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vincentvelour · 5 years ago

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The price of “nut rage” and four other things I’m glad I learned in 2019

1/15/2020

By John Bostwick, Head of Content Management

For the last half dozen years, we’ve published a year-end “best of” blog post summarizing our most notable articles. For a combination of dull reasons, we didn’t do that at the end of last year. Most readers probably won’t regard this hiatus as a great loss, but I thought it might be interesting to publish a similar post early this year, with a twist.

This article consists of five concepts or facts from the Vistra International Expansion blog that were new to me at the time we developed the posts, and that I still find interesting and valuable. Basically, it summarizes five things I’m glad I learned in 2019.

First let’s look at some stats. In 2019, we published 52 blog posts. Based on a random sampling of 12 posts (one from each month), the average number of words per article was a little over 1,000. The total number of words published on the blog last year was about 54,000, which (according to one source) equates to about 215 pages in a typical published book. (I can vouch for that, since I read all the posts in preparation for drafting this piece.)

And now, here are the five things I’m glad I learned.

1. There’s a little-known U.S. government report that captures the economic significance of international expansion and operations.

Last spring, James Clancy, one of my coworkers in Vista’s Boston office, sent me a link to a CNBC video interview with Steve Liesman about something called U.S. foreign affiliate sales. I forwarded the link to Saul Howerton, and that ultimately led to Saul's article about top international expansion countries. The post also looks at the affiliate sales numbers Liesman discussed in the CNBC interview.

The original sales numbers are captured in a U.S. Department of Commerce Bureau of Economic Analysis (BEA) report. For someone who, like me, has worked in the international expansion and operations services industry for nearly seven years, the BEA report was a revelation. It’s also something I’m genuinely surprised I’d never come across before. Essentially, the BEA sends mandatory surveys to U.S. multinational enterprises that have activities abroad. The surveys collect among other things information on sales made by foreign affiliates of U.S. parent companies.

One of the BEA reports based on those surveys is called “Sales by Country and Industry.” The report shows that foreign affiliates took in $5.7 trillion in sales outside the U.S. during the most recent year data was collected. As Liesman observes in his interview, if this massive number were taken into account when calculating the U.S. trade deficit with China, that deficit would shrink almost to nothing.

The BEA report also effectively provides an authoritative list of top expansion target countries for U.S. multinationals. Perhaps surprisingly, China is only number five on that list. (Check out Saul’s post for the full top 10 ranking.)

2. Multinationals shift profits to avoid paying taxes, and now I know how they do it.

In February, I edited a post by Tom Lickess, our global head of tax, about a UK law that became effective in April. It taxes income derived from intangible property (that is, intellectual property, or IP) held by non-UK resident entities in low-tax jurisdictions. The law looks to address profit shifting by multinationals and tax them where they actually engage in economic activity. The law is in line with the OECD’s base erosion and profit shifting program, or BEPS.

None of this was new to me, or so I thought. Then Tom asked me to add a graphic illustrating his example of how a multinational group actually shifts profits and how the UK would tax those profits under the new law. The result is the graphic below, which I essentially drew on a napkin and gave to our stellar designer Neal Fassnacht, who cleaned it up.

The above scenario involves a hypothetical company called Music IP, which holds its intellectual property in Bermuda. Music IP is related to the company MSC, which sells access to Music IP’s software. Until working on the graphic, I’d never firmly grasped — even at a high level — this method of shifting profits to avoid taxation. If my brief description and the graphic above don’t cause the scales to fall from your eyes, read Tom’s post.

3. Chinese culture has changed the venture capital landscape.

We published four interview blog posts with Vistra experts in 2019. One of our subjects was Caroline Baker, Vistra’s managing director of the Alternative Investments division for Asia. She discussed venture capital trends around the world, and one of her observations struck me as particularly compelling. Here’s the passage in full: “Being in Asia, we have really seen the [venture capital] landscape shaped by China. The opportunity in that market is incredible, but it’s also remarkable the way that China has entered other Asian countries. The amount of money invested is obviously transformative, but they also bring their own way of doing business. We have had to be cognizant of how to work with Chinese investors and embrace their way of operating.”

The idea that a business must be sensitive and adapt to the cultural expectations of its deep-pocketed customers is not a new one. (One example of this kind of thing is how Chinese restaurant owners in the U.S. changed their recipes to make them more palatable to Americans.) Until reading Caroline’s comment about “embracing” Chinese investors’ “way of operating,” I’d never considered how Chinese cultural expectations must have transformed the venture capital landscape over the last decade or so. That transformation must be profound, given that China has invested nearly $2 trillion abroad since 2005.

4. Trust accounts can make cross-border payments quick and easy.

I won’t pretend to know how all the various kinds of trust accounts work across all industries. Thanks to Eugenia Vlas-Wright’s "Why you should consider trust accounts when expanding abroad," though, I’m confident I now know how and why international expansion providers use trust accounts on behalf of their clients.

If you’re expanding internationally, you may be able to set up a trust account or multiple trust accounts with a third-party provider to make tax-withholding, payroll and certain other payments. It’s a little like your mortgage company paying your real estate taxes on your behalf. But in this case, you’ll pay your international expansion provider in your home currency, and they’ll in turn fund individual trust accounts in other currencies, which they’ll use to make payments for you in other countries.

Trust accounts, then, can simplify the process of making ongoing payments to keep your international operations going. They can also in some cases eliminate the comparatively long and burdensome process of setting up bank accounts in other countries. Finally, trust accounts typically offer excellent exchange rates, since the companies that offer them deal in volume.

If you’re remotely interested in this subject, read Eugenia’s post. I know of no other article that so clearly describes what these kinds of trust accounts are and how they work.

5. The price of the "nut rage incident" was steep.

When first reading a draft of Suzie Woodcock’s post on Korean anti-bullying legislation, I laughed out loud at a passage describing something known as the “nut rage incident.” While there are comic elements to the story, it highlights the serious, global problem of workplace bullying.

It occurred in 2014 and involves the former vice president of Korean Air, who was also the CEO’s daughter. While waiting for the flight to take off, she was triggered by being served macadamia nuts in a bag instead of a porcelain bowl. Enraged, she demanded the flight crew return the plane to the gate so the offending flight attendant could be kicked off.

In the end, the flight attendant was awarded over USD$300,000 in a civil suit, and the enraged VP actually did five months in prison. That’s no laughing matter obviously, but few workplace bullying victims could dream of such a favourable outcome.

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relationshipadviser-blog · 6 years ago

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Ripe for a kicking: Hollywoods love-hate relationship with Rotten Tomatoes

New Post has been published on https://relationshipqia.com/must-see/ripe-for-a-kicking-hollywoods-love-hate-relationship-with-rotten-tomatoes/

Ripe for a kicking: Hollywoods love-hate relationship with Rotten Tomatoes

Twenty years after its launch, the movie-review aggregators verdict is now seen as vital to a films success or failure. Is the site too influential for its own good?

Twenty years ago, the internet was a very different place. Google was a fresh rival to Alta Vista and Lycos. Apple computers looked like boiled sweets, and we dialled up to surf the net, having installed the software via CD-Rom. The movie world of 1998 was also somewhat different: the box office was ruled by meteorite movies and Adam Sandler; Harvey Weinstein was an Oscar winner; and The Avengers was a lame, retro spy comedy with Ralph Fiennes and Uma Thurman. It was into this climate that Senh Duong launched Rotten Tomatoes known in the business as RT a site that has transformed both worlds, although nobody seems quite sure if it has done so for better or worse.

Duongs idea was simple to compile movie reviews and it still drives Rotten Tomatoes. He was inspired by his love of Jackie Chan and Jet Li movies and would scour the internet looking for reviews of them. So why not put them in one place? Duong already had a full-time job, he says. Rotten Tomatoes was a side project I worked on in the evenings. He single-handedly designed and coded the site in just two weeks. It was very laborious. Every page was manually assembled using HTML. Every review was manually searched for, read and quoted.

In the same way that, say, lastminute.com and Expedia compare plane ticket prices, Rotten Tomatoes review aggregation has turned out to be super-useful, particularly as it boils all those reviews down to a single, convenient percentage score. It then boils down that score even further, to a simple graphic of a tomato. In the same way that Siskel and Ebert gave a thumbs up or a thumbs down, or the man from Del Monte tasted a pineapple and said yes or no, so Rotten Tomatoes Tomatometer separates movies into fresh or rotten. If at least 60% of a movies reviews are positive, it is graded fresh, signified by a ripe, red tomato. Less than 60% and it is rotten, signified by a green splat. Over 75% gets you a certified fresh logo, like a sticker on a quality piece of fruit. (The 1998 Avengers movie, if you were wondering, scored a supremely rotten 5%.)

Lady Bird a hit with critics and Rotten Tomatoes. Photograph: Allstar/A24

Today, movies supposedly live or die by the ripeness of that virtual fruit. Rotten Tomatoes has become the one movie site to aggregate them all. The Tomatometer appears not only on Rotten Tomatoes site but also on ticketing sites such as AMC cinemas and Fandango (which has owned Rotten Tomatoes since 2016). It comes up on Google searches, iTunes, SoundCloud, in Twitter and chatroom discussions and (as long as the rating is fresh) in movie studios marketing campaigns. It is a news item when a movie achieves a 100% fresh rating, as recently happened with Paddington 2 and, before that, Greta Gerwigs Lady Bird.

With its dominance and prominence, Rotten Tomatoes is becoming the story and not always in a good way. After Lady Bird got its 100% score, for example, one critic opted to lob a green splat into the mix, not because he hated the movie, but because everyone else liked it so much. I had to consider whether to cast Lady Bird as fresh or rotten in the context of a perfect score that people were using to trumpet Lady Bird as the all-time best-reviewed movie on RT, Cole Smithey tweeted. In other words, Rotten Tomatoes status as a neutral measure of critics opinions comes into question when it starts to influence those opinions.

The possible gaming of Rotten Tomatoes scores has taken on more sinister aspects lately. Earlier this month, Facebook announced it had taken down the page of a group called Down With Disneys Treatment of Franchises and Its Fanboys, which was attempting to orchestrate a mass troll assault on the Rotten Tomatoes score of the superhero movie Black Panther. Alongside the critic-designated Tomatometer score, Rotten Tomatoes also gives each movie an audience score, determined by registered users and represented by a popcorn bucket: red and full for positive; green and tipped-over for negative. The anti-Black Panther group sought to lower the movies audience score by bombarding the site with negative reviews. It claimed to have programmed bots to create fake user accounts. It also said it was acting in the name of DC comics, the main rival to Black Panthers (Disney-owned) Marvel, but suspicions of far-right motivations persist, particularly because the same group had previously targeted Star Wars: The Last Jedi (also Disney-owned) on account of its supposed social justice warrior concepts.

Rotten Tomatoes has denied the attacks succeeded, but at present The Last Jedis Tomatometer score is 91% (a critical Yay!) while its audience score is 48% (a public Meh). Was this discrepancy the result of far-right bots or genuine audience division? Either way, it didnt matter much: The Last Jedi is now the ninth-highest-grossing movie in history. Black Panther is likely to be a billion-dollar movie, too.

Paddington 2 perfect score.

When movies bomb, however, the studios have been quick to blame Rotten Tomatoes. Last summer, Hollywood resorted to tomato-shaming to spare its own blushes over colossal failures such as Baywatch (Tomatometer score: 18%), The Mummy (16%), King Arthur: Legend of the Sword (29%) and Pirates of the Caribbean 5 (30%). The critic aggregation site increasingly is slowing down the potential business of popcorn movies, complained the website Deadline. Director Brett Ratner called Rotten Tomatoes the worst thing we have in todays movie culture and the destruction of our business. He may have been stung by the fate of Warner Bros blockbuster Batman v Superman: Dawn of Justice, which Ratners company co-produced; it earned a malodorous 27%.

The situation came to the boil with Batman v Supermans 2017 follow-up: Justice League. For Warner Bros, the movie was a big deal: a superhero team-up with an estimated $300m budget. So, eyebrows were raised when Justice Leagues Rotten Tomatoes score did not appear on the site as expected, once an embargo on critics reviews lifted. Even when those reviews were available on other sites and the movie was previewing in cinemas, Rotten Tomatoes webpage for Justice League was blank. Instead, the excuse ran, Justice Leagues score was to be announced on Rotten Tomatoes new web show, See It Or Skip It, in which presenters provide context and conversation around the movie of the week before revealing its all-important Tomatometer score. For Justice League, that score was a decidedly unripe 43%. By the time it appeared on the website, it had dropped to 40%.

Some observers smelled a conspiracy, since Warner Bros holds a 30% stake in Rotten Tomatoes parent company, Fandango (Universal owns the other 70%). Rotten Tomatoes, however, denied Warner Bros had anything to do with the decision: We are absolutely autonomous, like any news organisation, it said. There is no outside influence on anything we put on the site. If the studio was secretly trying to bury bad news, it didnt work. The incident ultimately generated negative publicity for Justice League, Warner Bros and Rotten Tomatoes.

Duong left Rotten Tomatoes in 2007 to pursue other digital media projects. When I started it, he recalls, I was only thinking of its positive impact that it could be really useful to film fans. And to studios: they could use the Tomatometer to promote their good films. I wasnt thinking at all about how they would react to the poorly reviewed ones. He notes that Warner Bros didnt complain about Wonder Womans 92% rating, which it used in its own promotion.

Star Wars: The Last Jedi targeted. Photograph: Allstar/Lucasfilm

Often, though, studios find subtle ways to control Rotten Tomatoes message, or, if necessary, stop it getting through at all. They may screen a movie before its release to a receptive crowd a fan-filled festival screening, say, or a cherrypicked selection of sympathetic critics to get a decent Tomatometer score on the board early and hopefully set the tone.

The biggest blockbusters are withheld from critics, or their reviews are embargoed, until very close to the movies release date. Occasionally (when the studio knows its got a real stinker on its hands) they are not screened for critics at all. As a result, no Tomatometer score appears until the very last minute. Last summer, for example, Sony embargoed reviews of The Emoji Movie in the US until just a few hours before its release. Critics gave the movie an RT score of just 6%, but it achieved a healthy opening weekend of $24.5m (17.5m) in the US. Family movies are generally less susceptible to the power of the tomato, anyway: few parents ever dissuaded an eager six-year-old by arguing the data.

Can Rotten Tomatoes really make or break a movie? It definitely has an impact, says Ethan Titelman, a senior vice-president at the Hollywood market research firm National Research Group (NRG). According to NRGs annual survey, 50% of regular moviegoers frequently check the site, often immediately before buying their cinema tickets. And 82% are more interested in seeing a movie if it has a high Tomatometer score, while two-thirds are deterred by a low score. Furthermore, Titelman adds, its influence is growing and broadening out. Once it would have been for your tech-savvy early adopters, but it has actually doubled its influence over moviegoers aged over 45 in the last couple of years alone.

Then again, a study by University of Southern Californias Entertainment Technology Center crunched the data on box office returns v Tomatometer scores for the biggest 150 movies of 2017 and found the correlation to be pretty much zero meaning that, in general, Rotten Tomatoes doesnt affect movies positively or negatively. Despite anomalies such as The Last Jedi, it also found a high correlation between critics scores and audience scores, which suggests that everyone tends to agree when a movie sucks. When Hollywood executives complain about Rotten Tomatoes scores, the researcher concluded, theyre really complaining about their audiences tastes because its basically the same thing.

Steven Gaydos, the executive editor of Variety, dismisses the studios complaints out of hand: Its really a case of shoot the messenger, he says. If Rotten Tomatoes reflects the consensus of opinion on a movie and the movie is bad and therefore doesnt do well, what part of that is Rotten Tomatoes doing something nefarious or terrible? Studios today bank on fewer, bigger movies, each of which can represent an investment of half a billion dollars in production and marketing costs, Gaydos points out. Also, a movies opening weekend typically accounts for one-third of its total box office. So, you can imagine how much pressure there is to get an opening weekend that has not been damaged or diminished by a bad Rotten Tomatoes score. Everything is at stake.

Rotten Tomatoes may not be killing movies, but it could well be killing movie criticism. Not only by attempting to bypass professionals and build buzz with the fans, but also by its inherent premise. Rotten Tomatoes only registers if each review is positive or negative (its rival Metacritic, by contrast, assigns a percentage score to each individual review, then calculates the average). A movie that everyone agrees is simply quite good could therefore be 100% fresh on Rotten Tomatoes, while movies that are more challenging, controversial or experimental are more likely to divide critics and get a lower score. The system favours safety and consensus. As well as movies, Rotten Tomatoes is grading the critics: if a reviewer goes against the grain, the Tomatometer score is proof that they are wrong.

Its self-censorship, says Varietys Gaydos. Critics have trained themselves to [pretend to] take seriously movies that they dont take seriously because the danger is not having a job and not being relevant, being aged out of the discussion. The numbers bear out this trend. The median Tomatometer score for movies grossing more than $2m was 51% during the 2000s and 53% during the 2010s. In 2017, though, the year of crashes such as Baywatch and Pirates of the Caribbean 5, the median was 71%. Either critics are enjoying movies more or movies are better than ever.

Warner Bros didnt complain about Wonder Womans 92% rating, says RTs founder. Photograph: Clay Enos/AP

Gaydoss fear is that Rotten Tomatoes is replacing nuanced, thoughtful film writing. We used to read Andrew Sarris and Pauline Kael arguing, and now were looking at a picture of a green tomato or a red tomato. We have to see what weve lost here, people!

Film-makers have expressed similar sentiments. Martin Scorsese complained that sites such as Rotten Tomatoes have absolutely nothing to do with real film criticism. They rate a picture the way youd rate a household appliance in Consumer Reports The film-maker is reduced to a content manufacturer and the viewer to an unadventurous consumer.

Others disagree. The New Yorker critic Richard Brody argued that Rotten Tomatoes has the merit of putting reviews by critics who write for smaller outlets alongside those who write for more prominent ones, which is all to the good. Duong also defends his brainchild: In regards to this fear that people would only look at the score and not read the reviews, its not supported by data. When I was there, 85% to 90% of users who went to a movie page on Rotten Tomatoes clicked on a review and left the site. Its not surprising when you think about it: its a page full of links with enticing quotes.

When Duong created Rotten Tomatoes in 1998, Hollywood released many more titles than it does now, and they were reviewed by a handful of significant critics: major newspapers and magazines, syndicated critics such as Siskel and Ebert. The media elite, you could say. Today, the situation has flipped. Hollywood releases fewer movies and they are reviewed by hundreds, possibly thousands, of critics. You could see this as democratisation and diversity of the media, or the emergence of a cacophony of critical voices. However, the proliferation created an opportunity at the top to simplify and aggregate the multitude into one overarching meta-entity: essentially, a new media elite. Depending on how you look at it, Rotten Tomatoes either showcases organic, heirloom varieties like an upmarket grocery store, or it blends all difference into one homogeneous, easily digestible puree. The fruit is either half-ripe or half-rotten; its all a matter of taste.

Read more: http://www.theguardian.com/us

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