Category Archives: Business

Trying to buy Time

After gobbling up a major satellite TV company last year, AT&T may have its sights set on buying another media powerhouse: Time Warner.

Executives from AT&T and Time Warner have had “informal” discussions about a possible deal, according to Bloomberg News.

Time Warner — not to be confused with Time Warner Cable, which sold to Charter Communications earlier this year — is one of the world’s biggest entertainment companies. It owns HBO, Turner, and Warner Bros., and a merger with AT&T would give the nation’s second-largest wireless carrier ownership over a massive catalogue of premium content.

Rumors of a Time Warner merger came a day after the Wall Street Journal said that AT&T is taking a major step with its other recent acquisition, DirecTV: To compete in the growing market for online streaming, DirecTV intends to launch an Internet-based TV service called DirecTV Now. The service will allow customers to sign up for live programming without the need to pay for satellite dishes, set-top boxes or other equipment, according to the Journal.

AT&T did not immediately respond to a request for comment.

AT&T has made no secret of its ambitions to grow beyond its roots in telephony and into a company that controls video programming.

As consumers shift away from landline phones to embrace smartphones, mobile data and online video, providing access to the Internet is no longer enough for many telecom and broadband companies. Now, some of the country’s biggest wireless firms are making moves to acquire exclusive content or to produce their own content in a major shift in their business model.

Verizon, for instance, is attempting to purchase Yahoo for $4.8 billion; although the embattled Web company is reeling after disclosing a historic data breach affecting 500 million user accounts, it commands one of the largest online audiences after Google and Facebook, according to the market research firm ComScore.

Underlying these moves, analysts say, is the hope that Internet providers will be able to collect behavioral data about where customers go on the Web and what they consume. That data can be turned into revenue in the form of targeted advertising.

Marketing aimed at children

In the fast-changing digital world, companies are looking for new marketing tactics to reach their audiences. Many of them have turned to a practice known as “influencer” marketing, in which YouTube and Instagram personalities are paid for using or talking up a product on their social-media channels.

Now, a coalition of advocacy groups is urging the Federal Trade Commission to crack down on a specific subset of these marketing messages: the ones aimed at children.

The advocates said they planned to file a complaint Friday with the Federal Trade Commission asking the agency to take enforcement action against Google, Disney’s Maker Studios and three other companies for what they alleged was the “unfair and deceptive practice” of aiming influencer ads at children. The advocacy groups — which include Center for Digital Democracy, Campaign for a Commercial-Free Childhood and Public Citizen — also urged the federal agency to issue policy guidance on the matter.

Influencer advertising is a multibillion-dollar industry, and it is used to peddle all sorts of products, including fashion, beauty and cooking items. But advocates say these tactics are problematic when they are used to market toys, snacks and other goods to children.

“Owing to their immature cognitive development children — especially younger children — have difficulty differentiating between content and advertising,” the complaint reads.

The advocacy groups provide examples of content that they say violate federal law prohibiting deceptive advertising. In some, children are seen unboxing new toys from the likes of Lego. In another, a brother-and-sister YouTube duo are seen sampling 20 flavors of Pringles potato chips. That video has more than 27 million views on YouTube.

There was no immediate response to emails or phone calls seeking comment from two companies named in the complaint: Collab and WildBrain. YouTube, Maker Studios and DreamWorks’s AwesomenessTV declined to comment because they had not viewed the complaint.

YouTube, the video site where much of this content is viewed, is a division of Google. The other companies that are named are involved in the production or distribution of content that is made for children.

First U S concert

The vaulted, concrete-domed Uline Arena in Northeast Washington can tell a D.C. story better than most. Its transformation has followed the ups and downs of the city’s history — experiencing both glorious and unremarkable moments throughout its 75-year life.

The structure’s latest chapter arrives at a time when the District is in the throes of a redevelopment boom that has attracted young, deep-pocketed and health-conscious residents. On Friday, Uline Arena will reopen as the East Coast’s largest REI store, a popular outdoor specialty chain that hopes to become a destination in the nation’s capital.

“This is transformative. We looked at it as a game-changer for the community,” said Norman Jemal, principal at Douglas Development, which owns and redeveloped the property. “You’re talking about a lot of history here. A lot of Washington, D.C., here. It touched a lot of people.”

Ice distributor Miguel Uline opened the eponymous arena in 1941 as a hockey rink and repurposed it into housing for service members during World War II. After the war, it was restored as a hockey and basketball arena, home to the Washington Capitols — the first NBA team with an African American man on its roster.

President Dwight D. Eisenhower hosted an inaugural festival there, but it was 1964 when the arena — by then sold and renamed the Washington Coliseum — made its biggest headline: The Beatles performed their first U.S. concert there shortly after their famed “Ed Sullivan Show” appearance. Bob Dylan, Chuck Brown and others also performed.

But as the District hit hard times, the arena lost its grandeur. The NoMa neighborhood near Union Station, which only recently acquired its trendy moniker, was a no man’s land filled with warehouses and vacant lots.

A devastating spiral continues

TO MOST investors, Venezuela looks less like a market than a mess. The IMF expects output to shrink by 10% this year and inflation to exceed 700%. As the bolívar’s value has plunged, multinational firms have announced billions of dollars of write-downs. For much of this year, however, some strong-stomached investors have scented an opportunity. They rushed to buy bonds issued by the government and by the state-owned oil company, PDVSA.

They have been rewarded handsomely. Venezuelan government bonds have outperformed other emerging-market sovereign bonds tracked by JPMorgan (see chart). The government, led by Nicolás Maduro, boasts it has never missed a debt payment. Indeed he has given priority to debt service over other urgent needs, such as importing food. Mr Maduro is keen not to scare off the foreign creditors sorely needed by PDVSA.

However, Venezuela looks increasingly stretched. Two big PDVSA payments, of $1 billion and $2 billion, are due on October 28th and November 2nd. Last month the company proposed a bond swap to ease a looming payments crunch: investors holding PDVSA bonds maturing in 2017 (which are not backed by a full sovereign guarantee), would exchange them for bonds maturing in 2020. This would buy Venezuela time, perhaps in the hope that oil prices rise.

Not so fast. Even sweetened terms for the swap have failed to lure investors. PDVSA has four times delayed the deadline for the exchange, most recently to October 21st. PDVSA warned in a press release on October 17th that if its offer is not accepted, “it could be difficult” to make its scheduled payments.

Francisco Velasco of Exotix, a brokerage specialising in frontier markets, says investors face a prisoner’s dilemma. They could agree to a swap, with terms that are less than ideal, in the hope that others investors will do the same. Or they could decline PDVSA’s offer. But that would make default ever more likely

Unveils Administration

Travelers may soon be able to get refunds for delayed baggage, more accurate information about on-time performance of the airlines they fly and more transparency when booking tickets with online travel services, under executive actions announced by the Obama administration Wednesday.

“Airline passengers deserve to have access to clear and complete information about the airlines they choose to fly and to expect fair and reasonable treatment when they fly,” Transportation Secretary Anthony Foxx said in making the announcement. “The actions we’re taking today and in the coming months will expand aviation consumer protections we have previously enacted.

“These actions will enable passengers to make well-informed decisions when arranging travel, ensure that airlines treat consumers fairly, and give consumers a voice in how airlines are regulated,” Foxx said.

Foxx said Wednesday’s announcement builds on efforts to promote competition and protect consumers at a time when mergers mean they have fewer choices when it comes to flying.

But Nicholas E. Calio, president and chief executive of Airlines for America, an industry trade group, said the public should be cautious about new efforts to “re-regulate” the industry.

“It would be difficult to find an industry that is more transparent than the airline industry; customers always know exactly what they are paying for before they buy,” Calio said. “Further, the fact that a record number of people are flying underscores that customers are benefiting every day from affordable fares and the ability to choose among carriers, amenities and service options that best meet their needs. Dictating to the airline industry distribution and commercial practices would only benefit those third parties who distribute tickets, not the flying public.”

Foxx said the administration already requires airlines to refund bag fees when luggage is lost, but he said officials soon hope to add a requirement that airlines refund fees when luggage is “substantially” delayed. Officials offered no details on how “substantially” would be defined, and there is no specific timeline for when the rule would go into effect.