Elon Musk Is Broken, and We Have Broken Him

Of all the striking things about the interview with Elon Musk The New York Times published Thursday night—the tears, the lack of regrets over certain tweets, the fact that rapper Azealia Banks may somehow be part of Tesla’s financial future—was Musk’s claim that he’d be ready to abandon his role as Tesla CEO and chairman.

“If you have anyone who can do a better job, please let me know. They can have the job,” he told the paper. “Is there someone who can do the job better? They can have the reins right now.”

On the surface, the implication—nobody else can do this—is nonsense. Lots of people could run Tesla. Starting with the hundreds of capable executives at the world’s automakers, most of which are larger, more efficient, and more profitable than Tesla. Go a bit deeper though, and you find the truth of the sentiment. Sure, someone might be a better CEO. But there’s no replacing Elon Musk. Because the man is not just a CEO. To many, the man is a legend.

Start with the tale of Tesla. When the company launched in 2003, car salesmen were stocking up on the 12-mpg Hummer H2. The most popular battery-powered vehicles were golf carts. The American auto industry is famously brutal to newcomers, and the idea of one succeeding with electric vehicles racked up the lolz. For years, skeptics waited to bury Tesla alongside Tucker, DeLorean, Fisker. Musk defied them. He made electric cars capable (and sort of self-driving). He made them easy to charge (on an infrastructure he built). But most importantly, he made them desirable. Owning a Tesla became a status symbol; about 400,000 people are on a waiting list to own the Model 3. The entire venture proved you didn’t have to be GM or Ford or Chrysler to make cars in America. And you didn’t have to be BMW or Mercedes or Lexus to make luxury cars appealing to Americans.

Simultaneously, Musk was running SpaceX. Under his leadership, the commercial space company defied entrenched aviation giants like Boeing by breaking into the rocket science business. Musk promised to colonize Mars. As his side hustles, he wished a hyperloop industry into creation, dabbled in artificial intelligence, and won a contract to dig tunnels under Chicago.

And all along the way, much of the world cheered him on. Musk graced magazine covers. He inspired songs. He went on talk shows, appeared on The Simpsons and South Park, made Page Six headlines. Sure, he had a sizable ego (who wouldn’t?) and habit of belittling those who doubted or opposed him (haters!), but the public largely forgave him these minor transgressions given his major skills in proposing big, bold ideas, and delivering on them.

But over the past year, this goodwill has started to fade. Much of that erosion can be traced to Musk’s greatest business struggle: the mass production of the $35,000 Model 3 sedan. The car Tesla had long promised, the vehicle that would bring clean driving to the masses and profits to shareholders, that would make Tesla a real automaker. As ever, Musk set ambitious goals and deadlines. As ever, he missed them. A few times over. Investors were used to this, but the company’s future hinged on the Model 3, a reality that evidently intensified the pressure, especially as the production process hit one snag after another. “This past year has been the most difficult and painful year of my career,” Musk told the Times. “It was excruciating.” He didn’t contain the pain. In the first half of 2018, he raged at the media, insulted financial analysts during a public call with investors, and attacked the National Transportation Safety Board—the Mr. Rogers of federal agencies.

Then, in the final week of June, at the very end of the second quarter, Tesla finally hit its goal of building more than 5,000 Model 3s in a single week (5,031, to be exact), the point at which Musk believes revenue from sales will outweigh the cost of production, and lead to profitability. The automaker has started to offer more versions of the car, indicating it was confident it could keep up the pace. Investors’ confidence in Musk seemed, at long last, justified.

It should have eased the pressure. But Musk kept finding himself the center of unwanted attention. In July, he railed against those saying his efforts to assist in the rescue of a group of boys trapped in a cave in Thailand were more self-aggrandizing than serious. When a diver who helped with the effort insulted him, Musk called him “pedo guy.” (He later apologized.) The same week, he struggled to explain why he donated about $40,000 to a Republican political action committee, given that many Republicans are climate change deniers. None of this inspired confidence in Musk, but Model 3s kept coming off the production line. Investors will forgive a lot if they make their money.

Last week, though, Musk’s erratic behavior and his taste for Twitter struck a blow not just to his reputation, but to his company. On Tuesday, he tweeted that he was considering taking Tesla private, and he had the necessary funding “secured.” The automaker’s stock price shot up, as did eyebrows at the Securities and Exchange Commission. Especially when Musk revealed a few days later that by “secured,” he meant not exactly secured. The SEC is investigating, and serious fines are a possibility. Angered investors have filed four lawsuits—so far. “As a result of Defendants’ materially false and misleading statements, as well as their market manipulation, Tesla securities purchasers were injured to the tune of hundreds of millions of dollars,” one reads.

The pressure to perform has eased, but its effects, it seems, endure. Musk cares deeply about what people think of him and his companies. His harsh reactions to negative press often beget more of the same, a surely unsettling shift from the years of mostly adoring coverage he received, of the publicly validated self-worth he must have come to expect. And while he retains a loyal army of Twitter followers, his mantle as a Renaissance Superman, gifted by an enthralled public—and media—is slipping.

In his interview with the Times, Musk said that in terms of Tesla’s operations, the worst is over. “But from a personal pain standpoint,” he said, “the worst is yet to come.” This bodes ill not just for his investors, but for everyone who thinks cars should be fun to drive and good for the planet, who wants to explore space, who believes in a better future.

Musk, then, is Hercules remixed. The greatest of Greek heroes performed his famed labors as penance for killing his children in a fit of insanity. Musk has completed his own labors, landing rockets on boats and delivering a wonderful, affordable, electric car. But the effort seems to have left him mad. And now he threatens to destroy what he has created.

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PK360 Grill & Smoker Review: Well-Built Cooking Excellence

It may have arrived at my home in a box delivered by FedEx, but from the moment I saw it, I wondered if the grill I was testing hadn’t been shipped directly from the set of some 1960s sci-fi television series.

Like no grill I’ve ever seen, the PK360 Grill & Smoker by PK Grills is a cast-aluminum clamshell perched on a base that may have been inspired by the octopods from Arrival. Two semi-elliptical tables clamp firmly onto the sides, a wire rail around them giving the whole thing a “rings of Saturn” look.

As visually striking as it is, the most impressive feature of this grill is the clear amount of thought that went into its creation. As I assembled it, then cooked one tasty meal after another, I kept imagining a circle of designers and engineers sitting around and puzzling their way through problem after problem: How can we clamp the lid down tight and position vents to help hold the temperature steady during long cooks? How can we make this an effective grill and smoker? How can we reengineer a hinge?

What they came up with melds some of the best characteristics of charcoal grills and smokers.

You can certainly dump a pile of hot coals in the middle and grill some steaks directly over them in what’s known as “direct grilling.” But with two vents on top, two below, and a rectangular grill grate, you can put the coals off to one side, allowing you to create two “zones,” one for direct grilling, and the other—opposite the embers—for “indirect grilling,” where the lid is down and you use the grill like an oven or smoker.

I was visiting family in New Hampshire while testing the PK360. I started with a whole chicken, cutting the bird in pieces, getting the internal temperature close to done in low heat in the indirect zone, then opening the lid and moving the parts directly over the hot coals just long enough to crisp up the skin. Then I fully opened the lower vents to increase the oxygen flow and really let the coals rip, allowing me to sear a bunch of asparagus. I lost a few too many spears through the stainless-steel grill grate, whose bars are a bit too far apart for my tastes, but for a first run with a new-to-me grill, I was mighty pleased.

The next day, I started steaks in the indirect zone, then rested them on a tray while I grilled a pile of veggies and some shrimp. Once the coals were ripping hot, I seared the steak.

Frankly, I could have done better—the steaks slipped from medium rare to medium in my pursuit of a good, hard sear, but that error was the result of me getting used to the grill. They were still great. And as my grill-guru friend Dave reminded me, “Every time you cook over coals, it’s a little different.”

I Need to Vent

Cooking the food on the indirect side meant I also got to familiarize myself with the vents, a phrase that even in my profession, I never imagined writing. I became proficient at adjusting the heat with the vents under the coals and above the indirect side, guiding the smoke diagonally through the grill’s interior and across the surface of the food by keeping the other two vents shut.

PK Grills

While you’ve seen versions of the 360’s top vents on other grills, the lower vents (PK calls them “air intake cylinders”) are ingenious. Each side employs an aluminum tube with three holes that slides into the body of the grill beneath three corresponding holes. Twist the end of the tubes like throttles to let ‘er rip or slow to a crawl. Combine the tubes with the firm-closing lid and I quickly learned how well they allowed me to control the heat, a quality on full display as I made my next dinner.

I was excited to have ribs on the menu. I had some applewood chunks to toss on the coals and a nice rub for the ribs themselves. Eight family members were looking forward to that smoky flavor and falling-off-the-bone goodness. and that’s about where I read into my first notable problem: the grill’s not huge. The 360 in its name denotes the number of square inches of its cooking surface, and that’s not a large enough number for slow-cooked ribs for eight; I fiddled around for a while trying to get the geometry to work and never came up with something that allowed for proper “two-zone” cooking, even with the coals nudged up against one of the sidewalls. I ended up buying a rib holder (a stainless rack that holds several sets of baby backs vertically), cutting the racks in half, and cooking two racks’ worth in the oven.

During the cook, the temperature control was excellent—not set-it-and-forget-it, but more like “just check in on it every hour or two and maybe slightly adjust a vent while you’re there.” Impressively, it was so efficient that after an afternoon of grilling, it had only used about a half of a charcoal chimney’s worth of briquettes.

The ribs it did make were splendid. After cooking away for hours, they had a lovely pink smoke ring around the edge and a nice, dark bark. My gang was a happy gang.

One of the things I really learned to appreciate was having a quality thermometer built into the lower left side of the lid. While most grills with built-in thermometers mount them rather uselessly near the top of the lid, the PK’s is just above grate level. Made by Tel-Tru, it passed a calibration test with flying colors and the readings it got compared to my “air probe” thermometer I mounted next to it during most of my cooking were so similar that I found there wasn’t much need for the air probe at all.

I’d also really come to admire how solid and well-designed the whole grill is. The hinge is an ingenious set of thick, interlocking tabs. The top and bottom edges are hand-ground. When it shuts, it feels like you’re sealing a bank vault closed.

Slow and Low

Throughout my testing, I’d been consulting several books, most notably Meathead Goldwyn’s Meathead and I was happy to have that book as a guide for one of barbecue’s big enchiladas: brisket.

Cut from the hard-working pectoral muscles of a cow, brisket is an all-day cook that tests (and exposes) any grill or smoker’s strengths and weaknesses. Having a potentially too-small grill and definitely fewer people than I needed for a full-sized brisket, I bought a 6.5-pound point cut—the fattier, more tender of the two muscle groups in a whole brisket. Like with the ribs, I’d head out to the grill every once in a while and make the occasional vent adjustment, but that cast-aluminum design kept me within 10-20 degrees Fahrenheit of the target temperature all day long—better temperature control than some electric ovens!

When the meat temperature plateaued at around 160 degrees Fahrenheit, a problem commonly known as “the stall,” I was ready, having encountered it last summer. I wrapped the meat in foil to keep the temperature rising toward the target internal temperature of 205 degrees. It did, but then it stalled out again in the mid 190s and I realized the brisket wasn’t going be done by dinnertime. My mom, having run into similar problems with my cooking adventures in the past had already begun rooting around in the fridge, preparing a sort of leftover smorgasbord for dinner.

Thanks, mom!

I later checked in with Meathead himself who assured me that a “second stall” is a common problem, likely because I hadn’t wrapped the brisket tightly enough in foil.

After dinner, I played cards with my brother-in-law Ben as the meat continued to cook. After a couple of hours, it was midnight, Ben had skunked me twice at cribbage, and I was ready for bed. I pulled the brisket at 196 degrees, and packed it into cooler, a trick that Meathead suggests to do for two hours to “allow the internal temperature to even out and the collagens to continue to melt.”

The next morning, I was up at sunrise to fish with my dad and nephew Eli, and stopped on the way to the dock to cut off a few “test” slices. Just lifting the brisket from the cooler, I was optimistic as the beef had a sort of pillowy spring to it that I’d only ever encountered in the unbelievable beef ribs I tried at La Barbecue in Austin, Texas. Cutting slices across the grain, I knew the results were going to be outstanding.

I brought a few slices down to the dock on a paper plate for Eli, dad and I. While I’m not usually the kind of guy who eats a day’s worth of beef before the sun rises, the three of us got an early snack of some on the best food I’ve ever cooked.

Meat Machine

My quibbles with the 360 were minor. If you’re frequently cooking for more than a couple of people, particularly if you’re cooking larger or longer cuts of meat, you’ll want a bigger model, and that isn’t an option. The interior bottom of the grill is not easy to clean; The manual says you can just hose it out, and I did, but there was some gunk in there that didn’t want to be blasted loose.

A little more troubling was the odd choice of the shallow grids etched into the tops of the side tables. While I was able to cut a bone-in chicken breast in two with nary a wobble, that crosshatching was hard to clean and felt like a breeding ground for salmonella. If you’re willing to shell out an additional $200, the teak side tables are smooth. The heavy-duty wheels were stout little buggers, but they’re way too small, making a roll across the deck more bumpy of an adventure than it needs to be.

I was surprised to not find a tiny notch between the top and bottom edges for a thermometer probe cable or two. There are utensil hooks, but they’re on the back of the grill, which means you won’t be hanging your tongs or spatula from them while you cook. My mom pointed out that you could buy some little “S” hooks and hang them from the rail beneath the side tables, which would solve the problem. Finally, taking the base apart clearly didn’t happen the way it’s supposed to, as the pole that holds the grill in place got stuck in the base, an issue a company rep acknowledged. My dad and I had to get creative with a hammer to get the parts separated.

Really though, I loved cooking with the PK360. It’s a durable and works so well at both at both grilling and smoking that it doesn’t feel like it cut corners in a successful quest to do both well. It’s efficient and well-thought out to the point that one afternoon I just stared at it, wondered what, if anything, would break first, and couldn’t come up with much. It’s built to last for decades.

I found the grill to be extraordinary, and if you’re looking for an all-in-one grill/smoker that’s going to last and keep you happy for years, it’d be hard to find one better than the PK360.

Food writer Joe Ray (@joe_diner) is a Lowell Thomas Travel Journalist of The Year, a restaurant critic, and author of “Sea and Smoke” with chef Blaine Wetzel.

Investors Keep Giving Startups More Funding Than They Need. Here's Why the All-You-Can-Eat Buffet May Cause Indigestion

“This is the best time to raise money ever,” Slack founder Stewart Butterfield told the New York Times in April 2015. “It might be the best time for any kind of business in any industry to raise money for all of history, like since the time of the ancient Egyptians.”

In the months that followed, I and many other observers cited Butterfield’s thoroughly rational exuberance as evidence of a historic tech bubble, one data point among many that private-company valuations had become untethered from reality to a degree that made a painful correction not just inevitable but imminent. 

About those predictions: Um, maybe not. Sure, there was a momentary slowdown and some dying-off of also-rans in overcrowded sectors like on-demand delivery. But that was a blip. Three years later, even the Pharaohs would be jealous of the pyramids of capital piling up around Silicon Valley. 

“Investors participated in a record 273 mega-rounds [defined as at least $100 million raised] last year, according to the data provider Crunchbase,” reports the Times‘s Erin Griffith. “This year is on pace to easily eclipse that, with 268 completed in the first seven months of the year. In July, start-ups reached more than 50 financing deals worth a combined $15 billion, a new monthly high.” 

Mind you, this all-you-can-eat buffet isn’t open to anyone. The investors driving it– sovereign wealth funds, China’s Alibaba and Tencent, and Softbank’s $93 billion Vision Fund–are specifically on the hunt for startups that can ingest nine figures of cash without going straight into a diabetic coma. There’s some trickle-down effect, with early-stage startup funding rounds getting bigger, but it’s offset by a decrease in the number of such rounds

Bubbles are supposed to burst when the market runs out of greater fools willing to bid up an asset. It seems like those of us who called a top underestimated the greatness of some fools out there, or maybe even missed a phase shift to a new stable equilibrium. Whatever. It’s too soon to revisit the bubble question, so let’s talk instead about what this new funding environment does to the startups that operate in it.

On the podcast “This Week In Startups,” Randy Komisar suggested it’s making them weak and stupid. “Most entrepreneurs fail from indigestion, not malnourishment,” Komisar, a partner at of Kleiner Perkins Caufield Byers, told host and angel investor Jason Calacanis. “What happens is, when you’ve got too much capital, you’re insulated from market information,” he explained. 

In other words, not having enough money is a potential sign that whatever you’re doing might not be a great way of making money. It forces you to pay close attention to customer feedback and come up with creative solutions instead of just investing in a lot of Steelcase chairs and butts to fill them. 

Not everyone sees it this way. Back in 2015, Bill Gurley of Benchmark Capital was one of the loudest voices calling the situation “speculative and unstable.” He predicted the landscape would soon be littered with the corpses of “dead unicorns” and fretted that easy money without public-market scrutiny was rewarding startups for financial indiscipline. 

But now Gurley is resigned to the new reality. With interest rates at or near zero for the past decade, there’s just too much cheap money sloshing around. “No one in the history of business has seen what we are seeing right now,” he says via email. “It truly is unprecedented.” 

Hunger might make you smart, but “[i]f your competitor is going to raise $150 million and you want to be conservative and only raise $20 million, you’re going to get run over,” he told Griffith. 

That makes sense–except that businesses where the competition comes down to who can raise more money tend to be businesses where that competition inevitably drives margins down toward zero, and companies with tiny margins will have a hard time returning big multiples to their investors. That’s an argument Peter Thiel makes in his book Zero to One, and Gurley should be familiar with it, since it more or less describes the arc of his most notable portfolio company, Uber, from its birth until now. 

To escape from the infinitesimal-margin trap it has set for itself, Uber has long been counting on the arrival of self-driving cars, which will allow the company to pocket the full fare from each trip, not just the 30 percent left over after the driver’s cut. But the development of autonomous vehicles has so far been nothing but a money sink, drinking up between $125 million and $200 million per quarter, reports The Information. Now Uber–and Lyft, its main rival–see a similar hope in electric scooters and bikes, another form of driverless transport. But with margins on those trips likely to be equally bad, Uber and Lyft are–ironically, given their rhetoric about taking on vested interests–hoping to entrench themselves from competition in at least one market by partnering with the local government. In other words, they’re doing something not all that far from what they’ve always accused taxi fleet operators of doing. 

“As VCs that compete at the top tier, we are involved with businesses going after big markets,” Gurley says. “I don’t think there is a single ‘business model’ that’s 100 percent immune to a competitor blasting at you with hundreds of millions of dollars.” 

In any case, unless there are mega-funds on other planets, Uber and other beyond-late-stage unicorns will eventually have to move out of their parents’ houses and get a job. They’ll have to IPO, that is. But the real world is a harsh place for companies that never had to think about where money comes from until their first Wall Street earnings call. In Bloomberg, Shira Ovide notes that the proportion of young public companies with negative cash flow from operations has risen sharply since 2014, jumping from 29 percent to 37 percent. 

You would think the investors writing $100 million checks would be keener than anyone to see the companies they fund generate profits. But they have other things on their mind. “These giant funds are looking for start-ups that can take large sums of money with one shot,” reports Griffith. “Writing lots of small checks is too time-consuming, and the returns from small bets will not make a difference for a such a big fund.” 

We’ve always had smart money and dumb money. Now, apparently, there’s lazy money. Investors insisting on giving startups more money than they need because figuring out what else to do with it is too much of a hassle may not be proof of a bubble, but it’s definitely a sign their interests aren’t aligned with those of their entrepreneurs. Even a healthy appetite can get indigestion from force-feeding.

China's Tencent second-quarter profit falls 2 percent, first decline in nearly 13 years

HONG KONG (Reuters) – Chinese technology giant Tencent Holdings Ltd on Wednesday reported a surprise 2 percent fall in second-quarter net profit, the first decline in nearly 13 years, due to slower than expected gaming growth and weak investment gains.

Logo of Tencent is displayed at a news conference in Hong Kong, China March 22, 2017. REUTERS/Tyrone Siu

China’s largest social media and gaming firm said April-June profit fell to 17.87 billion yuan ($2.59 billion), lagging the 19.67 billion yuan average of 12 analyst estimates compiled by Thomson Reuters.

The outlook for the most valuable company listed in Asia has been overshadowed by a slowdown in mobile gaming and concerns over regulatory setbacks as the Chinese regulator this week blocked Tencent’s sale of the blockbuster game “Monster Hunter: World” upon debut.

Tencent said it would try to reinvigorate its mobile game revenue growth by extracting more value from existing popular titles, launching more role-playing games, and publishing more of its China-developed games internationally.

Mobile gaming revenue rose 19 percent year-on-year in the June quarter to 17.6 billion yuan, representing a quarter-on-quarter decline of 19 percent. The company blamed that on “non-monetisation of popular tactical tournament games and timing of new game releases”.

Amid an industry-wide freeze on new game approvals in China since March, Tencent has yet to receive the license to sell survival-themed game PlayerUnknowns’ Battlegrounds and to introduce Fortnite, a tactical tournament game developed by its portfolio company Epic Games.

Trading in its shares has been volatile this year. Since the stock peaked in January, Tencent has lost around $170 billion in market value.

Revenue rose 30 percent to 73.68 billion yuan in the latest quarter, lagging 16 analysts’ average estimate of 77.5 billion yuan. That represented the slowest quarterly revenue growth since the second quarter of 2015.

Revenue from PC games dropped 5 percent year-on-year and 8 percent quarter-on-quarter.

“We view our internally developed games Arena of Valor and PUBG MOBILE, as highly suitable for expansion to gamers outside China,” Tencent said in the filing, adding Arena of Valor, a fantasy role-playing battle game, has grossed more than $30 million per month in the first half of the year outside China, while PUBG MOBILE grossed over $20 million in July outside China.

Users of its popular WeChat app grew incrementally to 1.06 billion.

Tencent said payment and related financial services and its cloud services helped its “others” business category record an 81 percent revenue increase to 17.5 billion yuan.

A Chinese central bank initiative that is expected to raise the centralized deposit ratio requirement for payment service providers to 100 percent in the near future – thus eroding their interest income – continues to adversely affects Tencent’s payment business revenue and gross margins, it said.

“We are currently approximately mid-way through this transition, and are seeking to mitigate the impact through various monetization initiatives elsewhere in our payment and related financial services,” it said.

Tencent’s net other gains decreased by 51 percent in the quarter to 2.5 billion yuan, mainly due to a decline in gains in investment disposals.

Reporting by Sijia Jiang; Editing by Christopher Cushing and Mark Potter

From blue lipstick to Facebook Live, home shopping networks refine their pitch

WEST CHESTER, Pa. (Reuters) – The Home Shopping Network is getting an image makeover.

A studio set is seen at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

A U.S. television network where shoppers can buy everything from electronics to kitchen gadgets, the Home Shopping Network is overhauling its lineup to offer more beauty products while adding streamed video content to win over shoppers without cable TV.

A division of Qurate Retail Group, the network is facing growing competition from Amazon Inc. and Evine Live Inc for consumers like 24-year old Erin Bounds, who regard buying products through TV shows a relic of the past.

“Someone who is 24 doesn’t have the time nor desire to watch an hour-long show about a piece of jewelry or a vacuum when they can get an answer and the product quicker and probably cheaper on Amazon,” said Bounds, a resident of Ellicott City, Maryland.

For decades, the main difference to shoppers between HSN and Qurate’s other shopping network, QVC, typically came down to variations in branding and merchandise, with HSN selling more electronics. Qurate acquired HSN in late 2017 for $2.1 billion so the two shopping networks could join forces to better compete against Amazon and its home-shopping-style online video promotions.

Qurate executives told Reuters they now are culling HSN’s core merchandise offerings to eliminate many higher-priced electronics and some home goods, such as vacuum cleaners and blenders.

Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

Instead, they are adding more niche cosmetic and apparel brands to help draw some distinction with QVC. They are also pushing both QVC and HSN to pursue younger shoppers with click-to-buy links on Instagram and Facebook Live for items such as earrings, shoes and Vince Camuto jeans, in a bid to spark a rebound in demand.

Second-quarter revenue at HSN declined 12 percent to $473 million from $533 million a year later the company announced Wednesday. Stock in the company, which counts media mogul John Malone as one of its largest investors, is down about 8 percent year to date, compared with a 14 percent increase for the Nasdaq index, and 64 percent increase for Amazon.com year to date.

“You’re seeing the impact of them digesting a large organization that is clearly not growing if you look at the numbers,” said Ben Claremon, partner and research analyst at investment firm Cove Street Capital, one of Qurate’s shareholders.

“There’s just not the degree of demand for home shopping products, and the desire to spend hours of the day watching them diminishes as you go down in age,” he said.


The new strategy is aimed at creating more distinction with the two cable channels after the merger, according to Rob Robillard, the new VP of Beauty Integration at Qurate.

In beauty, for example, one of HSN’s top selling products is Too Faced “Unicorn Tears” blue lipstick, which sells for roughly $22. One of QVC’s best products is the Doll 10 Nude lipstick with a price tag of around $25, noted Robillard.

Slideshow (20 Images)

“We were sort of hoping there would be this real big difference between HSN and QVC,” he said. “But the two are actually very similar.”

Qurate will partner with Robin Burns-McNeill, chairman of Batallure Beauty, a company specializing in brand strategy, product and package development, sourcing and manufacturing in the fragrance, cosmetics and skincare categories, to create a collection of proprietary beauty brands, the company told Reuters exclusively.

The first manufactured beauty products from this partnership are slated to launch in fall 2019 on QVC.com, and, if all goes well, the company said they would likely tap on Burns-McNeill’s shoulder to create proprietary brands for HSN as well.

They have a tall order. Amazon is the top online destination for beauty and the fifth-most-popular retailer for skincare and cosmetics, according to Coresight Research, behind leaders Walmart, CVS Health, Target Corp and Walgreens. QVC and HSN do not rank on the list.

In March 2016, Amazon launched “Style Code Live,” a daily live fashion show which has since gone off-air.

This June, Amazon unveiled Prime Wardrobe in the United States, allowing Prime members to try on clothing, shoes, and accessories before purchase. Customers have up to seven days to try their clothes on at home, and are charged only for those items they choose to keep.

Celebrity-driven shows and videos on QVC still have their upside, according to vendors such as Xcel Brands Inc Chief Executive Robert D’Loren. A QVC apparel vendor for more than six years, D’Loren cites on-air appearances of fashion designer and QVC host Isaac Mizrahi – D’Loren’s largest, most successful brand on QVC – as strategic advantage for the home shopping network.

D’Loren thinks Qurate, which currently accounts for 60 percent of Xcel’s brand volume, is well-positioned to take on competitors Amazon.com and video retailer Evine, and that it’s “only a matter of time” before millennials like Bounds give Qurate’s QVC and HSN a shot.

“There is something to tuning in, watching, having product fully demonstrated to you that is unique and has great value, and I haven’t seen that anywhere else in the market,” he said.

Editing by Vanessa O’Connell and Edward Tobin

Tencent games revenue in focus after China blocks "Monster Hunter: World"

BEIJING/HONG KONG (Reuters) – China’s Tencent Holdings Ltd saw its stock tumble on Tuesday, wiping out around $15 billion in its market value, amid concern of a blow to its video game revenue after regulators blocked the sale of one of its blockbuster titles.

A Tencent sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 4, 2017. REUTERS/Aly Song

Analysts had widely expected “Monster Hunter: World” to be one of 2018’s biggest hits for Tencent, which licensed the game from Japan’s Capcom Co Ltd to sell on its WeGame platform.

However the game, where players hunt fearsome creatures, disappeared from the platform on Monday, days after its Aug. 8 release. Tencent in a statement said regulators had received a large number of complaints about the game, which has sold over eight million copies worldwide.

Shares in Tencent, which is set to report half-year earnings on Wednesday, closed down 3.4 percent, against a 0.7 percent fall in the benchmark Hang Seng share price index.

The stock has dropped more than 14 percent this year, losing around $160 billion in market value since peaking in January.

“People are very concerned about Tencent in the short-term,” said Douglas Morton, head of research, Asia, at Northern Trust Capital Markets.

He said the block follows concern over Tencent’s ability to monetize “PlayerUnknown Battleground” (PUBG). Tencent had to alter PUBG last year after the regulator deemed it too violent, but has yet to receive a license to sell the updated version.

Industry executives said many firms have been awaiting games sales licenses since March after the government earlier in the year reformed its content regulatory body and split up the State Administration of Press, Publication, Radio, Film & Television.

“The key here is, not only PUBG, but no games are able to get licenses now,” a person from Tencent told Reuters on Tuesday on condition of anonymity due to the sensitivity of the matter.

The person said staff were puzzled as to why sales of Monster Hunter: World had been blocked as it was less gory than other titles and had received its sales license before March.

“It’s not impossible that you could still be hit even after you pass the censors, in the same way a movie can be pulled after public screening,” the person said.

Tencent declined to comment beyond Tuesday’s statement. The Ministry of Culture and Tourism, which regulates the video games industry, did not respond to requests for comment.

Morton said he remained bullish on Tencent stock and that there is always regulatory risk in China versus the rest of the global gaming market.

“For us this (firm) is a medium-to-longer-term holding with a history of good investment,” Morton said. “I think the monetization (of the blocked games) will happen, it is just a matter of time.”

Tencent said customers who purchased Monster Hunter: World were entitled to a full refund until Aug. 20. It said they will be able continue playing the game but that the firm could not guarantee associated services would continue.

Reporting by Pei Li in BEIJING and Sijia Jiang and Meg Shen in HONG KONG; Writing by Brenda Goh in SHANGHAI; Editing by Michael Perry and Christopher Cushing

Here's How to Stop Yourself and Your Team From Feeling Lonely

Americans continue to struggle with loneliness despite being attached to social networks, sending myriad texts, and consistently communicating via technology. That’s because, as research shows, social media’s effect on how isolated or lonely you feel really depends on how you use it. If you use social to stay connected to others, then it will have a positive impact, but if you’re simply scrolling through your news feed, there’s often a negative effect.

Cigna’s recently released bombshell report surveyed 20,000 adults nationwide using the UCLA loneliness scale and found that 54 percent of respondents sometimes or always feel that no one knows them well. The health insurer’s report gave America a loneliness score of 44, meaning “most Americans are considered lonely.” Not only does this have huge ramifications from a societal perspective, but such figures indicate what many entrepreneurs and business leaders already know: Work life can contribute to long-term bouts of loneliness if you’re not careful.

The Consequences of Loneliness Are an Incentive to Take Action

Employees everywhere struggle with isolation, especially founders or executives carrying tremendous responsibility. When the work piles up, so does the overwhelming sensation of being the lone person who can solve issues or right a listing ship. What’s worse, many go-getters tend to avoid delegation and collaboration, whether due to personality traits or the time crunch. Consequently, responsibilities get handled, but at a cost.

Loneliness can impact your physical health and your company’s bottom line. Staffing agency Adecco suggests that happy workers improve productivity and help their companies outperform competitors by roughly 20 percent.

The number of Americans employed full time has risen significantly in the past decade, and those workers are spending an average of 44 hours per week on the job, according to CreditLoan.com’s recently updated analysis of the state of the workweek. Ultimately, employers owe it to the future of their companies and their personnel to put measures in place to chip away at the growing sense of collective emotional isolation.

1. Model and value work-life boundaries.

No one said being at the helm of a growing company would be easy, nor that it wouldn’t occasionally lead to feelings of loneliness. However, entrepreneurs who successfully juggle work and private needs tend to experience far less isolation. At the same time, they help the people around them see that it’s possible to maintain a sense of belonging even if you have a full plate at work.

Does this mean you need to be the poster child for the proverbial “work-life balance”? Not really — it turns out the notion of true balance is something of an urban legend. A better solution is to carve out moments of personal time amidst the chaos of commitments. These could be 30 minutes here or there rather than huge chunks of time. Remember that being flexible with your employees’ schedules can also give them valuable opportunities to reconnect with others and push aside creeping feelings of loneliness.

2. Know the difference between being alone and being lonely.

It’s understandable to think that a worker who’s alone might be lonely, but that isn’t necessarily the case. Some people prefer solitude at work. In fact, proactive bouts of solitude can be a good way to recover from stress. When you insert periods of purposeful separateness into your days and weeks, you empower yourself by taking charge of your time. And an improved sense of empowerment always helps when tackling loneliness.

Individuals require varying degrees of downtime to recharge, and many opt to spend that time alone. They’re not feeling isolated during those moments but are deliberately removing themselves from the outside world. Encourage your people to embrace the difference, and practice alone time yourself.

3. Construct a diverse team.

You can combat isolation at your company by hiring a diverse team. What makes diversity a secret weapon against loneliness? A lack of diversity can cause minority employees to feel left out. If they are better able to relate to others in their department or company, they’re less apt to withdraw. For instance, given that 87 percent of developers are male, a tech-focused company might consider making a conscious effort to promote gender diversity. This can decrease the odds that a female employee will feel all alone in a crowded workplace.

To improve your organization’s diversity, start with a comprehensive review of your workplace policies. Do benefits support social health and family involvement? Do you offer mentorship opportunities for those who might otherwise feel overlooked or forgotten? Fill in the gaps, and you’ll foster a more cohesive, diverse working environment.

4. Ease your employees’ financial anxieties.

It probably won’t surprise you that money woes can make loneliness more difficult to handle, no small concern now that debt-saddled Millennials make up the largest generation in the U.S. workforce. Providing financial planning services for your employees, paying for outside training or certifications so your team members can learn without the financial burden, and offering employees who go above and beyond a productivity bonus or additional paid time off can all decrease the financial pressure your team likely feels.

One unexpected benefit of fostering your employees’ financial well-being is that financially healthy employees are more likely to get to know their team on a more personal level. And, the more connected a team member is to others, the more performance skyrockets.

What’s the bottom line? While you can’t completely rid yourself or anyone else of loneliness, you should make it your mission to reduce feelings of isolation for the betterment of your own health, the health of your workers, and the health of your company.

American Airlines Is Teaching Its Employees About Basic Customer Service (and, Boy, is it Basic)

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

Some things are given, right?

Buses won’t arrive on time, Starbucks will spell your name wrong and airlines are all about customer service.

What am I saying?

Many passengers will happily attest that too many airline employees act as if they’re members of a security force, rather than representatives of a brand that’s supposed to make customers feel good.

It’s (mostly) not their fault. 

Their bosses have flown them into these corners where they’re instructed to err on the draconian side.

Last year, United Airlines concluded that it had to do much better on the humanity side of its business.

Perhaps one shouldn’t be surprised, then, that American Airlines is working hard to teach staff how to offer good service.

It featured Jim Fahnestock, the airline’s Managing Director of Training, explaining something called the Elevate program.

This exists to remind employees of — or perhaps even teach them for the first time — the basics of creating a good experience for another human being.

Fahnestock said that the airline had worked with expert consultants to discover what employees were doing well and what they — or at least some of them — were doing badly.

The result was five basic essences that, to some, might feel so basic as to not even be worth mentioning, never mind teaching.

See how these square with your average American Airlines experience.

1. Acknowledge the Customer.

No, really. It seems that the airline believes employees need to be reminded they have customers at all. I know there are difficult customers. There are also natural human moods experienced by airline employees. But people really don’t like being ignored.

2. Be Present.

This is basic, but not necessarily easy. Employees in every job sometimes wish they were anywhere but here. And in a business in which complainers are — often justifiably — a hearty part of your daily diet, it’s easy to give the dull-eyed stare so often beloved, in my experience, by American Airlines check-in agents at Miami Airport and Southwest Airlines gate agents at LAX.

3. Show You Care.

But what if you don’t? Especially for that self-important halfwit who believes he deserves an upgrade by virtue of being a self-important halfwit. Fahnestock explained that if you do the same job every day, you get complacent. Yet an essential part of customer service is to make the customer feel like their problem is your problem. Or, at least, a valid human problem. I cannot confirm American uses the Stanislavski Method as part of this training.

4. Proactively Communicate.

Oddly, one of American’s insistences to Flight Attendants in First Class is that they should greet a customer by name and offer them a drink before takeoff. On my last experience in American’s First Class, this didn’t happen. This was partly because the lone Flight Attendant seemed so harassed that she had little time for anything. Perhaps that’s why the airline feels the need to teach the importance of, you know, proactively talking to people.

5. Give Options.

I’ve rarely seen this one in practice, though of course it would be nice. The option I suspect many flyers see — and not just on American — is My Way Or the Highway. Too often, dramatic tales that emerge from flights involve passengers who may or may not have been difficult and airline employees who rather appear to have been intransigent. Why, I seem to recall an incident in which a Flight Attendant challenged a passenger to a fight. That was on, oh, American Airlines.

Some might think it sad that American Airlines has to teach — or even re-teach — apparently obvious elements such as these.

I fear, though, it does reflect the drive in many airlines — and certainly American — toward revenue at the expense of customer service, which meant the latter is often bumped from the process.

Fahenstock rightly says on the podcast that your people are often the lone way you can truly differentiate your airline.

Yet the airline’s numbers people — which these days seems to comprise the majority of senior management — can’t quantify the benefits of customer service. 

Until, that is, something goes very wrong and the airline starts to lose business.

Treasury Snapshot: 10-Year Yield At 2.87%

By Jill Mislinski

Note: We’ve updated this commentary with data through market close on 8/10/18.

Let’s take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended Friday at 2.87% and the 30-year bond closed at 3.03%. The 2-10 yield spread is now at 0.26%.

Here is a table showing the yields, highs and lows, and the FFR since 2007 as of Tuesday’s close.

The chart below shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since the pre-recession days of equity market peaks in 2007.

A Long-Term Look at the 10-Year Note Yield

A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of “stagflation” (economic stagnation with inflation). Note the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&P 500 fell 5.16% that Friday and 20.47% on Black Monday.

The 30-Year Fixed Rate Mortgage

The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 4.59%. Here is a long look back, courtesy of a FRED graph, of the 30-year fixed rate mortgage average, which began in April of 1971.

Now let’s see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior.

Original post

Philippines sets rules for 'virtual monopolist' Grab after Uber deal

MANILA (Reuters) – The Philippine competition watchdog said on Friday it has approved ride hail firm Grab’s acquisition of Uber’s operations, providing it follows rules to ensure fairness to consumers given its stranglehold of the local market.

FILE PHOTO: A Grab employee uses the Apps to book a cab for passengers at the Ninoy Aquino International Airport (NAIA) in the metro Manila, Philippines, July 22, 2016. REUTERS/Romeo Ranoco

The Philippine Competition Commission (PCC) would strictly monitor Grab’s compliance with conditions intended to improve quality of service over the next 12 months, amid complaints about picky drivers and sharp prices increases at peak times.

Any breach of conditions could result in fines of up to 2 million pesos ($37,624) per offense and serious non-compliance could lead to the Grab-Uber deal being undone, it said.

“While Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been when they still faced competition from Uber,” PCC chairman Arsenio Balisacan told reporters.

Those include improving fare transparency, acceptance rates for bookings and faster response time to complaints, and re-evaluating drivers incentives.

Grab has a 93 percent share of the Philippines’ ride-hailing market, up from 45 percent when Uber was active.

Grab would abide with its commitments to the regulator, its head, Brian Cu, told reporters.

It would work with the anti-trust agency in appointing an independent trustee to monitor its compliance, he added.

Uber sold its money-losing Southeast Asian business to bigger regional rival Grab in March in exchange for a stake in the Singapore-based firm.

It prompted Malaysia, Vietnam and Singapore to launch separate reviews on the deal.

Singapore’s anti-monopoly watchdog last month proposed fines and suggested remedies on the ride hailing firms because the merger had reduced competition.

Several local ride hailing firms have started operations in the Philippines’ capital and in major provinces since March, but have yet to make a dent on Grab’s market share.

Reporting by Neil Jerome Morales; Editing by Martin Petty

China's Bytedance seeks to raise $3 billion at up to $75 billion valuation: sources

HONG KONG (Reuters) – Beijing Bytedance Technology Co, owner of China’s leading news aggregator Jinri Toutiao, aims to raise about $3 billion in its latest funding round that would see its valuation soar to as high as $75 billion, people with direct knowledge of the matter said.

FILE PHOTO: Visitors are seen at the booth of Bytedance Technology, which owns news aggregator app Jinri Toutiao and short video app Tik Tok, or Douyin, at the China International Software Expo in Beijing, China June 29, 2018. REUTERS/Stringer

The fundraising comes as the six-year-old firm is considering an initial public offering in Hong Kong next year and has been in talks with investment banks for a multi-billion-dollar listing, two of the sources said.

How successful Bytedance’s fundraising is will be an indicator of broader appetite for Chinese investments amid heightened Sino-U.S. trade tensions and Beijing’s debt crackdown that are slowing the Chinese economy and aggravating tight market liquidity.

Fast-growing Bytedance runs China’s popular news feed Jinri Toutiao and short video platform TikTok, which was also the world’s most downloaded app in the first quarter.

Founded by entrepreneur Zhang Yiming in 2012, Bytedance is targeting a valuation of between $70 billion and $75 billion in the latest fundraising, said one of the people.

That would rank it as the world’s second-largest “unicorn” – private firms valued at $1 billion or more, eclipsing ride-hailing firm Uber Technologies [UBER.UL] with a valuation of 68 billion and trailing only Ant Financial which is valued at $150 billion after a June funding round.

Bytedance counts venture firm Sequoia Capital, big private equity firms such as KKR, General Atlantic and Hillhouse Capital Group as backers, according to sources, but unlike most Chinese startups, it is independent from China’s duo of tech heavyweights – Tencent Holdings and Alibaba Group.

Alibaba held talks with Bytedance earlier this year about a potential acquisition or investment, but was turned down by the content aggregator, according to two people with knowledge of the situation.

Tencent, on the other hand, once owned a small stake in the company and later exited, two separate people told Reuters.

Bytedance declined to comment. Alibaba and Tencent didn’t immediately respond to a request for comment.

The Wall Street Journal first reported about Bytedance’s latest fundraising round.

Bytedance was seeking a $10 billion valuation in a late 2016 funding round, sources familiar with the fundraising said at the time. About a year ago, the firm was raising at least $2 billion at a valuation of over $20 billion.

The valuation exceeded $30 billion earlier this year and as its new video streaming apps such as TikTok gained user traffic, secondary market trading of its shares would value the firm at over $50 billion or $60 billion at times, according to sources familiar with the trades.

Bytedance started from news aggregator Jinri Toutiao, or “Today’s Headlines” in Chinese, which uses algorithms and artificial intelligence to select news, online books, videos and other content for readers, with the bulk of its revenue coming from advertising.

Since late last year, the firm established another business segment – entertainment, with a number of short video streaming apps and a $1 billion acquisition of popular lip-sync platform Musical.ly, which it shuttered and merged with TikTok last week.

Despite its quick success, the company has faced mounting scrutiny from China’s internet censors, with Toutiao temporarily taken off app stores for a cleanup in April while a separate joke app was permanently shut.

Reporting by Kane Wu and Julie Zhu; Editing by Muralikumar Anantharaman

Baidu ready to beat Google if U.S. firm returns to China: CEO

BEIJING (Reuters) – Baidu Inc (BIDU.O) is prepared to win against Alphabet Inc’s (GOOGL.O) Google in China, its chief executive officer said on social media, amid rumblings the U.S. search engine giant was planning to re-enter a market it left eight years ago.

A Baidu logo is seen at the Global Mobile Internet Conference (GMIC) at the National Convention Center in Beijing, China April 27, 2018. REUTERS/Damir Sagolj

Google’s search engine has been largely blocked in China since 2010, when the company exited the market over ethical concerns related to China’s strict censorship laws. Baidu dominates the domestic search engine space currently.

Last week, Reuters reported Google was developing a censored version of its search engine to enter China, citing information from the firm’s employees and Chinese officials. The plans were earlier reported by the news website Intercept.

Slideshow (2 Images)

In a posting on a private social media account on Tuesday, Baidu CEO Robin Li said if the two companies come head to head, “Baidu will win again”. “Chinese companies today have plenty of ability and confidence” to compete globally, he added.

A Baidu spokeswoman confirmed the posting, which was shared by local media, was authentic.

Li was reacting to an article posted by state media outlet People’s Daily which said Google was welcome in China but must abide by local laws. The report has since been removed from People Daily’s Twitter and Facebook accounts.

The article was originally circulated in another state media newspaper on Monday.

Google declined to comment on the report and Li’s comments.

News of Google’s plan to return with a censored search app, criticized by human rights advocates as a blow to global free speech, comes at a time when China has stepped up scrutiny of business dealings involving U.S. tech firms including Facebook Inc (FB.O), Apple Inc (AAPL.O) and Qualcomm Inc (QCOM.O) amid intensifying trade tensions between the countries.

Apple has removed hundreds of apps from its Chinese app store in the past year under increasingly strict censorship laws championed by Chinese president Xi Jinping.

Facebook, whose social media products are banned in China, is also making efforts to enter the restrictive market.

Last month, it said it was opening an innovation hub in the eastern city of Zhejiang, but only hours later the announcement of the project’s registration was pulled by regulators from a national database.

Reporting by Cate Cadell; Editing by Himani Sarkar

Apple removes most of U.S. conspiracy theorist's podcasts from iTunes

(Reuters) – Most of U.S. conspiracy theorist Alex Jones’s podcasts from his right-wing media platform Infowars have been removed from Apple’s iTunes and podcast apps, the media news website BuzzFeed quoted a company spokesman as saying on Sunday.

FILE PHOTO: Alex Jones from Infowars.com speaks during a rally in support of Republican presidential candidate Donald Trump near the Republican National Convention in Cleveland, Ohio, U.S., July 18, 2016. REUTERS/Lucas Jackson/File Photo

The move by Apple is the most sweeping of a recent crackdown on Jones’s programs by Facebook and other online sites that have suspended or removed some of his conspiracy-driven content.

Apple told Buzzfeed that it has removed the entire library for five of Jones’s six Infowars podcasts including the shows “War Room” and the daily “The Alex Jones Show”.

Only one program provided by Infowars, “RealNews with David Knight” remained on Apple’s platforms on Sunday, according to media accounts.

An Apple spokesperson was not available for comment early on Monday.

In other recent actions against Jones, Facebook suspended the radio and Internet host’s personal profile for 30 days in late July from Facebook’s site for what the company said was bullying and hate speech.

FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar

Also, Spotify, a music and podcast streaming company, removed some specific episodes of Jones’s programs last week.

“We take reports of hate content seriously and review any podcast episode or song that is flagged by our community,” a spokesperson said late on Sunday.

“Spotify can confirm it has removed specific episodes of ‘The Alex Jones Show’ podcast for violating our hate content policy,” the spokesperson said.

Since founding Infowars in 1999, Jones has built a vast audience. Among the theories he has promoted is that the Sept. 11, 2001 attacks on New York and Washington were staged by the government.

He has also promoted a theory that the 2012 Sandy Hook school massacre was faked by left-wing forces to promote gun control. The shooting left 26 children and adults dead at a Connecticut elementary school.

Jones is currently being sued in Texas by two Sandy Hook parents, seeking at least $1 million, claiming that they have been the subject of harassment driven by his programs.

Neither Jones nor a representative for Infowars were available early on Monday for comment.

Reporting by Rich McKay, additional reporting by Ishita Chigilli Palli; editing by Emelia Sithole-Matarise

American Airlines Kicked a Woman off a Flight and Called the Police. Here's Why the Airline Made a Mess of Things

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

Never assume that your outbound journey on an airline will be subject to the same joys as the one coming back.

The crew will likely be different. Their moods will likely be different. And consistency in airline service isn’t so easy to find.

This is something DePaul University music student Jingjing Hu found to her cost.

On Thursday, she was flying back to her home in Chicago from Miami. 

She had perhaps her best friend with her — her cello. Hu had been performing in a music festival. 

Airlines allow musical instruments on board, as long as you buy them a seat and strap them in.

Musical instruments are like children, but infinitely more melodic and much quieter on planes.

As her husband Jay Tang described on Facebook, this was where the music became hard to listen to, as the mood, dynamics and tempo of the trip were derailed.

Hu was suddenly told that her cello was too big for a Boeing 737.


This was just before the plane’s doors were about to close.

Yes, she was already on the plane, having been through all the palaver of security. She was also allowed to pre-board and says she had been given a belt by cabin crew to strap the cello in securely.

Worse, as she was escorted off the plane, her cello allegedly brushed the pilot. He apparently felt hurt by this.

She took a picture of him as he displayed what some might take as a V for Victory sign, as Hu was ushered away. 

The airline insists he was signaling to ground staff that there were now two free seats on the plane. Airlines rarely miss a money-making opportunity, do they?

Could that have played a role here? The two seats were quickly filled.


This, though, was merely the first movement of many. 

Hu said she’d been told that she could catch the next flight, a mere hour or so later.

Alternatively, she could purchase a First Class seat. Well, two.

Ah, but that flight wouldn’t let her and her cello on. It was also a 737. And there, at the gate, there were three police officers. The airline had called law enforcement.

Then she says she was taken to a Holiday Inn — first the wrong one, then the right one — and only put on a flight the following day.

Even at this point, she says she was denied pre-boarding.


Of course, so far we only have her and her husband’s side of things. Could it be that she’d begun to show frustration at some point in this mess?

It would have been hard not to, perhaps. 

“You have so many chances to tell me that you cannot board yesterday,” she told NBC Chicago. “You never told me until I sat down.”

On Facebook, Tang offered dark motives for his wife’s expulsion: 

AA is just playing around with customers. They just kick off passengers when they oversell their tickets using FAA regulations as an excuse. I could have been told those regulations when purchasing the ticket. My wife could have been told those regulations when flying from Chicago to Miami, at check in counter in Miami International Airport, at the gate or even when boarding the plane.

American Airlines rules allow an instrument on a separate seat if it weighs less than 165 lbs. Hu’s cello weighs 10.

My own calculations suggest that the seats on an American 737 are actually more or less the same size as those on the 757 and 767 which also fly on the Chicago-Miami route.

So she should have been allowed on the second 737, never mind the first.


I contacted American to ask for its side of this troubling farrago. A spokeswoman told me: 

A passenger on flight 2457 from Miami to Chicago was traveling with her cello.  Unfortunately, there was a miscommunication about whether the cello she was traveling with met the requirements to fit onboard the particular aircraft she was flying, a Boeing 737. We rebooked our passenger on a flight the next morning on a larger aircraft, a Boeing 767.

A miscommunication.

And somewhere, the University of Euphemisms announced that its work was done.

The airline added that it had provided hotel and meals for the “inconvenience.”

My sources suggest the airline believes the problem may have begun with a customer service manager, not a Flight Attendant. This manager suddenly decided that the cello was inappropriate for the plane.

Or, rather, had decided the cello was actually a bass violin. 

The rules do say that cellos should be in a bulkhead window seat in an exit row.

Tang told me his wife was booked in 23A and 23B, not bulkhead seats. But the airline had told him and his wife in advance that there would be no problem. And the cello was strapped into the window seat, so it wouldn’t be in anyone’s way.

Tang said the airline told him it would perform a “deep dive” into the issue. He says it hasn’t contacted him since.

The customer service manager — if that’s the person at the heart of this — was clearly, though, a touch mistaken. There was nothing wrong with the size of the cello.

Some might wonder whether the pilot and/or the Flight Attendants would also have known the cello rules — or at least got the plane moving.

Instead, a scene.


When it comes to cellos, American has a discordant record.

Why, though, didn’t it dawn on the cabin crew and the pilot that Hu had been allowed onto the plane and, presumably, told there was no problem with her instrument? After all, she’d already been given a belt to strap it in.

Indeed, Tang says he’d made all the appropriate calls when booking to ensure that her cello was permissible.

At the core, then, is another example of airline personnel enforcing rules — worse, in this case, seemingly not even knowing precisely what they actually are.

Which can cause a little frustration for passengers. 

I’m sorry. I mean mishappiness.

This Infographic Shows Which Mobile Apps Are Most Popular in 25 Countries (And it's Not Facebook)

Facebook has 2.23 billion monthly active users, which is nearly a third of the world’s population. Yet according Marketing Resources Incorporated (MRI), which sifted through insights from mobile app data platform App Annie, it’s not the most popular mobile app in any of the 25 developed or populous countries it researched. The messaging app WhatsApp, which is owned by Facebook, actually tops the list in several countries, as does the basketball game Dunk Line. And check out this weirdness: In Germany the two most popular apps are McDonald’s apps. Here’s an infographic created by MRI which lays it all out, according to country.

Published on: Aug 5, 2018