National News

Being human in the age of automation

Marketplace - American Public Media - Tue, 2014-10-07 02:00

In Nicholas Carr’s new book, "The Glass Cage – Automation and Us," he describes an academic study in which researchers discover a key difference between how we feel at work versus at home. At work, people can’t wait to clock out, whereas at home, they dread returning to work.

But surprisingly, the study also found that by many metrics, people are actually happier on the job. And in a world where the main goal of technology seems to be to reduce the work we do, Carr thinks maybe we should take a different tack:

“I think most of us, if we really thought about it, know that it’s really when we’re being challenged and when we’re really immersed in a task or a job…that’s when we feel like we are experiencing life in some better, more fulfilling way.”

In the book, Carr offers one example of how the video game, Red Dead Redemption, helped him realize that games can be a good model for software designed to engage and challenge us in an activity. Carr argues that if we are simply more mindful of how technology influences our experience of life, we can make better decisions about the things we buy, even if it’s as small as a video game.

Click the media player above to hear Nicholas Carr in conversation with Marketplace Tech host Ben Johnson.

Reviewing The Four Gay Marriage Cases The High Court Tacitly Endorsed

NPR News - Mon, 2014-10-06 16:39

All four cases relied on the Constitution's Equal Protection Clause to invalidate state bans on gay marriage. For now, the Supreme Court gave a tacit nod to the legal reasoning.

» E-Mail This

Win two tickets to see Marketplace live in New York!

Marketplace - American Public Media - Mon, 2014-10-06 15:55

How to enter:

1) Follow @Marketplace on Twitter.

2) Spot a Marketplace Road Show bus ad and tweet your photo of it to @Marketplace with the hashtag #numberslove.

3) That’s it! Check your direct messages on Monday, October 13, 2014, to see if you are a winner. 

Marketplace NYC Road Show Twitter Giveaway Official Rules

NO CONTRIBUTION OR PURCHASE IS NECESSARY - MAKING A CONTRIBUTION WILL NOT INCREASE YOUR CHANCES OF WINNING THIS GIVEAWAY

HOW TO ENTER THE ABOVE GIVEAWAY: No contribution or purchase is necessary to enter the Marketplace NYC Road Show Twitter Giveaway (the "Giveaway"). To enter, a) become a follower of @Marketplace on if you aren't already, then b) tweet @Marketplace a photo of one of the city bus ads promoting the Marketplace Roadshow with the hashtag #numberslove BETWEEN between 5:00 p.m. ET October 6, 2014 and 11:59 p.m. ET October 12, 2014 (the "Entry Period").

ELIGIBILITY: To be considered an entry in this Giveaway (hereinafter individually as "Entry" and collectively as "Entries"), the Entry tweet must include both @Marketplace tweet to account, and include #numberslove, the official hashtag for the Giveaway in the tweet. The Entry must comply with APM's User Submission Terms of Use. The Entry must not contain material that is unlawful, in violation of or contrary to the laws or regulations in any state where Entry is created. There is no limit to the number of times a follower may tweet a response; however, only one (1) tweet per person will count as an eligible Entry in the Giveaway.

Open only to legal residents of any one of the 50 United States or the District of Columbia who are 18 years of age or older at time of entry. THIS GIVEAWAY IS INTENDED FOR PLAY IN THE UNITED STATES ONLY. DO NOT ENTER THIS GIVEAWAY UNLESS YOU ARE LOCATED IN THE UNITED STATES AT THE TIME OF ENTRY. The following persons are not eligible: Persons who on or after February 1, 2014, were or are employees of Sponsor or its related organizations, including American Public Media, their immediate family, or persons living in the same household. Void where prohibited by law.

PRIZE: One (1) winner will each receive one (1) pair of passes (two admissions) to see Marketplace 25th Anniversary National Tour: How I Learned to Stop Worrying and Love the Numbers Hosted by Kai Ryssdal on October 16, 2014. Prize retail value is $60.00.

Winners are responsible for any costs associated with using the prize, including but not limited to transportation. Prize is nontransferable, is not good for cash, and cannot be exchanged for other merchandise. Winners will receive delivery of the prize as arranged by APM. Passes must be used in compliance with venue's policies. APM is not responsible for any event cancellations or changes. Every eligible Entry will be included in the drawing. On October 13, 2014,  one (1) winner will be randomly drawn from all eligible Entries. Winner will be notified by Twitter direct message on or about 4:00 p.m. CT October 13, 2014. Winner will be required to respond to the Twitter direct message from Sponsor with a reply e-mail within 24 hours of direct message send as a Winner. If a Winner (i) does not respond to the Twitter direct message as described above, (ii) is found to be ineligible, or (iii) the prize notification or prize is returned as undeliverable, then that unawarded prize will go to the first available back up thereof until the prize is awarded. The rules detailing giveaway eligibility and method of selecting winners are on file at American Public Media. The chances of winning are dependent upon the number of eligible entries.

INTERNET AND USE OF TECHNOLOGY: If for any reason this Giveaway is not capable of running as planned due to an infection by a computer virus, bugs, tampering, unauthorized intervention, fraud, technical failures, or any other causes beyond the control of the Sponsor which corrupt or affect the administration, security, fairness, integrity, or proper conduct of this Giveaway, the Sponsor reserves the right at its sole discretion, to disqualify any individual who tampers with the Entry process. The Sponsor assumes no responsibility for any error, omission, interruption, deletion, defect, delay in operation or transmission, communications line failure, theft or destruction or unauthorized access to, or alteration of, Entries. The Sponsor is not responsible for any problems or technical malfunctions of any telephone network or telephone lines, computer online systems, servers, or providers, computer equipment, software, failure of any email or Entry to be received by the Sponsor due to technical problems, human error or traffic congestion on the Internet or at the Website, or any combination thereof, including any injury or damage to participant's or any other person's computer relating to or resulting from participating in this Giveaway or downloading any materials in this Giveaway. SPONSOR IS NOT RESPONSIBLE FOR INCOMPATIBILITY OF ENTRANT'S HARDWARE, SOFTWARE OR BROWSER TECHNOLOGY WITH SPONSOR'S HARDWARE, SOFTWARE OR BROWSER TECHNOLOGY. CAUTION: ANY ATTEMPT TO DELIBERATELY DAMAGE ANY WEB SITE OR UNDERMINE THE LEGITIMATE OPERATION OF THE GIVEAWAY IS A VIOLATION OF CRIMINAL AND CIVIL LAWS AND SHOULD SUCH AN ATTEMPT BE MADE, THE SPONSOR RESERVES THE RIGHT TO SEEK DAMAGES OR OTHERREMEDIES FROM ANY SUCH PERSON(S) RESPONSIBLE FOR THE ATTEMPT TO THE FULLEST EXTENT PERMITTED BY LAW. In the event of a dispute as to the identity or eligibility of a Winner based on an email address or Twitter account, the winning Entry will be declared made by the "Authorized Account Holder" of the email address or Twitter account at time of Entry. "Authorized Account Holder" is defined as the natural person 18 years of age or older who is assigned to an email address by an Internet access provider, online service provider, or other organization (e.g., business, education institution, etc.) that is responsible for assigning email addresses for the domain associated with the submitted email address. Sponsor may ask any Entrant or potential Winner to provide Sponsor with proof that such party is the authorized account holder of the email account associated with the Entry.

Sponsor is not responsible for computer system, phone line, technical, hardware, software or program failures of any kind, lost or unavailable network connections, incomplete, garbled or delayed computer transmission or network connections that are human or technical in nature. Use of automated devices is not valid for Entry. Sponsor is not responsible for incorrect or inaccurate Entry information, whether caused by Internet users or by any of the equipment or programming associated with or utilized in this Giveaway or by any technical or human error which may occur in the processing of the Entries in this Giveaway. Incomplete, unreadable, inaccurate, unintelligible or late Entries or Entries which otherwise do not comply with these Official Rules will be disqualified. All Entries, upon submission, become the sole property of the Sponsor and will not be acknowledged or returned and the Sponsor has the right to dispose of the Entries at Sponsor's discretion. Sponsor reserves the right to, in its sole discretion, cancel, modify or suspend the online portion of this Giveaway (or the entire Giveaway) should any computer virus, bugs or other technical difficulty or other causes beyond the control of the Sponsor corrupt the administration, security or proper play of the Giveaway, at which time, the selection of the Winners will be determined in a random drawing from among all eligible Entries received at the time of Giveaway termination.

GENERAL: By participating in this Giveaway, participants agree to be bound by the Official Rules and that American Public Media and related organizations, their agents and employees have no liability whatsoever for any injuries, losses, or damages of any kind which result from use of the prize, or by participation in the giveaway. American Public Media or its related organizations may use winner's name and likeness for advertising, fundraising, promotional or publicity purposes without further compensation. Expenses as a result of winning this prize are the responsibility of the winner. By submitting an Entry, each Entrant consents to receive from the Sponsor a reply Twitter message and, if applicable, a Twitter direct message, email, and/or phone call notifying such Entrant that he/she is a potential Winner.

RESTRICTIONS: By participating in this Giveaway, a participant agrees to be bound by these Official Rules, and by all decisions of the giveaway sponsor.

SPONSOR: American Public Media, 480 Cedar Street, St. Paul, MN 55101, 651-290-1500

Did The Supreme Court Just Legalize Gay Marriage?

NPR News - Mon, 2014-10-06 14:54

As thousands more same-sex couples marry all over the country, this legal climate change becomes a kind of fait accompli.

» E-Mail This

5 Questions About The Supreme Court And Gay Marriage In The U.S.

NPR News - Mon, 2014-10-06 14:27

The Supreme Court surprised many by refusing to weigh in on gay marriage Monday. And it prompted a question: What does this mean for same-sex couples in 20 states that still have a ban?

» E-Mail This

Female Heads Of Household (And Hair) Reveal Afghanistan's Drug Use

NPR News - Mon, 2014-10-06 13:58

A new study of drug use in Afghanistan, relying on information from female heads of households and confirmed by lab tests, shows that 1 in 20 Afghans are using prescription or illicit drugs.

» E-Mail This

USA Swimming Suspends Michael Phelps Over DUI Arrest

NPR News - Mon, 2014-10-06 13:40

The 18-time gold medalist said that he was going to attend a program to "better understand myself." USA Swimming said Phelps will be excluded from 2015 FINA World Championships.

» E-Mail This

Some Americans Boosted Charitable Giving In Recession; The Rich Did Not

NPR News - Mon, 2014-10-06 13:39

As times got tough, America's less-wealthy citizens grew more generous, according to a new study. But people making at least $200,000 a year cut the portion of their incomes they gave to charity.

» E-Mail This

Americans don't know who runs the Federal Reserve

Marketplace - American Public Media - Mon, 2014-10-06 13:35

A news quiz for you from the Pew Research Center:

Of the following four people, which one runs the Federal Reserve?

The answer choices were:

a) Janet Yellen... correctly picked by 24 percent of people.

b) John Roberts... 5 percent.

c) Sonia Sotomayor... 6 percent.

d) And this one, the troubling part: Alan Greenspan... 17 percent.

Those who admitted to not knowing? Forty-eight percent.

Who's in charge of the @federalreserve? Don't bank on public knowing the answer http://t.co/2XF7CwRMRX pic.twitter.com/NQdBOT9W9I

— PewResearch FactTank (@FactTank) October 6, 2014

A New Understanding Of Arson Spurs A Retrial In A Fatal Texas Fire

NPR News - Mon, 2014-10-06 13:26

Much of the evidence used against Ed Graf, in prison since 1986 for setting a fire that killed his stepsons, is now considered junk science. His is one of many old arson cases Texas is re-examining.

» E-Mail This

Should Short Beards Be Allowed Behind Bars?

NPR News - Mon, 2014-10-06 12:26

Arkansas prisoner Gregory Holt hand-wrote a 15-page petition without the help of lawyers, arguing that he be permitted to wear a beard as part of his religion. The Supreme Court will hear the case.

» E-Mail This

A hard look at corn economics — and world hunger

Marketplace - American Public Media - Mon, 2014-10-06 12:05

The corn harvest is coming in, and great weather has produced a record crop. This is terrible news for farmers: Oversupply means cratering prices.

If that sounds like a paradox, consider this: Corn, the biggest crop in our agricultural powerhouse of a nation, is not a foodstuff. It’s a highly refined industrial material—more like aluminum than apples. And a hard look at corn economics puts world hunger in a different light. 

Let's start at an ethanol plant: Lincolnway Energy, in Nevada, Iowa. CEO and President Erik Hakmiller is our guide.

The plant includes several big buildings, lots of loud noises... and some unexpected smells. One is hard to place at first. "What you smell is residual carbon dioxide, and a cooking— very much like a bakery smell," says Hakmiller.

Then Hakmiller opens the door to a giant building with a corrugated metal roof.  

It’s a barn. Inside are these golden mountains—piled-up flakes of grain.

Mountains of grain at Lincolnway Energy in Nevada, Iowa, from Dan Weissmann on Vimeo.

For every bushel of corn that comes to Lincolnway Energy, only a third comes out as ethanol. Another third comes out as carbon dioxide, which goes into soda pop.

The rest—the fat, fiber and protein—ends up on one of these piles. "Each pile being about a thousand tons," says Hakmiller.

That’s one day’s worth of this stuff, called distillers grains.

"It’s good food for cows, chickens and pigs," Hakmiller says. Just as important, it’s cheap.

"For animal feeding, you feed the lowest cost to get the most growth out of the animal," he says. "So, everything has to price itself into the ration. Because a cow doesn’t say, ‘I’m eating Italian tonight.’ He’s got to eat whatever he gets fed."

If he’s in a feedlot—where most cows gain half their body weight—he’s probably eating corn, either distillers grains or the whole kernel.

And we are not. We wouldn’t recognize it.

Chris Edgington has been growing corn for decades. Here’s what his corn isn’t: "It is not the corn you eat off the cob," he says. "It is not what’s in the can. It is not what’s in the freezer, in the bag. It is not that product."

That product, sweet corn, is a different crop. And a lot smaller. Last year, for every pound of sweet corn, U.S. farmers grew more than 260 pounds of field corn.

Sweet corn-- the stuff on the cob-- is not the corn that's grown on 90 million acres. | Create Infographics

Which goes to farm animals. If you are what you eat, they are, more than anything else, corn.

So, when we eat a ham-and-cheese omelette, that’s mostly corn.

"It’s a very small component of other foods," says Joseph Glauber, chief economist of the United States Department of Agriculture. "People talk about high-fructose corn syrup, but..."

Want to guess how much of the corn crop goes to corn syrup?

Three-and-a-half percent. A little less than that goes to other sugars, plus alcohol for vodka.

Actual corn-type food—Doritos, Jiffy cornbread mix, cornflakes—represents 1.5 percent of the corn crop.

For stuff we eat and drink, that’s about it.

Other than as a low-cost ration for animals, the big use for corn is ethanol.

Ethanol has been booming since 2000; there’s eight times as much now.

That’s been great for corn farmers because they have so much corn to get rid of.  

"The joke in farm country has always been, if you give a farmer a market, he’ll overproduce it," says Monte Shaw, executive director of the Iowa Renewable Fuels Association, the state’s ethanol lobby. "And quite frankly, for over 200 years, that’s been pretty true, except for these last eight years, when ethanol sucked up all that extra corn production."

Extra production is not one year’s bumper crop, and it is not just the extra acres that got planted after the ethanol boom.

It’s a long-term constant. Productivity—the yield from one acre of cornfield—has been ratcheting up for decades and decades.

Even in 2012—a terrible drought year, with the worst yields in more than 15 years—productivity was more than twice as high as any year before 1960.

Which puts the whole food-versus-fuel question in a new light.

We plant more than 90 million acres of corn, and it’s in huge surplus. And it’s not even food. What if we planted actual food instead?

I put that question to Bruce Babcock, an economics professor at Iowa State University who studies corn, ethanol and renewable fuels.

"Our ability to supply the world with vegetables is practically unlimited," Babcock said.

Take corn, and add in other giant crops that basically just feed animals—crops like soybeans, barley, hay, sorghum—and two-thirds of U.S. farmland goes to animal feed.

"Such a small portion of our land goes to grow actual food that people consume," said Babcock, "that if we really wanted to increase that supply, it would be pretty easy."

The trick would be convincing the country—and other countries that import animal feed from the U.S.—to go vegan.

"There would be such a surplus of farmland to grow kumquats and pecans that we would be awash in those, in a heartbeat," says Babcock.

Would it be enough to feed the 10 billion people the United Nations projects as global population by 2100

"We would have more land available for the 10 billion than they would know what to do with," says Babcock.  

But we don’t. Thank markets.

"That’s not what consumers want," says Babcock. "As they get more money, they want to eat meat."

So farmers plant corn.

Is it time for orchestras to change their tune?

Marketplace - American Public Media - Mon, 2014-10-06 12:05

Members of the Atlanta Symphony Orchestra remain locked out in a labor dispute, unable to reach an agreement with management for the second time in two years. Both sides have now agreed to talk through a federal mediator. 

But what's happening isn't unique to Atlanta. Orchestras in Indianapolis, Philadelphia, Louisville and Nashville have also faced contract and budget issues. 

So why does this keep happening?

Tom Smith, an economist at Emory University's Goizueta Business School, says to think of an orchestra player like a professional athlete.

"You have these uniquely talented people, and they deserve more money," he says.  

Smith says just like sports teams, orchestras depend in part on ticket sales to pay their players. But whereas pro sports teams usually have packed stadiums, orchestras are struggling because of aging audiences and lagging box office sales.

So that's the problem, right?

Well, sure, says Smith, but it's more complicated than that.

"A team like the Chicago Bulls or the Atlanta Hawks or whomever else—maybe 35 percent of their revenue comes from ticket sales," he says. "So just filling the seats doesn't help the Hawks pay for their salaries on their players."

Smith says orchestras suffer from something called "cost disease."

Think of a string quartet: To be a quartet, there always need to be four players, and it takes them the same amount of time to play a piece today as it did 100 years ago.

But the costs associated with that performance—paying the players, renting a venue, promotion—increase over time.

That's cost disease: Expenses go up, but they're not offset by more accuracy or efficiency.

"Most people who work in the performing arts expect their pay to increase roughly at the same rate as pay in the rest of the economy," says Robert Flanagan, a professor at Stanford University and author of "The Perilous Life of Symphony Orchestras: Artistic Triumphs and Economic Challenges."

"But unlike the rest of the economy," he says, "the labor requirements for putting on a performance don't change."

To a lesser extent, sports teams suffer from the same economic affliction. It still takes 10 people to play a basketball game that's four quarters long. But sports teams have billion-dollar broadcasting deals, stadium naming rights and merchandise sales to round out their budgets. Orchestras don't have that luxury, so they have to rely on corporate donations, large individual gifts and endowments.

Flanagan says this is where declining demand comes into play: fewer large donors.

"Most of that declining demand is also people who had previously contributed to the support of orchestras," he says.

But Emory's Tom Smith says even when big donations do come in, they often come with a catch.

"People aren't usually going to just give you money and say, 'Oh, here's a million dollars and go ahead, use it to pay the salary of your violin players,'" he says. "They're going to say, 'I want a building, and I want a building with my name on it.'"

And that has led to the downsizing of orchestras, including Atlanta's.

Two years ago, the players agreed to salary cuts and the elimination of seven positions.

But cuts come with their own consequences, as the best musicians will leave for spots at bigger orchestras that haven't had to make the same cuts. So what's a struggling orchestra to do?

Symphony consultant Darrell Edwards says today's orchestras may need to diversify their music, opting for more of a mix of popular music and symphony classics.

"The orchestras that are doing well are doing both," he says. "And it's not to take away from the importance of orchestras playing the master works, because that's how they really grow artistically. You're not going to get better as an orchestra playing pops concerts."

Which leaves orchestra directors in a tricky spot. Do they play the score from "Star Wars" for the umpteenth time to bring in people, or play something new that might not appeal to a wide audience?

Edwards says it's a decision many directors may be reluctant to make. 

Firestone Did What Governments Have Not: Stopped Ebola In Its Tracks

NPR News - Mon, 2014-10-06 12:03

There's a company town in Liberia with 80,000 residents. Ebola was first detected in March. Firestone's resourceful response has kept the virus from spreading.

» E-Mail This

NBA strikes a streaming deal with ESPN

Marketplace - American Public Media - Mon, 2014-10-06 11:45

The NBA announced a new deal with TV networks today that gives us a glimpse into what one aspect of the future of TV might be like. 

The deal, which kicks in two years from now, gives TNT, ABC and ESPN the rights to broadcast professional basketball games through 2025, and one part of that deal will allow ESPN to stream some games online to customers regardless of whether they have a pay-television subscription, allowing the channel to have a much more direct relationship with viewers.

But don’t rush to cut that cable cord just yet. ESPN’s move is a baby step, and we don’t really know yet in what direction.  

“What ESPN doesn’t want to do is compete with itself,” says Peter Kafka, a senior editor for Re/Code who covers media and technology. Kafka says ESPN is likely only going to offer live streams to basketball games that are not going to be broadcast on one of its channels. 

“What you're not going to be able to do is watch a full suite of NBA games without getting ESPN,” says Kafka. 

That’s because ESPN’s cable channels are its cash cow. The network gets about $6 per pay-TV customer, more than any other channel. 

At a Re/Code conference last month, ESPN’s CEO John Skipper signaled this latest move is a part of the company’s future, but would not replace its present business model, which relies on pay-TV subscriptions. 

“We have two big revenue streams: payments from distributors, advertising. We think about, are there sports events we can offer that the consumer will pay us directly?” Skipper said, adding that the live-streaming services he envisions would be a third revenue stream, but would offer content that’s different than what’s on the TV channels. 

“It is incumbent on the NBA and on ESPN to reach audiences that are attractive to advertisers,” says Rebecca Lieb, a media analyst at Altimeter Group. 

Lieb says among the most attractive and hard-to-reach audience for advertisers is the 18-to-33-year-old male demographic, which is increasingly cutting the cable cord. And yet, if this audience tries to live stream a sports game today, it would have to have a cable TV plan. 

“What I see in this deal is the beginning of a kind of uncoupling of that," Lieb says, predicting that other pay TV networks, such as HBO and Showtime, may also take steps away from a cable-only approach. 

Mexican President Says He's 'Indignant' Over Case Of Missing Students

NPR News - Mon, 2014-10-06 11:35

Over the weekend, police found the mass graves that are thought to contain the bodies of some of the students.

» E-Mail This

Five ways a web series can make money

Marketplace - American Public Media - Mon, 2014-10-06 11:19

The web series "Frankenstein, MD" recasts Mary Shelley's titular doctor as "Vicky," fresh out of med school and vlogging with her assistant "Iggy," who only moans "yes, master" sarcastically. The show is born out of a partnership between PBS Digital Studios and Pemberley Digital, which made a name for itself with similar adaptations of Jane Austen novels.

Bernie Su developed "The Lizzie Bennet Diaries" and "Emma Approved" — webcam updates on "Pride and Prejudice" and "Emma" respectively — and now "Frankenstein, MD." He says telling stories in four-to-five-minute increments "speaks to our modern culture."

“People want to just get in and get out, get in and get out,” says Su. “What’s challenging for that format for us is when you’re talking about a long story, like a grand narrative.”

But Pemberley Digital’s challenge is even bigger than that. The studio doesn't only update classic literature broken up into YouTube-able chunks, it creates shows with an eye toward building franchises and making real money, which isn't something all web-series creators can say.

Here are five ways Pemberley has turned its web series into a business, starting with "The Lizzie Bennet Diaries."

YouTube Ads

YouTube's partnership program allows Pemberley and other users to get a cut from ads shown before their videos.

Merchandise

The world of Lizzie Bennet and William Darcy has not only expanded to spinoff videos, but pins, a mug, posters and more.

Affiliate marketing

Similar to the YouTube ad program, if Su's company links to another website and that site makes a sale, Pemberley gets a piece.

DVDs

You can still stream "The Lizzie Bennet Diaries," but Pemberly has also put the series out on home video.

"We’ve sold, I believe now, 7,000 units," Su says. "Again, for a show that is available for free online, which is amazing.”

Book deal

Simon & Schuster published a novelization called "The Secret Diary of Lizzie Bennet," which retells the series as journal entries. For those keeping score at home, Su says, "Lizzie Bennet is now "a book based on the web series, which is based on a book.”  

On China's Mainland, A Less Charitable Take On Hong Kong's Protests

NPR News - Mon, 2014-10-06 10:31

The pro-democracy protests in Hong Kong largely have been peaceful, but many mainland Chinese see the demonstrators as spoiled troublemakers who are asking for too much, too soon.

» E-Mail This

Hewlett-Packard splits

Marketplace - American Public Media - Mon, 2014-10-06 10:08

Hewlett-Packard is splitting in two, the company confirmed this morning.  The printing and computer side of the business will go in one direction, and in the other direction will go... everything else, under the name HP Enterprise. 

Hewlett-Packard Enterprise is a software and services business. It does advanced analytics, enterprise development and a number of other consulting services. 

The computer printer side is still grappling with the age of the tablet and smartphone, which hit the computer sector hard.

“Not only were consumers purchasing fewer desktops and laptops where HP was strong,” says Ross Rubin, principal analyst with Reticle Research, “but on the smartphones and tablets consumers were doing less printing because tablets can be taken with you and you can view the documents on the tablet itself instead of having to print it.”

The printer and computer side has stabilized over the past few years, and paid down some of its debt. Even so, the Enterprise group had higher margins, says Rubin.

“HP is splitting because there are two different directions and two segments of the business,” he says. “They have different market dynamics, different margin structures, different distribution systems.” HP Inc. (the computer-printer people) has a much bigger consumer-facing marketing component, whereas the Enterprise group is more consulting- and services-focused. 

Generally speaking, “independent companies can pursue what’s best for them rather than what a board of directors looking at various subsidiaries would be doing, and Wall Street tends to value that highly,” says Bill Caffee, a securities lawyer with White Summers Caffee and James. 

Investors who might’ve liked one side of HP but not the other will be free to invest in just the side they want, another reason why splitting can help valuations. Consumers won’t see much difference; computers and printers will keep the high-powered HP brand.  

Pages