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Bank risk-taking 'unfinished piece of business': Obama

Wed, 2014-07-02 13:57

In a wide-ranging interview covering the economy, President Obama on Wednesday said that despite financial reforms, Wall Street continues to take big risks, and for his administration, "that is an unfinished piece of business."

Obama also said that despite the fact that the economy has seen recovery and the unemployment rate has improved since the Great Recession, many Americans still feel like they haven't shared in those gains, particularly middle-class Americans. The President said gains have been made during his administration and said middle-class issues drive much of his agenda: 

"Although the economy has been growing, wages and incomes continue to be relatively stagnant, and that's been a 20- to 30-year trend, and that involves some structural issues that we've really got to work on. But, having said all that, what is indisputable is that the economy is much better now than it was when I took office and than it was the last time we spoke, and that does make a difference. It makes a difference that we've created 9.4 million new jobs, it makes a difference that manufacturing continues to strengthen for the first since the 90s, it makes a difference that we've been able to slow the rise of healthcare costs, it makes a difference that we have seen housing recover in many communities so that people are finally getting their houses back above water. So all these things add to confidence, add some momentum to the economy, but that underlying trend for middle-class families — that they don't feel like no matter how hard they work, they're able to get ahead in the same way that their parents were able to get ahead — that's something that we continue to tackle and drives a lot of my agenda now."

The President also criticized Wall Street — large banks in particular — for practices he said are aimed at generating revenue through "trading bets" instead of through investments that grow American businesses. Obama said that the United States has made significant economic reforms since the financial crisis in 2008, but there is still more work to be done:

The problem is that for 60 years, we've seen the financial sector grow massively. Now, it's a great strength of our economies that we've got the deepest, strongest capital markets in the world, but what has also happened is that as the financial sector has grown, more and more of the revenue generated on Wall Street is based on arbitrage -- trading bets -- as opposed to investing in companies that actually make something and hire people. And so, what I've said to my economic team, is that we have to continue to see how can we rebalance the economy sensibly, so that we have a banking system that is doing what it is supposed to be doing to grow the real economy, but not a situation in which we continue to see a lot of these banks take big risks because the profit incentive and the bonus incentive is there for them. That is an unfinished piece of business, but that doesn't detract from the important stabilization functions that Dodd-Frank were designed to address.

President Obama also took aim at the Republican majority in the House of Representatives for pushing back against policies he said would help the middle class, including immigration reform. The president spoke of House Republicans' "ideological predispositions," saying that they are "captive of a small ideological band inside their caucus."

I don't think this is a permanent state of affairs; I think over time the Republican Party will move back to the center, mainly because if they don't, they'll never win the presidency again. And at a certain point people are just going to get fed up. But in the mean time, what I have to make sure I'm doing is looking for every opportunity to go ahead and help the married couple that is struggling, working hard, paying their bills, but at the end of the month still don't have any savings and still don't feel like they're getting ahead. If I can help them on childcare costs, if I can help them boost their wages a little bit, if I can help them save for their kid's college education and keep college cost down, if I can do those things, then I will at least have the satisfaction of helping some people. And in the meantime I'm going to continue to reach out to Republicans wherever and whenever they're willing.

Music streaming is the next frontier for Google

Wed, 2014-07-02 13:52

The last few weeks have been busy in the online music industry. First, Apple bought Beats Music. Then Amazon added a music service to its Prime subscriptions. Now, Google is buying Songza, a streaming service that recommends music based on your mood or activity.

There are categories like “going to a festival” or “twerk at werk,” which queued up Pharrell’s “Happy.”

“Everybody’s competing for that slice of consumers’ time,” says Willy Shih, a professor at Harvard Business School. “You look at a service like Pandora, where the number of hours [users are] connected to the service per month is actually surprisingly high.”

When users aren’t on their computers, they can keep listening on smart-phone apps, which Shih says is appealing to advertisers. Since Google is already good at selling ads, this could be one more offering in their portfolio. 

But users have also shown they’re willing to pay to opt out of ads – and pay over and over again, essentially renting the music instead of buying it, says Sam Hamadeh, the founder and CEO of PrivCo, a research firm that’s looked into the financials of several streaming services.

“That’s sort of the holy grail in the internet or e-commerce business,” he explains. “Once you sign up, it’s a one-time sale, and a one-time marketing effort to get you to buy it and then it pays off dividends for years, if not forever.”

However, Hamadeh cautions these services aren’t actually profitable yet.

So there’s another reason to be in this business - and it’s not really about music.

“Every service that Google can offer that keep web users or mobile phone users within the Google universe of applications and services adds value,” says Matthew Crain, a professor of media studies at Queens College CUNY.

 It also keeps consumers away from Google’s competitors – which might be enough to make the company want to “twerk at werk.”

Fighting the classroom tech war in Los Angeles

Wed, 2014-07-02 13:50

The Los Angeles Unified School District had plans to give every kid an iPad; a billion-dollar proposition.

But it turns out the one-size-fits-all approach may not be  the best strategy after all.

So some LA schools will be allowed to choose between Apple, Microsoft and Google-based devices.

 

Broadening the choices makes sense, said Brandon Martinez from USC’s Rossier School of Education. “It allows students and teachers to see what works best for them. And then they can give feedback, they can swap devices, and give a more informed decision when they look to purchase at a larger scale.”

LA’s move isn’t great news for Apple. But it’s not going to knock the company off its throne, as king-of-the-educational-technology-market.

“Apple is in a very, very strong position,” said Mike Fisher, who studies the education technology market for Futuresource. “They are the number one in the U.S.”

But competition is coming on fast.

“The big trend we have seen in the last year is the rise of Chromebook,” said Fisher. Chromebooks run Google-based apps and they can be relatively cheap.

In 2012, Chromebooks accounted for only 1 percent of school devices shipped. By the end of last year, they had a quarter of the market.

Microsoft is also big player in the educational tech.  It recently scored a big contract with Houston Independent School District.

And Fisher thinks Amazon may be next to jump into the education game.

What's more, he thinks they’ll all start hooking up with curriculum providers.  “You’ll see some of the big publishers in the marketplace, people like Scholastic, Pearson, Houghton Mifflin Harcourt, partnering with hardware vendors.

Schools are a $13 billion global battlefield for makers of educational technology.

“It’s a green field,” said Stephen Baker, an analyst at the NPD group. “A place to sell that doesn’t have anything now,  so it’s all new volume.”   

By some estimates, only about a quarter of students and teachers in the U.S. have a classroom computing device.

As we move to a world where more kids are taking tests and learning online, schools are likely to want computers in everyone’s hands.

 

Target asks shoppers to please leave guns at home

Wed, 2014-07-02 13:41

Target - itself the recent target of gripes from some gun owners - issued a "respectful request" that customers leave their guns at home. Its action follows similar moves by Starbucks, Sonic, Chili's and others.

Companies are increasingly taking stands on a host of hot-potato issues including gay rights, contraception, and guns, whether they want to or not.

"These things can actually be forced on you," said Neeru Paharia, a professor at Georgetown's McDonough School of Business. "You do have to take a stand, right? You have to pick a side."

Target was drawn into the fray after gun rights advocates toted their rifles into Target stores in Texas and elsewhere. In response, an anti-gun group, Moms Demand Action for Gun Sense in America, collected almost 400,000 signatures protesting the carriage of firearms in stores.

Target says 80 to 90 percent of its customers are women and nearly 40 percent have children.

David Sutton, CEO of Top Right Strategic Marketing, said if a company takes a political stance, that stance should be aligned with the company's public image and private values.

"Whether it's gay marriage or gun control, if your inner identity is consistent with the statements you're making in public, I think you're on solid ground," Sutton said. "I think brands that take a stand on things they believe in - consumers appreciate that."

Not all consumers appreciate Target's decision. The company's interim CEO, John Mulligan, made the "no-guns" request in a post on the company's blog. It has received more than 2,000 comments, including some angry responses.

Target's request in no way affects gun carry laws. 

Paul Argenti, a professor of corporation communication at Dartmouth's Tuck School of Business, points out that Target may have some tough decisions to make if customers insist on bringing their guns to the store.

"I think the really interesting question is: what happens when the people who are obviously going to oppose this decision start pressing the issue," Argenti said. "That's when we're going to see some real action here."

What does the Fed chair worry about? Slack

Wed, 2014-07-02 13:31

The Labor Department releases its latest jobs report this Thursday, and a lot of economists are talking about  "slack" - the unused part of the economy.

“'Slack' means that there are significantly more people willing and capable of filling a job than there are jobs for them to fill,” said Federal Reserve Chair Janet Yellen during a speech in Chicago back in May. “There remains considerable slack in the economy in the labor market.”

Slack matters. But just how much of the economy isn’t being used right now is a matter of debate.

“Slack in the labor market is often one of the first things the Fed looks at in terms of setting monetary policy," says Mark Calabria, director of financial regulation studies at the Cato Institute.

And by monetary policy, he’s talking about interest rates and other ways the Fed fights inflation.

“To the extent there is slack in the labor market, slack in the overall economy, you’re not producing as much as you would otherwise," Calabria says. "You’re certainly falling short of the potential in terms of the economy.”

Calabria says slack means we’re a less wealthy society than we could otherwise be. It also matters for the un- or under-employed.

Justin Wolfers, professor of economics and public policy at the University of Michigan, says the economy is recovering from an "extremely unusual recession" that's left the labor market in a state it's never been in before. And that's causing some uncertainty. 

“If we had run out of slack, then we should start to see wages and inflation really starting to rise right now," Wolfers says. "But we don’t see that at all. And so by that measure it suggests we’ve got quite a long way to go.”

And since the head of the Federal Reserve thinks there’s a lot of slack in the economy, it probably means lower interest rates for a longer amount of time.

Meet the other undocumented immigrants

Wed, 2014-07-02 12:10

It doesn’t get much attention, but 30 – 40 percent of the undocumented immigrants in the U.S. entered the country legally. Some come as tourists. Others arrive here with a student or work visa.

A man I’ll call "Will" came to Los Angeles from Canada.

The last time he crossed the border, Will told the U.S. official he was just coming to Seattle to shop for the weekend. “So I basically entered the country on a lie.”

He eventually applied for – and got – a visa to work legally for a music company in LA. Then, the music industry tanked. Will lost his job and his visa.

Now 50-years-old, Will has lived in LA for half of his life. Much of that time, he’s worked under the table.

“In conversation, I’ll kind of jokingly say, ‘Well, I’m an illegal alien,’” says Will. “And people are always shocked because I don’t look or sound like an illegal alien.”

He’s white, with a medium build and sandy-brown hair. And even though he may not look the part, he does represent so-called "illegal aliens."

At least a third of the 10 million undocumented immigrants in the U.S. didn’t sneak across the border. Many of them flew here in an airplane with completely legitimate papers.

But it’s what happens next that concerns Republican Congressman Lou Barletta.

“They come on a visa. The visa expires and they simply don’t go home. They blend in to the interior of the country and we can’t find them,” says Barletta.

Those folks are known as ‘visa overstays.’

Will, the Canadian, is one of them. In the underground economy, he sometimes works alongside undocumented Latinos.

“As a handyman, I do work in houses that are under construction and I see how Mexicans are treated and how they’re paid. And I am not treated that way, even though I am just as undocumented as they are,” says Will.

Americans simply aren’t on the lookout for Canadians because they’re not seen as an economic threat.

Will says, “Canada has such a high standard of living. Much higher than it is in America. And most people in Canada have no desire to come here.”

But when Canadians do come here for work, Will says, they don’t necessarily have to start at the bottom. “I don’t see many Canadians who come here and work as busboys.”

Canadians are hardly alone. Educated professionals from around the world work in the U.S. without official authorization.

Congressman Barletta sees this flaw in the immigration system as a threat to national security - and job security.

“They may not be looking for an entry level job. They may be looking for much different jobs. And some of them even high tech jobs,” says Barletta.

Barletta has introduced a bill that would make it a crime to stay in the country after a visa expires.

In terms of any broader immigration reform, Congressman Barletta won’t support any legislation that doesn’t address visa overstays. He says, “It’s a non-starter for me.”

One solution involves the collection of biometric data from foreign visitors. At airports, we collect the biometric data on the way in. But not on the way out. That means there is no reliable calculation for the number of people who may have overstayed their visas.

“To do biometrics on departure would require implementation of some sort of infrastructure at all of our ports of entry – air, sea and land – that simply doesn’t exist yet,” says Theresa Cardinal Brown with the Bipartisan Policy Center, which recently studied the issue.

That new infrastructure would cost taxpayers north of $3 billion; money that hasn’t been allocated. So the U.S. is still a long way from being able to identify and track down visa overstays.

And that’s lucky for Will, the Canadian, living in LA. At home, Will plays the piano for an audience of one – his dog. It seems like a carefree existence.

But it could all be taken away. And after 25 years here, LA is the only home Will knows.

“I have nothing in Canada. I have no place to go,” says Will. “It would be just like going to another country and starting over. I have nightmares about it.”

Will is trapped in immigration limbo. If he ever returned to Canada, he would not be allowed back into the U.S. He’s already told his mother that he can’t return, even if she gets sick.

“I said, ‘You know, if something happens, I can’t go. If you have a heart-attack in Canada, I can’t go there.’ And she’s like, ‘I know. And I understand. And it’s okay,’” says Will.

That’s just one of the compromises necessary for people like Will who continue to work in this country after their visa has long since expired.

Homeowners brace for another foreclosure wave

Wed, 2014-07-02 10:42

In the thick of the housing crisis, some lenders slashed borrowers’ interest rates to as little as 2 percent. But rates start to rise again this year, and that will be hard for homeowners who are still struggling.

That group includes Adriana Martinez. She and her husband bought their dream house, in Olney, Maryland, in 2005. Right now, their monthly mortgage payment is about $2,200, thanks to an interest rate cut they got in 2010, through the government’s Home Affordable Loan Modification Program, which is referred to as HAMP. But even that payment has been tough, since Martinez lost her job last November.

“I need to find a job because, you know, it’s hard. It’s hard,” she says, holding back tears.

Martinez’s 16-year-old daughter, Julie, tries to help. She works part time at a gift shop. Julie says she and her mom were at the bank last week, confronted with a zero balance after the mortgage payment was deducted.

“I gave my mom my entire paycheck -- it was like $150 -- because she really actually needed it," she says.

And Martinez’s mortgage payment will rise by about $240 a month next year, because the HAMP interest rate cut is only temporary. After five years, the rate goes up by one percentage point a year, until it reaches the average interest rate at the time the loan was modified. Now, Martinez is afraid she’ll lose her home. 

She is trying to get help, meeting with a housing counselor at the non-profit Housing Initiative Partnership, or HIP. They talk about how Martinez can pare expenses, maybe try to get the principle on her loan reduced.

HIP counseling director Mary Hunter says they have a lot of clients like Martinez, who are already struggling and now face rising interest rates.

“If the mortgage payment goes up but their income hasn’t gone up, they’re going to be stretched,” she says, adding that some my lose their homes. “I am worried that there’ll be a new wave of foreclosures in the next year.”

It’s already happening. More than a million homeowners got a mortgage interest rate reduction through the HAMP program. But since the program began in 2009, about a third of them have dropped out. 

“Well, over 350,000 were not able to make their payments," says Christy Romero, inspector general of the Treasury Department’s Troubled Asset Relief Program. "And more than a third of those lost their home in foreclosures. Others lost their home in other ways, like short sales.” 

Romero says the Treasury still hasn’t spent about $26 billion that was supposed to be used to help homeowners. Recently, Treasury announced it’ll use some of that money to extend the HAMP program to more people, through 2016. But Romero says Treasury should focus on homeowners already in HAMP, to keep them from dropping out, and causing that new foreclosure wave.

Homeowners across the country who got an interest rate cut through HAMP are now facing a rate increase. Some haven’t been able to keep up with their mortgage payments.

Special Inspector General, Troubled Asset Relief Program quarterly report to Congress. April 30, 2014

This is what happens when the White House calls

Wed, 2014-07-02 05:00

So here's something I don't get to say every day.

The White House called Tuesday.

I know, right?!

They said if I can be in Washington on Wednesday by 2 p.m., I can have 15 minutes with the President.

So...we said "Sure." (Duh.)

A funny thing happens when that happens, though.

We gather a brainstorming team, of course, to figure out what we want to get out of the interview and how to frame the questions.

But then the ideas start coming. Everybody's got a thought on what I should ask him – which is great. Catch is, I've only got a finite amount of brain space to process all those ideas.

So the closer the interview gets, the more the stress mounts.

It happened last time we had the President on, too. Exactly this way. More and more ideas, less and less time to process them, until that moment when he and I shook hands as we prepared to sit down.

Then – and this is the only way to describe it – I had a moment of clarity. I knew how the interview was going to go, I knew how his answers were going to go, and I knew exactly how it was going to turn out.

And it did. Just like I thought it would.

All of which is to say – I'll be in Washington today.

Because the White House called.

The interview airs on Thursday. Here's the way it turned out last time. Me and the leader of the free world. On folding chairs. In the middle of the desert.

Video Credits:

Produced by Preditorial http://preditorial.tv

Music:

"Faster Does It" Kevin MacLeod (incompetech.com

Licensed under Creative Commons: By Attribution 3.0
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"Backed Vibes (clean)" Kevin MacLeod (incompetech.com

Licensed under Creative Commons: By Attribution 3.0
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"Shades of Spring" Kevin MacLeod (incompetech.com

Licensed under Creative Commons: By Attribution 3.0
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"Acid Trumpet" Kevin MacLeod (incompetech.com

Licensed under Creative Commons: By Attribution 3.0
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Not just T-Mobile: how bogus charges get on your bill

Wed, 2014-07-02 04:00

The FTC says T- Mobile made hundreds of millions of dollars from bogus charges on consumers phone bills. The charges were from third parties, but T-Mobile’s cut was allegedly as much as 40 percent.

"These were charges for things like flirting tips, dating tips, horoscopes, and other things that the consumer didn’t want," says FTC attorney Malini Mithal. "This is a practice called mobile cramming."

And it’s not something that T-Mobile invented.  "It’s been going on for years—decades even," says David Butler, a spokesman for Consumers Union. "Long before the popularity of wireless phones, landline phone users were getting hit by cramming charges."

A Senate Commerce Committee investigation from 2011 estimated the costs to consumers across the industry in the billions. The committee report details just how consumers end up getting stuck with these charges: 

1. 100 Percent, straight-up scamming. Billers just submit customer phone numbers to telecoms.

That includes unpublished numbers that nobody actually uses for phone calls. 

"Numerous businesses and government agencies told Committee staff they have incurred crammed charges on telephone lines that are dedicated to alarm systems, elevators, modems, and other lines that are not assigned to any employees," says the report. Many of the numbers were completely unpublished. A fax line got billed for music downloads. An ATM line got billed for "Internet services." 

A man in Connecticut fought charges from "Talent & More," which was charging his mother-in-law for hosting an online profile marketed to casting agents. "My mother-in-law us 82 years old, does not have internet access, and would not know how to use a website," he wrote to the state attorney general.

2.  Dummy calls to get bogus "authorization"

Business owners told the Senate committee staff that when they tried to fight bogus charges, they were told there was a recording of them giving authorization. The committee got some of those recordings, which "show telemarkets quickly reading through long scripts, while employees answer 'yes' or 'okay' to questions they clearly do not understand." 

3. Soliciting business via text... and not taking "no" for an answer

One company allegedly sent text messages offering horoscopes, dating tips and other services, and (according to the complaint in a class-action lawsuit) started charging people even if they replied "STOP" or called to say they didn't want the service. 

4.  With telecoms generally turning a blind eye — and sharing the profits

The Senate committee estimated that phone companies, which take a cut from third-party transactions, made more than a billion dollars from the practice over a ten-year period, and found that telecom companies did little to help their customers fight charges, or to check out companies that were obvious scammers.  

Which is pretty much what the FTC is charging in T-Mobile’s case.  The FTC says the company ignored signs that charges were bogus. And that the company buried those charges deep inside phone bills.

For its part, T-Mobile doesn’t dispute that stuff like this happened. But the company says it stopped billing for these services in late 2013.

For further reading:  Our friends at Ars Technica have been covering the cramming story for years, starting with an account by editor Nate Anderson of his own experience getting crammed in 2008

Here's an example the FTC says comes from a T-Mobile bill:

 

Train-hopping in the digital age

Wed, 2014-07-02 04:00

Train hopping, or the act of getting on freight trains without permission and riding them from depot to depot, is illegal and dangerous. It's also something that is, for many, a romantic endeavor, capturing the American spirit of adventure and travel.

Ted Conover did some train hopping in his youth, later writing a book about the experience entitled, "Rolling Nowhere: Riding the Rails with America's Hoboes." When his son Asa read his book, he felt the impulse to go train hopping himself. So Ted and Asa took a trip together, discovering along the way that new technology had changed the game.

In Ted’s experience, one of the hardest things used to be knowing where one was geographically while riding on a train; less of an issue today in an age of GPS-enabled phones.

Smartphones also allowed Asa an advantage over his father's earlier train-hopping days: the ability to document the experience in greater detail.

“I was on the trip to see what riding trains was like, rather than what being a hobo was like,” Asa said.

In addition to keeping them abreast of their location, the smartphones they were using let them contact home, document the trip through photos, and download a digital copy of an older guide to riding the rails, which the pair used often during the trip.

But even with digital enhancement, Ted believes the basic spirit of the endeavor has remained the same:

“One of the things that hasn’t changed is that your ability to get from point A to B on the rails is 100% determined by your own ingenuity and what you bring to the table.”

PODCAST: Companies get healthy

Wed, 2014-07-02 03:00

More on the lawsuit filed against Goldman Sachs that highlights alleged gender discrimination at the banking firm. Plus, the US Marshals' auction of bitcoin may have had an unintentional positive side-effect for the digital currency. Also, a look into why some companies are trying to offer healthier products without any prompting from government or legislation. 

Can companies Unilever and PepsiCo make us healthier?

Wed, 2014-07-02 03:00

For five years, Derek Yach pushed to make PepsiCo – the brand behind munchies like Lays and Cheetos – a producer of healthier, lower sodium, lower sugar foods and beverages.

The responses were both sweet and salty.

“There are parts of a company where the support and awareness of the needs to change are very high,” Yach reflects. “But of course there were many who isolated me.”

Yach is attending this year's Aspen Ideas Festival in Colorado as corporate insiders reflect on their role in creating a healthy society. He was brought on by PepsiCo’s CEO, Indra Nooyi. Yach says she saw the potential of a multinational to influence public health with different products.

“While I was there, I saw the growth of hummus, the launch of dairy products for the first time, yogurt, and we saw a range of other healthier products being tested," says Yach.

Still, the company wasn’t willing to invest as much into research and new products as Yach had hoped. He's now with a health research group called The Vitality Institute, but says unlikely companies are coming together with an interest in health and prevention.

“They include companies like Samsung, Microsoft, General Electric, small startups,” he says. “They’re looking of a root to profitability through new products to promote better health, whether it's devices or smart phones, or alerts, or adherence. And they’re looking at how it’s going to benefit the bottom line, and people’s personal health.”

Power From Behind The Counter

Rather than wait for consensus, or for the government to make the first move, drugstore chain CVS is trying to make the products behind its counters healthier. In October, CVS will stop selling tobacco products altogether, wiping out an estimated $2 billion a year in sales.

Dr. Troy Brennan, Chief Medical Officer and Executive Vice President of CVS, says it will be only a short-term loss.

“If you’re creative, you’ll be creative to the bottom line,” Brennan says. “Taking two billion out now, long-term that’s going to be a smart decision.”

He admits a lot of people were holding their breath before the announcement, expecting the stock to drop. Instead, Brennan says, it went up.

“We’re beginning to know we have to do something to take better care of ourselves. Companies that do those sorts of things, I think consumers are attracted to that and that’s the business interest.”

Across the pond, supermarket chain Tesco is also trying to nudge customers towards healthier decisions. By the end of the year, Tesco will remove displays of chocolates and candies at the checkouts in grocery and convenience stores.

Many more corporations are turning inwards and focusing first on wellness among employees. Yach says whether companies are changing products in stores or implementing health programs for workers, evaluation by a third-party will be key to understanding what works.

“The win will come through seeing whether the companies who do the right thing will see the uplift on the share price over the long term,” he says.

How a hotel earns five stars: the checklist

Wed, 2014-07-02 02:00

Hyatt is building a five-star hotel on West 57th street in Manhattan. According to Forbes Travel Guide, there are only seven others in New York City. The hotel’s pool will feature underwater speakers with a custom soundtrack from nearby Carnegie Hall, and the hotel's bath amenities are perfumed with Tubereuse 40, a custom scent created by Le Labo. 

Hanya Yanagihara, an editor at large at Conde Nast Traveler, says there are various evaluative bodies - AAA, the Michelin Guide - that rank hotels. For a hotel to win that coveted fifth star, certain standards must be met. 

“There has to be a 24-hour reception area, and there has to be an onsite restaurant, there has to be 24-hour room service, there has to be express dry cleaning service,” she says. 

Forbes Travel Guide uses 800 standards on a checklist used to evaluate hotels. Michael Cascone, the guide’s president and COO, says 70 percent of its secret algorithm is tied to customer service.

"No one leaves a hotel and says, 'you know what? That lobby was beautiful, but the service was bad and I’m going back.'” 

Bruce Wallin, editorial director at luxury lifestyle magazine "Robb Report," which covers hotels, says five-star guests expect 400-thread count sheets and nice artwork.

He agrees that top-notch hotels need to maintain high-end facilities, or as he puts it: "It can't be fake wood and Formica."

But Wallin also points out that ranking systems can be too focused on checklist items, and as a result, might overlook the less tangible elements of a hotel. This could potentially excluding smaller, yet special, properties.

What really sets top hotels apart, he notes, is service and surprise.

“In Milan there’s a hotel where every afternoon, you get a knock on your door, and instead of housecleaning it’s a cocktail cart and they’ll make whatever drink you want, right in your room," says Wallin.

But the real surprise may be six and seven star hotels, which Yanagihara says can be found in Dubai.

"It can mean that every guest has acess to their own Bentley, or there’s a helicopter pad on the roof," she says. 

The ranking, notes Yanagihara, is not formally recognized by any governing body.

A Five-Star Rating by the numbers

Inspectors for Forbes Travel Guide’s respond with a “yes” or “no” answer to certain standards during an incognito visit to a hotel. The hundreds of yes's and no’s on the inspection report are tallied into a score that ultimately earns the hotel a "Five-Star," "Four-Star," or "Recommended" rating. Here's some more numbers behind a Five-Star rating:

800 items

The number of items on the checklist that determines star ratings.

70%

The percentage of items on the checklist that are specifically related to service quality.

To receive a Five-Star Rating:

10 minutes

The amount of time within which bags should arrive after registration.

90 minutes

The amount of time within which the staff at the pool should offer a complimentary drink on a warm day.

5 minutes

The window of time surrounding the estimated time of delivery within which room service should be delivered.

24 hours

The amount of time that both a reception desk and a restaurant must be available and open.

To receive a five-star rating, a specific welcome gift should be provided, and bathrooms should be supplied with a variety of items the guest would find useful. For example, guests at Park Hyatt New York will be offered bathroom amenities scented with Le Labo Tubereuse 40, a custom designed scent for the hotel.

Bitcoin auction gives the currency more legitimacy

Wed, 2014-07-02 02:00

The US Marshals Service has announced that the bitcoins sold in its auction on Friday went to one, lucky bidder. Now, the almost 30,000 bitcoins have been transferred to that winner. 

The Marshals routinely seize the property of criminals, but only auction stuff off that’s legal. You wouldn’t have a heroin auction, for example. But they did auction the bitcoin seized from the black market website, Silk Road.

Why auction bitcoin?

“Because bitcoin is a legitimate asset," says Gil Luria, a managing director at Wedbush Securities. "And now the US Marshals Service has acknowledged that.”

But even with that legitimacy, bitcoin still isn’t easy to trade. To get it, you have to go to unregulated markets in places like Slovenia or China. Still, CoinDesk US editor Pete Rizzo says the auction helps.

“Is it raising awareness beyond where bitcoin was maybe a month ago?  I think absolutely," he says. "Does it still have a long ways to go?  I think yes.”

The new respectability has pushed up the price of bitcoin.  And even though it fell when the Marshals first announced their auction, it’s made up the lost ground, and then some.

 

 

 

 

 

When preschoolers outperform college students

Tue, 2014-07-01 20:07
<a href="http://marketplaceapm.polldaddy.com/s/preschoolers">View Survey</a>

People don't conference call during the World Cup

Tue, 2014-07-01 13:33

Today's US-Belgium World Cup game arrived at a most inconvenient time, coming as it did just an hour before deadline here at Marketplace.

20 mins before showroll, is @kairyssdal stressing about the day's script, or the defense in the #USAvsBEL game? pic.twitter.com/W473rkEdaf

— Marketplace (@Marketplace) July 1, 2014

We got the first half in.

But anyway: From the files of Intercall, a conference calling company, this little nugget (which we found on Quartz):

Conference call volume last week during the US-Germany game  was off 11 percent. That's "volume" as in the number of conference calls, not "volume" as in sound.

And to be honest, we were kind of lucky to get the show on the air today.

Aereo's competitors are itching to take its place

Tue, 2014-07-01 12:55

If you take a look at Aereo's website, there's a letter from the CEO that says the streaming TV company put its operations to a halt. The Supreme Court ruled last Wednesday that Aereo's service was deemed illegal.

That ruling - bad as it was for Aereo - was an opportunity for its competitors. Mark Ely is the founder and CEO of one of them: Simple.TV.

Ely says his company does things differently from Aereo. In his mind, the ruling was about  "where that TV content is fundamentally captured." Aereo captured broadcast TV content from a central facility and streamed it out to their subcribers. Simple.TV?

"We put the capture point in the user's home, and by doing so...really sit it in the same place that your traditional DVRs and place shifting technologies sit. It turns out that where you capture the content - who's doing it - really makes all the difference." 

According to The New York Times, the number of households who subscribe to paid television is down seven percent from last year while the number of households who use internet or other streaming services is up 30 percent from 2013. Ely sees this as an opportunity to increase business, especially since one of his main competitors is on pause.

"What we see is a whole generation of people growing up on Netflix and Hulu and over-the-top streaming services. And see those kinds of traditional networks - ABC, FOX, NBC - and others as having great content but they're not willing to necessarily buy those in a large bundle of other expensive channels that they don't care about."

Listen to our full interview with Mark Ely in the media player above.

Competition in streaming TV spikes as Aereo is halted

Tue, 2014-07-01 12:55

If you take a look at Aereo's website, there's a letter from the CEO that says the streaming TV company put its operation at a halt. The Supreme Court ruled last Wednesday that Aereo's service was deemed illegal. What it came down to is "where that TV content is fundamentally captured," says Mark Ely, the CEO of Simple.TV

Aereo captured broadcast TV content from a central facility and streamed it out to their subcribers. Ely says his company does things differently.

"We put the capture point in the user's home, and by doing so, kinda really sit it in the same place that your traditional DVRs and place shifting technologies sit, and it turns out that where you capture the content -- who's doing it -- really makes all the difference." 

According to The New York Times, the number of households who subscribe to paid television is down seven percent from last year while the number of households who use Internet or other streaming services is up 30 percent from 2013. Mark Ely is aware of this trend and sees the opportunity to increase business, especially since one of his main competitors is on pause.

"What we see is a whole generation of people growing up on Netflix and Hulu and over-the-top streaming services. And see those kinds of traditional networks -- ABC, FOX, NBC -- and others as having great content but they're not willing to necessarily buy those in a large bundle of other expensive channels that they don't care about. So we see ourselves as kind of a supplement to the whole generation that's growing up on internet video."

Yahoo gives 'Community' an online home

Tue, 2014-07-01 12:15

NBC’s TV show 'Community' was a cult favorite, but largely a ratings loser for the network, meaning it often seemed to be on the brink of being canceled.

That struggle was mirrored in its final episode, as the show's namesake community college faced an uncertain future.

Its main characters are told: “Your school is still bankrupt, it is still unmarketable and it is still on the permanent chopping block of anyone who has any say in its future.”
  Now, despite being canceled by NBC in May, "Community" is getting a second shot at life.   Its sixth season will air – or rather stream – on Yahoo, which will use the show to beef up its original video content.  

“Literally, last year we produced 86 series, none of whom you’ve ever heard about because it was sort of a failed branding exercise,” Yahoo CEO Marissa Mayer admitted at TechCrunch’s Disrupt New York event in May.

Mayer hopes that original content, along with the company’s more established search and email services, will help make the site part of consumers’ daily online routines, which would then boost advertising.

In order to draw people to the site, Yahoo needs strong, unique content – different from what Netflix or Hulu is offering, says Sam Craig, a professor at NYU’s Stern School of Business.

“It’s a crowded marketplace out there and unless you have something with an identity, people aren’t going to come to it,” he explains.

"Community" offers a dedicated audience, which – while small by broadcast standards – is passionate about the show and loyal to it, says Max Dawson with the media consulting firm Frank N. Magid Associates.

Another plus – the wealth of the show's existing viewers. 'Community' has very strong support among households making over $150,000.

“It beats out things like The Voice. It beats out mega-ratings success stories, [like] Big Bang Theory, in attracting those rich viewers,” says Dawson. “Thpse are viewers who are the most difficult to attract and the most appealing for sponsors.”

One network’s trash could be a tech company’s treasure.

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