February 28, 2005

Music Industry, in a Hole, Keeps Digging

Filed under: Business Moves,Consumer Outrage,Economy — Tom @ 10:00 am

The music biz gets about 65 cents out of each 99-cent download, but that’s not enough:

NEW YORK (CNN/Money) – Just as legal music downloading is taking off in earnest, the major record labels are in talks to raise the price they charge online retailers for song downloads, a newspaper reported Monday.

This wouldn’t be the first time the music biz ignored reality. Illegal downloading caught on because for years music executives stubbornly refused to even consider the idea of making music available digitally. When they finally did, the sites they built were anything but consumer-friendly. Apple, Roxio, and others spent millions and solved their problem, and this is what they get?

They can run their business any way they want, but raising prices is a really bad idea for a lot of reasons:
- 99 cents is a significant psychological barrier. Forcing Apple and others to raise the retails price to $1.19 per song (a 20% hike) would reduce demand by a lot more than 20%.
- The acts hurt the most would be those in the second-tier. Britney and Hilary Duff will get theirs; buyers will be less likely to take a chance on lesser-known artists.
- The industry makes plently of money on downloads, probably MORE than they make on CDs. A quick visit to Amazon shows me that a typical 12-15 song CD costs $14-$15, or just over $1 a song. There has to be a lot less than 65 cents a song left by the time you take out the material cost of the CD, duplication, packaging, shipping, the distributor’s cut, and the retailer’s cut–let alone having to deal with returns, product placement fees, and the other hassles inherent in retail.
- If prices go too high, turned-off customers will go the illegal route. Though they’ll try, the industry can’t sue everybody.
- The future is in downloads. Apple alone has sold over 250 million downloads. CDs are so 20th century. I for one will never buy packaged music again. Period.

Note to ignoramus artists who haven’t joined the digital age–If I can’t download it, I must not need it.

February 26, 2005

AARP’s Favorite Blogger

Filed under: Soc. Sec. & Retirement — Tom @ 7:44 pm

March 3 update–AARP has removed its links to other blogs.

AARP has had a Social Security web log for a couple of months now. It is predictably against any meaningful changes to the system, never mind that if it cranks along as it has it will send us the way of the unsustainable systems in France, Italy, and Germany.


What’s odd (maybe not) is that the number one site listed on its blogroll is none other than The Daily Kos, whose owner infamously wrote the following in reaction to the murder and hanging of American contractors in Iraq in April 2004 (link is to Little Green Footballs):

That said, I feel nothing over the death of
mercenaries. They aren’t in Iraq because of orders,
or because they are there trying to help the
people make Iraq a better place.
They are there to wage war for profit.
Screw them.

Others listed on AARP’s blogroll include Donkey Rising, The Left Coast, and other sites clearly associated with, if not funded, by the Democrat Party (“Kos” himself is a Democrat political operative who was a technical consultant to the Dean campaign and assisted several other candidates).

What’s wrong with all this? In principle, nothing. Of course AARP can associate with whomever they wish, even people who don’t mind seeing American noncombatants killed and hung by terrorists.

But don’t you think it would be a good idea for AARP to stop pretending?:
(bold and underline added)

With over 35 million members, AARP
is the leading nonprofit, nonpartisan
membership organization for people age 50
and over in the United States.

Uh huh.

UPDATE: To be clear–Yes, I’m aware that AARP supported the Republican Medicare prescription drug plan. No, I don’t think they should have been involved in that either, and they shouldn’t have been involved in supporting the Canadian-style “single-payer” health-care system that was proposed in the early 90s.

In all three cases of political advocacy (SocSec privatization, Medicare prescription drugs, and nationalized health care), AARP has pretended to represent its 35 million members. In all three cases, those pretenses are false.

If AARP wants to get behind a political cause, it should separately solicit its members, put the money aside separately, spend it separately, and make it clear to everyone that in putting their political weight behind a cause, they are NOT speaking for all of their members.

And as you can see from the original post, AARP would be well-advised to be careful about whom they associate with.

UPDATE 2: A return visit to AARP’s site on the morning of March 3 reveals that they have taken down their external links. Good for them, but how those links ever got there in the first place reveals a lot about where their loyalties lie.

February 25, 2005

Maybe Now Something Will Be Done about ID Theft

Filed under: Consumer Outrage,Corporate Outrage,Privacy/ID Theft — Tom @ 8:54 pm

Bank of America Consumer Data Tapes Lost
Bank of America Loses Tapes of Data on 1.2 Million Federal Workers; Potential for ID Theft

Why may it finally lead to action?

Sen. Pat Leahy, D-Vt., is among those senators whose personal information is on the missing tapes, (B of A) spokeswoman Tracy Schmaler said.

Paul Craig Roberts Loses It

Filed under: Biz Weak,Soc. Sec. & Retirement — Tom @ 8:24 pm

Paul Craig Roberts (PCR) first shows us why economists should stick to economics:

Jan. 12, 2005:

“The promised Iraqi election, if held, will settle nothing….
It has greatly damaged US credibility,
while greatly enhancing Osama bin Laden�s credibility.

Uh huh.

He then shows us why certain old economists who write about retirement should consider retirement themselves (From Business Weak, 3/7/2005 issue, not linked due to subscription requirement, excerpt constitutes fair use):

President George W. Bush’s plan to privatize Social Security
is as ill-considered as his “cakewalk” invasion of Iraq.
This is a hard admission for an economist
who has long beat the drums for Social Security privatization.

PCR doesn’t say so explicitly, but by noting elsewhere in the Business Weak column that privatization was a good idea 20 years ago but that it won’t work now, he’s essentially saying it should never happen. He’s as wrong about this as he was on the Iraq election. Of course if privatization’s opponents manage to run out the clock for the next 5 years or so, it WILL be too late, because the conversion cost probably will be too high. Which is why PCR’s inexplicable conversion to wholesale negativism since September 11 is so unfortunate (see his Lew Rockwell column archive here).

It’s hard to believe now that this guy was with the Reagan Administration, and was once an important conservative writer for the Wall Street Journal.

The national dialogue would improve if HE would retire.

Economy Roars, WaPo Yawns

Filed under: General,MSM Biz/Other Bias — Tom @ 1:49 pm

Fact: The Commerce Department reports that 4th Quarter GDP grew at a 3.8% annualized rate, revised upward from 3.1%. Anyone with a functioning brain would headline this along the lines of “Economy Stronger Than Expected in 4th Quarter.”

Washington Post (WaPo) web headline (requires registration): Economic Growth Estimated at 3.8%

WaPo to reader: Please yawn and move on. (It wouldn’t kill you to acknowledge that this is a good thing, would it, WaPo?)

But the 4th quarter isn’t even the real news, it’s the 2004 full-year result, which you won’t find until the eighth paragraph of the WaPo story:

For all of 2004, the economy expanded by 4.4 percent, the best showing in five years.

How good is 4.4%? Not only is it the best in 5 years, it’s the third-best year in the last 20.

Now you know something most WaPo readers probably don’t: The economy is rippin’ right along.

Wizbang: Foxes Advising Henhouse on Privacy

Wizbang reports that the Department of Homeland Security’s Privacy Advisory Board now includes experienced privacy violator and spyware purveyor Claria (formerly Gator). I would add my concerns about panel members from:
- Intel, the company that wanted to put a unique “fingerprint” identifier on each and every Pentium III computer (until public pressure caused them to back off).
- Nationwide Insurance, whose industry thinks it’s perfectly all right to classify drivers as high-risk simply because they have bad credit.

Wizby also wonders why someone from ChoicePoint wasn’t selected. After all, a privacy panel should only have people who don’t give a rip about privacy. Zheesh.

In that vein, I hereby nominate Scott (“You have no privacy. Get over it”) McNealy of Sun Microsystems. He’d be right at home.

February 24, 2005

Blue Pill Blues

Filed under: Biz Weak,Business Moves,General — Tom @ 9:15 pm

iPod sales are booming. Home prices keep climbing.

But one sector of the economy has gone, uh, limp:

(from Business Week-not linked due to registration requirements-excerpt is within fair use)

Judging by the tons of TV and print ads that pitch erectile dysfunction drugs, you would think the big three — Viagra, Cialis, and Levitra — were selling as briskly as beer at a football game. After all, what could be more marketable than a pill that helps aging men perform better in bed?

It’s not working out that way. Despite gargantuan ad budgets, sales are trailing expectations for all three contenders. Viagra’s worldwide sales fell 11% last year….

The article goes on to blame the, uh, dropoff on too many free samples and lack of market penetrati… (never mind, let’s try again)….the fact that only 15% of men who “need” erectile dysfunction drugs have tried them.

I dunno. From here, it seems more likely that the ED problem is nowhere near what the pharmas want us to believe (the article claims that 30% of adult men suffer from ED–puh-leeze). And maybe, just maybe–middle-aged men aren’t as hopelessly obsessed or for that matter insecure about their sex lives as we’ve been led to believe.

Social Security Point of the Day (SSPOD)

Filed under: Soc. Sec. & Retirement — Tom @ 9:43 am

Thanks to changes to the system made in the mid-80s (as a result of the work of the Reagan-appointed Greenspan Commission), the age at which a person can collect “full” Social Security benefits has been raised from 65 to as high as 67, depending on when you were born.

Two examples:
- Anyone born between 1943-1954 must wait until Age 66.
- Anyone born in 1960 or later must wait until Age 67.

The large majority of the participants in the retirement classes I teach believe that the Full Retirement Age is still 65 for everybody.

Sorry to be the one to break it to you if you didn’t know….

February 23, 2005

Consumers Take Lumps from Choicepoint Chumps

Filed under: Corporate Outrage,Privacy/ID Theft — Tom @ 1:50 am

Michelle Malkin has the goods on the data company that let thieves posing as real businesses get personal information about untold thousands of people throughout the US.

“Disgrace” is too kind a word for what was allowed to happen. The government, the financial-services industry, and the “data security” community have all been way too nonchalant about identity theft and privacy for way too long. One would hope this will wake somebody up, but don’t bet on it.

February 22, 2005

Card Sharks on the Attack

Filed under: Consumer Outrage,Corporate Outrage — Tom @ 9:18 pm

From Bankrate.com:
A record number of credit card companies have built “universal default” clauses into their agreements, which allow them to raise your interest rate if you’re late making a payment — even to someone else!

The provision, generally buried in the fine print of your credit card agreement, basically says that if you are more than 30 days late on any payment to anyone, the interest rate on your credit card could shoot up and your credit score may be damaged.

The less sneaky banks send out these announcements in a separate notice, but most include it with all of the other info that comes with your monthly statement, which means you always have to be on the alert. You will usually have about 30 days from the date you receive the notice in your statement to close your account. You can close your account and not pay off the balance, and at least keep the same (sometimes adjustable) interest rate while you’re paying it off.

I’ve been told of instances where the rate has gone from 12% or so to 23%, or more, so don’t get caught napping. If you let the deadline for closing your account pass, you will be stuck with the high rate and no recourse.

Don’t let it happen.

Marvel of the Day

Filed under: Marvels — Tom @ 8:52 pm

If there’s a better run office supplies catalog outfit than Quill, I have yet to encounter it.


Among other things, they sell three-ring binders (zzzzz). But WAIT–These are three-ring View binders with sheet separators–for less than $2, with free shipping for orders over $45. How in the world do they do it?

Nobody else is even the neighborhood of that price, and that doesn’t even consider the specials they have for quantity buys.

Maybe I should have kept this quiet.

Quote of the Day

Filed under: Quotes, Etc. of the Day — Tom @ 8:22 pm

Sometimes it’s really hard to see the forest for the sleaze.”

It’s from the movie “Hitch” (starring one of my favorite actors Will Smith).

It’s uttered by Sara (Eva Mendes), the woman of his dreams, when she thinks he’s just another conniving jerk.

That line is too good for it to remain stuck in one movie. It’s an all-purpose mantra for politics, the UN, the financial planning industry, life in general on a bad day….

Corporate Outrage–Would Someone Please Fire Me?

Filed under: Corporate Outrage — Tom @ 8:20 pm

I’d settle for 1% of the $42 million Carly Fiorina got.

The Money/CNN sub-headline notes: “But windfall for former HP boss is less than the $65.5M in stock options she received in 1999.”

We feel SOOO much better now. That HP Board drives a hard bargain, eh?

Social Security Point of the Day (SSPOD)

Filed under: Soc. Sec. & Retirement,Taxes & Government — Tom @ 8:13 pm

One thing about Social Security (or SocSec, as I like to refer to it) that most people expect is this: the more you make (while working), the more you get (as a retirement benefit).

Further, they expect that if you have consistently earned double what another person made while working, your SocSec benefit will be twice as high as the other person’s.

Right on the first point (sort of). Dead wrong on the second.

The Mercer 2005 Guide to Social Security and Medicare (primarily meant for employers–click HERE for more info) tells us that for two individuals retiring this year at the Full Retirement Age:
- if Person 1′s average annual earnings (adjusted for inflation) was $36,000, his individual benefit would be a bit under $16,000.
- if Person 2′s average annual earnings was twice as much ($72,000), his benefit would be a bit under $23,000.

So…the person who has paid twice as much into the system gets a benefit that’s not even 50% higher.

Remember, I’m just the messenger.