Marketplace - American Public Media

Hold up on aid threatens for-profit college

Fri, 2014-06-20 11:20

The U.S. Department of Education is tightening the screws on Corinthian Colleges Inc., the parent company of Everest, Heald and WyoTech for-profit colleges.

The federal body charges that Corinthian is evading questions about improper marketing to prospective students and allegations that some schools changed students' grades and altered attendance reports.

Corinthian will be prohibited from accessing any federal financial aid funds for 21 days, a sharp blow to a company that relies on those funds for the majority of its income. In a report filed with the S.E.C, Corinthian said "...the company's cash flows will not be sufficient to meet its obligations as they become due, which would cause the company to be unable to continue as a going concern."

If the company shutters schools, Corinthian's approximately 72,000 students, who are enrolled in everything from degree programs to trade schools, will need backup plans. It's not clear just yet what their options will be.

Bobbleheadmania hits Dodger Stadium

Fri, 2014-06-20 11:04

When it comes to the Los Angeles Dodgers' performance on the field this season, it’s been a disappointment; the team is playing barely above .500.

But if you take attendance, the Dodgers are clear winners, leading the majors with an average 46,088 attendance.  As it turns out, the biggest draw for fans has nothing to do with who’s playing on the field.

When looking at the most-attended Dodger games of the season – excluding Opening Day – they all have one thing in common: Something is being given away, whether it be a zip-up hooded sweatshirt, a mother’s day clutch, or the most popular item of all, a bobblehead.

“The bobbleheads are worth more than a ticket,” Tony Manrique exclaimed a few weeks ago, as he walked through a turnstile on the upper deck of Dodger Stadium after picking up his bobblehead honoring ace pitcher Clayton Kershaw.

The cheapest seats on Stubhub for the Kershaw bobblehead night were $32, more than five times what tickets went for the night before even though the opponent remained the same (the Philadelphia Phillies).

When the Dodgers offered a package selling just tickets to games where bobbleheads were given out, it sold more than every other package combined. The popularity of the giveaway isn't surprising to Stephanie Rosil, who stood on the upper deck of the stadium with her Kershaw bobblehead still safely in its box.

“Everyone collects them," said Rosil. "It’s like bringing a little player home. Who wouldn’t want to take Kershaw home with them?”

Like many fans, Rosil says she chooses which game to go to months in advance based solely on the giveaway.

“If you come to a game you pay the money, you pay for parking, you might as well get something that you like,” said Rosil.

Dodgers look beyond baseball to attract fans

Major League clubs handed out 2.59 million bobbleheads in 2013, twice as many as they did five years ago, according to Sports Business Journal.

No team gives away as many bobbleheads as the Dodgers. David Siegel, vice president of ticket sales, says when it comes to getting people in seats, giveaways are as close to a sure thing as there is in baseball.

“Regardless of how popular the team is, there could be as much as a 15,000-20,000 seat bump depending on what we’re giving away,” said Siegel.

Siegel won’t disclose how much the Dodgers spend on giveaways, which get more elaborate every year. Some of the cost is defrayed by sponsorships. Regardless, he says the money is well-spent.

The Dodgers field the most expensive sports team in the world, but a roster of stars provides no guarantee of winning. Siegel says that means the Dodgers try to to think beyond baseball.

“Obviously, we are tied to that and this is our core business, but we want people to come out here regardless of how the team is playing,” said Siegel.

The toy in the box of crackerjacks 

The key to the giveaways is uniqueness: There are only 50,000 or so made, you can’t buy them in the shop, and like the little toy buried in the crackerjack box, there’s no underestimating the value of free prizes. There’s also the nostalgia factor, says Irving Rein, a professor of communications at Northwestern and author of the book "The Elusive Fan: Reinventing Sports in a Crowded Marketplace."

"It almost reminds me of a carnival, getting the Kewpie doll," said Rein.  “I think it invokes memories. Those giveaways mark relationships. You can say 'I remember three years ago when I took  Jimmy to the game for the first time and we got this bobblehead doll.' You can look at the bobblehead in the house and it ties up the brand identity.”

The person credited with inventing sports souvenirs is Danny Goodman, a marketing executive who was hired by the Dodgers owner Walter O'Malley soon after the team moved to Los Angeles. Dodgers team historian Mark Langill says under Goodman, the team hosted batting glove and cap nights in the 1960’s.

"And it’s just evolved over the years," said Langill. "As people are drawn more to watching the game on television it’s important for teams to say, 'Let’s get the people out here.' Nowadays you don’t hear people say they want to see the Phillies or the Giants. It’s 'I want to go Hello Kitty Night.' They don’t care who we play, what time, or what day of the week it is.”

The rise of the bobblehead craze

Ceramic bobbleheads have been sold at ballparks for decades, but before the late 1990’s usually the only figurines available were historic or simply a generic version for each team. There were fears that featuring one active player would be bad for clubhouse chemistry.

The Dodgers' rivals, The San Francisco Giants, are credited with hosting the first modern bobblehead giveaway in 1999, handing out 35,000 plastic Willie Mays statues. 

The Dodgers hosted their first bobblehead nights in 2001 with three team legends: Tommy Lasorda, Kirk Gibson, and Fernando Valenzuela.

Langill says it wasn’t until a bobblehead promotion five years ago featuring a popular active player, Manny Ramirez, that he truly saw the power of the giveaway.

"It was a Wednesday afternoon game with the Pittsburgh Pirates, and normally at that type of game you’d be lucky to get 20,000 people," said Langill. "It was just packed. And that really shows you the impact of the right promotion at the right time. It doesn’t matter if you play the game at six in the morning on a Tuesday, people are going to want their prize.”

There have been some notable misses over the years, including a baseball giveaway in 1995 that sold out Dodger Stadium -- The game had to be suspended when fans threw their free baseballs on the field as a protest to then manager Tommy Lasorda and right fielder Raul Mondesi being ejected from the game for arguing a call. 

It was the first National League game to be forfeited in 41 years. And all because of a giveaway gone wrong.

Yo, stop making a big deal out of the Yo hack

Fri, 2014-06-20 09:57

Maybe it's because summer is almost here, or maybe it's because the Amazon Fire phone did not blow anyone's mind this week, but Yo has officially blown up. The App, which through the right lens could almost be considered tech industry self-parody, works like this: You and your friends sign up, and then with a click of the button trade one singular message. "Yo." And that's it. It's reportedly raised $1 million in funding, and it's already cracked the top five apps in Apple's App Store.

Here's the other way Yo has blown up: it has also had its security flaws exposed. Three students told TechCrunch today that they were able to mine the app for user phone numbers. Other developers seem to have backed that up, also saying that Yo can allow non "yo" messages to be sent.

But hold on. If this sounds truly scary to you, then you might need a reality check. Security flaws in popular apps are a serious issue, no question. But..."major security flaws" ? Ehhh. Just remember: getting random people's phone numbers and sending people messages that don't consist of the word "yo" is something you can do with a phone book. Any 7th grader with a taste for prank calls knows that.

I asked one of our Marketplace Tech regulars, Chester Wisniewski of Sophos, to characterize just how big of a deal the yo hack was, and he quoted the Bard. "Much ado about nothing." What Wisniewski did say was that Yo's security flaws are demonstrative of a larger problem: the low barrier to entry in the app universe for thrown-together software that doesn't have proper security. That's a bigger challenge for the app world, and Yo is a pretty low-priority example. 

So until this particular issue turns into something more serious--like access to your credit card data, or delivering your phone a virus--remember that like apps, not all "hacks" are created equal. Anyone still worried about this should look at the app permissions screen: 

 

 

This narrative can change of course, but it's not time to go Chicken Little on Yo just yet. If you want to see a list of app/web hacks that you should pay more attention to, look below:

6 notable tech hacks

The Tweetdeck Dictionary.

Via Creative Commons/Flickr/Sean MacEntee

 

1. Tweetdeck

 

The social media managing program briefly shut down after a "security issue" which caused bizarre tweets to show up in users' feeds. Twitter user @Firoxl, who uncovered the issue, later tweeted to CNN that his discovery "was some sort of accident."

The WhatsApp icon on an iPhone home screen.

Via Creative Commons/Flickr/Jan Persiel

 

2. WhatsApp

 

A group called KDMS Team took credit for defacing the website of the popular messaging app. The group left a message that simply appeared to raise awareness about Palestine, saying "Palestinian people has [sic] the right to live in peace." WhatsApp said in a statement that "no user data was lost or compromised" while their website had been hijacked.

Spotify HQ.

Via Creative Commons/Flickr/Sorosh Tavakoli

 

3. Spotify

 

Though the security breach only appeared to affect one unlucky user, Spotify decided it wasn't taking any chances. It pushed out a new version of the app to Android users that prompted users to uninstall the previous version, and asked users to re-enter their login details. As for the one user who was hacked, the company blog said "this did not include any password, financial or payment information."

Via Wikimedia Commons

 

4. Pinterest

 

Pinterest couldn't catch a break--it was hacked twice in the span of four months. The first time, users reported spam images of women in underwear, usually accompanying a weight loss spam message. The second time around, users' feeds were littered with messages advertising a strange Asian fruit purported to burn fat. Pinterest put affected accounts into safe mode, and encouraged its users to use "unique and strong passwords" to prevent another episode.

 

Skype's booth at SXSW 2012.

Via Creative Commons/Flickr/1000heads

5. Skype

 

2014 got off to an auspicious start for Skype when it became the latest victim of a hack attack from the Syrian Electronic Army. Skype's Twitter and Facebook pages, along with its company blog, were hijacked with identical messages calling for an end to government spying. The messages were quickly removed, and Skype tweeted the following day that no user information had been compromised.

 

Via Wikimedia Commons

6. Snapchat

 

Out of all the hacks on this list, Snapchat probably got hit the worst. Early in January 2014, hackers exploited a security flaw in the app's "Find Friends" function that was used to download the usernames and phone numbers for 4.6 million accounts and later posted the data online. Though the company had previously acknowledged that this was possible, they later released an updated version of the app that came with an option to opt out of Find Friends.

 

Pudding you in the mood for chocolate

Fri, 2014-06-20 08:01

Here's an extended look at the Marketplace Datebook for the week of June 23:

On Monday, the National Association of Realtors tells us how many existing homes were sold in May.

But hey, what about new homes? You only have to wait until Tuesday. That's when the Commerce Department gives us those numbers.

Then of course you have to fill your house with appliances. On Wednesday the Commerce Department reports on durable goods orders, including appliances.

The House Committee on Science, Space, and Technology discusses the future of human space exploration.

Next, let's go back in time and stand in a supermarket checkout line in Troy, Ohio. Come on, it'll be fun. Hear that beeping sound? Forty years ago on June 26 a pack of Wrigley's gum made history when it became the first purchase scanned using a bar code.

Thursday is National Chocolate Pudding Day. Seriously, I'm not making this up. Someone else did.

On Friday, fashion designer Vera Wang turns 65. She's famous for those gorgeous wedding gowns.

And since it's summer it's time to get out of the house. "Transformers: Age of Extinction" explodes onto the big screen.

The Gray Market: An invisible $2 trillion economy

Fri, 2014-06-20 07:37

When jobs are tough to find and salaries remain stagnant, sometimes people turn to something else to make ends meet. Maybe they start playing poker, or stripping or even selling Tupperware under the table to pay their bills — not necessarily illegal, but not necessarily mainstream.

According to Edgar Feige, economics professor at the University of Wisconsin-Madison, unreported income totals $2 trillion in the U.S. That includes illegal activities like drug dealing, but it also includes side jobs like nannies and eBay sellers.

We want to hear stories of the little and big things you did for money in this gray area. Email us or leave a comment.

Dan Szematowicz, Senior Producer of Marketplace Weekend, shares his story of how he pulled through leaner times early in his career:

A group of friends and I went to the local casino for an evening of shenanigans and tomfoolery. Next thing I know, I’m sitting at a poker table playing VERY low stakes Texas hold’em.

Over the next few hours, the stack of chips in front of me grew. Beginner’s luck, right?

I enjoyed the game, so I went back the next weekend. Same result. I studied the game, constantly practiced and steadily moved up in stakes. After a few months, I was making significantly more money from playing poker than I was from my more respectable job. That extra money allowed me to bridge the gap between what I was pulling down from my entry-level radio job, and the bills that needed to be paid. In turn, that gave me the feeling of security that I needed to concentrate on growing my radio career.

What does pain have to do with econ? Oh, everything

Fri, 2014-06-20 04:25

A pain clinic is a strange place to think about economics.

And to be honest, I wasn’t at the time. I was thinking of myself. My abdomen, freshly scarred from two surgeries to remove endometriosis. My pants, which didn’t fit. The pain and numbness that ran down my right leg. My hand, which wouldn’t hold a pen. I’m a reporter. I have to hold a pen.

The GW Pain Center was on my road back.

The waiting room was full of people with their own pain. Diabetics who’d lost a limb. Older men and women in wheelchairs. Restless kids dragged along, too loud for the small, tense space. Veterans willing themselves to walk a few steps, knowing a punishing set of parallel bars and weights was just inside the clinic doors.

We were not always kind to one another. How can you prioritize one person’s pain over another? Is my set of stairs worth more than your heavy purse? Does your 7 on the 1-10 scale look anything like mine?

Ruth Graham wrote a spectacular story in the Boston Globe about how pain, and our subjective responses to it, can exacerbate inequality. I feel like I saw this a million times over. The skeptical eyebrow at a patient, sometimes me. Were they seeking drugs? Really hurting? How do you know?

I’ve been thinking about pain a lot as we build our new show, Marketplace Weekend. In part because my experience was so formative to who I am now, both physically and emotionally. But more because of pain’s subjective nature. And the necessity to recognize that no matter what you’re experiencing, someone else is living a different experience. Even if you can’t quite grasp it.

But you can ask. And that, to me, is the essence of reporting.

How are you? What was that like? Tell me how it felt.

The author Leslie Jamison wrote a gorgeous and searing book, "The Empathy Exams." I recommend the whole thing, but the first essay, on her time making money as a medical actor, just nails this. “Empathy isn’t just listening,” she writes, “it’s asking the questions that need to be listened to.”

Or even if I’m stumbling around and stabbing at the wrong questions.

“Empathy requires knowing you know nothing.”

That’s how it is with money, too. It pushes you, shapes you. Your 1-10 scale of losing a job is utterly different from mine. That framed first dollar over the bar? Tell me why it’s special.

Our show certainly won’t be perfect, and there will be times when we know nothing. But we’ll aim to ask, with humor, curiosity, and, I hope, empathy.

GE Capital ordered to pay quarter of a billion dollars

Fri, 2014-06-20 04:00

The Consumer Financial Protection Bureau has announced the largest federal credit card settlement over discrimination in U.S. history. GE Capital Retail Bank, now known as Synchrony Financial, was ordered to pay $228.5 million in refunds to customers.

The CFPB says the bank told credit card customers certain services were free when they were not; signing people up and charging them without their consent, and even charging people who weren’t eligible to receive the service.

The largest chunk of the settlement ($169 million) is over allegations GE Capital Retail Bank declined to offer debt relief to people if they asked for service in Spanish, or if they had mailing addresses in Puerto Rico.

“These kinds of practices are amazingly common,” says Jill Fisch, professor of law at the University of Pennsylvania. “Historically credit cards have been an area where the credit card companies are able to identify lower income and less educated consumers and take advantage of them and we’ve seen that over many years.”

GE Capital self-reported the incidents and says it regrets its error. In April, Bank of America paid $727 million over similar practices, and over the past two years American Express, Capital One, Chase, and Discover have all been ordered to refund customers more than $700 million dollars total. 

PODCAST: Why Russia is allegedly anti-fracking

Fri, 2014-06-20 04:00

More on the news that NATO is accusing Russia of giving money to anti-fracking environmentalist groups. Plus, Detroit is implementing new pension plans for some of its residents, the implications of which have other states nervous. Also, Minessota will be the next state to offer businesses the option of classifying as b-corporations, a title which allows the equal prioritization of social missions and profit.

Silicon Tally: YO YO YO

Fri, 2014-06-20 03:00

It's time for Silicon Tally. How well have you kept up with the week in tech news?

This week we're joined by Marketplace's own Sabri Ben-Achour. Ben-Achour reports on Wall Street, finance, and anything New York and money related. var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-yo", placeholder: "pd_1403265357" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

Central bankers clear the way for stock gains

Fri, 2014-06-20 02:00

Markets around the world are riding high as the end of the financial quarter approaches next week. Michael Hewson, chief market analyst at CMC Markets (UK), joins Marketplace Morning Report host David Brancaccio to explain what's behind the surprising strength.

Click on the audio player above to hear Michael Hewson in conversation with Marketplace Morning Report host David Brancaccio. 

Watchmaking revived by at-risk youth

Fri, 2014-06-20 02:00

Behind the heavily secured doors of Tourneau’s New York workshop, watchmakers work on repairing the world’s most expensive timepieces, worth tens, even hundreds of thousands of dollars. With all the Rolexes inside, one expects to find an elderly Swiss man in a milking jacket in charge.

But the luxury watch seller’s technical director is American Terry Irby, a third generation watchmaker. His gentle Arkansas accent and pristine white lab coat give him the air of a country doctor; one with a magnifying eye loupe around his neck instead of a stethoscope. He’s running something of a teaching hospital for watch repair; an unusual program that combines students from tough backgrounds with the fantastically pricey watches that wrap the wrists of billionaires and celebrities. It’s a bid to save a threatened profession, while bettering the lives of some at-risk young people.

During a recent class, Irby leans over the workbench of 20-year-old Justine Hernandez, showing her how to delicately take the hands off a watch -- a tricky thing to do without scratching its face. The tools she uses include some of the smallest tweezers you’ve ever seen, because many watch parts are the size of gnats.

Like others in the class, Hernandez comes from Manhattan Comprehensive Night & Day High School. It’s for older students -- those whose progress may have been held up by poverty, homelessness, or run-ins with the law. The timepieces they work with come from a whole different world.

“We were looking at all the beautiful watches and there’s this one watch that stands out -- costs like $40,000, which is like a car, probably a couple of cars,” Hernandez recalls.

The skills she’s learning could lead to a stable job with solid pay. Irby says qualified watchmakers start at $50,000 and are in demand around the world. Students who do well in the class can move on to paid internships at Tourneau, which can lead to full-time jobs.

This program isn’t just corporate goodwill. Wristwatches are fashionable again and the company needs people.

“I have often said that I would take ten watchmakers today if I could find them,” Irby explains. “Our biggest complaint is that we can’t do the job fast enough.”

Irby’s office overlooks the floor where the watchmakers work, quietly hunched over benches tending to the world’s finest timepieces, some new and others passed through families over the decades. Among those at work is Edwin Larregui, a recent graduate of the program. Irby speaks highly of his talent and dedication and expects him to be in watchmaking a long time.

Fresh from wrapping up work on a handsome Cartier worth several grand, Larregui recalls a time when he got so wrapped up in his work that he unwittingly went home wearing his eye loupe. He giggles as he recounts the funny looks people gave him on the train home. Then he turns serious, speaking with the calm satisfaction of a young man who has finally found something he loves, something he’s great at.

“It’s a part of me now,” Larregui says.

B-corporations can put social purpose over profits

Fri, 2014-06-20 02:00

Come January, when companies in Minnesota can officially register as benefit corporations, Sunrise Banks hopes to be one of the first in line.

This new class of company lets firms declare that a higher social purpose is as important as profits. The idea has only been around for a few years but a growing number of states now offer the classification.

Sunrise Banks is a Twin Cities-based, family-owned firm. Chief executive David Reiling says the company has always had a social mission to help unbanked and underbanked people get better access to capital.

“What the means from a local standpoint is over 60 percent of our loans are made each year in low and moderate income communities,” he says.

Reiling thinks that's consistent with the idea of a benefit or b-corporation. The concept involves putting a goal, like improving the community or environment, on equal footing with profit-making.

Patagonia is one of the best known examples of a benefit corporation. It sells outdoor gear while trying to limit its environmental footprint.

David Reiling thinks the designation could boost Sunrise Banks' brand -- and profitability.

"We see it actually increasing and expanding because we're a b-corporation," he says.

B-corporation status also affords some legal protections. They'd apply less to a firm like Sunrise, where Reiling and his parents are majority owners, and more to publicly held companies.

If shareholders sue because social goals overtake profit goals, management has a defense: the company was set up with a social mission.

Critics of benefit corporations still expect plenty of lawsuits.

"Because ultimately there will be disputes between shareholders and management on the appropriate course,” says Charles Elson, a corporate governance expert at the University of Delaware. “[It’s] fabulous for the courts. Lousy for the investors."

Elson thinks firms that fail to turn a profit could hide behind their social missions, or unethical companies could masquerade as do-gooders. 

"I think it's one of these things that sound great, but when it's developed it creates a lot more problems than solutions," he says.

Right now it's a problem a growing number of companies are willing to have. Twenty-two states have adopted laws allowing b-corporations, and legislation is sitting on the governor’s desks in three more.

Detroit's revamped pension plan may set new precedents

Fri, 2014-06-20 02:00

The pension system that contributed to Detroit’s bankruptcy is changing. Current city workers will be switched to a new pension plan at the end of the month – one in which they’ll shoulder more risk in the future.

But that still leaves an elephant in the bankruptcy courtroom: the judge’s opinion that pensions people have already earned can be modified in bankruptcy.

That's "despite the fact that pensions cannot be modified outside of bankruptcy under the Michigan Constitution,” says law professor Laura Bartell of Wayne State University. “That is the provision that has been the source of all the consternation in the pension community.”

California’s state pension system CalPERS has been particularly vocal. CalPERS is huge, with 1.7 million members.

It's also an interlocked system, says bankruptcy lawyer and UCLA professor Ken Klee. He says CalPERS invests payments from a number of municipalities.

“And so when somebody can’t pay in their share because they’ve gone into bankruptcy, it puts a burden on the rest of the pension system,” he says.

Not every state authorizes municipal bankruptcies, but California has had a bunch of them.

 

Foreign investors may be behind your paycheck

Fri, 2014-06-20 01:30

Foreign-owned U.S. businesses employ 5.6 million American workers, according to a new report from the Brookings Institution. 

The report says more than a third of those jobs are in manufacturing, with an increasing share in the service sector, banking, high tech, and even pharmaceuticals. 

The foreign investment isn’t just clustered in a few big cities, says Devashree Saha, a Brookings senior policy analyst who wrote the report. Saha notes that in Raleigh, N.C., more than half of pharmaceutical jobs are in what's known as the foreign direct investment sector. 

She says FDI in the U.S. fell by more than half from 1999 to 2012, because of competition from developing countries. But that competition is falling off.  

“There are very few opportunities and the US seems like the better of several not-so-great options,” says Moyara Ruehsen, who teaches international finance at the Monterey Institute.

Ruehsen says now, foreign investment is picking up again, because investors see the U.S. as a safe haven.

 

 

 

No, companies don't usually fire their founders

Thu, 2014-06-19 13:37

Chopping off the head of the person who started it all is risky, so boards and investors are often slow to oust the founders of their companies.

"Almost always the decision is made to oust a founder when it just becomes intolerable," says Dave Logan, a management consultant who also teaches at USC's business school, "The amount of evidence, the amount of risk just reaches that overwhelming point."

Even so, it's not easy to fire a founder.

"Usually the founder owns a lot of the company's stock. Usually the founder has a lot of people who are still loyal to him or her at the company. So it's not something to be undertaken lightly," says Chris Yeh, a Silicon Valley startup investor. "There are all these fallouts that come out of ousting a founder: bad publicity, dirty laundry, potentially even lawsuits."

The company's profits and reputation have to be at great risk for a company to ax a founder. In the fashion world, American Apparel and Men's Wearhouse did so, for different reasons. But those perhaps most at risk: Young tech company founders, backed by venture capital. Dartmouth management professor Sydney Finkelstein says investors don't play around.

"They're looking for quicker returns and if they're not gonna get it, they're gonna make the tougher move, and so founder CEOs are [going to] be at bigger risk," says Finkelstein, "But it comes with the territory. If you're willing to take their money, that's part of the deal."

Groupon founder Andrew Mason learned that, but took the bullet with humor in a remarkable public goodbye letter. He started with the standard leaving to spend time with family bit and then, "Just kidding - I was fired today."

By Shea Huffman/Marketplace

Amazon wasn't the place to buy J.K. Rowling's new book

Thu, 2014-06-19 13:37

The stand-off between Amazon and publisher Hachette is complicating the release of the new Robert Galbraith (a.k.a., J.K. Rowling) novel, "The Silkworm".

Amazon didn’t allow pre-orders of the book. If you order it today, Amazon promises delivery in two to four weeks.

Meanwhile, independent stores like Carmichael’s Bookstore in Louisville, Kentucky, have taken pre-orders and have copies of "The Silkworm" for sale today.

Customers ask questions about the dispute between the publisher and Amazon. Owner Michael Boggs says, “We’ve kind of taken advantage of it by pushing Hachette books. Doing a little window of Hachette books, saying, 'You can buy these here today.’”

Big retailers like Wal-Mart and Barnes & Noble are offering discounts on Hachette books in an attempt to win customers away from Amazon.

But the smaller, independent booksellers may benefit most.

“It’s a great advantage if someone doesn’t want to sell a book. Then I have the opportunity to get that sale,” says Wyatt Wergzyn, who co-owns Bookworks in Albuquerque.

Amazon tactics with Hachette have backfired in terms of public relations. Consumer Jim Dembowski used to buy a lot of books on Amazon. Now, he says, “it’s made me think twice about how much I want to patronize Amazon.”

Store owner Wergzyn is putting stickers on the books he sells. He downloaded the stickers from the website of humorist and Hachette author Stephen Colbert. The stickers read, ‘I didn’t buy it on Amazon.’

Advertising at the World Cup is a different ball game

Thu, 2014-06-19 13:37

The World Cup in Brazil is an advertising bonanza. Companies pay as much as $100 million just to be an official part of the games. But if you’ve watched any games on TV, you may have noticed one big difference from other sports events: there are very few commercial breaks.

That means few ads like Budweiser’s Puppy Love, where a dog fell for a Clydesdale. 

“The World Cup is an anomaly because you’re not getting the same type of commercials every 10 minutes, every 20 minutes," says Ben Sturner, CEO of the sports marketing firm, the Leverage Agency. 

While there are few commercial breaks, all around the Brazil stadiums are logos for international brands like Coca Cola and Adidas. There are ads on uniforms, and even on the TV screen itself. 

“Having a static ad in the background may not give you the exact messaging in a commercial ad,” Sturner says, “but you’re getting minutes and minutes of time and your brand has association at the highest level.” 

This works really well for big brands that are already well known.

“All you want is lots of exposure and lots of reminders,” says Professor Gerard Tellis, who studies advertising effectiveness at the University of Southern California’s Marshall School of Business. 

He says seeing these logos raise the probability that we’ll choose Coke over Pepsi, or McDonalds over Burger King. 

Thirty second ads have been losing effectiveness over the last few decades. It’s now about getting a viral hit online, which can also save a company a lot of money. 

That’s what headphone maker Beats by Dre managed by releasing a five-minute video online showing players arriving while wearing its headphones.

Never mind that FIFA actually banned Beats from the World Cup because only Sony paid the big bucks to be an official sponsor. The Beats video already has more than 17 million views on YouTube. 

Iraqi violence adds to the Middle East refugee crisis

Thu, 2014-06-19 12:39

An appeal launched by the United Nations High Commissioner for victims of Syria's civil war has raised only 36 percent of the $4.2 million the UNHCR requested. Another appeal, for Iraqis displaced earlier this year in Anbar province, is only 12 percent funded. And hundreds of thousands of Iraqis have fled their homes this month, raising fears that fatigued donors and cash-strapped donor nations might be unable to provide desperately-needed funds. 

The 2014 primary season has been expensive

Thu, 2014-06-19 11:38

So far, the 2014 primary season has been busy and expensive. On Tuesday, there is a big election in Mississippi – a runoff between incumbent Sen. Thad Cochran (R-Miss.) and his Republican challenger, Chris McDaniel. Outside groups have poured millions into the race, just as they have poured money into races across the country. There are Tea Party groups on one side, and on the other side is the U.S. Chamber of Commerce.

The Chamber has been around since 1912, and it represents some 3 million businesses.

“This year, we have taken the most aggressive posture that we ever have,” says Rob Engstrom, the group’s national political director. He's the one responsible for ads that the Chamber puts out. “2014 will be the largest political program in the history of the Chamber of Commerce of the United States.”

In 2012, it shelled out more than $34 million, trying to defeat President Obama, and trying to help Republicans regain control of the Senate.

“After having squandered collectively five senate seats over the last two elections, we thought it was important to involve ourselves and engage ourselves using the Chamber’s brand,” says Engstrom.

The Chamber is spending more money, and it started spending it earlier – on candidates in primaries. The decision to do that came out of a meeting Engstrom convened last year, in Phoenix. According to him, it was “a constructive conversation,” and big donors were “candid” and “direct.” The upshot? “We’re ready to turn the page, and get back on offense,” says Engstrom.

So far, the Chamber has had a winning season. It backed Rep. Mike Simpson (R-Id.) and Senate Minority Leader Mitch McConnell (R-Ky.) in their races against Tea Party challengers.

“I can’t think of an example where they’ve really made a big investment and not had it succeed this year,” says Bob Biersack, a senior fellow at the Center for Responsive Politics.

In the run-up to 2012, conservative groups spent around $700 million. There is a lot of outside money this time around, but according to Biersack, it is being spent differently. “It’s being spent more professionally, I guess I would say.”

Engstrom says the group’s members expect that – they are executives and business owners. “You know, our members are bottom-line people.”

And in politics, as in business, they want a good R.O.I., a good return on their investments. It is up to Engstrom and his team to spend donors’ dollars wisely. An investor does due diligence. Engstrom says he meets personally with 150 candidates every cycle. He says he’s looking for people who are pro-business, who have a shot at winning.

“All these guys go home and campaign as conservatives, as fiscal conservatives,” says Russ Walker, the political director of FreedomWorks Action, a national Tea Party group. “But at the end of the day, that’s not always how they govern.”  According to Walker, FreedomWorks Action has spent more than $425,000 on the Republican primary in Mississippi.

Its donors also care about R.O.I., but Walker invests their money differently – less on ads and more on getting FreedomWorks Action’s members knocking on doors.

“They are the best communicator of that political message,” he explains. “They can carry on a conversation; whereas, if we run a 30- or 60-second spot, then really all we get is 30- or 60-seconds.”

This is a strategy many conservative groups seem to favor, at the national and the local level. Case in point: House Majority Leader Eric Cantor’s defeat last week.

Even if they won’t say so, these groups are fighting over nothing less than the future of the Republican Party.  

“You know, we are going to fight back, and we are going to involve ourselves in an aggressive manner with good manners and high integrity,” says Engstrom. “And then it’s going to be a barroom brawl.”

The Chamber of Commerce and Tea Party groups will try to land a few more punches this weekend, before the runoff Tuesday. Then, their focus shifts to the general election in November. After all, these are long-term investors. 

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