January 2012

The Food and Drug Association (FDA) has recently found a fungicide in Brazilian oranges that is known to cause cancer. The FDA is considering recalls on certain oranges, pending further investigation. Companies like Coca-Cola, which own Minute Maid, face the possibility that if this recall happens, demand for their orange juice products will plummet. A similar thing happened during the mad cow hysteria in 2003, and McDonald's and Wendy's were greatly affected, having their prices drop by 6%. It took half a year before these prices were able to get back to their previous highs. Experts don't think that this orange problem will grow as large as mad cow was. But if Coca-Cola begins to face higher prices for their oranges, they could be forced to sell their products for a higher price. This could lead to even less demand for these goods, as consumers could easily turn to other drinks. How big of a problem do you think this is going to become for Coca-Cola, and how much do you think its stock price will be affected, if at all?

January 2012

Netflix proclaimed a month ago that it sees HBO as its chief rival, and it appears that HBO agrees, as the company confirmed on Thursday that it had decided to stop selling DVDs to Netflix at a discount.

Netflix typically buys film and TV show DVDs that it rents to customers through wholesale venues, thereby taking advantage of volume discounts. But from now on, Netflix will have to buy DVD sets of shows like "True Blood" and "Boardwalk Empire" at retail in order to rent them to customers.

It's not a huge financial hit to Netflix, but it is a signal about what the competitive landscape looks like. Asked about the change, a Netflix spokesman said, "Netflix will continue to provide HBO titles on DVD and Blu-ray to our members."

The change was believed to have taken effect on Jan. 1.

January 2012

In a deal that represents billions of dollars in revenue for the Walt Disney Company, the entertainment giant and Comcast said Wednesday that they had reached a decade-long distribution agreement covering all of Disney’s television content, including streaming for iPads and other devices.

The unusually long-term agreement provides a window into the future of television viewing and how its content will be consumed. Comcast, the nation’s largest cable provider, will gain the rights to provide the Disney Channel, ESPN, Disney XD, ABC Family and the ABC broadcast network, among other Disney-owned services, to subscribers wherever they want to watch.

“This is a landmark deal for us,” Neil Smit, president and chief executive of Comcast’s cable division said in an interview. “It’s the first time customers can watch ESPN, ABC and Disney across multiple platforms both in and outside the home.”