There was a surprising yet familiar sight when the mail arrived one day this week at an old neighbour’s house where I’m staying, on a return to the Bay Area.
Among all the flyers and junk mail was a slim red envelope that took me back nearly 20 years. It was a Netflix DVD delivery.
While streaming has succeeded spinning a disc to get your entertainment, the DVD service still exists for people like my friend. He prefers to consume media at a slower pace, get those director’s commentary add-ons and discover the many movies still not available online.
Having physical media delivered is also a way of making you more aware of your subscriptions and their value to you. We reported this week that UK households cancelled video subscriptions in record numbers in the first quarter, as they were forced to take stock of their spending.
Consumers walked away from about 1.5mn video on-demand accounts as they curbed non-essentials to cope with the cost of living squeeze, reinforcing concerns that the pandemic-fuelled boom in streaming is over.
Netflix’s earnings last night confirmed the trend. The company said its decade-long run of subscriber growth ended in the first quarter with a decline of around 200,000 users, and a further 2mn expected to be lost in the current quarter.
The news has sent its shares down 35 per cent today and, as Lex points out, since its peak late last year, Netflix’s stock has crashed more than 60 per cent, reflecting a loss of around $200bn in equity value.
The company explained its biggest markets had reached saturation point and there was rising competition for subscribers from the likes of Apple and Disney’s streaming services.
It aims to shore up the business with higher subscription fees and the development of a lower-priced ad-supported service. It will also put the squeeze on shared accounts — it estimates that at least 100mn users are watching Netflix through shared passwords.
That doesn’t affect me watching a DVD movie with my old neighbour, but all those family and friends sharing out there are on notice that the era of binge-watching online for free is coming to an end.
The Internet of (Five) Things
1. Meta suffers Brazilian setback
Meta’s long-awaited plan to allow users to send money to businesses via WhatsApp in Brazil — what would have been a world-first for the encrypted messaging app — has been hit by clashes with potential payments partners. It’s the latest blow to the tech giant’s sprawling ecommerce ambitions and push into financial services.
2. Meta and Google restrict Lee
In accordance with US sanctions, Google and Meta have restricted the social media presence of former Hong Kong security chief John Lee, who is running uncontested with Beijing’s backing for city leader next month. YouTube suspended Lee’s campaign channel, while Facebook and Instagram have banned payment services for the former bureaucrat.
3. JET looks to offload Grubhub
Just Eat Takeaway is exploring a sale of Grubhub, ceding to months of investor pressure over a deal it struck at the height of the pandemic lockdown-driven food delivery boom. The entire JET group’s market capitalisation of $6.3bn is now lower than the $7.3bn it paid just for Chicago-based Grubhub. Helen Thomas says the acquisition always looked unappetising.
4. Musk struggles to attract PE interest in Twitter
Elon Musk’s $43bn bid to take Twitter private is struggling to draw interest from several large institutions with the financial firepower to pull off such a large leveraged buyout, in part owing to concerns over whether the social media group can become more profitable. Our Moral Money newsletter says Twitter shareholders should consider the social impact of a Musk takeover.
5. Muzmatch and Match are not an item, court rules
Muslim marriage start-up Muzmatch has lost the right to use its name after a trademark dispute with dating giant Match Group, which owns Match.com, Hinge and Tinder. The UK Intellectual Property Enterprise Court on Wednesday ruled that Muzmatch took an “unfair advantage” over the association of the word with Match, which could lead consumers to believe the two companies were connected.
FT Future of Finance, June 16-17
The Financial Times is hosting the FT Future of Finance conference, live-streamed from the heart of Europe’s leading tech festival, The Next Web (TNW). Join us to explore how new technologies continue to uproot existing banking operations and how fintechs are accelerating the transformation. Register for free today
Tech tools — B&O’s Beoplay EX earbuds
Bang & Olufsen has unveiled redesigned wireless earphones, with a look that reminds Engadget of Apple’s AirPods. The colours are definitely different, with the Beoplay EX available in Anthracite Oxygen, Gold Tone and Black Anthracite. B&O says the stem-based design ensures a stable fit for the user and the waterproof earbuds boast the largest ever speaker driver used by B&O in such devices. They will be on sale from May 5 at £349 / $399 / €399.
