Readings: Sports & Entertainment
Sports teams search for early signs of exceptional talent so that they can sign the best athletes before competitors do. This is nowhere more evident than in soccer. Major teams begin intensive recruiting and sign players in their teens, but it's very expensive to take a potential athlete through an entire program, only to have them not pan out. Ilja Sligte, a professor of neuroscience at the University of Amsterdam, of devised a cognitive test to predict which athletes have the greatest likelihood of success and at what position. Thus far, his company, BrainFirst, has several clients despite no empirical evidence that the product works. BrainFirst predicts it will be profitable this year.
Adidas' new "Speedfactories" in Germany and the U.S. will use automation to get new shoe designs to stores in days rather than months. Adidas says this is the biggest revolution in shoe manufacturing since moving production to Asia.
Toys "R" Us Inc. will live because manufacturers such as Mattel and Hasbro can’t let it die. They are offering pledges of support to counter Amazon and Wal-Mart and are propping up this single-category store.
China's disproportionately small sports industry and amateur community reflect decades of limited government support and insufficient disposable incomes. Alibaba's tiny sports arm is spending hundreds of millions of dollars to nurture China's interest in sports and related merchandise.
As Myanmar's government is transitioning, it clearly sees the opportunity for tourism development, and it has strongly encouraged it by creating some of the necessary infrastructural components. Unfortunately, the tourism sector has yet to kick in, and this is causing some consternation.
Bollywood makes more than twice as many movies as Hollywood, but profits are limited. Now, other regional filmmakers in India are challenging Bollywood, making for an increasingly difficult industry environment.
An Indian blockbuster, "Baahubali 2," had box-office revenues of more than $230 million in three weeks. This could spark more films outside the Bollywood mold. India produces 1,500 to 2,000 films a year and generated about $2.2 billion in 2016. It has about six screens per million viewers, versus 23 per million in China and 126 per million in the U.S.
Virtual reality is not a hit at home, so Imax tries arcades. Imax is piloting VR centers, since the cost of equipment has been a drag on consumers’ embrace of virtual reality. Tech and entertainment companies are racing for a slice of the virtual reality business, which Goldman estimates could generate $80 billion in revenue by 2025.
A successful French inventor and tech entrepreneur has developed a $200 device that can detect whether tennis balls are in or out. How will Sony, with its $60,000 system for tournament play, respond to this potentially disruptive innovation?
Trump’s talk of hard line dealing with China over trade has Hollywood worried. The Chinese had promised to further open their lucrative film market this year, and Hollywood doesn’t want anything to change their minds.
The U.S. and Chinese film industries have become increasingly interdependent, with big U.S. studios counting on Chinese financing and ticket sales. Last year the Chinese market generated 19 percent of global box office sales and had higher revenues than U.S. theaters for some films. In addition, Chinese firms have made major investments in U.S. movie theaters and film studios.
German music streaming service SoundCloud is in trouble despite having about 175 million users and the adoration of both artists and fans. Pandora and Spotify face similar problems as they continue to lose money while record labels get most of the streaming revenue.
For owners Comcast, Fox, Disney, and Time Warner, the Internet streaming service Hulu has been their beachhead in the increasingly popular world of video streaming. Now Hulu plans to offer live TV to strengthen its position against leaders Netflix and Amazon but may simultaneously continue to erode their owners’ cable TV businesses.
Professional sports leagues and individual teams are taking steps to create a more inclusive environment for fans and athletes. These include hosting pride nights and LGBT events. The outreach is at least partially motivated by the purchasing power of LGBT fans, but it also involves a potentially challenging cultural and image change for professional sports. Thus far, there is evidence of increased ticket sales as well as push-back and hostility.
Adidas's stock price is seeing a nice rise as the company picks up market share and sponsorship agreements. Part of the rise is fueled by a greater emphasis on fashion, including limited edition shoes. Adidas is also working with music entertainers to have them "design" shoes for the company.
Some of the world's largest digital effects companies are based in Britain, and the recent drop in the value of the British pound is making these firms even more competitive on a global scale. While skilled talent and competitive prices are important for movie studios that are looking for visual effects expertise, tax breaks or incentives also play a role in attracting portions of the movie business to Britain. Great tax deals in Canada, however, are now causing the British firms to shift some of their work to offices in Vancouver and Montreal.
An Olympics TV ratings slip among viewers age 18-34 is raising questions about NBC’s ability to profit from the games long term. One reason: Sports fans are getting older.
With technology stocks, IPO valuation is not necessarily related to current or past profitability. This is evident in the estimated IPO value of Spotify, the online music streaming service with 30 million users and $2.2 billion in revenues.
Detroit Bikes is helping to bring manufacturing back to motor city. But the economics of making bicycles in the U.S. are challenging.
Kevin Plank, Under Armour’s founder and CEO, has many ambitions for his company. These include intertwined business and social objectives of becoming world’s biggest sportswear company and revitalizing the city of Baltimore. A passionate and visionary leader, Plank consciously seeks to use the company’s momentum to shape Baltimore’s future.
Historically, Comcast has not been one of America’s most loved companies, and it had a reputation for providing clunky cable boxes and poor customer service. But Comcast is changing and wants to be loved. Instead of simply providing cable boxes and access to ever-changing lists of television channels, Comcast wants to make the TV the home’s command center. In doing so, Comcast needs to change its corporate culture to be more like a cool technology company and less like a regulated utility monopoly.
These five substances offer opportunities for secondary innovations that can make a myriad of products perform better.
Nervve is the company that cracked image recognition. Its image-recognition software is used by everyone from the NBA to U.S. intelligence agencies. Sports teams and leagues are using Nervve’s software to assess the value of in-game advertising.
Human resource management issues can challenge companies undergoing international expansion; Disney's experiences in China are one example. The company's theme parks depend on character-based entertainment, and in opening its Shanghai resort, talent development has been one of the biggest challenges the Disney has faced. Because there is a limited pool of talent trained in Western performing arts, Disney has needed to be innovative and make substantial investments to recruit and train performers. As competitors plan to open theme parks in China, Disney’s next challenge will be to retain the performers it has trained.
Kelly Slater Wave Company has figured out how to build the longest, most perfect, surfing wave on the planet. Can he can build a business around it?
In preparation for its Shanghai Disneyland theme park, Disney began working with arts institutes in China to build awareness and interest in performing at the park. Part of the challenge was to develop talented performers who could sing in the style of Disney show tunes, such as those in The Lion King. Another part of the challenge was to better understand how Disney productions could be modified to be more interesting to Chinese audiences. In a separate program, Disney launched English language training programs aimed at children two through twelve, with a curriculum that uses Disney characters.
Investments in energy efficiency can take years to pay back from cost savings so are often rejected by CFOs. But framing them as a portfolio with returns of over 20 percent convinced Adidas to invest millions per year.
Cotopaxi is an outdoor recreation products company with a social mission rather than a more common environmental one. Even though it is a B Corp that gives a share of revenue to humanitarian organizations, it has attracted venture capital funding.
The U.S. television industry produced more than 400 scripted series last year, a record. That’s causing shortages. An explosion in American television production is threatening to overwhelm filming facilities from California to Canada and Georgia.
In order to attract European customers, an increasing number of content distribution companies like Netflix and Amazon are developing exclusive programs and series. Whereas the exclusive programming that Amazon and Netflix have developed in the U.S. to attract customers has some level of international appeal, in order to gain market share in European countries these firms are investing in original content tailored to each country's language and culture.
MSC Cruises is developing a $200 million private island in the Caribbean, part of an industry push to provide the perfect vacation. Carnival spent $85 million developing its private cruise getaway.
Nascar's new business model, which includes issuing nine-year charter memberships to 36 cars, guarantees cars entrance into every race on Nascar’s top circuit and, as a result, makes it much easier for them to secure sponsorship deals.
The National Hockey League (NHL) keeps its books in U.S. dollars, with all revenues expenses earned in other currencies converted to U.S. dollars (not unlike many U.S.-based multinational firms). The recent fall in the Canadian dollar, however, means that the league will be reporting lower overall revenue when the Canadian funds are converted to U.S. dollars. With about a third of the NHL's revenues coming from Canada, an 18% drop in the exchange rate means that revenues would fall around 6%. All player salaries, however, are negotiated in U.S. dollars.
Approximately one third of National Hockey League (NHL) revenue is generated in Canada. Since the league’s compensation arrangement is based on revenue sharing and salaries measured and paid in U.S. dollars, the weak Canadian dollar is affecting team owners and players. The revenue sharing arrangement, a variation on profit-sharing, means that players and owners share in the currency risk.
As gaming leagues show rapid growth and indications that they're growing profits too, the competitive arena for leagues and teams has ramped up. As profits become more certain, interest from major investors seeking to leverage their economies of scope and scale are beginning to enter the fray. In question are the distribution of overall industry profits (appropriation) throughout the key stakeholder groups involved and how the cooperation can create even more value.
A lawsuit could result in Spotify having big liabilities from unpaid royalties. How much are these potential liabilities? And how is Spotify dealing with them?
British singer Adele and Sony Music Entertainment are betting fans will show up at record stores and on iTunes to buy a copy rather than stream it on Apple Music and Spotify. The initial sales data suggests they are right. There are questions if this phenomenon will slow the growth of streaming services.
The attorney general of the State of New York is threatening the fantasy football industry. The top three competitors are responding very differently, but the primary concern is that other states will follow suit and substantially change the laws that govern fantasy football.
Carnival’s CEO, Arnold Donald, has replaced seven of the company’s nine cruise line heads, and given them a charge to think outside the box to reach new customers. Donald believes that a diverse group of people working together can outperform a more homogenous group 90 percent of the time. His new cruise line heads reflect this philosophy. In an industry that is male-dominated and white, four of Donald’s new cruise line heads are women, one is black, one is gay, and some have no experience in the industry.
Indoor rock climbing gyms are being opened worldwide, and the world's largest builder (Walltopia) comes from an unlikely location - Bulgaria. Two and a half hours outside Sofia, in the small town of Letnitsa, is a factory that has supplied walls to gyms in more than 50 countries. Through a combination of cheap labor, innovative designs, and willingness to develop custom walls for clients, Walltopia has gained a loyal worldwide customer base for their climbing walls.
Internet video economics will increasingly favor original, higher-value productions. Call it the "Netflix effect."
Original content has become a key success factor for video streaming services that want to compete with Netflix and Amazon. The revenue generated by subscription and rental fees is fueling higher-quality productions than the ad model.
Wavestorm of Taiwan has become the surfboard industry leader by selling soft surfboards for $99.99 exclusively through Costco. Some say WaveStorm is killing the industry with low margins. Others hope it will expand the market and lead to eventual growth in sales of higher-end boards.
Wavestorm surfboards, which launched in 2007 and are sold for $99.99 exclusively through Costco, are now the leading surfboard brand, selling five times more than the closest competitor.
Fantasy sports sites claim that they're not gambling sites, but states are moving to regulate them like casinos. The most recent round of investigations follows allegations of cheating at two of the leading sites, DraftKings and FanDuel. Who will win this game?
Roku is not for gamers. CEO Anthony Wood believes that Xbox and Playstation consoles will continue to win over the gaming elite, Apple has too much power and presence in the mobile area, and Roku is choosing to stay clear. Is it a wise strategy?
Apple, Amazon, and Google all think there is an opportunity to stream games over their new streaming devices. Roku is listening to game makers and gamers who disagree.
Bollywood film studio Eros hopes to build a strong enough position in video streaming to fend off Netflix and Amazon when they enter India. With a large library of its own films, original programs, music videos, and a head start, Eros wants to be the dominant streaming service in India.
Eros is one of Bollywood's largest studios, releasing around 70 movies a year. Hoping to attain a first-mover advantage in advance of foreign rivals such as Amazon and Netflix, Eros is launching a video streaming service.
Netflix is on track to become the first worldwide, online subscription television network. But it may have difficulty selling the same service the same way everywhere, especially in Japan.
Netflix continues to see a growth in revenues, with strong sales in the United States, Canada, Australia, United Kingdom, and Brazil. Now the company has its sights set on Asian markets as it rolls out its service in Japan. This, however, will bring new challenges, as Japanese consumers are not used to paying for programming.
Netflix has been a Western phenomenon. Betting that streaming will become a global phenomenon, Netflix will expand to more than 150 countries by the end of 2016.
Overproduction combined with an FTC investigation caused Skechers’ Shape-ups shoes to go from fad to fiasco. But the company rebounded. Skechers’ valuation has risen from $600 million at the end of 2011 to about $8 billion today.
South Carolina's Grand Strand is dotted with golf courses, condos, and resorts. After some recent acquisitions, China-based Yiqian Funding now owns 22 of the golf courses and is adding to its real estate holdings. Yiqian's goals include increasing the number of Chinese tourists, and potential condo owners, to the area.
Saying it has learned from experience in Paris and Hong Kong, Disney has gone to much greater lengths to tailor its new park in Shanghai to Chinese culture and society. Yet retaining an authentic Disney experience may be key to succeeding in China’s increasingly competitive amusement-park industry.
Disney is preparing to open a new theme park outside Shanghai that blends standard Disney features with Chinese themes. It also has to adapt to the Chinese demographic, where, as a result of the one-child policy, it is expected that there will be four adults for every one child at the park.
Bolt Threads expects products made with its yeast cell-based silk to be available in 2016.
Two Los Angeles suburbs have approved big-ticket stadium projects in the hope of luring an NFL team.
After a raid and seven arrests, questions of bribery and corruption surround the organization that runs global soccer.
How Buffalo Wild Wings turned the sports bar into a $1.5 billion juggernaut.
Two inventors found it easier to build $7,900 bike wheels than to sell them.
About 300 million Chinese play basketball, and the NBA hopes to use that fan base to someday eclipse soccer’s popularity. With that dream be realized?
The British tea company Twinings has bowed to pressure from activists and customers and pulled a promotion linked to the R-rated movie “Fifty Shades of Grey.” Meanwhile, the box office prepares for a blockbuster success.
Western brands vie for product placement on China's hit shows, and often don't even have to pay for the publicity.
The Tiny Times movies have pulled in $208 million at the box office, making them attractive for promoting luxury brands to an affluent and young Chinese market.
Increasing cybersecurity is one way for U.S. corporations to respond to hackers who can cripple operations and steal valuable data. Should corporations also be able to retaliate?
Some fans thought it meant the end of baseball. But free agency proved to make baseball fairer . . . and maybe even a little more interesting.
Although a media critic is harassed for challenging sexism in video games, the industry's lack of inclusiveness may hurt its future.
Can SeaWorld overcome the backlash over its treatment of marine animals?
The most influential artist in the music industry is young, successful, and confronting the streaming music format.
A great innovative company doesn't rely on its early success for extension; it leans on its brand reputation.
Adidas's sales in the United States are down 14 percent this year due to weak sales in basketball and golf.
Too European? Adidas leads the industry in soccer globally, but it hasn't been able to bring in enough U.S. fans as sales fell 14 percent in the first half of 2014.
Purchases of pay-per-view events for Ultimate Fighting Championship matches have fallen by one third since 2010. The response to this decline is to attract more women to the “human cockfighting” sport with a reputation for domestic violence. The effort will be a challenge.
Is zero a fair wage for NFL cheerleaders?
Apple’s year-old indoor-tracking technology hasn't broken out from its pack of rivals.
Investors have cheered as Jeff Bewkes systematically dismembered Time Warner and raised the value of its stock. But at what cost?
How does a first-generation American move into the role of becoming a highly sought after spokesperson and a business-empire builder? Rapper Pitbull does it one partnership at a time.
After tremendous doubt about Brazil’s ability to make it happen, the World Cup wins. The match between the U.S. and Portugal on ESPN drew 18.2 million viewers, a record for soccer. Brave World Cup sponsors could not be happier.
Despite mounting losses, Sony is increasing spending on R&D and releasing new products like the SmartBand, which it hopes will be the next big thing.
Streaming music services are having a difficult time capturing any value for themselves or their music suppliers.
Was Led Zeppelin's Stairway to Heaven a copy?
Nike is making a big push to catch Adidas in the soccer gear market.
An estimated 300 million people play the game and 1 billion people watch it. Soccer represents a growing global market and Nike wants to take it over.
Do we really need another TV?
The Supreme Court's decision about online streaming could cause the end of a company.
Is gambling revenue a dependable source of income for state governments?
Amazon has stepped into the living-room turf war with its streaming Fire TV, but it’s in for a tough fight.
Amazon wants time in your living room.
Is China's digital wall coming down?
Mickey is tracking your every move. Disney is betting a billion dollars that RFID wristbands will create a better experience. Will it work?
The academic fraud scandal at the University of North Carolina reveals ways that the university has failed its athletes.
According to hundreds of government filings analyzed by Bloomberg, 18 percent of companies have reduced the amount or delayed payment of 401(k) matching funds and dragged out vesting schedules. For many, that could mean the difference between financial security and scarcity in old age.
Do you want your cable company to be bigger and have more control over what you watch and how you get online access? Comcast does, and it's spent more than $75 billion in acquisitions to make that happen.
The responses of university officials seem almost as irresponsible as the failures underlying the academic scandals involving the University of North Carolina's athletic programs. To some extent, attitudes seem to be changing.
Sony has revived a record label for jazz, a genre that sold 14 million albums in 2007 but only 5 million albums in 2013. Is the jazz audience still willing to pay to listen?
Is the digital music market saturated? Beats says its brand cachet will give it an edge in the chase for 29 million streaming music subscribers worldwide.
How many photo-sharing sites can consumers tolerate?
Shredding is out; self-destruct messages are in.
Why ignore the biggest communication network in the world? The fastest and largest network is the one we have all been building together, router by router. It's changing the face of the wireless industry.
Scented vapors with my nicotine, please.
Microsoft’s Xbox One has the hope that games and entertainment will collide into something even bigger and better. Will it make a difference in the decline of console purchases?
Lego, which controls about 60 percent of the construction-toy business, is wooing older children with a $350 robot set.
Lego has expanded its product lineup and tapped into Internet-based opportunities to fuel growth.
Apple is quietly seeding its mobile devices with iBeacon, which provides impressive location-based tracking. Why is the company being so quiet about this new technology?
Promoting the mantra “Keep Calm and Chive On,” TheChive.com is a tacky little frat-boy-like site –- with an annual revenue stream approaching $100 million.
British television producers look to global markets, including the United States, when developing new television shows.
Sing your way to social media.
Roku vs. Apple: the battle for streaming video.
More ads coming your way.
They can see you even better now.
The proposed settlement of the concussion class action suit against the NFL involves compromise on both sides and may have broad social implications.
Only 10 companies in the S&P 500 have carried out stock splits this year, compared with an annual average of 48 since 1980.
Let's optimize presentation and see what happens.
Will Fox Sports 1 be able to compete with ESPN, and how will each of them likely charge per cable subscriber?
“When you walk into the stadium, I’ll know everything about you.”
Using your smartphone as a DVR?
Can anything save the Nintendo Wii U?
Xbox isn't just for gamers anymore.
Will clear communications from Bernanke help avoid market disruptions when the Fed finally allows interest rates to rise?
Can the garage developer survive the branded app?
With a dedicated user base regularly spending big money, mobile gamemaker Supercell turned a 58 percent operating margin last quarter.
TV networks are investing in an app that keeps viewers subsidizing the TV ad model even while glancing down at their phone.
Steve Wynn might lose control of Wynn Resorts. What effect might this have on the corporation?
Recruiters and headhunters are playing matchmaker/agent for freelance programmers by having an A-list of software engineers on speed dial for clients who need coders fast and now. The startups turn to 10X Management for pick-up programming whenever they need it.
How did Rupert Murdoch and his company's stock price survive a potentially career-limiting phone-hacking scandal?
Visit more, stay longer. LinkedIn doesn't mind if you do.
The value of global takeover and merger announcements in March was the lowest since July 2009. Why do some think a sharp rebound is coming soon?
You make the call. Are China's Internet companies imitators or innovators?
Media companies are now producing original content sit-coms, dramas, and mini-series in Eastern European countries.
Apple sells a lot of electronics, but can it sell the iWatch?
Carnival has a history of bouncing back from toxic business problems, but its latest major incident was the third in as many years. So far the stock price hasn't reacted negatively to $80+ million in claims and potential lawsuits, so the long term impact is unclear.
After a series of mishaps and related public relations disasters, will Carnival's reputation and stock price be able to rebound after the Triumph debacle?
Is there room for another online streaming service?
Are TVs making a comeback?
How can the worst company to work for in America be so successful?
Italy has turned out to be a great market for QVC, with the company's average tele-shopper spending around $1,900 a year.
Growth can be expensive. Competition is tough for Pandora Media, which pays more than 50 percent of its revenue toward royalty payments for artists, while its rivals pay far less. Will the equation change?
Is Thursday the new football night? The NFL receives $1.1 billion annually from its NFL Network on pay TV as it reserves Thursday night games for its own channel.