Centives

If you have a few hundred gigabytes of data that you want to send then it’s faster to have FedEx come pick it up rather than trying to transfer it over the internet writes Randall Munroe. When will the internet finally exceed FedEx’s prowess?

• Total internet traffic is currently around 167 terabits per second.
• FedEx can deliver about 26.5 million pounds a day.
• If you were to store data on MicroSD cards then FedEx could transfer about 177 petabits per second – a thousand times more than the internet.
• Based on current growth rates of the internet, the internet’s bandwidth will surpass that of FedEx by 2040.
• However that assumes that we won’t invent an even lighter form of storage than the MicroSD card. When we do FexEx could ship that instead to get even higher throughput rates.
• In fact, because transfer and storage are so deeply linked it is unlikely that transfer over the internet will ever beat the physical shipping of data.

Read Munroe’s entire fascinating and humorous explanation over here.

Source: What If?

In-N-Out Burger, a popular chain of restaurants in the west coast of the United States is an extremely secretive private company. Seth Lubove pieced together information from a variety of sources to paint a fuller picture of the chain:

• While the company is private, based on what little information is available, the chain is valued anywhere between $1.1 and $2 billion.
• The company is wholly owned by the granddaughter of the chain’s founders. She has no college degree yet is thought to be the youngest female American billionaire.
• The company refuses to franchise in an apparent bid to maintain quality control.
• The chain uses fresh beef patties that are delivered to the stores every day from two distribution facilities. The chain only opens in locations that are within a day’s driving distance from the distribution facilities.
• The estimated 20% margin that In-N-Out Burger manages to maintain is in part due to the simplicity of its limited menu.

Read more about the minor family feud that took place in the past, comments from In-N-Out Burger, and what the youngest female billionaire likes to do with her free time over here.

Source: Bloomberg

If you’re anything like us you spent a good part of the week making your way through Netflix’s latest House of Cards. Rebecca Greenfield looked at the economics of the show:

• The show costs Netflix about $50 million a season to produce.
• Netflix intends to have five new shows of a similar scale every year.
• Yet most of its revenue comes from people paying $7.99 a month for a streaming subscription. It doesn’t use ads to top up that revenue.
• If Netflix wants to recoup the costs of producing the shows then the shows need to attract 2.6 million new individuals who subscribe for two years.
• Yet for Netflix this would be an increase of less than 10%. Last year Netflix increased its US membership by about 13%.

Read more about the dynamics of Netflix’s big bet over here.

Source: The Atlantic

Earlier this week the company Research in Motion announced that it was changing its name to Blackberry as it struggles in a marketplace ruled by Android, iOS, and Windows Phone. Brian Palmer explored the history of corporate name changes:

• Studies suggest that corporate name changes usually either have no effect on the subsequent success of the company or a mildly negative effect.
• The few companies that do succeed usually do it because they started off as a small businesses with a local name, and are now so successful they need a global brand. Hence a company called Tsushin Kogyo changed its name to Sony to find success around the world.
• Businesses whose stock prices fell prior to a name change usually see the price continue to fall for the next three years.
• Moreover the former Research in Motion has now linked its reputation to just one product: Blackberry. If the product fails then the whole company will be associated with failure.

Read more about the types of name changes that are successful, companies that have bucked the trend, and why the Blackberry name is already off to a bad start over here.

Source: Slate

The team that wins the Super Bowl tonight will be able to call itself the world champion of American Football. Yet this title is only slightly less misleading than the title of Miss Universe – a competition which we only invite our own solar system to – since no other country really plays American Football. Joshua E. Keating looked at why this was:

• It can’t be because the sport is American. Baseball is American and that has a global fan base. Nor can it be because of how rough it is. Rugby is rougher.
• The biggest reason why other countries don’t play American football is because of cost. With basketball you just need a ball and a hoop. Baseball requires a ball and a bat. American football requires all of the gear and equipment for all the players.
• People might also be put off by the complexity of the rules.
• Efforts to promote American Football across the oceans have mostly failed. This is because players who do well go to the United States, robbing the fan base of other countries of their favourite star – the very same fan base that could make the game popular.

Read more about the various efforts to export American Football over here.

Source: Foreign Policy

Pret A Manger is a UK based chain that has seen immense growth and success in the United States. Timothy Noah revealed one of the secrets behind this achievement:

• Employees of Pret A Manger are expected to genuinely enjoy and be excited about their work…or at least to pretend to. This is why the attendants at Pret always seem to have an infectious good mood.
• The parent company enforces this policy by sending a mystery shopper to each outlet once a week. If the mystery shopper gets the kind of treatment that Pret expects then the entire staff get a bonus. If not then nobody in that outlet gets a bonus that week.
• This type of emotional labour isn’t new. After all prostitutes have been faking emotions and affection for centuries.
• It is, however, something that more and more companies are requiring. Which is a pity for men since women are better at it. This might explain why the recent downturn in the economy disproportionately hurt men.

Read more about this emotional labour, Pret’s rationale for opposing unions, and Noah’s thoughts about the entire concept over here.

Source: New Republic

It’s Super Bowl weekend and Betty Liu and Dominic Chu looked at price inflation it was driving in New Orleans. Here’s what they found:

• The normal average cost for a three day trip to New Orleans is $1,000.
• During the Superbowl though that same trip will cost you $15,400.
• The price of an average hotel has increased by 944% from $249 a night to $2,600 a night.
• The price of a nonstop flight has increased 353% from $300 to $1,360.
• Who would’ve thought that the car rental companies are the most reasonable of them all? The price of a rental car has ‘only’ increased 200% from $66 a day to $198 a day.

Source: Bloomberg TV

Today, February 1^st, 2013 is the day when Netflix released the entire first season of House of Cards for subscribers to watch online. In the future we might look back at this day as the day when television’s next transformation began writes The Economist:

• Netflix as well as other online video providers such as Hulu and Amazon are increasingly producing their own professional television content to air on their streaming services rather than on traditional cable channels.
• They are doing this because it’s exceedingly expensive for them to acquire the rights to stream movies owned by other companies. By producing and streaming their own content they have a handle on costs.
• The video streaming sites also need a way to differentiate themselves from one another and having their own proprietary content is the best way to do this.
• Netflix is getting creative. Rather than follow the weekly episodic release cycle, it has instead released the entire first season because telemetric data suggests that people prefer ‘binging’ on TV shows.

Read more about what House of Cards means for television over here. As a PSA The Verge is reporting that owners of an Xbox will not be required to have signed up for Xbox gold to watch the series this weekend.

Source: The Economist

Laura Northrup wrote about an individual who had a miraculous experience with their cable company:

• Time Warner increased the internet speed of someone living in Kansas City by 50%.
• And what did they have to pay for this boost? Nothing. Time Warner decreased their bill by 33%.
• Perhaps coincidentally, Google Fiber, an internet initiative that promises to give Americans truly high speed internet will be coming to that individual’s location.

Read more over here.

Source: Consumerist

We’ve previously looked at the absurdity of Amazon’s business model. After Amazon announced its fourth quarter results, Matthew Yglesias thought of a theory as to why the company does things the way it does. He writes:

“Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way.”

Read more here.

Source: Slate