National / International News
Commerce and payments are splitting up. Ebay is breaking away from PayPal and its payments operation will turn into a separate, publicly traded company.
Netflix dominates streaming media in a lot of ways. It has 50 million subscribers, some well-regarded original series, enough clout to go toe-to-toe with the likes of Comcast and Verizon and it accounts for a jaw-dropping 34 percent of web traffic.
Netflix may have a virtual monopoly, but there are plenty of competitors lining up. Amazon, Hulu, Playstation Network, Xbox, Yahoo and others are all throwing around a lot of money to break in to original programming.
"The problem is, at a certain point, there's going to be too many of these services and they're not going to be able to sustain themselves," television critic Alan Sepinwall says.
An expensive cable bundle helps all channels subsidize each other, he says, but "There's no equivalent of that for streaming, and I don't think there will be."
Here's the recipe Netflix's competitors are following to try to break in to this hot new market.
Step 1: Don't wait for the audience to find to you
How can people watch your shiny, new original content if they don't know about your service? That's not really a problem for streaming-centric companies like Netflix and Hulu, but for other established brands it's a surprisingly tough nut to crack.
"Most of the time when I go to Amazon it's just listing 'Here are items you've viewed, maybe you should order those!'" Sepinwall says. "So you don't inherently think of Amazon as a streaming business. Whereas with Netflix, that's the only reason you go."
In fact, a study from earlier this year showed about a third of Amazon Prime customers have never used the video streaming service included in their membership.
Yahoo's Screen service has faced similar problems. At TechCrunch Disrupt, CEO Marissa Mayer noted that Yahoo had produced 86 different series over the past year, "none of whom you've ever heard about because it was sort of a failed branding exercise."
Only "Burning Love" — a "Bachelor" parody with literally dozens of big names attached — got any traction, and Yahoo Screen kept lagging behind until it suddenly made headlines in July.
Step 2: Buy yourself some credibility
Cult hit "Community" had barely hung on at NBC over five seasons of firings, re-hirings, behind-the-scenes drama, cast changes and sinking ratings before finally being canceled. But "Community" was exactly what Yahoo needed.
"The more players there are, the more you need to do something big to sort of stand out and seem like you belong on that same playing field," says Vox culture editor Todd Vanderwerff. "I think a lot of this is just purchasing credibility."
It's the same reason Netflix resurrected Fox's "Arrested Development" last year. A niche flop on traditional TV could be a huge hit for a new company if the audience is willing to follow.
There are a few other ways to close the credibility gap, too. Amazon paid through the nose this spring for the right to stream old HBO shows, and Hulu has built up a respectable catalog of foreign shows along with a just-announced Stephen King adaptation.
Even the mighty Netflix is still buying credibility, especially as it changes strategy. The service brought back three canceled shows this year, and Netflix is set to release its first original feature film — a sequel to "Crouching Tiger, Hidden Dragon" — the same day it's released in IMAX theaters.
Step 3: Make a word-of-mouth hit (and stack the deck with a good gimmick)
It's tough to make a hit from scratch, but there are a couple of ways to tip the odds.
Sepinwall points to "House of Cards." The show isn't that good, he says, but gets by because it looks like a so-called prestige cable drama — the way it's shot, the antihero, the high-profile cast — and people like binge-watching it.
"I remember when 'House of Cards' season one was released ... I would watch my Twitter feed and it turned into a race," he says. "Even if [the show] is not that great, but it has some sense of forward momentum, it becomes easy to go forward and you feel like [you're] on the ground floor of something special."
When the show's second season debuted on Netflix all at once, the explosion of social media conversation seemed to prove the show's success. Netflix doesn't make its streaming numbers public, Sepinwall notes, so it's impossible to know how many people actually watched.
Amazon has turned to crowd-sourcing, letting subscribers see user-submitted pilots and vote on their favorites. The process has its flaws, both critics said, but after a few tries Amazon may have its first big hit in "Transparent," which debuted over the weekend to rapturous reviews.
Step 4: Wait for the industry to shake out
Vanderwerff compared streaming to the early days of home video, predicting we'll see a lot of media companies come and go or change hands as the industry adjusts.
"I really think we're on the precipice of everyone in Hollywood trying to get in this game, and it's going to come down to the same companies you've always heard of."
The player to watch is HBO. Their streaming service is still bundled with cable, but when they break from that model and embrace streaming, Vanderwerff says, many more companies will follow.
Streaming services are still tied to traditional TV in other ways. They have no restrictions on time or content, but they don't stray far from what the networks are offering.
"There's no reason an episode has to be 30 or 60 minutes," Vanderwerff says. "That is an artificial constraint placed on us by the early gods of television that we have now evolved past, we just haven't realized it yet."
The full possibilities of streaming TV — the niche ideas, the crowd-sourcing, the binging and more — might not come to fruition until the format has become more standardized, and that could take some mergers and acquisitions.
The security lapse happened when President Obama visited the Centers for Disease Control and Prevention in Atlanta. The incident continues to raise questions about the Secret Service's efficacy.
Weary employees could need more than just time off to re-energize. Some employers have ditched the time cards, let workers set their own schedules or allow them to rotate jobs to prevent burnout.
Antonio Cavalcante helped get a candidate for governor barred after showing that the politician had embezzled millions of dollars while he was a state legislator.
Traditional methods for containing the Ebola outbreak aren't working fast enough. So some scientists want to bypass the typical trial phases and bring new vaccines directly to people at risk.
In a stunt to promote the next season of the hit zombie show The Walking Dead, London chefs have concocted a burger inspired by human flesh. They're giving them away Tuesday at a pop-up restaurant.
Deep in the jungle of Ecuador, after a steep climb over the Andes and into the rainforest, oil executives struck gold. Well, more oil anyway. This was back in the 1960s. Texaco was drilling wells in Colombia and had reason to believe there was plenty more petroleum to the South. The boom that followed brought airports, roads, jobs and a middle class that hadn't really existed before in Ecuador.
But the oil company — Texaco then, now a part of Chevron — did everything fast and cheap.
Waste was dumped straight into unlined oil pits. Water used in oil production was left untreated on the surface of rivers. Although the Ecuadorian government noticed, no officials came from Quito to supervise.
The long-term damage to the community prompted an environmental lawsuit that lasted more than two decades. In the process, the pursuit of justice turned an initially well-intentioned lawyer named Steven Donziger into a green celebrity, and later, a Machiavellian figure.
Paul Barrett has documented the bad behavior all the way around, and wrote about it in his new book, "The Law of the Jungle."
Listen to the full interview in the audio player above.
The lawyer Steven Donziger stepped out onto 104th Street. He looked west toward Riverside Park and east toward Broadway. The dark sedans had been tailing him for at least a month now. They followed him for blocks at a time, slowing when he slowed, stopping when he stopped, their passengers watching his every move.
Donziger lived on a quiet block on the Upper West Side of Manhattan. He worked from home, a two-bedroom apartment he shared with his wife, their five-year-old son, and a cocker spaniel. Photographs and artwork from Latin America adorned the apartment. Documents in cardboard boxes surrounded the dining table. In the narrow foyer, stacks of stapled legal filings competed for space with a mud-spattered mountain bike.
On this morning in the spring of 2012, Donziger had wheeled the bicycle down the hall to the elevator and across the marble-floored lobby. Fifty years old, he dressed like a graduate student, in jeans, unironed button-down shirt, and tattered jacket.
“Cómo estás?” he asked the doorman as they bumped fists.
“Bien, muy bien, señor.”
Then Donziger had emerged from the building and, as was his habit, searched for the dark sedans. Six-foot-four and powerfully built, he would not have been difficult to track. Sometimes, in addition to the cars, he thought he saw men on foot, pretending to peer into store windows if he looked their way.
Donziger began pedaling toward Ocean Grill, a seafood restaurant where he did business over lunch. As he approached the corner, he glanced over his shoulder in time to see the large car pull out of its parking space and fall in behind him. He didn’t fear actual physical harm. The company was too smart, he thought, to turn him into a martyr. It wanted to distract him, intimidate him.
He despised his corporate foes: their money, their influence, their cynical disrespect for his clients in the Amazonian rain forest of northeastern Ecuador. The company would never willingly pay what it owed. Its lawyers and lobbyists had said as much. Now they were coming after him, making it personal. He’d written down license plate numbers, but the police weren’t interested. Every day people killed each other in New York. What did he expect the police to do about cars that might or might not have been following him?
The surveillance wasn’t his main worry. A year earlier, in February 2011, the company had sued him. The 193-page suit, filed under the federal antiracketeering statute, alleged that he had ginned up fraudulent evidence as part of a conspiracy to extort the company. A federal judge had taken the accusations seriously. The judge forced him to turn over his hard drives, e‑mail, and boxes of documents. Donziger had said some truly dumb things—he admitted that much—and now they were public. His bravado sounded incriminating, he also acknowledged, especially if it was taken out of context. He’d cut a few corners, used tactics they didn’t teach back at Harvard Law School. He could lose his law license. Conceivably, the U.S. Attorney’s Office could bring criminal charges.
The company, as Donziger saw it, fought dirty; he fought back in kind. Slugging it out, he’d pulled off something amazing. His ragtag team had gone to a provincial Ecuadorian courtroom and won a judgment that mighty Texaco had ruined the lives of thousands of farmers and Amazon tribesmen. Because of him, a tiny third-world nation had spoken truth to power. Donziger had pressed the case for nearly twenty years now, beginning as the most junior member of the plaintiffs’ legal team and ultimately rising to field commander. Before going after Texaco (which was acquired in 2001 by Chevron), he’d never brought even a slip-and-fall suit. That he’d survived this long must have shocked the oil company and its lawyers. No wonder they were branding him a racketeer and prying into his personal life.
He was not alone, though. Impressed by the potential for gargantuan legal fees, Patton Boggs, a tough corporate law firm, had joined Donziger. Together, they were seeking liens against refineries, terminals, and tankers worldwide. He’d retained a famous white-collar defense attorney to represent him in the racketeering suit. The Amazon pollution case had been featured on 60 Minutes and in the New York Times, Vanity Fair, The New Yorker, and Bloomberg Businessweek. In 2009, it was the subject of an acclaimed documentary that played at the Sundance Film Festival. A rock star in green-activism circles, Donziger had received support from Bianca Jagger, Sting, and Sting’s wife, the actress Trudie Styler. He had given Brad Pitt and Angelina Jolie a private tour of the oil zone in Ecuador.
“I cannot believe what we have accomplished,” Donziger had written in private notes several years earlier, during a flight to Ecuador. “I cannot wait to get off the plane and see my fellow soldiers—often the only people I feel who get me. I want to look in their eyes and see if they understand the enormity of what this team has accomplished.” He had gone toe-to-toe with one of the most powerful multinationals in the world and won the largest pollution verdict in history: $19 billion. That was billion with a “b,” real money by anyone’s standard. If he could survive the vengeful countersuit and collect the judgment, the Ecuador case would, in Donziger’s expansive estimation, create a precedent benefitting “millions of persons victimized by human rights abuses committed by multinational corporations pursuing economic gain.” And it would make him a very wealthy man.
Arriving at the Ocean Grill, he slowed his bicycle. The surveillance sedan—Wait, were there two of them?—kept cruising south. Donziger chained his bike to a no parking sign and shrugged off his backpack. The spy cars disappeared in traffic. He knew they would circle back. They always did.
The four men were between the ages of 18 and 28 and stole games before they were released. They also stole Apache helicopter simulator software developed by a video game manufacturer.
A new battle in the war for our eyeballs has just been scheduled for August 28, 2015. The Weinstein Company announced a deal to release the sequel to the hit art-house martial arts film "Crouching Tiger, Hidden Dragon" simultaneously in Imax movie theaters and on Netflix.
It's a shot across the bow of the major movie theater chains — Regal, AMC and Cinemark — who control most of the theaters in the United States and demand an exclusive, 90-day "window" before their films move to smaller screens on television or online.
"Anything that starts to erode or challenge the 90-day window could be disaster for them," says Sam Craig, director of the Entertainment, Media and Technology program at NYU. According to Craig, if just 10 percent of theatergoers stayed home, it would mean a loss of more than a billion dollars in ticket sales.
"No one has approached us to license this made-for-video sequel in the U.S. or China, so one must assume the screens Imax committed are in science centers and aquariums," says an AMC Theatres statement.
Other movies have attempted to debut online and in theaters, but this deal is the first to include Netflix, and the first to include a film that could have just as easily debuted in theaters, according to BTIG media analyst Rich Greenfield. "I think if movie studios see the success of what Netflix and Imax do, I think others will follow," says Greenfield.
If they do, theaters will only be able to differentiate on the basis of the theatergoing experience — something they've been attempting to do for years. Regal Cinemas ran trailers in which action films gradually shrank to a small rectangle in the middle of the big screen, while a narrator intoned: "If you want action this big you can’t have a screen this small." But consumers with smartphones increasingly watch videos even on the smallest of screens, and hardware options have arguably made home viewing more theatrical.
"The exhibitors are right: It is a different experience," Craig says. "But you get a lot of people that have 60-inch HD screens and surround sound, and maybe they would be just as happy watching it at home."
In a unanimous five-to-zero vote, the Federal Communications Commission decided to eliminate the blackout rule. Since 1975, the regulation barred cable and satellite television from airing local sporting events when the team failed to sell enough tickets to fill their stadium. The National Football League has defended the rule for many years, calling it a tool to ensure a large attendance at the games.
Kenneth Shropshire, director of the Wharton Sports Business Initiative, talked with David Gura about the move. Listen to the full conversation in the audio player above.
EBay and PayPal are going their separate ways. It’s an amicable parting though.
They don’t need each other like they used to. PayPal is getting fewer and fewer new users from eBay — 25–30 percent today, dropping to 15 percent three years from now, CEO John Donahoe told CNBC. Ebay needs some flexibility as it tries to grow its share of e-commerce.
Activist investor Carl Icahn launched a high-profile campaign to split the companies nine months ago, heckling eBay’s leadership and preparing to insert board members of his choosing. He was rebuffed in the short term, but eBay has clearly come around.
“We are happy that eBay’s board and management have acted responsibly concerning the separation — perhaps a little later than they should have, but earlier than we expected,” Icahn wrote in a statement.
“They have to grudgingly admit he is right,” says Paul Sweeney, senior media analyst for Bloomberg Intelligence.
PayPal wants to be the way everyone pays for everything: online and at the store. But so does Square, Softcard, Google and now Apple Pay.
“The eBay folks and PayPal folks looked around the marketplace [and] they saw a market that’s continuing to change rapidly and continuing to get more competitive,” says Sweeney.
If PayPal has to consider eBay every time it makes a decision, it’s going to get tied down.
“They also recognize they were potentially missing out on other business opportunities by being part of the bigger company,” Sweeney says. “By being a stand-alone company they can be a little more nimble, innovative, and perhaps pursue new opportunities.”
There is enormous money at stake. Proximity payments — paying for things using your phone — are blowing up, says eMarketer analyst Bryan Yeager.
“This year we expect proximity payments to reach $3.5 billion — doubling over last year,” Yeager says. “We expect it to next year reach $8.59 billion, and by the end of 2018 hitting a little more than $118 billion.”
Even so, Yeager says that’s a drop in the bucket when you consider how much money gets put on credit cards.
EBay also needs to free up cash to work on its own issues; there’s competition from Amazon and maybe even Alibaba. Mergers and acquisitions may even be in eBay’s future, the CEO hinted to CNBC.
The companies will split late next year. But they’ll still be friends.