• Disruption in previously stable businesses: the Dollar Shave Club model


          Dollar Shave Club's first ad--warning: a bleeped out swear word is used.

    In a previous blog about Dollar Shave Club, I focused on the unique marketing done by this upstart company, which was launched by the video above in March, 2012. As of 2016, it has over 2 million subscribers and it was just purchased for $1 billion in cash by Unilever

    Recently, analysts have identified two disruptive trends influenced by companies using a model similar to Dollar Shave Club's:
    ---  the availability of third-party businesses doing work which previously had to be done in-house at great expense;
    ---  the loss in market share of large, stable businesses that have provided consumer goods for decades.

    What production and distribution processes are being provided by third parties
    ---  Communication is being provided by the internet--and facilitates management, production supervision and sales.
    ---  Production processes can occur anywhere in the world, because of the economies of container shipping.
    ---  Distribution through the expanded logistics networks of Amazon, UPS, FedEx and other carriers. 
    ---  Data storage and information management by providers of cloud services.

    What entities have suffered losses in market share due to disruptive start-ups?
    ---  Procter & Gamble
    ---  Gillette
    ... and more to come...

    What other companies are using some form of this model
    ---  Warby Parker   [eye-glasses] 
    ---  Casper [mattresses and bedding]
    ---  Walker & Company [personal care products tailored to the needs of non-whites]
    ---  Primary [kids clothing]

    The probable impact on corporations and employment cannot be underestimated. According to the DealBook article linked below:

    "The [Unilever/Dollar Shave Club] deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees."

    Sources: "Brands Born Online, Reshaping the Retail Landscape," by Farhad Manjoo, New York Times Tech, July 27, 2016. 
    "$1 Billion for Dollar Shave Club: Why Every Company Should Worry," by Steven Davidoff Solomon, New York Times DealBook, July 26, 2016.

    Follow up:
    ---  Do you subscribe to any monthly deliveries of items you used to buy at a retail store? If so, why?  If not, why not?
    ---  What other businesses do you think could succeed using this model?  Create a business plan outline for this business idea.
    ---  What are the similarities and differences among the disruptive companies listed above?

  • Quiz on 2015 business news stories


           http://www.bbc.com/news/business-35112563

    Part of being a business student and a business professional is developing a cultural literacy in business matters. A primary way to do this is to read business publications and keep up with current events--on a national and international level.

    This quiz tests your knowledge of last year's big news stories, world wide.  Enjoy!

    Source: "Business Quiz of the Year," by BBC News, December 29, 2015.

    Follow up:
    ---  How did you do on the quiz? If you did well, keep up your good reading and information-retrieval habits. If you did not do well, what habits will you change to improve your general knowledge about current events in business? Here are some suggestions: The New York Times, The Wall Street Journal, The Week, Forbes, Bloomberg News
    ---  Do an internet search for any of the terms and events that you did not recognize in the questions or in the answers. Make a list of these items and a write a brief description of what they are. 

  • Mostly Wrong?: Milton Friedman's Permanent Income Hypothesis


       a PowerPoint lecture explaining the Permanent Income Hypothesis
             --posted before the theory was discredited

    In 1957, Milton Friedman published a paper on the Permanent Income Hypothesis (PIH). In it, he posited that consumers spend based NOT on the income that they are receiving "today" (this year), but on the income they expect to receive over a lifetime. This means that a bonus or an inheritance (one-time money) will be put into the bank or into an investment...but that a raise increasing annual salary will influence current spending. Also, according to the theory, in periods of high interest, people are likely to save more and consume less (to take advantage of the interest earnings, and to avoid assuming higher-interest long term debt). 

    For years, this premise was accepted by the community of economists. Other theories--for example, "economic smoothing"--were based on the PIH principles, and were applied to macroeconomics. As someone who lives in the Los Angeles area, where many people work in the volatile film industry, I have anecdotal experience that the PIH may hold true for many consumers. Friends and neighbors whose careers are built on a succession of different jobs--with no future guarantees--often buy homes that are priced under those that they can afford in a "good year," and save money to get them over slumps--or an earlier-than-retirement-age inability to find additional work. 

    Economists now, however, are finding that this theory is mostly wrong. Since 1990, it has been demonstrated that at least half of all consumers live "paycheck-to-paycheck." This might be a result of trying to "keep up with the Joneses." Also, a recent study of Alaskans receiving payouts based on natural resource windfall revenues has found that the Alaskans are spending--not saving--the checks they receive.

    It could be that consumer behavior has changed since 1957--and economic theory and business assumptions have to change as well. A writer for My Bloomberg View, Narayana Kocherlakota, notes:

    Source: "Economists Give Up on Milton Friedman's Biggest Idea," by Noah Smith, Bloomberg View, July 26, 2016.

    Follow up
    ---  What do YOU do when you get a windfall of money, if you have been so fortunate?  Or, what do you imagine you would do? Would it depend on the amount--say $1,000 vs. $100,000?
    ---  Read the article and watch the video lecture. What evidence was an underlying factor in the original wide acceptance of this theory?

  • Assessing your digital business skills


        KPMG digital business aptitude quiz info-graphic


    The info-graphic above, although promoted by its author (the accounting and consulting firm KPMG) as an aptitude assessment, is more of a outline for skill assessment. It can be useful to both entrepreneurs and marketing managers for identifying where additional expertise is needed to meet the demands of the current marketplace. Marketing majors seeking future employment can also use it as a template to develop and highlight their own skill set. 

    Source: "What's Your Digital Business Aptitude?" by KPMG, www .kpmg.com/us/dba, May 16, 2016. 

    Follow up:
    --- Which of the general areas delineated in the graphic more closely addresses the skills you already possess? What, specifically, in your experience, demonstrates your abilities  in this area?
    --- Where are your skills the weakest? What do you plan to do to improve your weaknesses?
    --- If you are in a field other than marketing, sales, or entrepreneurship, how do the digital business skills apply to your professional area (e.g. Accounting, Finance, Human Resources)?

  • The algorithm-driven rut of information looping


       graphic from conversationxl.com

    It seems as though the personal information being compiled by Big Data, and used by Facebook and other social media, may be excluding potential customers (both for intellectual content and commerce). The information that users already like, and products they already like and buy, are what show up in their News Feeds. Related ads also show up as sidebars in their email or click-throughs. One result of this is that potential readers might be missing out on information about a new product that they'd like...or information about a big-ticket item that they buy infrequently, and have no history of researching. 

    Two examples of this problem follow:
    ---  My daughter mentioned to me, while she was in college, that whenever a new edition was published of a textbook she had purchased on line--she received repeated advertisements about the new edition of the text--several semesters after she had taken the class.
    ---  Recently I went on a cruise--so it is not likely I will go on another cruise any time soon. Nevertheless, I am being bombarded by cruise advertisements every time I open my laptop. 

    I'm fairly certain that this is not the most effective use of advertising. 

    NPR recently did a story about this problem, which is caused by the way algorithms are written to gather data and to decide who gets what information. Neither the customer nor the advertiser benefits from the way these algorithms work.  Moreover, narrowing the field of input decreases the opportunities to develop and exercise critical thinking skills. These skills are required for good decision-making--both as consumers and as people doing business in a diverse environment.  

    Source: "The Reason Your Feed Became An Echo Chamber--And What To Do About It," hosted by Rachel Martin, Weekend Edition Sunday; All Tech Considered, National Public Radio, July 24, 2016.

    Follow up:
    ---  What types of ads have you seen recently on your news feeds or online margins? Analyze why these ads are prevalent. Have you noticed a pattern over time?
    ---  Have you tried any suggestions made in the podcast to change the "shape" of your feeds?  How successful or unsuccessful has this been?

  • Investment Risk Tolerance Quiz


                Pictured above: the first four questions of the risk tolerance quiz linked below

    High risk is correlated with high rewards. Lower risk is associated with lower returns.  Now that interest rates at an all-time low, many investors are looking to stocks as a possible way to increase return. Financial planners (ethical financial planners, that is) assess the risk tolerance of investors when counseling their clients. The quiz, shown in part above, and linked below, is a first step in assessing one's own risk tolerance.

    Source: "Investment Risk Tolerance Quiz," developed by Dr. Ruth Lytton at Virginia Tech and Dr. John Grable at the University of Georgia, published by Rutgers New Jersey Agricultural Experiment Stationy, copyright 2016. 

    Follow up:  Take the quiz. What, if anything, do the results teach you about yourself?

  • Best-selling Business Books: Summer 2016

    In case you need a break from the convention news:
    The New York Times Best Selling Business Books, July 2016:



                live link: GRIT

     


                 live link: SHOE DOG

     


               live link: OUTLIERS

     


               live link: THE POWER OF HABIT

     


               live link: SELF-MADE

     


               live link: THE INEVITABLE

     


               live link: THE RISE AND FALL OF NATIONS

     


              live link: THINKING, FAST AND SLOW

     


               live link: ORIGINALS

     


               live link: THE CODE OF THE EXTRAORDINARY MIND

     

    Source: New York Times Business Best Sellers, July 2016.

    Follow up
    ---  Which of these books appeals to you the most? Why?
    ---  Have you read any of these books? If so, write a short review--including how the book may have influenced your life. If you have not read any of these books, write a review of another business book that you have read.


  • Failure and success: Minions boss speaks out


       trailer from Minions

    Chris Meledandri is the CEO and key founder of Illumination Entertainment, which produced the animated hit Minions. His career has had its ups and downs: billion dollar successes--as well as a $100 million loss of Rupert Murdoch's money. How does a manager keep motivated (and keep his or her job) in the light of an Epic Fail? One factor is a focus on product development, and satisfying an important need for consumers dealing with the isolation of modern life. 

    In this interview, Meladandri discusses several career milestones. One of them was the failure of the animated movie Titan A.E., which lost $100 million for Fox Entertainment. Nevertheless, Meledandri's ability to analyze what went wrong and learn from this setback was a factor in his superiors granting him additional projects. His level of risk tolerance and risk aversion were also factors. 

    Failures can be tough to overcome, but focusing on what is important, and being honest about one's mistakes and strengths can help a manager achieve future success.

    Source: "Full interview: Minions Boss on Failure and Success," by Kai Ryssdal, Marketplace, American Public Media, July 5, 2016. [podcast]

    Follow up:
    ---  Listen to the podcast: Why does Chris Meledandri feel that animation product development is important? What element is a key factor in a new entertainment product?
    ---  What is your biggest failure? How did you overcome it?
    ---  What is your level of risk tolerance? How has it affected your life choices?

  • The sharing-it-instead-of-reading-it aspect of social media marketing


           LINK to article  and this article is about a marketing study...
                                      NOT about an asteroid...

    Social media marketing is growing in importance to businesses. Marketers pay for "search optimization" of their commercial content. However, a recent study by scientists at Columbia University and the French National Institute concludes that 58% of the shared links have not actually been read by those sharing the content. 

    What does this mean for those paying for social media marketing?  It may not be a bad sign. It may mean that the headlines are absorbed and accepted by those sharing the link--no detail or support needed.  On the other hand, from a critical thinking standpoint--or even from the standpoint of whether or not one can trust one's social media acquaintances--it is a pretty sad situation. 

    Moreover, these "shares" shape the algorithms for future content--or at least future headlines, if that is all that the recipient is reading. From an "informed consumer" standpoint, this means that the universe of content that will be received will be edited by the kind of items that have been shared.

    By the way, I read or view content before I share or "like" it, for personal integrity reasons. After reading these articles, I am curious about what others I interact with do...

    Sources: "Scientists Say Giant Asteroid to Could Hit Earth Next Week Causing Mass Devastation," by Elizabeth Bromstein, Yackler Magazine, July 9, 2016. 
    "6 in 10 of you will share this link without reading it, a new, depressing study says," by Caitlin Dewey, Washington Post, June, 16, 2016. 

    Follow up:
    ---  Read the "asteroid" article and comment in black and white. 
    ---  What are your habits regarding reading, viewing, sharing or liking items? What are your thoughts and feelings about your actions? With what expectations do you "receive" the shares of your friends and acquaintances?

  • Marketing to women without children


      image from Jamie Dunham's Wordpress blog

    Mothers are the "largest spending consumer group in American," according to Maria Bailey, CEO of BSM Media. But this doesn't mean that childless women don't spend money. In fact, they often have more discretionary income for adult purchases. Whether childless-by-choice, childless-by-fate (chance), or fall under the category of childless-but-child-loving "PANKs" (Professional Aunt, No Kids): childless women have money to spend

    Childless women runs households: they buy cleaning supplies, furniture, and major appliances. They take vacations (spending 60% more days abroad than moms). They spend on health and beauty aids (twice as much as moms). They also spend more on groceries (35% more--possibly due to a more gourmet-centered than kid-centered palate). These women are not all young singles--these are also women in middle age and older. 

    Karen Malone Wright, founder of NotMom.com observes: 



    Marketers are beginning to notice.  Savvy marketers might also start thinking about the OTHER demographic groups they are ignoring.

    Source: "Childless Women to Marketers: We Buy Things Too," by Alina Tugend, New York Times, July 9, 2016.

    Follow up:
    ---  To which demographic groups do you feel that you belong?  Does the marketing you experience include you in your major or repeated purchase decisions? Do you feel excluded? How does this affect you at the feeling level and in terms of your purchasing decisions?
    ---  This article seems to be an open letter to marketers. Write an open letter to marketers about your own pet peeves, or write a letter from the perspective of another underrepresented demographic group. Share your thoughts with others, and listen to them. 

  • Behind-closed-doors woman-bashing at work

    Sam Polk, formerly employed by at Credit Suisse First Boston and as a bond trader at Bank of America, wrote a recent NYT op-ed piece about his Wall Street experience. He wasn't writing about his experience as a trader, he was writing about his experience in male-only work situations where objectifying or derogatory comments about women were made. He reports these comments as more the norm than the exception.

    He also expresses having felt discomfort in these situations, where language used behind-closed-doors was not used by superiors when women were present. In mixed situations, the sexual comments would have been politically incorrect--and probably characterized as illegal sexual harassment. 

    One particularly troublesome observation made by Mr. Polk was that two factors combined to make it unlikely that a junior trader would speak up when a comment was made by a superior:

    ---  Conformity is a required attribute for success in these firms. There is no "speaking truth to power" or even contradiction of bosses' opinions by anyone who expects to continue being employed by the firm.

    ---  Individuals who do not stay with the firm forgoe a huge salary potential--in the millions of dollars. This remains a downside risk of speaking up. 

    The consequences for women professionals of this kind of gossip is the reinforcement of negative stereotypes, decreasing women's chances for promotion. Even though Mr. Polk's conclusion supports a change in behavior within this industry, his warnings about dire career consequences for the lower-echelon men who speak up seems like career advice. Polk addresses only the change that could occur by a change that is promulgated from the top down. 

    As a side note, even the Unicode Consortium recently changed its approved emoji universe to include women at work in various fields--including a woman in a business suit. Perhaps this is an harbinger of a change in attitude...

    Source: "How Wall Street Bro Talk Keeps Women Down," by Sam Polk, New York Times, July 7, 2016.

    Follow up:
    ---  Recall a time when you were with members of your own sex, and someone made a comment that diminished a person of a different sex by objectifying them in some way. What happened next? Did anyone speak up? 
    ---  Role play a situation when a derogatory comment is made, practicing appropriate responses that would set a boundary and mitigate the derogatory effects of the comment.
    ---  Do you agree with the author's conclusions? Why or why not?

  • Pokémon GO: What is it? What are the marketing opportunities? Did I miss out on a good investment?


      NBC News story about the Pokémon GO phenomenon

    Pokémon GO, introduced by Nintendo last week, has penetrated the market rapidly. Not only have people become aware of the product through social media, the hordes of crowds on the street that it has generated also has raised awareness among people not connected to internet interactivity or gaming.

    For those of you (like me) who don't completely understand the phenomenon (and who have not--yet--downloaded and experienced the app), the article linked below gives a great summary, as well as discussing the opportunities the interactive game creates for social media marketing. These opportunities can also be used by businesses.

    Here is a brief summary of how Pokémon GO works, from the School Library Journal article linked below: 


          Live links:  Pokémon GO support page and Glossary.

    By the way, Nintendo stock was trading at $20.50/share as of July 1, 2016. It was trading at $30.20 as of midday on July 13, 2016. This is a gain of 47.3%. But Apple, Niantic (Google), and Pokemon Japan all invested in the game's development. Some analysts say those other investor companies will achieve greater profits. 

    Source: "Pokémon GO: What do librarians need to know?", by Carli Spina, School Library Journal, July 12, 2016.

    Follow up:
    ---  Have you downloaded the app and participated in the game?  If so, discuss your experience. What factors will influence how long you play the game?
    ---  Read the article. How can you apply some of the suggestions made for libraries to small businesses?  How about large businesses? You might want to check out another source for additional ideas: LINK

  • Good examples elsewhere: fixing the student loan crisis


      Structuring student loan payments in other countries
       ....from UK parliament publications

    Most students in the United States graduate with enormous student debt. The debt is often so great that even payments equivalent to rent are not enough to pay down the principal balance. Most of these loans are financed by private banks, which are profiting from collecting interest on this debt--interest that is far in excess of the interest percentage paid out to those with savings accounts.

    Other countries do things differently. For example, in Australia:
    ---  interest rates are set by the government at a very low rate
    ---  no payments on student loans are required until the loan recipient's income is above $40,000.
    ---  loan payments are set at 4% of income--so someone making $40,000 would be paying $1600 per year, or about $133 per month
    ---  since payments are deducted from employment checks, there is no need for paperwork when income falls. 

    In the United States, bank-set interests rates accrue from the moment loan funds are dispersed, and a fixed-amount repayment schedule is set up. The financial constriction that results from the level of U.S. student debt has both short and long term restricting effects on spending and the economy. Entrepreneurial aspirations are thwarted. Job mobility is restricted. A symbol of the middle class--home ownership--cannot be achieved. Other unforeseen consequences--on birth rate, mental health and family relationships also take a toll. 

    As a matter of public policy, the U.S. might consider the examples set by Australia and most European countries. The U.S. might also take its OWN example--from the 1950's through the 1970's. The U.S.Federal Defense Student Loan programs and the Federal Direct Student Loan programs set interest at 3% and interest did not accrue until nine months after the student graduated. 

    Of course, some of the responsibility lies with the students who take out these loans.  But often loan documents are signed without a reasonable amount of financial analysis.  A first step might be laying out the actual payment schedule, along with the loan balance amortization schedule. A second step might be comparing these payments to a realistic estimate of future income. If sweeping changes to laws cannot be enacted, perhaps U.S. lawmakers could require these calculations to be made and signed off on before loan amounts were disbursed. 

    Source: "American Can Fix Its Student Loan Crisis. Just Ask Australia," by Susan Dynarski, New York Times, July 9, 2016.

    Follow up:  Is a college education worth it?
    ---  Use a Loan Calculator to calculate the monthly payments, at 8% over a 10 year period, of a $30,000 student loan.  Now, assume the student went to a private school and/or a graduate school. Calculate the payments of a $200,000 loan.  
    ---  Now assume that the graduate makes $35,000 the first year after graduation, and gets a 4% raise each year thereafter for the next ten years. Make a chart for 10 years with these columns: (1) Annual salary;  (2) annual loan payment, U.S.; (3) net balance to U.S. graduate; (4) annual loan payment, Australia; (5) net balance to Australian graduate. 
    ---  Calculate the annual salary for each of the 10 years and list in in column one of the chart.  Then multiply the monthly payment for the $30,000 loan times 12 months, and put in in each row of the second column.
    ---  Subtract column two from column one and put the result in the third column. 
    ---  Next, put "0" in the rows for the Australian payment column (column 4), for each year in which the annual salary in column one is less than $40,000. For each year in which the salary is greater than $40,000, calculate 4% of the salary and put that number in column 4.
    ---  Subtract Column 4 from the annual salary in Column 1. Compare this amount (net for the Australian) to the net amount for the U.S. citizen. Discuss what this might mean in terms of lifestyle and opportunity.
    --- If you have the energy, do another chart, using $80,000 as a starting salary, and the $200,000 loan payment amount. Discuss the implications of the difference in this situation to an Australian vs an American. 

  • Getting past the computer that rejects résumés


       a somewhat scary video ad for software called "Resume Funnel"

    What is "résumé optimization"? Actually, in some form it has been around for a long time. Savvy job applicants have always tailored their résumés to fit specific jobs for which they were applying. The marketing axiom to "know your customer" is certainly applicable to individuals trying to sell themselves to a potential employer.

    The new wrinkle in this process is that the first-line reviewer for many positions is now a computerized software program. Nevertheless, the advice to optimize your résumé presentation for this non-human audience is still relevant. Since the programs are essentially pattern-recognition software, it is important to:
    ---  keep your resume in standard form
    ---  emphasize your skills, as they match the skills in the job announcement
    ---  be specific

    Happy job-hunting!

    Source: "Getting Past the First Cut With a Resume That Grabs Digital Eyes," by Rob Walker, New York Times: The Workologist, July 8, 2016.

    Follow up:
    --- Revise your resume, implementing some of the advice in the linked article. 

  • What very low interest rates mean to business and the economy

    Paul Krugman on today's "artificially low" interest rates:

    When interest rates are low, it is easy for businesses--both small and large--to borrow money and expand. Low interest rates also encourage consumers to spend money rather than invest it at low rates. This is also good for business. Low interest rates also make it a bargain for governments to borrow money to invest in infrastructure. This creates jobs--which is also good for businesses: people with jobs buy more products and services.

    Krugman, who supports the long-term benefits to business and the economy that investments in infrastructure provide, has more to say: "...there are huge unmet demands for public investment on both sides of the Atlantic. America’s aging infrastructure is legendary, but not unique: years of austerity have left German roads and railways in worse shape than most people realize. So why not borrow money at these low, low rates and do some much-needed repair and renovation? This would be eminently worth doing even if it wouldn’t also create jobs, but it would do that too."

    Not everyone takes the long view, however: opinions about infrastructure investment vary. Nevertheless, even if government does not take advantage of low interest rates, the low rates represent a good opportunity for businesses to expand and grow. 

    Source: "Cheap Money Talks," by Paul Krugman, New York Times, July 11, 2016.

    Follow up:
    ---  What was the average interest rate on a house mortgage in 1980?  What is the average rate today? Comment on the effect this might have in a personal investment like home ownership.
    ---  Read the linked article about varying infrastructure opinions. Summarize the points the authors are trying to make. 

  • What is a "virtual office"?


      image from centrexcenters.com, a company specializing in virtual offices

    The source article for a previous blog contained the sentence, "Space Angels Network is a New York-based investor in early-stage private space companies, with virtual offices in Los Angeles, Seattle, San Francisco, Zurich, Hong Kong, Stockholm and London." 

    Wait a minute, I thought. How can a "virtual" office be physically located in different cities? Doesn't "virtual" mean that there is no physical location?

    As it turns out--not quite. A virtual office needs to have a professional presence--sometimes including a prestige address--even though employees make be working from remote locations, or even from home. Some of the attributes of a virtual office can include:
    ---  a remote receptionist, representing workers in various locations
    ---  an answering service or call center (sometimes from the other side of the planet)
    ---  voicemail
    ---  a professional address, rather than a P.O. Box. Sometimes an intermediary business can provide a physical location where spaces for meetings can be shared my many client businesses with virtual operations.This type of shared location may also include a live administrative assistant who can sign for documents and triage problem situations.
    ---  mail-opening services that scan snail-mail and upload the documents to cloud servers

    Sources as linked above

    Follow up
    ---  What are the advantages and disadvantages of a virtual office from the standpoint of the employees?
    ---  What are the advantages and disadvantages of a virtual office from the standpoint of the middle manager or business owner?

  • Investing in space companies


       Jeff Bezos of Amazon on how investing in space can "save the Earth"

    Over $13.3 billion has been invested in space start-up companies since 2000. (That is "space" as in "outer space" not "office space.") One venture capital firm, Space Angels Network, focuses on extra-terrestrial business ventures.  Their investments include:
    ---  Planetary Resources: mining asteroids for minerals
    ---  Planet: launching small satellites to gather Earth images
    ---  Astrobotic Technologies: competing for the $30-million Google Lunar X Prize
         ... as well as several other investments delineated at and linked from the Crunchbase website.

    Chad Anderson of Space Angels Network says that a major reason for the burgeoning growth in this area is the clear and low-cost pricing that has been made possible by SpaceX

    As Anderson sees it, it will be interesting to see how each of the three areas of the industry develop over the coming years:
    ---  terrestrial (launchers and satellites, benefitting Earth);
    ---  in-space (manufacturing processes located extra-terrestrially--similar to what Jeff Bezos has in mind); and
    ---  planetary (which develop assets for use on the moon, on Mars, and eventually on other planets).
     

    Source: "Why investment in space companies is heating up," by Samantha Masunga, Los Angeles Times, July 7, 2016.

    Follow up:
    ---  Read the article.  What do space investors refer to when they mention the "eighth continent"?  Why is that location important?
    ---  Watch the video linked above. What aspect of space investing does Jeff Bezos think is important, and why?
    ---  If you are interested in Jeff Bezos' opinions about several topics in addition to the frontiers of extra-terrestrial business, check out RECODE REPLAY podcast from the CODE 2016 CODE Conference. What are your thoughts about his positions?

  • Copyright and "fair use"


         illustration from the online cover piece linked below:
             The Quiet Old Lady Who Whispers "Fair Use"

    Plagiarism. This is a concept that most college students learn to understand...and avoid if they value their own integrity and their academic standing. But in the world of commerce, the monetary aspects of violating another entity's copyright can be a tricky legal matter...particularly when it involves the issue of "fair use."

    The linked podcast explores this topic, using Keith Romer's personal experience with his take-off on the book "Goodnight Moon." His issues did not involve the more straightforward aspect of the  Fair Use Act--using portions of a creative work illustration or education. Romer's issues involved the grayer area of parody. If the work was really a parody, then it was considered to be a fair use, and not in violation of the copyright. Here, four factors had to be considered:
    --- 1) The "amount and substantiality" of the original work that was used in the parody's work
    --- 2) The "nature" of the original work--if it was fact, those facts can't be copyrighted. If the work was fiction (like this) then the story and characters were copyrighted, so had to be substantively different.
    --- 3) Was there potential profit involved in the newer work? (The issues here changed in the case involving the song "Pretty Woman": Campbell vs. Acuff-Rose.)
    --- 4) Would the newer work deprive the original work of sales?

    In the end, Romer was advised to contact Harper & Row, the publishers of the original work, to see if they could work out a licensing deal. 

    The meta aspects of "fair use" vis-a-vis this blog post: If you clicked the "Goodnight Moon" link, you saw a Wikipedia article about the book. It also included a picture of the cover. This picture was explanatory, or part of the commentary regarding the subject of the book.  Above, I inserted the artwork illustrating the concept of this podcast--also for illustration purposes.  I credited the author and the source, and in no way intended to infer that the drawing was done by me personally.  In other blogs written by me and other Cengage KnowNow authors, you will find quotes or charts from other sources. These items are credited, and are only used for educational purposes. Occasionally, I buy a cartoon from an online cartoon service, specifically for use as part of an educational blog. These are examples of the "fair use" of the creative work of others.   

    Source: "Episode 709: The Quiet Old Lady Who Whispers 'Fair Use'," by Jacob Goldstein and Keith Romer, NPR Planet Money, July 1, 2016. [podcast] [transcript]

    Follow up
    ---  Describe Keith Romer's experience with researching the legal issues regarding the possible sale of his "Goodnight Moon" spinoff. Specifically, describe how the case of "Pretty Woman" (Ray Orbison) vis-a-vis "Oh, Pretty Woman" (2LiveCrew) was analagous to Keith Romer's situation.
    ---  What recent lawsuits have involved the use of another's work in creating a more popular and lucrative entertainment product?  
    ---  What is a copyright? How long does the copyright on "Goodnight Moon" last? (listen to the podcast) How is the value of a copyright determined? (research this)

  • "Brexit" domino effect

    The problem with putting important policy decisions to a popular vote is that matters of economic policy are complicated, and actions taken may have unforeseen consequences. The classic voter conundrum--whether to vote one's conscience or vote one's self-interest--can even go by the wayside if a careful analysis is not undertaken. Dollars invested in marketing and media can influence voters to react emotionally rather than intellectually, even when a complicated economic decision with long-term consequences is involved.

    The United Kingdom has voted to exit the European Economic Union.  Some of the effects of this decision include:
    ---  an immediate sell-off of stocks in global markets, leading to a decline in portfolio values for individuals, hedge funds and other investors
    ---  a decline in the value of the British pound against all other currencies
    ---  a more conservative outlook in financial markets worldwide
    ---  the Federal Reserve in the United States is now unlikely to raise interest rates as it had intended
    ---  the British economy will lose out on trade agreements with its former European partners. 

    In a global economy that has not fully recovered from the recession of 2008, these consequences have a more profound effect than they might have in more robust economic conditions.

    Sources: "The Brexit Spillover," New York Times editorial, June 28, 2016.
    Podcast: Brexit (NPR Planet Money)

    Follow up
    ---  How did the United Kingdom handle national currency differently from the other nations in the European Union? What effect might this have had on the movement to exit the EU? Citing sources for your opinion, what do you think are the major reasons that the Brexit vote prevailed?
    ---  Do you have any plans to travel to England within the next 24 months? If so, what might your currency investment "move" be, in terms of a foreign currency exchange gain or loss? Explain.
    ---  Define "Brexit." Did UK businesses support this action? Why or why not?  Who mainly supported it and who were against it?