January 2012

[Commentary] Americans bought 50 million fewer movie tickets in 2011 than the year before, continuing a downward slide for Hollywood that began in 2003. The anemic ticket sales — the lowest total in 16 years — more than offset yet another increase in average ticket prices, causing box-office revenue to fall for the second consecutive year.

The numbers have some industry watchers wringing their hands, but they're not a portent of doom for the film industry. They're just a sign that movie fans have adapted to new technologies faster than the studios have. Some independent movie studios and producers have responded by embracing on-demand services, even to the point of offering titles on demand while they're still playing in theaters. The major Hollywood studios haven't been so bold; they can't afford to alienate the theater chains that play a crucial role in launching and promoting the hugely expensive "tent pole" films that bring in the largest chunks of the studios' revenue. Nevertheless, this year's box-office numbers fit into a pattern that's consistent across all forms of entertainment. Technology is enabling consumers to be more choosy, and they're willing to sacrifice timeliness for value. Studios and theater chains can cling to the hope that the coming year's sequels, reboots and book adaptations will be bigger hits than last year's, but the trend lines spell trouble for the status quo.

In the wake of social uprisings around the world this year, AnchorFree has become a poster child among human rights advocates for embracing the unintended uses of technology. Facebook was first used for tracking university friends; Twitter, to plan parties. YouTube and Bambuser, a live streaming video service based in Sweden, originally hosted home-made movies. All have become instrumental in facilitating and documenting social movements, from the Arab spring to Occupy Wall Street. In June the UN declared internet access itself a human right. Technology companies have accepted these new responsibilities to varying degrees, some begrudgingly reshaping internal policies to account for their wider role in society and a few, such as AnchorFree, interpreting them as a strategic opportunity. The range of reactions is giving rise to fresh tensions between Silicon Valley and international human rights organizations, with rights advocates directing the forces and rhetoric usually reserved for dictators against the technology services being tapped to topple them. They have been calling on chief executives to adapt to activists’ needs and establish human rights policies before crises erupt, and beseeching young start-ups to build human rights considerations into their mission statements.

The number of students in virtual schools run by educational management organizations rose sharply last year, according to a new report, and far fewer of them are proving proficient on standardized tests compared with their peers in other privately managed charter schools and in traditional public schools.

About 116,000 students were educated in 93 virtual schools — those where instruction is entirely or mainly provided over the Internet — run by private management companies in the 2010-11 school year, up 43 percent from the previous year, according to the report being published by the National Education Policy Center, a research center at the University of Colorado. About 27 percent of these schools achieved “adequate yearly progress,” the key federal standard set forth under the No Child Left Behind act to measure academic progress. By comparison, nearly 52 percent of all privately managed brick-and-mortar schools reached that goal, a figure comparable to all public schools nationally. “There’s a pretty large gap between virtual and brick-and-mortar,” said Gary Miron, a professor of evaluation, measurement and research at Western Michigan University and a co-author of the study.

The US produces almost one-quarter more goods and services today than it did in 1999, while using almost precisely the same number of workers. It’s as if $2.5 trillion worth of stuff -- the equivalent of the entire U.S. economy circa 1958 -- materialized out of thin air. Although businesses haven’t added many people, they’ve certainly bulked up on machines. Spending on equipment and software hit an all-time high in the third quarter of 2011. “Huge advances in technology have allowed businesses to do more with less,” vaporizing jobs for everyone from steelworkers to travel agents, President Barack Obama warned in December.

So are robots getting all the good jobs? This year may provide the answer as the economy gathers steam. Most economists, cheered by 540,000 hires since Labor Day, say technology inevitably destroys some jobs even as it ultimately creates new ones. But with more than 20 million Americans still jobless or underemployed, others worry that something fundamental has changed. “What’s different now is the speed and scale of what’s happening,” says Erik Brynjolfsson, director of the MIT Center for Digital Business. Brynjolfsson and Andrew McAfee, co-authors of the recently published book Race Against the Machine, argue that the economy is in the early stages of a “Great Restructuring” that is hollowing out the labor market and exacerbating inequality. Nonsense, say economists including James D. Hamilton of the University of California at San Diego. There’s nothing new about machines replacing people. In 1900, 41 percent of Americans worked on farms. Today, thanks to labor-saving tractors and combines, the figure is less than 2 percent. Yet ex-farm workers found new jobs. And as manufacturing grew leaner in recent decades, factory workers—or their children—migrated to finance, health care, computers, and other growing industries.