Actually, they're from ChartR.
Netflix's crown is intact
Netflix reported yesterday that they had added 2.4m new subscribers last quarter, confirming that they still wear The Crown in the streaming wars — for now at least.
The return to growth couldn’t have come quicker for Netflix after a terrible first half of 2022 in which the company lost almost 1.2 million subscribers. Big TV hits like Dahmer, Stranger Things and Cobra Kai — the latter of which was the most-watched show on any streaming service in mid-September — have pulled Netflix out of the red.
With consumers tightening their belts, and competition in streaming as intense as ever, Netflix execs were noticeably relieved with CEO Reed Hastings saying “thank God we’re done with shrinking quarters”. Investors are pleased too — Netflix shares are up 12% at the time of writing.
All-you-can-watch
Looking ahead, Hastings' confidence that Netflix will keep growing is probably well-judged — the launch of a cheaper ad-supported tier should drive new subscribers, as could a further crackdown on password sharing.
Interestingly, Netflix also reiterated that they would be doubling down on the "binge" release model — citing global hit Squid Game as a show that might not have gone as viral if not for the momentum created by people being able to watch episodes back-to-back-to-back.
Groceries of scale
Kroger, one of America’s largest grocery stores, is embodying their ideal customer as they go on a spending spree, with a $24.6bn offer to buy rival Albertsons, the parent company of Safeway, Vons and other chains. If approved, the combined entity (Krogersons?) would be a credible rival to Walmart’s scale in groceries, employing more than 700,000 workers across nearly 5,000 stores, with a ~16% share of the US grocery market.
In an industry in which margins can be razor-thin — Kroger’s average operating margin has been 2.6% over the last 10 years — bigger is usually better. More scale and more products tend to make retailers more competitive, which should be better for consumers — or at least that will be the argument that Krogers-Albertsons tell to regulators.
Self-checkout, help needed
At a time when food prices are rising sharply (see our recent inflation chart here), regulators are unlikely to let this deal pass through unchecked.
Kroger believes it can realize some $500m a year of cost savings with the deal, putting it in a better place to lower prices and compete against Walmart, Amazon and the fastest growing segment of US retail — dollar stores. To placate lawmakers, some analysts estimate that as much as one-quarter of Albertsons’ store base may need to be sold to a third-party to avoid limiting competition in certain overlapping regions.
On Sunday, the 20th National Congress of the Chinese Communist Party kicked off with General Secretary Xi Jinping consolidating his power after a decade leading the world’s most-populous country.
The backdrop for this year’s congress is arguably the most uncertain of Xi’s leadership, even as he remains poised to secure an unprecedented third term in power. Last Thursday, a man strung anti-Xi banners across a bridge in Beijing, a rare public protest in a nation that has become accustomed to swift suppression of dissent. The protest targeted the incumbent president after over 2-and-a-half years of some of the strictest COVID policies in the world which — whilst they saved lives — put the people of China under enormous strain.
Shifting sands
The country’s economy is also starting to slow, just as Xi turns his focus to national security and geopolitics. The closely-watched GDP figures, which were scheduled for release yesterday, were delayed without explanation. The last few quarters that have been released show a sharp slowdown, although China is hardly unique in dealing with economic struggles in 2022.
In a speech made at the congress, the president offered a bleak future insight into China’s already-strained relations with the US, and wariness clearly goes both ways in the nations’ relationship too. Biden’s latest semiconductor restrictions have reportedly hit China hard and a major shift in the US electorate’s view of the country is testament to how sharply relations have deteriorated, with around 80% of Americans now viewing China as an "enemy".
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