Here's why Netflix says it lost US paid subscribers for the first time in eight years - CNBC

Netflix Co-founder, Chairman & CEO Reed Hastings attends a Q&A during a Transatlantic Forum in Lille, France.

Sylvain Lefevre | Getty Images

Netflix blames its content slate, regional price increases and a "pull-forward effect" of its strong Q1 growth for its first quarterly loss of paid domestic subscribers since 2011.

The company on Wednesday reported a loss of 126,000 domestic paid subscribers compared with analysts' expectations for a 352,000 gain. Netflix also missed its own forecast for global subscriber growth by 2.3 million.

Its  shares plunged more than 11% Thursday.

The last time Netflix lost domestic subscribers was in 2011 after the company raised prices and tried to separate its streaming product from its DVD mailing service, sparking customer pushback.

Netflix said Wednesday its missed forecast was most pronounced in regions that saw price increases. The company said it does not believe competitive forces were to blame since "competitive intensity and our penetration varied across regions (while our over-forecast was in every region)."

Netflix said it will have a more robust content slate in the third quarter to attract more subscribers, forecasting 7 million paid net adds and revenue of $5.25 billion. The company said its TV show "Stranger Things" has already had strong viewership for its latest season, and it anticipates new seasons of "The Crown" and "Orange is the New Black" will be similarly popular.

Bernstein analyst Todd Juenger called the subscriber loss "the Q2 curse."

"There must be something about Q2 that makes it especially hard for Netflix to predict subs. Since 2016, they have missed their Q2 sub guidance three of four times," Juenger said in a note to investors Thursday.

While Netflix's subscriber loss in the U.S. is rare, its miss on international subscribers may be more troubling to investors since this represents its biggest growth opportunity. Netflix reported international net additions of 2.8 million subscribers compared with analyst estimates of 4.8 million.

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WATCH: Netflix's DVD business is still alive and profitable — here's what it looks like

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https://www.cnbc.com/2019/07/18/why-netflix-says-it-had-a-rare-subscriber-loss-in-q2-2019.html

2019-07-18 14:08:35Z
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Toys R Us makes small comeback with 2 stores, including New Jersey location - News 12 New Jersey

NEW YORK -

The first two new Toys R Us stores will open in November, including a location in New Jersey, as part of a small comeback of the defunct iconic toy chain in the U.S.

Richard Barry, a former Toys R Us executive and now CEO of the new company called Tru Kids Brands, says an online experience will follow.

He says brand partners and more details will be announced in coming weeks.

Plans are to open a store in the Galleria mall in Houston, Texas, and in Westfield Garden State Plaza in Paramus.

The first two locations will be about 6,500 square feet, a fraction of the brand's big box stores, which were about 30,000 square feet.

Barry noted stores opened later will be about 10,000 square feet.

For more information, click here.

AP wire stories helped contribute to this report.

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http://newjersey.news12.com/story/40806612/toys-r-us-makes-small-comeback-with-2-stores-including-new-jersey-location

2019-07-18 13:18:00Z
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Old School Corvette Owners Already Hate The C8 - CarBuzz

Another comical complaint quoted from the article is from a 70-year-old retired accountant from New Jersey who says "I just don’t like the look of a short front end,” and concludes that he thinks the view from the driver's seat would make it feel like "driving a bus.” Curiously, this is not a complaint we've often had driving front-engined supercars that already exist from the likes of McLaren, Ferrari, and Lamborghini.

To hammer home how reactionary Corvette fans can be, WSJ then brings up Tom Peters, who led the exterior design for previous generations of the Corvette. He remembered the controversy when they dropped the pop-up headlamps, specifically the hate mail he got and how "We would go to these Corvette events and people wanted to get physical with me.”

WSJ also brings up the outrage from the purists when Porsche switched from using air-cooled engines to water-cooled engines. However, they neglect to mention the fact that Porsche and the 911 is doing just fine and the point of evolving sports cars is to actually evolve. If Chevy was to keep listening to the cigar-chomping Tommy Bahama wearing retirees that are stuck in the past, the Corvette simply wouldn't improve.

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https://carbuzz.com/news/old-school-corvette-owners-already-hate-the-c8

2019-07-18 11:54:58Z
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Toys R Us makes a small comeback with 2 stores - KSL.com

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Toys R Us makes a small comeback with 2 stores  KSL.com

The first two new Toys R Us stores will open in November as part of a small comeback of the defunct iconic toy chain in the U.S..

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https://www.ksl.com/article/46596943/toys-r-us-makes-a-small-comeback-with-2-stores

2019-07-18 13:08:32Z
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Netflix Is Rolling Out A Low-Cost, Mobile-Only Subscription Plan For Users In India - BuzzFeed News

Netflix is launching a new, low-cost plan that will allow customers in India to only stream content on mobile devices.

The plan will roll out within the next three months, the company announced in a letter to investors on Wednesday.

Netflix said that the new plan “will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay TV ARPU (average revenue per user) is low (below $5).” The company did not announce how much the plan will cost, but it has been testing a $4 a month mobile-only plan in India and a few other Asian countries since March.

The announcement comes at the same time that Netflix suffered its first major loss of US subscribers in the last eight years. The streaming service lost about 130,000 subscribers in the United States from April through June, and blamed it on price hikes and its slate of original content failing to click with customers.

Netflix declined to comment on whether it's trying to make up for the loss of subscribers in the US by offering the service cheaply in India, a notoriously price-sensitive market. But sources familiar with the company’s thinking said that the launch of the low-cost plan in India was not a reaction to the drop in US subscribers, but the result of months of testing.

Experts, however, say that the fact that Netflix announced both things at the same time is telling.

“Netflix need to finds growth in emerging markets to drive subscribers,” said Tarun Pathak, an analyst at the technology industry analysis firm Counterpoint Research. “India is a mobile-first nation where many first-time users experience the internet on their phones, so the mobile-only plan in India will absolutely help Netflix increase their subscriber base.”

Video streaming has exploded in India over the last two years where data prices are relatively inexpensive.

Netflix has remained a niche player in the country because of its high pricing compared to competitors. Amazon Prime Video and Disney-owned Hotstar, for instance, are available for about $15 a year each.

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https://www.buzzfeednews.com/article/pranavdixit/netflix-low-cost-mobile-only-subscription-india

2019-07-18 11:48:00Z
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Netflix miss; Trade and earnings; Markets slide - CNN

The company added 2.7 million new subscribers in the second quarter of 2019, according to its earnings report released Wednesday. That's just over half of 5 million new subscribers that analysts had been expecting.

Netflix (NFLX) shares are set to fall 11% when US markets open.

It's a blow to the company at a time when competition with companies such as Disney (DIS) and CNN parent AT&T (T) is heating up.

Both rivals are expected to launch their own streaming services in the next year, causing Netflix to lose access to some popular shows like "Friends."

Next up among American tech giants: Microsoft (MSFT), which releases its results for the three months ending in June after US markets close.

2. Trade and earnings: Rising trade tensions are hurting Europe's most valuable tech company.

German business software group SAP (SAP) said Thursday that second quarter profits dropped 21% to €827 million ($930 million) because of restructuring costs and trade uncertainty.

SAP said that revenue from software licenses dipped 5% due to "trade-related uncertainty in Asia."

Investors had been expecting better results, and shares in the company dropped 7% in Frankfurt despite the group reiterating its full-year outlook.

It's the latest company to take a hit from the trade war between the United States and China. Car companies are particularly worried about tariffs at a time when auto sales are slowing.

3. Market dip: Markets are sliding as resurfaced trade concerns eat into investor optimism.

The Dow could fall 90 points, or 0.3%, when US markets open. The S&P 500 is poised to drop 0.3%, and the Nasdaq is tracking 0.4% lower.

European markets opened in the red. Britain's FTSE 100 dropped 0.7% in early trading, while Germany's DAX shed 0.9%.

That follows a tough trading session for stocks in Asia. Hong Kong's Hang Seng dropped 0.5%, while Japan's Nikkei shed 2%.

The Dow closed down 0.4% on Wednesday. The S&P 500 lost 0.7% and the Nasdaq fell 0.5%.

Before the Bell newsletter: Key market news. In your inbox. Subscribe now!

4. Coming this week:
Thursday — Japan inflation; Morgan Stanley (MS), Philip Morris (PM), Honeywell (HON), Microsoft (MSFT) earnings
Friday — American Express (AXP) and BlackRock (BLK) earnings; University of Michigan consumer sentiment

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https://www.cnn.com/2019/07/18/investing/premarket-stocks-trading/index.html

2019-07-18 11:33:00Z
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Qualcomm fined $272M in latest EU antitrust fine - The Verge

The EU has fined Qualcomm €242 million (around $272 million) for selling 3G modem chips at predatory prices in an attempt to drive a competing supplier, Icera, out of the market. The European Commission says that the company used its market dominance to sell chips meant for mobile internet dongles at below cost between 2009 and 2011. Today’s announcement marks the end of the EU’s nearly four year long investigation into Qualcomm’s actions.

Announcing the fine, the EU’s Competition Commissioner Margrethe Vestager, said that “Qualcomm’s strategic behavior prevented competition and innovation in this market, and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies.”

The EU’s investigation found that Qualcomm sold its 3G chips at below cost prices to Huawei and ZTE just as Icera was emerging as a viable competitor. The Commission called these price concessions “targeted” and said that they “allowed [Qualcomm] to maximise the negative impact on Icera’s business.”

Today’s fine is just the latest in a series of antitrust rulings that Qualcomm has been hit with in recent years. Earlier this year, a US judge ruled that Qualcomm charges “unreasonable high” royalties for its patents, and criticized its practice of offering discounts to customers who agree to exclusively use its chips. This latter practice was also the subject of a $1.2 billion fine, also from the EU, that was issued last year. Regulators in South Korea, China, and Taiwan have fined Qualcomm over a variety of anticompetitive practices.

However, unlike the previous antitrust rulings, today’s fine is unlikely to have an ongoing impact on Qualcomm’s bottom line. The predatory pricing the EU says Qualcomm engaged in ended in 2011, and in today’s ruling the Commission has not criticized any of the company’s current practices, or the amounts that it charges for its patents or licenses. Instead the fine, which amounts to 1.27 percent of the company’s 2018 revenue, is designed to deter other companies from attempting the same thing.

Unfortunately for Icera, the fine has come too late to save its modem business. The company was acquired by Nvidia in 2011, which exited the modem market in 2015. Nvidia had hoped to integrate the company’s modems into its Tegra processors, but the plans never made it to fruition.

Now, as we move towards the 5G era, the modem market is due to lose another player. Intel announced that it would exit the 5G modem business after Apple and Qualcomm ended their protracted legal battle, leaving just a handful of players left to compete with Qualcomm’s 5G modems.

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https://www.theverge.com/2019/7/18/20678641/qualcomm-eu-antitrust-fine-icera-nvidia-3g-dongles

2019-07-18 10:34:07Z
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