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On the show today, we'll lead with the big corporate news story of the day, a story about legacy and competition and the economy. From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab in for Kai Risdahl. It's Monday, July 8th. Good to have you with us. One strategy when things aren't going exactly as planned is to hang up your hat and turn a new leaf.
Yes, that was too many metaphors. No, I am not talking about politics. I'm talking about streaming. Last night, after months of dramatic negotiations, we learned the Redstone family's era near the top of the TV and movie pyramid will soon end. Paramount, which owns the likes of CBS and MTV, announced a merger with the production company Skydance. That's the studio behind Top Gun Maverick and recent installments of the Mission Impossible series.
The deal comes as Paramount faces challenges in broadcast TV and film, and challenges to its streaming platform, which has lost the company a ton of cash. Still, streaming is, if not already the present, certainly is the future. So what can Skydance offer Paramount in a field dominated by Netflix? Marketplace's Elizabeth Troval starts us off.
Paramount's iconic media assets like MTV, SpongeBob and The Godfather only get you so far in the entertainment biz these days. Consultant Brad Adgate. Paramount's not alone in the sense that they're trying to become profitable in the wake of having all of these assets that are not as valuable as they once were.
It's not just the decline of broadcast television. It's the challenge of creating a streaming platform that's profitable. It really comes down to content. I mean, I think the biggest challenge subscriber companies have, like a Paramount Plus or a Disney Plus, is not getting subscribers as much as it is keeping subscribers. Right.
Whether Skydance CEO David Ellison, whose father founded Oracle, can turn things around for Paramount is a wait-and-see situation. University of Minnesota's Joel Waldfogel is particularly skeptical about the streaming business. It's hard to understand how bringing tech fairy dust in here fundamentally makes it
sufficiently attractive relative to the other streaming services that it's going to attract a lot of interest. Subscribers only really want to subscribe to maybe three different streaming services. Netflix and Amazon Prime Video take the top two spots. That makes it a competition for bronze, says Charles Schreger, a professor at NYU and former HBO exec. In order to become in third place, you need to combine those services. Like if HBO Max combines with P
with Peacock, where Paramount Plus combines with Disney Plus. You can really only get gravitas in size if there is a combination of there's either a merger or the streaming services come together. He sees this Paramount merger as a step in that direction. Platforms merging or bundling to offer more content under one subscription. While that may mean fewer logins...
With all these combinations, there'll be less original programming for the consumer. Less programming, but he says there will still be plenty to go around. I'm Elizabeth Troval for Marketplace. Wall Street today didn't quite know where to go as we wait for the economic news of the week. We'll have the details when we do the numbers.
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Your local big box store might not seem like the most high-tech place in town, but many retailers are upgrading their aisles with digital shelf labels. They're electronic price tags that allow the store to change product prices in real time. Walmart not long ago said it'll be using them in over 2,000 stores. Whole Foods and Amazon Fresh already use them in some of theirs.
Now, this might be convenient for companies and workers who have to print and replace price tags. But is it good for consumers? Amanda Mull, senior reporter at Bloomberg, recently wrote about this. Amanda, thanks for joining. Thank you so much for having me. So you open your story talking about how you once worked at a big box store and you were sometimes in charge of switching out price tags. Tell us about how that used to work.
Yes. When I was in college, I worked at Best Buy for three years. And I would go in on Sunday mornings if I was scheduled for that shift. And back in the store's warehouse, there was a printer that was like connected to headquarters in some place.
obscure way. It would spit out every Sunday morning a new sheaf of price tags for things that were going on sale. It was the job of whoever opened on Sunday mornings to take all of those and replace the old price tags with the new sale prices. And then the last week's sales, you take all of those discounts out and it showed the regular price again. How long did that take you to do?
Usually just a few minutes. It was not a very involved task. Most of it was just wandering around the store trying to move from product to product. It was a very simple thing to do. But now you write about how digital price tags allow stores to just switch prices in what, a few minutes? Yes.
Less than that, even. Digital price tags are one of the ways that retailers are experimenting with what is more largely known as dynamic pricing. If a retailer gets a signal that sales are slowing down or that the store is getting crowded, either way, they can move prices up and down pretty much instantaneously. And it's a largely automated process. So it would happen without a bunch of human intervention, either on the central side or on the store side.
Tell me more about how retailers might use shopping data to make those real-time price changes. Retailers are always sort of like accumulating data. Internet shopping and the internet in general has given retailers many, many more ways to adjust their sales pitches, to adjust their pricing than they would have had in a more analog world.
So there's also the idea that retailers could find out that their main competitor down the street has adjusted prices in a certain way. And instead of having to wait until the next sort of pricing shift, maybe a week later, they can just adjust them immediately. That's a good point.
That also works in the opposite direction. If retailers know that everybody around them is raising prices on a particular type of good, then they get the opportunity to immediately raise prices as well. And instead of capturing potentially more market share, they capture more profit. And you talk about in your story about the concept of public price. What is that and why has it been important to pricing and the power between consumers and retailers?
Right. The concept of the public price is pretty central to modern consumerism as we know it. Basically, what that means is that if you and everybody else knows that a particular thing at a particular place will cost a particular amount,
then you can plan your budget, you can shop around, you can see what your other options are. It gives you sort of a baseline of stability in order to make informed choices. If you don't have any idea like when or why a price might change, it creates a sense of uncertainty
and a sense of scarcity that wouldn't exist if there were just publicly posted prices that everybody understood. And also, it sort of individualizes and isolates consumers as people. The ability of you as consumers to sort of like exercise your rights or your judgment en masse, which is the type of thing that theoretically is supposed to push consumers
So a question you pose in your story is, what if everything you bought was priced like airline tickets? Do you think that's where we're actually headed, that dynamic pricing is the future? Yeah.
Yes, in general, I do think that unless we have some sort of like regulatory reins put on sellers' ability to change prices like this and become fully untransparent, I think that it likely is where we're headed because sellers, what they want to do is figure out ways to extract the maximum amount of profit from each customer. Putting them at a huge information disadvantage with things like dynamic pricing allows them to do that more effectively.
Amanda Mull writing in Bloomberg about digital price tags. Amanda, thanks so much for joining us. Thank you so much for having me. One thing that does not have a price change, our podcast. In case you missed the broadcast, you can download it for free on the platform of your choice or listen at marketplace.org.
The education system in China is super competitive. Parents save money to hire tutors and live where their children can go to the best schools. And it's a lot of pressure for students, too, to get good grades, get into a good university, which hopefully leads to good jobs. But some families are now choosing to leave that rat race behind. Our China correspondent Jennifer Pak spoke to two families who have opted out.
This time last year, eight-year-old Awu was in central China's Wuhan city. He seemed happy in this home video of him practicing English. I enjoy speaking English. I want to communicate with the world. I want to change my life.
But day to day, he was struggling, says mom Xu Zhizhi. He'd wake up and cry, mom, I don't want to go to school. And that was when he was in grade one.
500 miles east in Shanghai, ex-coder Liu Qing was also worried about her twin girls who were in the third grade. She says they had so much homework they didn't usually finish until 9 p.m. and once till 1 a.m. Because that day there was a quiz, if you got one character wrong in a poem, you had to write out the whole thing three times. And one daughter made a mistake on every poem that semester. She had a lot to write.
Moms Liu Qing and Xu Zhizhi don't know each other, but they started looking for less intense schools around the same time. The international ones were out, too expensive. Then they saw this documentary about Siming Elementary in eastern China's Zhejiang province. The school, surrounded by lush green mountains, has been around since 1905. One class here is looking at a wild plant mentioned in a traditional poem.
Siming Elementary is losing students as families move to the cities. It's now welcoming non-residents to enroll. Two days after watching the documentary, Liu Qing, the mother of the twin girls, went to visit the school. I liked that the principal said academic scores are not the most important thing. Physical and mental health are.
Weeks later, she uprooted her family from Shanghai to the quiet village of Sizhai and enrolled her twins at Siming Elementary. Parent Xu Zhizhi did the same from Wuhan. And that decision to move from the big city to the countryside is kind of radical because Xu Zhizhi had done whatever it took to leave her home village.
Back then, the countryside was horrible, she tells me. At 16, she says, I joined my mom and got a coveted factory job in the city. But I hated it. She says she learned English at night school, landed an office job at IBM in Shenzhen, before becoming a full-time mom and yoga instructor. I was taken by IBM. That's how it was.
Now she has a different dream for her son and daughter, to be happy. At my son's old school in the city, he rarely played outside. Here in the village, he can run about in the mountains. Teachers can keep an eye on the whole class because there are only 13 students versus 50 in Wuhan.
Over at Liu Qing's house, her daughters can play with the family pets because they don't always have homework. My husband is a bit anxious. Studying hard is what got him out of his village. His company only hires people from top Chinese universities.
But ex-IBM worker Xu Zhizhi isn't worried. If you really have a talent, a skill, you can get a job in China. My children can't win this rat race, so we are choosing an easier path. I asked her son Awu what he thinks. My new school is better, he says. I study a lot, but I also play a lot. I don't want to be a father again!
But once he graduates from Siming Elementary, they'll have to leave the village to hunt for a junior high. In Sejai Village, eastern Zhejiang province, I'm Jennifer Pak for Marketplace. Coming up... Beauty and cosmetics in South Korea are light years ahead of what's happening in America. You've got my interest, but first, let's do the numbers.
The Dow Jones Industrial Average dipped 31 points, just under 0.1%, to finish at 39,344. The Nasdaq rose 50 points, 0.3%, to close at 18,403. And the S&P 500 gained 5 points, 0.1%, to end at 55.72%.
Boeing will have to pay a $243 million fine and invest at least $455 million in compliance and safety programs as part of a plea deal reached with the federal government. Prosecutors had charged the aviation giant with conspiracy to defraud the United States. It allegedly misled regulators who approved the 737 MAX aircraft, which was later involved in two fatal crashes. Boeing was up half a percent.
It's unclear how this will affect demand for Boeing's planes. A March report from the Government Accountability Office found that both Boeing and Airbus have had issues increasing production. One problem, finding enough skilled labor. Bonds rose. The yield on the 10-year T-note fell to 4.28%. You're listening to Marketplace. This is Marketplace. I'm Kristen Schwab.
Let's turn our attention back to the stock market. Even though markets today were mixed, indices keep hitting new highs this year. The Nasdaq and the S&P 500 both made records today. In fact, the last couple of years in general have been good ones for the stock market, thanks in part to some star performers in the tech sector. Looking at you, NVIDIA. But as share prices have risen, so has the cost of pretty much everything else. Marketplace's Daniel Ackerman looked into that relationship.
Even though inflation is down from its peak in 2022, it's left a lasting mark on prices, and not only at the grocery store. Inflation devalues everything, stocks as well as milk. Jim Angel is a finance professor at Georgetown, and he says there are a few ways that widespread inflation can raise stock prices specifically. Let's suppose that the inflation fairy came and doubled the price of everything overnight.
Well, then all the assets the companies own would also double. And those inflated assets can be part of what determines a company's stock price. Another part of firms earnings.
Those two can get an apparent boost from rising prices, says Samir Samana, a market strategist with Wells Fargo Investment Institute. There probably is a, you know, inflation component to stock prices for no other reason than things that companies sell, the goods and services. They are priced in nominal U.S. dollars. Nominal meaning not adjusted for inflation.
But even if inflation is impacting stocks along with everything else, it alone can't explain the current run-up in stock prices, says Kelly Hsu, a finance professor at Yale. Even if we were to inflation adjust, it would still be very much the case that the stock market has outpaced inflation.
The S&P 500 and Nasdaq have both easily posted double-digit gains this year. That's even though high inflation is often bad news for stocks, says Xu, because it causes the Federal Reserve to step in and cool the economy down.
When the Fed is raising interest rates, that tends to reduce the value of the stock market. Which means the recent stock market gains... Are in spite of inflation and associated rise in interest rates rather than because of it. So inflation or not, Xu says the stock market really does keep breaking records. I'm Daniel Ackerman for Marketplace.
David Brancaccio and our Morning Report team also do the numbers every day. Give it a listen.
There are two types of people in a relationship, be it a romantic one, a platonic one, or a parent-child one. There's the person who doesn't wear sunscreen and the person who nags the person who doesn't wear sunscreen. I'm usually the latter, which is quite a role because when you're at a picnic or the beach, you're supposed to reapply sunscreen every couple hours. Sunscreen that's often greasy and messy and hard to rub in.
Well, it turns out there are better products out there if you can get your hands on them. Alex Abad-Santos is the senior correspondent for Vox, and he wrote about how Korea isn't just a leader in skincare and cosmetics. It's sunscreens outshine options here in the U.S. Alex, welcome to the program. Thanks for having me. So I think we've all experienced goopy American sunscreens that take forever to rub in. What is Korean sunscreen like?
beauty and cosmetics in South Korea are light years ahead of what's happening in America. And so in South Korea, what makes me kind of sad as an American is that they figured out how to make sunscreen kind of a joy to put on, which is... A joy. A joy. No, no. I spoke to some experts and they were just like, yeah, the best sunscreen is the sunscreen you put on.
and what sunscreen manufacturers have figured out is how to make sunscreen that doesn't feel like a chore so it blends in with your skin I've been trying out some sunscreens from my article and I'm kind of amazed with some of them all the complaints we have sunscreen they've basically found a way to eliminate those complaints
So the flip side, I guess, of the idea that foreign markets are doing so well with sunscreen is that American sunscreen is just worse. Why are we behind everyone else? Well, apparently it's the government. Not to sound like a tinfoil hat, like a conspiracy theorist, but the actualities of it are there's something going on with our government and how it regulates sunscreen.
Yeah. In your story, you say the FDA has not greenlit any new UV filters since 1999. I looked up a few cultural references here. That's the year that gave us the Sega Dreamcast and Master. That's how far back we're going. Why has it been so long since the FDA has approved new sunscreen technology?
So sunscreen in the States is regulated very differently than it is overseas. Because there are claims like it will reduce sunburn or it will reduce your risk of skin cancer, right?
sunscreen is regulated like a drug. And to get it on the shelves, you have to undergo all this FDA approval. Now, the problem with that is that the FDA kind of works at a very glacial pace. And so while in Europe and South Korea and in parts of Asia, sunscreen is regulated like a cosmetic, you get more approval faster.
And I think like that is the main thing is so when you have a faster approval and faster testing, you can get more advanced chemicals, filters, more advanced filters, more advanced formulations on the shelves over there. Yeah, the last time I went to the dermatologist, he was like, the next time you go abroad, like bring a carry-on or sunscreen. Yeah.
Yeah, I think what your dermatologist was saying is like what I think a lot of people do now. Like there's a lot of sunscreen tourism on TikTok and everything. They're like, I went to Korea. I came back with all this sunscreen and it's great. And it's just funny to talk about sunscreen like that because you don't think of like sunscreen as a precious commodity. But I guess in comparison with the rest of the world, it is kind of. Well, besides sunscreen tourism, are there any ways to get your hands on these foreign brands?
So apparently the thing that's a little bit worrisome is that because of the growing trend of South Korean sunscreens, people are looking on Amazon and there's a lot of counterfeit stuff on Amazon and a lot of third-party sellers. So you can't really, really be sure that...
that the sunscreen that you think you're getting from Korea is actually Korean. You have to actually go to a retailer or a curator, and then hopefully that website or that seller is doing the correct things and getting you the real product. So I think anytime you go through that, there's a little bit of a worry if you're getting the real product. Right. Is there any chance the FDA regulations in the U.S. might change in the future?
I mean, what we had was a couple years ago was Alexandria Ocasio-Cortez. She actually has a couple viral videos about wanting to introduce legislation that would speed up the sunscreen advancement. But actually, we haven't really seen much yet. And like you said, it's been years and years since the Sega Dreamcast was released.
was being used. But yeah, it's been a very, very long time and there hasn't really been like any sign that the U.S. is speeding up its sunscreen advancement. Alex Abad-Santos is a senior correspondent for Vox. Alex, thanks for joining us. Thanks for having me. Put on your sunscreen. ♪♪♪
This final note on the way out today, as we enter a big week for economic announcements and data, the Federal Reserve released its monthly report on consumer credit today. In May, borrowing increased the most it has in three months, rising $11.4 billion. It's a possible signal that Americans are relying on credit cards and other forms of borrowing to keep up with inflation.
Speaking of inflation, Fed Chair Powell is on Capitol Hill tomorrow and Wednesday for his semi-annual remarks about monetary policy and the state of the economy. And on Thursday, we'll get the latest numbers on inflation when the Consumer Price Index comes out. Our daily production team includes Andy Corbin, Elise Hassan, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kristen Schwab. We'll be back tomorrow. This is APM.
Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money decisions.
Listen to Financially Inclined wherever you get your podcasts.
