Squeezing Every Dime from DVDs

http://www.businessweek.com/magazine/content/09_42/b4151059074777.htm

The article Squeezing Every Dime from DVDs by Ronald Grover and Tom Lowry discusses the different ways that the movie industry in Hollywood is trying to get a "bigger piece of the pie" in terms of DVD monies amid a poor economy. With the economy the way it is, DVD sales have been declining and DVD rentals have been increasing. Time Warner, owner of Warner Bros', states that they want "better economics" from their current deal with Netflix. Redbox, a cheap per day rental system with kiosks around the country is also beginning to feel the wrath of Hollywood. They are being pressured into sharing a higher percentage of rental fees, limiting the number of titles available in each kiosk, and having to wait 45 days before new releases can be rented.

Executives in Hollywood and the DVD industry believe that DVD sales will increase when the economy rebounds but are also preparing for a future without physical discs. The different movie companies have begun trying different ways to release their products in order to find a more profitable system of delivery. Industry analysts believe that by Christmas, the popular website YouTube may be able to offer digital movie rentals straight from their website.

As a movie lover, I do agree that the DVD industry may be hurting a bit due to the economy. At the same time, executives in Hollywood have to realize that your average American citizen is also hurting for the very same reason. Personally, I have always rented DVDs first and will only purchase a copy for myself if I enjoy the movie afterwards. I believe that if the movie industry is successful in their efforts against Netflix, Redbox, etc., they may irreparably harm their image with the public and then even fewer will purchase DVDs again once the economy reverses course.

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Summary - Gary Vaynerchuk's Startup Advice

The article Gary Vaynerchuk's Startup Advice talks about the different necessary components to successfully create a business. Vaynerchuk says to pick something that you love first. Then you need to build your reputation as an expert, deliver content online, and begin to make money by selling advertising, niche products, or services like consulting or speaking. Because of Vaynerchuk's passion and dedication, he turned his family's small liquor store into a wine business that grosses $60 million per year while also becoming a popular speaker and signing a book deal with HarperCollins. Professor Scott Shane from Case Western Reserve University believes that passion goes hand-in-hand with hard work. Another different factor is to choose a favorable industry, such as software instead of restaurants. In the end, Vaynerchuk states that picking the motive of profit over passion can result in utter failure. "People are chasing cash, not happiness," he says. "When you chase money, you're going to lose. You're just going to. Even if you get the money, you're not going to be happy."

Summary - Washington Revives the Mortgage Cramdown

Theo Francis's article Washington Revives the Mortgage Cramdown discusses the notion that cramdowns (from the idea of cramming deals down lenders' throats) would be a good way for citizens to adjust their unpayable mortgages before bankruptcy proceedings reaches the courthouse. Democratic Senator Richard J. Durbin (IL) is leading the charge in favor of these cramdowns. If Durbin's bill were to pass in the Senate (it narrowly failed in the spring), it would allow a judge to reduce principal or interest rates on home loans and lengthen the time to pay back mortgage payments. Another possible result of this bill will be for homeowners to have their unaffordable debts wiped free. Lobbyists on behalf of the financial industry in Washington D.C. are preparing for battle because the vote was extremely close last time around. While cramdowns may be good for homeowners in foreclosure, the banks are certainly hoping to try and avoid this.

Detroit's Salvation: Higher Gas Taxes

http://www.businessweek.com/investor/content/oct2009/pi2009105_910211.htm?chan=investing_investing+index+page_top+stories

Chris Farrell's article Detroit's Salvation: Higher Gas Taxes states that higher gas taxes would increase the demand for smaller, fuel efficient automobiles thus helping out the United States auto industry. With the Cash for Clunkers trade in program completed, car sales have fallen in September because many people took advantage of the $3,500 or $4,500 government rebate to purchase newer, fuel efficient vehicles. As a result of that, experts believe that a significant increase in the gas tax will help to bailout the still-struggling auto industry.

As a result of the now defunct Cash for Clunkers program, experts believe that a significant increase in the gas tax will help to bailout the still-struggling auto industry. Currently, the federal gas tax sits at 18.4 cents per gallon. N. Gregory Mankiw, an economist at Harvard University and former chair of the White House Council of Economic Advisers under President George W. Bush, believes that the federal gas tax should increase from the current level by $1 per gallon. Mankiw suggests phasing the tax increase in 10 cent increments for 10 years. However, three unnamed economists suggested back in 2007 issue of the Journal of Economic Literature that the federal gas tax should be $2.10. However one looks at it, it is a significant increase for your average citizen.

As a car driving American citizen, I would vehemently argue against an increase the federal gas tax. I am a college student with very little money and a gas tax increase of any significant change would greatly harm my personal finances. This is also on top of the fact that I drive a new, fuel efficient vehicle (2009 Pontiac Vibe, 25 city/35 highway). Low-income individuals who work full time would also have a difficult time to find the extra needed money to support a gas tax increase. In whole, while an increase in the gas tax may appeal to those in Detroit and on Capitol Hill, it could potentially devastate your average American car driver.

Summary - Typical U.S. Worker Saw 401(k) Lose 24.3% in 2008

Lauren Young's article Typical U.S. Worker Saw 401(k) Lose 24.3% in 2008 discusses what happened to the money U.S. workers invested in and how much of a loss occurred between 2007 and 2008. The average balance in a workers 401(k) account at the end of 2007 was $114,337 and by the end of 2008, it was $86,513. According to a study by the Employee Benefits Research Institute and the Investment Company Institute, the average worker invested 56% of their assets in company stock compared to 41% in fixed-income securities. The stock market did not help the average workers 401(k) accounts in 2008.

Summary - The Coming Energy Revolution

Rachel King's article The Coming Energy Revolution discusses the benefits of smart-grid technology, the different costs associated with it, and how smart-grid technology is currently being used. Smart-grid technology is a new type of electrical grid in which a two way network is constructed where power and information flow freely between producer and customer. If the smart-grid is created properly it will reduce energy consumption, enable customers to choose what type of energy they are using, and to sell energy back to the producers. The Electric Power Research Institute estimates that it will cost approximately $165 billion to create the smart-grid. Currently, Cargill, a major food producer with a plant in Springdale, Arkansas, is depending on their smart-grid to lower their electrical costs. When peak energy costs become too expensive, a sensor remotely starts the companies generators in order to save the company money. Cargill hopes to save about $680,000 this year in energy costs because of the smart-grid technology.