Spring 2017 by The IFJ

REVIVAL OF THE OLD,

Emily Winston

CREATION OF THE

Retail Customization in the â&#x20AC;&#x153;Digital Tailoringâ&#x20AC;? Era

SPRING 2016 www.theifj.com

Page 14 THE

GREAT ESCAPE 10

Lizzy Doykan LIQUID GROWTH The Demand for Premium Bottled Water and the Real Price to Pay

How U.S. Consumers are Giving Specialty Tea a Chai

Why Companies Should Embrace their Dark Side

NAP TIME IS MONEY

SHADOW BRANDING AND THE MOB

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Donâ&#x20AC;&#x2122;t Sleep on the Next Big Thing

THE GREAT ESCAPE

WINTER 2016 www.the-ifj.com

SUMMER 2016 www.theifj.com w

Rolling in Green

How U.S. Corporations Abandon Uncle Sam and Get Rich Quick

A New Byzantine Business

Christian Tourism in the Late Roman Empire

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Snap to the Future

The not so Disappearing Effect on Social Media

FALL 2016 www.theifj.com

Hallie Wolff POWER OF THE PURSE Ideological Protest in the New Political Age

20 Ben Wilson 50 Katharine Jessiman-Ketcham, SO TRUCKING TASTY Alan Tang )RRG 7UXFNV $FURVV $PHULFD THE VIRTUAL REALITY DEBATE :KDW LW LV :KHUH LW LV +HDGLQJ DQG +RZ \RX 6KRXOG Feel About it

Jake Goodman TRUMP AND SILICON VALLEY: THE TWEETER VS. THE INNOVATORS Silicon Valleyâ&#x20AC;&#x2122;s Uncertain Relationship With the New Administration

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TABLE OF CONTENTS Markets

Political Economy

Lizzy Doykan LIQUID GROWTH The Demand for Premium Bottled Water and the Real Price to Pay

Hallie Wolff POWER OF THE PURSE Ideological Protest in the New Political Age

Ted Rosen OH, SNAP! Snap, Inc. Files for Massive $25 billion IPO

Ben Chicchia A DIRE STRAIT A Fall in Maritime Security and its Effects on Inter national Trade

Karnika Pombra THE VOTE HEARD ‘ROUND THE WORLD How the National Election Echoed across International Economies

Amanda Chow OUT OF THE SHADOWS Marijuana’s Transition from the Shadow Economy to a Lucrative, Legal Industry

28 Joseph Kirby Belmonte AN OPPORTUNITY FOR GROWTH Newly Proposed Free-Market-Oriented Policies Give Hope for Economic Growth in the Philippines 30 Vanessa Jingjing Zhang EUROPEAN FINANCIAL CAPITAL Applications from Amsterdam, Dublin and Vienna

On Campus

Technology

14 Emily Winston REVIVAL OF THE OLD, CREATION OF THE NEW Retail Customization in the “Digital Tailoring” Era

34 37

Ryan Ma EIGHTY IS THE NEW SIXTY Ever-increasing Longevity and the Worry about Retirement Preparedness

Calvin Chu AROUND THE WORLD IN 80 DOLLARS Exploring the World without Breaking the Bank

Waylon Jin WHAT’S UP WITH METALS? Why the Market for Gold Matters to Us

Jake Goodman TRUMP AND SILICON VALLEY: THE TWEETER VS. THE INNOVATORS Silicon Valley’s Uncertain Relationship With the New Administration Benjamin Winston SEEKING GREATER HEIGHTS Luxury Travel For the Rising Middle Class

40 Neil Goh DOES JACK DORSEY HAVE TO GO? How the Digital Streaming Service Industry Saved the Modern Musician 42 Ben Bosis NETFLIX IS CHILL Why the Streaming Giant's Competition Doesn't Even Come Close

â&#x20AC;&#x153;The start of 2017 marked the first time bottled water sales surpassed the sales of soda in the US.â&#x20AC;?

Lizzy Doykan

LIQUID GROWTH The Demand for Premium Bottled Water and the Real Price to Pay

nspiration seemed to be the theme of the evening of February 5th when the Super Bowl took a sudden turn into overtime and the Patriots stole the show for a record fifth time. PepsiCo tried to drop their own inspiration in a 30 second Super Bowl commercial spot promoting its newest product, a line of premium bottled water dubbed Lifewtr. The commercial not only advertised the water’s “pH-balance and electrolytes for taste” but also the product’s bottle design which features the artwork of aspiring artists looking to be discovered. This clever marketing strategy was a conscious effort by PepsiCo to compete with the rise of healthier, hydration-focused products. Lifewtr will join the likes of SmartWater, Evian, and Fiji as yet another premium-priced, speciality water beverage that today’s health-conscious consumers seem to go crazy for.

actual trend that water bottle companies are taking advantage of? How are these companies addressing the issues that plastic water bottles pose to the environment?

With the emergence of so many brands like Lifewtr, there’s no question that specialty bottled water is “in.” However, the fact that people prefer the bottle over the tap suggests that some are growing less concerned about environmental sustainability. Are water bottle companies taking advantage of this trend? Is this an

Bottled water now comes in a variety of different tastes and flavors that include sparkling, vitamin and mineral-infused, and coconut. The many product varieties are marketed towards customers with refined palates and a predilection for organic foods. Phrases like “reverse-osmosis” and “vapor-distilled” create an

Liquid Growth: More than Water The start of 2017 marked the first time bottled water sales surpassed the sales of soda in the US. The premium bottled water market today is worth over $2.8 billion in the US and is currently dominated by Glaceau’s Smartwater, a Coca Cola-owned brand. How has a substance so freely accessible turned into such a profitable business? Nowadays, water is more than just water—its pure essence is something that companies have taken hold of and learned to transform in an endless number of ways.

“ Nation-wide campaigns that ban or discourage plastic water bottle-use are heard crystal-clear, but they have had little effect on consumer purchases." image that attracts the attention of today’s health-conscious consumer. As so many people today are constantly working, traveling, and exercising, buying a bottle of water is often more convenient than finding a source to fill up reusable bottles. Fears of Contamination In addition to the marketability of bottled water, the public also trusts bottled water as a safer choice over tap water. Flint, Michigan is the most recent notorious case of a location where people discovered dangerous levels of lead in their water at home. Residents of the Michigan area turned to buying millions of bottled water in 2016 for cooking, cleaning, and drinking. On a global scale, the concern for safe drinking water is even greater.

People from areas with limited access to clean water will have less fear of contracting illnesses when purchasing bottled water. But even in more developed countries like China, fears of contaminated water are greater due to heavy pollution. This leads to a greater willingness to pay for more expensive, quality drinking water. China’s rising incomes and worsening levels of pollution give an even greater opportunity for companies to sell premium-priced bottled water. Goodbye, Mother Nature Of course, bottled water does not come without its price on the environment. Nearly 70 percent of PET plastic water bottles end up in landfills, incinerators, or scattered on the ground. There is also a large amount of wasteful resources that goes into producing and transporting a bottle

of the filtered stuff. Most consumers are aware of the threats that plastic bottles pose to the environment—in fact, according to a 2016 survey by Mintel, two in five regular bottled water drinkers said they were drinking less bottled water because of its environmental impact. However, the results of this survey do not negate the fact that bottled water sales are barraging through the roof. Indeed,

U.S. BOTTLED WATER CONSUMPTION (BILLION GALLONS) 10 8 6 4 0

2000

‘02

‘04

‘06

‘08

‘10

‘12

‘14

Source: Beverage Marketing Corporation

nation-wide campaigns that ban or discourage plastic water bottle-use are heard crystal-clear, but they have had little effect on consumer purchases. Unfortunately, as people continue to swap out sweet, carbonated beverages for water, this will continue to be the case. In addition to promising better nutritional value in their products, PepsiCo also addresses environmental concerns in their “Sustainability Agenda for 2025” by stating goals to produce significantly less waste in their production process. However, goals such as “achieving zero waste to landfill across direct operations by 2025” seems infeasible. It is difficult to tell how dedicated water bottle companies like PepsiCo really are to environmental sustainability

Ted Rosen

OH, SNAP! Snap, Inc. Files for Massive $25 billion IPO

f taking a momentary break from your incessant Snapchatting to read the news, you would have noticed a story that has the investment world filled with excitement: Snap, Inc, the company that owns the popular media messaging app, Snapchat, recently filed papers for their Initial Public Offering (IPO). Although the final valuation, and hence the total amount Snap,

since it is in their best interest to sell as many bottles as possible. A Watered Down Public System: The Dangers of Water Privatization The fact that consumers are willing to pay more for their drinking water and use less of the tap water already available in their homes is disconcerting to say the least. As more people comprise the customer base for private companies, the public-backed water system will deteriorate even further as it receives less attention and fewer operational funds. This results in a lower quality of municipal tap water and the start of a vicious cycle in which private corporations gain more control, sell more bottles, and leave an even

larger carbon footprint. In this way, the demand for more water bottles poses a threat to the environment by creating a deep divide between private and public entities. Furthermore, several studies strongly suggest that bottled water is not really any safer than tap as both are ultimately overseen by federal agencies (the EPA and FDA respectively) with similar health-inspection procedures. Still, convincing consumers to switch over to tap is no easy task. The prevailing problem is that a large gap exists between anti-water bottle campaigns and actual consumption of water bottles. In order to lessen this gap, private companies should come up with additional ways to make their products more sustainable and effectively market

“Snap’s financials display a company that is simultaneously experiencing both remarkable growth and worrying losses.” Inc. will raise from the IPO is still being determined, the company is expected to raise around $3 billion at a valuation of $20-$25 billion, making this the largest technology public offering since Alibaba, a Chinese e-commerce behemoth which went public in 2014. An IPO of this magnitude for a company whose product is so commonplace in young people’s everyday lives warrants careful due diligence and analysis. Such an analysis will hopefully give potential investors an indication as to whether Snap will successfully create returns for investors or make their money

disappear faster than the average snapchat. Snapshot Since Snap’s flagship product launched in 2011 under the fitting name of “Picaboo,” the app’s popularity has been inextricably linked to the growth of the company. In the app’s early days, functionality was limited to pictures that would quickly disappear once sent to the recipient. Over the course of six years, Snapchat added features such as video messaging, instant messaging,

“The company is expected to raise around $3 billion at a valuation of $20-$25 bil-

lion, making this the largest technology public offering since Alibaba.” PRICE-TO-SALES OF SNAP INC. VS. RIVALS

Snap’s P/S based on $25 billion valuation. Price for others is enterprise value. 61.7

60 40 30 20 0

1.1

4.2

4.3

5.2

6.8

GoPro

Twitter

Yelp

Google

Yahoo

12.6

Facebook

Snap

Source: Bloomberg, SEC Filings

Geotags, Stories, and Memories—all of which have led to 158 million daily users (up 48 percent from 2015) who send over 2.5 billion pictures, videos and messages per day. Snap has other products as well, such as Publisher Tools and Spectacles, but they generate a fraction of the revenue that Snapchat does. And although the narrative of Snapchat’s incredibly large user base is very appealing, investors must take a much more analytical approach to valuing Snap that goes beyond the sheer number of users. Financials: The Good and the Ugly Snap’s financials display a company that is simultaneously experiencing both remarkable growth and worrying losses. The company generated

$404.5 million in sales in 2016, up from $58.7 million in 2015 (589 percent increase). This top-line growth has been driven entirely by soaring advertising revenues that have increased alongside the number of Snapchat users. Just like social media giant Facebook, Snap’s business model monetizes its users by having companies use Snapchat’s innovative platform to advertise to Snapchat’s users. And Snap’s user monetization is also improving alongside its revenue growth; the company’s global Average Revenue per User, or ARPU, has grown from $0.31 in Q4 2015 to $1.05 in Q4 2016. Unfortunately, Snap has yet to make a profit as expenses have grown each year (a characteristic endemic to most young and growing tech companies), and have created staggering losses of $372.9 million in 2015 and $514.6

million in 2016. If a half billion dollars in losses isn’t enough for some to question Snap’s potential $25 billion valuation, then look no further than when the company itself stated in their IPO filing documents that they “may never achieve or maintain profitability.” That disappointing yet brutally candid admission of Snap’s propensity for losses seems to make a Snap, Inc. stock look more like a liability for investors than an asset. In addition to the losses, the current valuation of Snap, as measured by the priceto-sales ratio, makes Snap incredibly expensive relative to other social media/technology companies such as Facebook, which has been profitable for years as seen in the graph. Growing Interest for Investors Yet despite Snap’s huge losses and astronomical valuation, many investors are open to buying into the IPO because of Snap’s projected innovation into the future and its growing ability to attract engaged users and advertising dollars. Snap relies not only on increasing the total numbers of its users, but also more specifically on increasing the number of engaged users—ones who use the app for long periods of time throughout the day. Snap knows these “engaged” users are the most valuable to advertisers, and the company has a great selling point in that the average daily user spends a whopping 25-30 minutes on Snapchat a day: an amazing length of time that only few products and services can claim. Investors rightly recognize this terrific user engagement as a validation of Snap’s innovative product, and Snap has accordingly priced this into

their valuation. Snap, however, is still looking to drive long-term user growth and engagement through continued product innovation, as shown through their $183 million expenditure on research and development in 2016 (up from $83 million). And if there is one thing all investors, bullish or bearish, can agree on, it’s that Snap knows how to innovate. From popularizing vertical video to rewriting social media with the concept of ephemerality of messaging, investors are very interested to see what Snap has next in their product pipeline.

this hot tech IPO. As stated before, the last big tech IPO was Alibaba, which happened almost three years ago. And year-to-date, there have been 123 tech IPO’s that have collectively raised $7.1 billion, a 20 percent drop in offerings and 58 percent decline in proceeds from this time last year. Due to this lack of tech IPO action, there is billions of investment dollars waiting in the coffers of technology investors patiently waiting to finally be infused into a company like Snap.

On a more circumstantial note that explains investor interest, the fact that there have been very few big tech IPO’s in recent years means tech investors are willing to pay a premium to get in on

The Fruits of Being Bold In 2013, the CEO and founder of Snap, Evan Spiegel, boldly rejected a buyout offer from Facebook for

$3 billion. While mocked by many in the tech world at the time for his perceived arrogance, Snap’s recent IPO filings have proved Spiegel right and everyone else wrong. Wall Street is saying that Snap, Inc. is worth billions more than what was offered to him by Facebook. And Spiegel, who is only 26 years old, stands to become a very wealthy man once Snap goes public. However, Snap’s increasing losses and seemingly expensive valuation relative to its peers should cause investors some pause. Snap is undoubtedly a remarkable success story, but only time will be able to tell if investors jumping in right now will be rewarded for their risk-taking.

Karnika Pombra

THE VOTE HEARD ‘ROUND THE WORLD How the National Election Echoed Across International Economies

f you were one of the 70 million Americans who pulled half an all-nighter to tune into the election results on November 8th, you may have thought that the map of the United States, with its 50 states alternating between red and blue, was all there was to the election. Economically speaking, however, perhaps expanding the map until it encompasses the rest of the world could give us a closer look at the financial implications of that night. Historically, the rise of globalization means that American elections have had far-ranging effects on foreign economies. Since 1928, the S&P 500 has averaged a drop of 2.8 percent every time the American election involves two non-incumbents, with foreign stock markets consistently following suit. This time around, the effects of financial uncertainty were magnified, especially when looking at key countries. This is mainly because markets, whether they are domestic or foreign, have an aversion to uncertainty. In

the case of this year’s election, the candidates had extremely different economic platforms, a gap that maximized market uncertainty. Additionally, as a candidate, Trump caused greater uncertainty in foreign markets because markets feared that his lack of experience, particularly in the political sector, would make his foreign economic policy even more unpredictable. Around the World in Eight Hours One of the most intriguing aspects of this year’s election was how instantaneous countries’ financial reactions were. Major changes were detectable in foreign markets even before a victory was declared. On the day of the election, global markets were on the edge of their seats, precariously positioned like dominoes. Around noon on Election Day, European and Asian trading prices were relatively high, and the Mexican peso was at a two-week peak as Clinton showed promise in early voting results.

However, in the eight hours of election night, the dominoes fell. Around midnight, and specifically when Trump victories seemed certain in the key states of Ohio, Florida, North Carolina, and Utah, the peso toppled to an all-time low. As predictions for Michigan and Pennsylvania began to point to a Trump victory, Asian and European trading prices plummeted as well. As soon as uncertainty was discernable in the polls offering predictions for the election, this same uncertainty translated into a loss of confidence across the markets, leading to their sudden drop. From London to Paris with Love In the case of Europe, the unforeseen election results put the continent in familiar territory, as the outcome was reminiscent of Britain’s surprising exit from the European Union. After Brexit, the pound fell roughly 11 percent and the euro tanked 4.7 percent just twenty-four hours after the deciding referendum. However, while the conclusions of both Brexit and the

US election were familiar in their unexpectedness, their economic impacts were slightly different. In fact, Trump’s victory actually allowed the euro to increase in value immediately after the election, in comparison to the severely weakened dollar. However, the euro is still on unstable ground, as investors are waiting to see if the Transatlantic Trade and Investment Partnership will be a victim of the president-elect’s emphasis on domestic economic activity. Asian Markets and the Slippery Road For most markets in Asia, the financial reactions to election night were considerably diverse. Most, if not all, markets plummeted in response to Trump’s victory in the battleground states of Florida and Ohio. In reaction to these states’ results, Japan’s Nikkei fell 5.8 percent and Hong Kong’s Hang Seng dropped 3.5 percent. Interestingly enough, some Asian currencies were actually positively affected. As in Europe, this was primarily due to the fall of the dollar. For example, due to the U.S. dollar falling 1.8 percent in comparison, the Japanese yen actually strengthened. However, other Asian economies had more negative or uncertain results. The South Korean won plummeted, mostly because trade with the United States may be severely affected by the results, which would be a blow to a country that has exports as 45.9 percent of its gross domestic product. As for China, the consequences are uncertain, with experts unsure whether the yuan could be hurt by Trump’s vow to label China as a currency manipulator or alleviated by the dollar’s fall.

A Pass on the Peso (and Canadian Dollar) The United States’ neighbors to the north and south were negatively affected by the election outcome. The Canadian dollar fell, and the Canadian economy began to suffer in reaction to the potential termination of trade and energy relations. Unsurprisingly, Mexico was affected even more severely. Early on during election night, the Mexican peso already plunged 8 percent. By the end of the election, the peso plummeted 20 percent, a record low, perhaps making it the country most critically affected by the outcome. Considering that nearly 80 percent of Mexico’s exports go to the United States, and roughly 6 million jobs depend on U.S. trade with Mexico, such a reaction is comprehensible. In the near future, we can see that proximity matters in how much the election affects foreign markets. While the United States’ trade with Canada and Mexico is comparable to its trade with Asia and Europe, the reverse is not true. Canada and Mexico’s trade with the United States is much greater than their trade with any other country, amplifying the elections’ effects on

their economies. Patterns and the Long-Term While it is tempting to fixate on the immediate global effects of election night, reflecting on the long-term impact is arguably even more valuable. Looking back at the outcomes in countries with economies that are deeply influenced by the United States, we see that the instantaneous reaction was typically some sort of crash, especially in volatile metrics such as stock markets and currency value. If a country’s currency value increased, it was usually only in the context of the sudden fall of the American dollar value. Looking ahead to the months following election night, we perceive the United States’ stock market to slowly but surely climb back up, with many European and Asian markets following suit. However, countries that markets forecast will be negatively affected by new trade policies, such as Mexico, remain at post-election lows. In the long-term, true predictions for foreign markets are impossible, perhaps showcasing how the unexpectedness of election results parallels economic uncertainty.

MEXICAN PESOS PER DOLLAR 18.0 18.5 19.0 19.5 20.0 20.5 Aug

Sept

Oct

Nov

Source: Economist; Thompson Reuters

Amanda Chow

OUT OF THE SHADOWS Marijuana’s Transition from the Shadow Economy to a Lucrative, Legal Industry

he topic of marijuana legalization has long been a contentious, highly controversial issue. The question of whether or not to legalize the use of marijuana for nonmedical purposes has figured prominently into the political landscape. Currently, voters in 26 states have decided in favor of legalization in some form. Support has only continued to grow in recent years, which was seen most recently in November 2016 with the passage of measures in California, Nevada, Massachusetts and Maine permitting the use of marijuana for recreational purposes. In these states, the market for marijuana has gained full legal status and is no longer confined to the obscurity of the shadow economy. While recent legislation will not take effect until 2018 at the earliest, questions of its economic impact are already generating debate. An Optimistic Outlook: Colorado’s Economic Success For some states, the introduction of marijuana as a legal, recreational drug has generated a new high in the local economies. Ever since the implementation of legislature legalizing marijuana in 2014, Colorado has experienced an economic boom. The legalized marijuana industry has led to the creation of over 18,000 full-time jobs in the state. In the two years that it has existed, the marijuana industry has already exceeded the output per dollar spent of 90 percent of all industries in Colorado.

A report conducted by the state in 2015 found that the industry has generated $2.39 billion of revenue and $121 million in combined sales and excise tax revenues, surpassing revenue generated by alcohol sales three times over. The state’s marijuana industry is still growing, and total sales are expected to reach over $1.5 billion annually. Clearly, legal marijuana is an industry that has contributed significantly to the local economy and is one that is still expanding; on a national scale, it will surely continue to establish its grounding as one of the growing markets. The Challenges of Putting Down Roots The economic benefits of marijuana legalization sound attractive, but implementing this legislation comes at a cost. The economic impact of legalization in California, whose economy is the sixth largest in the world, is estimated at $7 billion. While voters only need to decide “yes”, effort must be put into structuring the legal and economic framework before any actions can take effect. The drafting of laws and regulations will be a formidable task for policymakers. Government workers are charged with drafting laws that will encompass all aspects of the industry: from where weed is grown to how it can be sold, to laws regarding its use. Failure to do so will allow the black market to retain its firm hold

“The introduction of marijuana as a legal, recreational drug has generated a new high in the local economies.“ 12

on marijuana sales. A black market that continues operating in the shadow economy will not contribute to tax revenues and will simply undermine the potential $1 billion a year that a state state could collect in taxes. Additionally, legalization measures will undoubtedly involve laws that pertain to licensing for growers and sellers. However, the behemoth task of drafting countless new laws and policies will create a need for more hands to fill administration and regulation positions, which will potentially create thousands of jobs. Planting on Foreign Grounds An unexpected consideration of legalization is the potential impact of legislation on markets outside of the US. Currently, much of the marijuana sold on the black market is sold in Mexico and smuggled into the US. However, legalization has made it cheaper for domestic growers. As more states pass measures legalizing marijuana, Americans will likely purchase more domestic marijuana, which can undercut growers in Mexico.

In an interview with NPR, Lawrence Payne, spokesman from the DEA, states that Mexican cartels are beginning to buy marijuana in America to smuggle back into Mexico. Increased legalization could mean that the US may predominantly export rather than import marijuana. Furthermore, the number of “cannabis tourists” to US states, in which visitors travel to another place in order to take advantage the legal use marijuana there, could increase. Social Impact and Health Risks While the economic effects of legalization have been at the forefront of the discussion, it is important not to neglect social and health risks associated with it. A report conducted by the Colorado Department of Public Health and Environment found that emergency department rates for visits that are “likely related” or “could be related” to marijuana increased by 77 percent and 68 percent, respectively, from 2011 to 2014. According to an analysis conducted by the American Automobile Association in May 2016, twice as many fatalities involved drivers who had THC in their systems in 2014 than 2012.

Although increasing numbers of drivers being tested positive for marijuana does not prove that marijuana was the cause of the accidents, the number of the deaths in which tests for marijuana returned positive are not insignificant. While the economic benefits of legalization are tantalizing at face value, it is important to consider the non-quantifiable impact and weigh them against economic arguments. Indeed, legalization can be a double-edged sword. The economic benefits are certainly significant: a legal marijuana industry can generate billions in tax revenue and lead to the creation of jobs. However, implementation can be complex and a significant black market may still thrive after legalization. There may also be health risks associated with it. When asked about the effects of the French Revolution, diplomat Zhou Enlai responded “it’s too soon to tell.” Perhaps we are undergoing our own revolution now. What will be the outcome of more widespread legalization of marijuana? Which way will the sword point? For now, it’s all mirrors and smoke.

www.wired.com

“In the two years that it has existed, the marijuana industry has already exceeded the output per dollar spent of 90 percent of all industries in Colorado.“ 13

Emily Winston

REVIVAL OF THE OLD, CREATION OF THE NEW Retail Customization in the “Digital Tailoring” Era We live in an interconnected world: one click on a social media application immediately reveals the fashion trends of the week and the latest outfits donned by celebrities at recent functions. As fashionistas and millennials reach out to social media outlets for style suggestions, they also turn inwards for inspiration, designing their own clothing and accessories through websites. Customization and personalization trends enable 21st century consumers to express their personalities and develop their unique styles.

inventor. Psychological and emotional attachment accompanies investment in a product. Creators and designers wear their personalized clothing, accessories, and shoes with pride. What is Old is New Again In 2016, popular fashion styles from the 1990s returned with “mom jeans,” chokers, and crop tops present from coast to coast. In terms of shoes, sneakers dominated the scene and continue to reign in the new year. Stan Smiths, Adidas tennis sneakers from the 1960s, are seen frequently on feet belonging to wearers unaware of Stan Smith’s former number one world ranking in world tennis. His eponymous sneakers are stylish, practical, and simple, and available in a variety of colors and materials. However, it wasn’t until celebrities began promoting new versions of the shoe on social media in 2014 that the sneakers became so widespread.

The Age of Personalization and Digitization Whereas personalization trends of the young arise from toys such as Build-A-Bear and American Girl Dolls, millennials who grew up in the digital age define themselves and their “likes” via personalized playlists on Spotify, bios on Instagram, and resumes on LinkedIn. Facebook and other forms of social media replace diaries and journaling that prevailed in the last two centuries. Now fashion has entered the scene of individualization and customization, with companies providing opportunities for customers to design their own items. Shoes can be designed on Shoes of Prey, clothing on Indochino, and accessories on Mon Purse. Not wanting to miss out on the latest trend, luxury brands such as Gucci, Louis Vuitton, and Prada provide customized lines as well.

There is a paradox in current fashion trends in that the old merges with the newly created. Styles from decades ago are embraced in addition to novel customized and individualized designs. The revival of Stan Smiths aligns with the theory that fashion cycles every 20 years. Bell bottom pants entered the fashion scene in the mid-1960s and 1970s only to be revived in the 1990s. In the 21st century, bell bottoms reemerged in stores’ inventories and customers’ wardrobes after another two decade cycle.

Personalization places the power of curation in the hands of the consumer. As in many fields, the time and effort devoted to the creative process rewards the

Personalization places the POWER OF CURATION in the HANDS OF THE CONSUMER. Express Your “Sole” with Shoes of Prey Startup retail companies allow the consumer to embrace the art of creation through websites that serve as “style guides.” Shoes of Prey grew from a small Australian startup company in 2009 to an industry transformer, selling 600 million pairs of personally designed shoes. Not only does the company’s website enable consumers to view shoes in 360 degrees, but it also allows them to customize and create their own footwear. Consumers select a base shoe style and then design the shoe of their choice. When perusing the

Shoes of Prey provides an exciting, rewarding, and fun experience for consumers as they witness their visions come to life on screen. Unlike traditional shoe stores that are only stocked for the current season, Shoes of Prey affords consumers the opportunity to construct and obtain the desired shoe regardless of the weather. Buying sandals in winter or snow boots in summer is a possibility with Shoes of Prey. A partnership with Nordstrom, $25 million in U.S. capital, and in-house technology allows Shoes of Prey to control its manufacturing process rather than outsource it. Consumers Create with Startup Customization Companies Indochino, like Shoes of Prey, is a customizable men’s clothing company with an accessible website for consumers. Suits and shirts are catered to specific sizes and available in a variety of fabric textures, patterns, and colors. Customers choose the type of lapel, number of buttons, style of pockets, and jacket and lining colors. Through the interactive website men are further involved in the process with a step-by-step video guide for suit measurements. However, personalization comes with a cost, with shirts selling at $129 and suits at $399.

website one can choose from a variety of heels, flats, and boots to customize. For instance, clients can select “High Block Heels” as a starting point and from there add specifics regarding strap styles, toe type, heel height, embellishments, colors, and materials. An example of a completed shoe design could be a patent leather peep-toed D’Orsay High Block Heel with shiny silver vegan piping. With additional features like 3D printers and virtual reality headsets, Shoes of Prey is not only conceptually ahead of its time but also technologically innovative.

In the accessories realm, Mon Purse gives customers the chance to monogram pouches, iPhone cases, cosmetic bags, passport holders, and luggage tags. The process of designing one’s own bag is simple: customers choose to monogram two letters, three letters, or names and phrases, then choose the size of their monogram, and lastly decide on its color. Mon Purse, like Shoes of Prey, is aided by 3D technology and a partnership with Bloomingdale’s, a retail industry leader. Unique 3D gaming technology enables customers to envision their final products as they decide

leather, size, color, and metal details. The company’s first U.S. launch in Bloomingdale’s flagship New York City store not only provides the company a new marketplace to shine but also is a branding opportunity that will increase online sales. Luxury Companies Customization

Embrace

Though customization and personalization are just beginning to thrive in the retail industry, the embrace of the trends from established brands is indicative that privatization and customization may persist. Gucci’s Do it Yourself service, first launched in May 2016 in Milan, allows consumers to customize their own bags, jackets, shoes, formal shirts, and sweaters with embroidered patterns, designs, patches, and monogrammed fonts from the Gucci collection. For Gucci, the Do It Yourself service allows customers to add their personality to traditional styles, while remaining true to the visions of

Alessandro Michele, the creative director of the brand. Like Gucci, Louis Vuitton enables customers to monogram bags with their initials. NikeID takes the customization idea a step further, giving customers the opportunity to choose an icon, material, color, or innovation and create a sneaker from there. With 3D technology customers can view their designed shoes online from all angles, including the sole, back, front, and sides. New Consumers, New Focus

can they cut the bottoms of their jeans to evoke a frayed look from the late ‘60s, ‘70s, and ‘80s, or patch their jean jackets for a denim-on-denim look reminiscent of the ‘90s, but they can also appreciate the fusion of design and technology available online that catalyzes their digital customization processes. With 3D technology and accessibility to innovative websites, brands can communicate easily with the creative and impulsive population of millennial shoppers whose style preferences are constantly evolving.

As fashion companies and retailers promote their products via social media marketing, models, and brochures, customizing clothing, shoes, and accessories through monogramming and designing is transforming the industry by increasing customer exploration and expression. Consumers are eager to connect with their clothing and can easily do so by digital and physical means. Not only

Though some people have yet to transition from the position of the consumer to the creator, many embrace this unique fashion opportunity. Brand loyalty still exists and style choices mirror earlier eras, whilst at the same time, personalizing shoes, clothing, and accessories through customization companies provides a meaningful, creative shopping experience for customers.

Ryan Ma

EIGHTY IS THE NEW SIXTY Ever-Increasing Longevity and the Worry About Retirement Preparedness

he saying “money is something you got to make in case you don’t die”, coined by twentieth century TV actor Max Asnas, has never been more applicable than it is today. Just 100 years ago, the average life expectancy was 51 years in the United States. That was a different time. According to the Royal Geographic Society, the life expectancy in the United States is now 78 for men and 84 for women. What may be most shocking is that life expectancy is still increasing. The Times They Are A Changin’ According to CNN, life expectancy increases two to three years every decade, meaning the average student strolling across Brown’s Main Green today can expect to live to be 104. This spike over the last century is certainly due in part to our rapid technological and medical advancements which have led to exponential growth in the quality of healthcare and hygiene, shelter and amenities,

“It is imperative that millennials learn about investing early and take advantage of investment at a young age in order to ensure a long and financially stable retirement” and overall nutrition. This ever-growing life expectancy places a lot of stress on many Americans who worry if they are financially prepared for 30 years of retirement. Between Social Security and personal savings, Americans have safety nets, but more and more Americans find themselves asking if it is enough for 30 years? It’s Not All Rainbows and Unicorns Increased longevity, the culmination of scientific progress and technological advancement, is a great thing. Yet, with a longer life expectancy comes greater concerns, for both individuals and the government. Currently, per the Society of Actuaries, a couple at age 65 has a 50 percent chance that at least one spouse will leave to be 92, and a 25 percent chance a spouse will live to see 97. This means that a couple currently of retirement age must be prepared to financially support themselves, and possibly a loved one, for another 25 to 30 years. This is extreme stressful for recent retirees or those approaching retirement age because when they began saving for retirement, they were not projected to live into their deep eighties or early nineties. Many individuals of retirement age feel forced to defer their retirement for a few years in order to save more and collect more Social Security in

the long run. As a result, longevity places high amounts of stress on all Americans, especially those eligible for retirement. Longer life spans also have a significant impact on the overall population and economy. The U.S. government is feeling the burden of longer life expectancies. The Social Security Act, passed in 1935, provides supplemental income based on tax contributions for all retired workers over the age of 65, per the Social Security Administration. However, in 1935, the average life expectancy in the United States hovered around 61 years of age, therefore, these benefits were only intended to last for no more than five to ten years, at maximum. Increasing longevity placed a large fiscal strain on the program, driving it to the brink of bankruptcy. Even if funding increased to accommodate more people for a longer duration, the program is perpetually in a lose-lose situation. By keeping the age at 65 or 67 with an ever-increasing life expectancy, Social Security payments must be made for a longer duration. However, if the age increased, say to 70 or even 75, this gives workers another ten years to contribute to contribute to Social Security, making their payments larger upon retirement. Increased life expectancy is placing a large strain not only on the minds and budgets of individuals, but also the US government.

Personal Stress Relief The best way to prepare for retirement is by starting early. This includes learning about investing at a young age. Jane Bennett Clark, a Senior Editor for Kiplinger, recommends saving income, even in small amounts, whenever possible. Through annual growth and compound interest, savings at a young age can have a large impact on one’s personal wealth years down the line. Kiplinger, assuming an 8 percent growth, calculated that an individual who starts saving 200 dollars each month at age 22 will have 1.2 million dollars by age 67. She also recommends investing early in a 401K plan or a Roth IRA, if a 401K is not offered, as it will produce similar returns to scale but is not matched by or associated with a company. Younger investors should be more willing to invest more aggressively. Ellen Rinaldi, an executive director at Vanguard, claims that young adults between 18 and 25 should have ninety percent of their investments in stocks. Stocks have the greatest growth potential, usually growing around seven percent yearly. Equity investment may yield high returns but also have significant volatility and risk. As individuals age, fixed income securities, such as bonds and Treasurys, become safer and more desirable investment options. Annuities are also great options for those looking for safe investments. Annuities are lump sums of cash invested that payout constantly over a fixed period of time. The produces a stream of income throughout retirement. The typical retirement portfolio evolves from high equity, low fixed income to focusing on growth and yield to one structured to preserve gains and mitigate uncertainty.

Choosing an optimal retirement age is also critical. Many workers are still able to perform their duties well into their 70s or 80s, allowing for them to continue working longer. By extending a career, workers can earn more income, increase their personal savings and increase contributions to Social Security. In addition, workers who wait to retire collect Social Security at a later date receive higher payments. It’s Not That Complicated Retirement has always placed immense amounts of stress on individuals and the government. However, the stress is growing, now more than ever, as longevity increases and the average length of retirement continues to grow. With proper planning, the individual burden can be conquered and the stress can be lifted. It is imperative that millennials learn about investing early and take advantage of investment opportunities at a young age in order to ensure a long and financially stable retirement. This advice becomes more and more imperative as life expectancy growth has no sign of slowing down as technology and society progress. It’s possible that humans will one day live to see 150, and that day may be sooner rather than later, making retirement planning crucial if retirement is to last over fifty years in the relatively near future.

Calvin Chu

AROUND THE WORLD IN 80 DOLLARS Exploring the World Without Breaking the Bank Traveling is exciting, but it certainly comes at a price, and a rather costly one at times. Between transportation costs, attractions, food, and living accommodations, seemingly small expenses can quickly add up to bank breaking sums. While it may be hard to cut costs on experiences and hot tourist activities, minimizing the proportion of a traveler’s budget spent on transportation has never been easier. Taking the Airway Most Travelled Airlines fly many routes, but not every route is created equal. Flight prices are created according to the popularity of their destinations and size of their connecting airports. For instance, small airports receive less air traffic, which translates into their flights being more expensive. As a result, flying from Los Angeles to Chicago may be manyfold cheaper than flying from Denver to St. Louis, even if the distance is longer. If you can arrange your travel to fly in and out of popular airline “hubs,” you may save hundreds on your airfare. More often

Traveling is exciting, but it certainly comes at a price, and a rather costly one at times. Between transportation costs, attractions, food, and living accommodations, seemingly small expenses can quickly add up to bank breaking sums. While it may be hard to cut costs on experiences and hot tourist activities, minimizing the proportion of a traveler’s budget spent on transportation has never been easier.

prices do come with strings attached, as both companies tack on transaction fees. Greyhound charges $5 per ride (one way), whereas Megabus tacks on $2 per transaction to incentivize buying a two way ticket. Make sure you take into consideration these extra fees before placing an order. Also, many stations charge more for in person, off line purchases, so make sure you book ahead online.

Taking the Airway Most Travelled

Public Transportation & Ride Sharing

Airlines fly many routes, but not every route is created equal. Flight prices are created according to the popularity of their destinations and size of their connecting airports. For instance, small airports receive less air traffic, which translates into their flights being more expensive. As a result, flying from Los Angeles to Chicago may be manyfold cheaper than flying from Denver to St. Louis, even if the distance is longer. If you can arrange your travel to fly in and out of popular airline “hubs,” you may save hundreds on your airfare. More often than not, a layover or multiple stop trip may save you big money by flying you between hubs rather than flying you directly to a smaller destination. The Wheels on the Bus Go Round and Round

Is the subway faster than the train? Are buses more convenient? Is there a day pass for buses? These are all questions you should find answers to before getting to a city. For example, buses can probably take you all the way across town, saving you from a hefty Uber charge, especially during surge times. Apps like Google Maps and Citymapper are great resources for finding the fastest route from point A to point B, but beware of the transfer rules for each system. If the system is very transfer friendly, then you may not need day passes. Otherwise, it may be wise to pay upfront for a tap card and load value or buy passes from there. Again, system prices vary greatly from place to place, so it is important to do your homework before you get there.

Riding Greyhound or Megabus may be a much cheaper alternative than riding the rails or flying to reach your destination. Especially for more remote destinations, taking the bus can help you with the final leg of your trip. Buses also do a great job of taking you through places you’ve never seen, if you’re up for a lengthy road trip. Another bonus is that if it’s a 6 to 9 hour drive, you can sleep overnight on that leg of the trip, saving you the cost of booking a hotel and maximizing your sightseeing time on the trip. However, these low

Don’t be afraid to use Uber Pool or Lyft Lines to save money on what otherwise would be a more expensive solo ride. This even goes for short trips that are walkable—time is money on your trip, and if you can save half an hour, that’s an extra half hour you get to explore the city. In cities with significant elevation differences, consider taking a ride up the mountain to a museum entrance, etc., to save time and energy. That being said, depending on your time urgency, don’t be afraid to walk

around and absorb the atmosphere of the place you’re visiting. The Early Bird Gets the Price Discount Sometimes stocking up or finding bundles is a great way to save cash on things you will do. Most major cities often offer a bundled admission pass to see a handful of the top attractions for one flat price. However, make sure you do a discount double check before buying multi visit passes or other promotions. Often the face value of the bundle is just a ploy to make you think that you’re saving money, but if you don’t go to any one museum, or if you miss one day, you’re better off just buying everything individually. Furthermore, avoiding packages allows for greater freedom and flexibility in case your travel schedule changes. A lot of awesome museums, parks, and exhibitions actually offer special promotions or free days and times, so check official websites to find out in advance! Time is a premium, and companies will charge more as you get closer to the event date. If you’re sure that you want to go to a must see event, buy the tickets in advance. With resale markets everywhere nowadays, if you can’t go, you can probably flip the ticket right back to the market to recoup your cost. This is particularly true for tickets to sporting events, which can quickly increase in price when people see that it’s a good day for an outdoor event. When in Rome Is $100 worth an instagram photo from a ferris wheel? Didn’t think so. Go to the places that you really want to see. Sometimes the free botanical gardens are worth more than the $50 theme parks. If you know someone who lives

in the area, definitely consider couch surfing to save on hotel costs, and it gives you the opportunity to see what it’s like to live there as a local, not just what it’s like to visit as a tourist. Part of travelling is working to immerse yourself into a place to get a taste of what the locals enjoy day in, day out. Ask around when taking public transportation what people really like to do, or if they have any tricks to go about the unbeaten path. Sometimes they’ll bring up a back road route that saves time, or a hole in the wall eatery that is a must try. While early planning offers structure to your trip, don’t be afraid to make some spur of the moment decisions to see different things. Sometimes an important sports game may pop up, or a chance to see a historical landmark. Maybe someone is trying to get rid of a ticket for very cheap. Whatever may happen, keep your eyes peeled for a new opportunity, and be flexible if things come up that aren’t planned. If you want to find everything by yourself, fear not! You’ll often find hidden gems just by stumbling around in a neighborhood, or looking at the street signs posted on a block.There’s always something just around the corner.

Waylon Jin

WHAT’S UP WITH METALS? Why the Market for Gold Matters to Us

Throughout history, jewelry has been worn to symbolize wealth and social class. Forty thousand years ago, jewelry was first worn by the Cro-Magnons as necklaces and bracelets made of animal cartilage, bone, and stone. In 4000 BC, Egyptians used the gold they collected from acquired kingdoms and African deserts to craft jewelry for the Ancient Egyptian elite. In a hierarchical society, price was never discussed. Demand only existed for a specific target market consisting of idolized figures. Today, jewelry has become more affordable and readily available across different consumer bases.

ewelry, most often associated with personal decoration, is worn as a symbol of wealth and fashion, especially among college students. Comprised of precious metals such as gold, jewelry has a direct relation with the markets. For college consumers, a drop in the price of gold could affect the propensity to buy jewelry.

“Uncertainties in macro markets and politics also have a direct influence on consumer behavior. ”

The Sky’s The Limit

From 2008 to present day, the number of people buying jewelry has decreased from 39.95 million to 29.84 million per year. During this same time period, the price of gold increased from $869.75 to $1,060.00. Tiffany and Co.’s Vice President of Investor Relations notes that the cost of gold is an important factor in calculating the price of jewelry, but not the sole determinant. Uncertainties in macro markets and politics also directly influence consumer behavior. The most popular jewelry people are buying is diamond jewelry. According to a survey by the Jewelers of America, diamond jewelry and loose diamonds make up about half of all jewelry sales.

With high jewelry demand, jewelry retailers are finding ways to both earn profits and satisfy the customer’s demands. Susan Thea Posnock, Jewelers of America spokeswoman, reports it typically takes around four to six months before a shift in precious metal prices affects the jewelry price. However, shifts in prices are less likely to influence high-end retailers since they focus on curating a prestigious image of their products. The same can be said for retailers who have purchased in advance and are less likely to turn over new products, since they will be keeping their inventory into the future.

“Ramping Up” Speed

Though jewelry may be expensive, retailers often fall short of their profit goals. In 2012, amidst high gold prices above $1600, jewelry stores only saw 5.3 percent profits before taxes. High overhead costs, from purchasing materials to insurance and salaries quickly cut into a retailer’s revenues and reduce net income. The cost to make jewelry also accounts for the cost of skilled labor, the tools needed to craft the jewelry, and the price to rent land. In addition to rent and employee salaries, jewelry retailers have to pay premiums to ensure the jewelry being bought. As a result, about 25 percent of products sold by jewelry retails were typically marked up 90 to 110 percent to compensate for costs.

of Asia might be viewed as an investment. In those regions of the world, gold jewelry is sold by weight, based on the prevailing price of gold and the purity of the gold in the jewelry. In the United States, jewelry expenditure varies by region. Residents of Western, Midwestern and Northeastern United States spend the most overall on watches and fine jewelry. According to the Consumer Expenditure Survey, residents in these regions spend 17 percent more than the nation’s average jewelry expenditure. Statistically, consumers prefer purchasing in the “romance and gift giving time period.” In November and December, holiday shopping prompts people to purchase more goods for their loved ones. After Christmas, Valentine's Day in Feb-

" The cost of gold will continue to set the “threshold” price of jewelry, but overall consumer demand will probably have a greater effect on jewelry prices in the future." Varying Regions, Varying Times: The Effect on Gold Price When analyzing jewelry sales, one must also consider geographic and seasonal factors. For example, in India and Singapore, gold prices adjust based on market fluctuations. During the busy Hindu holiday, Dhateras, Indian and Singaporean retailers increase prices more rapidly in response to the high demands of the consumers looking to buy the auspicious gold. Moreover, some jewelry purchased in India and parts

ruary and Mother's Day in May both drive up the demand for luxury jewelry. Weddings, however, are the most important life cycle events that drive jewelry demand. The bridal market – engagement rings, wedding bands, attendants’ gifts – represents up to 40 percent of a mass market jeweler’s annual sales. For high-end jewelers, bridal sales represent about 30 percent of annual sales. How Much Faster Can We Travel? The latest trend in the jewelry

market is moving online. The shift to e-commerce is fueling the growth in the global jewelry market. The Global Gems and Jewelry Market Forecast and Opportunities expects the global jewelry market to reach $257 billion by the end of 2017, and grow at a rate of 5 percent per year over the next five years. The online jewelry market is expected to grow at a fast rate over the next several years and is expected to capture 10 percent of the global jewelry market by 2020. Online fashion jewelry sales are projected to take an even bigger slice, capturing 15 percent of the market by 2020, according to Connecting Dots. Mithun Sacheti, the CEO of Carat Lane, India’s largest online jeweler, noted that “the market is growing, but it’s still small, as online sales of fashion and fine jewelry combined are expected to reach $150 million in 2015, while last year it was $125 million. In 2013 it was not even $2 million. This part of the jewelry market is exploding.” Online shopping is prevalent and catalyzes the growth of jewelry sales. Jewelry sellers are capitalizing on the opportunities this market affords them. Personalization, curation and home trial options attract new customers and boost product sales. While there is a correlation between gold price and jewelry sales, this relationship may be weakened by the rise of online shopping. The cost of gold will continue to set the “threshold” price of jewelry, but overall consumer demand will probably have a greater effect on jewelry price in the future.

Hallie Wolff

POWER OF THE PURSE Ideological Protest in the New Political Age

n the wake of a particularly tumultuous and extremely divisive election, the current political climate has brought the most unlikely entities under attack for their perceived political affiliations. Many opposing President Trump have begun to boycott retail companies such as Dillard’s, DSW, and Bloomingdale’s, all of which carry products from Ivanka Trump’s line of clothing and accessories. Liberal groups and individuals are also targeting Trumpowned enterprises such as L.L.Bean, and service companies with ties to the president, such as Uber. As a form of ideological protest, consumer boycotts have the potential to tarnish the reputations of companies that are currently on (what some believe to be) the wrong side of history.

while the New York Taxi Workers Alliance went on strike. Until early February, Uber’s CEO Travis Kalanick was set to serve on President Trump’s economic advisory council, signaling to many that the company itself supported, or at least condoned, some of Trump’s highly contentious political decisions. Kalanick has stated in the past that having “a seat at the table” is the best way to effectuate change, a sign that his relationship with the president did not mean an endorsement of the administration’s policies. However, many irate consumers found this cooperation with the president to be unacceptable, and were compelled to take action. 16 business executives, including those of General Electric, J.P.Morgan Chase, Disney, and (originally) Uber, were chosen to participate in the President’s Strategic and Policy Forum. Many of the selected executives have noted that, while they may not wholeheartedly support many of President Trump’s more contentious policies, having a say in how the rules are being written is extremely important for the futures

Caught in the Political Crossfire The most recent company to come under fire for proTrump behavior is Uber. Calls to #DeleteUber came after the company allegedly profited from the anti-immigration protests at JFK by eliminating surge pricing

â&#x20AC;&#x153;As a form of ideological protest, consumer boycotts have the potential to tarnish the reputations of companies that are currently on (what some believe to be) the wrong side of history.â&#x20AC;?

of their companies. Many of them also believe that there is a big difference between being in the President’s good graces and thoroughly approving of his every decision. Their customers, on the other hand, see it differently: efforts to “collaborate” with Mr. Trump have mostly been met with public criticism and visceral backlash. The ensuing boycotts and bad press put many CEOs like Kalanick and other corporate higher-ups in quite a bind. They are finding it increasingly difficult to choose between communicating with the new administration and maintaining their own customer base, straddling the separation of enterprise and state. It remains to be seen, however, if these boycotts can cause enough long-lasting damage to companies’ bottom lines to bring about major reform. Grab Your Wallet One boycott movement that has garnered much support is the Grab Your Wallet (GYW) campaign, which pressures companies to terminate contracts and cut ties with the Trump family empire by halting

consumption of said companies’ products. The GYW organization has published a list of companies to boycott, placing them into categories such as “Retailer that Sells Trump Family Products,” “Trump-Owned, Branded, or Operated Business,” etc. Included in the list is a section for “Recommended Action To Be Considered For Removal From Boycott List,” which details the demands of GYW. The ultimata range from “Stop selling Trump brand goods,” to “Remove senior executive leaders supportive of Trump.” Since its emergence in October 2016, the campaign, which exploded over social media, has received considerable news coverage and dropped 21 companies from its boycott list once its stated demands were met. Though the GYW campaign has garnered much attention in the past few months, some are skeptical of the true impact that consumer boycotts can have on corporations’ actions. This month, Ron Lieber of the New York Times explained that boycotts centered around highly polarized issues often have difficulty gaining traction. If the central matter is

“Boycotts must do more than just target a company’s bottom line—they must target the core of the company itself: the brand.”

partisan, he says, boycotters should expect that for every person jumping on the #DeleteUber bandwagon, there is another who pledges to back the company with comparable fervor. In a TIME article published in October, Maurice Schweitzer, a professor at the University of Pennsylvania's Wharton School of Business and an expert on the topic of boycotts, stated that the efficacy of Trump-brand boycotts is questionable. He attributed this to a lack of centralized control and long-term planning, both of which are necessary for successful boycott campaigns. However, the article was written prior to the rise of the GYW movement, which Schweitzer might have observed to be a potential leader, with the ability to rally, organize, and maintain longterm support. Hitting Where It Hurts It seems that if the GYW movement maintains its current level of support and organization, its intended goals may not be too far out of reach. Grassroots boycott campaigns can only produce real results with sustained and substantial backing, along with well-communicated goals. Long-term plans are necessary to ensure that sales will not rebound once the tension and anger inevitably dissipate. Clear and firm demands must be made in order to reinforce the credibility of threats and show direction in courses of action. Most importantly, boycotts must do more than just target a company’s bottom line—they must target the

core of the company itself: the brand. Brendon Steele, a senior manager of stakeholder engagement at Future 500, affirmed this idea in an article for the Guardian. He pointed out that a company is nothing without its brand, and that damage to corporate identity can create long-term effects that will not fizzle out like other forms of protest tend to do. He further reasoned that, â&#x20AC;&#x153;done strategically, putting a brand at risk can encourage a conversationâ&#x20AC;? about how a company might change its actions. For boycotters, this result is worth quite a bit more than the short-term pain caused by a few nasty tweets and a momentary slump in sales.

hardwaremassive.com

BOYC TT

Ben Chicchia

A DIRE STRAIT A Fall in Maritime Security and its Effects on International Trade

he Strait of Malacca is amongst the busiest sealanes in the world for international trade. Despite its importance, the Strait has been surpassed in news coverage by the events in the South China Sea. While the geopolitical posturing taking place over the Spratly islands and right to resource extraction in the South China Sea has taken precedence in recent years, the security of the Strait of Malacca is deteriorating. The potential for maritime terrorism and the collapse of multilateralism in maintaining the integrity of trade through the Strait poses one of the most understated threats to international trade and the security of the United States.

amti.csis.org

"With over 15.2 million tons of oil transported through the Strait each year, Malacca has the second highest trade volume of petroleum of any choke point on Earth." A Precarious Arrangement With over 15.2 million tons of oil transported through the Strait each year, Malacca has the second highest trade volume of petroleum of any choke point on Earth. A significant amount of the oil imported by the US passes through the Strait, not to mention consumer goods and other resources. However, the region has been susceptible to piracy in the past, as the high number of unarmed vessels and the strait’s close proximity to land make the area an easy launching point for potential raiders. Piracy prevention has primarily

CHINA

fallen to a US-facilitated alliance between Singapore, Malaysia, and Indonesia. While successful, the alliance may be untenable due to a number of political factors, including the United States’ recent reorientation to the South China Sea and the 1MDB banking scandal, which has called the legitimacy of the Malaysian government into question. In the Shadow of the Spratly’s Were the alliance to collapse, the region would become as synonymous with piracy as the Horn of Africa, a reputation that would not bode well for global trade. Shipping firms and insurers such as Lloyd’s of London

"International security must focus on more than the struggle between global powers for spheres of influence, especially in an age of globalized economies." have fallen on hard times due to the decline in oceanic trade, and would be hard-pressed to protect their ships. President Trumpâ&#x20AC;&#x2122;s focus on preventing Chinese dominance over the South China Sea would tie up key naval assets in the region, preventing easy responses to pirates.

Chinese aggression in the South China Sea is, of course, of concern; the threats to international law and the norms of sovereignty are tremendous in the face of Chinese expansionism. International security must focus on more than the struggle between global powers for spheres of influence, especially in an age of globalized economies. The situation would deteriorate further if Najib Razak, Prime Minister of Malaysia were to take an increasingly autocratic stance in the face of corruption allegations over the aforementioned 1MDB banking scandal, as civil unrest could create fertile ground for pirates to operate on the shores of the Malay Peninsula. Singapore and Indonesia have no grounds to police Malaysian waters under international law, and as such, there would be little chance to curtail piracy operations. Maintaining Commerce Were the U.S. to devote ships to bolstering the alliance, potentially

with a status of forces agreement with the Malaysian government, any destabilization in Malaysia could be addressed without the potential for the derailment of international trade. It is imperative that the United States maintain an open sea-lane in the strait in order to allow for the continued movement of goods, especially as the current administration edges closer to a confrontation with Iran that could jeopardize easy travel through the Strait of Hormuz. Providing security here would also help quell fears over potential threats to global trade, any harm to which would be a sight for sore eyes in a world where the reemergence of nationalism has made some wary of globalizing trade altogether. America First? The fear of Chinese expansion in the South China Sea is a warranted concern, especially as China uses its newfound economic power to build an offense-capable armed force. This should not, however, provide impetus for a one-sided security policy in Asia, as any close reading of history shows that a single-minded focus on one area can lead to neglect and conflagration in others. Free trade is an existential necessity for the United States, and as such, the potential for instability in this crucial sea-lane should be more of a concern for the current administration.

The U.S., and especially AFRICOM (the joint command of the U.S. military that deals with affairs in Africa), is still dealing with the effects of piracy in Somalia on terrorism. It would pose a serious threat to American security and prosperity were a similar situation allowed to develop in the Strait of Malacca or other regions where trade routes provide fertile ground for piracy, organized crime, and potentially even links to terrorist organizations. If President Trumpâ&#x20AC;&#x2122;s interests truly lie in putting America first, he should put serious consideration into a more multifaceted view of security and trade in Asia.

Joseph Kirby Belmonte

AN OPPORTUNITY FOR GROWTH Newly Proposed Free Market-Oriented Policies give hope for Economic Growth in the Philippines

n May 9, 2016, Rodrigo Duterte was elected as the new President of the Philippines and announced his plans to free the Philippine economy from the “clutches of oligarchs” by opening up key markets to new companies and foreign investors. Duterte has since gained worldwide notoriety for the abundance of politically insensitive and undemocratic statements he has made, as well as his infamous war on drugs that has, as of January 31, 2017, resulted in the deaths of over 7,000 people. Unsurprisingly, these controversial issues have had numerous social and economic implications on the country. Thousands of families have been left without their breadwinners, while the climate of uncertainty and instability has effectively scared away foreign investors. A Chance to Move Forward Although the potential benefits of

the following proposed economic policies in no way justify or validate the harrowing drug war, the policies do offer the country a glimmer of economic hope. If successfully implemented, the newly proposed competition-promoting policies aimed at opening the domestic market to new players could contribute to improving the efficiency of the Philippine econo-

refocusing––the brutal war on drugs would be another such way. Currently, the Philippine energy market is quite inefficient: while other Asian countries’ governments subsidize electricity production, the Philippines heavily taxes the industry and subjects it to royalties and fees. Moreover, excessive bureaucracy and anti-competitive behaviour

“Although the potential benefits of the proposed policies in no way justify or validate the harrowing drug war, the policies do offer the country a glimmer of economic hope.”

my, which could lead to significant economic growth. Specifically, the administration plans to deregulate critical sectors such as energy and telecommunications by removing–– or at the very least, altering––certain competition-preventing laws. This is important because institutional red tape, inefficient legal processes, and anti-competitive behavior from monopolists have severely restricted new firms from entering the market, ultimately hurting consumers. Current State of the Energy and Telecommunications Sectors According to Duterte, the policies are intended to “promote competitiveness and quality of service” within key sectors such as energy and telecommunications, as doing so is “the only way to make [the Philippines] move faster to benefit the poor”, though one could argue that ending––or at least completely

have made it exceedingly difficult for new firms to enter the market. Because of this, the Manila Electric Company (Meralco) has a monopolistic grasp on the energy market in the Philippine capital, Manila, as well as the surrounding provinces––a hold that makes energy shockingly overpriced. Indeed, according to the Freedom from Debt Coalition, energy in Manila should cost 40 percent less than it currently does. Electricity costs 16.7 cents per kilowatt-hour in Manila versus the average of 12 cents for the equivalent in the United States despite the fact that the Philippines is a far less-developed country with much lower average wages. The Philippine telecommunications sector is also grossly inefficient. Currently, the telecommunications market is subject to duopolistic rule by the Philippine Long Distance Telephone (PLDT) and Globe Telecom.

As a result, the average internet speed is among the slowest in the world—last in the Asia Pacific region and 103rd globally.

Potential Benefits of the Proposed Policies The most significant benefit of opening up the Philippine economy to new companies is that the increased competition within key sectors currently being dominated by oligarchs could, in turn, improve services and create lower prices for consumers. As new businesses enter the market, existing firms would be forced to adapt by becoming more efficient (i.e. by lowering their costs and increasing production). In addition, the increased competition would incentivise firms to innovate and create higher quality products for their customers. At the end of the day, consumers stand to benefit greatly from free-market-oriented policies, as they would benefit from more varied and cheaper services. Another advantage is that these new policies could effectively redistribute wealth from the oligarchs

“…a regretful public picking up their hope and prospects of a do-over, with a pressured parliament facing an important dilemma between its service to the people’s faith and its loyalty to the government.” controlling the key industries to other players, a shift that could improve employment levels within those industries as more businesses gain market share. This, in turn, could also lead to greater tax revenue for the government––which, if spent productively (i.e. on improving public education, public health care and/or infrastructure) and not on the war on drugs, could benefit the country tremendously. Finally, the entry of foreign companies into the Philippine domestic market could stimulate a cycle of more foreign direct investment by improving other countries’ perception of the Philippines. One potential drawback of these new policies, however, is that foreign companies may dominate the market and drive away smaller domestic

businesses looking to enter. Looking Ahead: Hope Amidst Uncertainty While the implementation of these policies would undoubtedly be a net positive for the country, the volatile nature of President Duterte makes their success difficult to predict. For instance, if Duterte were to impose martial law, as he has threatened to do, the potential advantages of an open economy could be negated, as outside businesses may be unwilling to invest in a country with so much political uncertainty. What Duterte ultimately plans on doing remains to be seen, but with these proposed policies, there certainly exists the potential for substantial economic growth in the Philippines.

Vanessa Jingjing Zhang

EUROPEAN FINANCIAL CAPITAL Applications from Amsterdam, Dublin and Vienna

Re: Amsterdam European Financial Capital To Whom It May Concern:

Talent Wanted!

Interested in a greater share of and dominance in the European market and global business? Not sure how to transform economic capabilities and social stability into further development? Looking for a leadership as well as a service role in the consolidation and betterment of the European Union? Apply to be the new European financial capital! After Brexit, the reconstruction, relocation and redistribution of financial services and companies lies on top of Europe’s agenda. As agreed, London will help facilitate a smooth transition post-resignation. To apply, please submit your resume in your reply.

I’m Amsterdam, and I’m writing with an interest to become the new European financial capital post-Brexit. My concentration is History of Art and Architecture, and I’m also top of my class in education, English-language penetration, and living standard. I’m most proud of my legal system and urban security. Since I’m a port city, I also have extensive access to the wider global market. As the founder of the oldest stock exchange in the world, the Amsterdam Stock Exchange, I’m confident that I will maintain Europe’s leadership in international finance with my capabilities and due diligence. Attached below is my resume. Thanks for your time and consideration. Groeten, Amsterdam, Netherlands Resume Netherlands • GDP: $769.930 billion (world 17thth); GDP per capita: $45,210 (world 15thth) • Gini: 26.2 (world 9thth lowest); HDI: 0.922 (world 4th highest) • Second-largest exporter of food and agricultural products in the world Amsterdam • Third-best city worldwide for corporate location selection • Fifth-best city worldwide equipped to develop, attract and retain business talent • Third-best city for startups, fifth for scale-ups per European Digital City Index • Top-scorer in EF English Proficiency Index • “Alpha world city” by the Globalization and World Cities (GaWC) • Seventh in global cities of the future 2016/17 • Fifth-safest city globally, second in Europe • Second-largest international airport (ranked 13th worldwide) • Fourth most attractive European city

Re: Dublin European Financial Capital To Whom It May Concern: I’m Dublin. I’m double concentrating in History and English, and am a member of the Phi Beta Kappa honor society. Brexit might not be the end of the world at all, as I myself possess most of London’s qualities and advantages, but for a lower price. As the former second-largest city in British Empire, I shoulder the responsibility for relaying the torch from London for the future of Europe. In fact, Industrial Development Agency Ireland has already reached out to financial institutions to entice them to Ireland, so I am truly more than ready for this job. I am a top candidate in fund management, administrative effectiveness, and favorable business environment, and I’m willing to serve and make the best of my financial potential as well as that of Europe’s. Please see below for my resume, and I will wait on your kind response. le meas, Dublin, Ireland

Resume Ireland • GDP: $308 billion (world 42ndnd); GDP per capita: $69,375 (world 11th) • Gini: 30.0 (world 23rd lowest); HDI: 0.916 (world 6th highest) Dublin • Most easing business environment • Twentieth most reputable city in the world (due to people’s willingness to work, live and invest there) • Thirty-third best city worldwide in quality of life • “Alpha- world city” by the Globalization and World Cities (GaWC)

Re: Vienna European Financial Capital Application

To Whom It May Concern: I’m Vienna. I have developed my own Independent Studies concentration, which integrates Music, History of Art and Architecture, and Sociology. I have been partly on leave from the financial world for almost this past century, but I’m now fully restored and equipped to become the new European financial capital. With unmatched prestige, globally celebrated environment, outstanding living quality, best on time transportation records and the air of a world capital, I have much to offer: 1) Finance is a game of timing and efficiency, and on-time rigor and detailed perfection have been among my traditions for centuries. 2) To be the financial capital of Europe is not to conveniently make oneself the master of Europe, but is rather to make the effort to integrate, centralize and serve all member states in the EU, be it developed or accession states. I believe myself an excellent candidate for the financial center because I’m dedicated to solidarity and for the good of the entire EU project, without the selfish thought of merely raising my own ranking. 3) My central position is my unique advantage, location-wise and ideologically, and it offers not only business convenience, but also insurance of prompt, inclusive and free communication among member states. “I can assure you that this (Vienna) is a marvelous place, and [perhaps] the best place in the world.” Ending with W.A. Mozart’s remark, I write with sincere dedication and genuine initiative with regards to my prospective transformation into the new European financial capital. Below is my resume for your reference, and I would appreciate your consideration. Viele Grüße, Vienna, Austria

Resume Austria • GDP: $387,299 billion (world 29th); GDP per capita: $44,561 (world 14th) • Gini: 27.6 (world 14th lowest); HDI: 0.885 (world 23rd highest) • Twelfth-richest country in the world Vienna • Top best city worldwide in quality of life • Most livable city on Earth • Sixteenth-best rising global financial center • “Alpha- world city” by the Globalization and World Cities (GaWC) • Ninth biggest international tourist receptor,

Fwd: Critiques

Forwarded above are qualified applications, and here are critiques from the strategy side: Amsterdamâ&#x20AC;&#x2122;s illicit economy, from its black market to massive legalized drug transactions, naturally puts asset inventory in danger. Its reliability as a financial center will be cast in doubt, as investors might be reluctant to secure their billions of dollars in the same streets as cafes that host marijuana trades in their backyards. Dublinâ&#x20AC;&#x2122;s small-sized urban area and relatively weak infrastructure pose obvious problems. Without solid railroad, airport and other facilities, it faces severe challenges in undertaking the physical burden of handling the massive influx of companies, banks, and the great amount of human capital that accompanies them. Vienna has not been active in international finance for a long period, so the prevailing sentiment suggests that investors and CEOs simply wonâ&#x20AC;&#x2122;t be able to picture it as a money machine, and will rather see it as a quiet, elegant, prestigious corner, as it has always been. The rise of Vienna may or may not take place in near future, and as such, its nomination to becoming the next London might be too much of a rush.

Jake Goodman

TRUMP AND SILICON VALLEY: THE TWEETER VS. THE INNOVATORS Silicon Valley’s Uncertain Relationship With the New Administration

The technology industry has become a bastion of connectivity, integrating the lives of people around the world through social media platforms and innovative gadgets. In an age where technology connects the world more than ever, global politics has taken a very different course. Donald Trump’s surprising rise to the presidency echoed populist uprisings around the world—connected by their mutual opposition to globalization. Trump’s appeal among the ‘Forgotten Men and Women’ he often refers to and his insistence on ‘America First’ manifest a rising frustration against the post-1945 globalized world order. Trump channeled this very frustration through his preferred social media platform, Twitter, to connect directly with his millions of followers.

sectors have reacted in a multitude of ways. The tech industry largely shunned Trump during the election. The Center for Responsive Politics reported in August of 2016 that the tech industry donated around $4 million to Clinton, while only donating a fraction of that to Trump. However, their mutual opposition to Trump did not stop after the election. Post-inauguration, over a hundred tech leaders, including those of companies like Facebook, Apple, and Google, penned a letter on Medium criticizing Trump’s immigration policies and rhetoric. Trump has not taken criticism from tech companies silently: on the campaign trail, Trump attacked Amazon for antitrust violations, called for a boycott of Apple, and badmouthed Mark Zuckerberg for his immigration stance. Not everyone in Silicon Valley opposed Trump though, and those who didn’t have been warmly embraced by the president. Peter Thiel, founder of PayPal, actively supported Trump’s candidacy, donating to his campaign and serving as a headline speaker at the Republican National Convention.

Caught Between a President and a Digital Space Technology CEOs now find themselves in an uncomfortable position; how can they maintain their message of connectedness in an age where that very idea is threatened? It seems different CEOs across a variety

"Technology CEOs now find themselves in an uncomfortable position; how can they maintain their message of connectedness in an age where that very idea is threatened?"

A Tough Crossroads Regardless, when the results came in and Trump was announced the winner of the election, tech executives faced a choice: do we cooperate with a president who stands in stark contrast to our values or do we actively work against him? In what must have been a hard ethical crossroads, most CEOs have chosen to work with him, hoping to ensure that Trump will lead the United States to success. In mid-December, executives from Silicon Valley met with Trump to discuss jobs, immigration, and China, agreeing to continue to meet quarterly. Trump has also asked Tesla’s Elon Musk and Uber’s Travis Kalanick to join his economic advisory board. The most notable interaction between Trump and the tech industry, however, was more contentious. Trump’s executive order to temporarily suspend the US refugee program and halting the arrival of citizens of seven majority-muslim countries faced fierce backlash from Silicon Valley. The CEOs of Google, Apple, Facebook, and Twitter issued statements condemning the ban. A group of tech companies filed a legal brief to the Ninth US Circuit Court of Appeals claiming the order is unconstitutional and bad for business. Although the ban only affects 1 percent of US technology workers, worries persist in the industry that Trump’s immigration policies will drive away foreign-born talent. These worries are not unfounded; Trump’s rhetoric on the campaign trail has quickly translated into action.

"It’s becoming clearer that while Silicon Valley is willing to work with Trump, involvement remains conditional upon how well Trump upholds tech executives’ values." The Value of Values It’s becoming clearer that while Silicon Valley is willing to work with Trump, involvement remains conditional upon how well Trump upholds tech executives’ values. Ethical values still maintain strong influence in the decision-making processes of tech CEOs. Uber’s CEO, Travis Kalanick, recently pulled out of the aforementioned business-leader advisory committee to the President, most likely due to the #DeleteUber movement. Elon Musk faces enduring criticism for remaining in contact with the President, but his expertise in alternative energy and technology can provide useful input in the new administration. Overall, the technology industry’s relationship with Trump will remain tenuous at best. Silicon Valley executives must balance the pursuit of their values with the reactions of their consumers. Starbucks recently faced ire from Trump supporters for its plan to hire 10,000 refugees over five years. Tech executives do not want to alienate either Trump’s or Clinton’s base; their message of global and national connectivity has not changed. If anything, Silicon Valley serves to balance Trump’s isolationist tendencies

www.flickr.com 36

with their message of globalism. Trump also has a stake in ensuring Silicon Valley works with him. His central promises of economic resurgence rely on the innovation that the technology industry brings to the economy. Though his outspoken behavior on Twitter has given him corporate influence, it’s not a sustainable approach. Meanwhile, tech CEOs understand the limited influence of their criticism on Trump. On both sides of the equation, the stability of the past eight years has faded into a new era in which uncertainty reigns, and the next four years will be a constant struggle that will continue to test the strength of ethical orthodoxy in an industry of change.

Benjamin Winston

SEEKING GREATER HEIGHTS http://www.sparrowpost.net/

Luxury Travel For the Rising Middle Class

ew people are willing to pay tens of thousands of dollars to charter a private plane, and even fewer can afford the expensive upkeep and operating costs of owning a million dollar jet. Nevertheless, private air travel has entered the marketplace. Travelers now have the increasing ability to opt into memberships and purchase individual tickets on shuttles and private flights, opening new skies in which the tech industry can spread its wings. New Highs for Private Air Travel

"In lieu of limited leg-room and the risk of a crying baby on a commercial flight, flyers now have a slew of private flying selections."

Private jet travel is more convenient and efficient than commercial travel since private planes have different regulations from commercial ones. They can fly to both small and large airports, thereby offering more choices in landing destinations. Private travel affords passengers personalized, fast travel without the hassle of long TSA lines or lost luggage.

Chartered planes are shaking up the private aviation market and making luxury flight accessible to a much larger audience. In lieu of limited leg-room and the risk of a crying baby on a commercial flight, flyers now have a slew of private flying selections. Through membership programs, private airlines and shuttle per seat charters, individuals can purchase the option that is best tailored to their needs. A New Kind of Club Several charter plane companies are charging high buy-in costs, annual fees and reasonable ticket prices in exchange for free, empty leg flights, helicopter transfer services and charter seats on “shuttles.” JetSmarter, a high-end private plane rental company, flies to major cities and even to a few international locations. Memberships cost between $10,000 and $40,000. Planes typically have WiFi and complimentary food. JetSmarter has been referred to as the “Uber” of air travel and, using the JetSmarter app, one can easily search for and find nearby private jets to travel on and purchase a ticket. Though these planes offer more personal space that what can be found on first class commercial flights, full occupancy can still feel a little crowded.

Private Airlines and Shuttled Flights, Oh My! Another alternative to commercial flying is using a private airline. Typically, members pay a membership fee and annual fee. These private planes have fewer than 30 passengers aboard and provide passengers with a refined flying experience. JetSuiteX, launched in April 2016, offers flights between California, Montana and Nevada. Flight accommodations and space are comparable to, if not more luxurious, than first class commercial seats. Like traditional private airlines, JetSuiteX continues to charter entire jets at rates of $8,000 per hour. Shuttled flights are also gaining traction in the airline industry. With these flights, passengers purchase their individual ticket with no knowledge of who else will be on the private plane. This travel method is typically offered on popular routes or for special events, such as political rallies or the Superbowl. Travelers avoid the commotion and stress of a large commercial airport and receive some of the privacy and luxury afforded by private planes. Flying Private Amidst Flying Markets Amidst economic growth and bull markets, the private plane market

has been expanding since the 2008 financial recession. Businesses, high net worth individuals, and government offices are better able to afford and use private jets, whether through owning, leasing, or chartering flights. Interestingly, an increasing number of colleges and universities are purchasing or leasing private jets for athletic teams and school administrators. According to ESPN, at least 20 public universities own planes and many more charter flights. Much controversy surrounds this phenomenon as critics fear the cost of these expensive multimillion dollar planes at public universities ultimately falls on the students and taxpayers. Low oil prices, rising markets, and low interest rates have helped private airlines enlarge their fleets. With increased demand, new flying options, and advantageous economic conditions, the private plane industry is gaining momentum. Of course, commercial planes will remain the predominant form of air travel. Yet, just as Tesla and Uber brought electric cars and on-demand car service to the forefront, JetSmarter and other technology startups are broadening the market for private air travel and new technologies.

assets.entrepreneur.com

“JetSmarter has been referred to as the “Uber” of air travel.”

Neil Goh

THE STREAMING REVOLUTION How the Digital Streaming Service Industry Saved the Modern Musician

In 2001, a quick scroll on the wheel of the newly introduced iPod gave us a mere glimpse of cluttered downloaded music libraries. But the technologically problematic decade that followed the breakthrough fostered by Steve Jobs was unpromising for the recorded music industry. Limited device storage capacity coupled with digital piracy of songs and albums impeded the financial prospects of professional musicians. Physical CDs remained a cumbersome, unreliable consumer choice. With the general popularity of recorded music and worldwide revenues plummeting, the industry continued to shrink until its prospects appeared bleak.

Now, however, record labels are experiencing a pleasant financial resurgence with the advent of a relatively new phenomenon: digital music streaming. Look around you on a bus or in a classroom and notice how students are listening to their music: it’s most likely through Spotify, Apple Music, Pandora, or SoundCloud—all the major competitors in the emergence of the music streaming era. With the widespread availability of WiFi and mobile data, listeners can effortlessly stream music online in real time, accessing audio without the need to download massive files to their devices. Echoing the postwar explosion of the jukebox, the streaming revolution has nudged overall music consumption ever so slightly in the right direction. Breaking the Boundaries: Early File-Sharing Launched in 1999, Napster first introduced the concept of freely sharing MP3 files across the mainstream and soon became one of the quickest growing businesses of all time, ahead of Facebook and Google. It revolutionized music media —the source through which people could access digital music itself—for audiophiles and casual listeners alike. Within just a few years, more than 80 million Napster users were exchanging music for free. Although it foreshadowed the emergence of hyper-profitable online music-sharing

services, it was too early to succeed on its model. When Napster was legally forced to release a subscription-based plan to its users to monetize original artists, it quickly failed, going under in 2001. Other startups with similar initiatives in the early 2000s, such as MusicNet and PressPlay, were quick responses to Napster’s collapse. Carrying blatant restrictions, low-quality audio streams, and questionably hefty subscription fees, however, they were ultimately unappealing to consumers, preventing them from upholding the market. From Startup Miracle to Industry Kingpin Spotify was the first successful player in digital music streaming. Responding in 2011 to the entrepreneurial drive of its predecessors, the Swedish-based startup identified flaws of past music sharing companies. Spotify brought the extremes of Napster’s ideal give-and-take to a realistic medium with its “Spotify Premium” subscription plan and wide implementation of licensing agreements. Competing music services scrambled as they witnessed Spotify quickly garner the trust of American record labels. By March of 2011, Spotify quickly achieved worldwide success as it quelled piracy while

“Spotify earned its success not so much by being original, but by correctly synthesizing the most lucrative ideas from previous companies, rightfully claiming the throne of its own creation: the digital music streaming industry.” 40

acquiring one million paid subscribers of a total 6.67 million users along the way. Fast-forwarding to 2014, Spotify’s revenues were $1.3 billion, rising by 45 percent in just one year. Experiencing a non-stop profit surge, Spotify earned its success not so much by being original, but by correctly synthesizing the most lucrative ideas from previous companies, rightfully claiming the throne of its own creation: the digital music streaming industry. While the majority of the music streaming industry comfortably sits in the hands of Spotify, other services, such as Apple Music, Pandora, and SoundCloud, have also prevailed, effecting a nascent oligopoly. Together, these companies drove digital music sales to hit a key benchmark in 2015, beating out physical music sales for the first time. Their combined sales brought the global music market a 3.2 percent increase in overall consumption and revenue, according to The Global Music Report 2016. Digital music revenues increased by 45.2 percent to $2.9 billion during 2016, making streaming the fastest-growing contributor to the recorded music industry’s source of revenue to date. “The Value Gap” and Economic Oppression Big name brand services are succeeding rapidly, but what about the artists themselves? An obvious con of streaming services’ ability to select and set prices as a rising oligopolistic industry is the so-called value gap. A commonly discussed issue

http://thetech.ninja/

among many career-oriented artists, the value gap highlights the large discrepancy between the intrinsic artistic value of a song and its actual market price rigidly set through these services. On Spotify, for example, contributing artists typically earn between $0.006 and $0.0084 per play. Although favorable to the side of corporatism, digital streaming has added a new constriction to the modern job market, underscoring a moral conflict between profitability and artistic value. But do these companies care about the woes of the modern musician? Are they making any effort to change? Unfortunately, they don’t have an incentive to. Since its existence, digital music streaming has thrived and given way to a new era of high consumer expectations. Listeners today value convenience, accessibility, and reliability, and the big players in the industry aren’t hesitating to fulfill this enormous appetite.

Although incomparable to the roaring popularity of disco records blaring from clunky boomboxes during the 70’s, the record-industry is nonetheless beginning to climb its margins with relatively steady and predictable sources of income. With 90 million users of streaming services worldwide, the aggressive transition has been the music industry’s largest saving grace since the introduction of digital music downloads itself. While it’s true that its rise is only impressive when compared to the tragic collapse of other physical forms of music, digital streaming is a milestone in the evolution of music media and a hopeful stride towards the resurgence of the recorded music industry. After all, within just a few years of its existence, it has led the first steady rise in music consumption in decades - one of the greater hits among more that will surely come.

Looking Forward It’s difficult to predict the future of overall music sales. According to the Recording Industry Association of America, U.S. revenues from music sales have lingered around $7 billion since 2010, with only slight sub 1 percent increases every year, revealing that profitability has plateaued for the streaming industry. Yet under President Trump’s administration, which plans to possibly distribute royalties for artists and deregulate the music-licensing process, domestic music executives, at least, are keeping their heads up.

“Although favorable to the side of corporatism, digital streaming has added a new constriction to the modern job market, underscoring a moral conflict between profitability and artistic value.”

Although incomparable to the roaring popularity of disco records blaring from clunky boomboxes during the 70’s, the record-industry is nonetheless beginning to climb its margins with relatively steady and predictable sources of income. With 90 million users of streaming services worldwide, the aggressive transition has been the music industry’s largest saving grace since the introduction of digital music downloads itself. While it’s true that its rise is only impressive when compared to the tragic collapse of other physical forms of music, digital streaming is a milestone in the evolution of music media and a hopeful stride towards the resurgence of the recorded music industry. After all, within just a few years of its existence, streaming has led to the first steady rise in music consumption in decades - one of the greater hits among more that will surely come.

Ben Bosis

NETFLIX IS CHILL Why the Streaming Giant's Competition Doesn't Even Come Close

When was the last time somebody asked you to ‘Hulu and chill?’ Or, for that matter, when was the last time you heard somebody joke about it? Recently, the growth of Netflix‘s competitors has led many internet commentators to speculate on the streaming giant’s ‘inevitable‘ downfall. After all, the company may have high stock, but it isn’t exactly a cash cow. Netflix’s free cash flows currently sit at a hefty negative 980 million dollars. When accounting for the expenses of market expansion and original content, Netflix’s profits are less than 2 percent of their 7.6 billion dollar annual revenue. Although Company executives expect the need for expansion spending to dramatically decrease in the near future, it‘s not certain whether or not that will be enough to enable them to stay in front of their content competition. Bumpy Waters are No Cause for Concern Despite the foundation,

apparent Netflix’s

lack of market

penetration in the U.S. is over 53 percent. In other words, the phrase is ‘Netflix and chill’ for a reason. While Netflix may not yet be totally synonymous with video streaming, it actually holds a greater market share in the industry than brands that are, like Kleenex in tissues and Band-Aide in adhesive bandages. The fact that Band-Aide, a brand name that is often confused with the entire adhesive bandage industry, is less ubiquitous than Netflix is nothing if not astonishing. Additionally, Netflix holds the hearts of a younger generation than most established products, finding its highest approval ratings among 20 to 35 year olds. That social sway works entirely to Netflix’s advantage - even those who have other service subscriptions find the need to justify them. When a friend of mine recently turned on HBO Now to watch a movie, they did so only while explaining “it’s actually surprisingly good.” Facing (instead of standard establishment difficulties) the often impossible challenge of penetrating millennials’ perceptions of ‘cool,’ these usually daunting competitors have been unusually slow to catch up. Why Hasn’t Netflix Money Before?

Made

So the question then is, if Netflix is doing so well, why do its margins seem so precarious? Netflix’s chronic performance woes can largely be attributed to one factor: unlike all of its competition, Netflix is a stand alone company. Amazon video, HBO Now, and even Hulu (the secret lovechild of Disney, Fox, and Comcast) all benefit from the backing and

safety net of a much larger, alreadyestablished corporation. Netflix is alone as an independent competitor because it now sits comfortably inside the massive ‘Barriers to Entry’ in the streaming industry. Overcoming those barriers is what prevented Netflix’s success in the past, and without the heavy investing Netflix received as an early player in video streaming, no other startups have been able to replicate their feat. Video streaming to a great extent depends on high subscription rates to cover the equally high copyright and distribution costs of the digital content they offer. Now that Netflix is established, any significant reduction in costs could produce a huge increase in profits, making them a legitimately secure stock for the first time.

Unfortunately, however, there are two sides to this Apple model: the one that gave the world the iPhone, and the one that gave it a computer identical to the three before it, less a briefly amusing touchbar. If Netflix keeps up its great original content, it has the brand power to continue dominating its competition. Even if its creativity falters, the company’s position is secure enough to take the hit. All Amazon and Hulu can do at this point is do their best, and hope.

The Power of a Really Strong Brand

“Video streaming to a great extent depends on high subscription rates to cover the equally high copyright and distribution costs of the digital content they offer.”

“The fact that BandAide, a brand name that is often confused with the entire adhesive bandage industry, is less ubiquitous than Netflix is nothing if not astonishing.”

The fact that Netflix has maintained its throne despite all these odds is a testament to its true strength. Their brand, built exclusively in streaming, is so firmly entrenched it in modern youth culture that in certain ways, its broad recognition and nameappeal resembles that of another tech company that grew to dominate an industry through incredible brand strength. Like Apple, Netflix started with a product and marketed the name above all else. Both companies had some previous enterprise, but decided to put all their eggs in one basket, and both took that basket all the way to the bank. Like Apple, Netflix now has the ability to funnel money into content creation, and even has some leeway to fail without threatening its position.

Our Chapter Campuses:

Brown University Columbia University Dartmouth College University of Chicago UC, Berkeley UC, Los Angeles University of the Phillippines University of North Carolina at Chapel Hill University of Richmond Vanderbilt University

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