The Most Unusual Example Of Longevity Risk, Ever!

Are you concerned about longevity risk? If not, you might wish to consider your priorities. After all, your lifestyle may be severely damaged if you outlive your retirement savings.

Pension plans and life insurance companies are often concerned about longevity risk as well. They establish plan contribution and premium levels that are based on assumptions about the life spans of covered members. If they under-estimate the longevity of those members, they may “under-price” their financial obligations.

But one of the most unusual examples of longevity risk was recently experienced by an organization that provides no financial services at all. The organization was the cable television network FX, which produced a series entitled Feud: Betty and Joan.

The series elaborately portrayed the bitter rivalry that existed between Hollywood film legends Olivia de Havilland and Joan Crawford. The actresses’ careers blossomed in the 1930s, when de Havilland starred in movies like The Adventures of Robin Hood and Gone With The Wind, and Crawford appeared in numerous romantic comedies with Clark Gable.

So how did longevity risk affect an FX series that portrayed the lives of film stars who feuded eighty years ago? Apparently, a lawsuit was filed by someone who claimed that FX misrepresented the relationship between the actresses. And who was the person who sued FX?

Olivia de Havilland herself.

Olivia de Havilland? The famed actress in films of the 1930s? How is that possible?

Apparently, de Havilland remains alive. She was born more than a century ago, and she still remembers the feud that she experienced with Joan Crawford. She sued FX, claiming that they defamed her personal character in their series.

FX was vindicated by the legal system. The Court decided that de Havilland may have lived through her experiences with Joan Crawford, but that she “does not own history.” Nevertheless, FX learned an unusual lesson about longevity risk.

And what is that lesson? Before any film studio produces a film about historical characters, it should always take the time to confirm that those characters have actually died.

We’re All Changing Our Thought Patterns To Fit Our iPhones

Two days ago, the Editorial Board of the Washington Post published its position on iPhone use by children. It strongly supported the attempts by major Apple shareholders to compel the firm to address excessive use among minors.

By why did the Post limit its focus to children? After all, we’re all changing our thought patterns to fit our iPhones. You can perceive clear evidence of the trend in this very online publication.

Consider last week’s blog posting, for instance. It addressed UPS’ decision to ask hundreds of its accountants and other office workers to sort and deliver packages during last month’s holiday gift shipping season.

A few years ago, I would have headlined that piece with a brief, humorous, and curiosity-provoking title like Accountants At Your Door or Accountants In Brown Shorts. But today’s online search engines prefer titles that are structured like long sentences that directly summarize the contents of the piece.

That’s why the Post titled its editorial Apple shareholders want the company to keep children away from screens. Good. And that’s why I chose to title my piece If UPS’ Accountants Can Deliver Holiday Packages, Human Capital May Be More Flexible Than We Expected.

Of course, one may argue that readers are better served by a long summary sentence than a brief, humorous, and curiosity-provoking phrase. Others may find the original style to be wittier and less ponderous.

But neither argument addresses a simple fact about title-writing. The discipline is not evolving in response to the intellectual preferences of readers. Instead, it is evolving in response to the algorithmic preferences of online search engines.

And as I condition myself to write in this manner, my ability to think in pithy and humorous terms erodes from disuse. Meanwhile, as my readers condition themselves to read in this manner, their ability to think erodes as well.

Feeling alarmed? Please don’t despair; you may find it relatively easy to implement a solution to this problem.

The next time you feel tempted to glance at your iPhone and read a few headlines, perhaps you can simply elect a different activity instead. Namely ….

Read a book.

What Happened To Star Wars?

Remember Star Wars? Just three months ago, the film enjoyed one of the biggest opening weeks in Hollywood history, grossing $390 million in revenues. Pretty impressive, eh?

But just five weeks later, its weekly gross had declined to a mere $19 million. And five weeks after that, it had declined to a tiny $3 million. How could it have fallen so far, so fast?

George Lucas, the legendary film maker who created the very first Star Wars and then guided the franchise through its first five sequels, might have the answer to that question. He sold the franchise to Disney after its fifth sequel; the current film (i.e. the sixth sequel) is the first one produced by the corporate giant.

And what does Lucas think of Disney’s first attempt at producing a Star Wars film? During an interview with Charlie Rose, he noted that the new film is primarily a “retro movie” instead of a movie that is “completely different with different planets, different spaceships …” Lucas explained that Disney “didn’t want to use (his) stories … (and) decided they were going to do their own thing.”

A New York Times reporter commented that Lucas “was harsh in criticizing the film industry for focusing on profit over storytelling.” And many critics felt that the new movie, in essence, plagiarized the earlier films and simply retold their stories.

So what should we make of this? Well, many people love to hear the retelling of a popular tale. And the earlier Star Wars saga was one of the most popular stories in Hollywood history. Thus, it’s no wonder that Disney’s masterful retelling (or, to use a less complimentary term, plagiarized content) opened to such initial success.

The drawback regarding repetition in film, however, is that such content quickly becomes stale. After all, if a storyteller doesn’t drive a tale forward with new ideas, people quickly lose interest. Indeed, it’s again no wonder that the Disney sequel rapidly lost its audience after its initial spurt of popularity.

Perhaps there is a lesson to be learned here. Organizations and people who simply reiterate a popular and familiar line may tend to grab the attention of an audience in the short term, but they are likely to lose them in the long term. Conversely, organizations and people who advance the conversation are likely to maintain an audience over a longer period.

That’s a great lesson for the Hollywood studios, and for other media organizations too. And, to extend that thought to a different milieu, it might also be a worthy lesson for the politicians who are campaigning for the Presidency of the United States today.

Media Bias In Presidential Politics

It’s easy to identify blatant media bias, isn’t it? Whenever some self-styled Democratic or Republican “strategist” on MSNBC or Fox News launches into a diatribe against the opposing party’s leaders, we’re able to recognize the source of the commentary, and to apply a health degree of skepticism to the critical opinions.

But sometimes media bias is so subtle, and so deeply immersed within the statements of experienced and credible senior journalists, that it’s impossible to recognize without the benefit of a DVR recorder and a rewind button. Consider, for instance, the very first question that Neil Cavuto asked the Republican presidential candidates at last week’s televised debate.

Cavuto is the senior vice president, managing editor and anchor for both FOX News Channel and FOX Business Network. He might indeed be the most experienced, and most respected, business news journalist in the United States. And yet this is what he asked the candidates, at the 4 minutes and 48 seconds (4:48) mark of the Part 1 video clip that FOX Business posted on YouTube:

We are not even two weeks into this stock trading year but … investors have already lost $1.6 trillion in market value. That makes it the worst start to a new year ever. Many worry that things can get even worse … that banks and financial stocks are particularly vulnerable. If this escalates like it did, back when Barack Obama first assumed the presidency, what actions would you take … ?

So what is wrong with Mr. Cavuto’s question? What makes it biased, albeit in a very subtle manner?

According to Wikipedia’s entry for the United States bear market of 2007–09, the Dow Jones Industrial Average (DJIA) dropped from 14,164 on October 9, 2007 to 7,949 on January 20, 2009, the date that President Obama took office. It continued dropping after January 20, bottoming out at 6,507 on March 9, 2009.

Thus, the DJIA dropped 54% in 17 months, with almost all of the months (i.e. 15 of the 17 months) occurring during President Bush’s presidency. Furthermore, more than four fifths of the total drop of the DJIA occurred during President Bush’s tenure, i.e. during the 15 months prior to President Obama’s inauguration.

So, with this in mind, was it reasonable for Mr. Cavuto to refer to the market crash of 2007 / 09 as something that occurred back when Barack Obama first assumed the presidency? Would it have been more appropriate to say that it occurred mostly during the final 15 months of President Bush’s presidency?

To be fair to Mr. Cavuto, I have no way of knowing what was on his mind when he asked his question. But as an independent voter with no affiliation to any political party, I believe that I’m reasonably positioned to identify examples of subtle media bias without being influenced by such biases myself.

With that in mind, I can only assume that the Republican presidential candidates at the debate preferred to associate Democratic President Obama (and not Republican President Bush) with the 2007 / 09 market crash. And thus I can’t help but wonder whether Mr. Cavuto instinctively played into their hands by phrasing his question in this manner.

Likewise, I can’t help but wonder whether an MSNBC commentator, moderating a debate of Democratic Presidential hopefuls, would have similarly accommodated the candidates by asking about the market crash that occurred back when President Bush was in his final year of office. In other words, I wonder whether such media bias is ingrained on both sides of the political spectrum.

Am I correct? Is this, in fact, a subtle example of media bias? And if it is such an example, can it influence the political leanings of television viewers?

That final question might be the most important one of all. Although a single isolated incident of bias might be immaterial, a pervasive culture of bias might wield a pernicious impact on the judgments of American voters.

Not The Game

If you were browsing through your cable television channels last weekend, you might have stumbled across the most historic sports series in American history. More historic than the World Series of baseball, which was first played in 1903. And even more historic than the Olympic Games, which were first held in 1896.

What series might you have seen? It was the Harvard / Yale annual football game, first played in 1875 and now simply known as The Game. Except for breaks during the first and second world wars, the teams have faced off every year since the dawn of the industrial age. Under Walter Camp, a player on Yale’s 1876 team who later became the father of American football, the game grew into the business juggernaut that dominates our modern sports world.

“Modern,” though, is a relative concept. Had you attended any football game at the Yale Bowl prior to last weekend, you would have taken a seat in a stadium that has never installed permanent lights for night games. Yale is the only team in the Ivy League that plays all of its games during the daylight hours, the way that Walter Camp played football in the 1870s.

Nevertheless, at least temporarily, the day-time tradition did change last weekend. Why? Because this year, for the first time in history, The Game was played into the evening hours under the lights. NBC Sports wanted to televise it, and noted that it could generate higher television ratings by broadcasting into the evening. So Yale University installed a temporary field lighting system, and The Game entered the modern age.

For the fans, of course, a night event under the lights on a chilly November evening is not The Game that was played in the sunlight of an autumn afternoon. The essential fan experience is a different one, whether one is watching in the stands or on television.

Isn’t it ironic, though, that NBC Sports was initially drawn to televising The Game because of its historic nature … and then modified the essential fan experience in pursuit of higher ratings? Although Yale undoubtedly shared in the wealth that was generated by the shift to evening hours, it sacrificed a daytime tradition that was uniquely historic in nature.

The NFL: Forgetting Its Business Model

When did it happen? When did the National Football League, the most successful professional sports organization in the United States, suddenly lose its ability to manage its own affairs after thriving for almost a century?

Many believe that this past month (or even this past week) has been the worst time in the history of the League.  And for good reason: public protests have recently exploded over a startling series of violently criminal acts, debilitating player injuries, and highly questionable corporate behavior.

But the origins of such recent outcomes might be traced back to 2013. Last year, after all, was the time that the NFL first appeared to decisively step away from its traditionally successful sports business model.

Or perhaps it would be more appropriate to describe its decision as “intentionally forgetting” its classic model. After all, at its essence, the traditional game of football generates far more violent physical contact than any other major sport in the United States.

That’s why, for much of its existence, the game was only played on Sunday afternoons. And that’s why each game initially featured (and still features) a half time break midway through its sixty minute period.

League officials always knew that the human body can only sustain “just so much” violent activity before it requires resting and healing time. Weekday, Saturday, and halftime (on game day) rest periods were thus mandated for recuperation purposes.

But last year, the NFL announced an unprecedented agreement for a television network to broadcast Thursday (i.e. midweek) games throughout the season. And earlier this year, the League boldly asked performers at its Super Bowl half time show to begin paying fees in exchange for media exposure.

So what should we make of a full slate of midweek games, staged for the benefit of television networks? And an even more drastically elongated half-time show for the purpose of showcasing musical acts?

Such activities are inconsistent with a traditional business model that is dedicated to placing the fittest (and the most appealing) players on the field to compete for athletic victories. Nevertheless, they are perfectly consistent with a model that is dedicated to optimizing television ratings, music sales, and other media revenue streams.

So it shouldn’t come as any surprise that the NFL’s recent travails betray a surprising forgetfulness of its traditional game-dominant business model. Instead, the League has recently chosen a media-dominant business model, a strategy that is now impacting its fortunes accordingly.

Time Warner vs. CBS: A Business Model Quandary

Please turn on your television set. Can you find the CBS television network there?

Two days ago, three million viewers from New York to Los Angeles lost access to CBS. Time Warner, their cable television provider, has refused to accept the network’s contract renewal offer, and CBS has responded by blocking its transmission.

So what is Time Warner advising its customers to do? They’re actually recommending that their viewers should use computers to view shows on the CBS web site, and should use antennae to capture signals over the public air waves! In other words, Time Warner is recommending that its cable customers should utilize competitor offerings to view CBS television programs.

Such a strategy may prove to be self-defeating in the long run, considering that the cable television industry’s business model is focused on selling a comprehensive collection of television channels at a single monthly price. The industry has resisted numerous entreaties by politicians and consumer advocates to sell access to individual channels on an a la carte basis.

Because most cable television customers actually watch relatively few channels, many pundits have speculated that the industry might fail to generate sufficient profits with an a la carte business model. Other commentators, meanwhile, have defended these business practices by emphasizing various benefits that customers supposedly enjoy when purchasing comprehensive packages of channels.

These benefits, though, are severely impacted when customers are forced to turn off their cable boxes and raise their antennas or turn on their computers to access popular programs. In other words, Time Warner may be undermining its own business model by recommending such activities to their customers.

And what if customers drop their cable television services entirely? Apple, Google and Intel are reportedly developing their own web based television platforms, and will undoubtedly find ways to offer alternative options.

So Time Warner might wish to settle with CBS as soon as possible. Although the network is taking a hard line in negotiations with CBS, upcoming battles with more formidable opponents may ultimately pose far greater challenges to the cable firm.