tv Taking Stock With Pimm Fox Bloomberg January 24, 2014 9:30pm-10:01pm EST
>> this is "taking stock" for friday, january 24, 2014. stocks take a beating today. our theme is to help you escape the madness. music can help you escape. we will talk about where the entertainment industry is heading and how much money they will make. with the snow and cold in the u.s. northeast, as well as other places in the northern hemisphere this week, perhaps everyone would like an escape to
a warmer climate. one travel executive offers details on the most desired destinations. wine also offers a bit of an escape. we will get to the details on how the california drought is affecting the wine industry. all of that and more over the next hour. but first, headlines from carol massar. >> u.s. stocks taking a beating today. the dow jones industrial average falling 318 points. the s&p 500 dropped more than 2%. benchmark indexes having their worst week since 2012. jpmorgan giving jamie dimon a 74% raise to $20 million last year. the compensation package included $18.5 million in restricted stock. 800,00 signed up for private healthcare. the total enrollment in the
affordable care act is 3 million people. those are some of the top headlines. back to you. >> music's big weekend is here, almost. the grammys will be bestowed on sunday evening. who will win and who will watch? streaming media companies are delivering music to listeners. joining me are two gentlemen who listen to the fortunes of the music industry. we have the chief executive and founder of stadiumred joining us from los angeles, jon erlichman, set the stage. do you have a tux and tickets? >> i go when they invite me to perform. i did not get that honor. there are always last-minute announcements. maybe they will tell me i can be one of the announcers. no. what am i talking about? are you kidding me? this is one of the hottest tickets in town. i am glad you talked about the streaming services. a lot of the acts that are talked about are the ones people are discovering on new platforms and listening to on services
like spotify. you see social media as well and new technology is a way to get the word out about artists. that is one of the reasons why this is one of the big shows on television, because of the big following of social media. >> tell people about your connection. >> we do services from recording studios all the way through events. we are working with the grammys to produce the official grammy viewing party in new york. >> what is an official viewing party? >> music is everywhere. in new york, the recording academy is everywhere. we do a lot of music in new york. the viewing party is bringing together all of the people in music in new york in a special environment to be part of the show. >> does this mean a big party with late-night and lots of musical acts? >> it means a lot of fun. we will be watching the show from l.a. a lot of great people involved. it is going to be the new york
way of partying and doing the grammys. >> jon erlichman, tell us what you expect. who is hosting? i know ringo starr and paul mccartney are scheduled to appear. >> there has been a trickle on some of the special performers and madonna making an appearance. one of the things the grammys does well is they do not say right away what the whole card will be. they let it come out in bits and pieces. you talked about the idea that music is everywhere. that is an important point. the grammys do not just look at this one night. they see it as an extension of what they are always doing throughout the year. being involved in events, going to events that musicians are involved with. this becomes the big celebration and extension of the stuff they are always doing. it is one of the reasons why artists love to be part of the grammys. plus they could get some
hardware for the shelves. >> have the grammys remade themselves and made peace with the internet? back several years, you probably would not be talking about spotify or pandora or any streaming media music service because of the fight over copyright and payment. they seem to have worked this out and have decided it is more profitable to be friends than enemies. >> the bottom line is music is about getting it to people. streaming services in today's world, we are consuming more music than ever before. >> what do you think of the new beats music? >> i think it is cool. >> tell what it is. >> beats music is part of the dr. dre streaming platform. it is streaming and builds music playlists around your life and experiences. you can have music for a party.
>> for example, jon erlichman who is originally from canada, i'm assuming you would have a lot of justin bieber on your playlist. >> i have no problem with the biebs or tragically hip. that is an obscure one from canada. >> we will try to get back with jon erlichman in a moment. i teased him about justin bieber because he has been involved in legal issues. are these celebrities that appear? are they sponsored by big businesses that we know of? olympic athletes are sponsored. what about the role of money in pushing artists? it used to be that way in radio to get a record played. >> artists are working with big organizations to promote their brands and help them earn revenue outside of music.
music is more of a marketing tool and way of connecting with fans. with social media and technology, these artists are trying any ways they can to leverage that and grow their own businesses. >> jon erlichman, i wonder if you can describe the way the musician can use to connect to the listener. it seems you need just as many marketers and people to sell your stuff as you did when there were record executives. >> you still need good placement, even if you are a user of a rival service. apple came out with their own service recently. they will be showcasing a specific album, making it exclusively there for you to check out first. everyone has talked about beyoncé using the power of her platform to put her album out first on itunes.
it depends on how big an artist you are. if you are big enough, you can do whatever you want. it will still depend on which service is choosing to get the exclusive deal to get you there first. there's only so much shelf space we are talking about using your phone to listen to music. >> there are other ways to do so. in your automobile, you can use sirius xm which carries a variety of different programming. there is the onstar system from gm. did those businesses make a presence at the grammys? >> the automobile industry makes a presence during the commercial breaks. although, it is a big event for pepsi, a huge sponsor during the grammys. i was at the consumer electronics show this year. it is very clear the automobile industry wants to be in business with the music business in a bigger way. that is why one of the selling features of so many cars today
is the integration with many of these services. for them, they want to have the integration because that is the one place you are a captive listener all the time for sure. >> claude, is it expensive to put on these kinds of events? you're talking about a party. what do these cost? >> it ranges. it is a lot in l.a. in new york, it is a big production as well. you're talking about 500 people in a venue. >> are you associated with any of the nominees directly? >> we worked on "good kid, m.a.a.d. city." it got two nominations. we have 24 nominations and 11 wins since we started. >> how do you measure success in the business?
you cannot measure albums anymore. is it how many 99-cent clicks you register? >> that is part of it. the biggest stars are using this as leverage for other stuff. you guys were talking about justin bieber earlier. his movie came out during the holidays. some would say it was a box office bomb because of the actual dollar amount it brought in at the theaters, but he was the one who produced it with his team so the budget for the film was very small. as an artist of a certain magnitude, you can use your music to leverage in other areas as well. >> you can make music but do not need leverage. jon erlichman joining us from los angeles. have a good time at the grammys. we're also joined by the chief executive of the stadiumred. coming up, justin bieber is out of jail for driving under the
>> the entertainer, the movie star, the music maker. justin bieber made more than $55 million last year. sold more than 15 million albums. he is also out of the miami jail after being arrested for driving under the influence, resisting arrest without violence, and driving on an expired license. the trouble he has landed in has some of his neighbors calling for justin bieber, who is canadian, to be deported. one service has offered to take him anywhere in the world for free. airfasttickets.com is behind the offer.
he is the global head of cruise and other products. thank you for being here. i have to say we did use this as a way to get to speak with you because of all of the inclement weather we have had in the united states. people may be wanted to go to a warmer client. who came up with the idea to send a letter to justin bieber's representatives offering a free flight to him? >> our ceo decided to do this. it is very imaginative and creative. he loves to start a buzz. all of the hoopla that has been going on with justin bieber, we decided to offer him a flight to anywhere, including a ticket around the world, as long as he stays out of the u.s. because all of the rigmarole and momentum building from americans urging him to go out of the country, we decided to give him a ticket like this.
>> you have a smile on your face. at least you take this as a tongue-in-cheek experience at the moment. one thing that is serious is the cost of travel and where people are going. airfasttickets.com, what makes it special? >> we are a special and fast way of booking travel. we guarantee the cheapest airfare. we guarantee the cheapest hotel and car rentals and cruises. if anybody matches our price, we give them a $50 voucher plus we pay for the difference. we have an algorithm that is proprietary to make sure we always offer the lowest prices available. >> you have a lot of experience in the travel and hospitality industry. tell us about the trajectory of your career.
>> my career started a long time ago when i started as a reservation agent. i experienced every aspect of the business. i then stepped into marketing. i worked for liberty travel where i headed the cruise operators for a long time. i worked for another company with cruise bookings. finally, i was recruited for airfasttickets.com. we are a global company and just started in the u.s. >> if someone came to you and said where should i go for warm weather? >> if i close my eyes and go outside, i would say the caribbean because you are guaranteed warm and beautiful sand and azure water.
the top destinations are san juan in puerto rico, saint maarten, aruba, jamaica, and the dominican republic with the palatial new hotels with casinos and golf clubs. they have outdone themselves. the caribbean has fantastic destinations. it is only 3.5 hours away. >> you have a hint for how people can get the vacation they want. for example, go online and look on tuesdays. what is so special about a tuesday? >> it is a secret of the industry that tuesday is when inventory gets recalculated by the airlines. it was started by the legacy carriers.
a lot of cruise lines do their promotions mondays or tuesdays. >> if you want a cruise, that is a good day. >> airfare and hotel, at the beginning of the week is when they recalculate. it is a secret algorithm. a lot of people are looking for that. >> are prices relatively high compared to previous seasons? >> it depends on where you look. some are higher prices. hotels are flat. cruises have a tremendous amount of inventory in the caribbean, amazing prices, as low as $499 with a lot of perks. >> sounds almost less expensive than staying home. thank you. coming up, a severe drought continues to grip california. how are the vineyards faring? more next on "taking stock." ♪
>> a severe lack of rainfall in california is causing real problems for farmers and ranchers. last week, governor jerry brown declared a state of emergency because of the drought. for more on how vineyards are coping, i want to bring in the executive director of the lodi winegrape commission representing farmers farming 100,000 acres. he joins us by phone. thanks for being with us. give us the conditions of the vineyards.
>> i have got to tell you, right now, the vineyards are doing what they are supposed to do in the winter time, which is taking a much-needed break from growing and producing phenomenal winegrapes. unfortunately, mother nature is not cooperating giving us the good drinks they need right now. we are still hopeful a good soaking rain is yet to be had in the winter season. but right now, conditions are pretty dry. beautiful, sunny california, but the grapes are doing exactly what they need to do, which is resting and getting ready for the next growing season. >> how much rainfall should you have by now and how much do you have? >> well, you know, up and down the state, we have varying levels of rainfall in wine country. that creates different dynamics. we are on par overall in the state of having about 20% of what we should have at this
point in time. right now in our area, we are 45 or 50 days without substantial rain right now, which is really challenging because, for the foreseeable future, we are not seeing any rain in the forecast of any measure. we are facing some challenges ahead of us. >> does the governor's declaration because of the drought, does it have any effect on the individuals and businesses you deal with on a regular basis? >> absolutely. the conscious recognition of the drought we have been facing in california is a good step in the right direction. fortunately, for us in the lodi region, our growers have been forward thinking with respect to water use and efficiency for our vineyards and have implemented water saving applications for
many years, as is the case in many areas of the state. the government officials have been remiss in taking a good, hard look at solving some of our dramatic water issues in the state overall. hopefully, the drought declaration will drive the conversation forward and force public policy officials to interact between the urban needs and our agricultural needs to water in california. >> how long can the vines go without getting the adequate supply of water? >> well, you know, it could have an impact. it varies from location to location based on the different soils. there are a number of farms and vineyards in california that are dry farms, that don't have irrigation in place. they thrive and do well because the root systems for winegrapes extend deep into the soil.