Sony tries to save face with 'Interview' flip-flop

ATLANTA — Sony's flip-flop on releasing "The Interview" shows the studio is working furiously to try to chart the right course through political and public-opinion minefields.

Although analysts don't believe the decision will have any effect on Sony's image, it will at least give the movie-going public a chance to vote with their wallets and send North Korea a protest message.

Last week, Sony canceled the Christmas Day release of "The Interview" in the wake of an extensive hacking attack and release of confidential emails by a group linked with North Korea. The movie stars Seth Rogen and James Franco as journalists tasked by the CIA with killing North Korean leader Kim Jong Un. The hackers threatened violence if Sony didn't pull the movie. Sony did so after major theater chains decided not to screen it.

But the company then wavered in the face of public outcry and criticism from President Barack Obama. On Tuesday, Sony Entertainment CEO Michael Lynton said Seth Rogen's North Korea farce "will be in a number of theaters on Christmas Day."

The film is set to open in over 200 theaters, down from an original release planned in 3,000. Atlanta's Plaza Theater and 16 theaters that are part of the Alamo Drafthouse chain in Texas are among those that plan to show it.

Lynton said Sony also is continuing its efforts to release the movie in more theaters and through more platforms — namely digital channels, such as Internet streaming or video on demand on cable systems. But Sony isn't offering specifics. Starz, which has first pay TV and streaming rights to Sony releases, didn't respond to requests for comment. Streaming service Netflix declined comment, while YouTube didn't respond to requests.

Plaza Theater owner Michael Furlinger said he was thrilled to be showing the movie. He canceled plans to fly to Long Island, New York, to see his parents for the holidays.

"We play a lot of controversial pictures, things I don't necessarily agree with, but I will never censor them," he said. "It's not for me to decide. It's for the customer to decide. If they want to come, they'll spend their money. If they don't, that's their choice. It should not be the choice of somebody from North Korea or China or anywhere else."

Atlanta Police spokesman Sgt. Greg Lyon said police will monitor the location for potential threats, but he wouldn't discuss specifics. Furlinger said the theater will take some precautions, though he said he wasn't worried about the threats.

If anything, the controversy has raised awareness about the movie. Although fewer theaters are showing it, those theaters might be more packed than they would have been otherwise.

Anthony LoRusso, 54, of Atlanta, thought the premise of the movie was "silly" and initially planned to wait for the DVD. Now, he plans to see it at The Plaza.

Colby Cohen, 29, of Atlanta said he probably would have seen it anyway, but the brief cancellation made him want to see it more.

"I'm going to get to fight terrorism on Christmas Day now," he said.

Because Sony has been wavering on its release of "The Interview" since last week, deciding to release it after all should not have a major effect on its image. Laura Ries, president of Atlanta-based branding consulting company Ries & Ries, said most moviegoers don't tie movies with the studio that makes them in the first place.

If Sony ends up expanding the theatrical release and sells the movie through digital channels, it could end up recouping some of its box offices losses. Doug Stone, president of film industry newsletter Box Office Analyst, had estimated domestic box office for the movie would be $75 million to $100 million, of which Sony keeps about 55 percent. But the release is too limited so far to give Sony much of a financial bump.

Furthermore, costly damage from the email leaks to relationships and future projects cannot be recouped, and there is a threat of more leaks as Sony plans on releasing the film now.

"Panic-based decisions are not sound crisis management," said Jonathan Bernstein, president of Los Angeles-based crisis management company Bernstein Crisis Management. The studio is making decisions too quickly and could face more embarrassment if hackers leak additional documents and emails in retaliation for showing the movie, he said. He said Sony should have waited until it is sure it can protect itself.

Still, moviegoers seemed enthusiastic Tuesday. Isaac Sokol, a 21-year-old university student in the Dallas suburb of Richardson, bought two tickets for a Christmas night show at the Alamo Drafthouse theater in Richardson.

"The only way to tackle world conflicts and human rights violations and all of the dreaded things around the world is to take them with a grain of salt," he said. "If you don't, it's going to just be sadness."

The Alamo Drafthouse said many showtimes across the chain were selling out for Christmas Day, but the company did not provide specifics.

Once James Wallace, the Richardson theater's creative manager, received word Tuesday morning that the movie was back on, the theater got to work preparing for several shows. Among other touches, the theater will offer a patriotic menu featuring burgers, "freedom fries" and apple pie.

"You better believe it's going to be all-American," Wallace said.

___

AP Film Writer Jake Coyle in New York and AP writers Kathleen Foody in Atlanta, Nomaan Merchant in Dallas, Joseph Pisani in New York and Michael Liedtke in San Francisco contributed to this report.

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Record Dow, U.S. growth spurs biz, consumer hopes

Business is booming again, the economy is going "gangbusters" and there's no end in sight, as even recession-weary economists are taking heart from yesterday's record high Dow and a revised report showing the biggest quarterly growth in the U.S. in more than a decade.

"This market is on a tear. There's momentum in place that will continue. All good things are happening right now," said Christine Armstrong, a senior vice president at Morgan Stanley in Boston.

"We have kicked and clawed and scratched our way to these record highs," Armstrong said. "We don't have anything that's taking our focus away from what's a good, solid, strengthening economy that looks good in the future as well."

The Dow closed at an all time high of 18,024.17, up 0.36 percent, after the government revised gross domestic product growth in the July-September third quarter to a whopping
5 percent — the largest quarterly gain since the summer of 2003. The GDP was revised upward from 3.9 percent.

"The higher numbers instill greater consumer or business confidence to add some credence to the durability and sustainability of the recovery," said Doug Handler, chief U.S. economist for IHS Global Insight. "It was really gangbusters."

The Standard and Poor's 500 index also posted a record high — its 50th record high this year, according to Armstrong.

The third-quarter growth came on the heels of 
4.6 percent growth in the GDP in the April-June second quarter.

"The revisions were reflective of a stronger consumer, and more business investment," said Lindsay Piegza, chief economist of Stern Agee, in a research note. "In a word, wow!"

The Commerce Department yesterday also reported that consumer spending increased 0.6 percent in November, the most in three months, and income rose 0.4 percent, the biggest gain in five months. Consumer spending accounts for 70 percent of the GDP, so that increase is likely to contribute to strong economic growth in the fourth quarter.

"It's pointing to a better fourth quarter than anticipated," said Handler. "November looks like it was a really good month."

Consumer spending has been buoyed in large part by a strengthening job market and plunging gas prices. According to AAA, gas prices have fallen for 88 straight days, the longest stretch on record, and cheaper fuel has acted as an unexpected tax cut for consumers, experts said.

In its research note, IHS said third-quarter GDP did not include a bump from lower gas prices, but Armstrong sees a bright forecast for the economy in the new year.

"It continues to be a good market and we'll probably have another few good years left," she said. "We're going to be seeing these big ups and big downs. It's going to be two or three steps forward, one step back."

Sal Guatieri, senior economist at BMO Capital Markets, said he expects consumer spending to fuel economic growth of 2.6 percent in the current October-December period. Guatieri also foresees solid growth of 3.1 percent next year, which would be the best performance since the economy grew 3.3 percent in 2005.

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US economy accelerates and helps lift Dow to 18K

WASHINGTON — A surge in U.S. economic growth lifted stocks Tuesday to record highs and showed that the United States is putting distance between itself and struggling economies around the world.

Fueled by hiring gains, cheaper gas and rising confidence, consumers and businesses drove growth to a sizzling 5 percent annual rate last quarter. Though the economy is likely cooling a bit, its solid pace is brightening hopes for 2015.

The economic strength could also shape the Federal Reserve's timetable for raising interest rates from record lows.

The government's third and final estimate of growth for the July-September period was the strongest for any quarter in 11 years. The result cheered investors. The Dow Jones industrial average ended the day up about 64 points to 18,024, the first time it's surpassed 18,000.

In its report Tuesday, the government sharply upgraded third-quarter growth from its previous 3.9 percent estimate. Much of the increase came from consumer spending on health care and business spending on structures and software.

The economy has been benefiting from sinking energy prices, which have helped keep overall inflation ultra-low. Gas prices have fallen for 88 straight days, according to AAA, the longest consecutive decline on record. Cheaper gas has acted like a tax cut to free up money for Americans to spend on other items, including cars, clothes and appliances.

Last quarter's growth was the fastest since summer 2003, and it followed a 4.6 percent annual rate in the April-June quarter. The government separately reported Tuesday that in November, consumer spending rose the most in three months and income by the most in five months. Both figures brightened hopes for the 2015 economy.

"After four years of rocky recovery the U.S. economy is now hitting its stride with a notable acceleration in growth," said Gus Faucher, senior economist at PNC Financial Services Group. "Growth should remain good next year, with lower gasoline prices a big plus for consumers."

Sal Guatieri, senior economist at BMO Capital Markets, said he now expects healthy consumer spending to fuel economic growth of 2.6 percent in the current October-December period. And Guatieri foresees solid growth of 3.1 percent next year. That would be the best performance since the economy grew 3.3 percent in 2005, two years before the Great Recession began.

Since the recession officially ended in June 2009, the economy has struggled to regain full health. Five years of growth have averaged an anemic 2.2 percent.

Tuesday's figures are sure to be closely studied by the Fed. Last week, the Fed ended a policy meeting by saying it would be "patient" in deciding when to raise rates because the economy wasn't yet fully healthy. Many investors concluded that no rate hike was likely before mid-2015 at the earliest, and they drove stocks to record highs.

Unexpectedly strong expansion, though, could escalate pressure on the Fed to raise rates, even though inflation remains well below its 2 percent target. One reason the Fed has kept its benchmark short-term rate near zero since 2008 has been to try to lift inflation from excessively low levels.

The government's figures Tuesday showed that the inflation gauge the Fed most closely watches has risen just 1.2 percent over the past 12 months. Partly as a result, few analysts think Tuesday's figures will prompt the Fed to raise rates in early 2015.

"We don't see the Fed moving before June," said Doug Handler, chief economist at IHS Global Insight.

And when the Fed does begin raising rates, Handler and others think the increases will be gradual and have only a slight effect on growth.

Also on Tuesday, the University of Michigan said its index of consumer sentiment found that U.S. consumers were more optimistic about the economy than at any other point in the past eight years, buoyed by more jobs and falling gas prices.

Two other reports Tuesday were more cautionary: The government said sales of new homes fell in November, evidence that job gains have yet to boost the housing sector. And it said factory orders for long-lasting manufactured goods slumped last month.

Still, the overall U.S. economy is showing resurgent strength and separating itself from others around the world. Europe is struggling to grow. So is Brazil. Japan has slid into recession. China is straining to manage a slowdown. Russia envisions a recession next year.

Many economists think U.S. growth will continue to strengthen as more businesses grow confident enough to hire. The country is on track to have its healthiest year for job growth since 1999. In November, employers added 321,000 jobs, the sharpest one-month increase in three years.

With more people working and having money to spend, solid gains are expected in consumer spending, which accounts for about 70 percent of the economy.

For the third quarter, consumer spending grew at a 3.2 percent annual rate, the best showing this year and a full percentage point above the government's estimate a month ago. The upward revision was driven by higher spending on health care.

Business investment spending rose at a 7.2 percent annual rate, 2.1 percentage points above the government's previous estimate. Much of the new strength came from investment in structures and computer software.

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Bitcoin now available at local stores

You can now pick up some bitcoin with that bottle of soda and bag of chips at the store down the street.

LibertyX, a company that originally made and operated bitcoin vending kiosks, has expanded to let any store sell bitcoin for cash at the register, just like anything else they have in stock.

"You hand over cash, you get a code," said Kyle Powers, co-founder of LibertyX, formerly known as Liberty Teller. A cashier gives the customer a pin number, which can be redeemed for bitcoin. LibertyX is working with 2,500 stores, mostly local businesses including convenience and computer stores, across the country in the obvious places — Cambridge and San Francisco — and some less obvious, such as Lowell and Missoula, Mont.

The move away from dedicated ATMs that sell bitcoin came from overwhelming demand, Powers said.

"We had people driving for hours," Powers said. "The whole thing was to reach areas that we couldn't otherwise."

The ATMs are still operational, including the one at South Station.

"We're doing the same thing (as the ATMs), just cheaper, faster, more convenient," Powers said.

To help LibertyX expand, the company has raised a little more than $400,000 in private investment. Project 11, the venture capital firm headed by Katie Rae, Reed Sturtevant and Bob Mason, formerly of TechStars Boston, led the investment.

Powers said much has been made of bitcoin's ups and downs, but he continues to have faith in the online currency.

"Bitcoin is like gold, except the market is a thousand times younger" he said. "What we're doing is a fundamental, foundational piece of the bitcoin ecosystem."

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Florida business helps artisans from India

BOCA RATON, Fla. — As a family, the Mehtas would often travel to India and bring back crafts from artisans.

But enjoying the crafts, which are made with ancient techniques in danger of disappearing, was not enough.

"I felt we should do something about it," said Sonali Mehta-Rao, now 26, who in 2010 co-founded Mela Artisans with her father, medical-device entrepreneur Navroze Mehta.

The Boca Raton-based company sells artisans' goods in the U.S., Europe and South America, while reinvesting in the artisan communities.

Mela Artisans designs jewelry and home decor that is crafted by the artisans and then distributes the goods to stores including Bloomingdale's in Boca Raton. It also sells them directly to consumers online at www.melaartisans.com.

Products include picture frames and bowls made from buffalo bone, gold, silver and gem jewelry, silk pillow covers, cashmere shawls, embroidered bags and handcrafted trays, coasters, place mats and runners. Prices vary from around $25 to hundreds of dollars.

The company devotes 1 percent of its revenues to help sustain the artisan communities. One recent project provided safety equipment for artisans working with dust-intensive bone.

Mela's business model so impressed Aavishkaar, a Mumbai, India-based venture and private equity group, that it earlier this year invested $3 million in the company. The funds are helping Mela reach out to a wider range of artisan communities in India.

The company said it has generated enough direct income for artisans to support more than 800 individuals working full-time for two months. Those artisans typically contribute more than 50 percent of the household income.

"We're helping them generate income so they can decide their own future," Mehta-Roa said.

Last year, the company partnered with New York City designer Dipali Patwa, who is both familiar with the artisan techniques in India and has worked for American designers including Ralph Lauren and Martha Stewart.

Patwa leads a team of designers who keep on top of the trends and give the artisans design concepts. The artisans then use the techniques they know to fulfill those designs.

CEO Navroze Mehta said that combination results in a style that is contemporary while maintaining tradition.

Mehta said the private company has tripled its sales — now in the millions — since its start in 2010. Mela Artisans works with 50 groups across 10 states in India that employ 4,500 full-time artisans, of which 77 percent are women.

Every item sold comes with tag, some hand-painted, that tells a story about the artisans. The company also blogs stories about the artisans, their craft and community on its website.

"We want to give voice to our artisans," said Kirsten Gilbert, who heads marketing and sales.

Mehta-Rao grew up in Boca Raton but spent summers in India visiting her grandmother and working for an organization that helped low-income people.

While in the U.S., Sonali said she got tired of seeing crafts from India marketed "with a sad picture of a child."

Besides high-end retailers, the company's crafts are sold on specialty goods websites including OneKingsLane.com.

Fort Lauderdale resident Theresa Hickler has purchased silk and cotton pillows, silver jewelry and a handcrafted tray from Mela. "They're more unique than anything you can find shopping around," she said.

Mela's give-back philosophy also makes a difference to her. "You know you're helping keep their traditions alive," she said.

Mehta has started many South Florida medical and technology businesses including NovaVision, Dermdex, and Boca Research.

But he gets particular pleasure from working with his daughter on Mela.

While it was essential for Mela to have an operation in Manhattan, the design center of America, Mehta said he will maintain Boca Raton as the company's home because of the team he has built.

"Get talented people who know more than you" is Mehta's advice for any start-up.

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©2014 Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by Tribune Content Agency, LLC

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PHOTOS (for help with images, contact 312-222-4194):

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Topics: g000362667,g000224320,g000362686,g000065577,g000362661,g000066164

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China cracks down on environmental crimes

BEIJING — China's environmental regulators nearly doubled the number of cases they referred to police involving suspected polluters over the first three-quarters of this year compared to all of last year, amid a larger push by the government to crack down on the country's severe environmental problems, state media reported.

The official Xinhua News Agency said Tuesday that environmental agencies also penalized about 190,000 enterprises for violating environmental laws over the past two years.

In total, Xinhua said, Chinese authorities have investigated and handed down punishments in 103,707 cases over the past two years. They issued about $633 million in fines during that period.

Xinhua said environment regulators transferred 1,232 cases involving suspected environmental crimes to police over the first three-quarters of this year, compared to 706 all of last year.

Chinese authorities are under intense pressure to clean up the country's environment, with toxic air, water and soil pollution a main source of public discontent. President Xi Jinping has also pledged to stop the growth of the country's carbon emissions by 2030.

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Single-family home sales fall in Nov.

Single-family home sales fell last month while the median price rose, particularly in Greater Boston, driven by a continuing shortage of inventory, according to the Massachusetts Association of Realtors.

Statewide, the number of closed sales dropped by 6.7 percent, from 3,817 in November 2013 to 3,560 last month, while the median price increased 4.4 percent, from $316,000 to $330,000 over the same period, MAR statistics show.

Condominium sales fell even more precipitously — by 10.2 percent — from 1,494 to 1,342, but the median price increased only 1 percent, from $299,000 to $302,000.

"Both the falling numbers of sales and the increasing median prices are a reflection of low inventory," said MAR President Peter Ruffini. "There's a lack of affordable housing for first-time buyers. It's very rare to see new construction priced at under $400,000. That's simply not a viable price point for most people looking to enter the housing market."

In the Metro Boston area, the median selling price for a single-family home rose even more dramatically — by 9.4 percent, the largest percentage increase since April — from $480,000 in November 2013 to $525,000 last month, the highest median home price ever recorded for November in the area, according to the Greater Boston Association of Realtors.

"Even at these prices, what is available is being jumped on pretty quickly," said Michael DiMella, the association's president and managing partner of Charlesgate Realty Group in Boston. "We're still seeing some multiple offers and bidding wars, although not as much."

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The Ticker

Pier 4 owner cashes out

Pier 4 master developer New England Development has cashed out of the 1-million-square-foot South Boston waterfront project, selling 130 and 140 Northern Ave. to the deeper-pocketed Tishman Speyer, the New York owner of properties including Rockefeller Center, Chrysler Center and Yankee Stadium.

The Newton company sold the two Seaport District parcels, which had been slated for an office building, a separate condominium building and waterfront public park, for $70 million, according to Registry of Deeds documents filed yesterday.

New England Development executives could not be reached for comment. Tishman Speyer, which also owns 125 High St. and One Federal St. in Boston, declined comment, but is expected to move faster with the development of the two parcels.

New Balance seeks sneaker design ruling

Boston's New Balance has filed pre-emptive court action against Massachusetts rival Converse to protect its ability to continue selling its 77-year-old PF Flyers brand of sneakers.

The federal lawsuit follows the North Andover-based Converse's October trademark infringement lawsuits against Wal-Mart Stores Inc., H&M, Skechers, Ralph Lauren and 27 other retailers and companies for allegedly knocking off the design of its iconic Chuck Taylor All-Star sneakers that date to 1917.

New Balance, which wasn't included in that round of lawsuits, is asking for a U.S. District court ruling that its PF Flyers don't infringe on Converse's trademark and that Converse doesn't have exclusive rights to use the design.

"Converse brought its case to the International Trade Commission to prevent consumer confusion, to protect its legitimate intellectual property rights, and to stop the sale of knockoff Chucks, all of which remain unchanged," Converse said in a statement.

Quincy hospital to close midnight Friday

The Department of Public Health yesterday signed off on the proposed closure of Quincy Medical Center, set for midnight Friday.

Steward Health Care, the owner of the hospital, said Quincy Medical will halt operations Dec. 26, at 11:59 p.m., with a satellite emergency facility set to open in the same location at 12 a.m. on Saturday, Dec. 27.

Steward said that Quincy Medical, as of yesterday, no longer has any inpatients.

Local elected officials have criticized Steward for the speed with which the for-profit company has moved to close the hospital after it claimed in November that it suffered financial losses and a decreasing number of patients at the Quincy hospital.

Cornerstone Pub to be redeveloped

The Cornerstone Pub and Restaurant in South Boston will soon be history as a developer has filed a project notification form with the city to build a mixed-use development on the 14 West Broadway site. The Southie landmark, which sits across from the Broadway T station, will be razed and replaced with a complex that would include 47 residential units, commercial and retail space, a ground-floor restaurant and garage parking.

THE SHUFFLE

Emmanuelle Debouverie has joined Boston-based criminal defense firm Rankin & Sultan as an associate. Debouverie was previously an associate at Clifford Chance.

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U.S. economy on a roll

The economy grew at a 5 percent annual rate between July and September, the fastest in 11 years.

2010

Q1: 1.7

Q2: 3.9

Q3: 2.7

Q:4 2.5

2011

Q1: –1.5

Q2: 2.9

Q3: 0.8

Q4: 4.6

2012

Q1: 2.3

Q2: 1.6

Q3: 2.5

Q4: 0.1

2013

Q1: 2.7

Q2: 1.8

Q3: 4.5

Q4: 3.5

2014

Q1: –2.1

Q2: 4.6

Q3: 5.0

Source: Commerce Department

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Honda recalls 1,252 Crosstours over side air bags

NEW YORK — Honda is recalling 1,252 Crosstour vehicles due to a faulty side air bag made by troubled air bag supplier Takata.

The Honda recall is for 2015 model year Crosstours. The National Highway Traffic Safety Administration says the side air bag may not inflate properly because of a problem with its inflator tube. Crosstour owners will receive a letter in the mail asking them to take their car to a Honda dealer and have the side air bags replaced free of charge.

Honda said no injuries were reported. Takata Corp. declined to comment.

Takata, a Japanese air bag maker, is at the center of massive recalls around the world. Several automakers have recalled vehicles with air bags made by the company because they can explode and send shards flying at drivers and passengers. In response to the recalls, Takata on Wednesday apologized to those killed or hurt by its faulty air bags and announced it was reshuffling its executives.

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