one.

Others disagreed. “This is the saddest moment in my 45-year career of practicing, studying and teaching psychiatry,” wrote Dr. Allen Frances, the chairman of a previous committee who has been one of the most vocal critics, in a blog post about the new manual, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM5.

Yet many experts inside and outside the process said the final document was not radically different from the previous version, and its lessons more mundane than the rhetoric implied. The status quo is hard to budge, for one. And when changes do happen, they are not necessarily the ones that were intended.

The new manual does extend the reach of psychiatry in some areas, as many critics feared it might. Hoarding is now a mental disorder (previously it was considered a symptom of obsessive-compulsive behavior). “Premenstrual dysphoric disorder,” a severe form of premenstrual syndrome, is also new (it was previously in the appendix).

And binge-eating disorder (also formerly in the appendix), a kind of severe, highly distressing gluttony, is now a full-blown diagnosis. This one by itself could tag millions of people considered healthy, if often overindulgent, with a psychiatric label, some experts said.

But the deeper story is one of compromise. It is most evident in how the committee handled three of the thorniest diagnoses in psychiatry: autism, depression and pediatric bipolar disorder.

The group working on depression declared early on that it wanted to eliminate the so-called bereavement exclusion, which stated that grieving the loss of a loved one should not be considered a clinical disorder, though it shares many of the same outward signs. Grief has always been a normal reaction to death, not a kind of depression.

Advocacy and support groups, such as those representing people who have lost a child, objected furiously to the idea that the bereaved might be given a diagnosis of depression.

“This was just astonishing, that they would eliminate the exclusion, and a distortion of the research on the subject,” said Jerome Wakefield, a professor of social work and psychiatry at New York University, who did not work on the manual.

In the end the committee cut a deal. It eliminated the grief exclusion but added a note in the text, reminding doctors that any significant loss — of a job, a relationship, a home — could cause depressive symptoms and should be carefully investigated.

“It’s like they took it all back,” Dr. Wakefield said. “I don’t like the way it was done — in a footnote — but it’s there.”

The debate over autism was even more furious, and it resulted in a similar rapprochement.

From the outset, the committee intended to tighten the definition of autism and simplify it, eliminating related labels like Asperger syndrome and “pervasive developmental disorder not otherwise specified,” or PDD-NOS. The rate of diagnosis of such conditions has exploded over the past decade, in part due to the vagueness of the definitions, and the committee wanted to draw clearer boundaries.

It proposed a single “autism spectrum disorder” category, with stricter requirements.

Some outside researchers raised concerns. In January one of them, Dr. Fred Volkmar of the Yale School of Medicine, who had quit the committee in protest, presented research suggesting that 45 percent or more of people who currently had an autism or related diagnosis would not have one under the proposed revision.

Autism groups reacted immediately, fearing that the change in the diagnosis would deny services to children and families who need them.

The committee countered with its own study, suggesting that the new definition would exclude about 10 percent of people currently with a diagnosis. And again, the experts took a half step back.

The new, streamlined definition was approved, but with language that took into account a person’s diagnostic history. “It’s explicit that anyone who’s had an Asperger’s or autism or PDD-NOS diagnosis before is now included,” said Catherine Lord, a committee member who worked on the new definition and who is director of the Center for Autism and the Developing Brain in New York. “Essentially everyone gets in.”

Pediatric bipolar disorder posed a different challenge.

In the 1990s and 2000s, psychiatrists began giving aggressive, explosive children a diagnosis of bipolar disorder in increasing numbers. The trend appalled many patient advocates and doctors.

Bipolar disorder, which is characterized by episodes of depression and mania, had previously been an adult problem; now the diagnosis is given to children as young as 2 — along with powerful psychiatric drugs and tranquilizers that also cause rapid weight gain. The committee wanted to stop the trend in its tracks, said experts who were involved.

Most of the children treated for bipolar disorder did not have it, recent research found. The committee settled on an alternative label: “disruptive mood dysregulation disorder,” or D.M.D.D., which describes extreme hostility and outbursts beyond normal tantrums.

“They essentially wanted to have some place for these kids, and D.M.D.D. was all they had in their kit,” said Dr. Gabrielle Carlson, a child psychiatrist at Stony Brook University Medical Center, who provided some outside consultation. “These are mostly kids who have A.D.H.D. or what we would call oppositional defiant disorder, but with this explosive feature. They need help; you can’t wait forever. The question was what to call it, without pretending we know enough to saddle them with a lifelong diagnosis” like bipolar disorder.

D.M.D.D. has its own problems, as many experts were quick to point out. It could be a symptom of an underlying condition, as Dr. Carlson argues. It could “medicalize” frequent temper tantrums. It’s brand new, and no one knows how it will play out in practice.

But it is now in the book — because it was the best solution available, experts inside and outside of the revision process said.

From beginning to end, many experts said, the process of defining psychiatric diagnoses is very much like finding the right one for an individual: it’s a process of negotiation, in many cases.

“That’s one of the take-aways from all this, and I think it’s a good one,” Dr. Carlson said. “A diagnosis is a hypothesis. It’s a start, and you have to start somewhere. But that’s all it is.”

One of the committee’s most ambitious proposals was perhaps the least noticed: a commitment to update the book continually, when there’s good reason to, rather than once every decade or so in a giant heave. That was approved without much fanfare.

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