May 9, 2024

Archives for December 2013

Credit Score, by Multiple Choice

That’s the message being delivered to more than 70,000 small-business owners in developing countries where credit ratings are rare and many potential entrepreneurs keep their money in cash rather than bank accounts.

Banks in 16 countries are using a psychometric test to predict future behavior — specifically, whether someone will pay back a loan. Originally a Harvard doctoral project, the Entrepreneurial Finance Lab’s test has increasingly won the confidence of risk-averse bankers in places where, many economists believe, credit bottlenecks are severely stunting growth.

Now, a new partnership with MasterCard has potential to speed the model’s proliferation.

In the United States and other mature economies, assessments by multiple credit agencies based on a lifetime of bill payments and account balances help determine with relative confidence whether to give an individual or business a loan.

But the lack of such data in much of the rest of the world creates a “massive inefficiency in emerging markets,” said Bailey Klinger, 34, the chief executive of the Entrepreneurial Finance Lab. Banks have money to lend, but even profitable small businesses often cannot access it, choking growth.

In wealthy countries like the United States, small- and medium-size enterprises are typically responsible for about half of business activity and almost two-thirds of employment gains. In poor countries, such enterprises, on average, account for only about 17 percent of spending and a third of new jobs.

In 2006, Mr. Klinger was studying this problem, known as the “missing middle,” with Prof. Asim Khwaja at Harvard’s Kennedy School of Government. They struck upon a technique some companies have long used to screen potential employees.

For Jhonathan Darwin Montes Mendoza, a 40-minute test led to a $1,500 loan last year to buy Christmas-themed towels, curtains and other decorations ahead of the holiday rush for his market stall in Lima, Peru. Mr. Montes’s score gave Banco Interamericano de Finanzas confidence he would pay back the loan — even though he had been in business for less than a year, with no credit history.

“You can’t give a loan to someone without knowing if they have psychological problems,” said Mr. Montes, 23, in Spanish, perhaps not fully understanding what the test was measuring. Though similar to tools used by psychologists to assess I.Q., define personalities or screen for addictions, the bank’s test was intended to measure the traits at the core of entrepreneurship: fluid intelligence, business skill, integrity and attitudes.

After paying back the first loan, Mr. Montes is on a second round, paying down a $2,500 debt. The finance lab calibrates the test for each country where it is introduced.

The lab’s model asks questions that do not necessarily have a right answer; using an algorithm, it aims to predict whether an individual is likely to default based on how the answers relate to one another.

For example, to assess their sense of personal control over outcomes — which tends to correlate with loan repayment — respondents might be asked to rate how much they agree or disagree with the statement: “I believe in the power of fate.”

Another question on risk tolerance might ask them to choose between opposing responses with equal social desirability, such as: “I plan for every eventuality,” “I’m in between” or “Planning takes the fun out of life.”

There are some unexpected findings: Optimism and self-confidence are good signs among seasoned entrepreneurs, but high levels in younger business owners do not bode well, statistically.

And the math and reasoning questions meant to measure fluid intelligence can also assess integrity — of the loan officer. Too many correct answers can reveal that an applicant was coached.

The small-business loans have proved to be a “good revenue source” for Banco Interamericano de Finanzas, the fifth-largest commercial bank in Peru, where they have increased by about 50 percent, said Hugo Palomino, its director of commercial products. Over the last year and a half, repayment rates on loans made with the entrepreneurial finance lab’s model have been about the same as those that used a traditional assessment.

Tanzina Vega contributed reporting.

Article source: http://www.nytimes.com/2013/12/31/business/credit-scores-from-a-test-not-a-history.html?partner=rss&emc=rss

Pending Home Sales Up Slightly in November

The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, rose 0.2 percent from October, to 101.7. But contracts were 1.6 percent below last November’s levels.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 1.0 percent.

“Several housing indicators have improved recently and the very modest increase in pending home sales in November is a tentative sign that activity is stabilizing, or perhaps even picking up,” said Daniel Silver, an economist at JPMorgan in New York.

Housing sales had been dampened by a rise in mortgage rates, which began to climb earlier this year as investors bet the Federal Reserve would start to reduce the stimulus it provides the U.S. economy.

The rise in borrowing costs helped push home resales down in November to their lowest level in nearly a year, but other recent indications of the sector’s health have brightened.

Housing starts rose in November to the highest level in six years and sales of new homes dipped only slightly following a big jump in October.

Along with the latest reading on pending home sales, those reports provided an encouraging sign that housing was adjusting to mortgage rates that have advanced by more than a percentage point since May, to almost 4.5 percent.

The signs of stabilization have been accompanied by other signals showing improvement in the U.S. labor market and manufacturing that have reinforced hopes the economy will deliver broad growth in 2014.

Expectations of stronger growth and a decision by the Fed to begin scaling back its bond-buying stimulus have led long-term borrowing costs higher, with the yield on the 10-year U.S. Treasury note breaching 3 percent last week.

The central bank announced on December 18 that it would scale back bond purchases by $10 billion in January to $75 billion and it is expected to maintain this moderate pace of tapering over the course of the year.

The Fed’s move confirmed its confidence in the underlying momentum of the economy and helped push Wall Street stocks to record highs.

“With home prices continuing to rise, labor markets slowly recovering and mortgage rates still low from a historical perspective, we expect the housing sector to continue its path toward gradual recovery in the coming year,” wrote Gennadiy Goldberg, U.S. strategist with TD Securities.

(Reporting by Alister Bull; Editing by Chizu Nomiyama, Diane Craft and Dan Grebler)

Article source: http://www.nytimes.com/reuters/2013/12/30/business/30reuters-usa-economy-homes.html?partner=rss&emc=rss

An Imported Sport, Soccer Gets New Glossy Magazines in the U.S.

Also this year, NBC paid a record $250 million for broadcast rights to every English Premier League game over the next three years.

But if professional soccer has gained a solid foothold in the United States, soccer journalism continues to lag its foreign peers. There have been few well-known publications dedicated to the sport; the most prominent is Soccer America, founded in the 1970s.

Now two soccer magazines are entering the fray with A-list writers and designers, hoping that enthusiasm generated by the approaching 2014 World Cup will help create a readership that will endure for years afterward.

One of the magazines, Eight by Eight, introduced its first issue in Manhattan last month. The other, Howler, is a year old. (A third, called XI, is in the throes of a financial crisis after a year in print, and its future is unclear.)

The publications, all quarterlies, have had modest beginnings, with small subscriber figures so far. But the pedigree of the founders of Eight by Eight and Howler, with decades of experience in publishing pantheons like Esquire and National Geographic, suggests they represent the first attempt to create a niche genre aimed at a passionate audience.

The editors acknowledge that much of the optimism is fueled by the excitement generated by the World Cup, to be held in Brazil beginning in June. The quadrennial event is followed by billions of people worldwide. Then there’s the recent ESPN poll in which American fans, for the first time, chose a soccer player — Argentina’s Lionel Messi — among their top 10 favorite athletes.

But there’s also a more primal impulse. “When we started (the magazine), we didn’t think, ‘Here’s a market we could exploit,’ ” said George Quraishi, co-editor at Howler along with Mark Kirby. “We wanted to make a magazine about something we love.”

Several years ago, when Mr. Quraishi worked at Condé Nast and Mr. Kirby was at GQ, the two used to play soccer together on Wednesdays at Pier 40 in Manhattan. “He’s a goalkeeper, I’m an attacker,” Mr. Quraishi said. “We had a good partnership.”

Soon they decided to combine their professional and sporting passions and start Howler.

Similarly, Robert Priest, one of the founders of Eight by Eight, describes himself as a “West Londoner who has strangely always been passionate about Manchester United.” Mr. Priest, 67, has been living in the United States since 1979, and has coached his two sons in youth soccer.

But passion doesn’t pay the bills. Howler got its start with $69,000 from Kickstarter and “pretty sizable” support through advertising by Nike and beIN Sport, the Al Jazeera-affiliated sports network, Mr. Quraishi said. He is the only full-time staff member, which keeps costs down. After a little more than a year, Howler has published three issues, with the fourth coming in early January, and Mr. Quraishi said subscriptions, which cost $50, are approaching 5,000 and increasing with each issue.

Asked why he was confident the magazine could make it, Mr. Priest pointed to the years of financial success he has had in designing magazines, most recently with his partner Grace Lee, at Priest Grace. Their client list includes Esquire; Forbes; O, the Oprah Magazine; and Bloomberg.

Mr. Priest and Ms. Lee, who are also partners in the magazine, said they had financing in the “six figures” to start their magazine, and that the first issue’s print run was 4,500 copies.

The magazines aim to go beyond the win-loss column and delve into personalities and issues. But they also differ in their approaches: Howler is a large-format publication that sends writers to locations like Mexico and Rome in search of long-form articles; Eight by Eight’s first issue splashes bright illustrations across many of its pages. XI, now struggling to put out a fourth issue, is smaller in size, almost academic and focused solely on North America.

Top writers from Britain, Germany, France and the United States have appeared in the magazines, including The Guardian’s Graham Parker and Sports Illustrated’s Jonathan Wilson.

Though all three decided to produce a print magazine, they also rely on digital media to reach their readers.

Mr. Priest said his publication intended to use its website to offer merchandise, up-to-the-minute news, and multimedia presentations. Mr. Quraishi has expanded Howler’s presence during the last year with online offerings that include podcasts and email bulletins. “We’re a print magazine, but most of the way we get the word out is digital,” he said, adding that many subscribers had come through social media.

The appearance of three soccer quarterlies in the same year has not been without behind-the-scenes drama. Mr. Priest and Mr. Lee were part of Howler’s founding team, working on that magazine’s first two issues. But then, Mr. Priest said, creative differences emerged, leading them to start Eight by Eight. “We wanted to develop something that was our own,” Ms. Lee added.

But there has also been uncommon camaraderie displayed as well. When XI announced its financial troubles, Howler wrote on Twitter: “totally bummed for our buds at @xiquarterly. we know how tough it is.”

Asked about this, Mr. Quraishi said: “The main idea we share with XI is that soccer fans have been ignored by the U.S. press. So there’s an idea we’re in this together. That’s part of our DNA.”

This article has been revised to reflect the following correction:

Correction: December 30, 2013

An earlier version of this article erroneously attributed a distinction to the start-up soccer magazines. Soccer America, published in Oakland, Calif., has focused on the sport since the 1970s; it is not the case that “there have been no prominent publications dedicated to the sport” in the United States.

Article source: http://www.nytimes.com/2013/12/30/business/media/an-imported-sport-soccer-gets-its-own-glossy-magazines-in-the-us.html?partner=rss&emc=rss

Wall Street Is Mainly Flat

The stock market showed little change on a quiet Monday as investors started shutting their books on what has been an extraordinary year on Wall Street.

Traders had little major corporate or economic news to work through.

The Standard Poor’s 500-stock index dipped just 0.33 of a point, to 1,841.07, and the Nasdaq composite index slipped 2.40 points, or less than 0.1 percent, to 4,154.20.

The Dow Jones industrial average moved less than 30 points the entire day, the narrowest range for the index since February 2007. The Dow ended the day up 25.88 points, or 0.16 percent, to 16,504.29.

Approximately 2.3 billion shares changed hands on the New York Stock Exchange, 40 percent less than average.

“The very narrow range reflects that there’s not a lot of news out there and a lot of investors’ positions are closed for the year,” said Alec Young, chief global strategist with SP Capital IQ.

With just one trading day left in the year, 2013 is looking to be a memorable one for investors. The S.P. 500 is up 29.09 percent so far, on pace for its best year since 1997. The Dow is up 25.95 percent, the most since 1996.

With 2013 in the books, investors have turned their attention to the beginning of 2014. Few expect next year to be as good to investors as 2013 was.

“After a year like this, people start to think a 30 percent-plus year is normal,” said Ron Florance, deputy chief investment officer for Wells Fargo Private Bank. “We need to be realistic going into next year.”

The next big piece of news awaiting investors will be the December employment report, which will be released Jan. 10. There is also corporate earnings season, which will start in the second half of January and encompass the closely watched holiday shopping period.

“The market is rallying on the idea that economic growth is picking up globally and in the U.S., so investors need to see those expectations matched,” Mr. Young said.

The bond market was quiet as well on Monday. The yield on the benchmark 10-year Treasury note slipped to 2.97 percent, from 3 percent late Friday, while its price increased 8/32, to 98 4/32.

The stock market is expected to be in a holding pattern until next week, when the midweek holidays are over, Mr. Florance said. Both the New York Stock Exchange and the Nasdaq will be closed on Wednesday for New Year’s Day.

Among the stocks on the move on Monday, Walt Disney rose $1.88, or 2.53 percent, to $76.23, the most in the S.P. 500. Analysts at Guggenheim Securities upgraded Disney to a buy from a hold on Friday.

Twitter fell $3.24, or 5.08 percent, to $60.51, following a 13 percent drop on Friday. Shares of the social media company, which went public for $26 in early November, had hit a closing high of $73.31 on Thursday.

Crocs jumped $2.81, or 21.08 percent, to $16.14, after the Blackstone Group said it was investing $200 million in the clog maker.

Article source: http://www.nytimes.com/2013/12/31/business/daily-stock-market-activity.html?partner=rss&emc=rss

China Says Local-Level Debt Soars, Stirring Fear

In the report, which is likely to further raise concerns about China’s debt problem, the National Audit Office found that local governments across the country had accumulated 17.89 trillion renminbi, or $2.95 trillion, worth of debt obligations as of the end of June. That was an increase of 12.7 percent from December 2012, when local government debt stood at 15.88 trillion renminbi, the report said.

The June figure also represented a sharp increase of 67 percent from the end of 2010, when an earlier report by the Audit Office estimated local government debt at 10.71 trillion renminbi.

Other reports have estimated local government debt at significantly higher levels, including one issued last week by the Chinese Academy of Social Sciences, a government-linked research institute, which put the figure at about $3.3 trillion.

In the five years since the onset of the global financial crisis, local governments at the provincial, municipal, county and township levels across China have gone on a spending spree, loading up on debt to finance a surge of investment in infrastructure, real estate and other projects.

Analysts have expressed fears that many of these investments may never make enough money to repay the interest and principal on the debt.

The structure of much of this borrowing has also raised concerns. With a few exceptions for pilot programs, local governments in China are prohibited from directly taking on loans or issuing bonds. Instead, they have set up thousands of special-purpose financing vehicles that borrow on the government’s behalf to pay for a given project.

Such financing vehicles had confirmed probable and potential debt obligations totaling 6.96 trillion renminbi as of June, according to the Audit Office’s report, accounting for nearly 40 percent of all local government debt.

Analysts had for months been anticipating the results of the audit office’s survey. As part of an investigation that began in July, the agency said, it deployed 54,000 auditors across the country, who combed through the books of more than 62,000 government departments and institutions and examined 3.4 million debt instruments related to more than 700,000 projects.

Including financial obligations on the national level, the audit office report found that China’s total government debt stood at 30.27 trillion renminbi at the end of June, up from 27.77 trillion renminbi in December 2012.

Based on findings of the new report, Lu Ting, a China economist at Bank of America’s Merrill Lynch unit, estimated that China’s total public debt stood at 53 percent of gross domestic product. Adding corporate and household obligations lifts the total debt ratio to as much as 190 percent of G.D.P., he estimated.

China’s overall debt ratio “is neither exceptionally high nor low,” Mr. Lu wrote on Monday in a research note. Still, he said he was concerned that for the last two years China has been adding debt faster than its economy has been growing.

“We believe the markets and the Chinese government should be alarmed by the rapidly rising leverage, but we do not believe China is on the brink of a debt crisis, especially if the new leaders can take decisive measures to arrest its rising leverage,” Mr. Lu wrote.

Under President Xi Jinping, the Chinese leadership has promised to deliver reforms that will be the country’s most ambitious financial overhauls in decades. Mr. Xi will head a group that will steer economic and social reforms, Xinhua, the state-run news agency, said on Monday.

Article source: http://www.nytimes.com/2013/12/31/business/international/chinese-local-government-debt-up-13-in-6-months.html?partner=rss&emc=rss

Egypt Detains Journalists It Says Aired ‘False News’

The arrests appeared aimed at deterring journalists from speaking with members of the Brotherhood or reporting on the group’s continuing protests. The Interior Ministry accused the journalists of broadcasting “false news” that “damaged national security” from two hotel suites. The authorities also said that the journalists possessed materials that promoted “incitement,” including information about campus strikes by students who supported the Brotherhood.

The Interior Ministry also asserted that one of the people arrested was a Brotherhood member, but it did not name that person or the other detained journalists. A colleague said that one of them was Peter Greste, an Australian correspondent for Al Jazeera who won a Peabody Award last year while working for the BBC in Somalia.

A spokesman for Al Jazeera confirmed the journalists had been detained but said he had no information about the charges.

News of the arrests came after Egypt’s interim president, Adly Mansour, said Egypt could hold a presidential election before electing a new Parliament, raising the possibility that the military-backed government was preparing to deviate from the transition plan it unveiled after the ouster of the former president — Mohamed Morsi, a Brotherhood leader — in July. The government has said it would follow that plan, citing it as evidence of its commitment to democracy.

Analysts have said that switching the order of the elections could allow Egypt’s leaders to maintain tighter control over their outcome, by allowing the newly elected president to influence the makeup of Parliament.

In the past week, the government has moved forcefully to eliminate the Brotherhood. It banned membership in the group last Wednesday after blaming it for a blast that killed 16 people, even though another unrelated group claimed responsibility.

Michael Wahid Hanna, a fellow at the Century Foundation in New York, said the government “seized on the moment and the grotesque nature of the attack” to accomplish several goals. While hard-liners in the security services aim to eradicate the Brotherhood, the terrorist designation gives other officials a “rhetorical” tool to stir interest in the coming elections, Mr. Hanna said. It also provides them with a firmer legal basis to detain protesters and further suppress dissent ahead of the vote, he said.

As the government tries to consolidate power, it has faced an unexpectedly sharp challenge from militant groups. On Sunday, a car bomb explosion outside a military intelligence building north of Cairo wounded at least five people, the third such bombing in less than a week.

Mayy El Sheikh contributed reporting.

Article source: http://www.nytimes.com/2013/12/30/world/middleeast/egypt-detains-journalists-it-says-aired-false-news.html?partner=rss&emc=rss

Democrats Turn to Minimum Wage as 2014 Strategy

The effort to take advantage of growing populism among voters in both parties is being coordinated by officials from the White House, labor unions and liberal advocacy groups.

In a series of strategy meetings and conference calls among them in recent weeks, they have focused on two levels: an effort to raise the federal minimum wage, which will be pushed by President Obama and congressional leaders, and a campaign to place state-level minimum wage proposals on the ballot in states with hotly contested congressional races.

With polls showing widespread support for an increase in the $7.25-per-hour federal minimum wage among both Republican and Democratic voters, top Democrats see not only a wedge issue that they hope will place Republican candidates in a difficult position, but also a tool with which to enlarge the electorate in a nonpresidential election, when turnout among minorities and youths typically drops off.

“It puts Republicans on the wrong side of an important value issue when it comes to fairness,” said Dan Pfeiffer, the president’s senior adviser. “You can make a very strong case that this will be a helpful issue for Democrats in 2014. But the goal here is to actually get it done. That’s why the president put it on the agenda.”

Top Republicans assert that a wage increase would dampen the economic recovery and indicated after Mr. Obama mentioned the issue in his State of the Union speech this year that they had no intention of bringing a minimum-wage increase to a vote in the House, which they control.

“Why would we want to make it harder for small employers to hire people?” Speaker John A. Boehner of Ohio said.

In the capital, Mr. Obama and congressional Democrats are supporting legislation that would raise the federal minimum wage to $10.10 an hour by 2015. Mr. Obama is planning a series of speeches across the country focused on improving wages for workers, aides said, many of them timed to coincide with key minimum-wage votes in Congress. Income inequality is also likely to play a prominent role in his State of the Union address next month.

At the same time, Democratic campaign officials and liberal activists — conceding that Democrats face tough prospects in some Senate races — are working to put minimum-wage increases on the ballot next year in places like Arkansas, Alaska and South Dakota. The hope is to stoke Democratic turnout in conservative-leaning states where the party’s Senate candidates have been put on the defensive by the mishandled rollout of the Affordable Care Act.

But in a sign that some moderate Democrats are uneasy about inflaming their local business communities, the imperiled Democratic Senate incumbents in Alaska and Arkansas, Mark Begich and Mark Pryor, have yet to embrace the ballot measures.

States with contested House races, including New Mexico, will also see campaigns to bring minimum-wage increases to a referendum next year.

After being battered for nearly two months on the problems with Mr. Obama’s signature health law, Democrats see the minimum-wage increase as a way to shift the political conversation back to their preferred terms.

“The more Republicans obsess on repealing the Affordable Care Act and the more we focus on rebuilding the middle class with a minimum-wage increase, the more voters will support our candidates,” said Representative Steve Israel of New York, the chairman of the Democratic Congressional Campaign Committee.

Democratic planning on the issue has picked up in recent weeks, as the 2014 elections approach and the need to counter attacks on the health law has grown more urgent.

This month, top aides to Mr. Obama including the economic advisers Jason Furman and Gene B. Sperling, Labor Secretary Thomas E. Perez and the legislative affairs office convened a meeting at the White House complex with an array of liberal groups to discuss the minimum wage. The gathering included representatives from Mr. Obama’s political arm, Organizing for America, unions and progressive groups like Americans United for Change and the National Employment Law Project.

An official from the National Employment Law Project presented a spreadsheet showing which cities and states were pursuing campaigns to increase minimum wages next year, according to a person who attended. The attendees also discussed the potential timing of a minimum-wage vote in the Democratic-controlled Senate.

Article source: http://www.nytimes.com/2013/12/30/us/politics/democrats-turn-to-minimum-wage-as-2014-strategy.html?partner=rss&emc=rss

U.S. Struggles to Keep Pace in Delivering Broadband Service

Riga’s average Internet speed is at least two-and-a-half times that of San Antonio’s, according to Ookla, a research firm that measures broadband speeds around the globe. In other words, downloading a two-hour high-definition movie takes, on average, 35 minutes in San Antonio — and 13 in Riga.

And the cost of Riga’s service is about one-fourth that of San Antonio.

The United States, the country that invented the Internet, is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies.

In terms of Internet speed and cost, “ours seems completely out of whack with what we see in the rest of the world,” said Susan Crawford, a law professor at Yeshiva University in Manhattan, a former Obama administration technology adviser and a leading critic of American broadband.

The Obama administration effectively agrees. “While this country has made tremendous progress investing in and delivering high-speed broadband to an unprecedented number of Americans, significant areas for improvement remain,” said Tom Power, deputy chief technology officer for telecommunications at the White House.

The disagreement comes over how far behind the United States really is in what many people consider as basic a utility as water and electricity — and how much it will affect the nation’s technological competitiveness over the next decade. “There aren’t any countries ahead of us that have a comparable population distribution,” said Richard Bennett, a visiting fellow at the American Enterprise Institute, who said that the United States was closing the gap.

But as the Obama administration warned in a report this year: “To create jobs and grow wages at home, and to compete in the global information economy, the delivery of fast, affordable and reliable broadband service to all corners of the United States must be a national imperative.”

The World Economic Forum ranked the United States 35th out of 148 countries in Internet bandwidth, a measure of available capacity in a country. Other studies rank the United States anywhere from 14th to 31st in average connection speed.

Generally, fast broadband is considered anything above 10 megabits a second.

In Riga, speeds average 42 megabits a second, but many users had service of 100 to 500 megabits as of mid-December, according to Ookla. In San Antonio, broadband speeds average about 16 megabits a second. While higher speeds are available through cable television or phone companies, the expense is such that many households in the city cannot afford a connection.

Those faster speeds can mean the difference between thriving and surviving. For Kosmodroms Ltd., a web design and video production studio in Riga, that high-speed connection lets it transfer huge files of video or photos in minutes.

With broadband of only a few megabits a second, it would take so long to transmit the files that the company would be better off delivering them physically, on a disk or thumb-drive, said Agnese Krievkalne, a company director.

Nils Usakovs, the mayor of Riga, said that when private investors started to build Internet infrastructure in the city, no systems were in place, so the builders were able to install the latest, fastest communications technology. “We’re the capital of a European Union member country, bordering with Russia,” Mr. Usakovs said. “The technology makes this an even more attractive place to invest.”

Leticia Ozuna, a former San Antonio councilwoman who worked on the municipal broadband effort, said that in her former district in South San Antonio, some 70 percent of households had no Internet service. Often, she added, students gather at night in the parking lot of the Mission Branch Public Library to do homework using the library’s free Wi-Fi connection, long after the library itself has closed.

Article source: http://www.nytimes.com/2013/12/30/technology/us-struggling-to-keep-pace-in-broadband-service.html?partner=rss&emc=rss

Time Inc. Is Preparing to Head Out on Its Own

Within the next six months, its parent, the media conglomerate Time Warner, hopes to spin off Time Inc. into a separate public company. But if the plan succeeds, Time Inc. will become independent at a difficult moment. Not only do the magazine industry’s fortunes continue to sag, but Time Inc. has also shown signs of instability. It has churned through three chief executives in the last three years, and lost a star editor, its former editor in chief Martha Nelson.

To combat these negative forces, Time Inc. will abandon the traditional separation between its newsroom and business sides, a move that has caused angst among its journalists. Now, the newsroom staffs at Time Inc.’s magazines will report to the business executives. Such a structure, once verboten at journalistic institutions, is seen as necessary to create revenue opportunities and stem the tide of declining subscription and advertising sales. 

Overseeing these changes is Joseph A. Ripp, a former longtime Time Warner official who became Time Inc.’s chief executive in September. In an interview, Mr. Ripp said it was refreshing to shake things up. In recent months, he confirmed publicly that there would be additional layoffs in 2014. He has also expressed openness to initiatives, including expanding the company’s television programming and conference businesses.

“Because we were part of a larger media conglomerate, our ability to expand outside of print magazines was always restricted,” said Mr. Ripp, who explained that Time Warner’s television and film businesses often hampered the magazines’ ability to move into video.

Time Warner is not alone in separating ailing print assets from more profitable businesses. In 2014, Tribune Company will try to split its newspapers from its television and digital units. And this year, News Corporation cleaved its film and TV businesses from its newspaper and publishing arms. 

In going it alone, Time Inc. will returns to its roots as a stand-alone company, which was co-founded in 1922 by the publisher Henry Luce. Roughly a quarter-century ago, Time Inc. merged with Warner Communications. Today, Time Warner is a media and entertainment giant with a $63 billion market value and profitable assets likes HBO. But in recent years Jeffrey L. Bewkes, Time Warner’s chief executive, has shrunk the company, discarding businesses like AOL and Time Warner Cable to concentrate on film and television. 

Next on the spinoff block is Time Inc. To run the magazine business as a separate company, Mr. Bewkes hired Mr. Ripp. He assumed the post this summer from Laura Lang, who lasted only 15 months in the job. She had succeeded Jack Griffin, who was forced out after less than six months in 2011.  

Mr. Ripp, 61, a former chief financial officer at Time Warner, said that while he moved to restructure Time Inc. and push it into new businesses, he recognized that the company’s value was tied to its magazines’ credibility.

But he draws a distinction between the journalistic standards applied to magazines like Time and those for lighter fare, like Cooking Light. Would it be an ethical breach for an executive on Time Inc.’s business side to suggest a certain type of cream cheese to be used in a frosting recipe? By Time Inc.’s old standards, it would be.

“We will never, ever, ever, violate our trust with consumers,” Mr. Ripp said. “If you look at journalism at Time Inc., we have applied the concepts equally to covering budget deficits and food titles. Service journalism can be different.”

To mediate any disputes and help the newsroom side maintain its independence, Mr. Ripp recently rehired Norman Pearlstine, Time Inc.’s former editor in chief, to become the company’s chief content officer, essentially acting as a corporate referee. 

Article source: http://www.nytimes.com/2013/12/30/business/media/time-inc-is-preparing-to-head-out-on-its-own.html?partner=rss&emc=rss

Breaking Bread: Going Unseen, but Asking the Tough Questions for Almost a Quarter-Century at WNYC

“Of course it’s happened,” Mr. Lehrer said of losing his voice, if only temporarily to a nasty cold. His solution, he said over lunch, is to “pump myself up on tea with honey and anti-inflammatories, and limp through as best as I can.” But he knows a trick or two to keep things from getting that bad in the first place.

“I think I’m just well-enough trained from earlier in my life,” said Mr. Lehrer, who is 61. “Having had voice training early, and also growing up as a flute and saxophone player as a kid, I learned good breathing techniques that probably tend to keep my voice in shape. And I try not to eat for a few hours before I go on the air, and I’m constantly drinking water — sip, talk, sip, talk — during the show.”

All this having been said, it should be noted that Mr. Lehrer’s voice, redolent of his New York City upbringing, is not his most prominent feature. Far more important is his inquisitive mind. It has made him and the morning talk program that bears his name a must-listen for any New Yorker in search of reasoned, scream-free discourse on newsy topics, be they the start-up woes of the Affordable Care Act or the cost of Christmas trees.

Come autumn, he will celebrate his 25th anniversary on WNYC. He is also a fixture on the cable station CUNY TV, and in political debates is often one of the journalists hurling questions at the candidates.

For what would be the final installment of “Breaking Bread,” we turned to Mr. Lehrer. He proposed meeting at La Camelia, a Mexican restaurant on Downing Street, a short walk from the WNYC studios on Varick Street. That neighborhood, just north of the entrance to the Holland Tunnel, has had the moniker Hudson Square slapped on it by real-estate types ever eager for fancy names that make it easier for them to collect fancy rents.

Our lunch was simple. Mr. Lehrer started with a corn-and-chicken soup — “if anybody does corn well, it should be a Mexican restaurant,” he said, “or an Iowan restaurant, maybe” — followed by mushroom tacos. The interviewer skipped a starter, and went with chicken tacos. Drinks got no more exciting than club soda.

The breadth of Mr. Lehrer’s range during his two hours on the air each weekday can impress even the not-easily-dazzled. He covers five or six topics. Across the year, he interviews easily 1,000 people. How does he do it?

As for many of us, keeping panic at bay can be a powerful motivator.

“I definitely over-prepare,” gathering more material than is likely to be needed on air, Mr. Lehrer said. “Some of that is motivated by a desire to be thorough, and some by fear of running out of things to say — or more so, usually, embarrassing myself with my stupidity by asking crudely uninformed questions. That’s the source of the fear.”

During lunch, Mr. Lehrer tended to speak slowly and choose his words carefully. With his orderly mind, he never lost his place, even after being distracted; he always picked up where he had left off.

As the soup and tacos arrived, conversation turned to the relative merits of radio and television. Radio “will always be my greatest love,” Mr. Lehrer said. Television is enjoyable, but it can also be “a very cumbersome tool.”

“Basically, all that you have to think about when you’re on the radio is the conversation you’re having,” he said. “On television, you have to think where the cameras are, how good your posture is, what you wear.” That does not mean he shows up at WNYC in, say, pajamas. “I’m supposed to present myself as a serious person,” he said. “But I’ve done overnight talk shows at radio stations before this, where I was underdressed by just about anybody’s standards.”

More often than not, his radio interviews are not conducted face to face. How desirable is that? Isn’t a conversation better when you can see the other person’s reactions?

Article source: http://www.nytimes.com/2013/12/30/nyregion/going-unseen-but-asking-the-tough-questions-for-almost-a-quarter-century-at-wnyc.html?partner=rss&emc=rss