It’s lunch time in Westlake Elementary school in Mississippi, the fattest state in the fattest country in the Western world. Uniformed lunch ladies stand ready behind the counter. Elementary students line up with trays in hand. Yes to chocolate milk, yes to chicken nuggets, yes to cheese fries, yes to orange jelly, no to salad. Bowls of iceberg lettuce and cherry tomatoes sit rim to rim, rejected.

Persuading children to eat vegetables is hardly a new struggle, nor would it seem to rank high on the list of world priorities. In an age of abundance, individuals have the luxury of eating what they like. Yet the U.S., for all its libertarian ethos, is now worrying about how its citizens eat and how much exercise they do. But it is no surprise, as it has become an issue of national concern.

The statistics are grim: Roughly two out of three U.S. Adults are overweight. This is defined as having a body mass index (BMI) of 25 or more, which for a man standing 5’9’’ means a weight of 170 pounds or more. Alarmingly, 36% of adults and 17% of children are not just overweight but obese with a BMI of at least 30, meaning they weigh 200 pounds or more at the same height. If current trends continue, by 2030 nearly half of American adults could be obese.

Americans may be shocked by these numbers, but for the rest of the world, they fit the stereotype. Burgers, sodas and fried foods are considered as American as the Stars and Stripes. But there is a glimmer of good news. After two decades of dramatic growth, childhood obesity rates are showing signs of leveling off. Government researchers at Proceedings of National Academy of Sciences (PNAS) have even reported slight declines among certain subgroups (such as young children and girls), leading some experts to speculate that the epidemic may have reached its peak.

But this turn around applies to some kids more than others. A closer look at the data indicates that this average decline doesn’t tell the whole story.

The researchers looked at adolescent obesity (an important predictor of adult obesity) by analyzing two large health surveys done by the NHANES and NSCH. While they confirmed that the obesity rate among adolescents is no longer climbing — after it “more than doubled over the past three decades” — this did not hold true across different socioeconomic groups.

Obesity is decreasing amongst adolescents who come from well-educated families, but it has continued to increase in poor teens. Looking at the obesity rate overall, this reads as a plateau.

It is unfair to aggregate trends in groups that are so different, the reality of the situation becomes unclear and misleading.

For adolescents whose parents have at least a college degree (black dots), obesity is on the decline. But for those whose parents have no more than a high school diploma (red dots), obesity rates are still rising — and the gap seems to be getting larger. (The short lines above and below the dots show the possible margin of error.)

Why are the rates of obesity so different among members of different socioeconomic groups, to the point where they are actually trending in opposite directions? The answer is more complicated than it might seem.

Exercise

A difference in exercise habits, not just eating habits, has been driving the obesity gap in children and adolescents. Take a look at the physical activity chart, which seem to mirror the obesity rate charts above:

On the left, NHANES, counts children as active in the if they had at least 10 minutes of physical activity in the past 30 days, an alarmingly low standard. On the right, NSCH counts children as “active” if they had at least 20 minutes of physical activity in the past seven days.

The disparity in rates of physical activity increased sharply in 2010 just like the disparity in obesity rates.

While the proportion of high socioeconomic-status adolescents has stayed about the same in recent years (most recently 94.7%), the latest NHANES counted just 82.1% of low socioeconomic-status adolescents as active — down from 90% in 2003.

Though there isn’t an exact reason for what’s causing the different levels of physical activity, a potential reason might be due to money and opportunities. Adolescents from poorer families are less likely to participate in school sports, which can cost money, and are more likely to attend schools that have had to reduce or eliminate their sports programs.

Parks and recreational facilities are funded by tax dollars collected within the surrounding area. In wealthier neighborhoods, tax revenue is higher and residents of the area will insist on these establishments. As a consequence, low income neighborhoods do not have as many parks or space to exercise. Though this is not the case everywhere, it is the case for many. The few opportunities combined with the safety of a neighborhood can affect whether kids are able or allowed to run outside or use parks or other recreational facilities.

A lead researcher at Xiaozhong Wen, a postdoctoral fellow at Harvard Medical School, shares interesting theories to the dramatic increase of obesity rates in adolescents whose family incomes are the below the poverty line. He draws his conclusions from distinguishing families based on needs of medicaid. “The health insurance is a proxy, or indicator, for some underlying… reasons for this disparity,” he says. “I think it might be the family environment, how the parents feed the children, how do they control or monitor the child’s eating or physical activity.”

Compared to more affluent children, Wen says, kids on Medicaid may be less likely to live in neighborhoods where they can play and exercise safely outdoors, and their caretakers are less likely to have access to supermarkets selling fresh, healthy foods.

Upper and middle-class adolescents are also four times as likely as lower class adolescents to have a regular doctor, so they may be more exposed to the importance of regular exercise. More contact with doctors, safer neighborhoods, more green space and better school programs may be part of the solution to encourage kids and adolescents to exercise. They doesn’t have to be competing in state level sports, healthy changes like a walk to the grocery store or an active video game can lead to positive results.

Parental Guidance

Parents of lower income families that lack education and job mobility are likely to work in low wage jobs with long hours. They have less time to be physically active and to encourage a healthy lifestyle for their kids from a young age. And when time and money are tight, it is cheaper to rely on fast-food meals than to buy and prepare fresh food.

In recent decades gender equality has improved and the work force is accepting more women. However, this improvement may have resulted in the growing percent overweight kids. A new study released in the Journal Child Development finds, “For each additional five-month period his or her mother is employed, a child of average height can be expected to gain 1 extra pound over and above normal growth” In addition, sixth graders with working mothers were found to be six times more likely than those with stay-at-home moms to be overweight.

Mothers who have jobs don’t directly cause weight problems in their children, but busy families may accelerate weight gain by relying too much on cheap convenient fast food rather than healthy meals. Food and lifestyle choices are definitely the direct cause of obesity, but it can also occur against a backdrop of physical and psychological challenges that can make weight watching a low priority.

In a recent study, published in Pediatrics, found that preschool-age girls in big cities were more likely to be obese if they had undergone stressful experiences such as witnessing household violence, having a mother who was depressed or abusing alcohol or drugs, or living in a tenuous housing situation.

Growing up in a unstable life with violence, moving around a lot or depression certainly means obesity goes down the rank of importance. These factors, however, were not associated with a higher obesity rate in preschool boys, which highlights the difficulty of making sweeping conclusions about obesity and socioeconomic status.

Children from low income families are hardly a homogenous population, and the relationship between obesity and family income varies wider by gender, age, ethnicity and geographic area.

A 2006 study in the American Journal of Clinical Nutrition that looked at several decades of national data found that obesity was strongly tied to socioeconomic status only among white girls. Mexican-American and African-American girls showed similar trends, yet they were still more likely to be obese compared to girls from white families of similar socioeconomic status.

Beauty is in the eye of the beholder

Regardless of age, race and socioeconomic class, girls all around the world strive to be beautiful. Whether it is to achieve the perfect skin tone, the perfect weight or the perfect hair color, many young females have the ability to improve their beauty if they tried hard enough.

The mean BMI of an African American women is 29.8 and mean Caucasian woman is 26.7. Interestingly enough there was no significant difference for BMI for men based on race. Though there is no research to explain this data, we are all quite familiar with the extremely thin standard of beauty immortalized by Barbie.

Sarah Constance from Irvine, Orange County, recalls a teenage memory. “Growing up in a primarily white and asian upper middle class suburb,I remember meeting up with other girls to get ready together before big dances. Each time we would all criticize our own bodies, and bemoan the fact that we weren’t measuring up to the ideal Victoria Secret model.”The girls always talked about what they ate and how much of it, as if it was a contest and the winner was whoever ate the least.

Sarah was surprised when a male from of Mexican heritage told her how sexy it was for girls to have “thick thighs”. A similar appreciation for a more voluptuous body type is also found in African-Americans. This could potentially relate to why Hispanic and African-American women are statically more likely to be obese, since those cultures do not equate such thinness with beauty and sex appeal.

U.S. college tuition is one of the world’s most expensive; yet, Chinese parents are willing to pay the bills for American higher education anyways. In 2014, Chinese students in American colleges and universities alone contributed $9.8 billion to the U.S. economy, according to U.S. Department of Commerce.

As China joins the World Trade Organization (WTO) in 2001, free trade with other countries of all kinds, including the trade of culture and education began to happen. As a result, University campuses in the United States have since accommodated triple times of total international students from China throughout the past ten yeas. Currently, students from China make up about 29 percent of total international students studying in the United States (WSJ). In the academic year of 2014/15, total number of students from China studying in the U.S. is 304,040, which is a 10.8% increase from previous year. Compared to ten years ago, when total Chinese students studying in the U.S. was around 62,582, the number today has more than tripled. Among all Chinese students currently studying in the US, or one year post-graduating from colleges, a majority of 41 percent are pursuing undergraduate degrees, 39.6 percent are graduate students, 5.3 percent are enrolled in other institutions such as private boarding high schools, and 14.2 percent are in the process of Optional Practical Training (OPT).

The growth in number of international students coming to the U.S. has created “significant positive economic impact” on the United States, commented the Open Doors Data. According to the U.S. Department of Commerce, “international students contributed more than $30.5 billion to the U.S. economy” (Open Doors Data).Most international students receive their funding for tuition and general daily expenses from their families overseas. Other than tuition, international students spend money on rent, cars, and daily expenses. For wealthy Chinese kids, expenses also include shopping for luxury goods, paying for vacations and other leisure expenses.

College tuition in the U.S. is not cheap. In fact, the US has one of the world’s most expensive higher education system in the world. On average, a private four-year institute costs from $45,000 to $50,210 per academic year. A public four-year institute, such as University of California—Los Angeles (UCLA) costs $12,753 for in-state students and $35, 631 for out-of-state students. Unlike most domestic students in the United States, for most international students, college tuition fee comes entirely out-of-pocket. American students have the option of applying for Federal student loans and pay back their tuition gradually after graduation; however, most international students are ineligible for financial aid or student loans, they have no other option than paying their bills all at once. About 64 percent of Chinese students cover 100 percent of their college education cost (Open Doors Data).

There is no surprise that Chinese families are willing to pay for these expensive tuition bills. As part of the Chinese cultural norm, Chinese parents have high expectations for their children. They expect their kids to succeed, which is usually judged by which schools their kids go to, which degrees their kids acquired, what type of jobs their kids do and how much money their kids are capable of making. Therefore, college education is viewed as the first stepping stone for success. Many Chinese families would rather save money to send their children abroad than making investments with their money. As China’s GDP soars after opening the gate for free trade, overall improving economic conditions in China allow more Chinese families to send their children overseas to receive higher education with higher quality.Additionally, because of China’s one-child policy, most college-age students are “only children” of their families; thus their parents, their grandparents might spoil him/her by granting financial support for luxurious lifestyle while studying abroad. The United States, known for its high quality in education, became one of the most popular destinations for studying abroad. 

Based on recent trends in leap of students coming from China, many people cannot help but wonder: are numbers of Chinese students in the U.S. booming since the 2000s because of their excellent academic performance or simply because they are profitable?

Chinese students applying to US colleges and universities with fake high school transcripts, fake recommendation letters is almost old news. Service agencies in China that assist students with their college applications charge students various amount of service fees, based on the number and rank of schools that students intend to apply to. The wave of a growing study-abroad population has created a rising new market for service agencies in China, where fraud is a norm.

The real problem is, once these students step into their admitted colleges and universities, their academic performance do not match with their application resume. In order that these students become capable of joining mainstream programs, some schools provide language courses for international students whose language fluency level has not met the mainstream class standards yet. Of course, these intense language courses are not free, a 15 week intensive english program usually cost $5395.

However, some Chinese students facing academic struggles opted for other tacks. Since the 2012/13 academic year, universities in the U.S. have expelled as many as 8,000 Chinese students in three years (Kutner, Newsweek). The most common reasons for suspension and expulsion is cheating, plagiarism, and low academic performance. “I became aware of some services that Chinese students pay for getting their essays written, getting their exams taken and so on”, says Nansong Huang, a professor teaching Chinese literature courses at USC, “I think these students are wasting their parents’ money.”

Throwing back to ten years ago, when few Chinese students came to study in the United States, much fewer suspension and expulsion cases have been reported. One reason might have been the lack of social exposure back then, another reason is that compared to Chinese students now, most students came to study with full scholarship or financial aids provided by universities ten years ago. The group of students from China on US university campuses today are no longer the 1 percent most talented, intelligent and hardworking students; instead, they are more likely to have wide ranges of interests, passion for American culture and more willing to join fraternities and sororities. Therefore the images of Chinese students studying in the U.S. today is entirely different from the “nerdy” Asian image before.

This is a result of American colleges and universities’ expansion on their international enrollment since 2000. Since the 2000s, American higher educational institutions have been raising tuition fees at the rate of 2.8 percent approximately. For example, USC’s tuition fee in 2005 was $44, 582 per year; today, USC’s tuition has reached $66,754 per year, an increase of almost 50 percent.

In American higher educational institutions, about 40 percent of institutional revenues for colleges and universities come from tuition, the rest consists of endowment and other income, state/local appropriations and federal appropriations. For domestic students, tuition is paid by Federal aid, non-federal aid and students themselves, among which Federal aid including loans, grants, tax benefits and work-study make up 55 percent (Department of the Treasury). For international students, tuition is mostly paid by themselves. This explains why US universities cannot resist the attraction of international students. 

However, complains have been voiced by domestic students in the US, arguing that international students have “crowded local students out of their own state schools” (Stephens, Washington Monthly). “The university (USC) has admitted too many international students, in my opinion,” comments Professor Huang, “Resources at the university compared to the size of the student body is immensely inadequate. Sometimes professors have to argue with the university when assigned class schedules and classrooms, because no one wants to teach a Friday class.”

Some institutions such as UCLA are making new policies to restrict the number of out-of-state and international undergraduate students admitted each year, in order to create more opportunities for in-state students while preserving high student academic quality. “But the reality is”, says Professor Huang, “the university needs the money from international students, thus it is a difficult bargain.” “For many institutions who are looking to balance their budgets, increasing the number of students from countries where they’re willing to pay full tuition is a strategy”, says Michael Bastedo, director of the Center for the Study of Higher and Postsecondary Education at the University of Michigan (Kutner, Newsweek).

Professor Huang predicted that “as anti-corruption policies tighten up in China, there might be a decrease in the number of Chinese students overseas in the future.” Meanwhile, as Chinese college-age population shrinks, the sudden boom in study-abroad is likely to slow down in the future. China’s economic slowdown might also lead to some changes in Chinese’s saving and spending choices. In addition, Chinese education department is working on retaining high school students in the country’s local universities while attracting students from overseas to come to China. On the other hand, US universities would still remain an attractive destination for Chinese students pursuing higher education. In the meantime, US universities’ interest in Chinese students will not fade away anytime soon. Chinese students, together with international students from other parts of the world, not only bring economic benefit to the United States, but also contribute intellectually in areas such as the STEM fields. Therefore, the relationship between Chinese students and US universities might still remain positive in the future.

 

http://www.iie.org/Research-and-Publications/Open-Doors/Data/Fact-Sheets-by-Country/2015

http://www.wsj.com/articles/international-students-stream-into-u-s-colleges-1427248801

http://www.washingtonmonthly.com/magazine/september_october_2013/features/international_students_separat046454.php?page=all

https://www.treasury.gov/connect/blog/Documents/20121212_Economics%20of%20Higher%20Ed_vFINAL.pdf

http://blog.collegetuitioncompare.com/2012/12/usc-tuition-cost-10-years.html

http://www.newsweek.com/us-colleges-expelled-many-8000-chinese-students-3-years-337445

“Hey, have you seen the BuzzFeed video I shared on Facebook yesterday?”

Instead of saying “Hey, have you seen the headline for the newspaper yesterday?”, nowadays a daily conversation between two friends often begins with discussing the trending articles/topics on BuzzFeed and other social media sites. The Internet has been selected as one of the most important inventions in human history. It brings us convenience, provides us a chance to connect with the rest of the world at our fingertips, further accelerates the evolution of print journalism, and starts a new chapter for digital journalism.

When looking specifically at the way content is distributed to audiences, from the beginning of 1800s to the 21^st century, the development of newspaper can be divided into three main eras, Push, Pull, and the combination of Push and Pull. The Push era started with the birth of traditional journalism and newspapers. The word “Push” essentially means providing content, or pushing content toward its audience. For instance, news reporters will pursue and generate stories that are assigned by their editors and the audience will become a receiver of the stories and information provided by the newspaper. In the Push era, advertisement plaid an important role in the way newspapers operated. Aside from annual subscription fees, advertisements became a major revenue source for the newspapers. Take prominent newspaper, The Huffington Post, as an example; in order to attract audiences of all types to read its newspaper, The Huffington Post delivers new stories and content on a wide variety of topics such as “Politics, business, entertainment, environment, technology, popular media, lifestyle, culture, comedy, healthy living, women’s interests, and local news” through multiple platforms. (“The Huffington Post”, 2013) Huffington Post’s online website generates huge levels of viewership, making it extremely valuable to advertisers seeking high-visibility advertising space. Its’ uncanny ability to attract viewership valued it at above 300 million at the time it was sold to its current parent company, AOL.

In 2014, according to a Pew Research Center analysis of Alliance for Audited Media (AAM) data, “both weekday and Sunday circulation of newspapers fell around 3% from the previous year.” (Barthel, 2015) With the decline of circulation, newspapers and journalists were trying to develop new ways to attract the audience. Demand Media, an Internet and content driven company based in Santa Monica, California, serves as an example of the Pull era. Owning online website eHow and Cracked, Demand Media is known for its ability to generate content based on its audiences’ needs, and enables its content creators to reach larger audiences in various categories. Demand Media’s “eHow” website owns massive amounts of articles and more than 2 million videos for its users to find answers to their questions and encourage its users to share their experiences with each other. By means of extensive research, Demand Media understands what kind of content its users need, and creates websites based on its category. The company also believes that content wouldn’t survive without community and conversation. Besides the website eHow, which focuses on topics such as cooking recipes, decorations and lifestyles, Demand Media has also created the on-line website “Cracked” in order to fulfill the needs of the younger generation and audiences who are interested in light-hearted content.

Although Demand Media and its content-driven websites have been very successfully in the first few years, critics have cast doubt on Demand Media and other similar websites’ abilities to “place search engine optimization goals over factual relevance” in order to obtain high amount of revenue in advertising. Through multiple analysis on Google search and the realization of what content is needed by the mass public, Demand Media utilizes its freelancers to create fast and cheap content. It is using the quantity over quality strategy. “No need for quality content produced by well-paid journalists: if you know how to perform search engine optimization, your low quality, rapidly-produced video or “article” will top Google’s results and dwarf playing-by-the-book regular media’s traffic.” (Decugis, 2011)

With the birth of the Internet, more and more people, especially younger generation, prefer to consume news online relative to the percentage of people who consume news via television. Nonetheless, the percentage of people who consume news on the Internet, which 40%, is still 30% lower when compared to the percentage of people who consume news on the television, which is 70%. The percentage of people who consume news on the Internet is continuing to rise, while on the other hand, the percentage of people who consume news on the television is continuing to fall throughout the years. (Grabowicz, 2014) In both the Push and Pull eras there has existed a one-way communication between newspaper and its audiences. In the Push era, reporters and newspapers possess the bargaining power between the communications. The audience accepted and received news content that was selected and being processed by the newspapers. In the Pull era, the audience retrieved the bargaining power; they have the say in what content should be produced.

Different than the Push and the Pull era, the combination of the Push and Pull era enables two-way communication between news organizations and its audiences. Rather than one side holding the bargaining power, in the combination of the push and the pull era, both side of the communication serve as the provider and the receiver. In the combination of the Push and Pull era, BuzzFeed is one of the most successful examples. Jonah Peretti and several others co-founded BuzzFeed, a social news and entertainment company, in 2006 in New York City. Besides generating breaking news, entertainment news, and videos, BuzzFeed creates Quizzes to better engage with its audience. It currently has more than 200 million monthly unique visitors, with the number still growing rapidly. Recognizing the potential traffic its audience might bring to the website, BuzzFeed focuses on the shareable aspect in every story and ensures that each story is relatable for its audience. Creative director of BuzzFeed, Philip Byrne, once said “the company spends 50 percent of its time on creating content and 50 percent of its time thinking of how to make it shareable.” (George, 2015) Native advertising is one of the keys to BuzzFeed’s success.

“Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.” Tyler James, Sharethrough’s Director, shared before his keynote presentation on native advertising. (Canarte, 2015) Take one of BuzzFeed’s quizzes as an example, “Which Donut Are You?”, in the quiz, the audience is asked a series of questions and based on those results, the audience is told in the end which kind of donut they are. It might not be hard to figure out the donut brand Dunkin Donut is the sponsor of this native advertising. Even though this native advertising is more obvious than the others, in the sub-heading, BuzzFeed put “you have to know” to encourage its audiences to click in. By incorporating native advertising to its website and capturing the important shareable aspect of its new content, BuzzFeed is able to generate content for its audience as the pusher and also as the receiver when receiving personal data from its audiences.

Tsan Chang, the general manager of ETtoday.net, one of the major online news website in Taiwan, has pointed out three future trends that carry possibility to dominate the online news and digital journalism. “ Having the experience to work in newspaper agency, witnessing the transformation of journalism from traditional, which is print journalism, to digital, which is online journalism, and currently working in an online news organization, I think the future trends for journalism as a whole is the rise of the mobile application increase dependence on social media, and the combination between data and journalism.”, Chang said.

Nowadays, people reply more and more on their cell phones. The percentage of people checking daily news using the mobile application has increased over the years. Many news organizations have developed their own mobile application in order to attract more audiences. Most of the mobile applications focus on providing as much information as it can to the mobile users in the shortest amount of time. Take the CNN mobile application as an example; when opening the application, major or breaking news content is displayed in the middle. Besides news content, the application notifies the mobile users first-hand breaking news when it happens. When asked whether social media servers as a threat to its online news organization, Chang replied, “instead of a competitor, for our online news organization, it is a plus. We have strong collaboration ties with social media such as Facebook. Many traffic of our website are brought by Facebook; when the audiences browsed through Facebook and saw our Facebook post of the news content, when wanted to know more, they would click on the picture, and that direct the users to our website.”

According to Chang, data servers as much more than an indicator of when to publish, what content to produce, where to post, and how to generate news content. Journalism has encountered a new trend of storytelling exclusively through data. More than just numbers in an excel document, data can take various forms and can be combined through a wide-variety of platforms to tell an interesting story. In the past, eye-catching and sensational content served as the key for online news websites. It attracted audiences and generated massive traffic to their website in order to create advertising revenues. Nowadays, data surpasses content as the key for online news websites.

It might be too early to judge whether the Internet has helped or destroyed the development of journalism. It certainly serves as a major factor and has pushed and accelerated the transformation of journalism from traditional to digital. Many news organizations are forced to change and adapt during the transformation; however, no matter it is pull, push, or pull and push, taker or receiver, journalism remains as an essential aspect of our lives.

 

 

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.

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.

The 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 11^th 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.

Examining 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.

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.

To 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

A healthy lifestyle, which includes eating right and working out, is becoming more and more needed as well as advertised in today’s society. This boom of working out has frequently impacted people’s health, along with athletic wear. Popular athletic apparel companies such as Nike, Under Armor, and Adidas have been the go-to products for comfortable, stylish, clothing to workout in. However, there is a unique athletic apparel company making an impact on consumers in new ways than just style. Lululemon Athletica is a billion dollar company that has established its brand as a top yoga apparel wear and is also influencing the industry in a positive way.

An Established Brand

Lululemon Athletica , also known as LULU, is yoga-inspired apparel which also includes running, dancing, and other athletic pursuits. Its mission statement is creating components for people to live longer, healthier, fun lives. Lululemon’s primary target customer is sophisticated and educated women who understand the importance of an active, healthy lifestyle. They have recently expanded in men’s and youth apparel. LULU creates the athletic clothing to offer performance, fit and comfort while incorporating both function and style. According to Hoovers, it operates some 250 company-owned stores primarily located in North America. The popularity and expansion of its clothing is making the company a competitor in the sportswear industry.

The Canadian company was founded in 1998 by Chip Wilson and the first retail store opened in November of 2000, by the beach area of Vancouver BC called Kitsilano. The distinctive name was voted in a survey of a 100 people and includes a logo which is a stylizing “A” that represent the first letter in the name “athletically hip,” one of the names that was up against Lululemon.

According to LULU’s website, the main idea of the first store was for it to be a community hub where people could learn and discuss the physical aspects of healthy living from yoga and diet to running and cycling as well as the mental aspects of living a powerful life of possibilities. However, the popularity of the store grew, making it too busy for employees to help the customers with this concept. This was the determining factor that the company needed to grow.

The Revenue and Expansion

As of February 2015, there are 211 stores in the United States, 57 stores in Canada, 26 stores in Australia, and five in New Zealand. This year Lululemon opened its first store in the United Kingdom and one in Singapore. The company plans on expanding more stores in the UK and Singapore along with opening new ones in Germany and Asia. About 95% of Lululemon’s revenues came from North America in fiscal 2014, which is about $1.5 billion. As the company expands in Europe and Asia the international revenue will begin to climb.

Lululemon has grown rapidly since its creation in 1998. The growth has influenced expansions for more stores in North America along with global expansion. According to its annual report, the net revenue has increased from $40.7 million in fiscal 2004 to $1.8 billion in fiscal 2014. Also in 2014, the company had an annual growth rate of 13%. Increasing from $1.6 billion in fiscal 2013 to $1.8 billion in fiscal 2014. The net revenue was $1, 797,213 billion in February of 2015.

The apparel company is definitely affected by seasonal trends and receives the most profit during its fourth quarter, which are from the strong sales during the holiday season. However, operating expenses are more equally distributed throughout the year. With this being the case, Lululemon’s substantial portion of its operating profits are generated in the fourth quarter of its fiscal year. For example, during the fourth quarter of the 2014 fiscal year, they generated approximately 42%, 39%, and 41% of its full year operating profit, making holiday shopping an important factor in its overall revenue.

Marketing a Community

The marketing structure of Lululemon is very unique. Mentioned earlier, their number one target is adult women who pursue exercise to achieve physical fitness and inner peace. Over the last couple years the company has designed clothing for men and athletic female youth who also exercise to achieve the same goals. The increase of the Baby Boomer generation seeking more longevity should also help lead to longer-term growth in the athletic participation. The company believes their consumers’ needs are driven by desire of a functional product and the wanting to create a particular lifestyle. Thus, Lululemon trusts their authentic brand is more than just for athletes, but for people who want to lead an active, healthy, and balanced life.

The community in which Lululemon operates in is an important factor for their business. The core of its marketing approach is very community-based and store-centric. LULU has no marketing team and is against advertising, very rarely will you see the brand in a commercial. The company wants to build loyalty and by doing this it creates local initiatives like its ambassador program. The ambassador program is evolved of 1,500 people and extends to unique individuals in store communities who provide the characteristics of the company. As other sportswear companies use star-athlete endorsements, Lululemon relies on the ambassador program in the same way. World-class athletes are a part of the program as well, such as cyclist Ryan Leech and 25 other Olympians. All ambassadors communicate with each other and the stores through an online forum. Social media is also another initiative that allows the company to market its brand.

There are three main channels in which the products reach customers. Corporate-owned retail stores, direct-to-consumer sales, which includes online sales, and wholesales. 80% of sales come from company-owned stores while 15% account from online sales and wholesales bring in the rest.

Lululemon’s mission is to provide technically advanced fabrics with a design team who works closely with their suppliers to incorporate innovative fabrics that create the particular product. Some of these product include shirts, tank tops, sports bras, spandex, long tights, leggings, and head bands.

LULU and Competitors  

The sportswear industry is definitely a competitive market. Lululemon competes against many large competitors with powerful worldwide brand recognition that also target women, such as Nike, Inc., Adidas, The Gap, Inc., and Under Armor, Inc. They also compete with other apparel sellers because of the uneven nature of the sports apparel industry. Many of the competitors have advantages because of their longer operating history, larger and broader customer bases, greater brand recognition, and other resources.

Competitors use traditional ways of advertising that are faster than Lululemon, which creates more sales for the competitive companies. This is a down side for LULU. In addition, the company does not own a patent or exclusive intellectual property rights for its products, which makes it easier for its competitors to sell products that have similar styles to LULU’s merchandises.

However, according to Lululemon’s annual report, the company is more profitable than its peers. The company’s retail-oriented model is a factor in the advantage, compared to other athletic goods sellers like Nike, Under Armor, Adidas, and VF Corporation. Sales are very marginal, products sell either through retail outlets or through its websites and phone sales.

Here is a graph that compares Lululemon Athletica with its peers:

The information provide from the graph shows that LULU has mostly outperformed its peers based on price-to-earnings ratios, except for Nike.

 

 

 

 

 

 

A Happy Work Environment

Working at Lululemon is a distinctive experience compared to other sportswear companies. The goal of the company is to train its people so well that they could in fact positively influence their families, communities and the people walking into its stores.

An employee for Lululemon named Jade Grace went into detail about how the company and its work atmosphere are positive and different from normal retail stores. “Lululemon sets you up to follow your own passion and not necessarily the passion and goals of the company,” Grace said, “They encourage you to follow your own goals and what you want and are looking for in life. No other company does that.”

Grace also went into detail about how in the corporate world LULU has the highest fire and hire turnover rate because so many people are following their own passion. They get the opportunity to be part of a corporate business and then apply that to whatever life adventure they wanted to actually go on. “The company really encourages you to follow your own dreams and not theirs,” Grace said, “In return there is loyalty and compassion the employee will have for the company.”

She also believes attention to small detail is what sets them apart from other big sportswear companies. They always want customer feedback and will actually make changes to its products to make customers happy. It gives freedom and comfort to consumers who wear the clothing. LULU listens to what people want and creates better versions of a product instead of just coming up with an idea that consumers may want.

Positive vibes are constantly promoted throughout the store for consumers and employees. “Lulu believes that happiness is a choice,” Grace Said, “they believe people who chose to be happy are going to be happy.”

Continuing to Grow

The popularity and demand of Lululemon is forcing the company to make changes and expand. One revenue driver that the company is hoping to rely on in the future is Ivivva, a dance-inspired brand for young girls that was launched in 2009. These stores have increased aggressively and is a key growth driver for the company going forward.

LULU has had a tremendous impact on the US market and will continue to expand. Sales have increased in US stores because of improving labor market and lower energy prices. IN 2017, the company plans on opening 20 new stores in Europe and Asia.

However, as the rapid pace of growing continues, it could be a risk for the company. They may not be able to adapt to the demand and constant complexity of the business. If this were to happen, LULU may result in a loss of market share and a decrease in net revenue and profitability.

Lululemon heavily relies on its brand and the reputation and value it expresses. Though expanding may produce risks that can affect the company, the brand of LULU is what keeps it strong and moving forward in the competitive market. It wants to remain a positive influence in athletics and have an impact on people by being more than just athletic wear, but a way of living.

The American movie theater business is in a state of flux. Theaters are scrambling to come up with fresh ideas and marketing strategies aimed at attracting more people to their establishments. Digital technologies like 3D and IMAX formats have pushed theaters to increase ticket prices over much of the last decade. Finally, the growing popularity of streaming services, like Netflix and Amazon Prime, have given people across the country easier access to entertainment. Before the advent of new and emerging entertainment platforms, movie theaters provided many people with an escape from reality. Today, it remains questionable whether the industry has the same influence it once had over the entertainment world. Major chains like Regal Cinemas and AMC now face the challenge of updating their business plans and reminding the public why the movie theater experience is not going anywhere.

The Old vs. New Business Models

The relationship between the movie studios and the distributors remains somewhat strict when it comes to how much money each party receives from the films being shown in theaters. David Mumpower, a financial writer for the website Box Office Prophets, explains how most people assume the studios and distributors split the box office gross down the middle. In the past, film studios actually had deals with distributors to gradually give bigger slices of the revenue to the theaters over time. For example, in the opening weekend of a new movie release, the theaters would receive 10 percent of the profits and the following weekend they would receive 20 percent of the profits. This business practice shows how much Hollywood banks on distributing hit movies on a weekly basis. It also demonstrates how volatile the industry can be, especially for the theaters which have unfavorable circumstances when it comes to their revenue.

Today, movie theaters get a standard cut of the profits no matter which week the movie is in theaters. The third quarter income information provided by Regal Entertainment Group, the largest movie theater operator in the country, suggests a growing consistency with how much revenue their theaters get from tickets sales and concessions. In September 2014, Regal Cinemas made $2.19 billion in total revenue, but paid $1.1 billion in film rental and operating costs, which means the theaters received about 50 percent of the profits that year. Similarly, in September 2015, ticket admissions were $2.28 billion and film rental costs were about $1.17 billion, making the theater profits about 49 percent.

In both years, ticket admissions do make up most of the revenue, but the high costs of even renting out theaters for different movies takes away a lot of that revenue. Since the standard revenue for theaters remains fixed, they now depend more on their concessions alone for most of the revenue they actually get to keep. For example, Regal Cinemas made $575 million in concession revenue, which, out of the revenue remaining after the film studios got their cut, was about 49 percent. The cost to operate their concessions falls much lower, which means half of their profits usually come from their concession stands and the other half comes from ticket sales. Despite how nice this sounds for the theaters in theory, movie theaters are now facing problems which are undermining this system of compromise with the film studios.

Trends: Attendance and Ticket Prices

In 2002, the average American went to a movie theater 4.9 times per year. In 2014, the number dropped to 3.6 times per year. Decreasing attendance has been a major factor in the decline of the old movie theater business model. According to CEO Randy White of the White Hutchinson Leisure and Learning Group, the last twelve years of per capita movie attendance had a steady drop of over 25 percent. The 2014 calendar year had only 1.26 billion consumers buying movie tickets which comes dangerously close to the 1.24 billion consumers seen in 1994. Overall, theater attendance does fluctuate every year, but the steady decline paints a negative picture of attendance in the long term.

What caused attendance to reach a twenty-year low last year? The National Association of Theater Owners point to the underwhelming performances of most tentpole movies and franchises in 2014. The Amazing Spider-Man 2 made nearly $60 million less than its predecessor and Transformers: Age of Extinction made nearly $107 million less than its predecessor.

In its most recent annual theatrical statistics report, the Motion Pictures Association of America emphasizes the dramatic decline in 3D movie attendance as another culprit. On average, 27 percent of the population went to a 3D movie in 2014, but the numbers for different age groups have all dropped between 5 to 10 percent since 2010. Since the arrival of Avatar in 2009, the U.S. film studios have hoped to replicate its success; however, the push to make more films in 3D might be losing steam mainly because it costs too much to make, which has an adverse effect on ticket prices.

In a 2012 interview with technology site CNET, CEO of 3D digital production company 3ality Steve Schklair explained how studios rely too much on the expensive post production conversion process to transform their movies. He thinks this affects the experience the audience receives in the theater and, therefore, the willingness for people to continue spending more money. In the chart below, ticket prices have never been higher with a steady increase of 25 percent from $6.41 in 2005 to $8.17 in 2014. 3D movies might have their moments of greatness on the big screen, but since they are more expensive to make, they have had a negative effect on both 2D and 3D ticket prices. Earlier this year, consulting firm PricewaterhouseCoopers took a survey of over 1,000 consumers in fall of 2014. The company asked consumers the main reason why they stayed away from movie theaters; approximately 53 percent said admission prices were too high .

What Else Is Hurting the Business?

It is hard to avoid the rise in online streaming services as a major reason why movie theaters are scared about the future. In October of this year, streaming giant Netflix released its own feature-length film called Beasts of No Nation. This film marked the second time the company released a movie online as well as in the theaters, which did not make exhibitors very happy. In an article from Variety, the four largest theater chains – Regal, AMC, Cinemark, and Carmine – announced they would not show the film because it did not follow the ’90-day delay rule’ between theatrical and home release. They do not see the the release of the film on various platforms as fair to any theater chain around the country.

Amy Kaufman, a producer on the film, noted the multiple ways people can get their content now and how that is shifting the film business in a different direction. Online streaming services like Netflix, Hulu, and Amazon Prime continue to have a large influence over the viewing habits of the average consumer. First, the convenience of renting or buying a movie through a subscription service from the comforts of your own home appeals to large portion of the population. Streaming services remove the whole ordeal of having to drive to a theater, pick up expensive tickets, buy expensive food, and deal with distracting people in a movie theater. As of April 2015, Netflix boasts over 60 million subscribers. Second, digital technology continues to evolve and audiences continue to crave more interactive experiences. In their 2014 report, the MPAA looked at how many devices moviegoers own and about 26 percent of them own at least 5 different devices. Therefore, theaters are not only competing for attention with television shows anymore, but also with computers, smartphones, and tablets.

Why are Movie Theaters still Relevant?

Despite all of these issues, the movie theaters still have certain attributes that are difficult to replicate elsewhere and theater chains have started enhancing the moviegoing experience for they customers. AMC Entertainment, for instance, showed how it would lead the improvement in customer experience by spending over $230 million to upgrade some of their theaters in 2014. Some of the upgrades include replacing some of the smaller seats with cushy recliner chairs, increasing the variety of food and beverages available including the installation of bars for adult customers, and expanding their multiplexes by building more screens. In an interview with Deadline, CEO Gerry Lopez hoped the overall relaxing atmosphere the company is striving for will improve revenue per customer visit. Cinemark, the third largest theater chain in the country, had a decent start to the year even with a 2 percent drop in ticket revenue during the last three months of 2014. Their success, according to their CEO Timothy Warner, came from a growing demand for food and drinks after the company installed self-service concessions stands. Warner said in his interview with the Washington Post the food and drink sales had increased five percent since the new concession stands were installed.

This seems to have paid off for AMC and Cinemark this year when their stocks increased 24 percent and 9 percent in the first three months of 2015 of this year respectively.  Film business analysts say successful films premiering or in theaters during the non-peak seasons, like Fifty Shades of Grey and American Sniper, have changed how theater companies view the normal business model. Fifty Shades of Grey premiered in February and made about $94 million during President’s Day weekend. American Sniper opened in January with $107 million in its first weekend. Both movies had a large social media following before their respective premiere date, which suggests the identity of movie theaters as a place to have a social experience remains strong and the business does not have to limit itself to certain times of year or certain blockbuster films.

The revenue trends from the last twelve years, courtesy of analysts from Bloomberg, show how film business experts project revenue for the movie theater business to reach approximately $11.5 billion this year. The business seems to still be alive and companies are starting to notice what makes the average consumer want to come back again and again: incentivization.

Incentivizing and Why It Works

The MPAA says 11 percent of people in the U.S and Canada were frequent moviegoers in 2014, yet those same people made up over 51 percent of tickets sold. This information correlates with the increasing price of tickets: Film buffs are the people most willing to pay to see multiple movies over the course of the year, so they would likely make up a sizable amount of the tickets sold.

In December 2014, AMC Entertainment took this information to heart when they started beta-testing a new subscription service called MoviePass. The movie geeks dream app allows subscribers to pay a fee to see as many movies they want each month. Subscriptions differ based on specific cities people live in and subscribers can only watch one movie per day. The average subscription fee in the U.S. is currently about $30, which means avid moviegoers have the ability to see more movies at a lower aggregate price. This seems nice for the cinephiles around the country, but the downside for most people could be underusing the subscription. Since ticket prices continue to rise, the MoviePass subscription service means AMC and other theater chains might have found an alternative method of making profits by taking a note from their current competitors like Netflix.

Other options theater chains have already started exploring to boost ticket sales include loyalty programs. As of 2013, the Regal Cinema Crown Club offers discounts up to $1 off tickets at various locations in five different states. According to the 2013 Loyalty Census conducted by research firm Colloquy, loyalty programs across the entertainment sector rose 35 percent in 2012 reaching a total of 30.5 million people.

Towards The Future and Beyond

Movie theaters are not only thinking about financial changes, but also aesthetic changes. The audio company Dolby launched a new project called Dolby Cinema in 2014, which aims to compete with and move beyond the IMAX theater format by transforming entire theaters into interactive experiences. Some of the features include acoustic panels surrounding the speakers which are meant to immerse the audience in the movie. The official website shows the company will partner with AMC Prime theaters to begin bringing the premium moviegoing experience to people around the country.

https://vimeo.com/113622792

Sources

http://www.boxofficeprophets.com/column/index.cfm?columnID=16796&cmin=10&columnpage=2

http://investor.regmovies.com/phoenix.zhtml?c=222211&p=irol-newsArticle&ID=2103033

http://www.hollywoodreporter.com/news/box-office-2014-moviegoing-hits-760766?

http://www.boxofficemojo.com/franchises/chart/?id=spiderman.htm

http://www.boxofficemojo.com/franchises/chart/?id=transformers.htm

http://www.mpaa.org/wp-content/uploads/2015/03/MPAA-Theatrical-Market-Statistics-2014.pdf

http://www.cnet.com/news/why-3d-movies-are-a-waste-of-money/

http://natoonline.org/data/ticket-price/

http://deadline.com/2015/01/movie-ticket-prices-high-summer-2014-box-office-1201349337/

http://variety.com/2015/film/news/major-theater-chains-to-boycott-netflixs-beasts-of-no-nation-1201445636/

http://www.forbes.com/sites/samanthasharf/2015/04/15/netflix-subscriber-count-crosses-62-million-sending-stock-above-500/

http://deadline.com/2014/09/amc-entertainment-accelerates-theater-upgrades-836097/

https://www.washingtonpost.com/news/business/wp/2015/02/23/forget-netflix-movie-theaters-are-on-track-to-have-their-best-year-yet/

http://business.time.com/2012/10/02/moviepass-goes-national-unlimited-trips-to-the-movies-from-25-per-month/

http://www.cnbc.com/id/100814464

http://www.dolby.com/us/en/platforms/dolby-cinema.html

On November 30, 2014, Yang Gu, a Chinese student in California State University, Northridge, received a phone call from her cousin in China asking Gu to buy coach bags from the coach outlet store for her. When Gu headed to the retail store of Coach Factory in Citadel Outlet, Los Angeles, she found that the store was flooded with Chinese customers. Among them, except visitors coming to the U.S. for shopping, many are purchasers buying for others like Gu.

According to 2013 China eCommerce Market Analysis Report published by China Research Center, 40 percent shoppers purchasing overseas via purchasing agent is motived by cheaper than local pricing of luxury brands.

Coach outlet online store, coach factory.com, opens to the public for several days per month with much lower price than regular market price. Realized that the price of luxury goods is much cheaper abroad, sites like Coachfactory.com has been a popular online store for Chinese customers including Gu’s cuisine, Ming Zhu. This year the website closed Zhu’s account, because of her over purchasing history, according to Coach’s customer service.

To sustain ability to control the distribution and pricing of products, brands tend to manage the amount of products to be sold online. This year, some Chinese buyers with China’s IP or Chinese credit card payment methods were also blocked in the online store. To solve the problem, in Zhu’s case, a relative studying in the U.S. enables her to buy bags without extra expense, while more often, customers like Zhu seek for overseas purchasing agents as alternative with extra service fee. Gradualy, a hidden market of purchasing agents (called “Daigou” in Chinese pinyin) is emerging.

Purchasing agents shop for “commissions.” Most of time, this “commission” means price difference between original price and offering price. In a overseas purchasing site under Tmall (Alibaba),  an Armani shoulder bag with original price at 250 Euro is charged for 3,300 RMB. With exchange rate of 1:9.3, each bag comes with 973RMB profit. 

The scale overseas purchasing agency market is getting biger year to year, according to the 2013 Chinese E-Commerce Market Monitoring Report. In 2013 total transaction via overseas purchasing agent market is $12.30 billion, a 59 percent up from 2012. Analysts estimated that the scale would be doubled in 2014 to $24.84 billion. Popular goods are clothing, bags, cosmetics and beauty products, milk powder, and electronics.

Based on scale and motivation, purchasing agents can be divided into amateurs, specialists and masters. Masters and Specialists are the main focus of online discussion, for the mature purchasing model and a wider variety of brands and products. The common feature of masters and specialists is the fact that they purchase for profits. On the contrary, Amateurs are usually individuals who purchase more occasionally for friends out of goodwill. Students like Yang Gu are usually amateur purchasing agents, though, but these years saw a trend for students to be specialist or master buyers.

Yolanda Zhong, studying public relations in the University of Southern California, earns $3,000 to $7,000 per month as an overseas purchasing agent.

She earns 8 to 15 percent of the original price, depending on the products. Usually, Zhong lists available products on Weibo, and waits for orders from Chinese customers.

Since calculating shipping fee is tricky, her offering price is often shipping fee included. In her words, “both size and weight count for shipping cost, thus it might be different to ship the same product if you use different boxes.” Therefore she has calculated an average shipping cost and adds it to the price.

Zhong’s parents don’t have a problem with her purchasing agency business. “As long as it doesn’t impact my study, they are very supportive.” Zhong said. “Indeed, it feels good to apply public relations knowledge to the real world.” Zhong said. “I constantly need to communicate with customer service of stores like Bloomingdales, Neiman Marcus, Nordstrom, Fifth Saks, and retailers like Juicy, Coach, Michael Kors. I learned how to ship, return, and negotiate with customer service.” She explained.

If packages are inspected through customs, “customers themselves need to take care of the tariffs.” Zhong said. For buyers like Zhong who only randomly accept order in spare time, customs inspection or package lost bring heavy losses, so tariffs and insurance are mostly at buyer’s expense.

Unlike part-time student buyers, Shanshan Hou has been a full-time purchasing agent after graduated from Cal State Northridge. To Hou, a tariff to be charged on one out of 20 packages is not a big deal to a big purchaser like her. Unlike Zhong, Hou has her own B2B sites on Taobao and Tmall (Alibaba), and has hired her own specialist buyers from all over the world to enlarge her overseas purchasing business. Right now, she receives more than 10 orders from taobao per day, and doesn’t charge for tariffs if inspected through customs. To her, enlarging customer base is more important, “ it is still profitable, as long as I have enough orders,” Hou said.

 

Online food ordering and delivery service is a highly competitive industry in Los Angeles. Some startups, however, smartly take advantage of their upper hand and successfully get into the market left untouched by many bigger players like GrubHub and Eat24.

Kirin Kang emigrated from China to U.S. six years ago. Until 2013, He worked as a sales man in a trading company. In his one-hour lunch break, Kang usually spent 40 minutes on ordering and waiting for his lunch, and then the rest 20 minutes on quickly swallowing the food. Kang later found his friends, colleagues, and other working class people have the same issue.

“How I wished to have a 10-minute break after my lunch,” Kang said, “ So I though if I can order food online and someone can delivery it for me, then my life would be much easier.”

In 2014, he decided to be person who provides the convenience. Since arrival, Kang has been living in the San Gabriel Valley, where the telephone area code is 626, so he named his company as ToGo626.

“I live in the 626 area and it’s also my major market now” said Kang, “I want to do something good: bringing Chinese food beyond this area.”

ToGo626 has partnered with over 90 businesses within 2 months. Most of them are Chinese restaurants.

“Speaking Mandarin helps me a lot in this process,” Kang said. “I communicate with the businesses owners in Mandarin and translate their menus from Chinese to English.”

As most of his customers are Chinese people, Kang had both Chinese and English version of ToGo626.com.

 

 

 

 

In April 2014, the biggest online food ordering and delivery site, GrubHub, initiated public offering at the price of $26 per share. It raised $200 millions in total. As the CNN Money reporting says, the company estimated to worth $2.7 billion at the current price. On the website, there are 3564 restaurants in Los Angeles partner with GrubHub.

Valley Boulevard in San Gabriel Valley harbors many popular Chinese restaurants like Boiling Point, Shanghai No.1 Seafood and Szechuan Impression. But these restaurants on can barely be found on GrubHub.

Eat24, as another big player in this industry, provides a few more Chinese food options, but still, many popular Chinese restaurants are off its list.

“Language barrier might be the reason why they haven’t opened the Chinese restaurant market for so long,” Kang analyzed.

Another startup called RushOrder shares the same notion. Like ToGo626, RushOrder focus on the Koreatown area.

“A lot of our team members, including myself, were raised in Koreatown. I still live there,” said Henry Choi, leading the sales and marketing department of RushOrder. “So we have this advantage than the bigger players in the industry — we know the area, the language, and the popular restaurants.”

With the help of the mother tongue, Korean, Choi and his team members were able to bring in 55 Korean restaurants within 3 months.

“Overall we are planning to go live with about 300 restaurants in the next a couple of months,” Choi said. “One of our goal is to provide Korean cuisine to people that may not have necessarily known about it. So if they go to the restaurant and see the menu, they might be intimidated and they don’t even understand what it is. So what we can do is we can fully translated and explain to them.”

Americans are estimated to spend $70 billion on food takeout and delivery in 2014, according to BI Intelligence. $9 billion out of that amount will be spent on online orders. Grub and Seamless merged in August 2013, and they will altogether take up 19% of the share. The rest 81% is divided by different smaller service providers.

 

Uber, the ride sharing company, is also trying to get a slice of the cake. Since August, 2014, it has been testing a food delivery service called UberFRESH. Currently, the service cover two areas: Westside and Beverly Hills/West Hollywood. The ordering time for lunch is between 11:00 a.m. to 1:30 p.m.; for dinner is 5:30 p.m. to 8:00 p.m.

UberFRESH claims the meals can be delivered within 10 minutes, compared to 45minuts to 1 hour of other similar services. And the delivery fee starts from $3 no matter how many meals the customer order.

Just like requesting the Uber ride, customers can order food delivery service online.

EatStreet is also an online food ordering and delivery service provider. Marcus Higgins, VP of sales, told QSRweb.com “The reason consumers prefer online versus traditional (phone or in-person) orders is because it offers instant gratification. It’s all about being able to have the convenience to go online, look at a menu, look at the items you want and not have to wait for someone,” he continued “There are also other benefits, such as order accuracy and price checking, the elimination of any language barriers, and the convenience of already having your payment information on file, instead of having to enter it every time.”

 

Higgin’s analysis echoes with the survey done by Statista.

The convenience brings ToGo626 around 100 orders during weekdays. “There may be more on weekends,” Kang said.

 

Thanks to the spread of Internet and smartphone, the age of customers using online ordering and delivery service is getting younger and younger. Most of the customers’ ages are between 18 to 45 for both ToGo626 and RushOrder.

“There are students, working class people, and parents that order food for their kids at home,” Kang said.

The online food ordering and delivery service not only benefits customers, but also helps bring more orders to businesses, and the service providers, in return, generates revenue from that.

“The way our business works is that the restaurant pays us depending on how many orders we bring to them,” said Choi from RushORder. For every months, “0-25 orders, is free. 26-100 orders, is 50 dollars. Anything over 100 orders is 100 dollars”

“We actually use a delivery company. The cost that the delivery company charging us, is what the customers paying for,” Choi continued. Therefore, the major revenue of RushOrder comes from businesses rather than customers.

Unlike RushOrder, ToGo626 has a 15-driver delivery team and some volunteer drivers. “But our delivery fee is only about $0.99 per mile,” said Kang, “So delivery is actually a supplementary service.”

Kang treats ToGo626 more as a platform to promote and advertise restaurants. Most of the restaurants provide sponsorship to keep the partnership with ToGo626.

However, not every business owner is aware of the influence of the Internet. Some of them are middle aged or even seniors. The big age gap made it hard for Kang to persuade them into joining the adventure.

When communicating with some traditional Korean restaurants, where orders are written on a piece of paper and orders can only be paid by cash, Choi encountered the same problem.

Accumulated popularity and fan base help solve the problem. Not only fans help recommend businesses to ToGo626, restaurants are also reaching out to Kang to get their name on the website.

As Kang promised, ToGo626 is helping restaurants with the online ordering and delivery service, as if they have branches in different cities.

RushOrder is trying to bring in more Korean restaurants. As Choi explained, one of their goals “is to provide access to non-Korean speaking people in Koreatown. Introductin them to the food, making it convenient for them…so they can try it out.”

Kang expressed the same feeling for ToGo626.

“This is only a start. A good start, maybe,” he said, “We will start from the 626 code area. After fully developing the market here, we will explore further, providing more choices, more restaurants and more cuisines to our customers.”

 

First time in its 102-year history, Hollywood tycoon Paramount has partnered with China Film Corporation, the country’s largest state-funded film group, to produce a movie about the legends of Marco Polo. The movie will mostly be shot in China, directed by Rob Cohen from Fast and Furious, with Chinese supporting characters speaking Mandarin on set.

What Paramount has been involved now, is the U.S. – China co-production, which is officially recognised by the Chinese government. The co-production projects has been backed up by the Chinese government in the early 2000s, but really gained its popularity after 2011.

Nevertheless, Xiaotian Mao, who represented the Chinese government at the 2014 U.S.- China Film Summit held in Los Angeles, thought the co-production business was far from success.

“So far, I would say I haven’t noticed any successful U.S.- China co-production film,” Mao said in Chinese while giving a speech at the summit.

Despite the discouraged feedback from Chinese official, the ticket to the co-production is already hard to get. To gain the co-production status, films must be licensed by China’s media regulator, which sets rules on the film’s finances. The movie must have a fair amount of filming location in China, and a percentage of Chinese stars in the cast approved by the government. The government also has the right to rip off the co-production label anytime when they find the project is no longer qualified.

Under the tedious rules, the co-production still seems booming with more and more Hollywood studios and investment coming in. Paramount is the fifth oldest surviving film studio in the world, yet the latest newcomer to the co-production game.

“Sometimes I woke up in a cold sweat, picturing myself 20 years ago and asking: why would we do that?” said Mark Badagliacca, Paramount’s executive Vice President and CFO. Badgliacca has served the company for more than 30 years and recently just got back from China, where the details of this co-production project has been finalized. “But they (the Chinese filmmakers) are willing to learn from us and we also need the access to the Chinese market.”

 

The tricky land of profit

Hollywood may have found another treasure land more than six thousand miles away in China. It was only from January to November 2014 that 11 Hollywood movies have made to the top 20 China box office list, with a total accumulative record of RMB 7.9 billion ($1.28 billion U.S. dollars).

The latest movie from the Transformers franchises, Transformers: Age of Extinction, is the most successful Hollywood blockbuster in China this year. From its world premiere in Hong Kong, which was also a first for Hollywood, it has swept the China silver screen. The movie has topped both annual and opening week box office record in China. Despite its flat performance in north America, Transformers: Age of Extinction still became the 19^th movie that has a billion dollar box office sales in the history. According to China’s film consultant Entgroup, over 30% of the ticket sales came from China.

 

According to the statistics from the Motion Picture Association of America (MPAA), the North America theatrical market has experienced nearly zero growth last decade. Meanwhile, China has become the world’s second largest movie market with a steady and rapid annual increase. In 2013, China’s box offices pulled in RMB 21.6 billion ($3.17 billion), a 27% increase from 2012. In China, there are 13 new cinemas opening in China each day according to MPAA, which in recent years has helped boost box office sales.

Still, China remains a tricky place for the Hollywood filmmakers to do business.

The success of Transformers: Age of Extinction is rare. A number of productions coming from Hollywood never made it to release in China, due to the government’s strict control. The government keeps a tight grip on foreign films that are shown in the country, requiring everything from preliminary script approval to sign off on the final cut. Foreign film releases are limited to 34 per year.

 

A path to the triple-win?

Despite how tedious the process of a co-production could be, the benefits, however, may be worth the pain. A co-production gets to keep 47 percent of box office receipts, while the imported films only get as little as 13.5 percent. Most importantly, the co-production doesn’t need to go through the release quota control set for the foreign movies by the Chinese government.

Chinese investors, on the other hand, have noticed the profit margin and eager to join the co-production game. Early 2014, Dalian Wanda Group said it is in talks to acquire a stake in Lions Gate Entertainment Corp. Alibaba Group’s Chairman Jack Ma paid a visit to Hollywood in October 2014, seeking alliances.

In recent years, Chinese government has vowed to grow the nation’s “soft power”. “The stories of China should be well told, voices of China well spread, and characteristics of China well explained”, said China’s President Xi Jinping in the 2014 new-year speech. According to Bloomberg Businessweek, scholars interpreted the new-year speech as a signal of political purpose for the government’s willingness to promote China’s culture and systems with Hollywood’s competence.

The propaganda mission of Chinese government, the eagerness of Hollywood studios to get access to the Chinese market, the desire of Chinese learning the Hollywood expertise in film and making profit… Co-production seems able to simultaneously work in line with all the agendas.

In 2014, there are more than 60 co-production applications sending to the media regulation department in China. But judging from the previous performance of co-production out in the real market, a strong possibility for disappointment remains.

 

The dilemma

The frequent box office failure of the U.S.- China co-production have brought the first wave of disappointment.

China’s web content provider Sina.com has put a collection of the co-production movies that bombed at the box office. Man of Tai Chi, which is Hollywood star Keanu Reeve’s directorial debut, ranked No.9 at the list. The movie made ¥ 27 million RMB ($4.3 million) in China and only $0.1 million in North America, leaving a huge loss of more than $ 20 million uncovered.

In the co-production business, some stories have utilized the benefits of the Chinese partner’s involvement with a story appealing to both the Chinese and North American audience, such as the Karate Kid (2010), made by Columbia Pictures and China Film Group in 2010, grossed $358 million in ticket sales worldwide. By contrast, the Chinese version of High School Musical, made by Huayi with Walt Disney the same year, earned less than $155,000. It is not an easy job to anticipate the audience’s preference and get the formula right.

“By far the biggest challenge for the co-production is finding the right story to tell,” said Robert Cain, who runs Chinafilmbiz.com and is a consultant to producers and others doing business in China. “Mostly they film stories that has been suitable for either the Chinese audience, or for the international audience, but not for both.”

Chinese authorities’ vague regulation has become another major challenge for the practice of co-production. There are no specific rules of the percentage for either the investment or the casting coming from China written in paper. The application may get approved smoothly; but the authorities can take the co-production title away in the milddle, or disapprove the final work after censorship and put the movie back to the “imported” category.

In response to the vague regulation, Hollywood blockbusters like Iron Man 3 chose to ignore the official co-production process. Instead of waiting in the line for co-production approval, “the film is challenging conventional wisdom about how best to tap China’s lucrative but tightly controlled film market”, quoted from the report by the Wall Street Journal.

“Generally speaking, the U.S.- China co-production is not a success,” said Stanley Rosen, political professor at University of Southern California specializing in Chinese politics and society. Rosen thinks there are two major reasons that lead to this failure; one is the tighter co-production policy from Chinese government; the other is that U.S. and China actually join the co-production with different purposes- China wants propaganda and experience, while Hollywood simply just wants to make profit.

 

A future of uncertainty

After years’ of development, the U.S.- China co-production has encountered with the bottleneck.

Robert Cain thinks it is possible to find better co-production story ideas through increasing the Chinese team’s film literacy and enhancing the quality of communication. After better stories ideas being made, the Chinese government censorship will become the next biggest obstacle on the way.

“If the censorship rules stay the same, it will be always hard to do co-productions,” said Cain. “The creative people in China don’t like the rules either. I think a government as strong don’t really need that kind of protection; but I don’t know if the censorship rules going to change in the future.”

Meanwhile, rumor goes on and off about the possible quota increase by the Chinese authorities to let more foreign productions in. China signed an agreement on its current quota system with the World Trade Organization in 2012, valid for five years. This means the second round of negotiations will start around Feb. 17, 2017.

It is uncertain for either the change for the co-production rules or an increase on the film import quota. The only thing people may know for sure, is that China has a huge film market with great potential.

According to an Ernst & Young report on China’s media and entertainment industry in 2013, China, which now stands as the second-largest film market in the world after Japan, will surpass the U.S. and become the biggest film market by 2020.

 Data retrieved from Ernst & Young

Facing China, the under-developed huge market with uncertainty, there are several options opening for the Hollywood filmmakers. It may be a good idea for the Hollywood studios to get a better understanding is role and keep involving in the co-production; it may also be a wise choice for the filmmakers to work with the storylines, avoiding sensitive elements, in order to get a bigger chance to release the works in China when the door opens up a little bit more.

For Paramount, the choice is doing whatever they can to get the access to the Chinese market, according to Mark Badagliacca.

“I think it is best for us to do everything we could; we are even going to make films in China for the Chinese audience only,” said Badagliacca. “China is a giant market; and it is something really have an impact on us.”