Gentrification: A Revival Movement in Downtown Los Angeles

Tucked away in the quiet Arts District of downtown Los Angeles (DTLA) stands the aged brick alleyway of Daily Dose Café, which once served as the primary railroad passage to deliver goods in the city; however, it now operates as a local gathering place for the growing community of entrepreneurs, artists and young professionals settling in the area. Photographers cluster at the entrance of the pathway setting up their camera equipment and preparing for a photo shoot while a group of twenty-something year olds chat and sip their iced coffees at a nearby table. The image of downtown Los Angeles has radically changed within the last few decades. The Daily Dose Café and Arts District are prime examples of the transforming social and physical landscapes that DTLA has undergone in recent years.

Timeworn structures ranging from the historic theatres on Broadway to the old, abandoned warehouses and factories that are scattered throughout the downtown area, especially in the Arts District, are being revitalized and transformed into lofts, hybrid industrial (HI) living and work spaces, restaurants, and bars to appease its latest residents. The redevelopment projects and revitalization efforts to repurpose these existing structures and urban neighborhoods would be considered one of the primordial stages of a process known as gentrification.

The newly renovated Clifton’s Cafeteria which reopened in September 2015 as a bar and restaurant.

What is Gentrification?

The process of gentrification begins when investors and development companies start infiltrating an existing city in an effort to renew and restructure abating areas to accommodate the influx of middle-class and affluent citizens moving into the city. Subsequently, the gentrification process displaces the city’s original, lower-income residents and business owners that are incapable of paying the higher cost of rent to live and operate a business in the city. The debate as to whether or not gentrification is a progressive or adverse development for a city remains at question.

A Change for the Better?

Certainly there are both positive and negative sentiments that could be shared regarding the issue of gentrification depending on whom you ask. Dana Cuff, a professor of architecture and urban design at the University of California at Los Angeles (UCLA), has highlighted a few of the issues that arise when gentrification occurs.

6258839515_424d7aee98The first problem that would occur would be change in housing affordability, whereas the second would be compromising the overall character of an existing neighborhood as a consequence of the method.

Gentrification challenges the concept of social justice within a city amongst its residents. The process leaves the lower-income residents in the city with no other option than to relocate, as they are now unable to afford the higher living costs of the area. As a result, this in turn causes individuals and families to either become homeless or are forced to transfer to higher crime rate neighborhoods that may leave them more susceptible to gang and street violence.

Additionally, by relocating a city’s indigenous residents, neighborhoods lose the rich cultural identity that it once possessed. Because the culture of the prior neighborhood is not preserved an area that may have once been known as being predominately Hispanic, for example, would lose that unique characteristic value.

On the other hand, a few positive features that are often upheld regarding the justification of gentrification are that it can boost a city’s economic standing as well as establish a platform for the city to ultimately flourish. Gentrification generates jobs and property-tax revenue for a city. Designing and opening dog parks and new coffee shops would purportedly prompt further development in the city, which would increase property-values. City officials and public figures are particularly attracted to the concept of gentrification because it can guarantee monetary advances for a city.

Loretta Lee, a professor of Human Geography at King’s College, disclosed that the financial gains that gentrification presents for a city are great. Lee stated that gentrification aids in a city’s overall effort to garner tourist dollars, new residents and attract more investors in the universal scale of capitalism and competition amongst cities.

Another celebrated effect of gentrification is that it reduces crime rates within cities because greater numbers of law enforcement officers are usually recruited to generate a sense of safety for its newest residents. Typically, along with the gentrification process comes the demand for improved policing.

Los Angeles Police Chief Charlie Beck has stated that implementing community policing, in which law enforcement officers patrol a neighborhood on foot and become personally involved with the community members and develop a safer community by establishing a better relationship with the community, has operated as a significant contributor to the waning crime rates that Los Angeles has been experiencing for the past decade (Aguilar, “LAPD: Crime in Los Angeles).

Moreover, Los Angeles Mayor, Eric Garcetti, has revealed that crime rates declined for the 11th consecutive year as 2013 came to a close. According to Garcetti’s office, Part 1 crimes, which would include homicide, rape and burglary, were down 5.2 percent (“LAPD Highlights Drop”).

Who is Moving Downtown?

There have been numerous articles published in recent years that have pondered and investigated the latest desire that many young Americans possess to move to the golden coast. The New York Times recently published an article stating that many east coast natives are choosing to relocate to Los Angeles for the opportunities that are arising in the business, technology and creative industries.

la-1428646-et-hyperionpublic-1-lkh-jpg-20130517Examining the demographics provided by the 2013 Downtown of Los Angeles Demographic study, which was published by the Downtown Center BID and the United States Census Bureau’s demographics for Los Angeles County, has revealed that there are approximately 52,400 individuals that reside in downtown, which is nearly double when compared to its 2000 numbers that documented a total of 27,849 residents; and roughly 64 percent of current inhabitants in Downtown Los Angeles rent property.

Of these residents, the average annual household income figure is $98,700. The 2013 average household income figure has increased tremendously when compared to the city’s 2007 average annual household income amount, which was around $54,000 (“Big Numbers and Big Money in Downtown Survey”). Furthermore, the current average rental price for a loft, apartment, or condo is $1,900.

The influx of new residents wanting to settle in Los Angeles can be perceived positively as it will enhance the city’s economic standing, but it begs the question as to where the new occupants will reside.

A Rising Housing Market

Downtown’s rising popularity and its low availability have enabled developers to raise their asking prices for living spaces, and it is growing increasingly common for rental prices to be more than $4 a square foot. Even at $4 a square foot that is about a 50% increase than what prices were a decade ago.

These statistics would indicate that neighborhoods in downtown have become primarily composed of middle and upper class individuals and families. Higher housing costs would clearly create a large disparity between the type of individuals that would be residing downtown, and it would force those whom do not make enough income to move out of the area.

rents-los-angeles

An anecdote that seamlessly illustrates this concept would be that of Vanny Arias. Vanny Arias, whom is a single mother of three residing in a neighborhood a few miles east of Downtown Los Angeles, has revealed that the consequences of gentrification are evident within her community. Arias had to move out of her former home off of Avenue 52 and York Boulevard when rent became unaffordable, and she now resides in a single bedroom apartment with her children. “I can’t help but feel angry. How are they going to raise our rent like that? Everything I know is here.” Arias shared (Solis, “Highland Park Residents”).

As what is demonstrated in Arias’ story, gentrification places one faction of individuals at odds. The California Supreme court attempted to ease the affordable housing crisis that the state is currently facing by passing a housing ordinance that would require developers building 20 or more units to list 15 percent of them below-market price or to pay into a city fund for low-cost housing. But even with the Supreme Courts efforts, housing affordability remains a huge concern for Angelenos as most are unable to keep up with the speed at which housing prices are rising.

For Those Who Can Afford to Stay, Where to Settle?

The city’s redevelopment efforts have extended beyond the constraints of the central downtown area. Redevelopment project are occurring throughout the entire perimeters of Los Angeles County. Gentrification can be observed to the north of downtown around Echo Park and Silverlake, to the east around the Boyle Heights area and to the south and west near USC and Koreatown.

BHTo address these concerns, there have been public hearings held at the Los Angeles City Hall recently regarding the proposal of investors and developers to begin improvement projects to the area Northeast of downtown in hopes of transforming nonoperational factories and warehouses into hybrid industrial living and work spaces.

The proposed Hybrid Industrial Live-Work Zone Ordinance states that the city has a dire need for these transformations.

The ordinance states, “It called for new zones that address the full range of industrial areas found in the City, including industrial mixed use districts—areas that retain a jobs focus but which may support limited residential uses… The proposed zone is a new zoning tool that would permit new construction of live/work, mixed use projects in appropriate industrial areas as a means to implement City policies related to economic development, job retention, and housing production” (“HYBRID INDUSTRIAL LIVE/WORK”).

Jesse Martin, the founder and owner of Value Produce, which is located off Central Avenue in Downtown Los Angeles, has witnessed the transformation of downtown since opening his business in 1992. Value Produce is a family owned and operated produce company that supplies Southern California markets with produce from around the world, including: Chile, Peru, Brazil, and Ecuador amongst others. The location of Value Produce cradles the border of the Arts District and the Fashion District in downtown Los Angeles. Both of which locations are appealing areas that investors and developers have already begun renovating.

When questioned about his sentiments regarding gentrification, Martin said that he perceives the process positively. He stated how he could recall the way the city was prior to the changes. “It [Gentrification] allows cities to grow and businesses to grow to help make the economy stronger,” said Martin.

Currently, Martin has over 50 active employees. None of which live downtown, but rather in cities 20 minutes away. Martin shared that he supports the Hybrid Industrial Live-Work Zone Ordinance, as he would like to see more of his employees have an easier commute to work.

“These guys work hard and the commute to and from work could easily take over an hour with traffic. After a hard day’s work – which includes labor intensive tasks like lifting palettes – a long drive is the last thing my guys want to do,” said Martin.

Whether you encourage gentrification or oppose it, the redevelopment process is a part of our country’s past, present and will undoubtedly continue to be present in its future. Aside from Los Angeles, traces of gentrification can be identified in any major city within the United States.

While some entities, such as civic leaders and political actors, encourage redevelopment efforts and gentrification as a measure to improve a city’s value, there remains a faction of others, such as low-income renters, whom oppose the process.

Therefore, as citizens, we must become aware and knowledgeable about issues that will impact us directly, such as gentrification. We must ask questions and truly evaluate at what cost we are paying for this change and to determine if it is really worth it both socially and economically?

 

 

SOURCES

http://www.ladowntownnews.com/news/big-numbers-and-big-money-in-downtown-survey/article_16ec53d8-cda8-11e0-94dc-001cc4c03286.html

http://losangeles.cbslocal.com/2014/01/13/lapd-expected-to-highlight-drop-in-crime-rates-for-11th-straight-year/

http://www.vice.com/read/gentrification-comes-to-las-skid-row-and-the-homeless-get-the-shaft

https://www.highbeam.com/doc/1P3-3718902691.html

http://planning.lacity.org/Documents/policy/HIZoneFAQandOrdinance.pdf

http://www.kcet.org/socal/departures/highland-park/northeast-los-angeles-gentrification-in-comparative-and-historical-context.html

Lomeli, M. (2014). White nostalgic redevelopment: Race, class, and gentrification in downtown los angeles (Order No. 3645664). Available from ProQuest Dissertations & Theses Full Text; ProQuest Dissertations & Theses Global. (1626384695).

http://www.laweekly.com/news/is-gentrification-ruining-los-angeles-or-saving-it-pick-a-side-5342416

http://www.theeastsiderla.com/2014/12/highland-park-residents-share-stories-of-gentrification-during-saturday-night-demonstration-vigil/

http://www.economist.com/news/united-states/21644164-gentrification-good-poor-bring-hipsters

http://www.nytimes.com/2015/05/03/style/los-angeles-and-its-booming-creative-class-lures-new-yorkers.html?_r=0

Cyber Monday Sales On the Rise as Black Friday Falls Short

Long gone are the days of actually celebrating Thanksgiving day by spending it with family and friends while giving thanks for the things that we already have to fill our lives and homes. Thanksgiving day unofficially marks the start of the holiday shopping season. After the Turkey is carved and our stomachs are full, we can’t resist but to power on our computers or to waddle our way to the mall to score those great Black Friday deals that we have had our eye on all week. However, if Black Friday shopping didn’t satiate our spending fever Cyber Monday is sure to satisfy that final craving.

blackfridaycybermonday

Both Black Friday and Cyber Monday are considered the busiest sales day of the year. The general trend of previous years resulted in Black Friday usually holding the higher sales figure in total revenue generated, but surprisingly Cyber Monday arose as the greater overall contender for 2015.

While Black Friday generated more total revenue, its sales numbers actually fell 10 percent when compared to last year’s. The total revenue for 2014 was $11.6 billion, whereas this year it only generated $10.4 billion. In addition, $2.74 billion of those sales were in online transactions with $905 million in mobile sales through iOS (Apple) and Android devices (PracticalEcommerce.com).

black-friday-2015-sales-deals-store-hours-what-time-do-sales-begin-open-walmart

In regards to Black Friday sales, the Associated Press reported, “Electronic commerce increased by 14.3 percent on Friday compared to last year’s figures.”

Cyber Monday, on the other hand, surpassed the forecasted $3 billion in sales that was predicated for the shopping day. The Adobe Digital Index, which determines its numbers based on collected and anonymous data from 200 million visits to 4,500 retail websites, calculated that Cyber Monday sales generated a total of $3.07 billion, with 26 percent or an estimated $799 million completed through mobile transactions. In total, Cyber Monday sales rose 16 percent when compared to last year’s numbers. Additionally, Adobe Digital Index reported that out-of-stock items broke record levels on Cyber Monday. It is determined that thirteen out of every 100 product views resulted in an out-of-stock message, which is twice the normal rate. (TechCrunch.com).

cyber-monday-woman-shopping

The main take away from these findings? More people are opting to shop online as opposed to traditional stores and sales via mobile devices are on the rise.

Experts believe that online sales will continue to climb this shopping season. Chris Christopher, whom is the director of consumer economics at IHS consulting, has revealed that between the months of November and December of this year there will be an estimated 11.7 percent jump in e-commerce sales, which would total to about $95 billion.

 

 

Sources:

http://www.practicalecommerce.com/articles/94777-Sales-Report-2015-Thanksgiving-Day-Black-Friday-Cyber-Monday

http://techcrunch.com/2015/12/01/cyber-monday-beat-forecasts-with-a-record-3-07-billion-in-sales-26-from-mobile-devices/#.ahdvta:bP2p

http://www.csmonitor.com/Business/2015/1129/Why-did-Black-Friday-sales-suffer-this-year

Gentrification in Downtown Los Angeles

Tucked away in the quiet Arts District of downtown Los Angeles (DTLA) stands the aged brick alleyway of Daily Dose Café, which once served as the primary railroad passage to deliver goods in the city; however, it now operates as a local gathering place for the growing community of entrepreneurs, artists and young professionals settling in the area. A cluster of photographers stand at the entrance of the pathway setting up their camera equipment and preparing for a photo shoot, where a group of twenty-something year olds chat and sip their iced coffees at a nearby table. The image of downtown Los Angeles has radically changed within the last few decades. The Daily Dose Café and Arts District are prime examples of the changing socio-economic and physical landscapes that DTLA has undergone in recent years.

Timeworn structures ranging from the historic  on Broadway to the old, abandoned warehouses and factories that are scattered throughout the downtown area, especially in the Arts District, are being revitalized and transformed into lofts, hybrid industrial (HI) living and work spaces, restaurants, and bars to appease its latest residents. The redevelopment projects and revitalization efforts to repurpose these existing structures and urban neighborhoods would be considered one of the primordial stages of a process known as gentrification.

The newly renovated Clifton’s Cafeteria which reopened in September 2015 as a bar and restaurant.

Certainly there are both positive and negative sentiments that could be shared regarding the issue of gentrification depending on whom you ask. Dana Cuff, a professor of architecture and urban design at the University of California at Los Angeles, has stated that there are two problems that arise when gentrification occurs. The first problem that Cuff highlights would be housing affordability, and the second would be compromising the overall character of an existing neighborhood as a consequence of the method. Cuff has noted that individuals who own property in a neighborhood that is undergoing gentrification will always perceive the process positively, but those whom are renting or looking for new housing will experience the negative effects of the process. The practice of gentrification challenges the concept of social justice within a city amongst its residents. Gentrification leaves the lower-income residents in the city with no other option than to relocate, as they are now unable to afford the higher living costs of the area. As a result, this in turn causes individuals and families to either become homeless or are forced to transfer to higher crime rate neighborhoods that may leave them more susceptible to gang and street violence.

A few positive features often upheld regarding the justification of gentrification are that it can boost a city’s economic standing as well as establish a platform for the city to ultimately flourish. Gentrification generates jobs and property-tax revenue for a city. Cities and public figures are attracted to the concept of gentrification because it can guarantee monetary advances for the city. Loretta Lee, a professor of Human Geography at King’s College, disclosed the appeal of financial gains that gentrification presents for a city. Lee stated that gentrification aids in a city’s effort to garner tourist dollars, new residents and investors in the universal scale of capitalism and competition amongst cities. It has also been noted that gentrification reduces crime rates within cities as greater numbers of law enforcement are usually recruited to generate a sense of safety for its newest residents.

Both the positive and negative effects of gentrification could be experienced extensively within the City of Angels; the redevelopment process has even extended beyond the constraints of the central downtown area. Gentrification is occurring throughout the entire perimeters of Los Angeles County. It can be observed to the north of downtown around Echo Park and Silverlake, to the east around the Boyle Heights area and to the south and west near USC and Koreatown. There have been numerous articles published in recent years that investigate the latest desire that many young Americans possess to move to the golden coast. The New York Times recently published an article stating that many east coast natives are choosing to relocate to Los Angeles for the opportunities that are arising in the business, technology and creative industries. The influx of new residents wanting to settle in Los Angeles can be perceived positively as it will enhance the city’s economic standing, but it begs the question as to where the new occupants will reside. Therefore, there have been public hearings held at the Los Angeles City Hall recently regarding the proposal of investors and developers to begin improvement projects to the area east of downtown in hopes of transforming nonoperational factories and warehouses into hybrid industrial living and work spaces.

According to the demographics provided by the 2013 Downtown of Los Angeles Demographic study, which was published by the Downtown Center BID and the United States Census Bureau’s demographics for Los Angeles County, there are approximately 52,400 individuals that reside in downtown. Of these residents, the average household income figure is $98,700. The 2013 average household income amount is a huge increase when comparing it to the city’s 2007 average household income figure, which was around $54,000 (“Big Numbers and Big Money in Downtown Survey”). These statistics would indicate that neighborhoods in downtown have become primarily middle and upper class individuals and families. Higher housing costs would clearly create a large disparity between the type of individuals that would be residing downtown, and it would force those whom do not make enough income to move out of the area.

Gentrification is a part of our country’s past, present and will undoubtedly continue to be present in its future, and traces of gentrification can be identified in any major city within the United States. While some entities, such as civic leaders, encourage redevelopment efforts and gentrification as a measure to improve a city’s value, there remains a faction of others, such as low-income renters, whom oppose the process. Therefore, as citizens, we must truly evaluate at what cost we are paying for this change and to determine if it is really worth it both socially and economically?

 

Sources:

http://newsroom.ucla.edu/stories/gentrification-in-l-a-isn-t-about-hipsters-becoming-your-neighbors

http://www.ladowntownnews.com/news/big-numbers-and-big-money-in-downtown-survey/article_16ec53d8-cda8-11e0-94dc-001cc4c03286.html

http://www.nytimes.com/2015/05/03/style/los-angeles-and-its-booming-creative-class-lures-new-yorkers.html?_r=0

 

An Unlikely Comeback: The Resurgence of Vinyl and its Impact on the Music Industry

Fashion sometimes can be a relentless cycle in which the trends of earlier generations are set to return with both their original charm accompanied with a modern twist. However, just as we are now seeing the billowing bellbottoms of the 70s reemerge back on our fashion runways so is another forgotten treasure belonging to a different trade: vinyl records.

IMG_2339

Vinyl records and turntables can be spotted at retailers such as Target or Best Buy to Urban Outfitters. No longer do vinyl enthusiasts have to search far and wide for an indie music retailer to purchase a copy of their favorite record.

The cyclical path that fashion takes may seem rational for the respective industry because there are only a limited number of ways a pair of denim jeans can be redesigned. However, technological advancements within this past decade alone that has in turn revolutionized the music industry.

Vinyl records pioneered the at-home listening experience and remained on top for nearly 50 years after being introduced in 1898 by RCA Victor. Yet, it was assumed that vinyl was a long forgotten medium by mainstream consumers as it fell from cultural popularity in the 1960s alongside the introduction of cassettes. But it was MP3s and MP3 players, such as Apple’s IPod and Microsoft’s Zune, which ultimately superseded CDs.

Undoubtedly; MP3s transformed the music industry and drove the business towards the digital realm, whereas vinyl became an ancient relic that remained exclusive to only a small niche of individuals whom were deemed vinyl collectors.

MP3s paved the way for sites and services that provide digital downloads and streaming like Apple Music and Spotify. The music industry’s growth rate would depict a steady growth pattern up until the turn of century when services such as Napsters’ peer-to-peer online file sharing service were launched in 1999. Services such as Napster hit the music industry hard as it made it easy to obtain music illegally.

But digital media has produced both positive and negative outcomes for the music industry. Digital tracks and streaming have allowed artists to expand and grow by easing the ability for music to be shared at a greater volume and speed than ever before. However, digital media sharing services have also facilitated piracy within the music industry and have subsequently caused an excessive loss of revenue for the business. The institute for Policy Innovations, which utilizes the RIMS II mathematical model maintained by the U.S. Bureau of Economic Analysis (BEA) to obtain statistics of the total amount of losses generated by piracy, has reported that universal music piracy causes approximately $12.5 billion of financial losses every year.

While piracy remains a looming issue that artists and record companies continue to combat, it has also affected the U.S. job market. The institute for Policy Innovations has also reported that piracy cuts 71,060 U.S. domestic jobs and creates a loss of $2.7 billion in workers’ total earnings. The illegal act also causes a loss of $422 million dollars in tax revenues annually.

Unfortunately, the digital age has made purchasing music less than necessary. Digital and physical album sales have declined tremendously in recent years. After selling approximately 165 million CDs in 2013, the total number of album sales has dropped 14 percent to 140 million by the end of 2014 according to Rolling Stone. Furthermore, digital sales through platforms, such as ITunes, have fallen 9.4 percent as reported by its 2014 sales figures (Kreps, Rolling Stone)

music-industry-1

Audience measurement company Nielsen Music, which records album and song sales and streams, has disclosed that mass market and chain music stores, such as FYE, have reported that their total music sales have declined roughly 20 percent by the end of 2014.

But piracy and physical music sales have not been the only reason why the music industry is experiencing a decline. Business Insider has reported that the recording industry and artists make the majority of their income from album sales. Therefore, with services such ITunes, listeners can pick and choose which songs from an album they want instead of purchasing the entire album.

music-industrymusic-industry-2

Another factor that would contribute to the weakening music industry would be the consumer’s shift in mentality of music ownership. Many listeners would rather access songs through sites such as YouTube or subscription services like Spotify than actually owning the file. Access to music has become more significant than owning the actual song (Blabbermouth.net).

“Music fans continue to consume music through on-demand streaming services at record levels, helping to offset some of the weakness that we see in sales,” said David Bakula, Nielsen’s Senior Vice President of Industry Insights (Kreps, Rolling Stone). “The continued expansion of digital music consumption is encouraging, as is the continued record setting growth that we are seeing in vinyl LP sales.”

The demand and popularity of vinyl has become an exciting music industry trend for artists and record companies. The 12-inch record sold roughly 9.2 million units in 2014, the highest amount of units sold in decades. Vinyl’s 2014 sales figure is over a 50 percent increase above its 2013 numbers, a trend in the vinyl market for nearly the past four years (Kreps, Rolling Stone). A decade ago vinyl sales accounted for only 0.2 percent of the total number of albums sold, but record sales now make up roughly six percent of all physical music sales.

Traditional record stores are quickly reemerging in the United States in response to the demand of vinyl, and vinyl record pressing plants have seen a significant spike in record orders and production overall. New vinyl pressing factories have also began appearing alongside the few plants that have sustained business since golden age of the vinyl era. It is estimated that smaller sized pressing plants are producing and receiving orders for at least 450,000 units per year, whereas larger factories are turning out around 7 million annually reported the New York Times.

The owner of Quality Record Pressings in Salina, Kansas, Chad Kassem, launched his own vinyl record-pressing factory in 2011 after he grew tired of waiting for his primary supplier to receive and complete his orders. Kassem’s business utilizes four presses in total and manufactures approximately 900,000 discs annually (NY Times).

“We’ve always had more work than we could do,” Mr. Kassem said. “When we had one press, we had enough orders for two. When we had two, we had enough orders for four. We never spent a dollar on advertising, but we’ve been busy from the day we opened” (NY Times).

Musicians have also recognized the new opportunities that the vinyl industry provides. The number of vinyl reissues, such as albums by the Beatles and the Rolling Stones, has grown in recent years. And many new musicians have begun providing vinyl discs as an alternative option alongside digital albums and CDs.

Jack White of the White Stripes released a solo album in 2014 entitled Lazaretto, which set a vinyl sales record. White’s latest album sold 40,000 vinyl units its first week and 87,000 by the end of the year.

jack-white-tonight-show-lazaretto-2014-billboard-650

In total, 2014 emerged as the greatest sales year for vinyl records in decades. While vinyl may not pose to be the savior of the music industry, the resurgence of vinyl could not have come at a better time. While the music industry has been on a continuing decline as as a result of piracy, album sales and the shift ownership mentality, it will be interesting to see how the new vinyl wave impacts the music industry and sales overall.

 

 

Sources:

http://www.nytimes.com/2013/06/10/arts/music/vinyl-records-are-making-a-comeback.html?_r=0

http://www.businessinsider.com/these-charts-explain-the-real-death-of-the-music-industry-2011-2

http://www.wsj.com/articles/pay-tvs-new-worry-shaving-the-cord-1412899121

http://www.experian.com/blogs/marketing-forward/2015/03/06/one-million-households-became-cord-cutters-last-year/

 

The Future of the Panama Canal

If you were to ask an individual when he first heard about the Panama Canal, he would probably reminisce upon his grade school days and how it was touched upon in his history book. As children, we learned the basics about the canal and how it served both military and trade functions.

Primarily, we learned how the American-built waterway facilitated the trade route for ships traveling across the Atlantic and Pacific oceans, and how the canal operated as a shortcut for vessels that would typically have to navigate around the tip of South America to get from California to New York.

Certainly these are all valid reasons as to why the canal was significant. But, the canal held much more importance than just cutting the trade route distance for vessels traveling through the Atlantic and Pacific oceans.

Irrefutably the Panama Canal holds immense historical importance for trade in the United States and the world. The canal aided in expanding commerce in our country in particular. It allowed the U.S. to prosper economically while creating meaningful relations with other countries. Currently, it is estimated that 13,000 to 14,000 ships utilize the canal every year.

However, in recent light, the future of the canal was at question as the shipping and trade industry’s shift to megaships gained momentum. It is due to rising fuel costs and the global financial crisis that the industry sought preference in megaships.

megaships

But the Panama Canal’s original design is unable to serve megaships because of their great size. Originally the canal was engineered as a 50 mile-long passage that can lift ships 85 feet above sea level. The type of cargo ships that can safely navigate through the canal would be at most 304 meters in length and 33 meters wide. Megaships, on the other hand, boast a length of about 400 meters and a width of 59 meters.

Therefore, to accommodate the larger ships the Panama Canal is undergoing a $5.25 billion expansion project that would widen and deepen the existing passage way. The project is expected to be completed by the end of 2015 and is 93.8 percent complete according to the official website for the Panama Canal expansion. It is believed that the expansion of the canal will change the shipping industry’s current routes and hubs.

img_mapa-ampliacion-ingles-1

Jorge Luis Quijano, the Panama Canal Administrator, said, “The expanded canal will change global shipping, and is already beginning to do so.”

It is predicted that the expansion of the Panama Canal would directly affect the west coast of the United States as many of its ports, such as the Los Angeles and Long Beach ports, will lose market share.

With the industry’s current routes and preferred hubs, the Los Angeles and Long Beach ports handle an estimated 40 percent of the country’s imported Asian goods. But the expansion project in Panama could cost these two west coast hubs nearly 10 to 15 percent of their current cargo business.

Therefore, while Panama’s future looks bright due to its latest renovations, how will this affect the ports in the United States and what actions could they implement?

Many individuals have upheld the fear of losing business to the Panama Canal since the improvements on the waterway began in 2007. The Jobs First Alliance, which is a coalition composed of business, government and labor leaders have devised a campaign called “Beat the Canal!”.

So how do you combat the canal’s expansion project? The Jobs First Alliance would insist that the answer is modernization. The coalition has been fervently pushing that the Los Angeles and the Long Beach ports modernize as quickly as possible to beat the canal.

An Unlikely Comeback: The Resurgence of Vinyl and its Impact on the Music Industry

IMG_2339

It has been said that fashion is a relentless cycle in which the trends of earlier generations are set to return with both its original charm accompanied with a modern twist. However, just as we are now seeing the billowing bellbottoms of the 70s reemerge back on our fashion runways so is another forgotten treasure belonging to a different trade: vinyl records.

Vinyl records and turntables can be spotted almost anywhere nowadays. From retailers such as your local Target or Best Buy to Urban Outfitters LPs are reappearing on the shelves of various stores across the United States. No longer do vinyl enthusiasts have to search far and wide for an indie music retailer to purchase a copy of their favorite record.

The cyclical path that fashion undertakes may seem rational for the respective industry because there are only a limited number of ways a pair of denim jeans can be redesigned, however, the technology field on the other hand has made tremendous advancements within this past decade alone that has in turn revolutionized the music industry.

Vinyl records pioneered the at-home listening experience and remained on top for nearly 50 years after being introduced in 1898 by RCA Victor. Records were originally launched as “program transcription” discs and initially varied in size between 10 and 12 inches in diameter.

Yet, it was assumed that vinyl was a long forgotten medium by mainstream consumers as it fell from cultural popularity in the 1960s alongside the introduction of cassettes. Cassettes replaced our beloved records and turntables, and were later substituted with compact discs (CDs) and Walkman’s. But it was MP3s and MP3 players, such as Apple’s IPod and Microsoft’s Zune, which ultimately superseded CDs. Undoubtedly; MP3s transformed the music industry and drove the business towards the digital realm, whereas vinyl became an ancient relic that remained exclusive to only a small niche of individuals whom were deemed vinyl collectors.

Digital media has produced both positive and negative outcomes for the music industry. Digital tracks and streaming have allowed artists to expand and grow, whereas it has also eased the ability for music to be shared at a greater volume and speed than ever before. However, digital media has also facilitated the risk of piracy within the music industry and has subsequently caused an excessive loss of revenue for the business.

While piracy remains a looming issue that artists and record companies continue to combat it has also affected the U.S. economic market. The institute for Policy Innovations has revealed that universal music piracy causes approximately $12.5 billion dollars of financial losses every year and cuts 71,060 U.S. domestic jobs. Additionally, it also creates a loss of $2.7 billion dollars in workers’ total earnings, and causes a loss of $422 million dollars in tax revenues annually.

Unfortunately, the digital age has made purchasing music less than necessary in today’s market. Digital and physical album sales have declined tremendously in recent years. After selling approximately 165 million CDs in 2013, the total number of album sales has dropped 14 percent to 140 million by the end of 2014. Furthermore, digital sales through platforms, such as ITunes, have fallen 9.4 percent as reported by its 2014 sales figures.

Statistics company Nielsen Music, which observes and records album and song sales and streams, has disclosed that mass market and chain music stores, such as FYE, have reported that their total music sales have declined roughly 20 percent by the end of 2014.

“Music fans continue to consume music through on-demand streaming services at record levels, helping to offset some of the weakness that we see in sales,” said David Bakula, Nielsen’s Senior Vice President of Industry Insights. “The continued expansion of digital music consumption is encouraging, as is the continued record setting growth that we are seeing in vinyl LP sales.”

Still, it has been observed that the vinyl revival movement has gained incredible momentum. The demand and popularity of vinyl has become an exciting music industry trend for artists and record companies. It has been noted that the 12-inch record sold roughly 9.2 million entities in 2014, which has been the highest amount of units sold in decades. Vinyl’s 2014 sales figure is over a 50 percent increase above its 2013 numbers, which has become a trend that has been observed within the vinyl market for nearly the past four years. A decade ago vinyl sales accounted for only 0.2 percent of the total number of albums sold, but record sales now make up roughly six percent of all physical music sales.

It is no secret that the music industry and its original business model has been flipped upside down and transformed throughout the 21st century. Upon the dawn of the digital age, CD sales began plunging at an alarming rate and large chain music stores, such as Tower Records, became unable to keep up with the shift and were forced to file for bankruptcy.

Similarly, when the demand for vinyl records waned in the 1980s companies began pressing fewer LPs. Therefore; in accordance to the economic law of supply and demand retailers began to cut its inventory of records and the audio equipment that would accompany the music format. Eventually most local retailers completely rid itself of the medium.

Even specific music genres that were eminent in the vinyl industry began to abandon vinyl discs. Jazz was recognized as a longtime forerunner in the vinyl industry as it was one of the first genres of music to appear on a vinyl record and released commercially to the public. The first Jazz recording was Livery Stable Blues by the Original Dixieland Jass Band in 1917.

However, with the comeback of the vinyl industry, many individuals and artists are swiftly jumping on the vinyl bandwagon.

It has been observed that traditional record stores are quickly reemerging in the United States, and vinyl record pressing plants have seen a significant spike in record orders and production overall. New vinyl pressing factories have also began appearing alongside the few plants that have sustained business since golden age of the vinyl era. It is estimated that smaller sized pressing plants are producing and receiving orders for at least 450,000 units per year, whereas larger factories are turning out around 7 million annually.

1399067191000-NAS-recordwarehouse-01

The owner of Quality Record Pressings in Kansas, Chad Kassem, launched his own vinyl record-pressing factory in 2011 after he grew tired of waiting for his primary supplier to receive and complete his orders. Kassem’s business utilizes four presses in total and manufactures approximately 900,000 discs annually.

“We’ve always had more work than we could do,” Mr. Kassem said. “When we had one press, we had enough orders for two. When we had two, we had enough orders for four. We never spent a dollar on advertising, but we’ve been busy from the day we opened.”

Musicians have also recognized the new opportunities that vinyl industry provides. The number of vinyl reissues, such as albums by the Beatles and the Rolling Stones, has grown in recent years. And many new musicians have begun providing vinyl discs as an alternative option alongside digital albums and CDs.

Jack White of the White Stripes released a solo album in 2014 entitled Lazaretto set a vinyl sales record. White’s latest album sold 40,000 vinyl units its first week and 87,000 by the end of the year.

jack-white-tonight-show-lazaretto-2014-billboard-650

In total 2014 emerged as the greatest sales year for vinyl records in decades. The vinyl comeback was definitely unforeseen, as many believed that vinyl discs were an antiquated music medium after the introduction of new technological advancements that have produced CDs and MP3s. But the resurgence of vinyl could not have come at a better time. While the music industry has been taking major losses as a result of piracy it will be interesting to see how the new vinyl wave impacts the music industry and sales overall.

 

Sources:

http://www.nytimes.com/2013/06/10/arts/music/vinyl-records-are-making-a-comeback.html?_r=0

http://www.wsj.com/articles/the-biggest-music-comeback-of-2014-vinyl-records-1418323133

http://www.rollingstone.com/music/news/streaming-vinyl-rises-amid-declining-album-sales-in-nielsens-2014-report-20150108

http://www.riaa.com/faq.php

 

Starting a Small Business During the Wake of the Recession

The sun is beaming brightly as a few clouds lay scattered throughout the brilliant blue sky. Even as California enters the autumn season it’s a beautiful day that can certainly boast weather conditions that would cause our friends residing on the east coast to become envious of during this time of the year. Faring at around 80 degrees it’s the perfect weather to be enjoying the outdoors. It’s California dreaming at its finest.

However, even with suitable weather conditions, one small business owner remains frustrated as he struggles to bring in customers to his carwash despite his best efforts. One would think that if the forecast predicated sunny days ahead and an individual had a dirty car that he would probably head to the carwash this week to get it cleaned. The logic behind that thought seems simple enough, and that would have been the likely scenario a few years ago. However, unfortunately, that is not the case anymore, and Chol Shinn of Los Altos Carwash in Long Beach has experienced this downward shift firsthand.

It has been less than eight years since the economic crisis ended in 2009 that economists have deemed “The Great Recession”; and it would appear that our economy is finally humming along the road to recovery. It’s no surprise that the recession hit Americans hard as our national unemployment rate skyrocketed to an unsettling 10 percent in 2009 according to the United States Department of Labor. Yet, for small business owners, such as Shinn, they have upheld determination to hold onto their business and the hope that the economy will turn around soon.

As a means for both small and large business owners to sustain the operation of their companies during the recession and these few years following the economic crunch, they have had to adjust and make changes to the way in which they manage their establishments.

Shinn has shared that he also had to make some significant changes to the way in which he operates his carwash. The first major change that happened to Los Altos Carwash would be the large but gradual cut in the size of its staff. Shinn revealed that when he first purchased the business in 2007 during the wake of the recession that he carried over the same staff that had been employed with the previous owner. However, as the economy weakened he was forced to cut his staff’s work hours, which eventually lead to many individuals quitting. Currently, Los Altos has a total of seven employees, which is a huge difference when compared to its 2007 staff numbers of roughly around 25 employees.

IMG_1060

Furthermore, Los Altos Carwash has also had to cut local advertising costs and provide special offers and coupons as a way to generate more customers. Shinn has being working vigorously with nearby shops and the California State University of Long Beach to craft special discounts for residents.

There have been both secular and cyclical shifts that have affected Shinn’s business. A particular shift that Shinn has observed in the carwash industry is the transformation of hand carwashes becoming express washes as means of cutting labor costs. The monetary benefits of running an express carwash is great and would be appealing for that matter solely. However, Shinn rationalized that express washes, which are simply the machine operated ones that customers would experience at a gas station, do not perform the same job as a hand carwash would and would not achieve the same sense of “clean”. Express washes are quicker and cheaper, but are not nearly as efficient as a hand wash. Therefore, this transition could be seen as a secular shift that has caused a loss of revenue and customers to hand carwash owners that refuse to give into the change.

In addition, other factors, such as gas prices and minimum wage, have affected Los Altos Carwash. Shinn has shared that the rising cost of gas prices have caused many people to drive less. Therefore, if an individual does not drive his or her car then there would be no need to have it cleaned.

“I don’t understand how customers expect me to keep to same prices and make a living when the cost to operate my business is on the rise,” explained Shinn. The rise in minimum wage has impacted Shinn’s business because he has had to raise his prices slightly to meet the new cost of minimum wage and still make some profit. By raising the price of his carwash packages to even a dollar more, Shinn has received numerous complaints from his customers.

Certainly, factors such as interest rates have also played a role on the challenges that Shinn has faced. For example, during the recession interest rates were at a historic low. However, it was difficult for individuals to qualify for these loans. If citizens were unable to qualify for a loan then he or she would be incapable of making large purchases such as a new vehicle. Shinn has noted that individuals with new cars seem the most concerned with the cleanliness of the vehicle and would come in more frequently.

Shinn has also disclosed that he believes that the carwash industry in itself is in a downward spiral. Prior to purchasing the business, Shinn revealed that he was under the impression that getting a carwash was a typical necessity that one would do often. However, he has come to the realization that getting a carwash is a luxury and if an individual does not have a disposable income then getting their car wash will not be on the top of his list of priorities. While many of the car washes in the surrounding area have gone under, Shinn explains that he believes he has been able to survive due to the fact that he and his wife purchased the property that the business is on and that has made all the difference.

What Summer Box Office Numbers Tell Us About the Economy

Baseball may longer be America’s only favorite past time. Americans have sought after a much more cost efficient alterative to let loose and relax than pay the high cost of a stadium seat. It seems that more individuals are heading to the big screen to unwind.

It has been noted that by economists that there may be a strong correlation between movie ticket sales and the health of our economy. During our economy’s peak, Americans had a much more disposable income to spend on vacations and were able to pay higher costs for entertainment. However, as a result of the recession many individuals have now become hesitant to spend money.

However, as our economy slowly begins to recover from the economic recession that occurred in the late 2000s it has been observed that Americans are watching more films, whether they are heading to a theater or relaxing on the couch at home streaming Netflix or popping in a Redbox rental.

It has been recorded that summer box office sales hit a record high in 2011, with a grand total of $4.4 billion in overall revenue. That being a notable increase of approximately 1 percent over the prior year, according to the National Association of Theater Owners.

Looking back and comparing how our economy was in 2011 to our 2015 economic numbers, one would certainly hope that he or she would see some sort of upward trend indicating that we are on our way to recovery.

Therefore, what would we hope to see in terms of box office numbers for this summer season? Certainly, we’d hope to see less individuals heading to the theater as a form of entertainment of course.

While we will not know the exact box office numbers for the summer of 2015 until after Labor Day weekend, it can be stated that there has been a substantial decrease when paralleled to our 2011 numbers.

Currently, the summer season has brought in approximately $3.8 billion revenue domestically. However, it is expected that there should not be any significant spike in numbers within the remaining week or so of the season.

It can be stated that this summer season is up 9.7% compared to last year, but that increase is suspected to be a result of more family movies being released this summer, such as Jurassic World. In addition, labor day falls at a later date this year and provides an additional eight days to the summer season.

So the method of observing summer box office sales and comparing them to the economy may seem unusual,  but it may be a valid economic indicator.