November 28, 2020

Court Upholds Ruling on Dish Network’s ‘Hopper’

The ruling by the Ninth U.S. Circuit Court of Appeals affirmed a lower court’s ruling last fall and lent further support to Dish as it markets the Hopper, a digital video recorder that comes with the ad-skipping feature, which has the potential to undermine the television advertising business. The Fox network, which sought the initial injunction and then appealed, said it was disappointed by the second loss in court and would “review all of our options.”

Fox’s parent company, 21st Century Fox, and the parents of CBS and NBC sued Dish after the distributor came out with the Hopper’s feature, called Auto-Hop, more than a year ago. Dish quickly countersued. With the injunctions now refused twice, the case may move to trial.

Unlike most digital video recorders, which require users to manually bypass ads, Auto-Hop skips right past all the ads in a show without any user involvement. It’s as if the ads are erased, though for legal reasons they are not. When combined with another Hopper feature that automatically records all of the prime-time shows on ABC, CBS, Fox and NBC, Auto-Hop is a godsend for some Dish customers.

Analysts said that Wednesday’s affirmation of a November district court ruling could compel other distributors to try adopting similar ad-skipping functionality. But at the moment none have, so Dish can continue to promote the Hopper as a reason to subscribe to its service instead of its competitors.

“This decision is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control,” Dish’s executive vice president and general counsel, R. Stanton Dodge, said in a statement.

Fox’s statement pointed out that “the bar to secure a preliminary injunction is very high.”

Rejecting Dish’s positioning, it said, “This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract.”

In his ruling on Wednesday, Judge Sidney Thomas of the Ninth Circuit seemed skeptical of Fox’s copyright infringement claims, citing the Supreme Court ruling in the Sony Betamax case, which held that home recordings of shows were not infringements on copyright. The judge was more open to Fox’s argument that Auto-Hop breached Dish’s distribution contract with Fox, but was not persuaded to issue an injunction.

“It seems increasingly clear that the absolute control over all uses of their works that content owners such as Fox want is increasingly slipping through their fingers,” said Glynn S. Lunney, a Tulane University law school professor who has been closely following the Hopper case.

“While copyright never gave them absolute control, when copying and distribution technologies were large, expensive and bulky, as they were for most of copyright’s history, copyright could give content owners considerable control over where and how their content was distributed to consumers,” Mr. Lunney added. “As copying and distribution technologies have gone digital, consumers, not the content owners, are increasingly in charge of where and how they experience content. It’s hard to know where this sea change will lead us, but Dish’s victory is one more sign of consumers’ new authority over copyrighted works.”

Article source: http://www.nytimes.com/2013/07/25/business/media/court-upholds-ruling-on-dish-networks-hopper.html?partner=rss&emc=rss

New Pay Model for Times Apps

On June 27, the company will start charging nonsubscribers who want to read more than three articles a day on The New York Times apps for mobile devices. Until now, readers using the apps were able to access 10 to 15 stories a day exclusively from its Top News section without paying for content. Subscribers are able to access articles, blog posts, videos and slide shows from all sections of The Times.

After readers click through three articles, nonsubscribers will be able to browse section fronts and get article summaries. But they will have to become subscribers to read more than three articles. Web subscriptions that include mobile apps range from $15 to $35 every four weeks.

To encourage more readers to pay for the app, the company said it is also introducing a seven-day free trial.

Denise F. Warren, an executive vice president of the company, said that The Times had been planning for a long time to charge for content on its apps because readers had access to so many more articles there than they did on the Web site.

“We always knew there was an imbalance,” said Ms. Warren in an interview. “We wanted to restore that balance between the Web site and the apps.”

Since April 2011, when the company introduced a metered pay model on its Web site, The Times and The International Herald Tribune have attracted 676,000 paid digital subscribers. On the Web site, nonsubscribers can access 10 free articles a month.

This article has been revised to reflect the following correction:

Correction: June 20, 2013

An earlier version of this article gave an incorrect price range for Web subscriptions to The New York Times. The range is $15 to $35 every four weeks, not $15 to $20.

Article source: http://www.nytimes.com/2013/06/21/business/media/new-pay-model-for-times-apps.html?partner=rss&emc=rss

Media Decoder: The Economist Looks to Colleges for New Readers

An effort that is to begin on Monday will carry the theme “Dare 2 Go Deep With The Economist” – the numeral, presumably, echoing how so many members of the intended audience use shorthand when they communicate online and on mobile devices.

Indeed, digital media is the primary way that The Economist and its new advertising agency, Atmosphere Proximity in New York, intend to disseminate the campaign, which has a budget of just under $1 million. The ads will urge turning to The Economist for a deeper, more thorough understanding of what goes on in the world.

The centerpiece of the effort will be a special Web site, or microsite, dare2godeep.com, with content that includes video clips featuring comedians like J.B. Smoove, interactive games, information about The Economist and an offer for a free, two-week digital subscription.

Social media will also play a major role in the effort, including a presence on Twitter that includes an account with the handle @Dare2GoDeep and a hashtag, #IgoDeep.

The decision to reach out within campuses came from research that suggests many people start to read The Economist “after it’s recommended by a mentor, a professor, a parent,” said Paul Rossi, managing director for the Economist Group and executive vice president for the Americas, who is based in New York.

Getting issues of the magazine — in print or digital format — in the hands of potential readers who are at a life stage where they are “open to new habits, new ideas,” he added, represents an opportunity to recruit them “for life, in many cases.”

An effort aimed at university halls also fits in with the broader subscriber outreach typically done by The Economist, Mr. Rossi said, which is directed at “the worldly, intellectually curious.”

Anyone miffed at being excluded from the target audience for the campaign should not be, he added, because there are plans for an effort “aiming at a more general population later in the year.”

The decision in November by The Economist to hire Atmosphere Proximity was a signal that whatever campaign was to come would be digital-centric because the agency specializes in digital marketing.

“This is a great opportunity to use the dynamics driving the sound-bite culture” like social media “to get people to engage deeper and connect with the premium content of The Economist,” said Andreas Combuechen, chairman and chief executive at Atmosphere Proximity.

Atmosphere Proximity is part of the BBDO Worldwide division of the Omnicom Group. BBDO New York previously created campaigns for The Economist that ran in the United States. Abbott Mead Vickers BBDO, based in London, continues to create ads for The Economist that appear in Britain and Europe.

That the free, two-week subscription being offered is digital is no accident. The Economist is keen on increasing its circulation in nonprint venues.

According to data provided by Mr. Rossi, the magazine’s total worldwide circulation of 1,558,119 is composed of 1,455,261 print copies and 102,858 digital copies. North America accounts for 897,849 of the total worldwide circulation, and the breakout there is 831,978 print copies and 65,871 digital copies.

Article source: http://www.nytimes.com/2013/04/30/business/media/the-economist-looks-to-colleges-for-a-new-generation-of-readers.html?partner=rss&emc=rss

Bits Blog: Microsoft and Nokia Unveil New Lumia Phones

In a screenshot from Nokia's webcast of its event, Kevin Shields, a senior vice president at Nokia, discusses the Lumia 920.In a screenshot from Nokia’s webcast of its event, Kevin Shields, a senior vice president at Nokia, discusses the Lumia 920.

Microsoft and Nokia, two companies that have not gotten much traction in the smartphone market, are hoping for another chance. The companies on Wednesday unveiled a Lumia smartphone that includes the Windows Phone operating system — new models of products that have not sold well.

At a news conference in New York, Nokia and Microsoft showed the Lumia 920, a smartphone that includes its camera technology called PureView and a wireless battery-charging capability. It also briefly introduced the Lumia 820, a mid-priced smartphone with exchangeable covers. The smartphones run Windows Phone 8, the latest version of Microsoft’s mobile software system.

“This is the most innovative smartphone in the world,” said Jo Harlow, Nokia’s executive vice president. She said the smartphone takes better pictures and video, especially in low light, than any other phone camera on the market, and that it would include access to Nokia’s mapping database, which provides maps for 200 countries.

Nokia, once the biggest phone maker in the world, was dethroned by Samsung earlier this year. Based in Finland, Nokia has been trying hard to gain a foothold in the smartphone market with its Lumia line. It tried to make a big splash this year with the Lumia 900 on ATT, which cost $100 with a two-year contract. Both ATT and Nokia backed this phone with an enormous promotional campaign, but sales were still lackluster.

On Wednesday the company demonstrated a feature called Nokia City Lens, which allows people to point the Lumia camera at restaurants and other local businesses and see reviews digitally overlaid on top of the image. It also showed the Fatboy, a pad that the phone can be placed on to charge its battery.

Nokia

Microsoft used Nokia’s new phone to rehash some new tools in Windows Phone 8, like the ability to stitch together multiple images into a panorama with a feature called PhotoSynth. Later in the event, Steve Ballmer, Microsoft’s chief executive, said the new Lumia devices foreshadowed a big year for Windows.

“This is a year for Windows,” said Mr. Ballmer, referring to phones, tablets and PCs that would soon run Windows 8 or Windows Phone 8. “All of the devices are designed to be beautiful and functional, to work for you in your personal life and your professional life.”

The companies did not disclose prices or release dates for either of the phones, but said they would arrive in some markets in the the last three months of this year.

Article source: http://bits.blogs.nytimes.com/2012/09/05/nokia-microsoft-smartphones/?partner=rss&emc=rss

Thinking Entrepreneur: Turning Thanksgiving Day Into Black Thursday

Thinking Entrepreneur

An owner’s dispatches from the front lines.

I have spent my entire life in retail, as did my father and both of my grandfathers. I have always thought of it as an honorable profession.

But it has changed substantially over the last 50 years. In some ways it has gotten better, with more choices and lower price points. And in some ways, it has hit a new low. First came the lower level of service that accompanied those lower prices. Fair enough, it was a trade-off. Then came the phony pricing schemes, with the constant 50 percent sales, or the “buy one, get one (or two) free” sales. That was irritating enough. But this year, I think we crossed a line.

It wasn’t good enough for the biggest retailers to open the day after Thanksgiving at 5 or 6 a.m. This year we finally went mad. Some of the big stores started their sales at midnight — or even at 9 p.m. on Thanksgiving Day. This means that the employees had to get to the store right after their Thanksgiving dinners.

Forget the question of whether this is really necessary. It isn’t. The world won’t come to an end if people have to wait until Friday morning to go shopping. This is about decency, fairness and even safety. What do we think is going to happen when thousands of employees drive home after a full day’s work and after having lost a night’s sleep? Almost 200,000 Target employees have signed a petition asking corporate headquarters to allow them their day off.

I have admired, respected and shopped at Target for years. But I wonder what they are thinking. I can tell you what they say. They say they need to remain competitive (in this blog post, an executive vice president discusses the decision in more detail). But in what regard? In the race to the bottom?

Target has led the market in having better products, better looking stores and more engaging ads. They were not the first big retailer to open early for Black Friday, and there are certainly companies whose labor practices have attracted more scrutiny. In explaining this decision, Target’s human resources director said that the company’s “guests” would prefer to go shopping the night before rather than have to wake up in the middle of the night to shop before dawn. I’ve got an idea. How about opening at 9 a.m.? It seems to have worked just fine for about 100 years.

Target likes to call its customers “guests.” They are customers, not guests (even if they are spending the night). I get it. Guests sounds classier. But this is faux class. Real class is treating both your customers and your employees well. How about taking the lead in stopping this  competition, which is turning Thanksgiving Day into black Thursday? Is shopping what we should be thankful for?

One hundred years ago, it was factory workers who were being taken advantage of, which resulted in bloody battles and the birth of many unions. Are we going backward? What’s next, working Christmas Day? Family values are not about saving money on a plasma TV. The retail employees and their families deserve to have their holidays off.

All retailers have to come to terms with what hours they are going to be open. No matter what time you open or close, someone is going to be unhappy. The owner of the business has to balance the needs and wants of the customers with the needs and wants of the employees. At the end of the day (or season in this case), it is a zero-sum game. Yes, sales were up for this year’s Thanksgiving weekend, but it’s likely those sales would have been made in the coming weeks even without the early openings.

The fact is, most retailers did not choose to open on Thanksgiving night. Why not? Wouldn’t it have helped them be more competitive? Perhaps it would have (I’ve noted that no matter what time we close, someone is occasionally going to pound on the door). But most companies would never consider it.

Would you?

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=7ad182459f8bca98614e31aed1cd5144

You’re the Boss Blog: Turning Thanksgiving Day Into Black Thursday

Thinking Entrepreneur

An owner’s dispatches from the front lines.

I have spent my entire life in retail, as did my father and both of my grandfathers. I have always thought of it as an honorable profession.

But it has changed substantially over the last 50 years. In some ways it has gotten better, with more choices and lower price points. And in some ways, it has hit a new low. First came the lower level of service that accompanied those lower prices. Fair enough, it was a trade-off. Then came the phony pricing schemes, with the constant 50 percent sales, or the “buy one, get one (or two) free” sales. That was irritating enough. But this year, I think we crossed a line.

It wasn’t good enough for the biggest retailers to open the day after Thanksgiving at 5 or 6 a.m. This year we finally went mad. Some of the big stores started their sales at midnight — or even at 9 p.m. on Thanksgiving Day. This means that the employees had to get to the store right after their Thanksgiving dinners.

Forget the question of whether this is really necessary. It isn’t. The world won’t come to an end if people have to wait until Friday morning to go shopping. This is about decency, fairness and even safety. What do we think is going to happen when thousands of employees drive home after a full day’s work and after having lost a night’s sleep? Almost 200,000 Target employees have signed a petition asking corporate headquarters to allow them their day off.

I have admired, respected and shopped at Target for years. But I wonder what they are thinking. I can tell you what they say. They say they need to remain competitive (in this blog post, an executive vice president discusses the decision in more detail). But in what regard? In the race to the bottom?

Target has led the market in having better products, better looking stores and more engaging ads. They were not the first big retailer to open early for Black Friday, and there are certainly companies whose labor practices have attracted more scrutiny. In explaining this decision, Target’s human resources director said that the company’s “guests” would prefer to go shopping the night before rather than have to wake up in the middle of the night to shop before dawn. I’ve got an idea. How about opening at 9 a.m.? It seems to have worked just fine for about 100 years.

Target likes to call its customers “guests.” They are customers, not guests (even if they are spending the night). I get it. Guests sounds classier. But this is faux class. Real class is treating both your customers and your employees well. How about taking the lead in stopping this  competition, which is turning Thanksgiving Day into black Thursday? Is shopping what we should be thankful for?

One hundred years ago, it was factory workers who were being taken advantage of, which resulted in bloody battles and the birth of many unions. Are we going backward? What’s next, working Christmas Day? Family values are not about saving money on a plasma TV. The retail employees and their families deserve to have their holidays off.

All retailers have to come to terms with what hours they are going to be open. No matter what time you open or close, someone is going to be unhappy. The owner of the business has to balance the needs and wants of the customers with the needs and wants of the employees. At the end of the day (or season in this case), it is a zero-sum game. Yes, sales were up for this year’s Thanksgiving weekend, but it’s likely those sales would have been made in the coming weeks even without the early openings.

The fact is, most retailers did not choose to open on Thanksgiving night. Why not? Wouldn’t it have helped them be more competitive? Perhaps it would have (I’ve noted that no matter what time we close, someone is occasionally going to pound on the door). But most companies would never consider it.

Would you?

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=7ad182459f8bca98614e31aed1cd5144

HSN Tests Onscreen QR Codes to Encourage Sales

The network on Friday began running so-called QR codes, patterned data squares similar to bar codes, on its high-definition channel. The codes, featured on the corner of the screen, correspond to products for sale. A scan brings the shopper to a product page on HSN’s mobile Web site or its app, where there is an easy link to the checkout page.

Shoppers have for some time been able to scan QR codes in magazine ads or store windows, but HSN says this is a first for television. If viewers take to the HSN experiment, which runs through Monday, the network said a scan-to-buy feature — where a scan of the onscreen QR code would put the product directly in the viewer’s shopping cart — could be next.

Market research shows that many people do not use QR codes, but some retailers see them as a potentially lucrative form of marketing. Brands like Ralph Lauren, Rachel Zoe and Original Penguin have begun adding icons and color to the traditionally black-and-white codes in an effort to make them more engaging and distinctive. And HSN said this weekend’s experiment was mostly about educating its viewers about the codes, so they could be used more fully in the future.

“I’m sure consumers are seeing these QR codes, and we’re actually going to explain to people how to download a QR reader, how to scan it,” said Jill Braff, the network’s executive vice president for digital commerce.

Some marketing experts are not sold on the effort. Andrew Grill, chief executive of United Kingdom operations for PeopleBrowsr, a social-marketing firm, said there were alternatives to the QR code — like a shortened URL address for a product — that would be less demanding on the shopper, television or otherwise.

“My fear is that it is simply too complicated for consumers to bother with,” Mr. Grill said in an e-mail. “There are multiple steps between seeing and recognizing a QR code, finding a suitable reader on an app store or Web site, installing it, then redeeming a code.”

The enthusiasm for the QR codes stems in part from their versatility. Unlike the grocery-store bar code, the pattern of squares can be read both vertically and horizontally, so they can be packed with a lot more information. When smartphones became ubiquitous, and free QR code-scanning apps became available, marketers began running QR codes in ads and offering something in return for a scan — exclusive photos or a prize entry.

Still, only 6.2 percent of mobile users in the United States scanned a QR code in June, according to the tracking firm comScore. And the type of person scanning was most likely to be young and male — great if you’re selling shaving cream or headphones, less so if it’s luxury women’s clothing.

Now, though, marketers are trying to make the codes more widely appealing and convenient to use.

At HSN, the company knew that many viewers were buying products by using the Web browser on their mobile phones rather than calling the television network. That got company officials thinking, Ms. Braff said.

“They are watching us on TV and using a mobile device as a faster, more convenient means of checkout,” she said. “We thought about what if we married the two — what if we allowed people to scan a QR code during a product demonstration, which would bring them directly to that product page on the mobile device?”

The network began the four-day experiment as part of its technology-themed weekend. HSN is running the codes only on its high-definition channel, because the resolution on the standard channel is not good enough for a scan.

While HSN is taking the codes to television, brands like Ralph Lauren and Rachel Zoe are making the printed codes a little better looking by adding icons and color to them.

“They don’t have to be ugly and generic anymore — they can be cool,” said Matt McKenna, president and founder of Red Fish Media, which has created customized QR codes for a number of brands. “I can’t allow my customers to put a black-and-white bar code that looks like digital noise on something that someone’s spending millions of dollars on to look beautiful.”

During New York Fashion Week, a Rachel Zoe QR code had a little platform shoe inserted into it, while a Ralph Lauren QR code that was used in store windows recently showed the company’s iconic horse-riding polo player.

When scanned, the Rachel Zoe code took viewers to exclusive behind-the-scenes pictures, while the Ralph Lauren code sent them to a mobile site where they could win clothes and United States Open tickets.

Perry Ellis began using standard QR codes about two years ago for its brands CC California and Original Penguin, both of which go after a younger crowd, said Michelle Magallon, vice president for digital commerce at Perry Ellis International. Shoppers could scan the codes in order to receive the brands’ text messages about sales or new items.

In the summer, when the brands began running custom QR codes, she said, the codes started to serve another purpose: now the codes themselves were ads.

Still, Mr. Grill said the basic problem with the codes — they are hard to understand and to use — remained.

“Until technologies such as QR code readers are completely integrated into a mobile phone’s hardware, then my view is that adoption will be slow,” Mr. Grill said.

Article source: http://feeds.nytimes.com/click.phdo?i=a77ca62d58a3acbe987e30ad12c31be8

ESPN Extends Deal With N.F.L. for $15 Billion

At $1.9 billion a year, ESPN will be paying 73 percent more than the $1.1 billion a year it has been spending for “Monday Night,” the highest rated program on cable television. ESPN began carrying Monday night games in 2006 when its previous package of Sunday night games moved to NBC.

But when ESPN made that earlier deal, which will expire in 2013, it received no playoff games and no chance of carrying a Super Bowl, which is rotated among CBS, NBC and Fox. All ESPN had were the rights to carry 17 regular-season games a year.

The new deal provides a path to adding a wild-card playoff game on the network by providing the league with an option to give one to ESPN — which would appear to mean taking one away from another network.

How that develops will probably be part of the continuing negotiations with CBS, Fox and NBC, which will be under pressure to retain their N.F.L. rights, at possibly steep fee increases, during a sluggish economy.

ESPN’s agreement will allow it to further secure its role as the cable channel with more N.F.L. content than any other except for the NFL Network. Under the contract, ESPN will expand its use of video highlights and add 500 new hours of league-branded studio shows almost immediately, including adding a third hour to the Sunday program “NFL Countdown,” which will now start at 10 a.m., Eastern time.

The daily “NFL Live” program will expand from a half-hour to 60 minutes. The deal will also let ESPN stream its N.F.L. programming to Verizon cellphones. Tablet users will be able to see “Monday Night” games and other league programs by using the WatchESPN app.

“The value of the N.F.L. to us is the ubiquity of the sport across our platforms all the time,” said John Skipper, the executive vice president for content for ESPN. “It’s just stupendous for us. It’s daily product — we don’t have a day without the N.F.L.”

He called the new deal, even at a much higher cost, “fiscally prudent for us” and one that “we will be able to absorb and continue to grow.”

For ESPN, the length of the deal, eight years, is advantageous because it will span a period when it will renegotiate all of its deals with cable, satellite and telephone companies — which will almost certainly lead to subscriber fees exceeding the more than the estimated $4.50 a month that ESPN now charges.

In a conference call, George Bodenheimer, the president of ESPN, said there would not be a specific “N.F.L. surcharge” added to subscriber fees. But, he added: “No portion of any of our fees is associated with any product. Our fees are based on the value of our products.”

Neal Pilson, a sports industry consultant, said ESPN’s $1.9 billion annual payment was affordable in cable economics.

“Hypothetically,” he wrote in an e-mail, “if you say 50 cents or one dollar (or more) of the $4.50 monthly sub fee is attributed to the N.F.L. on ESPN (and push that forward to support future increases in sub fees), you can easily justify the rights fee given all the programming and content ESPN will be carrying.”

At $15.2 billion for eight years of N.F.L. rights, ESPN’s contract greatly exceeds the size of recent deals like CBS and Turner’s $10.8 billion agreement to carry the N.C.A.A. men’s basketball tournament for 14 years and NBC Universal’s $4.38 billion investment in the four Olympics from 2014 to 2020.

ESPN made losing bids for the N.C.A.A. and Olympic contracts, perhaps signaling that the deal it really wanted was the N.F.L. extension.

“We do not have a more important deal than the N.F.L.,” Skipper said.

The league’s next TV deal might be for a second Thursday night package of games to augment the one that is now carried by the NFL Network. But the creation, and sale, of a second such collection of eight games is not imminent. Goodell said, “It’s not likely we will do it in the next year.”

Article source: http://feeds.nytimes.com/click.phdo?i=ddbaf37c03a8dfb980ec2b232c45650b

The Boss: Out of Cuba, With a Suitcase

We escaped to Jamaica on Aug. 22, 1961, then flew to Miami and were processed at the Freedom Tower. After that, we moved to New Britain, Conn., and stayed with my uncle. Each of us had taken just one suitcase from Cuba because my parents thought Castro couldn’t possibly stay in power long. But we stayed in Connecticut for nine years.

We left for Miami just before I started 10th grade, and I knew no one. The first day, I walked into Algebra II and saw two empty seats, one next to a girl and the other next to a guy. I sat next to the girl, and by Thursday of that week, I knew that she had also emigrated from Cuba, and she did her homework every night, and let me copy it every morning. Her name was Marcia, and I married her after our freshman year in college. We’re still married and have two children.

I attended the University of Florida for a degree in accounting. My father was an accountant, and I thought that having that background would give me a leg up in business. I was a competitive runner, but I knew that I wouldn’t be able to run well and be happily married and still get straight A’s. Something had to give, so I gave up running.

In 1977, I started working at what was then Peat, Marwick, Mitchell Company and stayed for three years. Then I worked for Certified Vacations, which operated Delta Dream Vacations. I was executive vice president for sales and marketing when I left in 1993. I learned how to run a business there.

Next, I joined Renaissance Cruises as senior vice president and chief financial officer, then became co-C.E.O. Renaissance was a luxury line that went bankrupt when the travel business plummeted after 9/11. The company and I had parted ways, however, before the attacks.

In 2002, I founded Oceania Cruises with a group of investors. We bought three ships that had belonged to Renaissance, and in 2007 sold a majority stake to a private equity firm. In 2008, we acquired Regent Seven Seas Cruises. The brands compete against each other, but we’ve achieved synergies and each company has learned from the other. Both are now under Prestige, the parent company.

I recall sitting around the table when we were starting Oceania, trying to come up with something different to offer. We had only $14 million in capital, a drop in the bucket for a cruise line. We had to find a business plan that improved our odds. Itineraries are similar for many cruise lines, so we focused on cuisine and teamed up with the chef Jacques Pépin.

I learned two lessons from the Renaissance bankruptcy. One is not to discount the importance of travel agents. Every business organization that has tried to marginalize them has paid a price. Many people thought that the Internet would eliminate all brick-and-mortar businesses, and travel agents were a symbol for them at that time. But travel agencies have evolved, and cruises are a complex product. Our travel-agent accounts are our lifeline.

The second lesson is, innovate or evaporate. But it’s just as bad to innovate too much as it is to do too little. As with anything, you need balance.

I’ve also learned that there’s no substitute for honesty. If you’re honest during good times and bad, people may disagree with you, but they’ll always trust you. I’d rather have someone’s trust than just about anything else.

As told to Patricia R. Olsen.

Article source: http://feeds.nytimes.com/click.phdo?i=7980fedf4fb4890dcab342cafdec87cb

Toyota Expects 31 Percent Profit Slump

TOKYO — Toyota Motor said Friday that it expected its annual net profit to fall almost a third from the previous year, hurt by production disruptions after the earthquake and tsunami that struck Japan in March.

The company’s prediction of a 31 percent decline in net profit to ¥280 billion, or $3.5 billion, for the year ending in March 2012 was gloomier than expected. Analysts had been anticipating a profit forecast of about ¥422 billion, according to a survey by Bloomberg. In the same period the previous year, Toyota earned ¥408 billion.

But Toyota’s forecast also projected a robust recovery in the coming months as the automaker made headway in mending its supply chain. Though Toyota’s 17 plants in Japan escaped the disaster relatively unscathed, factory lines have been working well below capacity, as vital suppliers in the country’s worst-hit areas have raced to restart operations.

Sales for the year are expected to shrink 2 percent to ¥18.6 trillion, the company said.

Toyota reiterated that there would not be a complete recovery in global production until November. Still, there have been signs that output may be bouncing back more quickly than expected. Last month, the automaker said production would begin recovering in June in all regions of the world, a month earlier than previously announced.

Even with a recovery, Toyota is still likely to lose its title as the world’s biggest automaker by sales to General Motors and be passed by Volkswagen as well, giving up its crown after just three years. Toyota now expects to sell 7.24 million vehicles for the year through March 2012, down from 7.31 million vehicles in the previous year.

A Toyota executive downplayed the importance of global rankings.

“We don’t see it as necessary to be the largest automaker in the world,” said Satoshi Ozawa, Toyota’s executive vice president.

Toyota executives have tended to avoid tough talk about global market share, especially after the company’s embarrassing spate of recalls in 2009, saying that customer trust and safety were more important.

Also weighing on production at Toyota are electricity shortages in Japan since the accident at the Fukushima Daiichi nuclear plant. Many other nuclear power plants are being kept closed as Japan rethinks its nuclear policy, leading to concerns about a power crunch this summer, when energy use peaks. A nuclear power plant that supplies the region where Toyota’s headquarters and its surrounding factories are located was shut down in May over concerns that it was vulnerable to tsunamis.

Japanese automakers, together with other manufacturers, are being asked to reduce their electricity use 15 percent this summer. Toyota officials have said they will do their best to cut electricity use, moving some shifts to the weekends to avoid peak times.

On top of the physical disruptions wrought by the earthquake, the strong yen continues to hurt Toyota earnings by blunting its competitiveness overseas and eroding overseas profits when repatriated into the home currency. The dollar has been trading at about ¥80, down from close to ¥95 a year ago.

The higher costs of producing cars in Japan has raised the question of how long Toyota can continue to base so much of its production in its home country.

Even compared with its peers, Toyota stands out in the number of cars it still manufactures in Japan, then ships overseas — a setup that has become a drag on its profitability. In 2010, Toyota made 43 percent of its cars in Japan, while Nissan made 28 percent and Honda 27 percent.

Akio Toyoda, Toyota’s president and a member of its founding family, has repeatedly said the company remains committed to keeping production and jobs inside Japan. But Friday, Mr. Ozawa hinted that Mr. Toyoda’s thinking might be changing.

The disruption caused by the earthquake and the strength of the yen had helped to remind Mr. Toyoda recently that his automaker was a global company, not just a Japanese company, Mr. Ozawa said.

“Someone told me the other day that Toyota manufacturing is not owned by Japan. When it’s put like that, I struggle to answer,” Mr. Ozawa quoted Mr. Toyoda as saying.

Article source: http://www.nytimes.com/2011/06/11/business/global/11toyota.html?partner=rss&emc=rss