More U.S. Profits Stay Abroad

It is not surprising to learn many U.S. companies keep the money they're earning abroad in foreign accounts. The WSJ has been touching on this subject for sometime now, I've found this intriguing because at first I thought to myself these companies are attempting to skirt taxes they should be paying. However, after reading the article on why companies do this I completely understand. Under our laws any money a company earns abroad has to pay the taxes to the country in which they're doing business in, and again when the money is brought into the U.S. This isn't fair to be taxed twice and works as in incentive to keep money out of our country. Furthermore, it deprives businesses from reinvesting earnings from abroad which helps keep jobs overseas. The WSJ analysed 60 companies that had over $5 billion in off shore accounts, in some cases these large companies earned more overseas than they did here in the U.S. If tax law where changed to allow companies to bring earnings back into the country, perhaps our unemployment would go down.

Not all of the assets held abroad are kept in cash, some is used to build plant and equipment, research and development, as well as other business functions. If companies weren't penalized for success aboard, it is very possible they would build those plants in the U.S.

These companies aren't holding a small amount, General Electric for example has almost $108 billion held in offshore accounts, Johnson & Johnson $14.9 billion, and Oracle at $20.9 billion. Because of this significant amount of holdings, maybe it is time for lawmakers to figure out a way to foster business growth and stop penalizing companies for their success. 

Local TV News Is Following Print’s Path, Study Says

An interesting article in the New York Times discussed how local news TV is going the way of print newspapers. The combination of ubiquitous smartphones and internet access has drastically changed the delivery method of American's receiving the news."Digital news sources are now used daily by 50 percent of Americans, according to Pew's survey, making the Internet nearly as important a source as television" This has enormous implications for the local news industry as advertisers may being to shift advertising to other sources of media. The marketing strategies of these local news outlets will have to convince the public they are the only source for local news. That endeavor may prove difficult as the article mentioned  local news heavily depends on weather, traffic and sports all of which can easily be checked via the internet. We have become a society of on-demand, not to be strapped down when programmers want to broadcast. Interestingly enough cable news outlets haven't lost many viewers. Hypotheses for this include more political talk and interviews with prominent individuals. 

I thought this article was interesting, I fit into this group of people, not watching local news for a number of years. I stopped watching because of such a strong focus on weather, traffic and sports. To me, it seemed as though traffic, weather and sports was the only news. Cable news has real world event and discusses these events in-depth. The way society communicates is drastically changing, due mostly to smartphones and instant delivery of news topics. 

http://www.nytimes.com/2013/03/18/business/media/local-tv-news-is-following-prints-path-study-says.html?ref=media&_r=0

Verizon Seeks to Shake Up Fees for TV Channels

Last week I wrote a blog concerning internet piracy and the financial reasons behind downloading show illegally. Pay-TV customers do not want to pay for channels they're not watching, Verizon is the first large media company to act on this sentiment. Today the Wall Street Journal published an article about Verizon's plans to bring al-la-carte television to its customers by only charging viewers for channels watched for more than 5 minutes. This would certainly be a game changer in the market place as large media companies have been unwilling to change their pricing structure despite customer complaints. Customers subsidize channels that have low viewership, for example ESPN receives $5.04 per subscriber from Verizon regardless of whether a subscriber watches the channel or not.  ESPN is vehemently against this because on average nationwide they only have one million viewers. Verizon, however still has to pay $23,688,000 to ESPN.

This would be one of the largest game changers in Pay-TV in recent years, probably more than the high definition revolution. Cable companies have to discover new ways of bringing the high cost of cable down for its subscribers, if Verizon is successful other large companies such as CableVision, Time Warner, and AT&T may follow suit.

I thought this was in interesting article, I share the same sentiment as other cable TV subscribers. I feel as though it is a waste of money and have debated pulling the plug on Pay-TV in exchange for streaming TV over the internet.

http://online.wsj.com/article/SB10001424127887324392804578362943263175884.html?mod=WSJ_article_comments#articleTabs%3Darticle

As Pirates Run Rampant, TV Studios Dial Up Pursuit

Over the past decade the music industry has made claims that digital pirates illegally downloaded millions of songs depriving the industry of revenue. In the late 90s broadband internet access was starting to become a commodity which allowed users to download songs in just a matter of seconds, the music industry was extremely slow to adopt this music format known as mp3 which transformed the landscape of how people listen to music. Over the past few years television studios have took notice to the same with their content. Television shows are available for download nearly minutes after they've aired without commercials in high definition. The article spoke of a popular show called "Suits" which airs on the USA network, NBC the parent company of USA has a digital dashboard that monitors people downloading the show. Illegal downloads multiply exponentially just one hour after it has become available. NBC issues what is called a take down notice which requires the operator of the site to remove the content, however after the content has left the U.S. the likelihood of removal is slim. This was not a problem a few years back, computers weren't powerful enough to encode video so quickly and lacked the ability to remove commercials as they aired. This type of technology is going to be in industry game changer, if the television industry acts appropriately and embraces the technology this could be an opportunity to generate revenue from this outlet.  If however it is rigorously fought by fining, suing, or other methods of coercion to stop users from downloading, I believe the industry will lose billions of dollars trying to win an battle that can't be won. 

One solution I believe would have an immediate impact is allowing cable subscribers to move to an al-la-cart plan which could bring cable subscription bills down and perhaps more people would subscribe to cable than pirate their favorite TV shows. 

I choose this article because I do believe there is a legitimate argument to downloading TV shows when the basic price cable TV starts at $50 dollars. I think there are many conduits in which the television studios can profit from this but they'll have to be quicker than the music industry to do so.

http://online.wsj.com/article/SB10001424127887324906004578292232028509990.html?KEYWORDS=piracy+suits