Movies are the least of Sony's problems

NEW YORK (CNNMoney)

But the film business is really the least of Sony's problems.

That's partly because Sony's studio accounts for less than 10% of its total sales.

The company is really struggling in the realm of electronics, which it once dominated with innovations like the Sony Walkman and the Trinitron TV.

• Its TV manufacturing unit, which once produced Sony's fattest profit margins, now struggles to make money.
• It dropped out of the personal computer business earlier this year.
• Sony's smartphone business has just 3% of the market. And it wrote down the value of that unit by $1.7 billion last quarter, which led to another loss for the entire company. It lost $1.2 billion in its fiscal year that ended in March.
• Its debt was downgraded to junk bond status early this year.
• It recently suspended its dividend for the first time in its history.

"Sony had very large margins on its consumer electronics business because it had such a good brand," said Van Baker, a consumer electronics analyst at Gartner. "But consumer electronics has become very competitive, especially with competitors in China."

Related: Can anything save Sony?

There are a few bright spots for Sony (SNE). Its PlayStation video game console is a hit, beating Microsoft (MSFT, Tech30)'s Xbox. Japanese consumers, who still constitute a major market for electronics, remain very loyal to the Sony brand. And the Japanese government's policy of keeping the value of the yen low helps make its prices competitive in overseas markets such as the U.S.

But Sony has been struggling for over a decade -- at least since Apple (AAPL, Tech30) first unveiled the iPod in 2001.

In addition to the hack, Sony's film unit is facing the same headwinds as every other studio that makes money selling movie tickets in the age of the Internet. And it's had has had its share of flops, like the 2013 Channing Tatum thriller "White House Down."

Sony's televisions used to produce top profit margins for the company but now that unit struggles to make money.

But it's still capable of turning out hits, such as the Spider-Man or James Bond franchises, as well as critically acclaimed films like last year's "American Hustle." In fact, Sony management balked when hedge fund titan Dan Loeb pushed the company to spin off the studio early last year.

Sony has been slow to recover from a series of missteps in the late 90s and early 2000s, Baker said. "I don't know if they can become Sony again."

First Published: December 18, 2014: 9:01 AM ET

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Steve Carell North Korea project said to be another casualty of Sony breach

NEW YORK (CNNMoney)

A Steve Carell "paranoid" thriller "that was to be set in North Korea" has been scrapped, according to Deadline and other entertainment news outlets.

The project from director Gore Verbinski and writer Steve Conrad wasn't yet titled, Deadline reported, though some other industry outlets said the working title was "Pyongyang," which is the North Korean capital.

"Sad day for creative expression," Carell tweeted Wednesday evening, adding "#fear eats the soul" as a hashtag (That post was shared on Twitter (TWTR, Tech30) 11,000 times.)

New Regency, the studio reportedly behind the movie, did not immediately respond to a request for comment.

Related: Get up to speed on the Sony mega-hack

The major hack of Sony Pictures led the studio to cancel the Christmas day release of "The Interview," the Seth Rogen and James Franco comedy about the killing of North Korean leader Kim Jong-Un.

The hackers threatened a "bitter fate" to people who go to see the movie and several major U.S. theater chains said they would not carry it.

U.S. investigators said late Wednesday they are preparing to announce hackers working for the Pyongyang regime are responsible for the mega-breach. That announcement could come as soon as Thursday.

--CNNMoney's Brian Stelter contributed to this report

First Published: December 18, 2014: 9:37 AM ET

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$57.6 million for Countrywide whistleblower

Countrywide whistleblower Edward O'Donnell will get $57.6 million from Bank of America.

NEW YORK (CNNMoney)

Edward O'Donnell, a former executive at mortgage lender Countrywide Financial, is set to collect a cool $57.6 million from Bank of America (BAC), for his role in exposing fraudulent activity at the firm.

A federal jury ruled last year that Countrywide Financial, which is now owned by Bank of America, had defrauded government-backed firms Fannie Mae and Freddie Mac by selling them defective mortgages. That fraudulent activity contributed to the real estate bubble and mortgage crisis of 2008, which finally led to the widespread economic fallout known as the Great Recession.

O'Donnell is entitled to 16% of a $350 million payment from Bank of America, according to documents filed this week in the Southern District Court of New York. The payment is a portion of the $16.65 billion settlement that Bank of America has to pay. It's the biggest financial settlement in history.

Related: What Wall Street won in budget deal

O'Donnell's piece of the $350 million is equal to about $56 million. He's also entitled to an additional $1.6 million payment from Bank of America, to total about $57.6 million, which must be paid within a "reasonable time," according to the federal court document.

Bank of America acquired Countrywide in 2008.

First Published: December 18, 2014: 9:45 AM ET

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U.S. moves expected to ease trade restrictions on Cuba

The U.S. embargo on Cuba hurts both nations. The Obama administration will finally start easing trade restrictions.

NEW YORK (CNNMoney)

The expected announcement is part of a new deal worked out by the Obama administration to have Cuba release an American prisoner there, Alan Gross.

Trade has been frozen between both countries for half a century now. Americans want Cuban cigars, rum and clothing -- but can't get them. Cubans love American cars -- but they're still driving Chevys made in the 1950s.

The current embargo is expensive too. Every year, the U.S. economy loses out on $1.2 billion in missed sales, according to the U.S. Chamber of Commerce. The Cuban government says it misses out on $685 million each year because of the embargo.

Shortly after Fidel Castro's armed revolutionaries deposed the Batista regime in 1959, the United States placed economic sanctions on Cuba -- blocking exports since 1960. These trade restrictions only got tighter in 1962.

Related: Venezuela squandered oil riches

Diplomatic relations have remained frigid since. The Cuban people suffer because of lack of trade. And the embargo only tightens Castro family's dictatorial control of the island, because it severely limits Cubans' access to American music, movies, books and culture. All they get instead is communist propaganda.

Warming U.S. relations with Cuba are also a sign of changing political sentiments. The first generation of Cuban refugees, who typically fled to Miami in the 1960s, are vehemently opposed to U.S. trade with Cuba. Their reasoning: The Cuban government controls the economy, so it will benefit and grow even more powerful.

But second- and third-generation Cuban-Americans tend to take a more liberal stance. They support increased trade, under the assumption that more exposure to American culture will inspire free thinking and fuels dissent.

However, President Obama can't lift all trade restrictions himself. Only Congress can formally overturn the embargo. In the meantime, the White House has some authorities to liberalize trade and travel to the island.

For instance, the Obama administration plans to permit great American travel to the island. It's unclear how easy it will be for Americans to travel there, though, as tourism will still not be permitted.

CNN's Elise Labott contributed to this story.

First Published: December 17, 2014: 9:48 AM ET

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Drivers to save $550 on gas in 2015

Drivers will spend a lot less on gas next year.

NEW YORK (CNNMoney)

The average driver will spend $1,962 on gas next year, according to the Energy Information Institute, down about 20% from this year. That savings comes to about $45 a month.

The last time drivers spent so little at the pump was in 2004.

The average price for gas nationwide is now down to $2.51 a gallon. The average price for the full year of 2015 should be about $2.60 a gallon, says the EIA, down from 2014's estimate average of $3.37 a gallon.

Related: What are you paying for gas in your state?

Gas and oil prices have fallen steadily over the last six months, due to lower demand in Europe and Asia, as well as more fuel efficient vehicles worldwide.

An increase in U.S. oil production, which made the nation the world's largest source of crude earlier this summer has also pushed prices down, as has OPEC's refusal to cut production and a strong dollar.

Related: The story of the great American oil blob

First Published: December 17, 2014: 9:59 AM ET

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Wealth gap between middle class and rich widest ever

NEW YORK (CNNMoney)

That's led to the widest wealth gap on record between the middle class and the rich.

The median household net worth of middle-income Americans remained at $96,500 between 2010 and 2013, according to a new report from the Pew Research Center, which looked at Federal Reserve Bank data.

Upper-income households, however, saw their wealth grow to $639,400 last year, up from $595,300.

Related: Elizabeth Warren: 'Wealth trickles up'

That means the rich have 6.6 times more wealth than the middle class, a figure that's grown from 4.1 in 1998 and 3.4 in 1983.

It's also a record 69 times the wealth of lower-income Americans, who had accumulated only $9,300 as of last year.

Related: Whites get wealthier, while Blacks and Hispanics lag further behind

Part of the reason for the gap stems from how the rich and the middle class build wealth. The former are more likely to invest in the stock market, which has been on a tear in recent years. The latter have more of their net worth tied up in the housing market, which hasn't recovered as much.

That's also why the Great Recession had a bigger impact on the net worth of the middle class. Back in 2007, before the housing crash, the middle class saw its median wealth soar to $158,400.

The rich also haven't recovered fully from the downturn, but they are a lot closer to their 2007 peak of $718,000.

Looking longer term, the rich have more than doubled the size of their nest eggs over the past three decades, while the middle class have inched up 2.3%.

Pew defines middle income as family of four with a household income between $44,000 and $132,000. Some 46% of American household fall into middle income under its methodology, which adjusts for family size. Upper-income Americans are those who earn more than $132,000 for a family of four.

Share your story: Has your wealth gone up or down in recent years?

First Published: December 17, 2014: 10:00 AM ET

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Toys 'R' Us extends hours for last-minute shoppers

NEW YORK (CNNMoney)

Its flagship Times Square location, meanwhile, will remain open from 7 a.m. Wednesday, Dec. 17 to 10 p.m. on Christmas eve a week later -- over 180 hours of shopping time.

Toys 'R' Us has hired on 45,000 seasonal employees, more than doubling its workforce, in order to facilitate its shop til you drop strategy.

And there will be daily discounts on everything from Barbie dolls, to Charmazing jewelry kits and Playmobil sets.

Related: Who is winning the price wars? Consumers

Toys 'R' Us kept all of its stores open for four straight days as early as 2010, so this year's event isn't the marathon it once was.

But this year the store is looking to cut expenses and rejuvenate its business, and the cost of keeping its 900 stores open for days on end are high. But at the last minute, brick-and-mortar stores can do what online sellers can't: guarantee the gift you buy will be under the tree on Christmas morning.

Many Amazon (AMZN, Tech30) shoppers will have to make their purchases much earlier to get their stuff in time for Christmas. The cutoff for free shipping that will arrive by Dec. 24 is Friday, Dec. 19. Shoppers who pay for the Amazon Prime service have through Monday to order. Last year, Amazon and UPS (UPS) failed to make many deliveries in time.

Last week, Kohl's (KSS) announced it will keep its 1,100 stores open around the clock for the five days leading up to Christmas.

Related: Walmart 'layaway angel' pays $50,000

First Published: December 16, 2014: 9:47 AM ET

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