Page 60 - The Economist20171214

60 Business The Economist December 16th 2017
2 programmes anywhere, on internet-con- Retailing
nected TVs, tablets and smartphones.
Apps such as Facebook and YouTube are The brand played on
fine-tuned to keep users gawping. Ameri-
cans spend more than eight hours a day on
NEW YORK
their various devices, compared with just Ivanka Trump’s fashion business repositions athome and soars in Asia
over four hours a day on TV in 2002, ac-
cordingto Nielsen, a research firm. AUREN, a Democrat from Maryland, have also spent to express theirsupport.
That leaves little room for the cinema. Lmakes an impassioned case fornot Ms Trump started herfirm in 2007 as a
Americans are on track to have bought shoppingat Ivanka Trump, the business diamond-jewellery boutique selling
around 3.6 movie tickets per person by the founded by Donald Trump’s daughter. $50,000 products. But competingwith
end of the year, down by 30% from 5.1 in First comes a predictable argument; she established designers proved difficult.
2002. They pay $8.93 for a ticket, 54% more abhors supportingany brand that uses The company rebranded, capitalising on
than 15 years ago, which means, for now, the Trump name. Second, the sparkly the popularity ofa book, “Lean In”, by
higher total takings, but attendance is ex- sandals she bought backwhen Ms Trump Sheryl Sandberg, the chiefoperating
pected to decline further. Frequent filmgo- was a tabloid celebrity, not an adviser to officerofFacebook, with a new cam-
ers—those who go once a month or more— the president, fell apart within a year. paign: #WomenWhoWork.
have dwindled, from 28% of North Ameri- Shoppers will soon be able to take such Usingfeminism to sell $100 office
cans in 2002 to 11% in 2016, according to the complaints directly to sales staff: the frocks worked well. In 2015 the com-
Motion Picture Association of America. brand is about to open its first standalone pany’s clothingline alone reportedly
The average American goes to the cinemas store, in Trump Towerin New York. generated $100m. Abigail Klem, who
only to take in a big-budget spectacle orthe Floral frocks, stilettos and bangles became chiefexecutive in January, said
occasional buzzy hit. aimed at the mid-market customerdo not that in 2016 sales rose by 21%. Ms Trump’s
This shift in how people consume en- often inspire strongreactions, but Ms visibility duringthe campaign helped.
tertainment has also changed how it is Trump’s fashion line is divisive. Though But in February Nordstrom, a depart-
made, further boosting the allure of the Ms Trump distanced herselffrom her ment store, dropped the fashion line and
couch. Competition forsubscribersamong company in January, she owns it and Neiman Marcus, anotherupmarket
Netflix, Amazon, HBO and other pay-TV receives money through a trust. Some retailer, stopped sellingthe jewellery.
serviceshassubstantiallyincreased invest- consumers are boycottingit. Others have Both cited decliningsales. The brand has
ment in television series and films made purged theirwardrobes ofitems they edged downmarket. Its biggest retailers
for home viewing. Why go to the cinema already own. Thredup, a second-hand are Lord & Taylor, Zappos, Macy’s and
when you can binge-watch “The Crown” fashion site, says users listed double the Walmart. Accordingto Edited, an analy-
and “Stranger Things 2”? MoffettNathan- numberofIvanka items forsale in the tics firm, 84% ofIvanka Trump footwear
son, a research firm, reckons that Netflix’s first five months of2017 than in the same is discounted, by an average of55%.
production offilmsthatneverreach the big period last year. But lots ofTrump fans Ms Klem has said the company now
screen will reduce movie ticket sales in wants to build an identity separate from
America by $300m-1bn a year. Ms Trump. The new store’s location will
With the exception ofDisney, profits are not help. Asian consumers, moreover,
stagnating. Lastyearthe earningsbefore in- appreciate the bond between Ms Trump
terest, taxes, depreciation and amortisa- and herbrand. Its profile has risen sharp-
tion of the film studios at Fox, Time War- ly in line with hers. ApopularJapanese
ner, Universal and Viacom (Paramount) shoppingsite, Waja, started selling
added up to $1.8bn, down from $1.9bn in dresses from the Ivanka Trump fashion
2010, MoffettNathanson estimates. Stu- label in 2012. It sold nearly 30 times as
dios used to make a lot of money when many Ivanka products in November2016
consumersstayed athome, fromDVDsales as it did in the same month ofthe previ-
of their films, but no longer. When “Re- ous year. The label now outranks Kate
venge of the Sith”, another “Star Wars” Spade and Calvin Klein on the website.
film, was released in 2005, retail sales, rent- In China the line is so coveted that
als and downloads of all films totalled fake Ivanka merchandise has flooded the
$25bn, with the studios taking fat profit market, and the brand has registered at
margins. That market collapsed to $12bn least16 trademarks there. Three ofthem
last year, according to The Numbers, a were granted on the same day Ms Trump
website. Streaming revenue is on the rise, joined herfatherand Xi Jinping, China’s
but less of that money goes to the studios. president, fora steakdinnerat Mar-a-
(Disney is likely to buy Fox in part to bulk Lago. Abroad, ifnot at home, Ms Trump’s
up its own streaming service, which it Waja to go, Ivanka style may turn into a wardrobe staple.
plans to launch in 2019.)
Studios rely increasingly on interna-
tional markets for box-office returns, espe- Others have sold out of the market. That in tastes. Jeffrey Katzenberg, a former head
cially fast-growing emerging markets such may have been wise. AMC Entertainment, of Disney’s film studio and co-founder of
as China. China’s box office is expected to a large North American chain in which Da- DreamWorks Animation, observes that
grow by more than 20% this year to about lian Wanda Group ofChina holds a major- American film-going has evolved from a
$8.3bn, and could surpassAmerica’sbythe ity stake, has been on a spending spree to “blue collar egalitarian” habit to a more
end of the decade. The country added acquire smaller chains. Its share price has “upscale” experience, at cinemas with lux-
more than 1,600 cinemas last year—more fallen by 55% this year. uriant comforts and IMAX and 3D screens.
than fourperday. In America, some exhibi- Studio and cinema executives argue Thatmaybe true, butthere isa limit to how
tors have invested heavily in upgrades, that the secular trend in American film longnewtechnologycan justifyrising tick-
such as recliner seats, to attract customers. habits is less about decline than a change et prices forthe silverscreen. 7