Marketplace - American Public Media

A show that sets the market for classic cars

Mon, 2015-08-17 02:00

About 20 late-sixties Ford Mustangs are hauling around a tight turn at the Mazda Laguna Seca Raceway, near Monterey, CA.

Most of these cars are being driven by their owners, but some owners hire professional racers.

“It would be unfair to say that everybody here is really rich, because there are a lot of people who have owned their cars a really long time,” says Automobile Magazine writer Jamie Kitman. "But there's also plenty of super-duper millionaires.”

These are super-duper millionaires to whom luxury brands want to sell their cars. So the companies have hauled out an arsenal of their own antiques and latest models for the Concours d’Elegance, aka the Pebble Beach Car Show, a four-day celebration on California’s Monterey Peninsula.

“There isn't any other place in the country that has a concentration of people that are affluent automotive enthusiasts,” says Kim McCullough,Vice President of Marketing for Jaguar Land Rover North America.

McCullough wouldn’t say how many dollars this event could bring in for her company, but it’s pretty clear how much cash is being tossed around at the classic car auction happening at Pebble Beach.

The highest valued car here is a 1962 Ferrari, estimated to fetch $14 to $16 million.

“It’s a very wild and important Ferrari,” says David Gooding, founder and President of Gooding and Company, the host of the auction. The prices battled out here will drive the overall classic car market. Values have doubled in the past decade. But Gooding says don’t get into it for the investment.

“You should buy it because you love it because you want to use it you want to show it or vintage race it,” says Gooding. “Or just have it at home and stare at it.”

The 1962 Ferarri, by the way, went for $16.5 million dollars.

Take a look, clean water is in a book

Mon, 2015-08-17 01:58
56 percent

That's how much the net worth of blacks with college degrees dropped from 1992 to 2013, according to a new study published Monday. By comparison, whites with college degree saw their net worth rise 86 percent during that same time. Published by the Federal Reserve Bank of St. Louis, the report finds that a college degree, long believed to be a safeguard against the negative effects of recession, does not protect black and Hispanic graduates to the same degree that it does whites. As the New York Times writes, a key factor could be that blacks and Hispanics have to accumulate more debt in the pursuit of middle-class status.

$1.43 billion

That's how much the concert industry took in during the first half of this year, meaning live music is headed towards a record in 2015. Part of that has been so-called boomer bait; bands like the Rolling Stones and Fleetwood Mac drawing longtime fans to stadiums across the country. But it also shows that bands and promoters are using big data to price tickets smarter, scooping up money that used to go to scalpers.

$16.5 million

That's how much a 1962 Ferrari sold for at the Concours d’Elegance — aka the Pebble Beach Car Show — a four-day celebration on California’s Monterey Peninsula. Many attendees are among the uber rich, and as a result, the show is an opportunity for luxury brands to show off both their antiques and latest wares.

99 percent

That's the amount of bacteria that can be removed from water using one page of "The Drinkable Book," a product created in partnership between pAge Drinking Paper and WATERisLIFE. Each page of the book (which is embedded with silver and copper), can purify up to 26 gallons of water. As Quartz reports, the product was proven successful in 25 contaminated water sites in South Africa, Ghana, Kenya, Haiti and Bangladesh.

I believe I can fly (for a very, very long time)

Mon, 2015-08-17 01:53

Emirates, the airlines, announced its adding a flight between its hub in Dubai and Panama City. Perhaps most notable is the sheer length of the flight: At 8,590 miles, and with an estimated travel time of 17 and a half hours, it will be the longest non-stop flight in the world.

In its honor, Stephan Richter, editor-in-chief of The Globalist, joins us as quizmaster. The topic? Travel, of course.

Click the media player above to play along.

Behind Amazon's newest venture: music

Fri, 2015-08-14 15:01

Last month Amazon launched a new experiment that's part album and part playlist. It's called Amazon Acoustics, and it's group of songs performed by 32 different artists.

Some are covers of songs you've heard before, and some are original. The songs are available to stream for Amazon Prime customers along with other people who want to purchase them online. What the playlist represents though is something that companies are spending more time and money on lately: exclusive content.

Steve Boom is the vice president of digital music for Amazon and the executive behind the project. He talks to Lizzie O'Leary about Amazon's plans in the music business.

Click the media player above to hear the interview with Boom.

Startup hopes to make art investment more inclusive

Fri, 2015-08-14 14:52

Madelaine D'Angelo had the idea to found Arthena, sort of a mutual fund for fine art. It's an online crowdsourcing platform that allows investors to essentially buy an equity share of an art collection for the relatively low price of $10,000. That money gets pooled with other investors, which allows the group to own art collections, like "New York Art 1960s to 1980s" and "European Emerging Artists."

Investing in art tends to be outside the financial grasp of most individuals. Art auction house Sotheby's sold Vincent van Gogh’s "L’Allee des Alyscamps," and Monet’s "Nympheas" for price tags well over $50 million each.

D'Angelo grew up and worked in the art scene, but noticed that museums and collectors were trying to reach out to a wider audience that she was a part of. "We know that there's people out there that want to participate, but we just can't seem to bring them in," D'Angelo says.

"I'm part of this generation that they're trying to reach out to, and I realized that this generation looks at art not only from a cultural perspective, but also a financial perspective. And it makes sense, because if you look at how many kids my age have student loans, if you put $10,000 into something, you want to make sure it'll be worth $10,000 the next day."

D'Angelo notes that while post-war contemporary art has made roughly 10 percent gains the over last five years, "past performance does not indicate future success."

Click play above to hear more about Arthena and the art market.


Looking back at New Orleans, 10 years after Katrina

Fri, 2015-08-14 14:21

Next week, Marketplace Weekend is looking at New Orleans and its people, exploring life, business and culture in the city 10 years after Hurricane Katrina.

If you live there and/or were affected by the storm, we want to hear from you. What's changed the most in your post-Katrina economy?

Reach out to us on Twitter or email, we'd love to hear your stories. 

Check out past Marketplace stories from the city:

The story of New Orleans' recovery in one business

Banking on a New Orleans recovery

How independent businesses kept New Orleans afloat


Iceage's Elias Rønnenfelt on creativity and success

Fri, 2015-08-14 14:19

If there's a theoretical person who doesn't care about making money, it's a punk rock star. Part of that kind of studied coolness is a nonchalance about material success. But success is exactly what's happening for the Danish band Iceage. Their third album was reviewed as "brilliant" and they're in fashion magazines and on a U.S. tour. 

Lizzie O'Leary spoke with frontman Elias Bender Rønnenfelt in downtown New York, where he was staying with an artist friend. She sets the scene with a mattress on the floor, stacks of philosophy books and an ever-present cigarette.

Listen to Elias Bender Rønnenfelt's thoughts on success and creativity by clicking the audio player above.

A requiem for fallen Columbia House

Fri, 2015-08-14 13:44

This week, the company that owned music subscription service Columbia House — physical music, like, actual tape cassettes and CDs and stuff — filed for Chapter 11 bankruptcy protection


Before digital music services like Spotify, Pandora, iTunes and Napster became the dominant music distributors, you could sign up with Columbia House to receive 12 or so albums for a penny. Every additional album you wanted would be billed at an inflated price, but a difficult-to-break contract resulted in a lucrative business.


The collapse of the company inspired Soraya Nadia McDonald, writer on arts, entertainment and culture for the Washington Post, to share this story of music, adolescence and figuring out who you are.


When I read that Columbia House filed for Chapter 11 bankruptcy protection, my first reaction was, "They were still around?"

Columbia House was responsible for me cultivating my own musical tastes outside of my parents'. The first cultural artifact I could truly claim as my own came to me as a gift from my older and only sister, Carol. It was the debut cassette of a hip-hop/new jack swing group called Another Bad Creation.

When "Coolin' at the Playground Ya Know!" came out in 1991, our father saw Red, Chris, Mark, RoRo and David in their oversize puffy coats and blanched. To him, they registered as menaces. Carol tried to explain that hip-hop was part of black culture.

Click play above to hear McDonald's story, or read more at the Washington Post.

Ashley Monroe on the business of music

Fri, 2015-08-14 13:17

Ashley Monroe is a 28-year-old country music artist who wrote the line, "Had somebody that I trusted leave me broke and busted." That's a pretty perfect distillation of what it feels like to be brokenhearted, artistic and poor. Lizzie O'Leary speaks with her about her relationship with money, her new contribution to the Amazon Acoustics playlist (she sings John Mellencamp's "Pink Houses") and what it's like on the road. 

Monroe tells O'Leary that the lyrics she wrote to "From Time to Time" came to her in her sleep.

Hush, little darling, celebrate
Today's gonna be your birthday
Even if it's not the 10th of September
Sometimes down here you will find
Life won't give you peace of mind
It's like you're holding on to a dying ember

Along with her contribution to Amazon Acoustics, Monroe has also released her third album, "Blade," this year.

How much does being financially secure figure into her plans as a musician?

I didn't really think about money until after my dad died. I remember the first time I thought about it afterwards was going to the funeral home and seeing how much a stone was, and thinking 'Oh my gosh, are we going to be able to afford this?' I was like my first dealing with money....

How does the music industry stack up to what she thought it would be, before she was a well-known country artist?

I used to see buses backstage when I would go see shows, and I would think, 'Oh, they're drinking champagne and they're getting their hair done, and oh, probably getting a massage.' And probably unless your Beyoncé, that's not the case. And maybe not even her. But I'm still going to imagine somebody does that. But yeah ... it's not like what you think....


High hopes and hurdles in selling to Japan

Fri, 2015-08-14 13:05

While negotiators working on the Transpacific Partnership met earlier this month on the Hawaiian island of Maui to try to finalize the rules that will govern about a third of global trade, John Holman opened a Power Point presentation in a small conference room on a nearby island.  

“Why should you export?” he asked the roughly dozen attendees. 

Holman works for U.S. Commercial Service. It’s part of his job to get companies interested in exporting and help them navigate the process.

New exporters often come to him to ask about selling to Japan or China. His message? Look for the path of least resistance.

“What markets can you get into as an exporter, in the shortest amount of time, the least amount of cost, and generate the greatest return?" he says, pulling up a slide of the World Bank’s global rankings for ease of doing business. Singapore is first on the list of 189 countries; Japan is number 29. “Then reinvest that revenue and experience into new markets.”

As the world’s third-largest economy — and one with a wealthy consumer class — Japan is a tempting target for foreign companies. If the dozen countries in Transpacific Partnership finalize the trade agreement they’ve been working on for the last five years, it would be the first free trade agreement between the U.S. and Japan.

But there are high hopes and hurdles when it comes to selling to Japan.

On the one hand, Japan has many benefits, such as good transportation networks and low corruption, says Peter Petri, a professor at Brandeis University. Additionally, its tariffs on many goods are very low, except for a few heavily protected industries. For example, rice imports above a certain quota face tariffs over 700 percent.

“There are also other kinds of unique regulations that make it very hard to do business in Japan, much harder than in other advanced economies,” Petri says.

He lists four main areas where foreign firms face challenges: agriculture, medicine, foreign investment and services, like insurance or internet providers.

“In these areas where there is a great deal of regulatory intervention, Japan is really pretty far behind,” he says. “One way to see that is that the amount of investment going into Japan is, in our estimates, maybe a third as much as we would predict for Japan.”

The Maui Gold Pineapple Company's 1,200-acre hilltop farm. 

Tracey Samuelson/Marketplace

U.S. automakers also complain they face unfair regulations and exchange rates when trying to sell to Japan. Therefore, Petri says, the TPP’s biggest economic impact won’t come from lowering tariffs, but from addressing these other rules and regulations, and making them more uniform across the various countries.

That could be welcome news for lots of exporters, but some are still skeptical. 

Hawaii used to be a major player in the global pineapple market, but its production contracted with the rise of cheaper labor and lower prices elsewhere — a common story in global trade. 

“You try to aim your markets where you can get the best pricing,” says Rodrigo Balala, vice president of Maui Gold Pineapple Company, as he drives up the dusty, rutted roads of the 1,200-acre hilltop farm.         

He sells most of his pineapples locally, sends some to California — and he’s also started exporting to Japan.

“Japan pays for quality. If you can put a quality product out there, they’re willing to buy it,” he says, noting the low acidity of the pineapples he grows, a trait he says Japanese consumers prefer.

Sure, selling into Japan that first time was tricky.

Pineapples grown by the Maui Gold Pineapple Company 

Tracey Samuelson/Marketplace

“There was a lot of stuff we needed to learn,” he says. “We thought we knew all we need to know, but there’s a list of paperwork you’ve got to do.”

Now he says it’s not a problem, especially because he works with a local importer who handles much of the work and covers the roughly 20 percent tariff Japan levies on his products.

However, even while Balala might benefit from lower tariffs and a smoother exporting process, he looks at past trade deals and is unsure about the TPP, worried about the impact of increased competition from abroad.

“It’s the same thing with NAFTA and CAFTA,” he says. “It hurts, especially if they can come in cheap. Everyone knows the costs of producing stuff in the U.S. is expensive. Hopefully, it doesn’t hurt us that way.”

He sees both risks and rewards in expanding trade. 

"What's a department store, Dad?"

Fri, 2015-08-14 13:00

The latest retail sales numbers from the Census Bureau show increases for almost every kind of store, except three. Gas stations (see also crashing oil prices), electronics (note  Radio Shack’s bankruptcy) and department stores. 


A hundred years ago, department stores like Macy’s in New York and Marshall Field’s in Chicago weren’t just places to buy stuff. They were destinations — especially for women  — and local icons.



As described by Jan Whitaker, author of “Service and Style: How the American Department Store Fashioned the Middle Class, "they offered customers something like an entire world.

 "When women went shopping there, they might spend hours within an individual store," she says. "Especially if they ate lunch or went to the hairdresser."


Or brought in bills to pay, or a watch to be repaired. Or consulted with a decorator, or a travel agent. "There were so many possibilities there that could consume your time," she says.


Whiling away the hours is no longer every consumer’s dream, and Whitaker says the rise in women’s employment was as big a factor as any in shifting the market. Discounters like Walmart were open in the evening, a convenience for working women.


Today, Nordstrom may be the bright light among department stores, according to Cowen and Company analyst Oliver Chen. The company has a thriving web presence, the discount arm Nordstrom Rack and a strong reputation for selection and service.


But is Nordstrom really a department store? Can you even buy a coffeemaker there? Or a suitcase, or dishes?


"I don’t even know the answer to that," Chen admits (the answer is "no").


However, Chen says, women’s clothes are the bread and butter for all department stores, including those that sell toasters. It also remains the areas where department stores retain their biggest advantage: having the merchandise right there — and lots of it — ready to be tried on. "Like those skinny jeans you find appealing, or that stretch denim," Chen says. "I mean, you might want to look at that stretch."

Apple hits the pause button on live TV streaming

Fri, 2015-08-14 13:00

We’ve been talking about Apple’s plans to launch a live streaming TV service for a while. A long while. There are reports today we’ll have to keep waiting.

So, why’s it so difficult to get the deal done?

For one, there are infrastructure and technical issues to solve. No one wants glitchy TV.

“What they are doing is not easy,” says Marc Tayer, the author of the book "Televisionaries: Inside the Chaos and Innovation of the Digital Revolution."

Apple has to get the rights to stream the content from all the big players — Fox, CBS, NBC and ABC — and potentially from the local affiliates of those networks.

“That requires licensing with each individual content provider that they want to include, and make sure that the terms and conditions are such Apple can get the return on their investment at some point,” Tayer says. 

For Apple, getting that return on investment could be tough; it's certainly not as simple as when it launched iTunes.

“They are not in as good a position as they were when they were negotiating contracts with the music industry,” says John Butler, senior analyst at Bloomberg Intelligence.

When iTunes launched, the music industry was desperate.

“They were facing the loss of music through free services like Napster,” he says. Television providers, on the other hand, “they hold all the cards and content really is king.”

They're in the catbird seat.

Content providers are thinking about their own bottom line — looking for a good deal, not just any deal.

Apple hits the pause button on live TV steaming

Fri, 2015-08-14 13:00

We’ve been talking about Apple’s plans to launch a live streaming TV service for a while. A long while. There are reports today we’ll have to keep waiting.

So, why’s it so difficult to get the deal done?

For one, there are infrastructure and technical issues to solve. No one wants glitchy TV.

“What they are doing is not easy,” says Marc Tayer, the author of the book "Televisionaries: Inside the Chaos and Innovation of the Digital Revolution."

Apple has to get the rights to stream the content from all the big players — Fox, CBS, NBC and ABC — and potentially from the local affiliates of those networks.

“That requires licensing with each individual content provider that they want to include, and make sure that the terms and conditions are such Apple can get the return on their investment at some point,” Tayer says. 

For Apple, getting that return on investment could be tough; it's certainly not as simple as when it launched iTunes.

“They are not in as good a position as they were when they were negotiating contracts with the music industry,” says John Butler, senior analyst at Bloomberg Intelligence.

When iTunes launched, the music industry was desperate.

“They were facing the loss of music through free services like Napster,” he says. Television providers, on the other hand, “they hold all the cards and content really is king.”

They're in the catbird seat.

Content providers are thinking about their own bottom line — looking for a good deal, not just any deal.

The beer purchase that saved a man's life

Fri, 2015-08-14 13:00

Mark Byrne and his friend were at the Michigan International Speedway to see the Indie car race in the summer of 1998.

“When we got to the parking lot, there were two people walking out. They said they had to go somewhere but had good seats and wondered if we wanted their tickets, and we said ‘Sure we’ll check them out.’”

On the way to their new seats, they stopped at a concession stand to grab some beer. They had a choice between Miller Lite and Labatt Blue; they chose Labatts. “To our surprise, the keg was empty,” Byrne recalls, but they decided it was worth waiting a few minutes for a new keg.

That’s when things started getting strange, Byrne says. “While we were sitting there waiting, we started noticing a police officer and a couple of emergency responders going by, and the next thing you know, there was a few more and a few more. There got to be about 30of them that ended up going by.”

Once they got to their new seats, they noticed that the entire section was closed off. So they went to the seats they originally were supposed to sit in.

“On the way home we’re listening to the radio recap and all that, and to our surprise we found out that Adrian Fernandez had crashed in turn four and basically some of his car had flown into the seats. Several people had been injured, and three people had been killed,” Byrne says.

 It turned out Byrne and his friend were extremely lucky. “The people that had been killed had been sitting in Row 8 and Row 10. Having our seats being in Row 9 in that section, we had to wonder just how lucky we were that we waited in line to buy that Labatt beer there instead of settling for the Miller Lite.”

And that’s how a $4 beer saved a man’s life.

Firms, organized labor wait for major ruling

Fri, 2015-08-14 13:00

Heavy hitters in American business and organized labor are watching and waiting for a ruling expected any day now that could change the way they work forever.

The case before the National Labor Relations Board technically involves a waste management company, a union and a staffing company. But the impact could go far beyond that, potentially resetting how employment has worked for decades and impacting a whole range of companies and workers.

The case is about employees working for subcontractors or franchisees. As with many cases pitting industry against labor, there are sharp points of disagreement. But there’s consensus among all sides of the issue that the impact will be far-reaching because of what’s at stake.

Think of a big corporation that hires a company to clean its building, or a burger chain that franchises. Right now workers can’t collectively bargain with the corporation or fast food chain, only the subcontractor or franchisee. Unions don’t like that and want the NLRB to get corporations and chains to the bargaining table along with subcontractors and franchisees.

“Labor standards or protections for workers haven’t kept pace, and this is an opportunity simply to modernize the rules so that they keep the spirit of the law intact,” says Michael Wasser, from the pro-union group Jobs With Justice.

The disagreement begins with whether it’s a good idea to change things. Various industries are against this because they don’t want to be liable for subcontractors and franchisees.

“This will be so disruptive to those relationships, and what the board is suggesting it may go to would have really significant impact,” says Marilyn Pearson, a partner at DLA Piper, who advises corporate clients on labor issues.

Companies argue making them responsible for contractors would strangle profits and ultimately hurt jobs. Unions believe such a move would create a better environment for workers.

One final point of agreement: We may soon find out who’s right. The NLRB currently leans Democratic. Observers on all sides are betting it’ll rule in favor of the union soon.

A new older generation may attract more ad dollars

Fri, 2015-08-14 13:00

 Next week a new marketing company linked to AARP will launch to target adults 50 and over. Influent50 is part of AARP’s for-profit subsidiary.

This is a wealthy, arguably ignored demographic. Influent50 says just 10 percent of marketing money targets people over 50.

“There’s also an opportunity to not be good at it,” says Lori Bitter of the Business of Aging consultancy. She says this is a hard group to target well.

As people age, Bitter says, their buying psychology changes: They no longer want, say, BMW to tell them what the ultimate driving machine is. They’d prefer Apple suggest they “Think Different.”

“It’s allowing us to think about ourselves as opposed to being told what the product is about,” Bitter says.

She and others say marketers have been tripping over a few myths about older adults.

One: that they don’t spend money.

Two: that they’re overly brand loyal.

“I’m not going to buy a different brand of mayonnaise — I like my mayonnaise,” independent advertising consultant Chuck Nyren says. “But everything else is open. And people go to the store, and they’re constantly looking for something different.”

Oh, and one other myth: This group wants to be treated as old people. After all, 50-somethings are represented in this demographic.

Is there an example of what works in today’s marketplace?

“The new Viagra spots,” says Paul Gilbert, at the marketing agency Register Media. “It’s a woman in probably her 40s or 50s, talking about the things Viagra is used for. Think about the sophistication: It has great views and is written for that boomer mindset.”

The marketing firm out of AARP wants to reach boomers on behalf of corporate clients in the initial areas of travel and insurance and eventually pharmaceuticals.

Weekly Wrap: China's yuan and a 3rd Greece bailout

Fri, 2015-08-14 12:58

Joining us to talk about the week's business and economic news are Sudeep Reddy from the Wall Street Journal and the Washington Post's Catherine Rampell. The big topics this week: China devalues its currency, Greece reaches a third bailout agreement deal, Google restructures itself under Alphabet and oil prices fall. 

Click the media player above to hear the conversation.

The Arts Shrink will see you now

Fri, 2015-08-14 11:28

Business and art don't seem like two fields that would naturally overlap. After all, many individuals who become artists do so to follow their creative passion and not worry about the drudgery of health insurance or fundraising to succeed.

But that can be a self-defeating attitude. Corbett Barklie, known as the Arts Shrink for KCET's Artbound, says, "I think that a lot of artists that I work with really embrace this notion of a starving artist, the idea that they'll sit in a drafty attic, and they'll do their work and they won't be recognized. And also going along with that is that emotional angst that even adds to how romantic that idea [of becoming an artist] is."

Barklie works as an arts consultant and professor, and in her column, provides answers about how to make a living following what you love.

"I think that every artist has to look at their relationship with this idea of starving and angst and correct it, before they can have a career that really does provide a living for them, also."

Selected columns from the Arts Shrink:

Why do some artists get all the money?

How to make your crowd-funding campaign stand out

What's the most common mistake artists make?

Many factors at play in the devaluation of yuan

Fri, 2015-08-14 10:01

It’s an interesting week in the currency markets, especially for China’s renminbi, which fell in value against the dollar for three straight days.

The devaluation was engineered by Chinese authorities, and some analysts see it as a way to help China’s slowing economy by making its exports cheaper and therefore easier to sell overseas.

Interestingly, the International Monetary Fund greeted the devaluation as a welcome step.

China wants the yuan to be a global reserve currency; one step toward achieving that would be inclusion in basket of currencies that make up the IMF’s reserve assets.

“China does want to be recognized as a member of the Big Boys Club when it comes to currencies and the IMF seal of approval would be important there,” says Eswar Prasad, an economics professor at Cornell University.

China says it wants to let market forces play a bigger role in setting the yuan’s exchange rate, something Prasad says the U.S., the IMF and the rest of the world has been calling for.

But this week’s moves were also part of larger financial reforms that Chinese leaders want to pursue, especially in light of slowing economic growth, says Nick Consonery, with the Eurasia Group.

“The overriding motivation for the government is that they recognize that financial reform is a necessary component of economic restructuring to make the Chinese economy more sustainable over the longer term,” he says.

PODCAST: Infrastructure in Cuba

Fri, 2015-08-14 03:00

On the docket for today: a crazy week for Chinese currency; infrastructure overhaul for Cuba; and the Marketplace Wealth & Poverty team revisits a neighborhood in the midst of gentrification.