|Day's range||1.0000 - 4.1000|
Virtual reality hasn't taken off yet, but Apple could be the company to give it the boost it needs.
Stocks in 2020 are still poised for gains, but maybe not at the same rate as 2019.
Google is betting big on health care - so big, that the tech giant has confirmed it's collecting health data on millions of Americans through a partnership with Ascension.
(Bloomberg) -- Google is taking its deepest dive yet into the financial lives of its users with plans to roll out a checking-account service.Citigroup Inc. and a California credit union are the tech giant’s initial partners for the venture, which will let users access their bank accounts through the Google Pay app beginning next year, according to people familiar with the matter. Other banks could join up later, the people said, asking not to be identified because the plans haven’t been announced.The move is the latest sign of Silicon Valley’s determination to muscle in on financial firms’ territory, looking to expand their hold on customers and accumulate data on their finances. At the same time, it shows banks are more willing to pair up with technology companies in their quest to avoid getting shut out of the relationship entirely. In the Google arrangement, the financial institutions will handle most of the compliance requirements.Google has spent years building out its payments capabilities, offering consumers the ability to send money to friends and check out both online and in stores through Google Pay. With the checking accounts, consumers will be able to receive their paychecks and transact solely inside the Google ecosystem.“We’re going to see more of this, but it’s not the death of banking,” Bryce VanDiver, a partner with Capco who advises banks and payment companies, said in a telephone interview. “Compliance is still being manged by Citi. If you look at banks’ core competencies, compliance being one of those, they’re really good at that.”Representatives for Google and Citigroup declined to comment. The Wall Street Journal reported Google’s plan earlier Wednesday.For Google, the trove of data associated with checking accounts and financial products is another step in its push to collect information on all aspects of consumers’ lives. The firm has a wealth of information on consumers’ search behavior from its flagship site as well as partnerships with the largest U.S. health-care systems to analyze consumers’ health data. The move comes at a time when Google and other large tech companies are under increased scrutiny in D.C. with antitrust probes around competition law.“This is probably more about Google Pay and how they plan to position that going forward to access all financial products, not just credit cards,” VanDiver said.One of the people said Google partnered with Citigroup in part because the lender has spent the last year building out its digital banking arm, an effort that’s helped the bank gather more than $4 billion in deposits this year.The partnership is a bit of a shift for Citigroup, which has been relying on marketing its digital bank accounts to existing customers in the firm’s sprawling cards business. The New York-based company said earlier this month it would offer special perks for checking accounts to customers of its co-brand credit card with American Airlines Group Inc.“This year we’ve increased the deposits we’ve raised digitally more than fourfold,” Anand Selva, who leads Citigroup’s consumer bank in the U.S., said at an investor conference this month. “As we continue to test and learn and enhance our digital capabilities and experiences, the digital deposit momentum has accelerated through the year.”For the finance industry, the worry is that tech giants could one day replicate the success of Alipay and WeChat Pay in China, where money flows through digital systems without the need for banks.To fight off the threat, banks are striking deals to keep a firm hold on their customers. Apple Inc. paired with Goldman Sachs Group Inc. this year to offer a credit card that extended $10 billion in credit lines as of Sept. 30. Uber Technologies Inc. announced last month that it would offer a bank account to drivers on its platform through a partnership with Green Dot Corp.\--With assistance from Julie Verhage.To contact the reporter on this story: Jenny Surane in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve Dickson, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc. introduced its first major update to the MacBook Pro laptop in three years on Wednesday, adding a slightly larger screen to the top-end model, improved speakers, a better keyboard, and faster processors from Intel Corp.The new computer has a 16-inch screen, bigger than the 15.4-inch screen on the previous version. That alone may not be enough to spur upgrades or elicit switchers from Windows PCs, but the new “Magic Keyboard” is designed to address a pain point that professional users have complained about for years. The new models start at $2,399, Apple said.The Mac Pro desktop computer, which Apple announced in June, will go on sale December, the company said. The Mac Pro starts at $5,999 and its optional screen and costs another $5,999, making the set one of the most expensive computer systems on the market.The Mac continues to be a steady seller for Apple, generating about $26 billion in fiscal 2019 or about 10% of Apple’s total revenue, even as Apple pushes more portable devices like the iPad and iPad Pro.The MacBook Pro laptop is Apple’s highest end portable computer and it is differentiated by its faster processor and larger screen that are ideal for video editors, software developers, and gamers. The device saw its last major update in 2016, which added improved displays, a larger trackpad, and a new design. The new models include main processors from Intel, not Apple-made chips that it plans to add to at least some computers as early as next year, Bloomberg News has reported.In 2015, Apple switched to a keyboard with what is known as a “butterfly mechanism,” which gives it less travel but makes it thinner. The new keyboard on the latest model is less prone to breaking than the current ones, Apple said. Due to several issues with the keyboards on current and earlier models of the MacBook Pro and MacBook Air, including sticky keys, Apple has opened up rare free repair programs.The MacBook Pro and Mac Pro cap a year of Apple product releases that also included the iPhone 11 line, Apple Watch Series 5, and AirPods Pro.To contact the reporter on this story: Mark Gurman in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Unlike what some academics in finance say, investors can in fact time the stock market. First, use charts properly. Second, spot a clear follow-through.
Likelihood of a soon-to-be-signed U.S.-China trade deal, upbeat holiday season sales expectations and decent earnings have led the Nasdaq-100 ETF to a new high.
(Bloomberg Opinion) -- Netflix Inc. broke the cable-TV bundle. Now it’s time to put it back together again, and cable giants like Comcast Corp. look eager to help.It’s true that streaming has created more choices for consumers. You don’t necessarily need to subscribe to a $100-a-month cable package just to access kid-friendly Disney programs or re-runs of “The Big Bang Theory” (or pay extra for the ability to DVR the episodes you’ll miss). There are on-demand apps for both of those now — Disney+, which launched on Tuesday, and HBO Max, which becomes available in May. At the same time, one major consequence of the streaming wars is that they’ve caused a new kind of consumer frustration. It feels like everything is becoming segregated across various services with their own individual paywalls. That requires knowing which TV programs and movies reside where, having to toggle among those different apps — which isn’t as smooth as simply channel-surfing — and managing multiple monthly subscriptions. Sign up for enough of them, and it can easily add up to the cost of good old cable, especially given that a strong internet connection is a necessary component. It’s a situation that’s unsustainable, and already the media and cable giants seem to be eyeing the reintroduction of bundles to make things easier on consumers (and to make their subscriptions stickier).As Comcast’s Matthew Strauss put it, "The great un-bundling could give birth to the great re-bundling.” He should know. Strauss is the former executive vice president of Comcast's Xfinity Services; he was recently put in charge of Peacock, the company’s own streaming product set to launch in April with content provided by its NBCUniversal sports and entertainment division. It will join Netflix, Disney+, Apple TV+, Amazon Prime Video, HBO Max and many more in the new streaming marketplace."How could someone possibly navigate all these apps? That's not how you watch TV,” Strauss said in a phone interview in September. “My prediction is that we're going to come full circle."Strauss and I were on the topic because Comcast had just made something called Xfinity Flex free to customers who subscribe to the company’s internet services but not its cable-TV packages. Flex is essentially a dashboard where users can access streaming subscriptions. It’s a lot like the home screen shown when powering up a Roku, Apple TV or Amazon Fire TV Stick — a display of tiles teasing different programs or services. The Xfinity X1 cable service is still front and center for Comcast, but Flex is a sign that the company is at least exploring how to cater to what may some day be a mostly internet-only customer base. While it may not be a bundle, it’s not hard to make the leap and envision a day when Comcast tries to offer bundles of streaming apps to its internet subscribers, serving as the go-between for programmers and customers just like it does in the cable world. Walt Disney Co. is already providing some evidence that it’s thinking the same way. As I noted in my column Tuesday, the entertainment giant recognizes that many viewers want more than a single app dedicated to superhero flicks and G-rated content. That’s why, alongside the launch of Disney+, it also began offering a $13-a-month bundle that tacks on Hulu and ESPN+. While Apple Inc.’s own original works such as “The Morning Show” can be watched with an Apple TV+ subscription, the company also has separately taken to aggregating rival apps in Apple TV Channels, where users can sign up on an a-la-carte basis. Similarly, Amazon.com Inc. has Prime Video and Amazon Channels. These aggregation efforts could all be precursors to bundling.Charter Communications Inc. CEO Tom Rutledge, during a September investor conference, discussed the challenges for so-called direct-to-consumer businesses — such as Disney+, CBS All Access, and so on — that traditionally haven’t had to deal directly with subscribers because the cable giants had typically maintained those relationships. Suddenly, programmers are having to handle billing and service issues and come up with customer-retention strategies. (Disney got a taste of this Tuesday, when its brand-new app was hit by technological glitches.) “All of those activities we do on behalf of traditional pay-TV vendors,” Rutledge said. It’s very hard to get “economies of scale in the direct-to-consumer marketplace like we’ve gotten out of the historic business.” That certainly sounds like someone who’s ready to negotiate some new distribution partnerships. Direct-to-consumer is industry jargon referring to how a streaming app bypasses the traditional distributors — flying directly past Charter and Comcast to the end user. So wouldn’t it be something if the winners of the streaming wars turned out to be none other than the cable companies? At the very least, remnants of their bundling model are sure to live on in streaming.To contact the author of this story: Tara Lachapelle at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Hon Hai Precision Industry Co. reported quarterly profit above analysts’ estimates, indicating solid demand for Apple Inc.’s iPhone 11 range.The assembler of most of the world’s iPhones and iPads posted net income of NT$30.7 billion ($1 billion) for the September quarter, compared with an average estimate of NT$27.7 billion.Apple last month forecast holiday revenue that surpassed Wall Street’s projections, suggesting healthy appetite for iPhone 11 models with lower entry prices and vastly improved cameras. It’s now said to expect iPhone shipments to return to growth in 2020 when it finally introduces its own 5G devices -- a boon to hardware suppliers such as Hon Hai and chipmaker Taiwan Semiconductor Manufacturing Co. coping with a decelerating smartphone market. Assembly partners like Hon Hai and TSMC typically begin gearing up for production weeks, if not months, ahead of a device’s commercial launch.The outlook for Apple and its main suppliers remains overshadowed by an ongoing trade war. AirPods, Apple Watch, HomePod and other devices made in China have been hit with 15% tariffs, and U.S. President Donald Trump hasn’t ruled out the possibility of a levy on iPhones starting Dec. 15. Hon Hai said it’s getting into the production of wearable gear next year, potentially competing for more Apple business but also increasing its exposure to the trade war.Hon Hai, which gets half its revenue from its Cupertino, California partner, is now diversifying away from its main Chinese production base to mitigate the impact of potential punitive tariffs. It’s spending more than NT$17 billion building factories in India and Vietnam, responding to customers’ needs, Chief Financial Officer David Huang said at an earnings conference. Those two countries will become regional manufacturing hubs, he added.Read more: Apple Expects IPhone Shipments to Return to Growth in 2020Hon Hai’s investment encapsulates a fundamental trend that’s beginning to shake up production of most of the world’s electronics. Taiwanese companies like Hon Hai, which today make most of the most recognizable brands, began investing in China decades ago, kicking off a transformation that’s made China the world’s factory floor. But faced with growing trade tensions and U.S. tariffs, the leaders of those companies -- which typically operate on wafer-thin margins -- are reconsidering their commitment to China.Read more: The Tycoons Behind China’s Gadget Factories Boom Prepare to ExitAlthough any pivot away from the country is just starting, factories that leave won’t come back anytime soon. In Hon Hai’s case, billionaire founder Terry Gou has even promised to shift jobs and production into the American heartland. Gou has said he intends to press ahead with construction of a display panel factory in the state of Wisconsin, an endeavor once tagged as a $10 billion investment but that has fallen far behind schedule. Vice Chairman Jay Lee said that project was “‘on track.” Hon Hai has completed initial construction on the first, main factory and the company will also target the defense and aviation markets with its panels, he added.Hon Hai executives also forecast a rebound in consumer electronics demand in 2020, which could help prop up its top line. The company reported NT$1.39 trillion in sales for the September quarter, barely changed from a year earlier. Chairman Young Liu said the firm’s goal is to achieve 10% gross margins within three to five years. Its shares closed down 1.4% ahead of the earnings on Wednesday, after gaining 27% this year.“The lower pricing of the iPhone 11 has been effective in driving demand past the Street’s expectations,” Sean Lin, an analyst at President Capital Management Corp., said in a Nov. 4 note.(Updates with executives’ comments from the fifth paragraph)To contact the reporter on this story: Debby Wu in Taipei at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Silicon Valley’s solution to the global tech-lash is starting to sound strangely like the old model of Quaker capitalism popular in 19th-century Britain. A record number of people in California now live in vehicles — unable to rent or buy a home. Apple is not the only company that thinks it’s a good idea to wade into the state’s property market and try to alleviate the situation.
(Bloomberg) -- Soon after Alex Chow fell off the edge of a parking garage in Hong Kong, the allegations began spreading online.Posts circulating in chat groups and on social media claimed the 22-year-old student was chased -- and maybe even pushed -- by police who were clearing protesters with tear gas nearby. Officers blocked an ambulance from reaching Chow, the posts alleged, delaying aid that could have saved his life.Nevermind that the claims were unsubstantiated, that police denied chasing Chow and that mainstream news outlets, including the South China Morning Post, described the circumstances of his fall as unclear. Hundreds of protesters seized on his Nov. 8 death to engage in clashes with police that resulted in one person being shot on Monday.As Hong Kong’s anti-government protests stretch into their 23rd straight week, the city is being inundated with online rumors, fake news and propaganda from both sides of the political divide. The polarizing rhetoric is fueling distrust and violence, making it harder to resolve the crisis that has plunged Hong Kong into a recession and raised doubts about the city’s role as Asia’s premier financial hub.“False information feeds itself to polarize public opinion,” said Masato Kajimoto, an assistant professor at Hong Kong University’s Journalism and Media Studies Centre, who has spent the last seven years studying fake news. “I worry that it reaches a point where reconciliation of this divide is no longer possible.”While the spread of disinformation has become a growing concern around the world, few places have been as affected in recent weeks as Hong Kong. In the past 24 hours alone, local authorities have denied rumors that they ordered police to fire on protesters at will; planned to cap cash withdrawals from banks; and would use emergency powers to shut financial markets and schools. After one of the most violent days since protests started in June, Hong Kong Chief Executive Carrie Lam urged citizens to “stay calm and see the facts.”The city’s protests began with largely peaceful demonstrations against the Chinese government’s growing encroachment on Hong Kong’s freedoms. But as factions of the movement have grown more extreme, so too have the narratives spread by both sides.While protest supporters often demonize the police and the government, pro-establishment camps tend to push narratives describing demonstrators as angry rioters, terrorists and “cockroaches” intent on destabilizing the city and doing the bidding of foreign agents.The proliferation of questionable information has coincided with waning confidence in once-trusted Hong Kong institutions. Nearly 80% of the public is dissatisfied with the government’s performance, up from 40% a year ago, according to the Hong Kong Public Opinion Research Institute. Just over a tenth of the city supports Lam, and only half the population is satisfied with the police force.Hong Kong doesn’t have a fake news law, though Secretary for Security John Lee said this month that “most of the laws in the real world are applicable to the online world,” such as publishing information that threatens public safety. In October, the city’s high court granted an injunction banning anyone from “disseminating, circulating, publishing or re-publishing” internet posts that incite violence on popular platforms including Telegram and LIHKG.Three quarters of the population get their news from the internet today, up from 48% in 2016, according to the Hong Kong Public Opinion Research Institute. In August, a third of people rated the internet as their most trustworthy news source, surpassing television for the first time since the institute began tracking the issue in 1993.One disputed story that spread online in recent weeks involved the death of 15-year-old Chan Yin-lam, whose naked body was found last month floating in Victoria Harbor. Police have called her death an apparent suicide, but some protesters claim Hong Kong’s police, city officials or the Chinese government killed the girl for participating in protests. Several demonstrators responded by showing up at her school to smash glass doors and spread graffiti on the walls.“In more peaceful times maybe I wouldn’t believe those claims that the police or government agents murdered her and are covering up the evidence,” said Ko, a first year law student at the University of Hong Kong who declined to give his last name, as he handed out protest fliers beside a shrine for Chan. “People are scared and don’t trust the authorities anymore. I’m not sure what to believe now.”Spokespeople for the Hong Kong police and government denied the protesters’ allegations. China’s Ministry of Foreign Affairs didn’t respond to a request for comment.“Everyone is angry and not backing down,” said Paul Yip, director of the Center for Suicide Research and Prevention at the University of Hong Kong, who said he hopes to get more clarity on the girl’s death. “Both sides are shouting into their own echo chambers, separated by a high wall that can’t be crossed over. It’s a dangerous point we’ve arrived at.”Once unsubstantiated claims about the protests start spreading on social media, they’re often hard to contain. When violent clashes erupted between demonstrators and riot police at Hong Kong’s Prince Edward MTR station about three months ago, protesters alleged the altercation ended with fatalities after the police and the train’s operator MTR Corp. evacuated the station and closed it off to media and first aid providers.The allegation was denied by police, but the protesters’ story line was amplified after activist Joshua Wong posted on Twitter that lives were sacrificed during the protests, a claim repeated by U.S. House Speaker Nancy Pelosi. Half the city still thinks people were beaten to death by police in the incident, according to a poll by the Hong Kong Public Opinion Research Institute. The backlash has resulted in dozens of vandalized subway stations and a 10 p.m. shutdown of train lines that acts as a de facto city curfew.Both sides have stepped up online efforts to win the battle for public opinion. Hundreds of social media accounts linked to a Chinese government-backed information operation to undermine the protest movement were removed in August, according to Twitter Inc., Facebook Inc. and Alphabet Inc.’s YouTube, which deleted the accounts. New accounts have since appeared pushing the same kinds of narratives, according to research from Astroscreen, a startup that monitors social media manipulation.Pro-government posts often spread photos, memes and videos propagating unsubstantiated rumors of U.S. black hands funding the demonstrations and young female protesters acting as so-called comfort women for male counterparts. Their messages are sometimes amplified by Chinese state media and nationalistic netizen networks known as “fangirls.”Anti-government protesters have used similar tactics as they seek to influence global perceptions of the movement. One protest Telegram channel with 25,000 subscribers assigns three to four tasks each day to keyboard warriors tasked with spreading content, hashtags or narratives on Twitter.The channel has called for supporters to tweet against Activision Blizzard Inc. with the hashtag BoycottBlizzard at least 30 times since the American video-game company punished a player for supporting the protests.Among more than 20,000 accounts that shared the BoycottBlizzard hashtag, Astroscreen found a fifth were created between August and October. Similar tasks have targeted the National Basketball Association and basketball star Lebron James. Blizzard, the NBA and James didn’t respond to requests for comment.Of course, many posts in support of the protest movement and against the city’s authorities are authentic. But there’s evidence that some have gone beyond digital activism and into the realm of misinformation, which researchers define as erroneous posts spread unintentionally. That differs from disinformation, which is false content spread with the specific intent to deceive, mislead or manipulate.For example, a protest supporter last month posted a misleading image depicting Chief Executive Lam using her mobile device during the enthronement of the Japanese Emperor, a sign of disrespect. Within hours, the post was shared thousands of times, including by prominent activist Agnes Chow and local news outlet Apple Daily. It turned out the image was actually taken before the event started, according to a report from Annie Lab, a fact-checking project at HKU’s Journalism and Media Studies Centre.Annie Lab has also found instances of disinformation. One photo purporting to be a CT brain scan of a protester hit by a police baton actually came from a radiology Wiki page before it was doctored and posted on Telegram, garnering more than 120,000 views. It was also published in a since-amended article by the SCMP, according to Annie Lab. The newspaper said it immediately removed the photo upon discovering it hadn’t been verified and has taken steps to ensure the incident isn’t repeated.There’s little sign that such fact-checking efforts have had a meaningful impact on how Hong Kongers digest information related to the demonstrations. In the case of Chow, the 22-year-old student who fell to his death, many protesters continue to believe there’s a sinister explanation.“There are too many suspicious deaths since June,” said Joe, a 35-year-old bank employee and protester who declined to provide his surname. “We cannot let Chow die without justice.”(Adds latest opinion poll in ninth paragraph. An earlier version of this story was corrected to show just over a tenth of Hong Kong supports Lam.)\--With assistance from Josie Wong, Dandan Li, Qian Ye and Matt Turner.To contact the reporters on this story: Shelly Banjo in Hong Kong at firstname.lastname@example.org;Natalie Lung in Hong Kong at email@example.comTo contact the editors responsible for this story: Daniel Ten Kate at firstname.lastname@example.org, Michael Patterson, Chris KayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Google’s move could further alarm lawmakers already anxious about the concentration of increasingly intimate personal information within a few big tech companies. After Facebook has run into widespread resistance to Libra, Google has said it wants to “partner deeply” with existing financial services providers.
(Bloomberg) -- Walt Disney Co.’s much-anticipated debut of its new streaming video service was marred by technical glitches and crashes for some users, though it still stirred excitement online.New “Star Wars” series “The Mandalorian” was trending on social media, and Twitter users cheered that they were finally able to sign up and watch Disney+ after months of well-orchestrated promotions from the Disney marketing machine.Some users reported trouble getting the app to work as soon as they tried to log on in the early hours of Tuesday morning, when the East Coast of the U.S. and Canada was waking up. Problems reported on the @DisneyPlusHelp Twitter handle ranged from “service not available” to specific issues such as “The early seasons of The Simpsons are in the wrong aspect ratio.”Disney said consumer demand for the service had exceeded its highest expectations. “While we are pleased by this incredible response, we are aware of the current user issues and are working to swiftly resolve them,” a spokeswoman said in a statement, mirroring a tweet on the help-line account.The glitches ramped up from about a hundred reported outages to more than 7,000 within the span of an hour on DownDetector.com. They dipped to about one-tenth of that by midday but were rising again in the evening New York time as consumers returning home from work tried to log on.Disney is hardly the first media company to struggle with the technical side of streaming. In 2014, HBO’s streaming service crashed during the season premiere of “Game of Thrones.” Even technology giants like Amazon and YouTube have had problems, though their glitches happened while broadcasting live sports online, which is seen as more difficult than streaming on-demand TV shows and movies. Disney bought a controlling stake in BAMTech, a leader in streaming technology, to run the back end of its online services like Disney+.Streaming services often struggle when many people try to watch at the same time, said Dan Rayburn, the principal analyst at Frost & Sullivan, who writes for the website Streamingmediablog.com. “It’s hard because of the complexity of the workflow and doing it at scale,” Rayburn said.It’s not just streaming shows smoothly, he added, but also managing the back-end database, like whether a user had paid and setting up a profile.“If in the next two or three hours everything is cleared up, it’s not that big of a deal,” he said. “If this continues throughout the day, this is a real problem.”Crowded MarketIn its quest to turn a nearly century-old entertainment giant into a streaming leader, Disney is entering a market already crowded with heavy hitters, including Netflix Inc., Amazon.com and Apple Inc. And more rivals are diving in soon, such as AT&T Inc. and Comcast Corp. next year. The world’s largest entertainment company thinks it can seize the day with a product packed with the company’s best movies and TV shows, including “Star Wars,” Marvel and Pixar films, as well as its library of some 400 children’s movies.“I feel great about what we’ve done,” Chief Executive Officer Bob Iger told a roomful of reporters last week. “I love the app. It’s rich in content. It’s rich in brands. It’s rich in library.”Priced at $7 a month, Disney+ is a bet that the company can attract as many as 90 million subscribers worldwide in five years.It already has some key allies. Some 19 million Verizon Communications Inc. customers will be able to get the service free for the first year, thanks to a deal Disney cut with the carrier. Disney fan club members, meanwhile, got to prepay for a three-year subscription for less than $4 a month.“These are deals you just can’t beat,” said Kevin Mayer, who heads Disney’s direct-to-consumer division and has helped craft the streaming strategy.Disney shares rose 1.4% to $138.58 at the close of trading Tuesday in New York.Disney is looking to make the product accessible to as many people as possible. Customers will get to store their password in as many as 10 devices per family and watch four concurrent streams of movies or shows.The site is designed around five main “tiles,” named after the company’s key brands, including Marvel and the recently acquired National Geographic channel. Disney is spending $1 billion on new programming -- such as “The Mandalorian,” the first live-action “Star Wars” series -- in the first year alone. Disney+ also will offer the “Star Wars” movies in 4K-definition video for the first time.Unlike Netflix, which releases new seasons of programs all at once. Disney+ will put out one episode per week for its original shows. The programs will come out at midnight Pacific time on Fridays -- timing geared toward attracting a global audience, according to Ricky Strauss, Disney’s head of content and marketing for the product.A key part of Disney’s streaming strategy is bundling its services together. For $12.99, subscribers can get a package that includes Disney+, ESPN+ and the ad-supported version of Hulu. Those three services would cost about $18 a month if purchased individually.It’s all coming at great cost to the company. Mayer’s direct-to-consumer division saw its losses more than double to $740 million in the quarter that ended in September. The company doesn’t expect to make a profit on Disney+ for at least five years.But the marketing blitz for the new service seems to have paid off. UBS Group AG analyst John Hodulik surveyed more than 1,000 consumers in October and found some 86% had heard of Disney+. Nearly half were likely to subscribe.The company created its largest cross-promotional push ever, putting solicitations for the new service in Disney-owned hotels and its radio network. Disney also promoted the new service on ESPN’s “Monday Night Football.” Fans watched a preview of Disney+’s new “High School Musical” spinoff on ABC on Friday.“If you haven’t heard about Disney+ by Tuesday,” Strauss said last week. “I promise you will.”Among the new originals on the show is a live-action version of “Lady and the Tramp.” Normally a remake of a classic like that would get a big premiere, a theatrical run and advertising everywhere.In the streaming era, it gets dropped on a Tuesday morning. The question now is whether the Disney magic still comes through without the Hollywood glamour.Either way, Disney doesn’t have much of a choice, said David Yoffie, a professor at Harvard Business School.“Netflix has changed the nature of the game,” Yoffie said. “If they didn’t participate, they would be left behind.”(Updates complaint reports in fifth paragraph.)\--With assistance from Brandon Kochkodin.To contact the reporters on this story: Christopher Palmeri in Los Angeles at email@example.com;Scott Moritz in New York at firstname.lastname@example.org;Gerry Smith in New York at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
All eyes will be on President Trump Tuesday for U.S.-China trade war updates. Walmart, Nvidia, and others are set to report their quarterly earnings. And why Casey's General Stores (CASY) is a Zacks Rank 1 (Strong Buy) right now...
Cisco's (CSCO) first-quarter fiscal 2020 results are expected to reflect the robust adoption of security solutions despite headwinds pertaining to the U.S.-China trade war.
(Bloomberg Opinion) -- It’s Disney+ launch day, the arrival of a new video app that serves as Walt Disney Co.’s official entry into the streaming wars. But while the $7-a-month service may be a perfect choice for fans of “The Avengers” and “Star Wars,” or for parents of young children, Disney knows that’s not nearly enough variety for most people. Its efforts to address that shortcoming hint at what’s next for the industry: the revival of bundles. Buzz about Disney+ has been building for some weeks, as ads for the service cropped up on Twitter, billboards and TV. What’s gotten less attention is the crucial role Hulu plays in the company’s strategy. As part of Tuesday’s launch, consumers also now have the option of getting Disney+, ESPN+ and Hulu (the on-demand version with ads) together for a rate of $13 a month, rather than paying for each app separately, which would total $18. Internally, Disney appears to be calling it the “super-bundle,” based on the image file name that was displayed on the sign-up page early Tuesday morning in place of a logo that wasn’t rendering (whoops):With the way content has been atomized — e.g., you can only stream Disney stuff on Disney+ going forward — no service on its own will provide all the shows and movies that a typical consumer wants. So as more viewers become completely reliant on streaming subscriptions, they’ll try to configure a set of apps that gets closest to imitating their ideal cable package. But that may get quite expensive. Say you want to watch “The Mandalorian” — the “Star Wars” series that’s headlining Disney+ — but you’re also a fan of Netflix’s “Stranger Things,” hooked on HBO’s “Succession” and want lots of live sports, the likes of which Google’s broadcast-channel-heavy YouTube TV service provides. That would add up to $85 a month, in addition to the price of internet access — not quite the savings one might have envisioned from canceling cable. For the media companies, this is going to lead to lots of subscriber turnover month to month, with viewers pausing one subscription in favor of another just to binge on a new season of a hit series.The pickings on Disney+ are simply too narrow to be a cable substitute. This is where Hulu comes in, and to a lesser extent, ESPN+ (which is chiefly for fans of soccer and college sports). Hulu provides some of what’s missing from Disney’s superhero and family-friendly fare, with popular originals such as “The Handmaid’s Tale,” recent episodes of “Grey’s Anatomy” and other licensed programming. While the super bundle is really just Disney+ and Hulu throwing in ESPN+ for free, it's strategically priced at the same rate as Netflix and provides insight into Disney's thinking.Disney won’t be alone in looking for ways to bundle services for customers. HBO Max, the streaming app that AT&T Inc. is introducing in May 2020, is effectively a $15 bundle of HBO, content from sister networks such as TBS, the “Friends” and “Big Bang Theory” franchises and Warner Bros. films (all for the same price as HBO on its own). Apple Channels, where users can sign up for third-party services such as CBS All Access and Starz using their Apple ID, at least allows users to consolidate their payments to a single company, but it doesn’t provide discounts for doing so. For cable giants Comcast Corp. and Charter Communications Inc., negotiating with programmers to structure discounted streaming-app bundles would be a natural evolution of their businesses.So much of the focus of the streaming wars has been on trying to pick the winner, or who will be the true Netflix killer. In fact, Netflix and Disney may control 60% of the U.S. streaming-video market by 2024, according to Geetha Ranganathan, an analyst for Bloomberg Intelligence. Most people wouldn’t want to see the streaming marketplace go the way of the box office — where Disney’s Marvel movies and animated features are the overwhelming majority. (And Netflix isn’t exactly known for the highest-quality menu.) Bundles that include broader arrays of content from different sources offer a better shot at sustained competition, and that sounds awfully better than a world in which all Hollywood’s creative decisions rest in the hands of just a few giants.It’s time to bundle up.To contact the author of this story: Tara Lachapelle at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.