Marketplace - American Public Media

Movie theaters react to threats over "The Interview"

Wed, 2014-12-17 01:30
25 percent

Apple has shut down online sales of its products in Russia, citing the fluctuating value of the ruble. As Bloomberg reports, Apple had increased the price of the iPhone 6 by 25 percent last month to try and accommodate the plummeting value of the currency. 

$30 million

Based on audience interest, projections for "The Interview," the comedy in which an assassination attempt is made on North Korea's Kim Jong-un, showed a possible $30 million in profits in its first four days. However, with the most recent threats from "The Guardians of Peace" to attack showings of the movie, theaters have been given the option to opt out of carrying the film. 

11 states

The sale of cannabis to adults 21-and-over with valid ID is now legal in Colorado, Washington, Oregon and Alaska by voter initiative. Marijuana-legalization advocates, meanwhile, predict that as many as 11 more states could pass similar initiatives by 2017: California, Nevada, Arizona, Missouri, Massachusetts, Maryland, Delaware, Maine, New Hampshire, Vermont and Hawaii. 

$188 million

Pennsylvania-based Walmart employees have won a class-action lawsuit against the company. The workers claims involved having breaks for meals and rest cut short. Walmart has been ordered to pay $188 million.

6 months

(Former) American Apparel CEO Dov Charney was officially fired yesterday, 6 months after being suspended from the position. Paula Schneider, who has leadership experience at BCBG Max Azria and Laundry by Shelli Segal, takes the helm of the company starting January 5th, as reported by the New York Times. When Marketplace spoke with Dov Charney in January of this year, host Kai Ryssdal asked about his greatest weakness. His reply: "My biggest weakness is me. I mean, lock me up already! It's obvious! Put me in a cage, I'll be fine. I'm my own worst enemy."

Gibson CEO: We're so much more than guitars

Tue, 2014-12-16 14:07

Henry Juszkiewicz grew up playing guitar and played some gigs before becoming the CEO of one of the world’s most recognizable music companies, Gibson.

“My first band had an accordion, because we played a lot of weddings,”  Juszkiewicz says.

But Gibson is a lot more than just guitars these days, according to Juszkiewicz.

“We are in the music business, not just one segment,” he says.

Gibson is getting into the headphone business, Juszkiewicz says, and the company recently signed a 15-year lease for one of Los Angeles' most recognizable music hubs, the Tower Records building on the Sunset Strip.

“I’m gonna try to bring back the feeling that Tower had on people…. We also want live entertainment. We want it to be a thriving cultural place,” Juszkiewicz says. 

A different kind of higher education

Tue, 2014-12-16 12:19

What’s a university to do when it’s trying to burnish its reputation for sober academics, but it’s surrounded by stores selling Moonwalk, Lemon Diesel and Trainwreck strains of legal pot?  

This is the situation the University of Colorado Boulder is in. It’s ranked fourth for prevalence of marijuana use in student surveys, according to Princeton Review.

“CU Boulder, an exceptional school academically, has been in the top five or six schools on that 'Reefer Madness' list for a long time,” says Princeton Review publisher Rob Franek. 

But since the beginning of 2014, with implementation of voter-approved legalization of adult-use recreational marijuana, stores and dispensaries have proliferated in and around Boulder.   

And that development happened in the same year that the school experienced a 28 percent jump in undergraduate applications. 

“We see no correlation between our rise in applications and the legalization of marijuana,” says university spokesman Ryan Huff. “It’s really a coincidence of timing.”

Kevin MacLennan, Boulder's director of admissions, explains that coincidence: the same year that recreational marijuana legalization took effect in Colorado, the university adopted the Common Application. The common app, is it’s known, makes it much easier for students to apply to multiple colleges. Schools typically see a double-digit jump in applicants when they begin using it.

Applications are up again this fall by 12 percent as of late November, according to MacLennan. He attributes the rise to increased recruitment. Similarly, Colorado College in Colorado Springs – No. 13 on the Reefer Madness list — has also seen applicant numbers jump by double-digits since 2012. The college partly attributes to joining a new college consortium that has expanded the applicant pool.

It could also be that some of these students want to come to Colorado because of the legal recreational pot. But, says “that’s something that’s fairly hard to track on an admissions application," MacLennan says.

On an official tour of the 30,000-student campus, there wasn’t much discussion of the issue among prospective students and their parents. But the issue was on their minds. 

“Of course as a parent I would be concerned that an addictive substance is legal,” said Charles Stevens, visiting from Chicago with his son. “But alcohol is legal. I don’t know a whole lot about cannabis, but I’m certainly going to learn more about it.”

His son, Alex, said Boulder is his first choice because of the skiing, not the liberal marijuana laws.

Suzanne Baker, who lives in Denver, was visiting with her granddaughter from Hawaii. Baker is pro-legalization so the issue “doesn’t concern me,” she says. “If my granddaughter is going to get into something, she can get into alcohol or anything else, so I think it’s a personal decision.”

For years, university administrators have been trying to downplay their party-school image, talking up Boulder’s academic reputation, cutting-edge research, especially in science and aerospace, and touting the number (five) of faculty members who are Nobel laureates.

During freshman orientation and in programs run by the school’s health services, students (and their parents) are warned early and often that pot is still banned on campus, and that it’s illegal for anyone under 21. And reminded that heavy use can get in the way of academic success.

Several years ago, the administration cracked down on the local 4/20 "smoke-out," where thousands gathered on campus to openly get high. 

“That was a huge disruption to our academic pursuits here on campus, so we have effectively shut that down,” says Huff. “I think when you take steps like that, when you take greater education to your students, you’re going to see the use drop.” 

Students are noticing the new PR push. “There has definitely been a concerted effort to rebrand CU not as a party school, but as an academically serious institution,” says Lauren Thurman, a junior who is opinion editor of the student newspaper, the CU Independent

“You’ll see these little banners all over campus where it’s like, ‘Be Ambitious, Be Generous, Be Bolder.’”

Thurman says plenty of students, including her close friends, are serious about their studies and don't smoke much pot. Still, she says, it's ubiquitous.

“Definitely on a daily basis you’d get a whiff of it somewhere," Thurman says. "So in the dorms you wouldn’t smell marijuana so much as you would smell burning popcorn, which was sort of the universal sign that someone was trying to cover up smoking.”

College students will probably be covering up their smoking less – and using pot more, in coming years – as legalization spreads to other states and the social stigma falls away. This is a generation raised thinking of marijuana as safe, even salutary, for human health.

“Most of the highest-achieving, most brilliant students I know are really heavy smokers,” says Anna Squires, a sophomore at Colorado College. “I don’t know that that’s a good thing, but I think they exist on a more philosophical plane, and they’re just thinking really deeply about what they’re learning.”

The Sony hack, dissected

Tue, 2014-12-16 11:00

The Sony hack saga continues, and the hackers are getting more serious. They warned of 9/11-like attacks on movie theaters if the movie "The Interview" opens as scheduled on Christmas Day, and also promised a "Christmas gift" of files. 

Kai sat down with Marketplace Tech host, Ben Johnson, to talk about the lingering questions, including what happens when email systems get hacked. 

Hacking Sony's emails

Tue, 2014-12-16 11:00

The Sony hack saga continues, and the hackers are getting more serious. They warned of 9/11-like attacks on movie theaters if the movie "The Interview" opens as scheduled on Christmas Day, and also promised a "Christmas gift" of files. 

Kai sat down with Marketplace Tech host, Ben Johnson, to talk about the lingering questions, including what happens when email systems get hacked. 

December shores up 'mom and pop’ toy shops, for now

Tue, 2014-12-16 11:00

The Big Fun Toy Store in Cleveland just celebrated its 24th year in business. And although the store has had ups and downs, owner Steve Presser says he has reason to smile this time of year. The holiday season accounts for a big chunk of the toy store’s sales.

"Depending on how the calendar treats us, five or six weeks, for most businesses like myself, it’s 25 to 35 percent of our business," says Presser. "December has been really strong."

Still, Presser worries about the future of mom-and-pop shops.

"In the last six to nine months, I’ve seen just a dramatic turn towards [online] shopping by customers," Presser says. "The public has gotten very lackadaisical and it’s easy just to order at home."

Coffee engineered to put you to sleep. Seriously.

Tue, 2014-12-16 11:00

There's a coffee company based in Vancouver that is, in my opinion, completely missing the point.

New Counting Sheep Coffee helps put you to sleep. Seriously. The coffee is blended with organic valerian root, which is an herbal sedative. 

It comes in two varieties, Bedtime Blend/40 Winks and Lights Out. The founders of the coffee company pitched their product on the Canadian television series "Dragon's Den."

Should you be interested, the coffee is available on Amazon.

 

Subscription services stage a comeback

Tue, 2014-12-16 11:00

AMC Theatres is experimenting with a new subscription service: Pay a monthly fee and see an unlimited number of movies.

This is the latest in what might be called a "subscription boom." Food, clothing, personal hygiene products, are all being offered through subscriptions. Stacy Spikes, CEO of Movie Pass, the theatrical subscription service partnering with AMC, says people increased their moviegoing by 60 to 70 percent after signing up for a subscription. And most of those people are from that most coveted of demographics: millennials.

Predictable income from young consumers has spawned new businesses like Dollar Shave Club, Blue Apron and Trunk Club. Their investors subscribe to the belief that the future of commerce looks a lot like the old-school business model of media companies.

Subscriptions make a comeback

Tue, 2014-12-16 11:00

AMC Theatres is experimenting with a new subscription service: pay a monthly fee and see an unlimited number of movies.

This is the latest in what might be called a "subscription boom." Food, clothing, personal hygiene products, are all being offered through subscriptions. Stacy Spikes, the CEO of Movie Pass, the theatrical subscription service partnering with AMC, says people increased their movie going by 60 to 70 after signing up for a subscription. And most of those people are from that most coveted of demographics: millennials.

Predictable income from young consumers has spawned new businesses like Dollar Shave Club, Blue Apron and Trunk Club. Their investors subscribe to the belief that the future of commerce looks a lot like the old-school business model of media companies.

When the ruble falls, who hears it?

Tue, 2014-12-16 11:00

The ruble is worth half – half – of what it was worth in July.  The simple reason, of course, is that people don’t want the ruble.

“People aren’t investing in Russia,” says Alexander Kliment at the Eurasia Group. “That was the problem before the Ukraine crisis and it’s been exacerbated by the sanctions and what’s followed."

It is also the reason the ruble’s fall isn’t expected to cause major economic havoc outside Russia. 

Jeff Mankoff, deputy director of  the Russia and Eurasia Program at the center for Strategic and International Studies, says while Russia’s economy is larger and more interconnected, “because of the sanctions there’s been an effort on the part of a lot of those companies in neighboring countries and Europe to reduce their exposure in Russia.”

Inside Russia, of course is a different story.  Russia’s imports are now twice as expensive as they were in July.

“Not only is Russia’s economy contracting, it’s also experiencing inflation,” says Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman. “This is a horrible mix – if you stimulate the economy you fuel inflation.”

Russia’s foreign debts are also more burdensome.

“Russia has about 680 billion dollars of borrowing it did overseas,” Chandler says. “about two thirds of it is denominated in U.S. dollars,” which are now more expensive.

Analysts including Kliment say they don’t see widespread default, yet.

“A lot of that corporate debt is held by state companies ...so if they were to get into trouble the state would probably bail them out.”

While the consequences of Russia’s currency route inside the country are economic, outside they are geopolitical. 

“The economic pressure that Russia is experiencing right now is being framed in Russia as part of a western campaign to weaken Russia,” says Kliment. President Putin’s popularity – which is around 90 percnet – isn’t counted in dollars or rubles. “It’s based almost entirely on a very nationalistic tough guy image.”

So how will that tough guy respond when economically cornered?

Russia ramps up response as ruble plummets

Tue, 2014-12-16 11:00

The Russian Central Bank hopes raising interest rates from 10.5 to 17 percent will give people an incentive to hold onto the ruble and not bail into say, the euro, or the dollar

“The falling  price of oil and economic sanctions are having a very dramatic impact in terms of isolating Russian entities from the international capital markets,” says Charles Movit, chief Russia economist at IHS Global Insight.  Oil accounts for two-thirds of Russia’s export revenue.  Raising interest rates is likely the first of many painful steps for the Russians.

“I think they're going to have to end up doing even more radical measures, like simply stop people from taking money out of the country as best they can,” says Kenneth Rogoff, a Harvard University economist. “The banking sector can't take this for very long. The banks can't afford to pay these kinds of interest rates when they've made a lot of loans, they can’t afford to pay this to depositors."

Pulling out of Ukraine and thereby escaping sanctions is one possible fix for Russia’s currency problem, Rogoff says. Another more likely solution would be a gradual rebounding of oil prices this coming spring.

Where is your extra gas money going?

Tue, 2014-12-16 11:00

What you and I and all the other drivers in the country aren't spending on gas could add up to hundreds of billions of dollars in savings. The savings will act as an economic stimulus, says Geoffrey Heal , professor at Columbia University's business school. “It will. Definitely," he says. "We’re giving consumers significantly more spending power.” (function(){var qs,js,q,s,d=document,gi=d.getElementById,ce=d.createElement,gt=d.getElementsByTagName,id='typef_orm',b='https://s3-eu-west-1.amazonaws.com/share.typeform.com/';if(!gi.call(d,id)){js=ce.call(d,'script');js.id=id;js.src=b+'widget.js';q=gt.call(d,'script')[0];q.parentNode.insertBefore(js,q)}})()

“They have a little bit more money, but at the same time their investment are doing a little less well," he says, "so they don’t necessarily feel that much richer.

Low gas prices could have a negative impact on the stock market. Shares of oil producing companies might go down, so would our retirement funds which puts us in the mood to save, not spend.

Scott Wren, a senior equity strategist with Wells Fargo Advisors, says we have seen low gas prices act as an economic stimulus in the past. But that was then, and this is a recovering economy.

“In the past people were more prone to increase their spending. They were more prone to borrow money as well, do things like home equity loans," she says. "And I think right now the mentality is a little different."

At least we still like a deal. 

With a Starbucks on every corner, chain pivots

Tue, 2014-12-16 11:00

Forget that grande skim no-foam latte. What used to be "fancy coffee" has become average. That's pushed Starbucks to open the “Reserve Roastery and Tasting Room” in Seattle, the first of about 100 premium stores the chain has in the works.

Starbucks is trying to hit the reset button and make their ubiquitous coffees feel special again, says Tom Pirko, president of the food and beverage consulting company BevMark. The company is also trying to keep up with an ever-growing number of premium small roasters and cafes.

That increased demand, as well as new interest in coffee from Asian consumers, is pushing up prices for high-end beans, says Jack Scoville, a coffee broker with Price Futures Group.

Elvis Lieban, the co-founder and coffee buyer for Bay Area roaster Artís, says the price of his high-end beans has increased 20 to 25 percent this year, but customers don’t tend to be very price sensitive. 

Gourmet coffee is on the up, prices too

Tue, 2014-12-16 11:00

Forget that grande skim no-foam latte. What used to be "fancy coffee" has become average. That's pushed Starbucks to open the “Reserve Roastery and Tasting Room” in Seattle, the first of about 100 premium stores the chain has in the works.

Starbucks is trying to hit the reset button and make their ubiquitous coffees feel special again, says Tom Pirko, president of the food and beverage consulting company BevMark. The company is also trying to keep up with an ever-growing number of premium small roasters and cafes.

That increased demand, as well as new interest in coffee from Asian consumers, is pushing up prices for high-end beans, says Jack Scoville, a coffee broker with Price Futures Group.

Elvis Lieban, the co-founder and coffee buyer for Bay Area roaster Artís, says the price of his high-end beans has increased 20 to 25 percent this year, but customers don’t tend to be very price sensitive. 

Quiz: Studying social networks

Tue, 2014-12-16 04:46

The most discussed academic paper on the web in 2014 involved manipulating social media users, according to Altmetric rankings of online research.

We talked about the study back in July.

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PODCAST: Lend me your art

Tue, 2014-12-16 03:00

How the falling price of oil and its effects on the economy might factor into the deliberations of the Federal Reserve this week. And while the economic scars of the recession largely started to heal by 2013 for white Americans, minority Americans are still feeling an acute decline in wealth, according to Federal Reserve data that was crunched by the Pew Research Center. We dig into one of the reasons why: Housing. Plus, while western sanctions bite more deeply into the Russian economy, and there's talk of a new Cold War, the British Museum has stunned the world with an extraordinary gesture.  It's lent a priceless Greek antiquity to the Hermitage Museum in St. Petersburg. But why lend to the Russians? 

Wealth gap in U.S. widens among races

Tue, 2014-12-16 02:00

As the economy recovers, the wealth gap along racial lines in the U.S. is widening.

What’s driving the divide? Recent research shows one big reason is the disparity in asset wealth. 

Click the media player above to hear more.

Wealth gap widens among races

Tue, 2014-12-16 02:00

As the economy recovers, the wealth gap along racial lines is widening.

What’s driving the divide? Recent research shows one big reason is the disparity in asset wealth. 

Click the media player above to hear more.

How will the Fed respond to plummeting oil prices?

Tue, 2014-12-16 02:00

The Federal Reserve is expected to make some big announcements this week on the heels of meetings in Washington where Janet Yellen and her colleagues will discuss the health of the U.S. economy. One subject that will undoubtedly come up: Plummeting oil prices. As of today, oil is hovering right around $60 a barrel. So how will oil’s new low, low price affect the Fed’s anticipated policy changes?

Let’s start with inflation. One of the Fed’s stated goals is to increase inflation in the U.S. from its current 1.7 percent, to a target rate of 2 percent, “and all that’s going on in the energy sector is somewhat disinflationary if not deflationary,” says  Marilyn Cohen, president of Envision capital management. She thinks falling prices in the energy sector could make the Fed cautious about raising interest rates.

But Americans spending less on fuel means consumers have more money for goods and services, “and that,” says former Fed economist Morris Davis, “should create, or at least be correlated, with new job creation.”

Money not being spent on oil would do more good for the economy than the hit that U.S. oil companies will take, and Davis thinks the Fed sees these low oil prices as a new, longer term reality. “If that’s what the Federal Reserve is thinking then they would I guess, assume an extended boom on these low oil prices.”

A continuing boom would be a signal to the Fed that says "go ahead, raise interest rates." The Fed will issue its statement on Wednesday.

 

 

 

 

 

 

Navigating health insurance for small businesses

Tue, 2014-12-16 02:00

This is Mike Brey’s busiest time of year. 

Brey owns four Hobby Works toy stores in Maryland and Virginia, and he’s got about 50 full- and part-time workers. He huddles with one at his store in Laurel, Maryland, in an aisle jam-packed with remote-control cars. They're talking inventory.

Brey is just getting over a cold. There’s no time to sleep around the holidays if you own a toy store, and no time to look over health insurance plans – one of his least favorite chores.

“Yeah, I hate it,” he says.

Still, Brey does provide insurance for his employees, even though he doesn’t have to, because he has fewer than 50 full-timers. Brey leads me to his back office and computer, where he’s been noodling around on Maryland’s SHOP website, which was set up under the Affordable Care Act to connect small businesses with health insurers.

“There we go," he says, clicking on the site and reading. "See details of SHOP plans for 2014 coverage.”

Brey says he used to have only a couple of plans to choose from. But on the SHOP exchange, “You have CareFirst offering, Coventry, Evergreen, Kaiser, United.”

But here’s the thing: Brey’s just browsing, not buying. And he’s not alone.

“It’s been, admittedly, a little slow getting out of the starting gate,” says Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms. 

She says there are a number of reasons enrollment in the SHOP exchanges isn’t taking off. They’ve had technical problems, and a tax credit small businesses get for using SHOP is hard to apply for.

“I’ve heard from some small businesses that they’d have to pay their accountant and broker more than they actually would get back in benefits,” she says.

Still, there is some evidence that businesses could get a deal on SHOP. 

“We found, in general, that plans on the SHOP cost less than those off the SHOP," says Jon Gabel, a senior fellow at NORC, a University of Chicago research center. "Could be 9 percent lower on average.”

Still, Gabel says, it’s too soon to say whether the SHOP exchanges will survive.  

But Brey hopes they stick around. He says he’ll start some serious insurance shopping after the holiday rush.

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