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Netflix’s Strong Strike Defense May Still Have Some Cracks

There was plenty to impress shareholders in Netflix’s latest financial report yesterday, including new subscriber growth and hopes of improved cash flow from reduced content spending due to the strike.

But the company’s stock fell in after-market trading and continues to fall this morning. That’s partly because Wall Street expected better numbers. But despite being better protected from Hollywood’s shutdown than many of its rivals, the streaming giant will ultimately be hit by the near-total halt to American film and television production. There are also concerns that

The company scored some notable wins. A global crackdown on password sharing added 5.9 million subscribers in the second quarter, bringing the total to 238 million, reversing a year-over-year decline in subscribers. Sales increased year-on-year, but fell short of expectations.

And, as many analysts had predicted, Netflix will post 3.5 billion in free cash flow this year, thanks to lower content spending as Hollywood productions were effectively shut down due to writers’ and actors’ strikes. He said he expects it to rise from $5 billion to at least $5 billion.

Netflix is ​​the most well-positioned media player to strike. Not only has the company gotten a big head start in streaming, but it also has a vast network of international studios that are unaffected by the Hollywood outage. For example, our investment in Korean productions has strengthened our business in that country, and some of that content has since gained audiences around the world.

Netflix’s focus on streaming has also helped it sidestep some of the other problems plaguing its peers, such as lower-than-expected box office performances for big-ticket blockbusters. (It was also prominent in ChinaSome in Hollywood hoped it would make up for the poor performance at home. )

However, prolonged attacks can cause some damage. The company plans to cut back on content spending in 2023, but will have to pay US production costs at some point. Netflix itself says this.Some clumping may occurAnd investors may worry that streaming costs will rise for media companies if writers and actors are given a bigger slice of the economic pie to settle this conflict.

Netflix executives are probably alarmed by the company’s bankruptcy. selected for criticism By punching writers and actors (and Poor response to comments Disney’s Robert Iger), which stuck with its mostly offensive comments about the labor dispute. “This strike is not the result we wanted,” said co-CEO Ted Sarandos. told analysts yesterday. (He also noted that his father was a union electrician.)

Tesla’s shrinking profits have spooked investors. The electric car maker’s shares fell about 3% in after-hours trading. after the company said Price competition with rivals continues to squeeze profit margins. However, Tesla CEO Elon Musk said the company: invest more than $1 billion On supercomputers aimed at advancing self-driving products.

Wheat prices soar on threat of Russian blockade. Wheat futures in Chicago surged as much as 9% after Moscow said it was hostile to ships crossing the Black Sea to Ukraine. The prospect of wheat shortages fueled fears of a return to inflation just as food prices seemed to be finally falling in many countries.

China has rejected John Kerry’s appeals for faster progress in tackling climate change. President Biden’s climate change envoy left Beijing empty-handed after three days of negotiations over new ways the two countries could work together to reduce carbon emissions. President Xi Jinping instead said China would continue its own efforts at its own pace. On the one hand, the Earth is most likely to set a global temperature record.

The Fed fined Deutsche Bank $186 million. Central bank officials said there had been “insufficient progress in remediation” by German financial institutions to tighten money laundering regulations. It’s the latest blemish on Deutsche Bank, which has paid billions of dollars in fines in recent years for failing to crack down on illegal behavior by its clients.

Wesleyan University is the latest university to do away with the traditional admissions system. Weeks after the Supreme Court overruled affirmative action in higher education, Connecticut educational institutions announced they would no longer prioritize children of graduates. Both Democratic and Republican critics of traditional admissions policies say they disproportionately favor wealthy white applicants. Advocates say the practice helps schools raise more money.

Lawmakers, like most people, talk a lot about artificial intelligence. But with industry leaders massing in Washington and politicians broadcasting plans to closely monitor developments, we can’t expect the bill to be introduced anytime soon.

Instead, focus on regulators and courts. There, prominent authors, actors, and other creators have filed a number of lawsuits that could shape the contours of AI before lawmakers even embark on it.

“Congress must join the AI ​​revolution” Majority leader Senator Chuck Schumer said he discussed a range of AIs at an event with IBM in New York this week.insight forum‘, he has plans for this fall with companies, experts and tech commentators. The conference aims to help politicians better understand the technology and will focus on national security, privacy, workforce impacts, high-risk applications and bias.Some lawmakers have already made proposals on AI, but Schumer emphasize patience Given the complexity.

“There is no need to treat AI as an imminent catastrophe.” Dario Gill, director of research at IBM, told DealBook. He was one of dozens of company representatives who met with congressional staff in Washington yesterday. “Exaggerated rhetoric” that technology will destroy humanity or replace jobs fails to recognize its limits, he said.He also argued that existing rules are sufficient to start regulating AI.

Regulators say they are investigating. Securities and Exchange Commission Chairman Gary Gensler said AI: pose risks to financial stabilityAnd you’ll probably need new rules to protect your system. The agency already monitors fraud, conflicts of interest and bias, he added.

Last week, the Federal Trade Commission announced its first large-scale investigation into ChatGPT developer OpenAI over potential consumer harm from chatbots. And last month, the Consumer Financial Protection Bureau highlighted “the increasing adoption and use of chatbots by financial institutions.” violate the rules.

The most urgent action may be court. Creators, including comedian Sarah Silverman and authors such as James Patterson and Margaret Atwood, demand compensation from the company And you can sue over the use of intellectual property in large language models. Similarly, an increasing number of Internet users are demanding a say in how their data is used and filing lawsuits. This line of action across Congress shows that regulators and judges, not lawmakers, may ultimately be at stake. lead the way in defining the boundaries of AI

Other AI News:

  • apple is Develop a chatbot rival In contrast to ChatGPT and Google’s Bard, some engineers internally call it “Apple GPT.”

  • Google has pitched a new AI tool that can create news stories to news outlets like News Corp, which owns The New York Times and The Wall Street Journal. Benjamin Marin and Nico Grant of The Times reported that some executives who saw the pitch described the technology as “disturbing.”

  • Researchers believe that ChatGPT Poor performance of the selected taskI did more last month than I did in March, including solving math problems.


— Approximate headcount reductions due to layoffs or cutbacks in the first six months of the year by Wall Street’s largest banks According to Bloomberg. The slowdown in deal closings and capital market activity has been a big factor.


Throughout the coronavirus pandemic, economists and experts theorized about the lasting effects of the coronavirus on the labor market. But few trends remain, whether it’s “quiet retirement” or early retirement, and the labor market appears to have fully recovered, write The Times’ Gina Smirek and Ben Casselman. there is

Women are returning to work at a rapid pace. In the early days of the pandemic, women were overwhelmingly unemployed, a phenomenon called ‘withdrawal’, which led to fears that women would be permanently removed from the labor market. But recent employment figures show that women are recovering faster than men.

As of June, the employment rate for women in their prime has hit a record high.

Information of sale

  • Microsoft and Activision Blizzard have extended the deadline to complete the $69 billion deal to October, saying they expect major UK regulators to approve the deal. (New York Times).

  • Activist investor Elliott Investment Management reportedly Acquired a large stake in Catalent, a major contract pharmaceutical manufacturer. (WSJ)

  • The name Warburg Pinchas Jeffrey Perlman becomes presidentto replace former Treasury secretary Tim Geithner as investment firm’s next CEO (WSJ)

policy

  • Brad Lander, New York City Comptroller criticized black rock “Actions speak louder than words,” he said of the appointment of Saudi Aramco’s CEO to the board. (Bloomberg)

  • Massachusetts Democratic Senator Ed Markey introduced the bill. Raise taxes on private jet fuel This is to compensate for the tax relief paid by private plane customers. (insider)

  • A group of Chinese billionaires, including Tencent founder Pony Ma, Rare public statement endorsementPresident Xi Jinping’s handling of the economy is controversial. (FT)

climate

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