business news in context, analysis with attitude

Published on: May 6, 2016

by Kevin Coupe

There was a Bloomberg story this week saying that "YouTube is working on a paid subscription service called Unplugged that would offer customers a bundle of cable TV channels streamed over the Internet ... The project, for which YouTube has already overhauled its technical architecture, is one of the online video giant’s biggest priorities and is slated to debut as soon as 2017."

At the same time, the Washington Post reports that the Hulu online streaming service "is looking into offering live-streaming content from a handful of cable channels as part of a service that could cost about $40 per month ... The new service could launch in the first quarter of 2017 and would also include a digital DVR service..."

I think these are important shifts - and not just because they suggest that how and where we watch pretty much everything is going to change in fundamental ways, replacing traditionally bundled services with an a la carte approach that will put consumers in greater control of what they see.

Now, it may also cost consumers more money in the long run, though that is still to be determined. I cannot help but feel that if I want to watch four or five different programs that are appearing on four or five different services, I may end up paying four or five different fees. I have this sneaking feeling that this could end up costing me more money than, say, traditional cable packages as supplemented by the occasional - or not so occasional - iTunes or Netflix purchase. Add to that the potential feels that I may eventually have to pay to watch events like the Super Bowl or the World Series, and suddenly it could start to add up.

There are some essential questions that will end up being asked and answered - like, how much control is worth to the average consumer. The answers, I think, will be an Eye-Opener ... and will give us clearer sight lines into consumer mindsets and priorities.

Published on: May 6, 2016

The New York Business Journal reports on a new study from WSL Strategic Retail suggesting a change in shopper mindsets - that "shoppers have become more financially responsible, and that they’re looking to lead a less stressful life, spend more time with family, and travel. Retailers, from mass to luxury, initially blamed their across-the-board downturn in sales on post-recession, but it’s gone on long enough to now indicate a sea change that is going to affect retailers going forward."

The story goes on to say that the study "found that for 55 percent of women, their No. 1 priority is paying off debt, followed by saving (48 percent) and then vacations (35 percent). As shoppers, 8 out of 10 are simplifying how they take care of their homes and are making easier meals, seven out of 10 are adopting simpler beauty routines, and six out of 10 are spending less time shopping. Two-thirds of those surveyed are staying home more." The changes are said to be "a culmination of things that sort of layered atop one another, including in recent years, a recession that made consumers fearful of overspending, followed by a rise in the use of technology that made price comparisons and online shopping simpler."

“This shift is really foundational and it’s deep in the soul and psyche of the American people,” says WSL CEO Wendy Liebmann. “Here we are, eight years after the recession, 15 years after 9/11, and 20 years after Amazon, and the recognition is hitting [retailers] that this is fundamental.”

Published on: May 6, 2016

Reuters reports that Target "is cracking down on suppliers as part of a multi-billion dollar overhaul to speed up its supply chain and better compete with rivals" such as Walmart and Amazon.

According to the story, Target "plans to tighten deadlines for deliveries to its warehouses, hike fines for late deliveries, and could institute penalties of up to $10,000 for inaccuracies in product information, according to a letter sent to suppliers and obtained by Reuters ... A tighter grip on its deliveries is seen as crucial to keeping shelves stocked, maximizing sales and controlling costs. Target has already announced an investment of over $5 billion in supply chain and technology infrastructure between 2015-2017."

Target COO John Mulligan tells Reuters that "these steps are a key part of becoming more reliable." The new guidelines are slated to go into affect within the next three months.

Published on: May 6, 2016

Bloomberg reports that the New York Times "will begin selling ingredients for recipes from its NYT Cooking website as the newspaper publisher seeks new revenue sources to offset declines in print. The Times is partnering with meal-delivery startup Chef'd, which will send the ingredients to readers within 48 hours. The Times and Chef'd will split sales from the venture ... The Times' foray into meal delivery is another example of how the publisher is looking for new ways to make money from its content, brand and journalists to hedge against the uncertain future of newspapers."

Published on: May 6, 2016

The New York Times reports that the New York City Council voted 28-20 yesterday "to collect a fee on each carryout bag, paper or plastic, with some exceptions ... The Council settled on a 5-cent minimum fee after an earlier version of the bill called for 10 cents; stores, which will collect and keep the fees, can charge more if they choose." Exceptions include "plastic bags used for produce, small paper medicine bags at pharmacies, bags used at state-regulated liquor stores and bags used by soup kitchens. Those buying groceries with food stamps are also exempt from paying the fee"

Mayor Bill de Blasio has said he will support the fee.

Proponents of the legislation say they want to encourage the city's consumers to bring their own bags to stores and cut down on the "roughly 10 billion single-use plastic bags a year" that the city's Sanitation Department says it collects each year. Opponents, however, say that single-use bags often are anything but, and are used both to line garbage bags and to pick up dog feces; it is worth noting that the city also has a bill requiring dog owners to pick up pet waste from the city's streets and sidewalks.

The city's bag bill takes effect in October 2016.

Published on: May 6, 2016

The Seattle Times reports that "Amazon CEO Jeff Bezos vowed to hire 25,000 veterans and spouses of active-duty military personnel over the next five years, joining a 5-year-old White House program to support military families and furthering the tech giant’s steps into the civic spotlight."

The story notes that "beyond hiring the 25,000, the company also committed to training 10,000 additional veterans and military spouses in the booming business of cloud computing.

"Amazon, which has significantly increased its lobbying spending in recent years, has also made a greater case for its economic impact, showcasing on its website how its platforms help create millions of jobs. It has also stepped up its participation in local civic affairs, allowing one of its buildings to become a temporary homeless shelter for families run by Mary’s Place. This week Bezos matched $1 million in donations for the nonprofit, which focuses on homeless women."

Published on: May 6, 2016

• The Triangle Business Journal reports that Walmart "has announced plans to begin offering in mid-May its first online grocery pickup services in the Triangle at five of its stores in Wake and Johnston counties."

At least in the beginning, Walmart will offer click-and-collect services for free, which will position the company as cheaper than competitors such as Harris Teeter and Lowes Foods, which, the story notes, have fee-based click-and-collect services.

Published on: May 6, 2016

• Bloomberg reports that Amazon "could take as much as a 30 per cent stake in a large cargo airline, its second such deal this year as the e-commerce giant steps up efforts to take control of its own delivery logistics. As part of the agreement, Atlas Air Worldwide Holdings will operate 20 Boeing 767-300 cargo planes for Amazon."

The move is part of Amazon's broader efforts to take more control of its fulfillment processes, which could put it into competition with the very companies that have provided it with shipping and delivery services over the years.


• In the UK, the Telegraph reports that Amazon plans to launch a nationwide fresh food delivery service "within the month as the online retail giant continues to challenge 'the big four' of supermarkets ... The new service comes in the wake of Amazon signing a deal with Morrisons,  allowing British shoppers to buy fresh food through its website for the first time."

Published on: May 6, 2016

• NBC News reports that "Safeway and Albertsons are accused of misleading customers on their 'Buy One, Get One Free' promotion for meat products. A pair of customers filed a class action lawsuit in Multnomah County arguing the grocery stores raised the price of meat so customers actually paid more to cover the cost of the ‘free’ product."

The company has not commented on the suit.

Published on: May 6, 2016

Got the following email from MNB reader Gary Narberes regarding Michael Sansolo's column about NFL draft pick Laremy Tunsil:

Do you have an extra pair of rose-colored glasses that I may have so I can see the poor adolescent that you so glowingly refer to?

He wasn’t smoking a joint (it’s 2016 who cares about that) but rather had a gas mask connected to a bong that I dare say was not a first-time user stunt.  His claim that it was a couple years ago takes him back to being 18-19 years old. 
 
“In many ways, Tunsil is lucky”. The bigger point you fail to touch on is that he is a role model for some young players and the message being sent is don’t do drugs and get $21M/year as 3rd round draft pick or do drugs and get $13M/year as a 13th round pick.
 
Please don’t get me wrong, I fully embrace being a person who has not lived a “completely pure life”.  I do believe there are times when one can turn a blind eye to something, but I don’t believe this is one of those times.




We had a piece the other day about retailer complaints regarding chip-enabled credit cards that are costing shoppers an average of 10 seconds extra per transaction, which prompted one MNB user to write:

Because in 2016, waiting an extra 10 seconds is deemed unacceptable.

It isn't just 10 seconds. Let's just make the math simple. If a checkout has 100 transactions per day in which chip cards are used, that adds up to more than 16 minutes. If that store has 10 checkouts with the same experience, that adds up to 166 minutes ... or more than two hours of time wasted simply because the banks can't get their freakin' act together.

I think my math on this is right. If it is, I'm sympathetic to retailer concerns.

On the same subject, from MNB reader Mike Moon:

Retailers were mandated to have chip and pin terminals in their stores by what?, October 2015? or else they would be non-compliant with security. We ordered and installed these at $1000 a pop.

Here it is 9 months later, and NCR hasn't even released the software yet that allows the chip reader portion of the terminals to even work on my NCR system. So even though I did my part to stay secure, my hardware partner did not, leaving ME non-compliant. 

What a racket. Banks fight to keep high transaction fees saying they have infrastructure and network costs and to cover fraud losses. Now that they are pushing the fraud losses to the merchant, I bet we'll see no reduction in fees. Hardware and software providers, who have bought each other out over the years leaving few competitive choices, are too big and large and overworked to care about the merchants. I'm not sure they have any federal mandate or risk of penalty lighting a fire under them to give us what we need. And, finally, those in charge of PCI compliance keeps changing the requirements, adding new layers of security as they discover loopholes, often faster than the industry can keep up.

Racket is right.

MNB reader Kevin Berkheiser chimed in:

I think your article on the new processing delays hits home for retailer frustrations but totally misses the fact that customers are even more frustrated and are taking out those frustrations on the retailer.  As a customer, I hate the fact that I used to swipe and go to now having to leave my card in the terminal.  I even left my card once and had to go back.  I appreciate the extra security but it’s about time someone thought about the speed of the transaction.  This will be a win for everyone once implemented.



We had a piece the other day about generational differences, which prompted
one MNB reader to write:

Based on what is going at too many colleges these days, I prefer the name "snowflake" generation for millennials. It fits them perfectly...they melt in the face of any heat, they cannot be faced with any opinion that differs from what they are spoon fed by the liberal professors and an even more liberal media. If the group coming up behind this sad group is even  more delicate, GOD help us.

I could not disagree with you more ... and I do so from the vantage point of someone who spends a lot of time with college-aged people, both in my personal life and as a member of the adjunct faculty at Portland State University.

For the most part, the young people with whom I interact are smart, passionate (though not necessarily about the things you and I might be passionate about), diverse, tolerant, open-minded and hard-working.

Do they sometimes want more immediate gratification than their elders? Sure...but that's not necessarily wrong. I think that a lot of people my age and older were far too willing to accept delayed gratification and ended up being screwed by those above them who were far more interested in themselves than the people who worked for them.

(I went out on my own 20 years ago in part because I got tired of being spoon-fed such crap by people for whom I worked ... and because I have a healthy sense of irreverence, insubordination and autonomy that made me unfit to owe my soul to the company store. Maybe that's why I like the millennial generation...)

The teachers I know don't try to mold students to their way of thinking, but encourage them to think, to form their own opinions, to argue and debate and challenge the status quo. And most of the students I know take them up on it.

You condescend to them - and misunderstand them - at your own risk.

Published on: May 6, 2016

Spenser is back this week in "Slow Burn," the 45th novel featuring the intrepid Boston private detective created by the late Robert B. Parker. Since Parker's death in January 2010, Ace Atkins - who, in addition to being an avowed Spenser fan, is an accomplished novelist with several series to his credit - has been writing the Spenser series, with both critical and popular success.

"Slow Burn," Atkins' fifth, is a worth addition to the Spenser canon, proving yet again that he has been an inspired choice to succeed Parker. What Atkins does is not so much an imitation of Parker as an evocation - he captures the Boston atmospherics and uses the sardonic, hard-boiled, first-person narrative to perfection.

In "Slow Burn," Spenser is asked to look into a fire that killed several of the city's firefighters; one of the survivors suspects arson, but the authorities aren't listening, so he asks Spenser to investigate ... and, inevitably, the trail leads to a series of fires that are ravaging the city. (In writing about the fires, Atkins demonstrates a facility with research that reflects his journalistic beginnings.) As usual, Spenser has to deal with his share of Beantown baddies, with names like Jackie DeMarco and Killer Kowalski, sometimes with wry wit and sometimes with an uppercut; he also has, as backup, the enigmatic Hawk and native American Zebulon Sixkill. And moral support from his longtime love, Susan Silverman, who Atkins makes sure is nurturing without being nauseating (something that Parker wrestled with, sometimes unsuccessfully).

There are a number of things I continue to really like about Atkins' Spenser novels. One is that he is acknowledging the passage of time and the history of the characters, at least as much as he can within the framework of a series in which the protagonist will always be in his fifties. At one point in the book, Spenser and Susan take a side trip to Cape Cod, where they enjoy a sentimental weekend at a Hyannis hotel where they stayed in "Promised Land," the fourth Spenser novel; they mention having stayed there 20 years earlier, though, in fact, "Promised Land" was published in 1976 - a whopping 40 years ago. (It simply wouldn't do for Spenser and Susan to be well into their seventies...)

At the same time, Atkins allows for life to happen - Pearl, their dog, is aging (dog years appear to be the polar opposite of Spenser years), and the formerly troubled Sixkill has matured to the point where he's ready to leave Boston and move to Los Angeles. (I suspect this means there is an LA-based Spenser book on the horizon.) There are mentions of old foes - Gino Fish, Joe Broz, Tony Marcus - that suggest Spenser has managed to outlive them all, which also allows for the introduction of new and dangerous antagonists. There is even change in the police department, with Martin Quirk having been promoted and replaced by a female detective who may prove to be a worthy adversary.

(By the way, fans of the TV series "Spenser: For Hire" may see a reference in "Slow Burn" they'll recognize, if they pay attention. Extra credit - and a signed copy of "The Big Picture," to the first person who sends me an email telling me what it is.)

I do have one small problem with "Slow Burn," I must admit. There is an old dramatist's rule - invented, I think, by Anton Chekhov - that if you introduce a gun at the beginning of a story, you'd better make sure it goes off by the end of the story. Otherwise, it shouldn't be there. In "Slow Burn," there is the introduction of a character with whom one might expect Spenser to have an interaction before the end of the book ... but it doesn't happen. (I anticipated something along the lines of how Spenser and Hawk deal with Zachary at the end of "The Judas Goat.") I'm thinking that Atkins is simply setting up a conflict that will pay off in a future novel ... so I've decided to take this as a positive, since it indicates there will be future novels.

In short, this is all good stuff, as Atkins manages to keep the flames of an old hero alive while injecting the stories with new energy and insights. "Slow Burn" amply demonstrates that Spenser - first introduced in "The Godwulf Manuscript" back in 1973 - shows no signs of burning out.




As tired as I am of comic movies, it didn't stop me last night from going with my son to see Captain America: Civil War - in IMAX 3-D, no less. I'm happy to report that within the limits of the genre, it is a terrific piece of work - lively and kinetic, well-acted, and written in such a way that it manages to have some serious issues on its mind without being grim and heavy-minded in the manner of the recent Batman v. Superman.

In some ways, the underlying theme of Captain America: Civil War is similar to that of B v. A - it is about what happens when gifted people of different mindsets clash about personal responsibility and allegiances. In Captain America, there is a move to create a registry of super heroes that will make them report to the United Nations. Some, like Iron Man (Robert Downey Jr.) think this is necessary because of the havoc that has been wrought in the past, even as these superheroes have saved the world; but Captain America (Chris Evans) feels he needs to be independent in order to be effective.

While there certainly political undertones to the plot, there is lots of action, plenty of fights, some witty dialogue, and even a few plot twists. (And a welcome appearance by Tom Holland as the new Spider-Man ... who is terrific.) Captain America: Civil War is what it is, but that's not at all bad ... a comic book movie with heart and even intelligence. It's going to make a fortune, and put Batman v. Superman to shame critically and financially.




As befits any week in which I read a new Spenser novel, I tried a new beer this week - Driftwood Ale from the Montauk Brewing Company, a copper colored and refreshing beer that I think is going to go into the rotation.




That's it for this week. Have a great weekend, and I'll see you Monday.

Slàinte!