mm
The Daily Tar Heel Thursday, March 30, 19895
Stocks
A
COMPANY CLOSE CHANGE HIGH LOW WK. AGO
BeBSouth 42 42 t8 41 78 41 58-
Duke Power 43 58 - 18 43 34 43 38 43 58
Food Lion 10 10 19 9 78 10
NCNB Corp. 36 14 78 36 14 35 18 36 18
RJRNabisco 56 14 - 18 86 38 86 13 86 78
mm
316 317 320 321 322
DTH Graphic
Coke Pepsi ( market share)
2330 i .
2320 I ;
2310 j -
2300 j
2290
2280 j I P ; ; 3
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DTH Graphic
New home sales down in February; further drop
from Associated Press reports
j WASHINGTON Sales of new,
$ingle-family homes slumped in
February to the lowest level in more
: jhan a year, the government said
Wednesday, and analysts expect
'further declines as rising mortgage
fates push more people out of the
market.
Sales dropped 9.4 percent in
February to a seasonally adjusted
annual rate of 626,000 after advanc
ing 2.5 percent in January, when
'This tape will self-destruct in five seconds . .
From Associated Press reports
SAN FRANCISCO Reminis
cent of the "Mission Impossible"
television series, a major film com
pany plans to test-market a video
cassette that will self-destruct after the
movie has been watched a set number
of times.
MGM-UA Home Video has
decided to test the "disposable" tapes
this summer in an undisclosed city,
according to Herb Fischer, vice
president of sales and marketing.
The mission of the new video
cassette should studios decide to
accept it will be to encourage the
production companies to sell video
rental stores more copies of a movie
for the same price they would pay
for tapes with unlimited play. That
would make it easier for movie renters
nationwide to find a hot new release
at their video stores.
V "It saves you going back three times
2281.52
UP 5.98
VOLUME: 144.24 million shares
323 324 327 328 329
Source: Edward D. Jones & Co.. Chapel Hill
Coke vs. Pepsi
1988 MARKET SHARE
The two top cola competitors increased
their share of the market in 1988, but Coca
Cola padded its edge over No. 2 Pepsi last
year. Coke gained 0.9 percent of the market,
up from a 30.8 share in 1987, while Pepsi
increased its share 0.4 percent, from 24.9
the previous year.
DTH GraphicSource: The New York Times
8.000 simple
8.5958.970
8.7309.120
8.7309.120
9.0959.520
Business Briefs
unusually mild weather brought out
more buyers.
The drop in sales was accompanied
by an 8.9 percent increase in the
median price of the homes sold, which
analysts said showed that lower-
income purchasers were the ones who
left the market.
"The first people forced out of the
to get the same film," said Steve
Roberts, president of the Los
Angeles-based S. Roberts Co.
The company is consulting on the
project for Rank Video Services
America, a manufacturing duplicat
ing company based in Torrance,
Calif., that licensed the patent to the
new product.
Although these tapes will not go
up in smoke when the limited number
of plays are completed, they will erase
themselves and cannot then be re
recorded, said Roberts.
"It becomes inoperative as a
normal cassette," said Bob Pfann
kuch, chairman of Rank Video
Services America. He said the tech
nology for this type of videocassette
has been around for three to five
years.
Introduction of the new tapes,
which will have green cases to
distinguish them from the typical
Record Bar looking to ypdate nmage
Stores shrink
LP collection,
get new name
By CRAIG ALLEN
Staff Writer
The Record Bar Corporation is
beginning to reduce its inventories of
vinyl albums (LPs) and is in the
process of renaming all of the com
pany's stores, according to Steve
Bennett, vice president of marketing
for Record Bar.
According to Bennett, the corpo
ration plans to phase out most of its
LP inventories slowly over the next
year. Bennett said many major record
companies are beginning to produce
fewer LPs, so Record Bar is forced
to carry fewer of the vinyl albums,
which were once the leader of the
audio market.
Sherman Tate, assistant manager
of the .Franklin Street Record Bar,
said the store's sales of LPs has
steadily declined since the introduc
tion of the compact disc (CD).
"A year ago, we had a store full
of LPs, and five years ago we had
(a total of) five CDs in the store,"
Tate said.
Tate also said this decline is partly
because companies are beginning to
produce fewer new releases on the
vinyl albums. He said Record Bar
used to be able to get any LP through
special order. But now, he said, new
releases are often hard to get on vinyl.
Another reason for the decline of
the LP, Tate said, is the current trend
in the market toward CDs. Tate said
fewer people are buying the LPs. He
said LPs will probably continue to
be available, but he is not sure.
"Who's to predict the future, I dont
know," Tate said. "We still have some
LPs, and we still have people talking
about LPs. But they're (consumers)
not buying them."
Record Bar's move away from LPs
will help business across the street at
School Kids Records, according to
Matt Steigerwald, an employee at
School Kids. Steigerwald said there
is still a demand for LPs, mainly
because not everyone can afford a CD
player.
Execo Itives take raises amid llavoffs
From Associated Press reports
CHARLOTTE The five top
executives of Duke Power Co. got
hefty raises last year as the Charlotte
based utility laid off 1,200 people in
a cost-cutting move.
Duke gave a 31 percent increase
to $478,983 in 1988 cash compensa
tion to Chairman Bill Lee. The
utility's other four top executives also
received double-digit increases in pay
in 1988.
The compensation was disclosed in
the firm's annual proxy statement just
mailed to shareholders.
But Duke Power spokesman Joe
Maher said that it's unfair to consider
the executives' salaries in light of last
fall's cutbacks.
"Their salaries were set on Jan. 1 ,
market in times of rising rates are
first-time buyers who barely qualify
to buy a home," said John Tuccillo,
chief economist of the National
Association of Realtors.
Last month's median price for a
new home was $123,100, meaning
half the homes sold for more and half
for less.
Analysts said that because the
housing market is particularly sensi-
tive to interest rates, it is among the
sectors of the economy most directly
black cases, could meet strong initial
demand for popular movies, said
Roberts.
He said retailers lose from 5 percent
to 20 percent of their potential
business because frustrated custo
mers who cannot find their first
choice movie leave without renting
anything.
A retail outlet currently pays more
than $60 for a movie title and cannot
afford to stock it in depth. However,
with the disposable tapes pro
grammed at 20 plays, that retailer
could buy the same movie for about
$30, he said.
"The goal of this is not to replace
the traditional black tapes," said
Roberts, who explained that retailers
would still buy the permanent tapes
but would also purchase the green
disposable movies for "depth of
copy."
Roberts said rental fees probably
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At the Franklin Street Record
"It obviously helps us because
anyone who wants LPs has to come
here," said Steigerwald.
However, Bennett said he does not
foresee a time when LPs will not be
available at Record Bar, at least in
limited supply. They will carry
overstocks from clearinghouses who
specialize in selling publisher over
runs, he said.
One reason for making some LPs
available is that many college or
alternative artists, long popular in
Chapel Hill and other college towns,
continue to produce mainly on vinyl,
Bennett said.
Tate agreed, saying that LPs will
never completely disappear.
"My gut feeling is that it won't be
extinct completely," Tate said. "So
many people have turntables and
collections of albums."
1988," based on 1987 performance,
he said. "Their salaries are reviewed
once a year. The work activity review
had nothing at all to do with it."
The big increases in 1988 pay
would seem "a little bit lower" when
deferred compensation is included,
Maher added. The executives took
more deferred compensation in 1987
than last year.
Many compensation experts
believe executive pay should reflect
the performance of a company, the
newspaper said. Some executives
such as Nucor Corp. Chairman Ken
Iverson and NCNB Corp. Chairman
Hugh McColl Jr. have taken big
pay cuts during disappointing years.
In 1988, Duke's earnings rose 10
percent to $550 million after a 7
affected as the Federal Reserve Board
tries to restrain growth and dampen
inflationary pressures by driving rates
upward.
Housing construction and sales of
existing homes also were down
sharply during February, according
to earlier reports from the Commerce
Department.
"The housing sector is stumbling,"
said economist Bruce Steinberg of
Merrill Lynch & Co. in New York.
"It's an indication that higher mort-
will not be affected, but customers
will have to be more cautious about
rewinding.
The disposable tapes can be
rewound up to 20 minutes into the
movie without triggering the counter
that marks the number of plays. After
that, any rewinding would count as
a play, said Roberts.
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Career Corner
Resume Drop April 4
Open Sign Up April! 9
Date Company Job Major
425 Firestone ' Sale BU7BS
Rmgt EconBA
n
Bar, vinyl albums are getting the
Despite this change in format,
Record Bar is not planning any price
changes in the near future. The prices
in the stores are dictated by the record
companies to some extent, according
to Bennett. Before Record Bar can
lower any prices, record companies
must lower the prices they charge the
store and other suppliers.
"I think CD prices everywhere are
going to come down," Bennett said.
"The problem is that manufacturers
are manufacturing the products a lot
cheaper than they were five years ago
but typically are not passing that
savings on to the comsumer.
"We hope that manufacturers will
lower their prices, and we can come
"down behind that," he said.
Record Bar is also adding video
rentals in some locations. Most
percent increase in 1987, but last
year's increase stemmed from a
change in accounting. Without the
change, which added $102 million to
earnings, profits would have fallen 10
percent.
. Duke trimmed its staff in
November after officials discovered
the firm was exceeding its 1988
budget by $70 million. Increasing
competition and prospects of indus
try deregulation are forcing Duke to
operate more efficiently, company
officials say.
"Duke is recognized as one of the
utility industry's best-run compan
ies," Maher said. "Our executives are
compensated to reflect their contri
bution to that. Our executives earn
considerably less than they would in
gage rates are taking a toll on the
housing sector, one which is likely to
intensify over the next couple of
months."
Tuccillo said that with mortgage
rates expected to continue rising
through the spring, new home sales
likely will decline further over the
next few months and then start to
pick up.
Dave Seiders, chief economist for
the National Association of Home
Builders, said sales for all of 1989 are
expected to be down 6 percent from
last year, but the situation could be
worse if the Fed tightens credit too
severely.
"Our association is very uptight
about what the Fed has been doing,"
Seiders said. "When the Fed moves
to slow down an economy like this,
they almost always overshoot."
Governor's Awards announced
RALEIGH Eleven businesses
and art groups have been named
V
DTHEvanEile
squeeze from compact discs
Record Bar stores already offer
videos for sale. However, because of
space considerations, Record Bar will
probably not feature video rentals at
its Franklin Street store, Bennett said.
Digital Audio Tape (DAT), a new
technology on the horizon, may
someday become as profitable as
CDs, Bennett said, maybe even co
existing with CDs as much as cassette
tapes and LPs have in the past. But
right now this technology is more
expensive than CDs were at the time
of their introduction and are not a
viable alternative although . some
other companies on the West Coast
are selling them, he said.
Within one or two years, the
Record Bar name will be gone from
all the company's stores to be
replaced by "Tracks," Bennett said.
a nonutility company."
"On the surface, it's appalling," said
Thomas Jerdee, a UNC-Chapel Hill
business professor. "On the other
hand, if these people are in demand
I don't know if they are it might
make sense (to raise pay) for com
petitive reasons."
Only half of executive salaries are
paid for by Duke's customers under
state regulations, said Robert Gruber,
executive director of the public staff
of the N.C. Utilities Commission.
While Gruber declined to comment
specifically on Duke, he said the link
between executive pay and perfor
mance is weak" generally.
"Other industries do the same
thing, I'm afraid," Gruber said. "But
that doesn't justify it."
predicted
recipients of the 1988 Governor's
Business Awards, said Doug Booth,
chairman of the Governor's Business
Council on the Arts and Humanities.
Receiving the awards are Carolina
Mills, Inc., of Maiden; Cellular One
of Fayetteville; First National Bank,
Reidsville; First Savings Bank, Hick
ory; Glaxo, Inc., Research Triangle
Park; Greater Smithfield-Selma Area
Chamber of Commerce, Smithfield;
High Point Arts Council, Inc., High
Point; Leader: Newsmagazine of the
Triangle, Research Triangle Park;
Robeson Historical Drama, Inc.,
Pembroke; The Historical Preserva
tion Foundation of N.C, Raleigh;
and United Carolina Bank,
Whiteville.
The awards will be presented by
Gov. Jim Martin during the council's
annual awards banquet April 6.
The council was created in 1977
to encourage support of the arts and
humanities.
J!