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Free-Messaging Apps Siphon Profits from Cellular Providers

December 5, 2012 by Leave a Comment

Relief is on the way. Cellphone users are sending more text messages than ever, but increasingly they are free — thanks to the Internet. While that is good news for consumers, it could cost the world’s wireless companies tens of billions of dollars in lost revenue.

Standard texting, the kind where you send abbreviation-filled messages over a cellphone network, has been in decline in many parts of the world, and now appears to be shrinking in the United States. That is because smartphones can use free Internet-powered services that send messages over data networks instead, and those services are attracting millions of users.

The shift is opening an opportunity for big companies like Facebook and Apple and smaller start-ups like WhatsApp and Kik, which are making aggressive grabs at this market, aiming to put themselves at the center of how people communicate in the smartphone era.

Peter Deng, a product director at Facebook who oversees its Messenger software, said that text messaging was “ripe for innovation” because it had been held back by outdated technology.

“It’s limited to 160 characters,” Mr. Deng said, “and it’s not at all rich in its expression. People want to connect deeply with each other, and they don’t want to be constrained by various technical boundaries and decisions made 20 years ago.”

Unlike ordinary text messages, Facebook’s messaging service allows people to see when their friends are typing a reply and when messages are received, among other features, he said.

Standard texting is still popular. CTIA, the wireless industry trade group, said that in the first half of this year, Americans sent 1.107 trillion text messages. But that was down 2.6 percent from the 1.137 trillion messages sent in the first half of last year. Ovum, a mobile communications research firm, estimates that by 2016, Internet-based message services will have eaten up $54 billion in revenue that carriers could have made from text messaging.

For years, text messages have been a source of pure profit for carriers because it costs nearly nothing to deliver them. In response to the rise of Internet services, they have been overhauling their pricing plans to stay profitable.

Verizon Wireless and ATT, for example, offer new plans that include unlimited texting and phone calls, while charging bigger fees for using Internet data, which is likely to be their main source of growth. (Internet messaging over a carrier’s data network does use up some of a customer’s monthly data allotment, but it is a tiny amount relative to, say, watching a video.)

John Walls, vice president for public affairs at CTIA, said carriers were always expanding their services by offering things like all-you-can-eat texting plans and the ability to donate to charity via text. He noted that 72,000 text messages were being sent every second of every day.

“I hardly think the end is in sight for texts,” Mr. Walls said.

For Internet companies, messaging will never be a cash cow. But they have other reasons to get excited about this market.

Facebook benefits if more people use its messaging service, because those people are likely to spend more time on its Web site and mobile apps, seeing more ads. On Tuesday the company said it would allow Android users in some countries to sign up for its messaging service with just a phone number, no Facebook account required, partly because this might eventually persuade non-Facebook users to cave in and sign up for an account. That feature will come to the United States at some point, Facebook said.

Apple’s free texting service, iMessage, comes installed on iPhones, iPads and iPod Touch devices, where it automatically routes messages over the Internet if they are being sent to another Apple device. The service also works with the Messages app on Apple’s computers. That could encourage people to continue buying Apple products to keep in touch with family and friends cheaply and easily. Even the design of iMessage makes people feel like they’re in a special clique: an iMessage shows up on an Apple device as a blue bubble, while a normal text message from a non-Apple phone is green.

Perhaps the most talked-about player in texting right now is the small start-up WhatsApp, based in Mountain View, Calif. The 30-person company, founded by Jan Koum and Brian Acton, two former Yahoo executives, says its service is used in more than 100 countries. Its app is one of the most popular in the world on iPhones and Android devices, and on the BlackBerry it is even bigger than Research in Motion’s own messaging service.

Article source: http://www.nytimes.com/2012/12/05/technology/free-messaging-apps-siphon-profits-from-cellular-providers.html?partner=rss&emc=rss

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Court Upholds F.C.C. Rule on Use of Data Networks

December 5, 2012 by Leave a Comment

WASHINGTON — Cellphone companies must allow customers of competing wireless carriers to use their networks for the Internet and e-mail when outside their home territory, a federal appeals court said here on Tuesday.

The United States Court of Appeals for the District of Columbia said that just as the Federal Communications Commission required wireless carriers to allow voice-service roaming by customers of other carriers, it also can require the same, at commercially reasonable rates, for data customers — in essence, those who use smartphones, tablets and other wireless devices.

The judges’ 3-to-0 decision is a significant victory for the F.C.C. The agency has lost authority over Internet communications in recent years. And it is a big win for smaller cellphone companies, who now have the leeway to offer customers national calling and data plans, albeit ones that could generate extra charges.

On the losing side is Verizon Wireless, which had challenged the agency’s data roaming order in 2011. The company argued that the agency did not have authority to oversee data communications on wireless broadband networks and that it was imposing “common carrier” regulations on companies — essentially, regulating them like public utilities, as it does with home phone service.

Verizon said that it already had data roaming agreements so there was no need to codify the practice. “As we made clear throughout the case,” Ed McFadden, a company spokesman, said on Tuesday, “Verizon Wireless regularly enters into such data roaming agreements on commercially reasonable terms to meet the needs of consumers, and will continue to do so.”

The decision has broad implications for the agency, analysts said. “This does bode well for the F.C.C.’s ability to assert its authority in regulating wireless services,” said Andrew Jay Schwartzman, senior vice president and policy director for the Media Access Project, a nonprofit law firm that promotes consumer choice. “This is the first time these issues have come up in the context of data, which obviously is our future,” he said.

The F.C.C.’s chairman, Julius Genachowski, went further, saying the court’s opinion “confirms the F.C.C.’s authority to promote broadband competition and protect broadband consumers.”

In 2010, in Comcast v. the F.C.C., the same appeals court rejected the legal theory that the agency was using to validate its regulation of broadband Internet service. While Tuesday’s decision does not reverse that ruling, it does signal that the agency may have found a justification for its broadband rules.

Both Tuesday’s and the 2010 decisions were written by one of the appeals court’s more liberal members, Judge David S. Tatel.

John Bergmayer, senior staff lawyer at Public Knowledge, which filed a brief supporting the agency, noted that many of the legal arguments Verizon made in the case are also part of another challenge in the same court.

There, Verizon is trying to overturn the agency’s Open Internet order, a 2011 regulation that contains elements of net neutrality rules. Those rules require Internet service providers to treat all traffic equally, rather than favoring some transmissions over another.

The Open Internet case is in its early stages and has not yet been argued before the appeals court. But agency officials say they think the appeals court, in Tuesday’s case, rejected at least one of the arguments Verizon makes in the Open Internet case.

Many small wireless companies had supported the agency’s data roaming requirement, saying that it would provide more competition, particularly by allowing them to offer national service to compete with Verizon and ATT.

The large wireless providers argued that the data roaming order gave them less incentive to invest in their networks, because it would benefit rivals that would not shoulder any of the costs of building infrastructure.

Article source: http://www.nytimes.com/2012/12/05/technology/court-upholds-fcc-rule-on-use-of-data-networks.html?partner=rss&emc=rss

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Houston Is Booming, Pushed by, Surprise, Its Energy Industry

December 5, 2012 by Leave a Comment

HOUSTON — Even first-time visitors here can tell that the city is growing rapidly. Construction cranes overhang office and apartment sites all along the Katy Freeway, a stretch of Interstate 10 that connects a string of booming submarkets west of the 610 Loop. This expanse includes the Westchase neighborhood and the Energy Corridor, home to an expanding cluster of energy companies.

The energy sector drives job growth and all manner of business activity here, with the greatest demand for office space concentrated in the west side where oil and gas companies are clustered, in the medical center just south of the central business district and in the Woodlands, a master-planned community 27 miles north of downtown.

“Houston is clearly a growth leader,” said Walter Page, director of office research at Property and Portfolio Research in Boston. “It was the first major economy in the U.S. to register more jobs than it lost in the recession.” Employment here is up 3.7 percent since August 2008, when it peaked before declining during the recession. That compares with New York’s gain of just 0.7 percent from its peak in April 2008 before declining, Mr. Page said.

The city’s office vacancy rate was 11.9 percent in the third quarter, down from 13.4 percent a year earlier, according to the CoStar Group, a real estate research firm in Washington. Developers are creating new space to meet that strong demand, completing 15 major office buildings in the first three quarters of this year alone. Of the 3.9 million square feet of office space under construction, more than 90 percent is in the western submarkets or in the Woodlands, Mr. Page said.

The energy sector accounts for 3.4 percent of the city’s employment, more than five times the national average of 0.6 percent, Mr. Page said. Despite that heavy concentration, the rest of the city’s economy is diverse and helps spread the wealth that energy brings into the community to other sectors.

Brisk commercial real estate sales reflect investor interest in the market. This year, an affiliate of the Houston-based Enterprise Products Company bought the Shell Plaza, a 1.8 million-square-foot office complex in the central business district, for $550 million, CoStar reported. The seller was a fund operated by Hines, a Houston-based developer that built the property in the 1970s. Last year, Shell renewed its leases for nearly 1.3 million square feet at Shell Plaza.

Hines developed much of the city’s commercial real estate. Today the company’s projects here include multifamily construction in the shadow of office buildings that it developed in the Galleria, a group of office towers, hotels and retail on the southwestern rim of Loop 610, with a skyline that rivals downtown’s.

Mark Cover, Hines’s chief executive for the southwest region, said that energy, the medical center and the Port of Houston are the three largest engines driving the economy here. “The global energy industry is headquartered here,” he said. “It’s not just oil and gas, it’s alternatives, too. Intellectual capital in the energy field is heavily concentrated here.”

In the only major city in the United States without zoning laws, developers can, in theory, build virtually anything, anywhere in the city. In practice, however, understanding and catering to local industries is a critical element in site selection, Mr. Cover says. “When you really get down to it, the city is market-zoned, because land prices are not based on zoning rights, they’re based on purely capitalistic, highest and best use value,” he said. “If you build the wrong product or build in the wrong place, the market is going to severely punish you.”

Market forces shape the city’s development in hubs, says Jim Knight, who heads land development in Texas for Bury Partners, an Austin-based engineering firm.

Refineries and distribution centers cluster near the port, while energy companies and other major employers tend to establish a presence, either downtown or in a submarket, and stick to that area indefinitely.

Article source: http://www.nytimes.com/2012/12/05/realestate/commercial/houstons-boom-is-led-by-the-energy-industry.html?partner=rss&emc=rss

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The 30-Minute Interview Mitchell Roschelle: The 30-Minute Interview: Mitchell Roschelle

December 5, 2012 by Leave a Comment

Interview conducted and condensed by

VIVIAN MARINO

Q. Tell me a little bit about the practice.

A. The practice has about 100 professionals across the country. We’re in New York, Boston, Philadelphia, South Florida, Chicago, Los Angeles and San Francisco. There are seven partners, in addition to four managing directors, and we cover the real estate asset class from single-family residential to big office.

What we do really depends on the market needs, but it includes due diligence, financial advisory and strategic portfolio performance reviews. Our specialty is analysis. We don’t compete against the brokerage community — we don’t have any vested interest in the outcome of a transaction.

Q. What is your main role there?

A. I get involved in recruiting and retaining our people and our clients.

Q. Who are your clients?

A. It’s mostly institutional. They tend to be the big pension funds that invest in real estate or advisers to the pension funds and REITs. But I do have entrepreneurial clients. J. P. Morgan Investment Management and Starwood Capital, GE Capital, NorthStar Realty Finance and Ogden CAP Properties are examples of clients.

Q. How is business?

A. It’s very good. There are two ways of answering the question. One, the real estate asset class couldn’t be positioned better in an economy like now, so there’s a tremendous amount of capital formed to invest in real estate, which is good for our business. And then because there are some markets where prices are at prerecession levels, there are clients looking to take money off the table, so there’s selling of assets. There’s a lot of transaction activity, which is good for our practice.

What’s interesting is, if things are terrible and there are bankruptcies and disputes between parties, we do well. If things are going gangbusters like they were in ’06, we do well. The only time we’re slow is when there’s a lot of indecision in the market.

Q. Like during the recession.

A. But interestingly enough, when that went on in ’08 and ’09, valuation was a tremendous issue and valuation is a big part of our practice. Financial instruments were hard to valuate; hard real estate was a little bit easier.

Q. How would you categorize 2012?

A. Coming out of the recession the big gateway cities were the ones that performed best. That included New York, Washington, San Francisco, Boston, Chicago and Los Angeles. That’s where investors were willing to take risks. You had diverse employment base, better leased buildings, less risk of a double-dip micro recession.

So that’s where we were — and 2012 was a continuation of that.

Apartments were the darling real estate subsector. But what happened in 2012 was we saw apartment cap rates get too low in some of those markets — south of 5 percent — and so investors were looking to invest outside apartments and outside the gateway cities. We started seeing in 2012 an interest in the office asset class, the industrial asset class, and a little bit more interest in retail.

Q. Are there regions of the country where you see future growth?

A. The other 45 markets that are covered in our investors survey look like that’s where all the opportunities are — whether it be Raleigh-Durham, N.C.; Texas markets like Austin, Houston and Dallas; Seattle; and Denver.

None of them is radically overbuilt from an office or apartment perspective. What’s also interesting is those markets have a high percentage of echo boomers in their population — the 25- to 34-year-olds. That’s who’s going to buy a house in the future, who’s going to work in an office or retail or warehouse, or shop in retail.

Q. Let’s talk about your recently released 2013 Emerging Trends Survey of investors.

A. One cool thing: We asked the 900 participants what they think their prospects are for profitability for the real estate asset class, and we intentionally don’t define profitability — 93.1 percent felt that 2013 would be fair or better from a profitability perspective. That’s up almost seven or eight percentage points from last year.

There isn’t a lot of overbuilding in this country, so all of the stock that was created in the wake of the boom leading up to 2006-2007 — that’s in the process of being absorbed. Housing has turned a corner. The challenge we have in our country is in our job re-creation.

Q. Do you personally invest in real estate?

A. I have a home. That’s it.

Article source: http://www.nytimes.com/2012/12/05/realestate/commercial/the-30-minute-interview-mitchell-roschelle.html?partner=rss&emc=rss

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Rhode Island Judge Has Stake in Pension Case Outcome

December 5, 2012 by Leave a Comment

Rhode Island, the site of a sweeping pension overhaul last year, has brought in a prominent New York lawyer to litigate the question: David Boies, perhaps best known for representing Al Gore in the fight over the 2000 presidential election and for waging an antitrust battle against Microsoft on behalf of the government in the 1990s.

Rhode Island’s dispute may not reach quite those dramatic heights, but it is being closely watched as a first major test of whether, and how, financially strained states and cities can cut the benefits of their workers and retirees.

Several public employee unions have sued Gov. Lincoln Chafee and other Rhode Island officials, accusing them of acting illegally when they pushed through a package of money-saving pension cuts last year, including suspending annual cost-of-living increases for most retirees. The unions want the richer benefits restored.

Their five pension lawsuits were assigned to Judge Sarah Taft-Carter of the state Superior Court, who has handled public pension cases before and handed a big victory to the unions in one recent case. Mr. Boies, who at $50 an hour is working for a small fraction of his ordinary fee, is seeking a less conflicted judge, and could even ask to move the case into federal court.

The case has raised questions and strong feelings about the overhaul in Rhode Island, a state so small that it seems as if nearly everybody has friends or family in the pension system. Could the judge see beyond the harsh effects on her own family?

When the subject came up in a hearing in October, Judge Taft-Carter acknowledged that her son, a state trooper, was earning a pension, and her mother, the widow of a mayor, was already receiving one. (The uncle’s pension came to light only later.)

She said she had researched the matter, sought advice from a judicial ethics board and concluded that her relatives’ interests “will not reasonably impact my ability to be impartial.”

Her son joined the state patrol just three years ago, she said, so calculating his pension “requires a large degree of speculation and assumption.” Her mother’s pension was too small to be a factor, she said. (Court papers put it at about $22,000 a year.)

And while the overhaul means the judge’s pension will be smaller despite having to contribute more, she said that was true of all judges in the state: “If my financial interest should require disqualification, then all other state judges would be similarly required to recuse themselves.”

Mr. Boies is expected to appear in court on Friday and cite the state’s judicial code of conduct, which requires judges to recuse themselves when their spouses, parents or children have an economic stake in the litigation before them.

The state’s Supreme Court justices, who have been asked for a review, are also members of the state pension system.

In an interview, Mr. Boies said that challenging Judge Taft-Carter’s impartiality was just “the first step,” and the bigger issue was whether any judges in Rhode Island could handle the case, given their personal stakes. Companies routinely have their pension disputes decided by federal courts, which grant more leeway in changing pension plans.

“The plaintiffs brought this case the way they did to try to avoid federal jurisdiction,” Mr. Boies said.

Whatever the outcome of the hearing, Mr. Boies said he would continue to represent Rhode Island until all of the lawsuits and appeals were decided.

Mr. Boies, whose standard fee is $1,250 an hour, said $50 an hour was “the same fee that I charged the United States when I represented the Department of Justice in the Microsoft case.”

Mr. Boies became involved, he said, because he was convinced that Rhode Island’s pension troubles were just the tip of a $5 trillion iceberg of unsecured retirement promises to the nation’s millions of public workers. “This is something that can cripple state and municipal governments at a time when the federal government is, more and more, cutting back on the services it provides,” he said.

Public employee unions, in Rhode Island and elsewhere, argue that people like Mr. Boies are exaggerating the size of America’s total public pension shortfall.

This article has been revised to reflect the following correction:

Correction: December 4, 2012

An earlier version of this article wrongly attributed the following quotation: Rhode Island’s effort is “the clearest example of fundamental pension reform that we have right now,” Ms. Monahan said. “Even though whatever Rhode Island decides doesn’t serve as actual precedent for other states, other states and cities still want to know if it can work.” The quote was from Amy Monahan, not Gina Raimondo.

Article source: http://www.nytimes.com/2012/12/05/business/rhode-island-judge-has-stake-in-pension-case-outcome.html?partner=rss&emc=rss

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Economic Scene: Unionizing at the Low End of the Pay Scale

December 5, 2012 by Leave a Comment

But their lives are connected. They both work in the fast-food industry — Mr. Carrillo at a McDonald’s in Midtown Manhattan and Mr. Williams at a Wendy’s in Brooklyn. They both earn a little more than $7 an hour. And they both need food stamps to survive. Last Thursday, both did something they had never done before: they went on strike.

Their activism, part of a flash strike of some 200 workers from fast-food restaurants around New York City, caps a string of unorthodox actions sponsored by organized labor, including worker protests outside Walmart stores, which, like most fast-food chains, are opposed to being unionized, and union drives at carwashes in New York and Los Angeles.

Labor unions are hoping that the unusual tactics, often in collaboration with social justice activists and other community groups, will offer them a new opportunity to get back on the offensive, helping to raise the floor for wages and working conditions in the harsh, ultracompetitive economy of the 21st century.

Mr. Carrillo’s and Mr. Williams’s meager salaries also underscore the straightforward choice we face as a nation: either we build an economy in which most workers can earn enough to adequately support their families or we build a government with the wherewithal to subsidize the existence of a lower class that can’t survive on its own. We are doing neither.

More than two million workers toil in food preparation jobs at limited-service restaurants like McDonald’s, according to government statistics. They are the lowest-paid workers in the country, government figures show, typically earning $8.69 an hour. A study by the Economic Policy Institute, a liberal-leaning research organization, concluded that almost three-quarters of them live in poverty. And they are unlikely to have ever contemplated joining a union.

On a full-time schedule, they could make a little over $18,000 a year, just about enough to keep a family of two parents and one child at the threshold of poverty. But full-time work is hard to come by. With fast-food restaurants increasingly using scheduling software to adjust staffing levels, workers can no longer count on a steady stream of work. Their hours can be cut sharply from one week to the next based on the business outlook or even the weather.

Orley Ashenfelter, a labor economist at Princeton, published a study earlier this year that captured the plight of workers under the Golden Arches in a novel way: measuring pay by the burgers a worker could buy for an hour of work, he calculated that the real wages of McDonald’s workers in the United States hit about 2.2 Big Macs an hour last year. That’s 15 percent less than in 2000.

Many economists will argue that concern about the lowly McJob is misplaced. These jobs offer a wage to people with no training or education. Mr. Carrillo, for instance, doesn’t speak English. “To get a better job at my age, you need a profession,” he says. To improve the lives of American workers, most economists argue, we might do better by focusing on education to equip them with the skills to perform more productive, better-paid jobs.

But this argument overlooks the fact that the McJob is hardly a niche of the labor market reserved for the uneducated few. Rather, it might be the biggest job of our future.

The American labor market has been hollowing out for decades — losing many of the middle-skilled, relatively well-paid jobs in manufacturing that can be performed more cheaply by machines or workers overseas. It has split between a high end of well-educated workers, and a low end of less-educated workers performing jobs, mostly in the service sector, that cannot be outsourced or mechanized.

This process is not expected to reverse any time soon. According to government statistics, personal care aides will make up the fastest-growing occupation this decade. The Economic Policy Institute study found that some 57 percent of them live in poverty.

This poses an existential question for labor unions, which are struggling because of the loss of union jobs to automation and stiff competition, both from cheaper labor in the mostly union-free South and developing nations around the world: can they do something to improve workers’ lot?

They have in the past. A recent study by the International Labor Organization concluded that low-wage work was rare where unionization rates were high. In countries where more than half of workers belong to a union, only 12 percent of jobs pay less than two-thirds of the middle wage, on average.

Still, there is little reason to believe that American labor unions can do much to lift the floor on wages in the future. Fewer than 7 percent of workers in the private sector are in a union. We have the largest share of low-paid jobs in the industrial world, amounting to almost one in four full-time workers, according to the International Labor Organization. And our rates of unionization continue to fall.

E-mail: eporter@nytimes.com; Twitter: @portereduardo

Article source: http://www.nytimes.com/2012/12/05/business/unionizing-at-the-low-end-of-the-pay-scale.html?partner=rss&emc=rss

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E.U. Finance Ministers Deadlock on Plan to Oversee Banks

December 4, 2012 by Leave a Comment

The ministers agreed to reconvene next week, a day ahead of a summit meeting of European Union leaders who had been hoping to focus discussion on the design of a banking union — something the leaders agreed last summer to establish as a way to safeguard the industry after member countries racked up enormous debts bailing out their banks.

That agreement in June had called for setting up the single regulator under the European Central Bank. And the bloc’s administrative arm, the European Commission, has proposed phasing in the system beginning Jan. 1.

But the deadlock on Tuesday indicated that there was sharp disagreement among member states over how many banks in the euro currency union should be covered by the new system; how to ensure that countries outside the currency union have a way to rebuff regulations they dislike; and how to ensure that the European Central Bank would keep monetary policy separate from its decisions on bank supervision.

After ministers failed to reach agreement Tuesday during their regular monthly meeting, Vassos Shiarly, the finance minister of Cyprus, the country holding the Union’s rotating presidency, set another session for Dec. 12.

If ministers fail to reach agreement at that meeting, the E.U. leaders will arrive at their summit meeting the following day without a cornerstone in place for the banking union. One of the goals for the union could eventually be to issue debt jointly backed by euro zone countries, as a way to buffer the sort of interest rate spikes that have often bedeviled weaker countries, including Spain.

Some ministers warned on Tuesday that further delays in designing the banking union could lead to a return of acute financial pressures in the euro zone. “If we are not able to deliver in the dates we have committed, this will not be neutral in terms of the stability of the markets,” said Luis de Guindos, the Spanish economy minister.

For Spain, stricter supervision was supposed to be the condition for using European funds to bail out its troubled banks directly and a way to avoid accumulating more sovereign debt. Once the supervisor is in place, Spain wants the money it is drawing upon for its bailout to be moved off its government ledgers.

But France and Germany remained divided over the new banking rules on Tuesday. That is a significant obstacle because agreement between the two countries usually is needed to accomplish major reforms in Europe.

Pierre Moscovici, the French finance minister, told the meeting that the new rules should apply to all lenders rather than lead to a two-tier system.

Chancellor Angela Merkel of Germany has suggested that the system could eventually apply to all 6,000 banks in the euro zone. But some German officials and industry groups would rather have the new centralized oversight apply only to the biggest European banks, and leave regulation of the country’s smaller savings banks in the hands of national officials.

French officials have stressed the need for a system that covers all euro zone banks. Otherwise, the French have warned, any sudden intervention by the E.C.B. into the affairs of a bank under national regulation could raise alarm among investors and depositors and even lead to bank runs.

But Wolfgang Schäuble, the German finance minister, said Tuesday that trying to give too much central authority to a new banking regulator would meet stiff political opposition in his country.

“I think it would be very difficult to get an approval by the German Parliament if you would leave the supervision for all the German banks to European banking supervision,” Mr. Schäuble told the meeting. “Nobody believes that any European institution will be capable to supervise 6,000 banks in Europe.”

The government in Berlin has complained that overly rapid implementation of the rules could lead to regulatory loopholes. German state governments also have balked at giving the central bank oversight of their sparkassen, the hundreds of small and midsize savings banks that do much of the lending to consumers and small businesses.

Germany also refused to support one of the main British demands: new voting rules to ensure that lenders based in London continue to be regulated by Britain.

Yet another concern for Mr. Schäuble was whether placing so much supervisory power within the European Central Bank could lead the central bank to compromise its decisions on monetary policy — if, for example, the E.C.B. were setting interest rates while also trying to oversee politically sensitive issues like bank bailouts.

“In the long run, you will damage the independence of the central bank,” Mr. Schäuble told the meeting.

Germany is the biggest financial contributor to the European Union, and establishing the single supervisory system could oblige Ms. Merkel to dip into the treasury to help prop up weaker European banks, like many of those in Spain. Such aid could be an issue for German taxpayers, ahead of national elections in their country next September. German citizens have already grown weary of paying most of the bill for bailouts, and they are wary of using more money to help banks in vulnerable southern European countries.

Another issue to be resolved in coming weeks will be the leadership of the group of ministers who oversee the euro area.

Jean-Claude Juncker, who has been the group’s president since 2005, reiterated at a news conference Monday night that he would step down at the end of this year or at the beginning of next year.

But he declined to signal his preference for any particular successor to the post, which gives the holder significant power over the agendas of their meetings.

Article source: http://www.nytimes.com/2012/12/05/business/global/daily-euro-zone-watch.html?partner=rss&emc=rss

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Netflix Wins Disney Movie Rights for 2016

December 4, 2012 by Leave a Comment

SAN FRANCISCO — Netflix’s video subscription service has trumped pay-TV channels and grabbed the rights to show Disney movies shortly after they finish their runs in theaters.

The multiyear licensing agreement announced Tuesday represents a breakthrough for Netflix as it tries to add more recent movies to its popular service that streams video over high-speed Internet connections.

It is the first time that one of Hollywood’s major studios has sold the coveted rights to Netflix instead of a premium television network like HBO, Starz and Showtime.

Starz currently holds the rights to Walt Disney’s movies under a deal that expires in 2015.

Beginning in 2016, Netflix will be able to show Disney movies about seven months after they leave theaters.

Netflix did not disclose how much it is paying Disney.

Article source: http://www.nytimes.com/2012/12/05/business/media/netflix-wins-disney-movie-rights.html?partner=rss&emc=rss

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Publicis Buys Ad Unit With Luxury Focus

December 4, 2012 by Leave a Comment

Publicis portrayed the deal as a vote of confidence in the continuing buoyancy of luxury goods advertising, in which, the company said, spending was expected to rise 7 percent worldwide this year, despite a generally downbeat outlook for advertising.

“The luxury market is an advertising segment ripe with investment opportunity,” Jean-Yves Naouri, chief operating officer of Publicis, said in a statement.

AR’s staff of 50 has worked with fashion brands like Valentino, Versace, Salvatore Ferragamo, Jimmy Choo and Dolce Gabbana, as well as brand owners like Moët Chandon, Banana Republic and Conrad Hotels, creating advertising and advising them on strategy.

While AR focuses on the U.S. market, Publicis said it would add the agency to a mini-network of agencies specializing in the luxury sector, including Publicis Shanghai, Publicis 133 Lux and Publicis EtNous. By joining Publicis, AR will also gain more direct access to the media buying clout of Publicis, one of the big four global advertising giants, alongside WPP, Omnicom Group and Interpublic Group.

“AR New York will now have the expanded resources of Publicis Groupe to continue to deepen our international growth — particularly in Asia and India, where many of our clients are actively driving new initiatives,” AR said in a statement attributed to Diane desRoches, the chief executive, and Raul Martinez, the chief creative officer.

Publicis declined to disclose what it paid for AR, which has grown quickly since its founding in 1996 and has gained a reputation for hip creative work.

“They are passionate about the powerful influence of contemporary arts, design and culture on consumers’ engagement with brands,” Mr. Naouri said.

Article source: http://www.nytimes.com/2012/12/05/business/media/publicis-buys-ad-unit-with-luxury-focus.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Media Decoder Blog: Netflix Bests Starz in Bid for Disney Movies

December 4, 2012 by Leave a Comment

LOS ANGELES — Walt Disney Studios said on Tuesday that it had completed a deal to show films from its Disney, Pixar and Marvel banners on Netflix, replacing a less lucrative pact with Starz.

The agreement is the first time that one of Hollywood’s Big Six studios has chosen Web streaming over pay television. Netflix has made similar “output” deals with smaller movie suppliers like DreamWorks Animation and the Weinstein Company, but all of the majors – Disney, Paramount, Universal, Warner Brothers, Sony and 20th Century Fox – have stuck with Starz, HBO or Showtime until now.

Library titles like “Dumbo,” “Alice in Wonderland” and “Pocahontas” will become immediately available on Netflix, Disney said. Netflix will begin streaming new-release Disney films starting in late 2016, when the existing accord with Starz expires. The deal announced on Tuesday includes direct-to-DVD titles.

Financial terms were not disclosed. The deal does not include films from DreamWorks Studios, which has a theatrical distribution arrangement with Disney but relies on Showtime as a pay-TV partner. However, the deal will ultimately include movies from Lucasfilm, which Disney is in the process of acquiring.

Ted Sarandos, Netflix’s chief content officer, called the deal “a bold leap forward for Internet television.” Janice Marinelli, president of Disney-ABC Domestic Television, said in a statement, “Netflix continues to meet the demands of its subscribers in today’s rapidly evolving digital landscape.”

The so-called pay TV window is one of the entertainment industry’s most important business tools.

In the past, Starz, HBO and Showtime have paid steep licensing fees of about $20 million a picture for exclusive rights a few months after films arrive on DVD. But Netflix — capitalizing on a consumer shift to streaming content on computers, tablets and Internet-connected televisions — has been aggressively going after the business by offering more lucrative terms.

With the Disney deal, Netflix will be able to offer customers exclusive access to a pipeline of films that are reliably some of the year’s biggest box office successes. Netflix has also made it a priority to strengthen its children’s and family offerings.

What does the loss of Disney mean for Starz? Anything that increases the marketplace clout of Netflix is damaging. Moreover, the premium cable service does not have the original programming strength of HBO or Showtime to fall back on.

Starz will continue to have films from Sony, but the absence of Disney movies will be a hole in its offerings. In a statement on Tuesday, however, Starz said that it had decided to part ways with Disney, not the other way around.

“Our decision not to extend the agreement for Disney output past that time allows us the opportunity to implement our plan to dramatically ramp up our investment in exclusive, premium-quality original series which will best meet the needs of our distributors and subscribers,” the company said in the statement.

Article source: http://mediadecoder.blogs.nytimes.com/2012/12/04/netflix-bests-starz-in-bid-for-disney-movies/?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,
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