How immune is Netflix to Hollywood hits?
Yesterday’s latest Netflix financial report had a lot to impress shareholders, including renewed subscriber growth and a better cash flow outlook, thanks to cuts in content spending.
But its shares fell in aftermarket trading and are still down this morning. In part, that’s because Wall Street expected better numbers. But there’s also concern that, while it’s better insulated from the Hollywood lockdown than most of its competitors, the streaming giant could eventually be hurt by the near-total blackout of American film and TV productions.
The company has had some notable wins. Its global password-sharing campaign helped it add 5.9 million subscribers in the second quarter, bringing the total number of subscribers to 238 million and reversing a decline in subscribers during the same period last year. Revenue was up year-over-year, although it didn’t quite meet expectations.
As expected by many analysts, Netflix said it expects free cash flow growth this year to at least $5 billion from $3.5 billion, thanks to lower content spending due to writers and actors’ strikes that effectively shut down Hollywood productions.
Netflix is the best media player out there. In addition to a big head start in broadcasting, the company also has an extensive network of international studios to draw from that aren’t affected by the Hollywood downtime. Its investment in Korean production, for example, has boosted its business in that country — and some of that content has since found audiences all over the world.
Netflix’s focus on streaming also helped avoid some of the other issues bewildering its peers, including weaker-than-expected box office results for expensive movies. (This was also evident in Chinawhich some in Hollywood hoped would make up for the poor performance at home.)
But a prolonged blow may cause some damage. While the company will save on content spending in 2023, it will have to pay for US production at some point. Netflix themselves said this.It may create some lumpsin free cash flow in 2024. Investors may fear that broadcast costs will increase for media companies if writers and actors are given a larger piece of the economic pie to resolve the crisis.
Maybe Netflix executives are wary after their company has been criticism By beating up the writers and actors (and making use of Poor reception of comments by Disney’s Robert Iger), stuck to largely soothing comments about the labor dispute. “This hit is not the outcome we wanted,” Ted Sarandos, the company’s co-CEO, said. analysts said yesterday. (He also notes that his father was a union electrician.)
Here’s what happens
Tesla’s shrinking profits spooked investors. Shares of the electric car maker fell about 3 percent in after-hours trading After the company said The price war with competitors continued to eat away at profit margins. But Elon Musk, CEO of Tesla, said the company would Invested more than 1 billion dollars on a supercomputer aimed at enhancing self-driving offerings.
Wheat prices rise due to the threat of the Russian blockade. Chicago wheat futures jumped 9 percent after Moscow appeared to signal it would treat as hostile any ship passing through the Black Sea to Ukraine. The prospect of a wheat shortage has sparked fears of renewed inflation, just as food prices in many countries seemed to finally be coming down.
China rejects John Kerry’s pleas to move faster on climate efforts. President Biden’s climate envoy left Beijing empty-handed, after three days of negotiations on new ways their countries could work together to reduce carbon emissions; Instead, President Xi Jinping said China would stick to its efforts at its own pace. Meanwhile, Earth has most likely set global temperature records.
The Fed fines Deutsche Bank $186 million. Central bank officials cited “insufficient remedial progress” by the German bank to strengthen money laundering controls. It is the latest black eye for Deutsche Bank, which has paid billions of dollars in fines in recent years for failing to crack down on illegal customer activity.
Wesleyan is the latest university to end its legacy admissions processes. The Connecticut institution said it would no longer prioritize the children of graduates, weeks after the Supreme Court struck down affirmative action in higher education. Democratic and Republican critics of the old admissions policies say they disproportionately favor wealthy white applicants; Advocates say the practice helps schools raise more money.
Like everyone else, lawmakers talk a lot about AI. But with industry leaders arriving in Washington and politicians airing their plans to closely monitor developments, don’t expect legislation anytime soon.
Instead, watch regulators and the courts, as prominent authors, actors, and other creators have brought forward a number of legal cases that could shape AI before lawmakers get to grips with it.
“Congress must join the AI revolution” “Insight forumsthat he planned for this fall with companies, experts, and technology pundits. The meetings, which aim to help politicians get technology up to speed, will focus on national security, privacy, the impact on the workforce, high-risk applications, and bias. Some lawmakers are already releasing AI proposals, but Schumer is not. Emphasizing patience due to the complexity.
“We don’t have to treat AI as a looming disaster,” Dario Gil, director of research at IBM, told DealBook. He was one of dozens of company representatives who met with members of Congress in Washington yesterday. He said that “exaggerated rhetoric” about technology destroying humanity or replacing jobs fails to recognize its limitations. He also argued that the existing rules are sufficient to start regulating AI
Regulators say they are on the case. Gary Gensler, Chairman of the Securities and Exchange Commission, said that artificial intelligence poses a threat to financial stability, and new rules may be needed to protect the system. He added that the agency already monitors fraud, conflicts of interest and bias.
Last week, the Federal Trade Commission announced the first major investigation of OpenAI, the creator of ChatGPT, into potential consumer harms of chatbots. And last month, the Consumer Financial Protection Bureau highlighted “widespread adoption and use of chatbots by financial institutions” that may It goes against the rules.
The most urgent action may be in the courts. Creators, including comedian Sarah Silverman and authors like James Patterson and Margaret Atwood, are Companies claim compensation and filed lawsuits over the use of their intellectual property in large language models. Likewise, an increasing number of internet users want a say in how their data is used, and they are suing. This flurry of activity outside of Congress suggests that regulators and judges, not lawmakers, may end up caught up lead the way Defining the limits of artificial intelligence
In other AI news:
Camel Develop a competitor bot To ChatGPT and Google Bard which some engineers internally call “Apple GPT”.
Google has introduced a new AI tool for media organizations, including The New York Times and News Corp, owner of The Wall Street Journal, that is able to write news articles. Some executives who saw the presentation called the technology “disturbing,” Benjamin Mullen and Nico Grant of The Times report.
The researchers found that ChatGPT It performed worse on specific tasksincluding solving math problems, last month compared to March.
– the approximate reduction of staff in the first six months of the year by the largest banks on Wall Street, either by layoffs or attrition, According to Bloomberg. The decline in deal-making and capital market activity is the main reason behind this.
Is the waiver over?
Throughout the coronavirus pandemic, economists and pundits have theorized about its lasting effects on the labor market. But few of these trends—whether “quiet resignation” or early retirement—have persisted, and the job market appears to have fully recovered, Jenna Smyalek and Ben Casselman wrote for The Times.
Women are returning to the workplace in force. Early in the pandemic, women suffered greatly from job losses, a phenomenon called “dismissal” that led to fears that women would return to the labor market permanently. But employment data recently showed a faster recovery for women than for men.
As of June, the employment rate of women in their first years of work was the highest ever.
Microsoft and Activision Blizzard have extended the deadline for closing their $69 billion deal to October, signaling they believe a major UK regulator will sign off on the deal. (The New York Times).
It was reported that activist investor Elliott Investment Management I took a big stake in Catalent, a large pharmaceutical company. (Wall Street Journal)
His name is Warburg Pincus Jeffrey Perlman as its presidentsucceeding Tim Geithner, former Treasury Secretary, in this role and placing him as the next CEO of the investment firm (WSJ)
New York City Observer Brad Lander Swipe Black Rock To name the CEO of Saudi Aramco to its board of directors: “Actions speak louder than words.” (bloomberg)
Sen. Ed Markey, Democrat of Massachusetts, has introduced a bill to Raising fees on private jet fuel To compensate for the lower taxes paid by private jet customers. (inside)
It issued a group of Chinese billionaires, including Pony Ma, the founder of Tencent General statements are rarely supportedIn President Xi Jinping’s controversial handling of the economy. (foot)
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