Companies

JetBlue Pilots Vote to Unionize

After previously rejecting bids to unionize, the airline's pilots voted in favor of joining the Air Line Pilots Association, "so that we have the ability to improve our professional careers," co-chairs of JetBlue's organizing committee said

JetBlue Airways pilots overwhelmingly voted in favor of joining the Air Line Pilots Association (ALPA), the union announced on Tuesday.

The majority of JetBlue’s roughly 2,600 pilots took part in the vote, and 71% voted in favor of joining the ALPA. The move comes after JetBlue pilots previously voted against unionization in 2009 and 2011, the New York Times reports.

The pilots are the first employees to unionize at JetBlue, which was founded in 1998. The ALPA is the world’s largest pilot union and represents nearly 50,000 pilots in the U.S. and Canada.

“Today, JetBlue pilots have voted for ALPA representation so that we have the ability to improve our professional careers,” captains Rocky Durham and Gustavo Rivera, co-chairs of the JetBlue Organizing Committee, said in a statement. “As committed as we are to our objectives, we also want to work with management to ensure we continue to contribute positively to JetBlue’s success. We believe in JetBlue and look forward to helping make this company one of the best in the industry.”

Silicon Valley

Ed Norton’s Charity Company Doesn’t Sound So Charitable

Mat Hayward—Getty Images

How do you become a $23 million darling in Silicon Valley? By building a for-profit business that serves nonprofits, apparently

What’s one of the rare blessings of living in an era characterized by tremendous asset inequality and a chastened, hamstrung welfare state? Charitable giving has by some accounts reached an all-time high, both among the general public and among the American wealthy. What a time to be alive.

As has been the case with many a popular activity in our time, techies have now come along to philanthropy to offer the piggy-back ride they like to call disruption, claiming to fix something that may not have needed fixing while skimming a fee for doing business. The crowded crowdfunding field offers any number of sites that handle charitable donations, from Indiegogo to GoFundMe to Causes to JustGiving. All tend to follow the same basic formula, allowing users to register their own charitable causes and to donate to established ones. It’s hard for any one site to make a name for itself.

But on Monday one of the pack stepped forward from the others with big news: CrowdRise, a charity-specific crowdfunding venture, had landed $23 million in venture capital funding from a group including Twitter/Tumblr investors Spark Capital and Union Square Ventures, and Jeff Bezos’s personal investment fund, Bezos Expeditions. (This funding round followed an earlier seed round that included investment from Twitter founder Jack Dorsey.)

Those big names join the biggest one that had previously been attached to the site: Edward Norton, the actor and director. Norton and a band of cofounders launched the site in November 2009 after they raised a surprising $1.2 million for a wildlife preservation concern in eastern Africa. They figured, If we can raise good money like this, why shouldn’t we let everyone else do the same? That was a giving notion, and it’s of a piece with CrowdRise’s passionate and playful message. The site’s motto says its users will “have the most fun in the world” while fundraising, and little jokes pepper its official literature. To wit: “CrowdRise is way more fun than anything else aside from being all nervous about trying to kiss a girl for the first time and her not saying something like ‘you’ve got to be kidding me.’” Fun!

But what does altruistic fun have to do with a $23 million round of funding? That cash would do some good in the pockets of the charities CrowdRise users support. The site’s literature explains its business plan this way: “When a donation is made through Crowdrise, we deduct a transaction fee so we don’t go out of business (GOB).” No, ExxonMobil’s corporate communications team would never write such a plain thing. But perhaps what they would write would not fudge things, either. Those transaction fees not only kept CrowdRise from going under but made the business promising enough to land all that venture money. As TechCrunch put it: “[CrowdRise is] profitable and … viewed the Kickstarter goal of $1 billion raised on CrowdRise as very doable.” (CrowdRise had not responded to questions from TIME as of late Tuesday afternoon.)

Capitalist techniques have gained an increasingly stable foothold in the world of nonprofits. Universities, hospitals and big foundations are lousy with MBAs and executives who command (citing market logic) salaries close to what their for-profit counterparts make. CrowdRise’s big-bucks waltz into this moral vacuum might be a little brazen—but at least it’s clever. The opposite of clever is the spirit that accompanies any event like this. A perusal of the comments on TechCrunch’s post, and the Twitter response to the same, indicates an unflinchingly positive reaction to the news. “Great to see.” “Psyched.” “Congratulations.” That’s a whole lot of accolades for a common middleman who just got a whole lot richer.

celebrities

Gwyneth Paltrow’s Goop Lost Money in 2012 and 2011

Gwyneth Paltrow poses in the winners room at the British Fashion Awards 2013 at London Coliseum on December 2, 2013.
Gwyneth Paltrow poses in the winners room at the British Fashion Awards 2013 at London Coliseum on December 2, 2013. Mike Marsland—WireImage/Getty Images

Gwyneth Paltrow's lifestyle website appears to have unconsciously uncoupled with its cash flow, at least in 2011 and 2012, as its expenses—including significant compensation for the actress—exceeded revenues

Gwyneth Paltrow’s lifestyle company Goop, famous for its weekly newsletter, was in debt and losing money through the end of 2012, the company’s corporate records reveal.

Unaudited financial statements for the privately-held company that were filed with the UK’s Companies House state that Goop reported a 2012 loss of around $39,000 (£22,954), Radar Online reports. That was a big improvement from 2011, however, when the company reported nearly $260,200 (£155,834) in losses.

The company had real revenue — the records show significant product sales and income from Groupon — but expenses exceeded gross profits. Compensation for Paltrow and recently departed Goop CEO Sebastian Bishop was one of the more notable administrative expenses. The two took in close to $589,000 (£350,000) together in 2012, nearly a third of the company’s gross profits that year and a significant increase from the almost $173,000 (£102,788) they received the previous year.

Economy

America’s Middle Class Falls Behind

For the first time in decades, middle-income Americans are no longer the richest middle class in the world

Once the juggernaut of the American economy and the envy of the world, the middle class has finally lost its position as the richest in the world, according to a new report.

The New York Times, citing an analysis of survey data going back 35, reports that the middle class in the United States has fallen behind Canada’s middle class. While economic growth in the U.S. is equal to or stronger than growth in other countries, those gains have gone almost exclusively to the wealthiest Americans. America’s middle class is still wealthier than corresponding demographics in Europe, but the gap has narrowed significantly in the last 10 years. Meanwhile, the poor in the U.S. are significantly worse off than their counterparts in Europe and Canada—a total reversal from 35 years ago.

Median income in the U.S., about $74,000 after taxes for a family of four, rose by 20% between 1980 and 2000 but has since remain mostly unchanged, according to the Times analysis. Median income in Canada, in contrast, rose by 20% between 2000 and 2010 alone.

“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” Lawrence Katz, a Harvard economist not associated with the study, told the Times. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”

The analysis blames the struggles of the middle class on stagnating education attainment, higher executive pay, lower minimum wage and weaker unions, among other factors.

[NYT]

Apple

Watch: Video Goes Inside Apple’s Stunning New Headquarters

A new video shows an up-close view of Apple's new home

+ READ ARTICLE

A video released Monday and posted on Gizmodo shows the most detailed view yet of Apple’s new corporate campus.

It’s pretty astonishing. Shaped like a perfectly rolled bagel slathered in shiny solar panels, the verdant campus will run on 100% renewable energy, according to Apple vice president Lisa Jackson. The goal is to build a campus that has no net increase in greenhouse gas emissions. And it certainly looks like it descended from a distant future: 80% of the campus will be green space, and with large glass walls, open workspaces, and leafy swaths of forest outside.

The project’s legendary architect, Lord Norman Foster, claims in the video that the campus will ultimately redefine how people socialize and work. The 176-acre campus will house as many as 14,200 employees, Bloomberg reported in 2012, and the main circular building will total 2.8 million square feet.

The video is the first extensive look at the building since Steve Jobs presented the plan to the city of Cupertino in 2011. (That presentation, no surprise, is also pretty incredible.)

[Gizmodo]

Media

AT&T’s $500 Million Plan to Crush Netflix and Hulu

New AT&T Store Aims to Outshine Apple on Chicago's Magnificent Mile
Bloomberg—Bloomberg via Getty Images

AT&T is forming a new online video business with the entertainment company The Chernin Group that will use both subscription-based and ad-supported monetization models, placing it in competition with YouTube and Amazon Prime as well

AT&T announced Tuesday that it is forming a new online video business with the entertainment company The Chernin Group. The new initiative will place AT&T in direct competition with premium online video services such as Netflix and Hulu.

The venture will include multiple video services that use both subscription-based and ad-supported monetization models, according to a company release. The Chernin Group, started by longtime News Corp. executive Peter Chernin, will contribute its majority stake in anime streaming website Crunchyroll to the new venture. (News Corp. is one of Hulu’s owners.)

AT&T will enter a crowded market that includes not only Hulu and Netflix, but also Amazon’s Prime Instant Video service and Google’s YouTube platform. Yahoo is also reportedly prepping a Netflix rival, and Microsoft is developing several original shows for its Xbox console. The new AT&T venture will be more similar to Netflix and other online video services than the Internet-based cable competitors being developed by Verizon and Sony, an AT&T representative told Variety.

Further financial details and release timing for specific video services were not disclosed; The release pegged the companies’ investment in the venture at $500 million.

[Variety]

Courts

Supreme Court Cloudy on Aereo Streaming TV Case

Chet Kanojia, founder and CEO of Aereo, Inc., stands next to a server array of antennas in New York, Dec. 20, 2012.
Chet Kanojia, founder and CEO of Aereo, Inc., stands next to a server array of antennas in New York, Dec. 20, 2012. Bebeto Matthews—AP

The justices considered arguments around a tech startup that is capturing free over-the-air broadcast signals and selling them to consumers on the cheap, without paying networks the hefty retransmission fees they get from cable companies

There was a lot of talk Tuesday at the Supreme Court about the future of television—how we will watch it, how we will pay for it, and whether, crucially, the old broadcast model will be blown up for good. While such rhetoric is usually overwrought, in this particular case—American Broadcasting Companies vs. Aereo—it’s actually justified. If the court decides in favor of Aereo, a small, Brooklyn-based TV-streaming tech startup, it could have the effect of destroying traditional broadcasters’ business model, and fundamentally reshaping the way the TV industry operates.

Aereo captures free, over-the-air TV signals with thousands of small antennas that are rented to individual users, and it transmits that content to customers online for a small monthly fee—without paying broadcasters the so-called retransmission fees cable companies pay them to provide their channels to cable customers. While Aereo founder Chet Kanojia has publicly tussled with the big broadcasters over whether such a disruption is good for consumers—Kanojia says it will free viewers from pricey cable bills but the big broadcasters disagree—the Supreme Court on Tuesday homed in on another question entirely. Namely, this one: If it’s legal for someone to put bunny ear antennae on his roof and watch TV for free, and it’s legal for him to record that free TV onto a DVR (or an old school Sony Betamax VCR, for that matter) so he can watch it again later with friends, then does it matter, from a legal perspective, whether he actually owns that antennae, or that he is in possession of a physical DVR?

The antennae farm across town and a “DVR” based in the cloud, Aereo argues, are legally no different from the old antenna and VCR.

ABC, backed by CBS, NBC, FOX, and the U.S. Justice Department, says: not so fast. They argue that by capturing copyrighted television programming and then transmitting it back to thousands, or tens of thousands, of users, Aereo is acting exactly like a cable company and should pay retransmission fees.

The justices didn’t offer much in the way of clues as to how they might rule during hour-long oral arguments Tuesday. A ruling is expected in the summer.

Aereo’s lawyer David C. Frederick insisted repeatedly Tuesday that the company does not “perform” anything; it is nothing more than an “equipment provider.” ABC’s lawyer, Paul D. Clement, scoffed at the idea. Of course Aereo is “performing,” he said; to suggest otherwise “is just crazy.” Clement argued that Aereo—by essentially plucking copyrighted material out of the sky, selling access to that copyrighted material back to subscribers, and refusing to pay copyright royalties—is attempting to “get something for nothing. … It’s like magic.”

The justices’ questioning returned repeatedly to the implications that any decision on this case will have for cloud computing as a whole. If an individual downloads a video onto the cloud using a popular application, like Dropbox or iCloud, and then accesses it later and watches it on his computer, then does that also amount to, as Justice Elena Kagan asked, “public performance?” Both Aereo and ABC appeared to agree that an individual user of the cloud should not be required to pay royalties when he watches, say, an episode of The Sopranos that he has already purchased.

Clement urged the justices not to try not to “solve the problem of the cloud once and for all” in this one case. He instead attempted to steer the discussion toward what he characterized as a common sense interpretation of copyright law.

Frederick, by contrast, relished the cloud debate, warning the justices that if they decide in favor of the big broadcasters, they run the risk of fundamentally undermining the business model of the cloud. “If you turn every playback into a ‘public performance,’” he said, that will have “huge implications” for cloud-based businesses.

“The court’s decision today will have significant consequences for cloud computing,” Frederick said in a statement following oral arguments. “We’re confident, cautiously optimistic, based on the way the hearing went today that the Court understood that a person watching over-the-air broadcast television in his or her home is engaging in a private performance and not a public performance that would implicate the Copyright Act.”

Smartphones

Older Americans Are Buying Smartphones

Grandma is no longer cell phone illiterate, according to a new poll

America’s elders are getting in on the smartphone craze.

Fifty-one percent of Americans 55 and older own a smartphone, according to a new poll. That’s a 10% increase from early 2013 and marks the first time that a majority of all age groups have owned smartphones, according to the the Nielsen survey.

Seven out of 10 Americans now own smartphones, and 85% opt for them when shopping for a new phone.

Apple continues to reign as the largest smartphone manufacturer, with 42% of smartphone owners opting for Apple products, according to the survey. Most smartphones in the U.S. run on Google’s Android operating system (which works across devices made by a variety of manufacturers), and 19% are made by Samsung. BlackBerry devices are continuing to fall out of favor, and Windows Phone handsets only make up 3% of all American smartphones.

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Retail

This Is Amazon’s Real Achilles Heel

Amazon
Bloomberg / Getty Images

Online sales taxes are discouraging people from shopping on Amazon, according to a new study by researchers at Ohio State University. Regular online shoppers living in states that implemented a tax on Amazon decreased their spending on the website by 10 percent compared to states without the tax. The drop was even steeper for big-ticket purchases above $300, for which Amazon sales in taxed states were down 24 percent.

The lack of sales tax for online purchases has been a big advantage for Amazon over brick-and-mortar retailers for more than a decade. But an increasing number of cash-strapped states, which lose a reported $23 billion from uncollected sales taxes on online goods, are now making consumers pay taxes for Amazon purchases. In total 20 states now levy an Amazon tax, according to Bloomberg.

Online retailers can be compelled to collect taxes in states where they have a physical presence, like an Amazon warehouse, or in states where the retailer pays marketers to send traffic to their sites. Unsurprisingly, Amazon has been battling these tax laws for years. It lobbied the Supreme Court to rule on the legality of a New York online sales tax law, but the Court declined to hear the case in December. Amazon has said that it is in favor of a federal law allowing states to collect taxes from online shops in a more uniform manner. But the company also knows the tax issue is a significant threat to its future business. In Amazon’s latest annual report, the company noted the rise of online sales taxes as potential risk factor. “A successful assertion by one or more states or foreign countries requiring us to collect taxes where we do not do so could result in substantial tax liabilities, including for past sales, as well as penalties and interest,” Amazon wrote.

The researchers behind the study followed the purchasing habits of 245,000 households nationwide that spent $100 on Amazon in the first six months of 2012, then tracked the shift in spending when a third of those consumers were hit with the Amazon tax during 2012 or 2013. Though Amazon purchases slumped, the additional taxes didn’t actually help brick-and-mortar stores, which saw a mild two percent bump in sales. The bigger winners were competing online retailers, whose sales jumped 20 percent.

 

Gun Silencers Are Suddenly Selling Like Hot Cakes

US-POLITICS-GUNS-NRA
A convention goer picks up a weapon equipped with a silencer during the 142nd annual National Rifle Association(NRA) Convention at the George R. Brown Convention Center May 4, 2013 in Houston, Texas. KAREN BLEIER—AFP/Getty Images

Gun silencer sales are booming as buyers look beyond guns

Gun silencer sales in the United Sates are exploding as firearms owners are looking to accessorize.

Silencer sales to civilians shot up 37% in 2013 to nearly 500,000 units, increasing from 360,000 in 2012 and 285,000 in 2011, CNNMoney reports. There’s now a nine-month wait to register silencers with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

The silencer buying frenzy is the second wave of gun-related purchases in the last two years. After the Newtown massacre, gun owners feared that a weapons ban would be enacted and rushed to buy assault rifles. Now that last year’s push for universal background checks has failed, gun owners have a lot of guns on their hands, and are outfitting them with gadgets including silencers, flashlights, laser scopes, stocks, pistol grips and rail systems.

“People have gone crazy buying guns, but they’re done buying them for the time being, so they’re buying accessories,” Ben Shim, a firearms instructor and gun industry analyst with CRT Capital Group told CNNMoney.

Silencers are regulated by the 1934 National Firearms Act, and are legal in 39 states. While purchasing a gun requires a photo ID and an electronic form submitted to the ATF, purchasing a silencer requires applicants to mail a photo and fingerprints to the ATF and pay a $200 tax. And they often cost more than guns, approaching prices over $1,000.

The thought of a silenced gun conjures up the image of a black-gloved hand wielding a smoking pistol in some grimy back alley, but advocates say they’re in demand because they allow hunters to fire multiple shots without frightening game. “Silencing is not a crime,” is the slogan of Georgia-based Advanced Armament Corp.

[CNNMoney]

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