Taylor Swift hypes her "The Tortured Poets Department," New York Post lays off some staffers, Judge Juan Merchan scolds the press, MAGA Media targets Mike Johnson, TikTok blasts Congress as lawmakers ready to pass divest-or-ban legislation, Google fires 28 employees over in-office protest, Quentin Tarantino abandons film project that was set to star Brad Pitt, and so much more. But first, the A1. |
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Netflix Drops the Curtain |
CNN Photo Illustration/Mario Tama/Getty Images |
In the early stages of life, a key metric is growth. As children age, their parents measure precisely how much they are flourishing in size, using charts to keep close eyes on and document the journey.
But when children mature into young adults, physical growth is no longer the barometer used to judge progress. Other metrics come into play.
Netflix is trying to persuade Wall Street that it is now all grown up. After squeezing out millions of additional subscribers via its password sharing crackdown and through the introduction of cheaper advertiser-supported plans, the streamer knows that its growth spurts are coming to an end — and now it wants investors to stop obsessing over those pesky membership numbers and instead focus on other metrics.
"In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential," Netflix told shareholders Thursday as it reported quarterly earnings. "But now we're generating very substantial profit and free cash flow. We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth."
To that end, Netflix said that it will no longer report quarterly subscriber numbers, starting in 2025. Alas, the metric that Wall Street has forever judged Netflix on — the metric that prompted legacy media companies to burn endless piles of cash in their bids to compete with the streamer — will be retired. It's going the way of the woolly mammoth, Netflix said. Goodbye!
The decision to shut off transparency on the metric represents a significant turning point in the streaming revolution. For years, Netflix has prided itself on being extraordinarily transparent. Now it is aiming to hold its cards closer to its chest. And given that streaming giant is the trendsetter in the space, one could expect that other media companies will be inspired by the company's move and also opt to cease reporting such data.
To be fair, what Netflix is saying isn't necessarily off base either. As the company shifts its business model away from subscriptions and toward advertising and other revenue streams, it makes sense to consider how much time users are spending on the service. The more content a user consumes on Netflix, the more likely they are to continue paying for the service, and the more money Netflix then makes from that single subscriber (particularly if they are in an advertiser-supported tier).
"We're focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction," Netflix underscored in its letter to shareholders.
Regardless, less transparency in an already opaque industry is not ideal. The walled garden of streaming already lacks the same detailed viewership data that Nielsen collects on linear television broadcasters. Now, visibility into the streaming world will get even dimmer. Instead, Netflix said it will "announce major subscriber milestones" as it crosses them. But that's a very general statement and it is unclear what the company defines as a milestone. The announcement from Netflix managed to overshadow its otherwise stellar quarter. The company handily beat exceptions and added a staggering 9.3 million subscribers, meaning it now boasts nearly 270 million in total. Netflix also beat analyst expectations on both earnings and revenue.
But it wasn't all good news. Netflix forecasted its subscriber growth to be lower in quarter two, chalking it up to "typical seasonality." That led the stock to slide nearly 5% in after-hours trading.
Whether "typical seasonality" is solely to blame, or whether the streamer is simply starting to hit a ceiling, is hard to tell. Perhaps it is a mix of both. Whatever the cause, the stock sliding on the less-than-ideal outlook is a prime example of why Netflix wants Wall Street to stop focusing on its subscriber numbers. And, in one year's time, investors won't have a choice. |
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CNN Photo Illustration/Taylor Swift |
Spotlight on Swift: Are you ready for it? Taylor Swift's highly anticipated 11th album, "The Tortured Poets Department," is set to drop at midnight. You don't need me to say it: The album by Swift, who is at the apex of her powers, is expected to be a towering success and will very likely be the year's top album from a commercial standpoint. Swift disclosed that the first single will be "Fortnight," which features Post Malone. "I've been such a huge fan of Post because of the writer he is, his musical experimentation and those melodies he creates that just stick in your head forever," Swift wrote on her Instagram page, hyping the release. Swift said the "Fortnight" music video will drop at 8pm ET on Friday. ► Ahead of the release, The WSJ's Allie Jones published a feature on Tree Paine, Swift's longtime power publicist who has gained fame amongst Swift fans. "The fan obsession has been fueled, in part, by how little Paine has shared publicly about herself," Jones writes. |
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- First in Reliable | The New York Post laid off roughly 3% of its workforce, or about a dozen employees. Publisher Sean Giancola and Editor-In-Chief Keith Poole told staff in a memo that the cuts were part of larger restructuring to ensure the tabloid is "best positioned for the future." Read their full memo here.
- CalMatters, the California-focused nonprofit news outlet, acquired The Markup, the tech- and data privacy-focused nonprofit news site. (Axios)
- Jessica Testa looked at Highsnobiety, while asking a larger question: "What is a magazine now?" (NYT)
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- Apollo Global Management has started talking with Sony Pictures Entertainment "about teaming up for a joint bid to acquire Paramount," Benjamin Mullin and Lauren Hirsch report. (NYT)
- Former CBS boss Leslie Moonves was hit with a $15,000 fine for receiving secret details concerning an LAPD sex assault probe targeting him. (Variety)
- Music rights investor Concord struck a deal to buy Hipgnosis Songs Fung — which owns the rights to catalogs from A-list musicians such as Neil Young, Journey, Justin Timberlake, Shakira and plenty more — in a $1.4-billion deal. (Bloomberg)
- Richard Rushfield argued that A24 is "still acting like a little micro-budget indie" while "taking some big swings." He then contended, "The results through that lens are not so spectacular." (The Ankler)
- Amazon has pulled the plug on its standalone Prime Video subscription, requiring new users to purchase a full Prime plan. (Cordbusters)
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- The Economist hired Ethan Wu as its Asia correspondent. (TBN)
- Morning Brew hired Cassie McGrath as a health care reporter. (TBN)
- BBC News hired Mitchell Labiak as a business reporter. (TBN)
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CNN Photo Illustration/Timothy A. Clary/Pool/AP |
A Call for Caution: The judge overseeing Donald Trump's historic hush money criminal trial skewered the press on Thursday, directing newsrooms to be more cautious about the information they publish that could inadvertently reveal the identity of a juror. "I'm directing that the press simply apply common sense and refrain from writing about anything that has to do with physical descriptions, it's just not necessary, it serves no purpose," Judge Juan Merchan said. The scolding came after a juror told the judge that she no longer wished to serve after portions of her identity had been made public. "The first thing she said was she was afraid and intimidated by the press," Merchan noted. CNN's Hadas Gold has more here. ► A strong point from Brian Stelter: "Responsible newsrooms are having thoughtful conversations about how to handle Trump juror details that are shared in open court. But how much do their decisions really matter when there's a separate pro-Trump propaganda media that will publicize every single detail without hesitation?" |
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- While Rupert Murdoch's outlets appear to support Rep. Mike Johnson, other facets of right-wing media very much do not. Charlie Kirk, for example, called on the embattled House speaker to "resign" and effectively accused him of having "betray[ed] the voters." (MMFA)
- 🔪 Knives out: Breitbart's Matt Boyle published an article targeting a Johnson staffer, portraying her as disloyal to the MAGA Movement.
- Other far-right blogs such as The Gateway Pundit are mocking Johnson and relishing in the fight Marjorie Taylor Greene is bringing to him.
- Switching gears: Adam Sichko profiles Clay Travis, taking a hard look at "the business of outrage." (Nashville Business Journal)
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CNN Photo Illustration/Bing Guan/Bloomberg/Getty Images |
TikTok on the Brink: TikTok on Thursday laced into Congress for including divest-or-ban legislation into a package of bills primarily aimed at providing aid to Ukraine and Israel. "It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually," a TikTok spokesperson told me in a statement. The spokesperson declined to say what, if anything, the company is doing to actually fight back against the congressional action, though Politico reported officials from the Chinese Embassy had lobbied against it recently. 🔍 Zooming in: The inclusion of the TikTok legislation in a foreign aid package makes it much more likely the measure will pass. If that occurs, President Joe Biden has promised to sign it, dealing a colossal blow to its Chinese parent company ByteDance, which will have just nine months to sell TikTok before the short-form video app is banned in the U.S. |
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| - Google fired 28 employees protesting at its offices over a deal the company has with the Israeli government. (AP)
- A real game-changer: Apple is starting to roll out AirPlay in hotel rooms. (The Verge)
- Meta is integrating A.I.-powered smart assistants across Instagram, Facebook, WhatsApp, and Messenger. (NYT)
- Mark Zuckerberg's "battle with ChatGPT begins now," writes Alex Heath. (The Verge)
- Gerrit De Vynck: "The A.I. hype bubble is deflating." (WaPo)
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CNN Photo Illustration/Vianney Le Caer/Invision/AP |
Tarantino's Plot Twist: Quentin Tarantino has had a change of heart. The famed director will no longer make "The Movie Critic," which was slated to be his tenth and final film. According to Deadline's Justin Kroll, who first reported the news, Tarantino "simply changed his mind" about making the movie, which had been set to star Brad Pitt. Kroll reported that Tarantino will now be "going back to the drawing board to figure out what that final movie will be." More from Kroll here. |
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| - New photo-based advertisements for A24's "Civil War" have sparked controversy. (THR)
- Shots fired: Brian Cox found Joaquin Phoenix's performance in Ridley Scott's "Napoleon" to be "truly terrible," saying he "would have played it a lot better." (Variety)
- Zack Snyder revealed that he talked to Leonardo DiCaprio about playing Lex Luthor in "Batman v. Superman." (The Wrap)
- Conan O'Brien's new Max show, "Conan O'Brien Must Go," is receiving positive reviews from critics. (Rotten Tomatoes)
- Netflix will end "The Witcher" after its fifth season. (Deadline)
- Netflix dropped the trailer for Richard Linklater's "Hit Man," starring Glen Powell. (YouTube)
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Thank you for reading! This newsletter was edited by Jon Passantino and produced with the assistance of Liam Reilly. Have feedback? Send us an email. You can follow us on Instagram, Threads, and LinkedIn. We will see you back in your inbox next week. |
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