Newsletter: California Inc.: The brave new world of YouTube stardom
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I'm Business columnist David Lazarus, and here's a rundown of upcoming stories this week and the highlights of last week.
Looking Ahead
PayPal goes solo: Shares of PayPal Holdings Inc. will start trading on Nasdaq today. eBay Inc. announced last year that it would spin off PayPal, its electronic payment unit, amid heavy pressure from billionaire financier Carl Icahn and other activist investors. PayPal had $8 billion in revenue last year, almost as much as eBay.
Minimum wage: Los Angeles County supervisors are expected to vote Tuesday on a plan to increase the minimum wage to $15 an hour by 2021 from the current $9. If approved, the wage increase would apply to nearly 400,000 workers in unincorporated areas. The city of Los Angeles approved a similar wage law in June.
Tech results: Apple, Microsoft and Yahoo will release quarterly financial results Tuesday. Investors hope that Apple will reveal sales details on the Apple Watch, which some reports say is selling tepidly. Analysts want Microsoft to disclose specifics about the layoffs of 6% of its workforce. Yahoo watchers seek more information on the company's plan to spin off its 15% stake in Chinese e-commerce giant Alibaba.
Video fan fest: VidCon, the annual gathering for online video enthusiasts, will begin a three-day run Thursday at the Anaheim Convention Center. The fast-growing conference, which will have twice the floor space as last year, will feature appearances by Yahoo news anchor Katie Couric, YouTube Chief Executive Susan Wojcicki and CBS Interactive Chief Executive Jim Lanzone.
Volcker Rule: New provisions of the so-called Volcker Rule will take effect Tuesday. The rule, part of the 2010 Dodd-Frank Act, is aimed at reducing speculative short-term trading by banks. The new provisions impose restrictions on securities trading and require banks to rid themselves of certain risky deals, the kind that contributed to the 2008 financial crisis.
The Agenda
Monday's Business section profiles Anthony Padilla and Ian Hecox, who this week are starring in their first feature film. Who are these guys? Ask your kids. The comedy duo, better known as Smosh, has cranked out about 3,000 YouTube sketches to adoring fans for the last 10 years. In the process, their 35 million subscribers have turned them into something of a blueprint for aspiring online stars armed with a selfie stick and a camera.
Story Lines
Here are some of the other stories that ran in the Times Business section in recent days that we're continuing to follow:
Getting to LAX: Los Angeles airport officials agreed to permit ride-hailing companies such as Uber and Lyft to begin picking up passengers at LAX. The decision made Los Angeles International Airport the largest in the nation to welcome the fast-growing, mobile-app-based services. The firms could operate at LAX by late August, subject to final approvals by airport officials and the city attorney.
Uber woes: Uber -- plagued by problems with regulators, drivers and taxi unions around the world -- was in the news on another front, taking a big blow in its home state when an administrative law judge recommended that the company be fined $7.3 million and suspended from operating in California. Uber, the judge found, had not complied with state laws designed to ensure that drivers are doling out rides fairly to all passengers, regardless of where they live or who they are. Uber said it would appeal.
California jobs: Employers added a net 22,900 jobs statewide last month, barely half the number added in May. But analysts said that the variation was normal and that the latest numbers still showed solid growth. In addition, the unemployment rate fell in June to 6.3% from 6.4% in May, according to the California Employment Development Department.
Home sales: The Southern California housing market is humming. Home sales in June posted a sizable 18.1% pop from a year earlier, and prices continued to climb, rising 5.7% to a median of $442,000, according to a report from information services firm CoreLogic. The dramatic sales increase, the largest in nearly three years, comes as families race to buy homes before interest rates rise further.
VC money: Despite their concerns that some start-ups are getting more investment than their business plans merit, venture capitalists aren't ready to slam on the brakes. From April through June, they gave about $19.2 billion to U.S. start-ups, or 24% more than in the same time frame a year ago, Dow Jones VentureSource said. Start-ups in Los Angeles, excluding a $1-billion investment in rocket-builder SpaceX, raised nearly as much in the first six months -- more than $2 billion -- as they did all of last year.
Pump pain: Gas prices hit more than $5 a gallon at some Los Angeles area stations as a shortage in refined petroleum pushed the average price above $4 in the last week, according to the Automobile Club of Southern California. Meantime, Exxon Mobil Corp.'s Torrance plant, idled by a fire early this year, may not return to production until the end of the year.
What We're Reading
And some recent stories from other publications that caught our eye:
Garment industry: The Los Angeles garment industry isn't sure how it will deal with a law requiring a $15-an-hour minimum wage by 2020, according to the Wall Street Journal. The industry's numbers have slipped from earlier highs, but L.A. still boasts more jobs making jeans, jackets and other apparel than any other pocket of the country. The city's wage law serves as a test for urban minimum wages.
Tesla in Texas: Tesla shouldn't expect a warm welcome for its direct-sales model in the Lone Star State. Texas Gov. Greg Abbott said the system of selling cars through dealerships works "quite well the way it is," Bloomberg reports. Tesla has been trying for two years to crack the nation's second-largest auto market, but it has been stymied by a powerful dealership lobby opposed to direct sales to consumers.
Airbnb critic's roots: The Center for Public Integrity casts its eye on Neighbors for Overnight Oversight, a leading critic of Airbnb. The organization is actually a creation of the American Hotel & Lodging Assn., a century-old trade group that represents giant hotel chains such as Hilton and Marriott. Experts say it's the kind of faux grass-roots campaign that industries create whenever they face serious threats.
Streams for kids: An intriguing story is in the California Sunday Magazine about how Netflix and Amazon are targeting children. Streaming services know that kids watch a lot of TV, increasingly on tablets, and they want to hook new customers while they're young. More tech-savvy kids prone to rerunning favorite programs give video-on-demand networks a big advantage over conventional broadcast and cable networks.
Healthcare priority: ProPublica examines the distinction between "good" and "bad" hospitals. The conventional wisdom is that a good one can protect patients from medical errors that injure or kill hundreds of thousands of them. But an analysis of Medicare data found that it is much more important to pick the right surgeon.
The big one: If you haven't visited Seattle recently, maybe it's time. The New Yorker shakes things up with a story about the Cascadia subduction zone, which apparently is due for a very large earthquake. The magazine warns that a quake, within minutes, could level "the northwest edge of the continent, from California to Canada and the continental shelf to the Cascades." Or as one official puts it: "Our operating assumption is that everything west of Interstate 5 will be toast."
Today's Cool Consumer Tip
If you have expired or unused medications at home, don't flush them down the toilet. If you do, you might just end up dosing yourself the next time you eat fish. Instead, according to the Food and Drug Administration, remove the meds from their original containers and mix them with something yucky, such as coffee grounds or kitty litter, to keep kids and pets from taking an interest. Then place the mixture in a sealable bag and throw it out with the rest of your garbage.
For the latest money news, go to www.latimes.com/business.
Until next time, see you in the Business section.
