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Updated: 12 min 55 sec ago

Should the post office sell personal loans?

Tue, 2014-02-11 01:23

Imagine you've just walked into a U.S Postal Service branch office in 2016.

Mail that package -- check.

Buy stamps – check.

Apply for a loan --- uh, check?

The Service’s independent Inspector General wants post offices to provide basic financial services, both to help low-income people who are underserved by banks and to shore up its own ailing balance sheet. If you want to meet unbanked and underbanked people, go stand outside ACE Cash Express in Arlington, Virginia. Stevenn Foster just paid off a $500 payday loan, "and interest was $136,” he says, referring to the fees. That gives his short term loan an effective APR of several hundred percent.

“If that’s what they say I have to pay, I pay, I don’t have no problem with that,” Foster says. “I mean, they been good to me.

He can’t get a loan from his regular bank. In fact, most people here say they’re grateful to have somewhere to cash checks and pay bills.

But just a block away, there’s a post office.

David Williams is Inspector General of the U.S. Postal Service and if he gets his way, that post office would offer some of the same services as ACE Cash Express, for less. He says that would be a huge draw for the 68 million people who are underserved by banks.

“People that are currently in a pretty desperate situation,” he says. “They live in economic deserts today, they don’t have access to anyone other than these enterprises that charge 300% plus (for a loan).”

Post offices already provide money orders. Williams thinks they should expand to provide pre-paid debit-type cards (people could load cash or paychecks onto the card), savings products, and even simple loans.

He says collecting a fraction of the money now spent on interest and fees for payday lenders and other banking alternatives would bring in nine billion dollars a year. That’s the payoff for the Postal Service, which has lost about 25 billion dollars since 2011, due in part to a Congressional requirement that the Postal Service pre-fund retiree health benefits.

So, does additional revenue + helping the underbanked = win-win?

Lauren Saunders is managing attorney with the National Consumer Law Center. She likes the creative approach to reaching people underserved by traditional banking. But, “getting into loans, I think, is a little more of a tricky area,” she says.

The idea is that borrowers at post offices  would arrange to have loan payments automatically withheld from their paychecks. That would lower risk and interest rates.

“A lender may feel confident they’re gonna collect on your loan if they get to take part of your paycheck before you get it,” Saunders says. “But that doesn’t mean you can afford it, and that you can make it through the month, and pay for the necessities and expenses that you have, without getting yourself into a cycle of debt.”

Even with better terms, many low-income people just can’t afford more debt.

Still, the Inspector General’s postal banking idea is gaining steam with Congressional Democrats. The Postal Service itself says it’s evaluating the recommendations.

Should the U.S. Postal Service get into financial services?

Tue, 2014-02-11 01:23

Imagine you've just walked into a U.S Postal Service branch office in 2016.

Mail that package -- check.

Buy stamps – check.

Apply for a loan --- uh, check?

The Service’s independent Inspector General wants post offices to provide basic financial services, both to help low-income people who are underserved by banks and to shore up its own ailing balance sheet. If you want to meet unbanked and underbanked people, go stand outside ACE Cash Express in Arlington, Virginia. Stevenn Foster just paid off a $500 payday loan, "and interest was $136,” he says, referring to the fees. That gives his short term loan an effective APR of several hundred percent.

“If that’s what they say I have to pay, I pay, I don’t have no problem with that,” Foster says. “I mean, they been good to me.

He can’t get a loan from his regular bank. In fact, most people here say they’re grateful to have somewhere to cash checks and pay bills.

But just a block away, there’s a post office.

David Williams is Inspector General of the U.S. Postal Service and if he gets his way, that post office would offer some of the same services as ACE Cash Express, for less. He says that would be a huge draw for the 68 million people who are underserved by banks.

“People that are currently in a pretty desperate situation,” he says. “They live in economic deserts today, they don’t have access to anyone other than these enterprises that charge 300% plus (for a loan).”

Post offices already provide money orders. Williams thinks they should expand to provide pre-paid debit-type cards (people could load cash or paychecks onto the card), savings products, and even simple loans.

He says collecting a fraction of the money now spent on interest and fees for payday lenders and other banking alternatives would bring in nine billion dollars a year. That’s the payoff for the Postal Service, which has lost about 25 billion dollars since 2011, due in part to a Congressional requirement that the Postal Service pre-fund retiree health benefits.

So, does additional revenue + helping the underbanked = win-win?

Lauren Saunders is managing attorney with the National Consumer Law Center. She likes the creative approach to reaching people underserved by traditional banking. But, “getting into loans, I think, is a little more of a tricky area,” she says.

The idea is that borrowers at post offices  would arrange to have loan payments automatically withheld from their paychecks. That would lower risk and interest rates.

“A lender may feel confident they’re gonna collect on your loan if they get to take part of your paycheck before you get it,” Saunders says. “But that doesn’t mean you can afford it, and that you can make it through the month, and pay for the necessities and expenses that you have, without getting yourself into a cycle of debt.”

Even with better terms, many low-income people just can’t afford more debt.

Still, the Inspector General’s postal banking idea is gaining steam with Congressional Democrats. The Postal Service itself says it’s evaluating the recommendations.

Tesla's 'fair price' China strategy - will it work?

Tue, 2014-02-11 00:25

There’s a reason the big automakers charge as much as they possibly can in China for their top end models: China’s rich are always willing to spend more.

"From the point of view of having something everybody knows is expensive, as a means to show you’ve made it," says Michael Laske, CEO of the vehicle testing company AVL China, "I think people are more inclined to want to spend higher prices."

But Tesla announced the price of its Model S electric car in China will only be 50 percent higher than its U.S. price.  That's a far cry from typical pricing behavior by foreign automakers in China, which are known for marking up the price of their high-end vehicles by up to 200 percent.

Tesla says the 50 percent markeup is necessary to account for unavoidable taxes and shipping costs.

"It's kind of a good marketing tool," says Jack Perkowski, founder of JFP holdings. "But they need that because they have some other shortcomings they have to overcome."

Like trying to sell electric vehicles in a market where ‘environmentally conscious’ is largely regarded as a foreign spending habit.

But forget Chinese consumers, says AVL’s Michael Laske. China’s government is the one at the controls of the economy, and it wants more electric vehicles on China's expanding network of expressways.

"I think the Chinese government strategy is to try be a market leader in the electrification area," says Laske, "So any company that comes in and supports this approach I think will be welcomed."

Laske says Chinese automakers are five years behind their foreign counterparts in internal combustion engine technology, and the government would prefer to leapfrog over gas guzzler,s and focus their energies on developing innovative electric vehicles - a smart choice, given China's big supply of rare earth metals like lithium, which is used to make batteries for electric cars.

Tesla plans to open operations in a dozen Chinese cities, and expects to achieve a third of its overall growth from China by the end of this year.  It's an ambitious goal for a newcomer, but one that Laske thinks is reachable. After all, Tesla only sold around twenty thousand cars last year, and China now has more than a million millionaires – many of them looking for the newest flashy sports car.

Another day, another delay for the Affordable Care Act

Mon, 2014-02-10 17:06

Another day, another delay for the Affordable Care Act.

The White House announced today that it's going to give medium size companies -- places that have between 50 and 99 workers -- an extra year before they have to offer health insurance to full-time workers. 

Bigger companies -- with 100 or more people -- also got a break on how quickly they need to provide coverage for their workers.

Basically: Just about everyone gets a little longer to figure this all out.

9 ways to save on rental cars

Mon, 2014-02-10 13:55

Listeners wanted to know how rental car companies make money. The answer got us wondering -- what if they're making extra money off of us?

There are a lot of ways to pay less than top dollar on your next rental car. Here are a few tips based on our interview with Jack Gillis, director of public affairs at the Consumer Federation of America, and author of The Car Book.

1) Don’t go for a size -- or model -- upgrade. When’s the last time your suitcases didn’t fit in the trunk of a car? If you don’t need a mid-sized car or SUV, and an economy or compact is available, make sure to ask for it.  You’ll save on gas in a smaller car, too.

2) Ask for a free upgrade. If you want a bigger car, or more options free of charge, the counter clerk may do it.

3) Bring accessories, don’t rent them. A sophisticated GPS device might cost $7 to $9 per day to rent, and it only costs $100 or so to buy. After the first ten GPS rentals, the rental-car company is making pure profit from you. So bring your own. If you have a smart phone, buy a $10 dash-mount and use that to navigate.

4) Bring your own car seat. But make sure it’s not more expensive as airline carry-on than the additional rental cost.

5) Fill the tank yourself before returning the car. It’s the cheapest gasoline option. Paying for a full tank in advance is only worth it if you return the car with the gas tank completely empty.

6) Decline the additional insurance. You probably don’t need it if you own a car and carry private auto insurance yourself. Make sure to check with your insurance company to verify your coverage. Your credit card company may offer additional coverage, too.

7) Shop online early (and often) for rental deals. If you don’t like the rates for given dates at a given airport, make a reservation and then shop again days or weeks later. Because of demand-pricing, if rental-reservations are slack for a specific time-period, the rates are likely to go down to attract more business. Typically there is no penalty for cancelling a rental reservation made directly with the rental company.

8) Use online services like Priceline and Orbitz. Bid on rental cars using these and other services to get a better deal. A warning, though: These reservations may have to be paid in advance and will likely not be refundable.

 9) Make sure to use affinity discounts. AAA and Costco memberships may get you a better deal.

Will Missouri football player Michael Sam get drafted?

Mon, 2014-02-10 13:33

An athlete's sexuality isn't usually a business story.

But when University of Missouri football player Michael Sam announced he was gay to ESPN and the New York Times, it made some wonder if it would hurt his chances in the NFL draft later this year.

Sam is widely known to be a talented defensive player.

"He is one of the more decorated players you'll find in college football this season," says Holly Anderson, staff writer at ESPN's Grantland.

Anderson rattles off a list of Sam's achievements: being named a First Team All-American, winning Defensive Player of the Year in the SEC, getting voted Most Valuable Player by his own teammates -- after telling them he was gay.

"It doesn't seem like there would ever be a perfectly ideal time to do this," says Anderson about Sam's announcement, only weeks before the Combine, but months before the draft.

The National Football League is a business -- and Anderson says it's beginning to make business sense to welcome players without hesitations over sexuality. She points to the Mizzou team's reaction to the announcement, including players bragging about the team's "family environment" in support of Sam's announcement.

But the real implications for Sam's future aren't clear, though Anderson leans on the side of confidence. She says some teams may see Sam as a risk worth taking, while for others, it could be a non-issue.

"And realistically, we also don't know that there aren't teams feeding negative information about him, so they can get him at a steal."

AOL CEO Tim Armstrong: How many chances does he get?

Mon, 2014-02-10 12:34

AOL CEO Tim Armstrong is back in the spotlight for something he said.

A few days ago, he radically altered the company’s 401(k) program, making his employees mad. He implied the change happened because a couple of employees had difficult pregnancies that cost AOL a lot in health expenses. He called them “distressed babies,” which made a large swath of people across the country mad.

Over the weekend, he apologized and reversed the 401(k) changes.

This isn’t the first big apology for Armstrong. Last time, it was after firing an employee during a mass conference call because the worker tried to take a picture of him. The corporate board deciding his fate let him keep his job, despite widespread criticism from the public.

This time? "He’ll be cut some slack for these comments in large part because of the overall business performance," says Brian Wieser, senior analyst at Pivotal Research Group.

That’s not to say that AOL is doing fantastic. It’s recovering from the disastrous acquisition of the local news site Patch, and there are still big questions about its future. But the most recent earnings report showed an increase in revenue, and the numbers are ultimately what matter to corporate boards, even when CEOs say offensive things.

But when unlikable leaders have only numbers to protect them, it can be awfully lonely when those numbers change.

"You don’t realize that your enemies are lying in wait, and boom, when the performance goes south, you can get pushed out very, very quickly," says Stanford management professor Bob Sutton, author of "Scaling Up Excellence."

CEO gaffes are especially problematic for a company like AOL, which needs to draw an audience. There can come a point when bad press from bad behavior drags corporate numbers down.

"It becomes a pretty powerful force in the Twitter world, and on Facebook, and the bloggers talking about all the things they don’t like about this guy. That starts to add up," says Sydney Finkelstein, management professor at Dartmouth’s Tuck School of Business. "It could have a business effect, a business impact."

Finkelstein is known for his annual list of the best and worst CEOs. Armstrong didn’t make the bottom five for 2013, but Finkelstein says he was "in the running."

There are signs investors are concerned about the impact of Armstrong’s behavior on the company. AOL’s stock dropped more than 3 percent Monday.

Mark Garrison: This isn’t the first big apology for Armstrong. Last time it was after firing an employee during a mass conference call because the worker tried to take a picture of him. Armstrong still has his job because a corporate board decides his fate, not an outraged public. Brian Wieser  is senior analyst at Pivotal Research Group.

Brian Wieser: He’ll be cut some slack for these comments in large part because of the overall business performance.

Not that AOL is doing fantastic. There are still big questions about its future. But the most recent earnings report showed an increase in revenue and that’s ultimately what matters to corporate boards, even when CEOs say offensive things.

Bob Sutton: As long as they’re bringing in the money, this is what I always say, you can be an incredible jerk.

But Stanford management professor Bob Sutton also points out that when unlikable leaders have only numbers to protect them, it’s awfully lonely when those numbers change.

Sutton: The problem you’ve got is you don’t realize that your enemies are lying in wait and boom, when the performance goes south, you can get pushed out very, very quickly.

CEO gaffes are especially problematic for a company like AOL, which needs to draw an audience. Dartmouth management professor Sydney Finkelstein says bad press from bad behavior can drag the numbers down.

Sydney Finkelstein: It becomes a pretty powerful force in the Twitter world and on Facebook and the bloggers talking about all the things they don’t like about this guy. That starts to add up. In other words, it could have a business effect, a business impact.

And investors may already be walking away. AOL’s stock dropped more than 3 percent today. In New York, I'm Mark Garrison, for Marketplace.

Entrepreneur offers a better shave for growing market

Mon, 2014-02-10 12:26

Twenty-nine-year-old Tristan Walker is a classic overachiever. He was valedictorian of his college class, earned his MBA from Stanford, and worked in business development for Foursquare. Still, for most of his adult life, Walker had trouble doing something that millions of men do every day: shaving. He was plagued by razor bumps and skin irritation.  

"I know what it feels like to walk your first day on the job, having folks tell you to shave that hair off your face and being mortified," Walker said. Fellow sufferers include many African-American men, and others with curly hair. 

"Traditional mass-market brands today sell multi-blade razors, and a lot of times that's the culprit," Walker said. "Because multi-blade razors will cut the hair underneath your skin. Which is just going to cause your coarse, curly hair to grow back in to your skin."

Under the umbrella of Walker and Company Brands, he recently launched Bevel, a line of shaving products targeted specifically to men of color. Some of Walker's investors are no doubt impressed by his experience in Silicon Valley. And with recent studies projecting that African-American buying power will reach $1.1 trillion next year, Walker thinks the time is ripe for companies seeking to market products to Black consumers. 

"As the demographic continues to grow, continues to have influence in this country, I think a lot of folks will have to take note," Walker said. 

One of those taking note is Cheryl Pearson-McNeil, a Senior Vice President of Public Affairs and Government Relations for the Nielsen Company, who, in 2011 proposed the idea of looking specifically at what African-American consumers buy, watch and listen to. Nielsen produced surveys in 2011, 2012, and again last year in a report entitled "Resilient, Receptive and Relevant," which offers a glimpse into a largely youthful, connected, media-savvy market. 

"The Black population is young, hip, and highly influential," Pearson-McNeil said.  The question though, is whether companies and advertisers recognize this. Pearson-McNeil says that of seventy five billion dollars a year spent in TV, print, internet and radio ads, "only three percent of that is being spent with Black media or with media that targets Black audiences." 

McNeil says that rather than one-size-fits-all marketing strategies, companies can do a better job of connecting with Black consumers by featuring African-Americans more prominently in advertisements, and by trying to develop an authentic connection with consumers. 

"If people can see themselves, it does help move the needle to where they will respond to your brand," Pearson-McNeil said. 

Tristan Walker appears to understand this well. An online commercial for Bevel, whose first shipment of products went out this month, features a thirty-something African-American man conducting his morning routine in a beautifully-appointed apartment. A voiceover tells us Bevel is a shaving sytem, "that we can use." 

Entrepreneur offers a better shave for growing market

Mon, 2014-02-10 12:26

Twenty-nine-year-old Tristan Walker is a classic overachiever. He was valedictorian of his college class, earned his MBA from Stanford, and worked in business development for Foursquare. Still, for most of his adult life, Walker had trouble doing something that millions of men do every day: shaving. He was plagued by razor bumps and skin irritation.  

"I know what it feels like to walk your first day on the job, having folks tell you to shave that hair off your face and being mortified," Walker said. Fellow sufferers include many African-American men, and others with curly hair. 

"Traditional mass-market brands today sell multi-blade razors, and a lot of times that's the culprit," Walker said. "Because multi-blade razors will cut the hair underneath your skin. Which is just going to cause your coarse, curly hair to grow back in to your skin."

Under the umbrella of Walker and Company Brands, he recently launched Bevel, a line of shaving products targeted specifically to men of color. Some of Walker's investors are no doubt impressed by his experience in Silicon Valley. And with recent studies projecting that African-American buying power will reach $1.1 trillion next year, Walker thinks the time is ripe for companies seeking to market products to Black consumers. 

"As the demographic continues to grow, continues to have influence in this country, I think a lot of folks will have to take note," Walker said. 

One of those taking note is Cheryl Pearson-McNeil, a Senior Vice President of Public Affairs and Government Relations for the Nielsen Company, who, in 2011 proposed the idea of looking specifically at what African-American consumers buy, watch and listen to. Nielsen produced surveys in 2011, 2012, and again last year in a report entitled "Resilient, Receptive and Relevant," which offers a glimpse into a largely youthful, connected, media-savvy market. 

"The Black population is young, hip, and highly influential," Pearson-McNeil said.  The question though, is whether companies and advertisers recognize this. Pearson-McNeil says that of seventy five billion dollars a year spent in TV, print, internet and radio ads, "only three percent of that is being spent with Black media or with media that targets Black audiences." 

McNeil says that rather than one-size-fits-all marketing strategies, companies can do a better job of connecting with Black consumers by featuring African-Americans more prominently in advertisements, and by trying to develop an authentic connection with consumers. 

"If people can see themselves, it does help move the needle to where they will respond to your brand," Pearson-McNeil said. 

Tristan Walker appears to understand this well. An online commercial for Bevel, whose first shipment of products went out this month, features a thirty-something African-American man conducting his morning routine in a beautifully-appointed apartment. A voiceover tells us Bevel is a shaving sytem, "that we can use." 

How do rental car companies make money?

Mon, 2014-02-10 12:01

An "I've always wondered..." two-fer: Two listener questions on the rental industry we just couldn't take apart...    1) Why do rental car companies give you two keys that can't be separated? If you lose one, you lose both. -- Brianne Halbach from Atlanta. "We share cars between branches, and since we have more than one key set, each car comes with two sets, we just want to have both sets together when we sell the car," Ian McGrath, who works behind the counter at an Enterprise Rent-A-Car   In fact, this has nothing to do with us as consumers.    A word of advice from someone who's tried -- you really can't get the keys apart.   A few months ago, I rented a car from Hertz. A parking attendant locked both keys in the car. I called Hertz, they sent triple-A, I’m charged $130. I said to the Triple-A guy, "If these keys weren’t attached I wouldn’t have had this problem."   He offers to cut them apart, and his bolt cutter couldn't even do it—that wire is like titanium or something.   Paula Rivera at Hertz explains: "We have about a half-million cars in our fleet. So logistically, it’s very difficult for us to store the second set somewhere and then match it up with the original car."   I put it to her that it’s a real pain for renters—if they lose the keys, or lock them inside like I did.   Her response?    "Hertz actually offers a premium roadside service. So for approximately an additional $6.50 a day, things such as keys locked in cars or lost keys are included in that service." Yes, she tried to upsell me with the "premium roadside service." Which brings us to another question from a listener.   2) How do rental car companies make money? -- Barry Reeves from Portland, Ore.   One answer: They buy so many cars, the automakers cut them big discounts. And they’ve figured out the formula to make sure those cars are on the road 80 percent of the time.    Jack Gillis of the Consumer Federation of America says where they really push for profits is the add-ons. Ten percent of revenue comes from car seats, gasoline, insurance, GPS—stuff we opt for at the counter because of convenience, or a hard-sell. "Many of us fall victim to pay for the full tank up front. And the only way that’s ever going to pay off is if you return the car and roll in running on fumes. There’s virtually no reason to buy the auto insurance, if you own your own car and have your own insurance policy." And, finally, the companies get pretty good resale value when they unload the cars—20,000 or 25,000 miles later.   Some people buy rentals as used cars, and don't even know it. Chris Brown is with Auto Rental News. He says car renters have a scarier reputation than they deserve.   "The majority of rental cars are driven by people between the ages of 25 to 65. More than half are air travelers, they hold credit cards, so they have some financial means."   So the answer to both questions—the two identical keys, how the rental companies make money—ties in to resale value. Keep those keys together, save a few hundred bucks. Keep the car clean and in good working order, boost your revenue when it’s time to sell to a dealer or consumer.   At the end of the day, renting cars?   It’s kind of beside the point.

Delivering better medical care, at $15 an hour

Mon, 2014-02-10 12:00

Often, talk of effective medical innovation means something high-tech and high price, but a report out today in the Journal of the American Medical Association highlights one that's anything but: The low-tech, low-price lay community health worker.

For about $15 an hour, community health workers are doing what much better paid doctors, nurses and social workers struggle to do: keep sick patients from returning to the hospital again and again.

To understand what a community health worker does, let’s talk about a real case -- a woman who kept showing up to the hospital with high blood pressure, a little overweight, complaining of chest pain.

"Automatically, people worry she’s having a heart attack," says Dr. Shreya Kangovi , an internist with the University of Pennsylvania Medical System, and lead author of the new study. "She comes in, she gets stress tests, she gets EKGs, she gets cardiac catheterization she gets medication."

After six months of expensive hospitalizations, Kangovi says the patient was paired with a community health worker. It was at that point the patient opened up about a sexual assault.

"This had really traumatized her and it was leading to these feelings of panic and social anxiety," Kangovi says.

Ferreting out the source of the problem, says Kangovi, is really what the patient needed -- not going to the hospital every month. In fact, the patient returned just once after that. Kangovi says her randomly controlled trial found high-cost patients who were matched with health workers felt better, and were less likely to be readmitted multiple times.

Economically, this investment is smart, says Dr. Joshua Sharfstein, the Maryland Secretary of the Department of Health and Mental Hygiene.

"If getting admitted again and again, each admission is several thousand dollars, then it is pretty easy to save money with that kind of intervention," he says.

As more pressure is put on hospitals and doctors to save money, the idea of employing these workers is picking up steam.

"We’re proving out right now this is a great idea," says Bob Koche, a former healthcare advisor to President Obama. "We have a bunch of things done by people that are expensive, like doctors, that can be done by people who are lower cost like community health workers."

'Flappy Bird' flaps away

Mon, 2014-02-10 10:51

Sometimes, if you build up your courage and spread your wings.... you find out that your wings are stubby and don’t work very well and you fall, crashing, to the ground. 

That is the experience of many players of mobile mini-game Flappy Bird, like the one who left this review:

Whoever made this game is an evil mastermind.  Once this game is on your device all hope is lost you will never have your life back.

It was also the case for the game’s creator, Vietnam based Dong Nguyen.  Even though he claimed he was making 50 grand a day in ad revenue since the game mysteriously went viral after nearly a year of anonymity, Nguyen called it quits after hate mail started pouring in. He yanked the game from Google and iTunes.

If you’ve never heard of Flappy Bird, you might count yourself lucky.  The incredibly simple mobile game – it involves guiding a little bird in between pipes – is incredibly hard but incredibly addictive.  It’s been downloaded 50 million times.  But no longer.

Koopee Hiltunen, director of Finnish game industry group Neogames, sams Nguyen was a victim of his own success.  “He was this small indie developer and he wasn’t ready to handle the situation,” both from a business perspective and a personal one, says Hiltunen.  “He received a lot of hate mail” from frustrated users,  including death threats and professional criticism over the game, “and he took it quite personally.”

In many ways, Flappy Bird is a blast from the past, when indie developers could cook up a cheap game, go viral, and make money. That’s really hard to do – and to manage – today.  Ben Cousins, manager of mobile game studio Scattered Entertainment, says the game has been upped.    “That’s certainly not a business strategy anyone should replicate, you’re trying to capture lightning in a bottle really,” says Cousins.  “Chances of success are remote – this kind of success I would equate with winning the lottery.”

To become a top 20 mobile game, you need a strategy for retaining users for the long term.

Scaling success in a mini game is hard.  “Most successful developers create lots and lots of games, on a small investment level, and they’ll send those games out into a test market” to see how they fare, says Cousins.  If one does well  -- “likely by accident,” then you launch world wide, you develop in-app purchases, and invest in advertising to generate as many users as possible.  Some app developers have even turned to TV ads. 

That kind of scaling requires investors, who are reluctant to put money on a mini-game.  Simple, unsophisticated games “are very easy to copy,” says Cousins, pointing out that there are already 6 knockoffs of Flappy Bird on different platforms. 

With an unsophisticated game like Flappy Birds, it’s not clear if it will be able to retain users over the long term.

Basically, in today’s gaming app market, there’s not a lot of room for the little guy to fly.

Navigating the many firsts of freshman year

Mon, 2014-02-10 10:26

Raven Gribbins sits in trigonometry class, right in the front row, her cell phone buzzing on her desk. As the instructor takes attendance, Raven snaps a quick selfie and sends it off to a guy she’s been texting.

Then she gets down to business.

"For the angle 330 degrees – first of all, what quadrant does that lie in?" the instructor asks the class.

"The fourth," Raven answers.

"And what is the reference angle?"

"It’s 30," Raven says quietly.

Raven, who is studying to be a high school math teacher, has been here before. She took this class last semester. It didn’t go so well. One of the first lessons of college: It’s not high school.

"It’s a lot more homework, a lot more studying and a lot more effort," she says. "It was kind of a shock."

A lot about coming to college was a shock. Raven grew up in a poor and dangerous neighborhood in Cincinnati, called Lower Price Hill. Neither of her parents finished high school. Both struggled with drug addiction.

Raven has just started her second semester at Penn State Greater Allegheny, a small campus near Pittsburgh. This is usually the time when things get real, says Siobhan Brooks, coordinator of the Learning Center, where students like Raven get tutoring and other support services.

"I think that is the wake up time for most," Brooks says. "The first semester is often trial and error, because they’re still trying to figure out how this works. ‘Do I really need to be in every class or can I miss a few and still get it?'"

By the second semester, she says, they catch on.

Raven has tried a lot. She played volleyball. (Her team made it to the playoffs.) She got a new boyfriend. (They broke up.) She got her tongue pierced – something she’s wanted to do for years.

"I couldn’t eat for three days," she says.

And she went through two roommates.

"I don’t get along with females, for real, so I knew I was going to end up with a single by the end of the semester," Raven says.

The price of all that trial and error: a 2.5 grade point average. To get her education degree, she hopes to transfer to the main Penn State campus in State College after her sophomore year. To do that, she’ll need at least a 3.0 GPA.

So Raven has a plan. At the end of a long day of classes, she meets with one of two math tutors she’s been assigned, Justin Guadagni.

"Any specific questions on the ones we went over in class?" he asks as she sits down.

"No," she says.

The tutoring is part of a federally-funded program for first-generation and low-income students. Raven will also take a class on study skills, like how to read textbooks and take notes.

She has a lot of people watching over her. One of them is her volleyball coach, Tracy Gibbs, who meets with Raven every week for study hours.

"I know her dad in high school, when she lived with him, was always on her about homework," Gibbs says. "As it turns out, you know, she needs the same thing still. She needs someone to be the annoying, nagging person to say ‘Did you do x, y and z?’"

But Gibbs says Raven is thriving in other ways.

"She’s always responsible, she’s always on time, she’s always respectful," Gibbs says. “I don’t think I’ve ever even seen her angry."

That might surprise some of her high school teachers. Raven used to get in fights and mouth off in class. But while she was back home in Cincinnati for winter break, she says people noticed a change.

"They say I’m getting brighter and, like, more educated," she says. They told her she was turning into "a nice young lady," she says.

Raven says she didn’t want to come back to college after the break. She misses her dad and her little sister. According to the Pell Institute for the Study of Opportunity in Higher Education, low-income, first-generation college students are far more likely to drop out after the first year than better-off students whose parents went to college. They may be less prepared academically. Many have financial pressures. Or the pull of home is too strong.

"In my case, it was easier for me not to go home," says Teresa Heinz Housel, who was the first in her family to go to college and has since co-edited two books about the first-generation experience.

Breaks can be especially hard, Housel says.

"I have memories of being in a near-empty campus dorm because I chose to stay on campus," she says. "It was just easier for me to do that than to go through the anxiety of trying to get used to a different cultural environment and then coming back."

But Raven did come back. She says dropping out is not an option.

"This is a good opportunity for me," she says. "I’m doing it to better my education so when I get older, I can take care of [my sister] if she needs my help."

And what she’s left behind has also given Raven an edge. For her "Issues in American Education" class, she gets an assignment:  to respond to a passage about the effect of poverty on schools.

There is a “social burden placed on schools by poverty, drug abuse, violence, and hopelessness,” writes Nan Stone in the Harvard Business Review. “Troubled children carry the ills of their homes and neighborhoods into their classrooms every day.”

Poverty, drug abuse, violence and hopelessness. Sounds a lot like Raven’s old neighborhood.

"Yes, it does," Raven says. "I could relate to it because it happened when I was a child, when I was growing up."

The instructor, Anthony Mitchell, says Raven’s experience will help make her a good teacher.

"I’m very happy to have a student that brings her background and brings her perspective," he says. "Many students in this class have not had an experience like Raven."

"It makes me feel stronger," Raven says. "I had to work my way to get here."

She’s quickly learning she’ll have to work just as hard to stay.

What kind of stock photo says "working women"?

Mon, 2014-02-10 10:26

In ads, magazines, and marketing campaigns, a few images of women seem to come up again and again:  

Working woman?  Climbing ladders.  Or maybe wearing boxing gloves.

 There's also the woman-laughing-alone-with-salad.  

Most of these stereotypical images come from stock photo collections.  Now, Lean In, a non-profit led by Facebook's Sheryl Sandberg and named after her book, aims to correct the problem through a partnership with the biggest distributor of those photos, Getty Images.

Michelle Underwood looks for stock photos all the time, in her job as an art director for Zocalo Group, a marketing firm in Chicago. 

"I want to write a note to stock photographers," she says, "because every woman on every stock-photogaphy website is wearing a spaghetti-strap tank top.  And it drives me crazy."

The Lean In collection at Getty Images has about 2,500 images tagged to correct the problem. Jessica Bennett helped curate it for the Lean In Foundation, which gets ten percent of Getty's revenues from the photos.

"You’ll notice these people look real," says Bennett. "That was one of the biggest things." 

These are not just workplace images.  The first few pictures include a young girl on a skateboard, a mom teaching her daughter how to ride a bike, and a heavy-metal dad with his daughter on his shoulders. 

However, in the world of stock photography, 2,500 images is a very small collection.  

"That’s really nothing," says Lanny Ziering, an investor who has run stock photo companies. Getty’s site alone has tens of millions, and it has competitors. 

Ziering compares the Lean In collection to "what a couple photographers might be able to create in a week."

Which could be part of the point.

Jim Pickerell, a former stock photographer and an expert on the business, says stock-photo websites offer an overwhelming number of choices.

Together, we do a very common search on Getty’s site:  "woman office computer."    About 24,000 images come up.

Pickerell says most people will look through maybe three pages of search results.  At 100 images per page, that’s 300 photos.

"What about all those other images?" says Pickerell.  "Does anybody ever get to see them? And the answer is 'no.'" 

So helping this small number of pictures stand out—and starting a conversation about them—may be the point.  

"Maybe it has a shaming mechanism," says Bennett of Lean In.  "Like, there’s no excuse. This collection exists. No matter how small you think it is, this collection exists."

I suggest to her that getting a few news stories out there today may be the point of the exercise, and she doesn’t disagree.

Neither does Getty's co-founder and chief executive, Jonathan Klein.  "Two-and-a-half thousand images is certainly not going to change the way women are viewed across the world," he says.  "But it's creating the conversation."

It's Monday. Let's talk about stress.

Mon, 2014-02-10 10:23

From the Marketplace Datebook, here’s a look at what’s coming up Tuesday: 

In Washington, the Labor Department releases job openings and labor turnover data for December.

Feeling a little stressed? You might have company. The American Psychological Association releases its annual Stress in America survey.

She spent years as a castaway on an uncharted desert isle with no phone, no lights, no motor cars. The “movie star,” Tina Louise turns 80.

The Commerce Department reports on wholesale inventories and sales for December. The Senate Armed Services Committee is scheduled to discuss “Current and Future Worldwide Threats.”

And it’s 'Get Out Your Guitar Day' AND 'Make a Friend Day.' Hmm ... I don’t think you can do both. 

PODCAST: Problems in the U.S. drug pipeline

Mon, 2014-02-10 07:04

A Congressional Committee today will dive deeply into the world of drug shortages. Namely why manufacturers continue to run out of cancer drugs and other medications. It turns out this is a classic healthcare problem, trying to control costs and maximize value.

Back in the late 90s when ambassador Baucus was Senator Baucus, he traveled to China to promote the country’s inclusion in the World Trade Organization. More than a decade later, China’s a WTO member, Baucus is ambassador, and according to one former U.S. diplomat in China, he’ll have a lot on his plate - including a chill in relations between U.S. businesses and the Chinese government. 

Of all the industries technology is disrupting, the music business is experiencing some of the biggest changes. One thing that has not changed significantly: Music education. But the inventor of a new tool hopes to change that.

Toyota will stop making cars in Australia by 2017

Mon, 2014-02-10 04:44

First it was Mitsubishi, Ford, and a car company called Holden. Now Toyota says it will stop making cars in Australia, by 2017. The BBC's Phil Mercer joined us from Sydney to give some perspective.

Click play on the audio player above to hear the whole interview.

How Michael Sam coming out might impact his paycheck

Mon, 2014-02-10 04:41

The NFL is about to get its first openly gay player: University of Missouri defensive lineman Michael Sam revealed on Sunday that he is gay, just months before the draft. The announcement may end up hurting Sam's earnings potential – but by how much? 

Scott Rosner, sports business professor at the Wharton School of the University of Pennsylvania, joins Morning Report host David Brancaccio to break down the numbers.

How Michael Sam coming out might impact his future in the NFL

Mon, 2014-02-10 04:41

The NFL is about to get its first openly gay player: University of Missouri defensive lineman Michael Sam revealed on Sunday that he is gay, just months before the draft. The announcement may end up hurting Sam's earnings potential – but by how much? 

Scott Rosner, sports business professor at the Wharton School of the University of Pennsylvania, joins Morning Report host David Brancaccio to break down the numbers.

Who are the biggest givers? And where do they get the money?

Mon, 2014-02-10 04:18

Big philanthropy came roaring back in 2013, after a handful of years in which the economic downturn lead to the shrinkage of charitable giving. 

"The amount that [living donors] gave was as much as they gave in the previous two years combined, and that's a really strong showing," said Stacy Palmer, editor of the Chronicle of Philanthropy.  

Facebook founder Mark Zuckerberg and his wife Priscilla Chan came in first on the list, with a gift of nearly $1 billion to the Silicon Valley Community Foundation, marking, Palmer said, the first time someone under 30 has topped the list. 

Nike co-founder Phil Knight and his wife Penelope Knight were third on the list, with a pledge of five hundred million dollars to the Oregon Health and Science University Foundation.

"This is an incredible gift, and we're extremely grateful to the Knights," said Dr. Brian Druker, who directs the Knight Cancer Institute. Druker said the money will be used for cancer research. Knight's gift comes with strings attached. OHSU must also raise $500 million within the next two years, or forfeit the money altogether. 

"It was a complete surprise to all of us," Druker said. "And the surprise was they would donate $500 million to the OHSU Knight Cancer Institute, if we raised $500 million within two years. So the amount was shocking and staggering, as was the timeframe and deadline." 

And while it might sound odd to attach strings to a gift, Dr. Druker calls it "a brilliant move," explaining that simply handing over $500 million with no conditions might make other donors believe the center didn't need more money. In fact, Dr. Druker said, a full billion is needed in order for the center to have the kind of impact it desires. 

Some philanthropy watchers found the list largely unsurprising. 

"Overall what strikes me is how completely conventional their giving strategies seem to be," said Lucy Bernholz, a visiting scholar at Stanford University's Center on Philanthropy and Civil Society. "It's going to foundations or community foundations. You don't get much of a sense that they're working with new technologies, that they're thinking about the intersection of politics and charity." 

And while she found notable the number of young people and tech entrepreneurs on the list, Berhnolz said, "It looks like a list of activities that could easily have been pulled together 10, 20, years ago, well before the advent of the internet or the creation of social entrepreneurship."

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