Nearly two-thirds of pay-TV subs now also have Netflix: study

Are Netflix and other streaming-video services contributing to the demise of cable and satellite TV? Some consumers may be deserting TV for streaming services, but for most pay-TV customers, Netflix and its ilk continue to be complementary to traditional television.

About 65% of pay-TV subscribers say they now have Netflix -- up from 41% in 2013, according to a new study by consulting firm PwC. The increases were most pronounced among older demos: Netflix subscribership among pay-TV customers 50-59 rose from 19% last year to 58% in 2014. That's compared with 37% to 66% among those 35-49; 51% to 71% among those 25-34; and 56% to 65% for 18-24.

Those rates of growth indicate a strong affinity for Netflix among pay-TV customers. Overall in the U.S., the net number of Netflix subscribers increased 19.7% over the last 12 months, from 31.1 million in the third quarter of 2013 to 37.2 million in Q3 2014.

In addition, the PwC survey found that overall, Amazon Prime subscriptions jumped from 18% of pay-TV households in 2013 to 32% this year, while Hulu Plus subscriptions rose from almost 8% to more than 11%.

But with more video options than ever, a growing number of consumers may be cutting -- or shaving -- the cord. Overall pay-TV subscriptions have declined among consumers under 35, the study found, while it was flat for those 35-49 and up slightly among the 50-59 cohort. Among those 18-24, cable and satellite subscriptions dropped from 77% in 2013 to 71% this year. Furthermore, only 42% of pay-TV subs answered yes when asked if they saw themselves subscribing to cable 10 years from now, vs. 91% in a year from now and 61% five years from now.

For consumers the consternation with subscription-TV service continues to center around paying for channels they don't watch -- with 41% of survey respondents saying they'd prefer a la carte pricing options, according to the PwC study. But TV remains popular, with 73% of viewers saying that watching TV increasingly is often as good as going to the movies.

The study also found binge-watching of TV series to be a major phenomenon, with about 50% of viewers saying they have watched an entire season of a show in one week.

The data is based on an online survey of 1,024 consumers conducted in September 2014. PwC said the survey sample is representative of the U.S. population across gender, age and income. The 2014 results were compared with a similar 1,008-person study conducted in the fall of 2013.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Finance errors to cost Alibaba Pictures more than $47 million

Alibaba Pictures Group, the film making unit of China's e-commerce giant, will have to restate its net asset value and take losses of at least US$47 million (HK$364 million) after an assessment of the company's financial mismanagement.

The company announced the findings of an auditor that it called in after finding irregularities that related to a period before its acquisition by Alibaba. The Hong Kong-listed company was at the time known as Chinavision.

The auditor found that Chinavision had failed to use correct invoices and had therefore mis-calculated its Enterprise Tax in mainland China. It had often applied incorrect value added tax rates in China, and it has applied the wrong valuation of certain corporate bonds. That in turn meant that the stated value of certain warrants were incorrect.

The group's net asset value would have to be reduced by HK$70 million (US$9.03 million) in the year to end of 2012, by HK$58 million (US$7.48 million) in the year to end of 2013 and between HK$257 million and HK$323 million (US$33.2 million to US$41.7 million) in the as yet unreported six month period to June 2014.

Net profits will have to be restated; by a reduction of HK$61 million (US$7.87 million) in the year to end of 2012; by an increase of HK$21 million (US$2.71 million) in 2013; and by a reduction of between HK$324 million and HK$390 million (US$41.8 million to US$50.3 million) in the six months to June 2014.

Alibaba Pictures said that it will report the results as soon as possible and apply for trading in its shares to start after that. It made no mention of criminal or civil action against the previous management of the company or its financial advisers.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Dunkin’ Donuts brews up green building program

Dunkin' Donuts is encouraging U.S. franchisees to go "green" when constructing new restaurants.

The Canton chain has launched DD Green, a new green building certification program aimed at more sustainable and energy-efficient restaurants that starts with site development. It incorporates features including energy-efficient LED lights, low-flow performance plumbing, high-efficiency HVAC systems, paint without volatile organic compounds and regional landscaping.

"What we wanted to do was really encourage franchisees to do more sustainable elements within their stores that not only are great for the planet, but also help to reduce their utility, their electrical and their water usage," said John Herth, Dunkin's senior director of global design and construction.

The program is optional, and Dunkin' has a goal of 100 certified restaurants by the end of 2016. Franchisees who comply with the program, expected to cost 1 percent to 3 percent more than the traditional

buildout, will get a plaque from Dunkin', but no financial incentives. "Most of the elements that cost them additional money have a direct effect on their utility usage and reducing that so, inevitably, there would be some payback ... over time," Herth said.

Dunkin' opted for its own program over the U.S. Green Building Council's widely recognized and more stringent Leadership in Energy & Environmental Design (LEED) certification, because it's specifically designed for Dunkin' restaurants and uses its own staff instead of third-party consultants, making it more cost-effective, according to Herth.

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Deval Patrick: Charlie Baker should go on trade missions

Gov. Deval Patrick yesterday urged his successor, Gov.-elect Charlie Baker, to embark on the same aggressive agenda of international trade missions that Patrick did in his second term, but warned the Republican to expect "body blows" from the press if he does.

Patrick, speaking yesterday at an MIT forum on innovation in Massachusetts, defended his frequent travel overseas to Europe, Asia and the Middle East, which he said has helped foster investments back home and a range of deals to bring direct international flights to Logan International Airport.

"In today's marketplace, and I think it is hard for some in the media to quite understand it, you don't get off the plane with a fistful of purchase orders," Patrick told the crowd. "You start by making friends. ... And after eight years, there is a lot of tangible stuff" that came out of those trips.

"I encourage the governor-elect to travel as well," Patrick said, "notwithstanding the fact that you're going get body blows from reporters when you do. And I would encourage all of you to encourage the governor-elect."

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Asian shares mostly lower on weak China data

TOKYO — Asian stock markets were mostly lower Wednesday as data from both China and Japan pointed to continued weakness in the world's second and third-largest economies.

KEEPING SCORE: Japan's benchmark Nikkei 225 slipped 1.6 percent to 17,530.39 after a government survey showed a deterioration in business sentiment in the current quarter, especially among smaller companies. Hong Kong's Hang Seng index slipped 0.1 percent to 23,455.87 while the Shanghai Composite rose 0.3 percent to 2,863.57 after a dramatic tumble Tuesday. South Korea's Kospi lost 1.3 percent to 1,944.80 and Australia's S&P/ASX 200 fell 0.4 percent to 5,262.60. Shares in Southeast Asia were mixed.

CHINA INFLATION: China reported Wednesday that its consumer price index rose 1.4 percent in November, the slowest pace in five years, and a sign of weak domestic demand. That was way below the government's target of 3.5 percent, though lower oil prices are seen as an important factor.

THE QUOTE: "China has entered into a rapid dis-inflation process, and faces the risk of deflation as commodity prices continue to trend lower and growth is expected to slow further in the coming year," ANZ economists Li-Gang Liu and Hao Zhou said in a commentary.

HANGOVER: China's benchmark fell 5.4 percent on Tuesday, snapping a buying frenzy that has pushed it up by 41 percent since June. Investors remained cautious following sharp declines in Asia and Europe, where jitters over political developments in Greece added to uncertainty.

WALL STREET: U.S. markets fell Tuesday but losses were capped by a rally in energy company shares. The Dow Jones industrial average lost 0.3 percent to 17,801.20 while the Standard & Poor's 500 was almost unchanged at 2,059.82.

CURRENCIES: The dollar gained slightly against the Japanese currency, trading at 119.56 yen versus 119.40 late Tuesday. The euro edged lower to $1.2373 from to $1.2385.

ENERGY: Benchmark U.S. crude fell 96 cents to $62.86 a barrel in electronic trading on the New York Mercantile Exchange. It gained 77 cents to close at $63.82 a barrel on Tuesday. Brent crude, a benchmark for international oils, was down 88 cents to $65.96 on the ICE futures exchange in London.

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California prosecutors sue Uber; Lyft settles

SAN FRANCISCO — California prosecutors sued Uber on Tuesday over the ride-booking company's background checks of drivers and other allegations, adding to the popular startup's worldwide legal woes.

San Francisco County District Attorney George Gascon also announced that Uber competitor Lyft agreed to pay $500,000 and change some of its business practices to settle its own lawsuit. Lyft will have to pay only half the fine if it complies with the agreement's terms over the next year.

The lawsuits filed in San Francisco Superior Court are the latest legal hurdles to confront the nascent ride-hailing industry. The industry in general — and Uber in particular — have been battling lawsuits and regulatory issues over whether the businesses are regulated taxi services or app-making technology companies.

"Uber continues to misrepresent and exaggerate background checks on drivers," Los Angeles District Attorney Jackie Lacey said. "It's not our goal to shut them down. What we're saying is their advertising is false."

Lyft, on the other hand, agreed to drop similar claims that its background checks are the "best available" and the "gold standard."

Among other concessions, Lyft also agreed to submit its fare-setting app to the state regulators to ensure it's fairly charging riders, and it agreed not to do business at any airport unless it receives a permit.

Lacey partnered with Gascon in a probe of the ride-app industry. A third company — Sidecar — is still under investigation and could face a lawsuit of its own if it can't reach an agreement with prosecutors, Gascon said.

Uber's lawsuit accuses the company of misleading consumers by claiming it conducts "industry-leading" background checks on its drivers. Gascon said that claim is false since the company doesn't fingerprint its drivers.

Uber uses information supplied electronically by its applicant drivers for background checks. But applicants can get around those checks by using stolen or false identifications, Gascon said.

"Only a fingerprint-based process can ensure this is not happening," he said.

Uber spokeswoman Eva Behrend defended the company's role in California in a statement that did not address specific allegations.

"Uber is an integral, safe and established part of the transportation ecosystem in the Golden State," Behrend said. "We will continue to engage in discussions with the district attorneys."

Uber also is being sued for charging passengers an additional $4 for trips to and from San Francisco International Airport even through the company lacks a permit to do business at the airport and neither Uber nor its drivers pay the airport fee.

Taxis must pay for a permit to do business at San Francisco's airport and other major airports in the state.

Further, Uber is being sued for charging passengers an additional $1 per trip for a "safe ride fee," which the company claims helps pay for its "industry-leading" background checks.

Finally, the lawsuit accuses the company of failing to obtain approval from state regulators on how drivers calculate fares. Taxi cab meters are tested and verified by an agency in California's Department of Agriculture.

Uber has endured negative attention about the actions of some of its drivers.

An Uber driver was arrested in San Francisco in September and charged with felony assault after allegedly using a hammer to attack and seriously injure a passenger who complained about a route. Another Uber driver was arrested in June in Los Angeles and accused of abducting a drunken female passenger and taking her to a hotel with the intention of sexually assaulting her.

In October, a Los Angeles woman reported that an Uber driver drove 20 miles out of her way and ignored her complaints and questions before stopping the car in a dark and deserted parking lot. She said the driver then locked the doors when she tried to leave. The woman reported that she escaped only after screaming. Uber refunded her fare.

Government entities around the globe are grappling with how to regulate and monitor ride-hailing companies. Taxi and limousine drivers and companies complain that the app makers should be subjected to the same regulations and fees they face around the world.

The ride-booking companies counter that their drivers are private contractors who use the startups' technology to find customers in need of rides.

Uber, in particular, is fighting numerous legal and regulatory battles as it aggressively expands worldwide.

The city of Portland, Oregon, on Monday filed a lawsuit seeking to halt Uber's expansion in that city, arguing the company failed to obtain the proper permits.

A Nevada judge has temporarily barred Uber from operating in the state.

Overseas, police in India recently questioned an Uber executive about the company's claim it conducts comprehensive background checks. And a top official called for the service to be banned nationwide after one of its New Delhi drivers was arrested Sunday and accused of rape.

Separately, Spain has barred the company's operation, and Thailand said it was illegal for private cars to be used as taxis and threatened fines of $60 for each violation.

Nonetheless, San Francisco-based Uber raised $1.2 billion in its latest round of funding from venture capitalists, a sign investors aren't fazed by the legal woes.

The latest investment put a value on Uber of $40 billion.

___

Associated Press special correspondent Linda Deutsch in Los Angeles contributed to this report.

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Nuts! Korean flight delayed by first-class spat

SEOUL, South Korea — Forget dust-ups over reclining seats in economy class. There's a new and exclusive twist on inflight anger: Nut rage in first class.

A recent Korean Air flight was delayed when its chairman's daughter, who was also vice president responsible for cabin service at the airline, ordered a senior crew member off the plane. His crime? Allowing her and other passengers in the pointy end of the aircraft to be served bagged macadamia nuts instead of nuts on a plate.

The executive, Cho Hyun-ah, resigned Tuesday amid a storm of public criticism in South Korea. The airline had earlier excused her behavior even as it apologized for inconveniencing passengers. It said she will no longer serve as head of cabin service but will retain other executive roles at the airline and its affiliate businesses.

South Korean media reported this week that the flight from New York to Incheon, South Korea, returned to the gate after Cho told the head of the cabin crew to leave the plane. The reports said Cho quarreled with crew in the first-class cabin and the flight departed 20 minutes late.

Cho, 40, is the oldest child of Korean Air's chairman, tycoon Cho Yang-ho. Her two siblings are also executives at South Korea's largest airline.

The incident caused an uproar in South Korea where it was seen as an example of over-mighty behavior by the offspring of the moneyed elite.

The South Korean economy is dominated by family-controlled conglomerates known as chaebol. Family members often wield greater influence over major companies than shareholders and executives with no blood ties to the founding family. The Cho family owns about 10 percent of Korean Air Lines Co., part of a business empire than spans the travel, logistics, hotel and leisure industries.

Korean Air confirmed that Flight 86 was delayed at John F. Kennedy airport on Dec. 5 due to the nut incident. But the company said the decision to disembark the crew member was made by the flight's captain.

South Korea's government said it is investigating whether Cho violated aviation safety law. Cho could face legal action if the probe shows that she interrupted the flight or endangered safety by using threats, her status or violence.

Korean Air said Tuesday before Cho's resignation that it was "natural" for her to fault the crew's ignorance of procedures.

The airline's cabin crew is required to ask first-class passengers whether they want nuts, partly to avoid serving them to people with allergies. The nuts also should have been served on a plate.

The airline said it will step up training to improve customer service and safety. It denied a Yonhap news report that the crew member forced to leave the flight had been suspended. A spokeswoman said the man was taking a vacation.

Cho was not available for comment.

People's Solidarity for Participatory Democracy, a civic group, said it would file a complaint against Cho with prosecutors.

"The anger and the concern from the public were so big because safety and procedures related to important services were simply ignored" due to Cho's status, the group said.

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Reception to GOP tax amnesty plan mixed

Taxpayer activists are divided about a corporate tax amnesty program House leaders and Gov.-elect Charlie Baker are considering to generate cash for state spending needs.

House Minority Leader Brad Jones (R-North Reading) has filed legislation to create a two-month corporate tax amnesty program, which he estimates would yield $15 million to $20 million. Baker said it's not an ideal situation, but one he might support. House Ways and Means Chairman Brian Dempsey (D-Haverhill) said Democratic leadership is actively considering the possibility.

A two-month tax amnesty program for individual filers that ran through the end of October pulled in roughly $57 million.

Michael J. Widmer, outgoing president of the Massachusetts Taxpayers Foundation, said in many cases, businesses, like some individuals, don't pay their taxes because they dispute their assessment.

"The amnesty is a chance to reach an agreement and collect revenues which might otherwise never be received or only after a long period," Widmer said in an e-mail yesterday. "We haven't looked at this, but my one caution would be not to use one-time revenues to support ongoing operating expenses."

But Barbara Anderson, executive director of Citizens for Limited Taxation, was flummoxed by the idea of an amnesty for corporate scofflaws.

"You and I have to pay our taxes, so why don't they? Wouldn't I go to jail if I didn't?" Anderson said. "The bigger ones — I don't see how they could have any excuse; they have accountants ... It seems to me there's a moral hazard here. Once everyone understands that if they don't pay their taxes sooner or later there's going to be an amnesty, there's an incentive to hold out and have that money in the bank, earning interest."

Herald wire services contributed to this report.

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City to give boost to veteran-owned businesses

Veteran-owned businesses will soon get the same preferential treatment that women- and minority-owned businesses get from the city of Boston.

During his speech at the Greater Boston Chamber of Commerce this morning, Mayor Martin J. Walsh is expected to announce a new executive order that will give veteran-owned businesses an advantage when bidding for city contracts.

"This really changes the dynamic, to go beyond what is being done at the state level and gives all veterans the opportunities to bid with the city of Boston," said Francisco Urena, Boston's commissioner of veterans services. "This is a chance for veterans to utilize the skills they've learned in the field and in their service to our country, to launch a successful business, and for the city to support their post-service careers in a sustainable way. Boston continues to lead as a veteran-friendly city, and this is another reason why."

The city currently gives extra weight to bids from woman- and minority-owned businesses, and will add veteran-owned businesses to that group when the executive order is issued.

Joyce Linehan, Walsh's chief of policy, said the programs have been effective in giving businesses more opportunities.

"It certainly is much more than symbolic," she said. "(Veterans are) a population that could certainly use a hand up."

Veteran-owned businesses will also be able to get a weekly dispatch from City Hall, which details what contracts are up for bid.

"It's the least we can do," Linehan said.

In a meeting last month with a veteran business owner, Linehan said she was surprised that no policy existed.

"You don't understand why it wasn't already done," she said. "It's a really good way for us to say thank you."

The executive order will also establish a minimum percentage of contracts, which should be awarded to veteran-owned businesses.

Businesses will need to be federally certified as veteran-owned to qualify. There are roughly 800 businesses in Massachusetts that are federally certified as veteran-owned.

The city's legal team is in the process of putting the executive order together, but there is no concrete timeline for its implementation.

The city awards millions of dollars in contracts every year, for jobs including fixing traffic lights to installing cables inside City Hall.

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US stocks open lower as oil renews slide

NEW YORK — U.S. stocks opened lower Wednesday, led by declines in energy stocks as the price of oil resumed its slide.

Oil dropped on reports that OPEC had slashed its estimate of how much crude it will need to produce next year due to rising supplies from other producers such as the U.S.

KEEPING SCORE: The Standard & Poor's fell 12 points, or 0.6 percent, to 2,046 as of 9:51 a.m. Eastern. The Dow Jones industrial average dropped 122 points, or 0.7 percent, to 17,681. The Nasdaq composite fell 19 points, or 0.4 percent, to 4,746.

ENERGY: Benchmark U.S. crude was down $1.63, or 2.6 percent, to $62.18 a barrel on the New York Mercantile Exchange. The price of oil has plunged more than 40 percent from a peak of $107 a barrel in June as traders speculate that the supply of oil being pumped by the world's biggest producers exceeds demand.

FLYING HIGH: Airline stocks were among the gainers as the price of oil plunged. Southwest Airlines was the leading gainer in early trading. The stock rose $1.13, or 2.5 percent, to $41.76, taking its gain this year to 121 percent. Delta Air Lines also advanced, rising 55 cents, or 1.1 percent, to $46.81.

EUROPE'S DAY: European stocks rebounded on Wednesday after a sell-off a day earlier on concerns that Greece might have to hold early general elections and that a left-wing opposition party would win. The Syriza party wants to cut what Greece owes in bailout money, which could potentially derail the country's recovery.

France's CAC-40 gained 0.2 percent to 4,271 and Germany's DAX was up 0.6 percent at 9,857. Britain's FTSE 100 added almost 0.1 percent to 6,532.

BONDS AND CURRENCIES: Government bond prices were little changed. The yield on the benchmark U.S. Treasury note, which rises when prices fall, edged up to 2.22 percent from 2.21 percent on Tuesday.

The dollar fell to 119.01 yen from 119.40 late Tuesday. The euro rose to $1.2394 from $1.2385.

___

Kurtenbach reported from Tokyo.

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