Tuesday, January 22, 2008

The Britney Industrial Complex

By Richard Cohen, Washington Post
Tuesday, January 22, 2008; 12:00 AM

The most useful magazine journalism of the (still) new year comes to us not from the usual sources -- Newsweek, Time, etc. -- but from Portfolio, a business publication. It has enumerated the vast amounts of money Britney Spears is worth not just to herself, but to others as well -- about $110 million to $120 million annually to the struggling U.S. economy. This is what Portfolio calls the Britney Industrial Complex.

Spears' ubiquity goes without question. She gets the sort of coverage only dictators, potentates or absolute monarchs can command or even dream of. "Between January 2006 and July 2007, Britney was a cover subject of People, Us Weekly, In Touch, Life & Style, OK!, or Star a total of 175 times in just 78 weeks," Portfolio tells us. And on Yahoo, just to throw another statistic your way, she was the No. 1 search subject in six of the last seven years. Her single slip to No. 2 came in 2004, when she was bested by Paris Hilton -- a dark, dark year for us all.

Portfolio says a Las Vegas nightclub reportedly sold seats next to Spears' table for $50,000. (I'd like to see a cover story on those people!) Spears herself gets a reported $250,000 to $400,000 just to appear at an event, giving new meaning to Woody Allen's observation that "90 percent of success in life is just showing up." At Spears' prices, Woody would no doubt show up 100 percent of the time.

Portfolio's point, and mine as well, is that Spears is big business -- and ought to be viewed that way. She herself still makes oodles of money -- about $9 million a year, the magazine says -- and maybe has a personal fortune of about $125 million. In a way, though, she is worth as much to others as she is to herself, if such a thing is possible. One photo agency, X17, sold $2.5 million worth of Spears pictures in 2007, and although it did not do better with Britney than Britney did with Britney, it didn't have to pay Kevin Federline $35,000 a month in child and ex-spouse support either.

The Britney Industrial Complex is a handy tool to examine more than just Britney Spears. It also explains why Hillary Clinton's human backdrop changed from Iowa to New Hampshire. On election night in Des Moines, Clinton surrounded herself with familiar figures, some of them not so young anymore, while Barack Obama had a backdrop of youthful faces radiating pheromones. By New Hampshire, Clinton had younged-up her crowd, suggesting she was now, like Obama, an agent of change.

A major difference between young people and older ones is that the former are likely to spend their last cent on whatever attracts them. Why not? They usually don't have kids or mortgages, or live with the fear that their boss has blown the money that was in their 401(k) accounts on his mistress. That being the case, young people are beloved by marketers who will flatter them just so they can reach into their pockets and take their last penny. This, in an abridged form, is why we have come to see young people as somehow inherently wise and able to peek into the future. Marketers have lied to them in the same way that a man on the make tells a woman that she is -- cross his heart and hope to die -- the loveliest of all things. In America, the consumer is never wrong.

Portfolio's Britney Industrial Complex illustrates the economy's need for celebrities. Vast amounts of money can be made by manufacturing ones who appeal particularly to the young. Spears was once one of those, although at age 26 she has leaped that demographic boundary. Still, the breadth of her drawing power cannot be fully estimated. Portfolio's concoction does not, for instance, measure her worth to the morning television shows -- "Today," etc. -- which on any given day are mere adjuncts to the fan magazines. Nor can it measure what she is worth to us as a topic of common interest for our communal water-cooler moments. Even this column has, in a sense, exploited her.

It is one thing to do an economic analysis of Britney Spears and still another not to see her as a sad, updated version of the lumpy prizefighter from more than one black-and-white movie. She's taken too many punches and soon those who have attached themselves for the ride will drop off. As Portfolio shows, the Britney Industrial Complex represents an economic truth -- as good a reason as any for economics to be called the dismal science.

Thursday, January 10, 2008

Tired of Poll-Driven News Coverage of Elections, Instead of Issue-Driven News Coverage?

Lie to a Pollster.

Tuesday, January 08, 2008

Note: While we'll never get a handle on global warming and smog as long as we continue to be tied to cars and oil as the main way to get around, until that changes it's good to see an independent oil firm push for more competition. While oil companies over the last 20 years have been closing gas stations despite the huge growth in the number of cars in the USA, all the while buying each other and concentrating control of the remaining gas stations in the hands of 5 big corporations, one independent is opening new gas stations...

Valero steps on the gas in state

The company's service station growth pace has been speedy since entering the California market in 2000.

By Elizabeth Douglass, Los Angeles Times Staff Writer

January 7, 2008 Three gas stations vie for customers along Interstate 5 in Cardiff-by-the-Sea, but Cheryl Ahern-Lehmann usually bypasses the Chevron and Arco in favor of a station she once spurned as too pricey.

That station in north San Diego County, a Texaco for years, won her business after n Antonio-based Valero, which began gasoline operations in California in 2000, now owns two of the state's 14 fuel-making refineries and displays its brand on 921 service stations out of a statewide total of around 9,400. In the last three years, the company has added nearly 300 Valero locations to its California roster.

Valero's quiet expansion, which has continued apace across the country as well, represents an unusually speedy entry for a new brand. The company's push is all the more unusual because it comes as many major oil companies shed dealers, sell off stations to wholesalers and concentrate on larger, high-volume locations known as "super-pumpers."

"All the major brands have indicated that they really don't want any more gas stations . . . and they're terrified of cost cutting by companies like Costco and Wal-Mart," said Charles Langley, gasoline project manager at the Utility Consumers' Action Network, a San Diego-based watchdog group. Of Valero, he said, "they're the only brand that I see that actually seems to be growing and is aggressive about growing."

Since 2000, Valero has gone from an industry footnote to the largest refiner in North America, with 17 plants from California to Aruba in the Caribbean. The company supplies 5,800 gas stations in 38 states using the Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon brands. Most of the sites are owned and operated by individual dealers and distributors instead of by Valero.

for rest of story: http://www.latimes.com/business/la-fi-valero7jan07,1,5037050.story?page=1&ctrack=1&cset=true&coll=la-headlines-business

Saturday, January 05, 2008

Cable group says it opposes bundling

From Bloomberg News
January 5, 2008

A group representing 1,100 smaller cable companies said Walt Disney Co., Viacom Inc. and other network owners force them to buy unwanted channels, and asked the Federal Communications Commission to step in.

The American Cable Assn. made its remarks in a filing to the agency, which requested comments by Friday on the practice of bundling, or requiring more program purchases when cable operators buy the most-popular channels.

Disney, in a separate filing, said the market is fair and FCC action isn't needed.

The cable operators' group gives FCC Chairman Kevin J. Martin support for plans to widen industry regulation. He has criticized the cable industry for boosting prices 93% from 1995 to 2005.

Thirteen of the biggest channels, such as Disney's ESPN and Disney Channel and Viacom's MTV, are bundled with obligations to carry at least 60 other channels, the trade group said.
Scam to get consumers to replace their DVD Collections Picks Up Steam?
(When they come up with some "high definition" writing, let me know...)

DVD format war appears to be over

Warner picks Blu-ray over HD, but some say the Net may beat both.

By Dawn C. Chmielewski, Los Angeles Times Staff Writer

January 5, 2008

The fuzzy future of high-definition DVD came into sharper focus Friday after Warner Bros. said it would release movies for the home video market exclusively on the Blu-ray disc format.

The decision, announced on the eve of the influential Consumer Electronics Show, delivers a de facto knockout punch to the rival HD DVD format backed by Toshiba Corp. and others now supported by only two of Hollywood's six major movie studios.

It also averts a further costly format war that has been stymieing the growth of the next generation of DVD with promises of enhanced video images and digital audio to match the popularity of flat, big-screen television sets. For the first time, sales of movies on regular DVDs declined last year, jeopardizing a longtime and important source of profits for Hollywood. The studios hope the new, higher-quality format will spur consumers to restock their DVD shelves.

In addition to Warner Bros., studios supporting the Blu-ray format include News Corp.'s 20th Century Fox, Walt Disney Co., Sony Pictures and Metro-Goldwyn-Mayer. Taken together, they represent about 70% of the home video market. HD DVD is supported by General Electric's NBC Universal, Viacom Inc.'s Paramount Pictures and the independent studio DreamWorks Animation.

"Expect HD DVD to die a quick death," said Richard Greenfield, an analyst with Pali Research in New York, in a research note Friday.

Late Friday, the HD DVD group canceled a news conference scheduled for Sunday at the Consumer Electronics Show in Las Vegas. "We are currently discussing the potential impact of this announcement with the other HD DVD partner companies and evaluating next steps. We believe the consumer continues to benefit from HD DVD's commitment to quality and affordability," the group said in a statement.

The larger question, however, is how long even the winning high-definition DVD format may survive. Some analysts say the battle between Blu-ray and HD DVD may become irrelevant as high-speed Internet and on-demand video become the pipelines of movies into the home.

"I think the fat lady just sang," said Rob Enderle, principal analyst with Enderle Group in San Jose. "This gives Blu-ray a decisive lead. The question now is whether it is too little too late."

Enderle said consumers might have moved on to digital downloads to get movies rather than wait to buy them on next-generation DVDs. The next big chance to sell high-definition movie players won't be until next Christmas, he said. "By then, it may all be moot."

Warner Bros. had remained neutral as the rival technology camps spent millions to win over consumers. Each group engaged in aggressive price cutting and promotions this holiday season in an attempt to persuade consumers to take the high-definition DVD plunge.

But sales of these next-generation discs fell short of expectations, given the huge summer box office from popcorn movies, said Kevin Tsujihara, president of Warner Bros. Home Entertainment Group. Nor, he added, did the high-definition DVD players keep pace with the sale of high-definition TVs.

"There's a window of opportunity here," Tsujihara said. "There are a number of high-definition television sets being purchased. The best time to sell one of these high-definition DVD players is when the consumer walks out the door with that television set. That window was beginning to close on us."

Warner Bros. even sought its own solution to the format war at the 2007 Consumer Electronics Show, proposing a high-definition disc that combined the Blu-ray and HD DVD formats. But Warner was the only studio to embrace the dual format, so it never reached stores.

Sony Corp.'s Blu-ray discs have had a 2-1 sales edge since the beginning of 2007, thanks to its exclusive studio deals and the sale of Sony PlayStation 3 game consoles that play films in that high-definition format.

That prompted the HD DVD camp to flash its cash to remain viable. It paid $150 million to Paramount Pictures and DreamWorks Animation in August to secure exclusively the rights to such major movies as "Transformers" and "Shrek the Third" on HD DVD. Paramount had previously released movies in both high-definition formats.

"HD DVD had a lot of momentum in 2007 when they had their own defection of Paramount. That was a very big move," said J.P. Gownder, an analyst with Forrester Research in Cambridge, Mass. "Now, the balance of power shifts back to Blu-ray."

The Paramount deal reportedly sparked a furious courtship of Warner, which was the last of the major studios to support both high-definition DVD formats. Warner will begin releasing movies exclusively on Blu-ray in June.

Barry Meyer, chairman and chief executive of Warner Bros., flatly denied that the studio was offered a big check to choose the Blu-ray format.

"This was not a bidding contest between the two formats. This is a huge business for us," Meyer said. "We're the market leader globally. We're not going to make a strategic decision based on any kind of short-term financial gain."

Nonetheless, studios such as Warner are facing pressure to grow the nascent high-definition video business at a time when consumer spending on DVDs is declining.

And it's clear that the format war -- though benefiting consumers by driving down the price of high-definition DVD players -- has been confusing them too and keeping them from replacing their DVD players and their movie collection.

"Unfortunately, the loser here with the format war has been the consumer," Gownder said. "We found that 28% of people said the fact that there was a format war meant they weren't going to buy a high-definition DVD player. They weren't going to try to figure it out."