Economics in the News – April 17-23, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Apple, the most valuable company in the world as measured by market capitalization, wants to operate as your bank. The tech giant launched a high-yield savings account, offering an annual percentage yield of 4.15 percent. The savings account requires no minimum deposit and are protected by the Federal Deposit Insurance Corp., up to $250,000. The 4.15 percent APY is higher than standard savings accounts and popular high-yield savings accounts such as Ally Bank, or Goldman Sachs owned Marcus.
The high-yield savings account works in conjunction with Apple’s credit card, which offers customers an option of “buy now, pay later” on certain products. Apple’s new savings account could be attractive to customers with concerns about the stability of the banking industry with the company’s brand recognition and favorable rates. [The Wall Street Journal]
o Before it upended the entertainment industry and ushered in the era of streaming, Netflix was a company that revolved around sending DVDs in the mail in easily recognizable red and white envelopes. The company announced that after 25 years, it will be ending its DVD-by-mail business. Netflix said that it will mail out its final DVDs to customers on Sept. 29.
At its peak, Netflix had roughly 20 million people signed up for its DVD-by-mail subscription service with more than 5.2 billion DVDs sent out since March 1988. The service has since become outdated with the rising popularity of streaming, which Netflix has been among the leaders in making content readily available for the masses. Netflix’s current subscriber base now totals 232.5 million globally. [The New York Times]
o Intense competition has fueled a price war among electric vehicles manufacturers in China. The country’s EV market has expanded rapidly since 2020, propped up partly by government subsidies, but the program expired in Dec. 2022 and that intensified the competition to attract buyers in a crowded segment of the market. Car dealers are luring customers with free vacations or lavish gifts.
Tesla lowered prices in China for the second time in three months in Jan. 2023, adding pressure to other manufacturers to do the same. While the price cuts have not impacted solely China – Tesla has also lowered prices in the United States and Europe – the intensity of competition echoes that China is the most competitive EV market globally. There are around 300 domestic EV manufacturers across China and the average price for an electric car is less expensive than the rest of the world. The average EV in China sells for around $35,000 compared to $60,000 in Europe and $70,000 in the United States. [The New York Times]
o Broadway’s longest-running show “Phantom of the Opera” held its farewell performance Sunday, April 16. The decision came from the impact of 40-year high inflation and dwindling tourism amid the COVID-19 pandemic shutdown. Throughout its 35-year run at the Majestic Theater on Broadway, the show wowed audiences with nearly 14,000 performances and seven Tony Awards.
“Phantom of the Opera” grossed $1.36 billion since its opening in January 1988 and has been played in 17 languages in 45 countries, grossing more than $6 billion globally. The show is still running globally in locations such as London, Australia, Japan, South Korea and Sweden. [Associated Press]
o Seventy-six counties across the United States are without a grocery store, according to the US Department of Agriculture. Most of the counties without grocery stores are in rural communities located in the Midwest or Great Plains. Businesses have struggled to stay afloat historically in rural settings because of dwindling populations, while big box stores have only added to the pressure.
Entrepreneurs and community initiatives are seeking to debunk the trend of grocery stores closing in rural parts of the country. The Rural Grocery Initiative was created in 2006 to help establish and sustain grocery stores in rural communities. The initiative shares resources with local grocers, creating co-op opportunities for towns to provide food options. The co-ops sell a full range of groceries, including fresh produce, meat, and household supplies. Meanwhile, investors receive discounts and dividends while electing a board of directors to oversee the large financial decisions. [NPR]
