By Alexa Ritacco

My mother calls Uber “the magic app.” She loves that with just a touch of button you can call a ride that could arrive in just minutes. Not to mentions the completely digital, cashless transaction that makes for a smooth ride, with no awkward moments or hesitations when it comes to tipping.
As a college student in LA, Uber has become an essential way to get around, especially when it comes to nightlife. Coming out of a bar in Downtown LA, the streets are normally lined with dozens of Ubers and Lyfts waiting to pick up their passengers. This is a completely different picture than what existed just a few years ago. It even has its own verb now.
“Oh yeah, let’s just uber.”
“Going to uber over now!”
“No, I ubered.”
Founded in 2009, Uber now exists in sixty countries, and over three hundred cities. In just 6 years Uber has become a globally used and extremely well-known app. But global success does not certainly mean global acceptance. Resistance to the ride sharing service has come about from all angles. Some consumers think the service is sketchy.

“I don’t know, I just get a bad feeling about it. You’re getting into a complete stranger’s personal car. What if they’re a creep? What if someone tries to take advantage?” said Alexis Colner, a senior at USC. Colner’s not alone in her sentiments. There have been countless reports of harassment, extortion, and sometimes even robbery, and Uber’s response to such reports have been pretty mixed. But others view Uber as the lesser of two evils.
“I would much rather hop in an Uber than a taxi cab,” said NYU student, Elizabeth Gurdus, “Taxi drivers are so incredibly rude, and never take me the route I want to go. Uber drivers have a rating incentive to make my experience at least somewhat pleasant, and generally that’s been the case in my experience.”
While consumer perception has been an issue, the most resistance to Uber has come from Taxi cab drivers, as well as local city legislation. New York City, a place known for its thriving taxi sector with the infamous yellow cabs, has seen quite a bit of controversy surrounding Uber and other ride sharing services.
Uber launched in New York in May of 2011. Since then, the service has exploded, having given millions of rides to New Yorkers, and employing over 30,000 drivers. And it has been driving the NYC taxi drivers absolutely insane. Many drivers claim to be taking a hit financially, and feel that it is completely unfair that Uber just waltzed in one day and began stealing customers. They feel betrayed by New York City for letting this go on.
For so long, they were the only ones on the market for private transportation around the city. If a New Yorker wasn’t taking the subway, bus or personally driving themselves, chances are they were taking a taxi. And really, that was their only other option. Now suddenly, the consumer has quite a few options when they’re strapped for a ride. Rather than stepping out onto the sidewalk and hailing a cab, they very well may be whipping out their phone and calling for an Uber or a Lyft. The transportation market has changed completely, and now Taxis are dealing with some very hungry competitors.

Taxi medallion owners have put a lot of pressure on Mayor Bill de Blasio’s administration to help them and act in their favor. Satwinder Singh, ad NYC Taxi Medallion owner gave this analogy in a New Yorker article, “The city is the father and mother. They created the yellow cab as the baby. Now they’re refusing to take care of it!”
Another owner Lal Singh continued the analogy citing the fifty cent tax that is charged on cab fares that goes directly to the MTA. “We’re giving them eighty-five million dollars a year! And yet everybody accepts Uber is the stepfather and all the politicians are the stepsons!” he said.
After much badgering, de Blasio pushed to start regulation and capping on Uber in NYC in the late Spring of 2015. The legislation would basically limit the amount of Uber drivers that could be in New York City at all times, and prohibit any further growth of the company in the city.
This launched Uber into full on defense mode. They put out countless adds dissing taxi cabs, attacking their well-known racist stereotyping practices, as well as pushing all of the different types of services they offer, ranging from Pool to Lux. They rallied support from consumers in the form of petitions and protests, and even got a view celebrity endorsements via Twitter, including Kate Upton, Neil Patrick Harris and Ashton Kutcher.

It came as no surprise to many when de Blasio decided to halt his efforts to place a cap on Uber while further studies were conducted to see really just how hard Uber is hitting the transportation market. Obviously this infuriated NYC cab drivers and launched them into a series of protests. Some of the leaders of these protests have gone as far as to suggest emulating what cab drivers in Paris did in response to Uber, which included blocking major intersections and entrances to airports. But until something drastic happens, for now, it looks like Uber will not be leaving New York anytime soon.
Since Uber is still a private company, it is pretty difficult to tell just how much of an impact they are having on the transportation market. But by looking at employment numbers, leaked reports and the cab side of things, it is pretty easy to tell that Uber has made a giant mark on the Big Apple.
It has been noted that the number of abandoned taxi cabs in Brooklyn outside of dispatcher offices has been on the rise. Many drivers have reported that they jumped ship for Uber. By doing this, they lose the worry of paying the lease on their cab, and the countless other fees that cab drivers that don’t own their own medallions have to pay.
In November of 2014, it was leaked that Uber was set to generate $350 million in revenue for that year. It could have only grown since then, as Uber has expanded over 14% in NY over the past year.
A New York Post article reported that as of October 2015, 30,000 Uber drivers are employed in New York, and that they could be making an average of $40 per hour.
Based on all of these factors, there is no doubt that Uber has taken a large bite into the transportation market in New York City. So will this mean the end of taxi cabs in NY? Of course not. But this situation has forced taxicab companies to start thinking more forwardly. It has been reported that they have been developing apps similar to Uber for cab drivers to being using. Features would include GPS based fares as well as a possible rating system.

Uber has totally woken up what was a sleepy transportation market in New York. Only time can tell what will come of the industry, and if these two competitors will ever be able to peacefully coexist.

Sources:
http://www.businessinsider.com/uber-revenue-rides-drivers-and-fares-2014-11?op=1
http://www.businessinsider.com/proof-that-uber-is-obliterating-new-york-citys-taxi-industry-2015-8
http://www.newyorker.com/magazine/2015/08/03/revving-up
http://newyork.cbslocal.com/photo-galleries/2015/09/17/medallion-taxi-drivers-rally-against-uber-drivers/
http://www.capitalnewyork.com/article/city-hall/2015/09/8577153/uber-fight-city-hall-overshadows-congestion-hearing
http://nypost.com/2015/10/07/there-are-more-than-30000-uber-drivers-working-in-nyc/
https://nextcity.org/daily/entry/number-of-uber-drivers-in-nyc
http://www.nydailynews.com/news/politics/n-y-taxi-drivers-rally-uber-article-1.2363707
http://www.cbsnews.com/news/uber-defends-surge-pricing-with-nyc-case-study/

Post Iranian Revolution, the Islamic Republic of Iran has continued to be in a state of unrest. The country’s political and economic instability has resulted in several accusations made against it. From entities accused of supporting terrorism (2001), to nuclear proliferation (2005), to officials in the government responsible for serious human rights abuse (2010), Iran has been at the forefront of violation of international laws. Consequently, in 1995, the US implemented sanctions against Iran that extended to companies dealing with the Iranian Government. Additionally, in 2006, the UN levied economic sanctions against Iran as a result of the country’s refusal to suspend its uranium enrichment program. The nail in the coffin was when the Congress issued the Accountability and Human Rights Act, 2012, targeting companies conducting business with Iran’s national oil company. “These sanctions have significantly hurt the exports of oil, which contribute to 80% of the country’s revenue,” said Mr. Wayne Sandolhtz, Professor of International Relations at University of Southern California. Sanctions on Bank of Iran and Iranian financial institutions have curbed the flow of capital into the country. Reduced foreign investments have further contributed to the declining growth. Consequently, the sanctions have disrupted supply chains, contributing to higher operating costs. High costs and reduced investments have forced companies to lay off workers. As a result, the economy has been severely damaged. Inflation is at 40%, with prices of basic food and fuel expected to further soar. Unemployment lurks at 10.3%, with unofficial figures rising to 35%. Recent sanctions (2012) have taken a toll on Iran’s growth, with the GDP figures estimating a drop by 20% from 2012. However, with Iran agreeing to restrict its nuclear program, an opportunity for future economic success has presented itself.

The recent conference in Tehran concluded on a nuclear deal agreed between Iran and the six economic giants: Britain, US, France, Germany, Russia and China. Iran agreed to limit its uranium enrichment program in return for the sanctions being lifted. New contracts were launched at the conference, with Iran expected to initiate 50 new projects in the coming year. “The deal will increase production by 500,000 barrels per day,” said Syed Mehdi Hosseini, head of the country’s oil contracts. This deal has major implications for Iran as it opens a door for reentry into the global oil market. The country can now attract foreign investors who will supply capital to the economy. This will bolster growth, primarily through rise in production and exports of oil.

According to the BP Statistical Review of World Energy, Iran leads the world in natural gas reserves and is fourth in oil. Influx of Western and European investment and technology could revive an industry that in a decade of sanctions has lost much ground to its rivals. “Since the sanctions in 2012, Iran’s oil production has dropped more than 20%. Meanwhile, Iraq has increased its production by 70%, where as Saudi Arabia has been pumping at near record levels,” said Mr. Gaurav Mukherjee, Professor of Applied Statistics at University of Southern California. “The country is currently producing 2.9 million barrels a day, and has a capacity to produce 4 million barrels a day. To fulfill this potential, Iran will require more investment than what the National Iranian Oil Company can muster. This opens the door to increased foreign investment.” The deal provides the perfect platform for influx of investment to aid Iran to step back into the oil markets, and challenge its competitors to gain back the lost share. The new contracts will increase daily production by 500,000 – 800,000 barrels per day, which will significantly boost the countries exports.

Iran will now become the largest country to rejoin the global marketplace since the breakup of the Soviet Union. Energy sector companies and business from other sectors have already travelled to Iran to seek market opportunities since the agreement to lift sanctions. “Iran holds potentially interesting promises and perspectives. We have to see how the market will develop,” said Shell Chief Executive Ben Van Beurden. Iran is already in contact with former oil buyers in the European Union – traders such as Vitol Group and big oil producers such as Royal Dutch Shell PLC, Total SA – as well as existing importers in Asia. Although Iran will welcome foreign capital, it will be careful on the manner of negotiations. “Iranians are likely to seek deals in which they pay a fee per barrel for the output increases achieved by Western companies’ technology and investment,” Professor Sandolhtz. However, with the assured backing of foreign investors, Iran is likely to make a strong statement in the global oil market. In addition to increasing supply to 3.5 millions barrels per day, Iran will experience an influx of foreign technology and ideas. This combined effect is predicted to raise Iran’s economy by 2 percentage points, to more than 5 percent GDP growth within a year. After an additional 18 months, GDP growth could reach 8 percent. With new channels to trade, easy access to raw materials and technology will improve efficiency and reduce cost of operations. This will help combat rising prices. Additionally, investment and consequent growth will also provide more jobs in the economy, hence chipping off on the high levels of unemployment.

In the global oil markets, Iran will benefit from increasing leverage. The sanctions restricted Iran’s exports of oil to limited countries. Iran heavily relies on China as a consumer for its oil supply. More than 15% of Iran’s oil is shipped to China. Additionally, due to limited access to global markets, Iran imports 35% of its gasoline from China. Hence Iran is significantly dependent on China for the functioning of its economy. Consequently, this reduces it power to dictate terms. However, with increased consumers, Iran is likely to enjoy an improvement in its economic position allowing it to have leverage in negotiations.

Scaling back sanctions will help Iran keep its best and brightest at home. From 2009 to 2013, more than 300,000 Iranians left the country in search for better job opportunities. Today, 25% of Iranians with postgraduate live in developed OECD countries outside Iran. This is a significantly high rate of “brain drain”. According to the World Bank, Iranian economy loses out on $50 billion annually as local talent look elsewhere for work. Iran’s GDP last year was US $368.9 billion. Hence, retaining its talented workforce will have a substantial impact on Iran’s growth. With access to high levels of investment and technology, the Iranians will regain confidence in their economy, willing to take their chances at home.

Although the economy will be brimming with optimism, it is important to acknowledge that lifting sanctions does not mean all players will invest in the economy. American oil companies, in particular, are subject to tighter restrictions than their European counterparts. They are likely to be far more cautious in their activities. Furthermore, oil experts predict that it may be some time before major oil and gas projects get underway. “The level of interest in Iran will be high, but actual investment will be slow,” Professor Mukherjee. Additionally, Iran cannot immediately increase its production to its predicted capacity of 3.5 million barrels per day. This will create an oversupply of oil in the market, dropping the price of oil, and hurting several economies in the Middle East. Hence, Iran must slowly work towards its target, which means realizing slow and steady growth.

The nuclear deal has raised interest elsewhere in the Middle East, with Iraq and Saudi Arabia keeping a watchful eye. The reentry of Iranian oil to the global market could lower 2016 forecasts for world crude oil prices by $5-$15 per barrel. With the current price already as low as $49 per barrel, Iran’s activities will trouble members of the OPEC. “Iran, through its contracts and potential investment, will take away a major share of oil exports from Iraq,” Professor Sandolhtz. Nearby, Saudi Arabia will also be dealt a significant blow. The leader of the OPEC has already increased supply of oil, dropping the prices to where they are today. The country is heavily reliant on oil for its revenues, and will stand to lose market share to Iran. The tensed Saudis will have to look to diversify away from deep dependence on the US for markets for Saudi oil exports. And what about the political and economic implications for Israel?

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Sources:

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

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

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

 

The emergency of new technologies has brought a change in the media industry. The digital media has brought a change that is affecting the entertainment industry. In the past, the Television network was the leading entertainment channel with almost 90% of people across the world using this platform. This has changed today as new services have been introduced in the market that are more affordable and offer a flexible way of watching any channel that you want. They offer specific options that are able to meet all the consumer desires and needs. Majority of the citizens are considering using these services as a source of entertainment, an act that has led to a drop in the viewership of the Television network.

Internet streaming is leading today in the entertainment industry. Among the most common and known companies are Netflix, Hulu and Amazon Prime that are offering lower prices for one to watch any type of film that they want. These internet streaming services has changed the manner in which people view TV while at the same time it affects the economy of the cable TV which is doing poorly in terms of viewership. The main point that is driven here is that Internet streaming has changed the ways in which the entertainment industry works.

A drastic change has been experienced in the number of TV viewers ever since the introduction of streaming services such as Netflix. Internet streaming has given the people especially the youths a chance to watch films on their own pace, at any time they feel like and on which ever platform they feel is more affordable in terms of cost of viewership. With this change experienced by Television network, it will be important to determine how some of the big networks like NBC and CBS adapt to this change and their future plans as the internet streaming platform continues to dominate the entertainment industry. It is also important to consider the factors that have led to the drop in the TV ratings over the years. The most important aspect of this issue is the economic impact that the shifts from the cable TV to internet streaming have, taking into consideration the future of the TV industry.

The introduction of internet streaming has made it easy for people to watch movies across the world especially those who have access to the internet. Today, anyone can watch or download video from their homes or the comfort of their office. Various internet streaming websites decided to take advantage of the fact that several people have access to internet and are using this platform to watch various films. Companies such as Netflix and Hulu have transformed the consumption methods within the entertainment industry. These online companies offer small charges for live streaming or downloading of various video contents.

When compared to the cable network, majority of the viewers has stated “the internet streaming is more reliable and cheaper compared to cable network thus the reason for their shift in the mode of entertainment.” According to a number of audiences that were interviewed regarding internet streaming, majority replied that “it was all about mobility and immediacy; we want content which is just a click away that will meet our needs without limiting us to be in specific place in order to be entertained.” Some claimed that the internet streaming has enabled them to catch up with their favorite programs while they are travelling or when at home and everyone wants to watch the television they can get a chance to see what they want without fighting over the remote.

However, as the internet streaming network is becoming more popular across the world, the cable TV is deteriorating in terms of viewership, something that would affect the cable industry. For instance, according to a report released by New York Times magazine, by the end of last year, the cable TV industry had lost about 2.2 million customers to internet streaming. The report stated that the consumers of cable TV were “cutting the cord” at the same time stopping to subscribe for their services.

According to a report released by the Experian Marketing Services, those individuals in the world who has high-speed internet stopped subscribing to satellite TV. The number of those who cut the cord rose to 5.1 million by the year 2013 with more than 7.6 million homes not watching the cable TV. The report showed that in the near future, majority of adults across the world would not spend their time watching the cable Television and instead will prefer online streaming method.

There are those analysts who however believe that with time, internet streaming will go down and companies such as Netflix will decline in regards to ratings. Ted Sarandos, who is the Chief Content Officer at Netflix, was quick to brush off this claim stating that “we have witnessed the company and the internet streaming network viewership increase in ratings with majority of the entertainment fans preferring to watch films and news on their tablets; we are hoping that the online streaming industry will continue to grow as the world continue to become computerized.”

Nevertheless, regardless of the difference in views on whether the cable TV will be totally overtaken by the internet streaming or not, the fact is that with time, people will get bored of subscribing to particular streaming services. This may lead to a decrease in viewership in various online streaming networks, but the truth is that the industry will continue to exist and be used by those who prefer flexibility when it comes to entertainment. It means that online entertainment industries such as Hulu and Netflix will continue to function in future. The demand for these online streaming networks might go down, but just like the cable TV, they will continue to exist.

The shift to online industry has greatly affected the economy of selling and producing TV shows. However, in order to protect the cable industry, the broadcasters and the producers are guarding the financial details so that their online streaming competitors cannot acquire the information. The Canaccord Genuity Group Corporation stated that “despite the huge competition coming from the internet streaming industry, the cable TV will continue to survive in the entertainment industry through provision of grants and loans to maintain the industry.”

The CEO of the Netflix Company agreed with this fact stating that “the cable company still has power and more advantage over the online streaming because of the strong relationship that the industry had built with the studios and video producers of the network television programs which are aired online.” This relationship will enable the cable TV company to demand for a right to own some programs, something that will force the viewers to watch television in order to catch up with their favorite programs.

However, while it seems that the viewers have seized control and power on how and when to watch TV, they should be aware that the cable network is getting curved up to meet the economic demands from the distributors. This will make accessing various shows online complicated and next to impossible. The viewers will be left with no choice but to pay more for multiple services, something that most of them will not be ready or willing to do. While the cable TV will be looking for people to fund their services, they will tend to be strict. Several analysts have suggested that this move could create a network snowball that would in the long run affect the viewers.

It is true that a stiff competition has been set between the cable TV and online streaming industries such as Hulu, Netflix, HBO, and Amazon among many others. The competition is contributed by various economic forces that are active in the current situation. For instance, the value of the dollar has affected the cable TV which today is charged highly. In developing nations, in order for a person to comfortably watch their cable television, they have to pay for it monthly. Majority of the people consider the cost of paying the cable TV plus the programs being aired on the channels and weighs it against downloading movies through various online networks and watching them at any time or at their homes or in the bus while travelling. After this careful evaluation, most people tend to prefer the internet streaming because it is cheap and affordable.

Majority of the online streaming websites charge less than 10 dollars to download movies for a specific period of time. On the other hand, the cable TV charges are always fixed and in some nations where the rate of the dollar is high against the nation’s currency, the charges on watching television also increases. This has made several people to shy away from the cable television thus the reason for the lower ratings in watching the cable television.

The other factor that has changed the pricing in the entertainment industry is the oil prices across various regions in the world. Today, the prices of oil are low, but the citizens pay for the low costs indirectly. Economic analysts believe that it is the major cause of rise in particular products in the nation such as the price of watching cable television. It means that the price of oil change has the power to change the game for an industry or a region.

However, in order for the government to keep the economy of a nation rising, they may consider shrinking city budget which may not only hurt businesses, but also families at large. The family and the business will have less money to spend thus continued to deteriorate in performance especially for the businesses. The federal government can consider recovering the dollar by increasing the taxes; something that economic analysts believe will have no impact on the cuts.

Sources:

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

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

 

 

 

David Arnold is afraid the bubble is about to burst.

It happened in the ‘70s and again in the ‘90s. The market got hot and everybody wanted in. To keep up with rising demand, companies beefed up their supply, to the detriment of their products’ quality. Because the quality of the product declined, so did the demand, eventually creating deflation.

Not even the “Death of Superman” could save the comic book industry.

But now comic books — thanks in large part to a series of high-grossing superhero films — are booming again, and Arnold, a lifelong lover of comic books and now, an online retailer, can’t help but feel a little anxious about its surge. Especially because, as a reader, the overload of movies and reboots has become overwhelming.

“There’s a lot of dead weight in the marketplace right now,” says Arnold. “There’s a lot of books that don’t need to be there, and I think a culling is good.”

Arnold started his business, DNA Comics and Grading, two years ago. Overworked and unhappy with teaching, at the age of 36, Arnold looked at the stack of comic books and toys he had acquired over the years, items he jokingly referred to as his “retirement fund,” and decided to cash in.

“Little did i know how much stress running your own business is,” Arnold muses. “I think I traded in six in one, for half a dozen in the other sometimes.”

And as plush as it may seem to stay at home, throw a bunch of comic books online and watch the money rain in, as Arnold found out, it’s really not that simple.

Unlike a regular storefront, where business-owners can refuse customers service per their discretion, eBay has built in a lot of protections for the buyer that Arnold feels punishes the seller.

For example, if a package is delivered but a customer claims he did not receive it, Arnold is obligated to refund the cost back to the customer — even if the tracking says the package was delivered.

And if he doesn’t? His seller’s rating is at stake.

This is one of the biggest differences between selling online and selling through a brick-and-mortar storefront. When shopping online, customers don’t only search for the best prices but for the best seller ratings. As a customer, Arnold acknowledges that if he sees a seller rating of 90% or less, he typically will not order from them.

And unlike a traditional storefront, online storefronts are all the same distance — just a few click — away from the customer.

“It’s frustrating being a seller sometimes because you feel like the whole system is set up for the buyer, and as a buyer you feel really comfortable,” says Arnold. “You feel good because you know if you’ve got any problems, you can complain and the seller basically has to bend over backwards to do what you want in order to get positive feedback.”

This is called “feedback extortion” by those in the eBay community, and there’s not much a seller can do about it.

Another challenge in selling online is keeping on top of inventory. Because most of his items don’t command a huge ticket price, Arnold has to be very careful to dedicate time each day to update his listings so he can continue to push out his inventory and make a profit.

When it comes to selecting inventory, comic book retailers also have to be great speculators.

One interesting thing about comic books is that they can sell when the rest of the economy is doing poorly. During hard times, Arnold typically sees a spike in collectibles sales — that is, old comics with great historic or sentimental value, like the first appearance of a popular character, or even more notable — a death.

It may be that hard times cause people to reminisce on the good ol’ days, which they try to reclaim through memorabilia. Or it could be a touch of escapism — the same thing that typically drives audiences to the cinema during economic downturns.

But the profit margin on these old books can be tremendous. Considering that a new comic book retails at three dollars — and used ones can be rummaged for at no more than a buck — a $50 resell is a tremendous profit margin.

But now that the economy is in recovery, the comic book industry is sill riding high on a wave of comic book-inspired movies.

This means that many sellers forecast which books to stock based on which movies will be coming out in theaters.

“It’s become much more of a widespread phenomenon for people to hunt for old issues because it’s a character from a movie or something like that,” notes Arnold.

“The first Rocket Raccoon was a five dollar book ten years ago … but (right) before the movie came out it was a $5,000 book. And now it’s cooled back down to $300-500 for a nice copy.”

Arnold hopes to open his own storefront soon. Not only is a storefront helpful in pushing out inventory, but as an online seller, Arnold, an “old guard nerd,” can’t take advantage of what so many comic book fans really go shopping for: community.

“Inevitably, the other thing about comics is that you always get one person that comes in and [is like] ‘I haven’t read comics in five years, what’s cool, what should I get into?’ and you don’t go into best buy and go ‘I haven’t watched a move in five years, what movie should I buy?’” says Arnold.

With decades of avid reading under his belt, Arnold has the clear advantage over some pubescent part-timer behind the counter.

“It’s a different marketplace, and the customers are weird because they wanna hang out, they don’t wanna just buy things and leave. They want to socialize. Nerds are very passionate about their nerdliness.”

15 years ago, Nitin Ashar backed his entrepreneurial skills to start his own company in the service sector. Now he is the CEO of Truevalue Marketing Services, a private company engaged in the commerce of ready to drink beverages and vending machines. Currently his business caters to the corporate sector on a local and national level.

Under Mr. Ashar, Truevalue has expanded its horizon in terms of competitiveness, quality and growth. He has carefully monitored movements in the sector to take advantage of changing customer needs to expand his business. For example a major secular shift in the sector would be a transition from premixes (powdered tea and coffee) to fresh milk, which is now widely consumed. Additionally, cyclical booms in the economy have also benefitted the company. Increasing growth within all companies has led to even small local offices demand for machines. As a result there are more customers to provide to. However, following growth there is dip, which hurts expansion. For example during the 2008 financial crisis, the company suffered with reduced demand and loss of existing customers. In on case, Infosys, a major tech company, closed down its contract leading to removal of 480 machines (leased) from their offices. Mr. Ashar also complained that several customers made late payments, which led to cost cutting within the company. Consequently, workers had to be laid off. However, being knowledgeable about the downturns of the economy, Mr. Ashar adapted. He spotted shifting consumer demands to make changes for the survival of his company. During a tough phase from 2008-2011, Mr. Ashar improved on his distribution channels, so that he could target small clients as well. Additionally, he was also willing to consolidate with large clients who would provide him a contract on a pan India basis. Lastly, ever since, Mr. Ashar believes in diversifying to minimize risk. This strategy helped his growth, as expanding into different cities would provide cash inflow when one channel would fail.

Given the importance of the two crops, tea and coffee, raw material prices have a major impact on business operations. An increase in prices of dairy products would lead to increase in business cost. Given that the firm cannot proportionately prices to remain competitive, the company would suffer from losses. “Despite the current raw material prices in India falling, the company must offer discounted prices to customers to remain in the market”, Mr. Ashar. Additionally, infrastructure also has a significant role in the business. Given governments investment in infrastructure, it is estimated that there will be an increase in the number of companies in the coming years, which would provide more customers to cater to. Summing up, high inflation and increase in infrastructure would both serve to reduce unemployment, thereby more mouths to feed, which would promote growth for the business.

By operating in the service sector, the major challenge faced by the company is manpower. This includes technical and operational activities. Besides, there is a great demand for customisation to satisfy customer demands. For example companies such as Vodafone and Cap Gemini had requested to obtain customised machines to suit the demands of their employees. Lastly Mr. Ashar complained about the unpredictable weather being an important challenge. He said, “The presence of drought in New Zealand couple of years ago had raised the prices.” Given certain varieties of tea and coffee are imported from New Zealand, an unpredictable change in weather affected his business negatively.

It seems that the previously mentioned factors were not the only challenge Mr. Ashar faced. An important component of the business was access to capital. Although interest rates played minimal role, capital dictated the operation of his business. He said that given the recent boom in the economy there is more access to capital which makes it easier to have more machines available for customers. However, on tracking back to 2011, where the economy was still recovering minimal capital access meant that Mr. Ashar could not execute orders from major companies such as Wipro and Deloitte for 500+ machines.

An hour into the interview with my uncle, I asked him about the competition existing in the segment. He mentioned that even though his company was one the top 10 companies operating in the western region of India, there was increased competition from local firms operating in each city. Major competitors included Nestle and Cafe Coffee Day. In terms of the competitive landscape, more companies are offering fresh milk, which is the preferred option over premxes. Given that it is the “healthier and fresher” option, there is increasing pressure on companies to provide high quality fresh milk. An increase in competition has hence led to the company providing reduced prices to maintain its competitive adavantage. Additioanlly, the company provides discount on larger volumes. For example, last year the compan secured a contract with Vodafone on an pan India level leading to reduction in the prices charged.

After having completed my interview I believe that I have gained enough knowledge about the company as well the industry. In order to gain more knowledge about the market it make sense to talk to customers since they set the trend. Knowing their perspective can help me understand what the future holds for this segment. Also speaking to competitors would also give me a better understanding their operations and outlook. However, my uncle being their competitor I doubt I will get a few minutes of their time. Lastly there is one macroeconomic data that I have observed. For example there has been an increase in demand for tea and coffee over aerated drinks. This goes back to argument of switching towards a healthier living. Hence demand for tea and coffee is definitely on the rise opening up great potential for this segment to grow with my uncle ready to take advantage of it.

 

On August 13th, 2007 Rick took a leap of faith and opened his take-out style restaurant, “Wings Plus.” In an effort to once again make a decent living, he invested every last dime from the sale of his house, after downsizing, into a small storefront in Port Washington, NY, located on the North Shore of Long Island.
At the time of opening, Rick was also in process of selling his family sports bar, located in Bayside, Queens, which had been in the family for over 60 years.
“It was a tough time. I had no income. My brother and I were selling our family bar, which at one point had been the pride of my family, and I was pouring every last one of my pennies into a new business. Not to mention that the economy wasn’t looking too hot.”
But Rick saw a hole in a community filled with just pizza parlors and Chinese take out.
“The Buffalo Wings were the claim to fame at our bar. People went crazy for them. I figured, why not bring em to the island?”
This was at a time when Buffalo Wild Wings had not reached the east coast quite yet, and chicken wing chains were not really on the radar yet. He came up with “Wings Plus,” meaning they of course had chicken, but also a whole lot more. Hence the “plus.”
It seemed like a win-win. Keeping a piece of the old family business alive while creating a new legacy to start supporting his wife and child again.
“It was a bittersweet time. I was sad to have to lay my father’s business to rest, one that I had run with my siblings for over 20 years. But it was what needed to be done. And I was excited to venture into something new with a long-time friend, who I was able to secure as an equal partner. Together we put in about $250,000 to create Wings Plus.”
The first six months of being open went extremely well. He hired a decent staff, pulled over some cooks from the old sports bar and within a month, he felt they had found their groove. The fall season brought in all of the football fans ordering for their Sunday games, and Super Bowl Sunday brought in unimaginable sales. The community seemed to like the new establishment, and Rick noticed quite a few repeat customers coming through the doors.
By the end of the first year they were closer than projected to breaking even. Rick and his partner were very pleased, and if things had continued the way they were going they would have made back their investments by the end of the second year. But unfortunately things did not go as planned. The fall of 2008 was rough for Wings Plus.
“The only thing that carried us through that fall and the beginning of winter, was football Sundays. Even with those, cash flow was extremely low.”
Rick noticed a major change in how people were paying. Customers were starting to use their credit cards way more frequently then before. He said it went from being about 50% cash business to around 25% cash business. Not to mention that sales seems to be declining each month.
Discouraged after a less than stellar year, Rick and his partner were left wondering if they had made a big mistake. Part of the reason they chose to open up in Port Washington was because of the amount of wealth in the community. The median household income in Port Washington is approximately $109,000, a little more than double the national media household income. It is an extremely wealthy community, with many of its community members being business people who commute and work in the Financial District in Manhattan. But that does not mean they weren’t feeling the effects of the 2008 recession.
“It was clear that something was going on. People were not spending money. Average order amounts were way down. Customers began questioning prices. And on top of all that, the price of chicken was going up.”
By the end of year 2 they were forced to raise prices, which definitely turned off some people, but it was essential to their survival at that moment in time.
Rick and his partner decided to invest in some marketing and promotions at the start of year 3. They put out various coupons in local papers and pennysavers, tested out some deals on Groupon, and created an email rewards program. While year 3 was still pretty slow, their investments in marketing paid off, and they decided to go for year 4. By this point, they were extremely close to breaking even, and mid-year 4, Rick and his partner finally saw the return.
Currently Wings Plus is doing just fine. Of course it has not been completely smooth sailing, but Rick is proud to have made it through such a horrible recession, and has come out with a profitable business. He is hoping to open up a second Wings Plus in 2016.
But Rick is a little worried about the future. New York seems to be pushing for a $15 an hour minimum wage. This would be catastrophic to Wings Plus.
“Most of my workers are part-time students. I pay my cooks well, but there’s no need to be paying my counter people who work 5-hour shifts at a time, $15 an hour. I already pay them above minimum wage. That would be the end of Wings Plus.”
In the meantime, Rick is planning to move forward with opening a second location, and looks forward to creating a Wings Plus legacy.

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

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

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

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

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

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

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

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

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

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

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

“Would you like to have some coffee before we get started, Kevin?” Meghan Fink, owner of Pasadena Sandwich Company asked me with a gleeful smile on her face. That’s what it’s all about here in the Pasadena Sandwich Company, customers first.

Pasadena Sandwich Company (PSC) is a family-owned restaurant that has been operating in the town of Pasadena, California for over 20 years. This family style restaurant is a costumer-oriented company, placing customers’ satisfaction at the core of their business mission, and treating each one like a family member. After their dad passed away 5 years ago, the Fink siblings decided to keep the restaurant that their dad has built from the ground up by running it together. Jonathan, the youngest of the 4, comes in to work every day at 6:30am just to roast the meat that they would serve later in the day. I had the blessed opportunity to have a little chat with Meghan, who was very happy to help me, about the economy and how her company works.

PSC has been described by Meghan herself as a company that is impacted by a secular shift. Since food is a necessity good, and is inelastic in economic terms, business has been steady for the past few years. Since the Pasadena community is rather small, as compared to big cities such as Los Angeles, people are always around to drop by for a quick lunch break. “The only time of the year where business is slow would be in August,” explained Meghan. “People go to vacations in August so that’s the only real impact we see on our sales.” However, since the pattern happens every year, the company knows what is coming on every August and hence are not impacted in a significant way. Also worth mentioning, was Meghan’s own little theory of how more people would come in to the restaurant at the second day of the day when there’s a weird weather pattern. “On a rainy day, the restaurant will be quiet, however, a day after that the restaurant will be crowded with customers!” Meghan laughed as she explained her theory.

When asked about whether the 2008 recession did a major impact on the restaurant, Meghan explained how in 2008, which was when her dad was still running the restaurant, they did not see a crazy hit on the company. Because of the reasonable price that they have kept for many years, and the great quality and quantity the restaurant served, people were still coming in the restaurant regularly amidst the recession. The only impact they see during the recession was to their catering business, which slowed down as compared to previous years.

The company, which is impacted most by the retail trade sales and food services sales has faced a few challenges over the years. One of which was the recent drought that the state of California is facing. Due to the recent drought, there has been a shortage of the supply of roast beef. This is a challenge for the company as beef is one of the core ingredients they use for their sandwiches. Another factor that affected their supply is the bird flu. To my surprise, Meghan revealed to me that the bird flu, is in fact happening right now! Due to the bird flu, there have been changes to the price of poultry meat such as chicken and turkey by the providers of PSC. However, Meghan also explained how the company has been loyal to their providers, whom they have been in business with ever since PSC is opened and hence even if prices were to increase, it will increase by only a little amount.

“Being a small business in California is also becoming more challenging,” Meghan explained. “The state is passing fewer and fewer things, and recently, they only declared 3 days of sick pay for the whole year!” That impacts the business as man-power is one of the company’s main resources. Since PSC is a small business, they do not have that much of a resource. There’s a total of 10 employees, including the 2 siblings, Jon and Meghan who are running the store. “If they raise minimum pay to $15 an hour, that will be what impact the business the most.” Explained Meghan. When asked if rising rates play a role in their business, Meghan simply replied, “Not really, tax goes up, and people go upset! But they still come in regularly, it is what it is.”

Being a part of a community that has a close relationship with each other have also helped PSC to become the successful company that they are today. PSC does marketing locally, they support schools and non-profit organizations and company by giving gift certificates. PSC is very big on the “Community for community” service, proven by the recent “Gobble Tournament” they did for a local high school where they fed football teams. Moreover, Cal Poly Pomona has just recently used PSC for one of their marketing class as an example of a company that helps the community by serving them, and in turn, the community helps them back. The customers of PSC have gone as far as helping them set up their social media, without even being asked! PSC’s popular social media sites such as Yelp, Facebook, and even their own website were set up by their own customers. Their customers do it for them as a part of the strong community support that they have for one another.

Operating a business by yourself might be a very challenging and risky thing to do, considering the roller coaster pattern of our economy, but with the help of family and a strong community, a small business can soar to great heights, as evidenced by PSC’s on going success.

The Big Mac index was invented as a lighthearted guide to whether currencies are at their “correct” level. Based on the theory of purchasing-power parity (PPP), the index follows the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.

Drawing on the example from the The Economist, the average price of a Big Mac in America in July 2015 was $4.79; in China it was only $2.74 at market exchange rates. So the “raw” Big Mac index says that the yuan was undervalued by 43% at that time.

 

 

Never intended to be a precise gauge of currency misalignment, the Big Mac Index has announced itself as a global standard for countries to position themselves in the world through the value of their currency. This could bring some joy to the office of the new CEO of McDonald’s following the fall in revenue by 11% in the last quarter.

 

 

The figure above provides a detailed summary of the Big Mac Index. For example, South Korea, which lost its value against the dollar post 2000 has been on a downward trend and has been significantly devaluaed to 21%. So what does this mean? Well, devaluing the currency decreases the exchange rate of the South Korean Won against the dollar. Hence one dollar can now buy more of the Won. This has a direct impact on the both the economies. It would decrease the value of South Korean goods, making them competitive in the international market, increasing exports from the country and increasing imports in the United States, and worldwide. Simultaneously purchase of foreign goods is more expensive decreasing exports in South Korea. This directly sponsors growth in the economy through increase in net exports. This practice seems relevant to economies that are looking towards growth, for example developing countries. Hence through the chart we can confirm that Russia, India, China and South Africa, four of BRICS countries are focused on aggressive growth. Yes, from the looks of it even China.

For individuals like me, who come from India and other Asian countries to United States, we will have more of currency shock than culture shock. With 1$ woth Rs.66, I am having trouble managing my expenses, so good luck to those students coming to United States for studies. For now, I am considering on going back to India and saving on those precious dollars.

Sources:

http://www.economist.com/content/big-mac-index

http://bigmacindex.org/