Millennials Better at Saving Than Previously Assumed

Millennials are often stereotyped as being bad with money. Many people view those 20-something-year-olds as frivolous spenders, more concerned with the here and now than with the future. However, according to recent research, Millennials don't actually deserve this classification. According to Jonnelle Marte's L.A. Times article, they are saving much more aggressively than in past years, and in some cases are saving more than their middle-aged counterparts.

In the study, "Millennials" were defined as consumers between the ages of 18 and 29, and the results blew away many assumptions previously made about their age group. About 62% of Millennials are saving more than 5% of their income for retirement, emergencies, or other future financial goals. This is a significant improvement from last year when only about 42% of Millennials put the same portion of their pay toward savings. Comparatively, it was found that about 50% of consumers between the ages of 30 and 49 were putting as much into savings.

Analysts believe that Millennials' interest in saving money for a rainy day may come from personal experience or what they saw family members go through. Many, especially those straight out of college, struggled to get a job during the recession. Others, even if unaffected themselves, watched as family members were hit by layoffs and saw how hard it was for parents or even grandparents to recover. Likely because of this, 40% of Millennials are putting their savings aside for an emergency, rather than for retirement or something else that would matter the most in the distant future. They know how hard it can be to survive if they unexpectedly lose their job, and as such, want to be sufficiently prepared.

How are Millennials able to save more money now than in previous years? Some are cutting their spending, realizing that instant gratification isn't worth potential financial struggles in the future. Others are getting better jobs or being promoted to better-paying positions in the recovering company, and therefore are earning more money and are more able to put some of it toward savings. Some went back to school when they found that they couldn't find work during the recession and are putting their degrees to use in getting jobs now.

Not all Millennials are choosing to put their money aside for emergencies. Many are saving in order to be able to afford big purchases in the near future. About 27% are saving for a future home, 26% are saving for a car, and 36% are saving to go on vacation. No matter what they are saving for, researchers agree that Millennials have come to understand the value of saving, often more than their older counterparts. When asked about their major goals, the majority chose "saving", while smaller, but still significant, portions chose "leading a healthy lifestyle" or "paying down debt." Saving money can have a positive impact on anyone's life, so it's a good thing that more individuals have come to realize the value of saving over spending.

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Disneyland to Incorporate Surge Pricing in Response to High Demand

Nearly 40 years ago, Robert Crandall, the then chairman of American Airlines, first employed a "dynamic pricing" system through which customers could get "super saver" fares, which adjusted based on demand and seat availability, among other factors. Since then, dynamic pricing has spread throughout many markets, which has caused surge pricing to be more of a normal part of the economy. As described by James Peltz, in his L.A. Times article, Disney became one  of the most recent companies to join airlines, online retailers, and ride-sharing applications in employing dynamic pricing.

While Disney's decision to incorporate surge pricing at Disneyland and its other theme parks may have come as a surprise to many customers, business analysts saw it as the sensible move for the company. Airlines are able to fill more seats without becoming overbooked using dynamic pricing because the pricing strategy encourages customers to buy seats on days where demand is usually lower. In that way, both customers and airlines can benefit. Customers are able to get a discounted price while airlines are able to sell tickets and fill seats on an otherwise underbooked flight. In much the same way, Disney will be able to control daily traffic to some extent.

Under the new policy, visitors will have prices ranging from a 4% discount on low-traffic days to a 20% surcharge on exceedingly busy days. This plan allows Disney to follow the same laws of supply and demand that all businesses do. Disney's supply is limited since they can only allow a certain number of visitors at any given time. Very often, especially in the summer months, when many people are out of school or are able to take time off from work, more people want to enter the parks than can be safely admitted, so some have to be turned away. This is bad for business, because it reduces the number of tickets Disney can sell, and it leaves potential customers with a bad taste in their mouth and make them less likely to want to return to the park in the future.

So, rather than turning away potential customers, surge pricing can convince customers that their day of enjoyment at the park might be more worthwhile if rescheduled to a different day. If they visit the park on a low-traffic day, the visitors will not only receive reduced prices, they will also be in a much less crowded park, which will allow them to enjoy more rides and attractions. Dynamic pricing has become more prevalent in the society because of improvements in computing technology. American Airlines was able to employ surge pricing originally because they had a computing system that allowed them to easily compare prices and availability, enabling them to sell seats at competitive prices. For most businesses, dynamic pricing was impossible until their data became much more computerized.

From ride-sharing services like Uber to the stock market to auto dealerships, dynamic pricing has spread throughout most markets. Data is key in determining competitive pricing. Teams use data from previous games and sales of merchandise in order to determine which games will be most in demand, and therefore should have the most highly-priced tickets. Pricing for hotels can be determined based on the events happening in the area and the level of demand for short-term housing. In general, improvements in computing technology have made pricing a huge part of sales and have improved the profit margins of many businesses. In the future, dynamic pricing will likely spread to every business, thus giving customers a choice. A potential customer may not like the increased price, but when it comes down to it, they can either take it or leave it. Every customer has the choice whether to purchase something or not.

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"The Wizarding World of Harry Potter" at Universal Studios Hollywood Expected to Greatly Increase Park's Revenue

J.K. Rowling's "Harry Potter" franchise has made the author a millionaire and a worldwide sensation in the relatively short time since she first published "Harry Potter and the Philosopher's Stone," the first book in a seven-part series. While it took her quite a while to find a publisher that was willing to take a risk on the new author, when she finally did, the series took off and quickly became the best-selling sensation it is today. Between the seven books in the main series, three other books set in the same universe, 8 movies, and all of the different kinds of merchandise, "Harry Potter" has been a huge money-maker over the years. One of the largest sources of merchandise income has been Universal's "Harry Potter World" in Orlando, Florida. Hugo Martin, in his L.A. Times article, discusses the upcoming opening of a new theme park, this time in Los Angeles: The Wizarding World of Harry Potter, at Universal Studios Hollywood.

Everyone expects the new theme park to be a huge success, both for the franchise itself and for Universal Studios Hollywood, which has undergone millions of dollars in renovations over the past couple of years in an attempt to bring in more visitors. In 2014 they started with a Despicable Me-themed attraction called Minion Mayhem and continued into 2015 with the Simpsons Springfield land and a new Fast and Furious ride. The new Harry Potter attraction, however, while still smaller than its Florida counterpart (about one-third of its size) is expected to do more for Universal's bottom line than any of the other attractions.

Besides the fact that the new Wizarding World of Harry Potter will attract more visitors to the theme park as a whole, analysts believe that a large portion of the increased income will be due mainly from merchandising. In 2010, when Orlando first opened a Harry Potter World, park attendance went up by 20% and total revenue increased by 41% in the first year. Analysts believe that a similar trend will be noticeable at the Los Angeles analog. Between souvenirs like wands or robes and food options like butterbeer and chocolate frogs, the Harry Potter World is expected to make a killing among die-hard fans and regular folks alike. With a franchise like Harry Potter, there is very little that can go wrong, since the fans, known as "Potterheads," are so invested in the series that nay addition to the magical world is seen as a welcome surprise.

Members of Universal Studios' sales and design teams have come up with many clever ideas to make the theme park a huge money-maker. Replica wands ($39.95) can be purchased to match a favorite character's, and for a slightly higher price ($47.95), one can purchase an "interactive" wand. These interactive wands are specially designed to activate lights and motors specially incorporated into some of the wizarding world's attractions when waved in a certain manner. Not only do these wands bring in more revenue, they also add to the overall ambiance of the park and make visitors feel more immersed in the magical world that Universal is creating. Costumed employees add to the "realism" of the immersive world, and visitors will have the ability to purchase robes, wands, and the like to add to their personal collections.

The Wizarding World of Harry Potter should be a huge success for Universal Studios Hollywood. As of now, it is smaller than the one in Orlando, but with enough traffic and high demand, the park will likely expand in future years. 2016 seems to be the year for all things Harry Potter related. Not only is California's wizarding world opening, but Rowling's sequel to the Harry Potter series, titled "Harry Potter and the Cursed Child," will be performed in English theaters in July and the script should come out in print soon after. Finally, "Fantastic Beasts and Where to Find Them," one of Rowling's other books set in the wizarding universe is currently in filming and is set to be released in movie theaters in November. One might expect that all of this new content will eventually be incorporated into new Universal attractions, which should make for even more income in the not-too-distant future.

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Alphabet to Surpass Apple as "World's Most Valuable Company"

For years, Google Inc. was always known for its internet/computer science businesses, including its online search database, maps, advertising platform, YouTube, Android, and more. In recent years, Google began investing more and more time, effort, and money in other kinds of technologies. From healthcare devices to drones to self-driving cars, Google has had its hand in many types of technological innovations. Unfortunately, that led to a somewhat unwieldy business model, in which every product/ technological focus was grouped under the single title of "Google." Paresh Dave and Andrea Chang discuss in their L.A. Times article how Google recently underwent a business shift and created a new corporation, Alphabet Inc., within which several subgroups focus on different realms of Google's technological goals.

Not only has the creation of Alphabet Inc. made the business more structured, it also has generated plenty of investor interest. In fact, according to Dave and Chang, Alphabet Inc. is well on its way toward claiming the position of "world's most valuable company" from competitor Apple Inc. In the fourth quarter, Alphabet showed that profit had grown by double-digits, and proved to investors and the world that projects like self-driving cars and virtual reality glasses were not wasting resources, but instead earning revenue. Where analysts expected Alphabet to earn $16.9 billion, the company surprised everyone by reporting $21.3 billion in revenue, an improvement of 18% over the course of two years.

Last summer, when Google first began changing to the Alphabet structure, the company aimed to separate online ventures from those involving physical technological innovations. Each of the individual units of Alphabet is designed to have flexibility over its own budget and operations, but in the end, Alphabet itself will keep watch over each sub-business and make the major business decisions. Certain ventures labeled as "Other Bets," which include YouTube and smart-thermostat maker Nest, had a loss of over $3 billion in 2015, which was to be expected, according to Alphabet's analysts. Loss is expected during the R&D stage of technological innovation, but executives believe that the loss is at an acceptable level based on predictions of future revenue.

Alphabet's momentum seems almost unstoppable. In the past year alone, Alphabet's stocks have risen more than 40% in total. On the other hand, Alphabet's major competitor, Apple, is having plenty of problems that have led their stock values to fall. As mentioned previously, much of Apple's recent troubles have been closely linked to the company's reliance on a single product: the iPhone. Since iPhone sales have gone down, Apple's stocks have taken a plunge. Alphabet's new business model will help to reduce the chances of a similar situation taking place, since the variety of sub-businesses means that even if one sub-business has trouble, it will have little effect on the company as a whole.

Overall, economic analysts believe that Alphabet will keep improving and that its stock prices will continue to increase. Executives have seen continuous increases in the number of users of Gmail and the Google Play Store. They also expect that advertisements on Google and YouTube will be very important for Alphabet's future revenue. Since Alphabet's creation, revenue rose nearly 14% and profit for the year rose by 16%. In the past year, Alphabet also added over 8,200 new employees. As you can see, Alphabet seems very confident about the company's future growth and is planning accordingly.

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General Motors Prepares to Become More Involved in "Ride-Sharing" Economy

Companies like Airbnb, Uber, and Lyft work based on opportunities available in what is called the "sharing economy." This generally means that their businesses run on the principle of connecting individuals that are willing to share their home or vehicle, for the right price. This type of business model is also known as "crowdsourcing" or "crowdfunding," and mainly involves the business creating an app or website, and acting as an impartial mediator between owners and consumers. Samantha Masunaga and Charles Fleming discuss, in their L.A. Times article, a new type of crowdsourced company called Maven, which involves the short-term rental of vehicles.

Just as Airbnb involves the short-term rental of a home, condominium, or apartment, Maven allows for users to "rent" a car for a short time. While the service has recently started in Ann Arbor, catering toward students at the University of Michigan, the company has plans to expand to other cities as the year progresses. Through this car sharing service, launched by General Motors, provides a free app on smartphones, which can be used to reserve a vehicle and unlock it. GM expects that a relationship with ride-sharing Lyft and its experience with services like OnTrac will help to make Maven a success.

General Motors is not the only company trying to get its foot in the door of this potentially lucrative business opportunity. Ford started a similar service in June and GM started a version in Germany called Car-Unity, which allowed rental to Facebook friends or members of the app's network. BMW has even begun to include features on their newest cars to allow for app-based connectivity. Everyone benefits: people have the ability to borrow a vehicle when they need one, and the owners of the vehicles are able to somewhat subsidize the costs of purchasing the vehicle in the first place.

Analysts wonder whether GM's decision, while bold, has long-term potential for the future. GM recently bought a failing ride-hailing company called Sidecar Technologies, Inc. and invested $500 million in Lyft. It seems that GM is trying to be prepared for any possible entrance into the ride-sharing market, and plans to do so by partnering with the best in the business. One day, GM hopes to partner with Lyft on an Autonomous On-Demand Network, which would even allow users to reserve self-driving cars. Although the market for self-driving cars has yet to fully expand, GM is planning ahead, predicting that today's investments will ensure success down the line.

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Apple Stocks Fall, Partly Due to Struggling Chinese Economy

While Apple is a large company with a variety of different products, many investors measure the company's success solely on the sales of a single product: the iPhone. Because of its popularity around the world, analysts tend to use the statistics of iPhone sales to monitor how the company as a whole is doing. Unfortunately, when iPhone sales are down, investors see this as a red flag and look to jump ship, thereby causing Apple stocks as a whole to go down. Paresh Dave and David Pierson write in their article about some of the possible factors contributing to lowered iPhone sales, as well as how this affects the company.

While just over a month ago, Apple stocks closed at $119, the same stocks have recently taken a plunge, going under $100 for the first time since October 2015. That's a decrease of over 15% in a single month, not a good sign for executives and potential investors. The iPhone 6S, this year's iteration of the popular cell phone, hasn't sold as well as predicted, in China as well as throughout the rest of the world. Several rumors have surfaced that assemblers and manufacturers of iPhones have recently been bracing for a slowdown in production, and financial analysts have determined that Apple has reduced supplies to Asian distributors.

While all of this may be coincidental, investors have taken these signs to be harbingers of future turmoil for the company and have decided to pull out for the time being. China's economy, which has doubled in the 7 years since Apple first opened stores and factories in the country, has a large impact on the company's success and failure, whether we like it or not. China's middle class is slowly expanding, opening up the market for iPhones to a much larger group of people, which will be good for sales when the economy gets back on track.

It seems that the first sign of a downturn for iPhone sales appeared in mid-December, when companies like Jabil Circuit and Dialog Semiconductor, which produce casings and internal parts for the iPhone reported lower-than-expected revenue predictions for the coming months. Decreased sales could be due to the fact that the newly released iPhone 6S is not very different from last year's iPhone 6, which would explain reduced demand, or it could be due to more economic factors. Either way, Apple seems confident that sales and stocks will go back up in the near future, especially with the new iPhone 7 in the works. While growth may be slow in 2016, executives believe that revenue will continue to grow at a rate of about 5%.

Where iPhone sales didn't boom as greatly as expected, products like the Apple Watch, iPad Pro, and Apple TV were popular gifts during the holiday season, thus boosting Apple's total revenue over the past couple of months. Apple executives are certain that China will remain a huge market for iPhone sales, but that it will just take a little bit of time for the economy to catch up again. In the long run, China is still one of the biggest markets for Apple products, even with current economic turmoil messing up sales. Eventually, Apple stocks should go back up, but the question is: How soon?

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Online Shopping's Increased Popularity Causes Extended Shipping Delays

Just in December alone, it is expected that United Parcel Service will deliver a total of about 420 million packages in the United States while its competitor Federal Express will deliver about 228 million. The U.S. Parcel Service is also in the game, expected to ship about 545 million packages this month. All together, they will be shipping a huge amount, almost 8% more than they did at this time last year. According to Samantha Masunaga, in her L.A. Times article, this dramatic increase in the number of people and retailers needing to ship packages is due mainly to a recent increase in e-commerce.

This year, many retailers offered Black Friday deals on their websites, essentially giving their customers a choice. They could come into the store on Black Friday and shop, finding deals and purchasing items to take home with them immediately. Or, they could shop online, earning the same deals and reduced prices as in the store, and have the item shipped. Sensibly, many customers chose the second route, choosing to wait a little bit longer for their item rather than braving the hectic battle in the store on Black Friday. While this online integration by the retailers helped to keep Black Friday running more smoothly in stores, it came as an unexpected hit among shipping companies, whose predictions were far surpassed, which led to many delays on deliveries.

With the holidays approaching, shipping companies were getting even more overwhelmed with many more orders than in previous years. Because of that, they began telling customers that there would be no assurances that their package would arrive before Christmas unless they used the higher-cost options, like two-day or overnight shipping. Even those options were not perfect. UPS's on-time delivery rates for two-day and overnight delivery have varied throughout the month, ranging around 97%. Basically, when it comes down to it, even the more expensive options are not a guarantee, so consumers should plan ahead and order far in advance if they want to make sure their item arrives in a timely fashion.

Cyber Monday sales exceeded expectations, reaching $3.07 billion, which was 16% more than last year's sales. During Black Friday, about 103 million people got their deals online while 102 million preferred to do their shopping in brick-and-mortar establishments. Online purchases this year, especially during its final months, soared higher than ever expected, which is why shipping delays occurred. While shipping services were prepared for higher demand than in previous years, they could hardly know exactly how much the demand would increase, so the explosion of e-commerce's popularity caught them off-guard. Even for many online merchants, this year's demand was surprising. For several retailers, popular items ran out very quickly, and some even experienced crashes on their websites due to the increased traffic.

Most people in this day and age have a smartphone or some other way to get online while on the go. Because of this, online shopping may be easier and more appealing than having to go to stores and hope that they have the item you want in the correct size or color or style. It is simpler to just go to a website, type in exactly what it is you want, and order it. Over the holiday season, about 25% of e-commerce shopping was done via a mobile device. Our society's increasing dependence on new technology could be a reason why retailers have integrated more of that same technology into the shopping experience, making it easier and faster for potential customers to shop with them.

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New Credit Card Chip Technology Makes Debut as Holidays Approach

Have you recently noticed having a longer wait when checking out at various stores? Part of the reason is that there were more people out shopping, in preparation for Thanksgiving and Christmas. Another reason is that checkers are having some difficulty getting used to new systems designed to deal with the new "chip" credit cards. In Samantha Masunaga's L.A. Times article, she describes the new type of credit card, the reasons why it was created, and how its creation has affected shoppers.

While everyone expects longer lines around holiday times, analysts expect that the new credit cards may make lines extra long this year. Starting October 1st of this year, many new credit cards began to come equipped with a small metallic chip. This chip, which makes purchases safer and fraud harder to commit, has also caused something of a headache in that it has forced merchants to install new terminals that are able to accept the new cards. Since it is expected that 70% of cards will have the new chip technology by the end of the year, most merchants and card issuers have found that they should jump on the bandwagon.

While shoppers and checkers are all still trying to get used to the new card chips, leading to confusion and a longer wait time, eventually, as the chips become more common, it is expected that the lines will go back to normal. In all, though, customers seem to be taking the longer lines in stride, understanding that the increased security is worth a little bit more of a wait. Because it makes it harder to create a fake credit card or steal another person's information, the chip in the credit card helps to reduce identity theft and fraud.

Major retailers like WalMart, Target, and Home Depot have already transitioned to new technology that can accept chip cards, but some smaller companies are yet to complete the transition. However, by 2017, all merchants, including gas stations, will be forced to adopt new terminals that can accept the chip cards. Some shoppers have admitted to avoiding using their new chip cards, at least for the time being. While the difference between a chip card and a standard magnetic strip card can be as little as a few seconds, a delay of a minute or two can be caused by someone trying to swipe a chip card. If the mistake occurs several times throughout the day, the seemingly insignificant delays can add up. Because of this, many people not accustomed to the new technology try not to use it, so as to avoid causing a hold-up in the checkout line.

Some merchants claim that they argued with credit card companies about releasing the new cards right before the holidays, out of fear for potential back-ups. They would have preferred to start the new cards in January or February when customer traffic is less and slightly longer lines would be not as noticeable. Unfortunately, credit card companies chose to issue the new cards late this year. On the positive side, customers will be able to get plenty of practice over the holiday season and learn to use the cards properly. Some stores claim that delays are unnoticeable, others state that lines are only slightly longer, and customers have reported some even longer delays. Either way, even if the issue is minimal, use during the next month or so will provide shoppers with the chance to master the new technology and keep even minimal delays reduced in the future.

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Some Stores Find Black Thursday Not As Profitable in the Long Run

Where several stores have decided to push up their Black Friday sales earlier on Thanksgiving day, many others are doing the opposite, closing their stores for the entire holiday in a show of support for those shoppers and employees who wish to spend time with their families. In her L.A. Times article, Samantha Masunaga investigates some of the deeper reasons behind the closure, as well as the financial implications for the businesses.

Over the past couple of years, Black Friday sales have been starting earlier and earlier. Historically, Black Friday is the day after Thanksgiving and is a time when people can get good deals on new electronics like video game systems, televisions, and handheld devices. Until relatively recently, Black Friday started around midnight on Thursday night (technically Friday morning) and continued throughout the day. As companies began to realize that Black Friday sales brought in a lot of income, they started opening as early as 8 or 9 PM on Thanksgiving itself, enabling the sales to last longer and bring more customers into their stores.

This year, though, some companies are pushing it even earlier, some as early as 5 or 6 PM on Thanksgiving, which cuts family time pretty short for employees. In opposition to this, many slightly smaller companies are choosing to remain closed all of Thursday, with a belief that the few extra hours will not make much of a difference in the long run. Companies like Staples, Gamestop, and H&M have announced that its stores, headquarters, and distribution centers will be closed for the holiday. This decision, while upsetting to some potential shoppers, could potentially lead to greater loyalty among other customers who see that the companies care about enabling their employees to spend time with their families on the holiday.

Furthermore, many of the smaller retailers have come to a realization that opening their stores earlier for Black Friday doesn't have so much potential for profit. Analysts have shown that larger retailers, who can more afford to purchase big-ticket items in bulk for very reduced prices, are helped by a longer Black Friday, but that the smaller stores don't stand a chance trying to compete. So, this year the smaller retailers are concentrating on building goodwill and encouraging customers to shop online, then are opening up on Friday with their Black Friday sales. Statistics even show that those stores that opened early on Thanksgiving had a reduce in sales of about 11% over the rest of the weekend since those people who shopped on Thanksgiving were less likely to come back later.

Large companies may find out eventually that starting Black Friday on Thanksgiving does not positively affect them to the required extent to make a sizable profit. After all, when employees work on Black Friday, especially the portion of Black Friday that falls on Thanksgiving day, they get paid a higher hourly rate. At some point, the stores will reach a point at which sales are maximized while costs are minimized, at which point they will try to open their stores at that sweet spot every year. Because they continue to open ever earlier, it appears that they have not yet found that perfect time. Maybe they will eventually go back to being closed during the entire holiday, whether due to a lesser profit ratio or a surge in public opinion. It's hard to tell, so we will just have to wait and see.

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Google to Offer New "YouTube Red" Subscription-Based System

Where YouTube once made all of its income through advertisement sales, the Google-owned company is planning to make a big change. Starting next week, YouTube will be providing an option for viewers to pay $9.99 per month to be a part of a service called YouTube Red. As described by Saba Hamedy and Paresh Dave, in their L.A. Times article, this service will not only remove advertisements from most videos, thereby enhancing the viewer's enjoyment, but will also provide the ability to download content and stream music from Google Play.

YouTube, which first opened in 2005, grew in popularity very quickly and as purchased by Google a year later. Since then, while videos on YouTube get millions of views per month, Google has found that the well-known site is not quite the money-maker it might have been expected to be. Analysts believe that this is because YouTube is free, in general. Artists, musicians, instructors, and entertainers can upload videos for free, and people around the world can watch, like, and comment those videos for free. Only videos with advertisements provide any sort of income to YouTube and the maker of the video.

Now, with YouTube Red, Google's parent company, Alphabet Inc., expects to make far more money from the site without increasing advertisements or drastically changing its currently free setup. Analysts YouTube Red has great potential to become hugely profitable, but only if YouTube finds a way to overcome competition by Facebook, Vimeo, and Snapchat, among several other competitors.

Furthermore, will it really be worth it to viewers? Is the removal of ads, even on top of the addition of all kinds of new content by such YouTubers as The Fine Bros, Lilly Singh, and Pewdiepie, really worth the $10 per month that it will cost. YouTube tends to be targeted more toward teenagers and younger Millennials, so that would also mean that subscription to YouTube Red would probably fall under the jurisdiction of viewers' parents, who may not be willing to spend money on that which used to be free.

Much of the new content will be produced by well-known YouTube stars, who, unlike so-called "traditional actors," tend to come up with the content in their own videos. Many such stars started out with comedy or singing shows, filmed in their bedroom, and since have accrued hundreds of thousands of subscribers. It is these individuals that YouTube Red is going to use to try to pique the interest of potential viewers.

Market research company EMarketer believes that the growth of YouTube's ad revenue will slow over the coming years, which would make now the perfect time for the company to move away from advertisements and toward other forms of income. Many wonder, however, how this new system will affect the YouTube stars, some of whom are making a comfortable living off of payments from advertising sponsors. Will they be willing to give up that security to be a part of this new project? Hamedy and Dave seem to conclude that with YouTube Red, the stars will have more opportunities to create newer and better content that previously would have been cost prohibitive. YouTube executives believe that the stars will see the project's potential and will happily sign on to be a part of this new system.

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Young Adults: Halloween's Growing Demographic

While Halloween was once considered to be mainly for children, statistics show that it has become a major consumer holiday, celebrated by plenty of Millenials and young adults. In fact, it is expected that this year, American will spend approximately $6.9 billion on Halloween and everything it entails. James Peltz, in his L.A. Times article, discusses how spending on such festivities has increased drastically over the years.

It is expected that over 157 million Americans will be participating in the festivities this year. Whether that includes purchasing candy to pass out to trick-or-treaters, or carving a pumpkin and wearing a costume, consumers will be spending a lot of money on their night of fun. The average price per consumer will be around $74, dramatically up from the $48 they spent a decade ago.

Spending, while high on Halloween, is still nowhere near the level during holidays like Christmas, Thanksgiving, Mother's Day, etc. However, for some businesses like costume shops and amusement parks, Halloween provides a significant portion of their yearly revenue. Most of the pumpkins grown in California are used for Halloween, thereby providing a reliable source of income for farmers in the San Joaquin Valley.

Some costume stores like Party City and Spirit Halloween open specific stores only for the six weeks preceding the holiday, thereby getting the most bang for their buck. Even though Party City has year-round stores, Halloween is their biggest season, bringing in about 25% of their annual sales. Even "Knott's Scary Farm" and Six Flags' "Fright Fest" have been known to encompass 15% of the total number of visitors to each amusement park in a given year. American consumers spend over $2 billion in candy alone per year. Generally, Halloween has become very profitable for an array of different kinds of businesses.

Even while consumers reuse decorations and costumes purchased in past years, they can't avoid spending on perishable items like food, candy, and fresh pumpkins, Research has even found that as involvement in social media has grown, so too have holiday-related costs. People share costume ideas via Facebook, Pinterest, and Twitter, alerting friends to sales at certain stores. Even more so, young adults, especially Millennials, tend to participate as a group, purchasing matching costumes and attending themed parties, all of which can be shared around the world by social media.

Peltz sees that nationwide spending on the festivities has doubled in the past 10 years. He believes that it is quite likely due to the technological era in which we live. As new devices and new movies/television shows enter our world, we have so much more to use in the celebration. Sure, kids are still participating in the holiday, but Peltz shows that Millennials make up the largest proportion of participants, and he believes that this trend will continue to hold true for many years to come.

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Grocery Chain Haggen's Bust May Have Little Effect on Competitors' Prices

Grocery chain Haggen Inc., which spent approximately $1.4 billion last year in a dramatic expansion along the West Coast, was forced to file for bankruptcy this month, undoing everything it had accomplished over the past several months. While Haggen believed that its buy-outs of several dozen Albertsons, Vons, and Safeway supermarkets would help the Northwest-based company grow, in Shan Li and Andrew Khoury's L.A. Times article, it is explained why their business plan may have been flawed from the start.

According to experts, Haggen's purchases were doomed to fail from the beginning. Not only was the cost of purchasing and converting 146 supermarkets of various brands remarkably high for the 18-store chain, but Haggen's prices were seen as too high for the quality of produce being provided. According to the founder of DJL Research, a research firm specifically for supermarkets, no one believed that Haggen had any chance of success with their large acquisition.

Analysts go on to claim that Haggen's prices were determined too much by the prices already in place at the purchased supermarkets. Instead of doing their own research, they chose prices similar to those of rivals like Albertsons or Safeway. Haggen is known for its higher quality meats, seafood, and organic produce, which would normally be reason enough to qualify higher prices than their competitors'. However, complaints from customers seemed to all point to less than fabulous service and produce of lower quality than advertised.

Perhaps the lack of proper business planning in the stores was due to the stresses Haggen experienced because of the buy-outs. Albertsons, one of the former owners of some of the stores, broke off their tenuous business relationship shortly after the purchase. Albertsons opened lawsuits against Haggen, stating that $41 million worth of inventory had not been paid for, and in response, Haggen sued Albertsons, claiming that the competitor was consistently working behind the scenes to push Haggen out of the market. Perhaps Haggen's legal struggles interfered with its ability to run its newly obtained markets properly, Now that Haggen plans to pull back and keep only its 37 stores in Washington and Oregon, its reputation for high-quality may one day be restored.

For the over 8,000 Haggen employees in California alone, the bankruptcy will hit hard, The Local 324 United Food and Commercial Workers Union is rightfully upset, especially after having filed recent grievances against Haggen for layoffs and reduced hours. For others in the community who do not work for Haggen, however, economic analysts and regular shoppers alike do not expect to be affected by the closures. Since there is enough competition going on in the community, between Ralphs, Wal-Mart, and other stores, they believe that prices will not likely rise significantly. Who knows? In the end, perhaps Haggen will earn enough money from the sale of the closed stores to get back on their feet in their Northwest home base.

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Viewers Dropping Cable for Cheaper Over-the-Air Options

5/10/15 - As many remember quite well, television of the mid-1900s consisted of a few channels for each of the major broadcasting stations: ABC, CBS, and NBC, among some others. Mainly due to the advent of cable and satellite television providers, modern television has hundreds of channels with content ranging from news to information to entertainment. Television has grown exponentially, but the downside of having so many channels is that prices have skyrocketed. Stephen Battaglio, in his L.A. Times article, discusses a recent phenomenon by which many consumers, unable to afford high-priced television packages, have “cut the cord” and gone back to the television choices provided by bunny-ear antennas.

Watchers of recent years have developed their own system by which they are able to watch all of their favorite shows at a fraction of the price for cable. They use “over-the-air” antennas to watch shows on FOX, CBS, ABC, and NBC for free, and use internet streaming programs like HBO Go, Hulu, and Netflix to watch a variety of other content. Since internet is already a necessity in most homes, this method cuts costs significantly.

Already, about 12.3 million homes rely only on over-the-air broadcasting for their television needs. While this is only 11% of total television users, this trend is a warning signal for cable and satellite providers. As television subscriptions go down, internet usage increases dramatically. Battaglio's sources suggest that cable companies recognize this fact and use it to their advantage. Many such companies are beginning to offer broadband internet service to serve as an alternative to customers while more and more households drop television service.

Price seems to be the big issue for most television watchers. Since cable companies are unable or unwilling to offer prices comparable to those of internet providers, the decision is made easy for many consumers. TV-Internet bundles seem to be the way of the future, but this could lead to problems regarding the FCC's ruling about net neutrality. With the new rules, internet providers are forced to give the same internet speeds and connectivity to all users. Unfortunately, this could take away much of the competitiveness between internet providers and reduce their ability to make economically effective partnerships with television providers.

Internet-based television will likely become more common in years to come, as it is the most economically feasible option for most families. What us the point of spending more money to get the same programs? Battaglio predicts that many people will begin to transfer over as they realize that having a cable or satellite connection is not the only way to access their favorite shows.

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Maintenance Issues at California's Refineries Lead to Gasoline Price Increase

5/1/15 - Drivers throughout California have been noticing gas prices climbing swiftly over the past few weeks, and they don't like it. In the last week by itself, prices have gone up by almost 34 cents, 6 cents of which happened over the course of a single day. Is this due to the state of the economy, or to supply-and-demand, or due to something much harder to control? Samantha Masunaga and Andrew Khouri, in their L.A. Times article, conclude that the increasing prices are mainly due to mechanical issues in gasoline refineries around the state.

California's refineries produce most of the gasoline used within the state, since production and delivery of California's “cleaner-burning blend” can be too expensive for out-of-state refineries to consider it economically viable. Furthermore, since the refineries produce as much gasoline as possible, any break in the production chain can cause massive issues throughout the system. Even if one factory would have to close down for repairs, the amount of gasoline in California would fall, making the available gasoline that much more expensive. The system leaves very little room for delays.

Unfortunately, refineries have been forced to stop or lessen production in order to perform maintenance work, whether planned or otherwise. After a February explosion at Exxon Mobil Corp.'s refinery in Torrance as well as some other, minor, issues elsewhere, the supply of gasoline is running low, thus forcing up the prices. Although the oil-refining companies are producing less, they still have contracts that obligate them to provide a certain amount of gasoline to customers, such as gas stations. In order to do this, they are forced to pad their supplies with purchases of gasoline from other refineries.

Many are upset about the price increases mainly due to the shock of it. When the price of a tank of gas increases by $20 to $30 in a month, it is hard to see it coming. To make matters worse, companies that purchase gasoline from other refineries during a time of low production try to keep such transactions secret, so as to not case a “pop” in the market. On the other side of the argument are the average Californians, who use gasoline and want some way to be able to predict when prices will go up. When a company has to purchase gasoline from another refinery, it is pretty obvious that they are having some issue with production.

The average person has had to cut down on certain “unnecessary” expenditures in order to put more money toward filling up the tank. Some have been forced to cut items when grocery shopping, and others have stopped eating out at restaurants. While gasoline prices are still, on average, below what they were this time last year, some areas are feeling far worse effects. A big cause of this, as Khouri and Masunaga point out, is that the market full of secrecy. If people know when companies are planning to purchase large amounts of gasoline from other sources, they will be able to more easily predict fluctuations and therefore plan out their gasoline purchases in a more beneficial manner. Gasoline has almost become like stocks, constantly changing and difficult to predict successfully. That could all change if refineries develop some transparency and give customers a fighting chance.

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Major Theater Chains Face Investigations Into Anti-Trust Violations

4/17/15 - Competition is a necessary part of economics. Without competition, a company or group of companies could gain control of a market and charge outrageous prices for goods and services, against which consumers may have no recourse. When competitors arise, such companies are forced to lower prices since consumers will be able to choose. As supply increases, prices must decrease, or the companies risk allowing demand to decrease.

A monopoly is when a single company gains complete control of a market or commodity. A cartel is when a group of companies have control over the market and agree among themselves on what prices to set. A trust is a group of companies that work together to force other, usually smaller, companies out of the market. Each of these is regulated by the federal government and is prevented as much as possible, so as to allow smaller companies the ability to be economically competitive. In his article, Richard Verrier looks into recent investigations into anti-trust violations by several major movie theater chains like AMC, Regal, and Cinemark.

Many complaints and lawsuits have been filed over the years by owners of smaller theaters, who claim that the major theaters have been involved in a practice called “clearance,” in which the smaller theaters are prevented from playing newly released movies. Is this practice considered a violation of anti-trust laws, though? While a Supreme Court decision in 1948 required that movie studios give up ownership in movie theaters, larger theaters still have the financial clout necessary to have some control over where popular movies will be played first.

Thus, the Department of Justice's anti-trust division has been spurred into action in an attempt to determine if clearances are against federal law. To the large chains, it's simply a matter of economic reasoning. The film studios have the supply, and the movie theaters have the demand. If a company like AMC wants a specific movie from the studio, it will effectively be providing more revenue to the studio, because the purchase of the film will involve hundreds of theaters across the country, while the purchase by a small company like IPic Entertainment will only involve a dozen or so. The studio will be more willing to give in to AMC's requests, because AMC provides more business.

With the Department of Justice on the case, we can assume that the matter will eventually be settled. The conclusion of this argument, however, could mean big things for small businesses. If the DoJ concludes that the major theater companies are not breaking any laws, then the small companies will be at a distinct disadvantage. If the DoJ rules that the major companies are breaking anti-trust laws through the use of clearances, then governmental entities may get more involved in economic issues that are out of their jurisdiction. What will it come down to: the natural order of economics, or the imposed order of government regulation?

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Decreased Chinese Demand Harmful to American Exporters

3/6/15 - Labor strikes at ports on the West Coast and the current strength of the American dollar are both contributing greatly to exporters and other businesses that rely on exports. However, Don Lee claims in his Los Angeles Time article that China's slowing economy is causing even more damage to the American market. The strong dollar is not a good thing for most exporters because it makes their products more expensive overseas, in their target market.

While the U.S. economy as a whole seems to be pretty steady, many worry about the effects of significant Chinese withdrawal from American imports. Last year, American exports to China grew only 1.6% while American imports from China grew 5.7%. This trade deficit is bad news for scrap-metal exporters in California, Midwestern manufacturers, and cotton farmers in the Mississippi Delta.

As China's economic growth slows, amid increasing production around the world, China is forced to reduce foreign imports and focus instead on domestic businesses. Even American companies with locations in China are finding it difficult to compete with private Chinese contractors. Fortunately for America, the decrease in trade with China is being somewhat balanced out by increased exports to other countries, including Mexico and Canada. Trade, which has been involved in about one-third of America's economy in recent years, has started to become less-viable as an economic practice.

China is switching from a majorly goods-based economy to more service-based, and according to some of Lee's sources, this may not be a bad thing. Yes, it will have negative effects on businesses and companies reliant on imports and exports, but as a whole, the American economy does better off with services, like finance, accounting, and entertainment. Such service-based businesses are affected to a much lesser extent by the strength of the dollar, which is beneficial for everyone involved.

Besides the slowdown of China's economy, the Chinese president has been cracking down on corruption, forcing government officials to cut back on gifts and parties. Because of this, exporters of such products as fine wines and premium fruits have lost a sizable number of their usual customers. A combination of the new strength of the dollar and an increase in productivity by many countries has driven the prices of commodities down, which could hurt goods-based economies.

According to Lee, the export of agricultural products by California fell 9% last year, due greatly to China's changing economy. Farm shipments on their own plunged by 30%, and other products like grapes and nuts felt dramatic drops in price. The economy as a whole seems to be holding up, but it looks like it is just a matter of time before we are forced to make changes to our economy, or face devastating consequences.

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FCC Introduces Rules Promoting Net Neutrality

2/27/15 - One of the most controversial topics in recent discussion is net neutrality. Net neutrality is the principle by which Internet providers provide equal access to all online materials, without favoring particular websites. The push for net neutrality comes from a common practice among Internet providers by which certain online content has slower speeds than others. This “speed discrimination” leaves users with two options: wait extra time to access certain data, or pay to use “faster lanes.” The FCC has, as of Thursday, passed a set of rules that provide for the government's regulation of Internet speeds. Jim Puzzanghera, in his L.A. Times article, discusses what this means, economically and otherwise.

While the Federal Communications Commission claims that these regulations will not be anywhere near as tough as the provisions in other industries, these net neutrality rules mean that the government will have some semblance of control over the Internet. Conservatives and telecommunications companies fear governmental intrusion in a system that is already working well, and liberals applaud the FCC for promoting free and equal access to all legal online materials.

Broadband, just like water and electricity, has become a commodity, a necessity in the everyday life of an average American. However, like with water and electricity, there may be some sense in the government regulating broadband, since it would give everyone access. Quoting similarities to freedom of speech, supporters of net neutrality feel that it is the best way to give everyone equal ability to acquire information.

Generally, neither side of the argument disagrees that Internet providers should have some sort of checks and balances. It is the extent of these regulations that worry many. The Internet, if treated as a commodity, should be as it is now. People can pay more money for a better product, just as people can pay more money for access to a better Internet connection. The two seem very similar. On the other hand, if treated as a utility, like water or electricity or telephone service, broadband seemingly should be equally available to all potential consumers.

In the past, two attempts by the FCC to introduce net neutrality rules have been blocked by federal judges as illegal in some way. Tom Wheeler, Democratic member of the FCC and architect of this net neutrality plan, seems confident that it will be successful. Wheeler decided to classify Internet as a “utility-like” product, which may or may not help his cause. There are sure to be many attempts to throw out the proposed FCC rules, and so, none are quite sure whether net neutrality will be a lasting phenomenon in our future.

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Plunging Gas Prices May Not Last Long

1/30/15 - Drivers throughout the state and the country have noticed the recent decline in gasoline prices and are hoping that this trend continues for as long as possible. While gasoline was over $3 in most areas a year ago, the cost of gasoline is now at $2 or even less, a nice change for everyone filling up at the pump. Unfortunately, says Don Lee, in his article in the Los Angeles Times, these low prices are unlikely to last long. In fact, he predicts that they will begin to climb within the next few months.

Lee first addresses the main question: why did the oil prices fall in the first place? One of the main answers involves development and usage of new technologies. A somewhat new process called hydraulic fracturing, also known as “fracking,” has become increasingly prevalent in the industry for use in forcing extra oil out of otherwise dry wells. Furthermore, the development of shale oil techniques, which allow for the conversion of organic matter within rocks into synthetic fuels, helps to increase supply.

Following the laws of supply and demand, the increased supply will likely lead to increased demand. This increased demand can give producers of gasoline a reason to increase their prices, which is why Lee expects the price of crude oil to be back on the rise before the year is half-over. Lee does admit, however, that it is possible for prices to stay low, if oil production continues to increase. Otherwise, waning supplies would force prices higher, just as they have done in previous years.

Reduced gasoline prices could have dramatic effects on economies around the world. Countries that produce and export oil, like Iran, Russia, Venezuela, and Nigeria, are likely to suffer because reduced prices mean less income. On the other hand, countries that don't rely on the export of crude oil, like the United States, Japan, South Korea, and China, are predicted to benefit because they pay less for the crude oil they import. Also, their citizens will pay less for gasoline, and will have more money to contribute to the economy in other ways.

Some states in the U.S. Will benefit more than others. Similarly to the situation in the global setting, oil-producing states like North Dakota and Texas will be harmed by low prices, while other states, and the companies within those states, will be unhurt. In fact, the low prices could even lead to an boost in job growth. Even with increases in employment, lowered gas prices could be disastrous in the long run. A lowered price of gas could lower prices for all commodities, which could force the Federal Reserve to increase interest rates. Inflation is a huge risk when dealing with drastic price decreases.

Lee concludes that the huge quantities of oil being produced in Saudi Arabia, which is another factor in the price decrease, may be an attempt by the Organization of Petroleum Exporting Countries (OPEC) to force the United States out of the picture. If Saudi oil prices stay low enough for long enough, it could become economically illogical for the United States to continue producing via shale and fracking. Whatever the true reason for the decline in prices, people are enjoying it for however long it may last.

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Where Have All the Workers Gone?

1/16/15 - Unemployment rates have been found to be decreasing throughout the country. The labor force participation rate, on the other hand, which shows the number of people working or not working, rather than just those classified as “unemployed,” has also been shown to be on a downward slope. So, what causes the seeming paradox between these two measurements. According to Michael Hiltzik, in his Los Angeles Times article, this discrepancy is due to a significant number of “missing” workers: those workers who are not working, and at the same time are not considered “unemployed.” Where have these so-called “missing workers” really gone?

How is it possible for both participation rates and unemployment rates to go down? Some economists believe that this phenomenon is due to a lack of effectiveness in current governmental policies meant to create and fill necessary jobs. Such economists theorize that the extreme difficulty many people are having in finding work has led them to stop searching altogether, to drop out of the labor force completely. Hiltzik, on the other hand, disagrees with this conclusion, preferring an alternative explanation.

Hiltzik presents sources in the article that seem to show that up to three-quarters of the perceived decline in participation rate is actually due to such factors as the retirement of baby boomers and the enrollment of workers in universities and other institutions of higher learning, both of which have little to do with the state of the economy. Over the past few decades, participation rates have been steadily declining, for both men and women. Statistics show that as the economy improves, the participation rate should improve as well.

Whatever the reason for the current employment trends, it is evident that the economy needs to get better. Hiltzik concludes his article as such: while the participation rate is declining, there is still room for it to recover. Workers may be out of the labor force due to the Great Recession, or lowering wages, or a variety of other possible reasons, but as the economy improves, workers should return.

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Holiday Shioppers Spending Confidently

1/2/15 - According to a retail analytics firm called ShopperTrak, the biggest shopping day of the year is the Saturday before Christmas. But, what is the second-biggest shopping day? Statistics show, at least for 2014, that the second-biggest shopping day of the year is not Black Friday, as some might expect, but rather the Friday following Christmas. As stated in an article by Tiffany Hsu, Andrew Khouri, and Ronald D. White, of the Los Angeles Times, a combination of post-Christmas sales, optimism regarding the slowly-recovering economy, and even the calendar's placement of Christmas on a Thursday, come together to make the day after Christmas the perfect time to shop.

Christmas falling on a Thursday can have quite an impact on retail sales. For many, this turns into a four-day weekend, which could give consumers a full three days to shop. Such a “blockbuster” weekend could end the year with a bang, ensuring the National Retail Federation's prediction that this season's revenue would pull in approximately $616.9 billion.

Even more effective than the holiday's placement on the calendar, though, is the slowly-returning faith of the general population in our local and national economies. With a lowering of gas prices and a slow increase in employment, people find that they have more money to spend on those items they want, not just what they need. Consumers are beginning to have more faith in the continuity of their employment; they feel a good degree of job security. With that sense of job security comes increased spending, as consumers are more willing to make purchases when they feel sure of a steady income.

Retail stores have done well in predicting the amount of inventory they need this year. Instead of purchasing too little inventory and running out, or purchasing too much and having to cut into their bottom lines, it appears that the retailers have done well with their inventory, thus maximizing revenue. Online retailers have improved their on-time deliveries, compared with previous years, thus giving consumers more confidence in ordering gifts through the internet.

The days following Christmas are great for gift card redemption. Knowing this, retailers provide extra discounts, hoping that such gift cards will be used to purchase excess inventory. Store prices are down after Christmas, and wallets tend to be fatter, both of which prod consumers to spend. People seem to be happier with the current direction of the economy, and that is helping the economy even more.

While current discounts will certainly bleed over to the next year, retailers are accepting it as a positive trade-off. The first quarter of the coming year may not bring in as much money as retailers would like, but sources show that the second and third quarters are quite likely to bring great improvement for the economy in the coming year.

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