The Business Writer Blog

Month: August 2015 (Page 1 of 5)

Hulu steals hit movies from Netflix with Epix deal

Hulu\’s new front in its competition with Netflix involves “The Hunger Games” and “Transformers.”

Hulu steals hit movies from Netflix with Epix deal

Hulu\’s new front in its competition with Netflix involves “The Hunger Games” and “Transformers.”

Why You Always End Up Paying Too Much For In-Flight WiFi

Surfing the Internet while flying used to feel like a modern miracle. But in the decade since airlines first began rolling out the service, we’ve come to expect that most flights will have some kind of web access. 

Checking email, Facebook and Twitter from the air has begun to feel like an essential — one we’re willing to pay for. 

Gogo, the most prevalent provider of in-flight WiFi in the United States, has more than doubled its connectivity prices on some of its routes, as the New York Times’ Brian X. Chen reported this week. For example, someone flying from San Francisco to New York can expect to pay $28 to $40 for Internet access during the trip — up from $18 in 2012. 

That’s more than an in-flight sandwich or movie. So what gives? Why are we willing to pay so much to stay connected during a flight? 

In part, prices are high so that we don’t all connect. If every passenger on a plane purchased Gogo’s Internet, the service would slow way down, says Steve Nolan, a spokesperson for the company. (This this is liable to change soon. On Monday, the Federal Aviation Administration approved a new technology to allow Gogo to deliver broadband speeds about 20 times faster on flights.)

For now, Gogo keeps speeds quick by using a practice called dynamic pricing, which shifts fees according to conditions that ratchet up demand. On days with lots of business travelers, who will expense almost any amount to access the Internet, Gogo raises its prices. For example, lots of people travel for work on Mondays, driving up demand for in-flight WiFi and bringing the price with it; WiFi tends to be cheaper on Saturdays, the least popular day for business travel. Thus, WiFi might cost $40 on a Monday flight from New York to Los Angeles and only $28 on Saturday. 

“If we didn’t price the product different on certain routes it would be completely unusable,” says Nolan. 

But this doesn’t explain why some companies — like Norwegian, Turkish Airlines and Jet Blue — are able to offer free WiFi to all passengers without experiencing massive outages. ”I would ask those providers just how well that’s working for them and if they get a lot of complaints,” says Nolan.

I did. Carly Odonnell, a spokesperson for Norwegian air, said that although the amount of customers using the Internet can sometimes slow down service, in general  customers seem happy. “I mean, it’s not something we get a great deal of complaints on from our customers,” she tells me. “It comes as a surprise to a lot of people.” 

So maybe there’s something else behind those sky-high prices. 

Nathan Novemsky, a professor of marketing and psychology at Yale University, explains that there’s a fluidity to what people are willing to pay for particular services, and this depends largely on how they justify it to themselves. “If you’re a business traveler, $8 an hour is not a lot of money to be able to work in your office,” he says, especially if you’re expensing it to your office.

Vacationers, Novemsky says, can often find justifications that are similar to those used by their working peers: “Wouldn’t you pay $30 or $40 not to be bored on a flight?” 

It all comes down to a behavioral economics theory called loss aversion.

Psychologically, people experience losses much more powerfully then a gains, which is why studies show that most people would much rather avoid loosing a chunk of money than receive that same amount down the line.  

As we become more used to being constantly connected to the Internet, being cut off for a six-hour flight begins to feel like a loss. According to Novemsky, most people are willing to pay a premium if they’re trying to avoid losing something. 

“When I’m used to connectivity all the time and then you take away Facebook or email or whatever, then I’ll pay twice as much to get it back,” he says.  

Novemsky surmises that some business travelers don’t even need the Internet for work. They’re logging in because being connected feels comfortable, and they can justify paying for it because of “work.” 

“There’s some work you literally can’t do without the Internet — sometimes you need to get that work done, and it’s urgent,” he says. But it’s difficult to know how often travelers are signing up out of need, or just using the web because it makes them comfortable. 

“Sometimes they’re fooling themselves with these arguments as much as anyone else,” says Novemsky.  

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opbmusic Presents: Mackintosh Braun

The Portland band’s brightly colored, danceable pop has landed in TV shows and movies. Watch Mackintosh Braun perform “In Reverse” live in the studio.

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Eskimeaux: Tiny Desk Concert

There’s lighthearted, almost childlike beauty in the way Gabrielle Smith puts words to song. Here, she performs a few of Bob Boilen’s favorite songs of 2015.

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Apple Gave A Major Shot In The Arm To Wearable Tech

The market for wearable technology is getting much, much bigger — and you can thank Apple.

A new report released Thursday by the International Data Corporation shows that 18.1 million wearable devices — things like the Apple Watch and Fitbit bands — were shipped between April and June this year. That’s a 223.2 percent increase from the same time last year, when the IDC reported shipments of 5.6 million units.

That’s not so surprising from a certain perspective — the Apple Watch didn’t exist during the same time last year. When Apple entered the market, it introduced millions of smartwatches, which obviously inflated the numbers. 

“Anytime Apple enters a new market, not only does it draw attention to itself, but to the market as a whole,” Ramon Llamas, a research manager at IDC, said in the firm’s press release

He’s right, of course: The iPhone basically invented smartphone culture even if it followed the Blackberry, much as the iPod blew up the music industry even if it was far from the first MP3 player. The cult of Apple is strong.

That said, while shipments of the device are substantial, one could argue — people certainly have – that the Apple Watch isn’t the same sort of revolutionary product. It’s unclear what its ultimate impact will be.

Moreover, actual sales numbers for the Apple Watch remain elusive. Early estimates suggested its launch was bigger than the original iPhone’s, and massive retail chain Best Buy has apparently been satisfied enough with sales to expand Apple Watch inventory to all of its stores nationwide.

The Apple Watch also seems to be smashing demand for classic timepieces, suggesting perhaps that smart devices really are the future for wrist wear.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

Tesla’s Model S Is So Great It Broke Consumer Reports’ Scoring System

Its price tag aside, the Tesla Model S P85D is nearly perfect.

A year after Consumer Reports published a harsh critique of the electric sedan it once ranked above all other cars, Tesla’s new speedy, all-wheel-drive version of the vehicle scored so high it shattered the rating system.

“The Tesla initially scored 103 in the Consumer Reports Ratings system, which by definition doesn’t go past 100,” Mark Rechtin, an editor at Consumer Reports, wrote in a review published Thursday. “The car set a new benchmark, so we had to make changes to our scoring to account for it.”

In 80 years of testing, no car has ever earned that high a score. 

“Model S receiving the first score of 100 out of 100 points from Consumer Reports is truly a testament to our commitment to continually give our customers enhancements in range, performance and value, and ultimately a better driving and ownership experience,” Tesla spokeswoman Alexis Georgeson told The Huffington Post in an email.

The Model S P85D, unveiled last year at a widely amped event, has better braking and handling and is more energy efficient than the top-scoring standard Model S, the magazine found. 

Tesla stock soared nearly 9 percent after Consumer Reports posted the review online.

The one problem: The vehicle is insanely expensive, starting around $101,000. The model tested by Consumer Reports costs $127,820.

“With a six-figure price tag, the P85D is expensive, meaning its virtues will be experienced by a rare few,” Rechtin wrote. “But its significance as a breakthrough model that is pushing the boundaries of both performance and fuel-efficiency is dramatic (even more so because it is coming from the factory of an American startup company).”

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

The 9 Most Segregated Cities In America

Racial segregation in U.S. neighborhoods has declined over the past several decades but it remains very high. Meanwhile, residential segregation by income has risen sharply from the relatively low levels in the 1970s. Large metropolitan areas are among the nation’s most segregated regions, and while none are meaningfully integrated, some are divided far more along racial lines than others.

To identify the most segregated neighborhoods in America, 24/7 Wall St. constructed an index based on the share of a metro area’s population living in racially homogeneous zip codes — areas where more than 80% of the population is of a single race or ethnicity. In metro areas with complete integration, every zip code has the same racial/ethnic distribution as the area’s whole population. In areas with the worst segregation, no one lives in a zip code with anyone of a different race/ethnicity.

We reviewed only metropolitan areas with more than 1 million residents. Of those, since racial segregation is only possible in areas with people of various ethnicity, only 29 sufficiently diverse metropolitan areas were considered. Based on our index, more than a third of residents in nine U.S. metro areas live in homogeneous zip codes, segregated from other racial groups.

Click here to see America’s most segregated cities. 

According to Richard Rothstein, research associate at the Economic Policy Institute (EPI), segregation is no accident. Federal housing policies starting in the 1930s are largely to blame for ongoing racial segregation and its economic effects. For example, in the last 60 years, black families were intentionally excluded from affordable housing options across the nation’s growing suburban neighborhoods. As a result, the predominantly black zip codes in America’s most segregated metro areas tend to be located near the city centers, while the predominantly white zip codes are more often found outside the city, in the suburbs.

For black area residents, less than 40% of housing units in five of the nine segregated cities were owned by their occupants. In contrast, homeownership rates among whites exceeded 70% in all but one of the nine cities.

Since wealth largely comes from housing investments, and home values have increased dramatically over the decades in many areas, those policies have exacerbated income and wealth disparities, Rothstein explained. Black Americans earn about 60% of what white Americans do, and accumulated wealth among typical black households is a mere 6% of the typical white household.

Those federal segregation policies, and the resulting economic fallout for black Americans, have contributed to lower educational attainment rates in segregated schools. Commenting on the effects of racial segregation in the school system, Rothstein said, “When you concentrate children with disadvantages in the same classrooms, the whole of instruction becomes remedial and below grade level.”

Racial and socioeconomic segregation are closely linked, especially in large U.S. metropolitan areas. The predominantly nonwhite neighborhoods in all but one of the nine most segregated metro areas have significantly lower educational attainment rates than those of white neighborhoods and the national rates. Segregation along racial lines is also associated with income segregation. The difference between black and white median household incomes exceeded the national gap of $22,681 in all but three of the 29 metro areas reviewed.

Segregation is in many ways a black/white phenomenon, although Hispanics and Latinos also frequently live in segregated neighborhoods. The Boston metro area is the only region considered where segregation impacted the Hispanic population more than blacks. Rothstein said, “For African Americans, it was the product of explicit public policy to segregate them from the rest of society. For Hispanics, it’s the result of traditional patterns of ethnic immigration.”

For Rothstein, racial and socioeconomic segregation must be undone in the same way it was implemented — by a federal desegregation policy. While federal policies make up the bulk of the explanation, the reasons for segregation persisting today are perhaps more complicated. In a recent report from researchers at Stanford University, “Neighborhood Income Composition by Household Race and Income, 1990-2009,” the authors observe that “Other factors, such as differences in household structure, lingering racial discrimination in the housing market, the location of affordable and subsidized housing, and residential preferences, likely also play a role.

These are America’s most segregated cities, according to 24/7 Wall St.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

Indiegogo CEO: Want money? Here’s the trick

Read full story for latest details.

Walmart Quits Selling AR-15s And Military-Style Rifles

Walmart says it will stop selling AR-15s and other sporting rifles, a spokesman confirmed to The Huffington Post on Wednesday.

The chain won’t stock modern sports rifles such as the AR-15, nor semi-automatic shotguns. The price of remaining inventory will be reduced, Walmart rep Kory Lundberg told HuffPost. BearingArms.com first reported the change Tuesday.

The company will continue to sell shotguns and other “hunting weapons,” Lundberg said. “We’re focusing on firearms more associated with hunters and sportsmen.”

Though the retail giant said the move was simply a reflection of changing customer tastes, it comes at a time when Walmart has been moving to a kinder, gentler image under new CEO Doug McMillon. The chain is under pressure as the minimum wage movement gains steam and the economy picks up. 

This new move is a sign of a more empathetic Walmart, said Bill George, the former Medtronic CEO who writes often about leadership. “This comes as a big surprise, given Walmart’s market. Good for them,” he said in an email to The Huffington Post.

The news came just hours after a shooting in Virginia, where two TV news reporters were gunned down and killed and a third woman wounded. That shooter reportedly used a handgun.

Emphasizing that Walmart only sells firearms at one-third of its stores, Lundberg said the change was entirely due to shifting customer tastes.

The company had been quietly phasing out AR-15s for a while. “We made the decision earlier this spring,” Lundberg said. They should be totally gone in the next couple of weeks.

The retailer’s been heavily criticized for selling these weapons in the past. It received some particularly harsh press in the aftermath of the Newtown, Connecticut, school shooting in 2012.

When asked if Walmart would ever simply stop selling guns, Lundberg said: “We have no plans at this time.”

The chain’s decision not to stock certain firearms was welcomed by New York’s historic Trinity Church, which is battling the retailer in court over gun sales. “Trinity Church is very pleased to hear that Walmart will no longer sell the kinds of weapons that have caused such devastation and loss in communities across our country,” Rev. Dr. William Lupfer, the church’s rector, said in a statement.

Trinity filed suit against Walmart in 2014, demanding its shareholders vote on a proposal that would bring assault weapons under the oversight of the company’s board. While a court initially ruled in Trinity’s favor, the ruling was later overturned. Now Trinity is raising the possibility of a settlement.

“We continue to believe that corporate boards have the responsibility to oversee the creation of  policies that will guide decision making on marketing and other issues that could have momentous impact on the safety and well-being of society and to shareholder value,” Lupfer said in a statement emailed to HuffPost. “We will continue to engage constructively with companies and fellow investors to this end, and we will be discussing with Walmart’s counsel whether there is a basis on which we can agree with them to drop our suit.”

Earlier this year Walmart announced pay raises. On Wednesday, McMillon said the company would donate $25 million to organizations specializing in disaster relief in honor of the 10-year anniversary of Hurricane Katrina. He posted the news on his Instagram feed.

This post has been updated with new information throughout.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

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