“Squid Game”, David Chappelle and Netflix’s FOMO Paradox: Morning Brief

0

This article first appeared in the Morning Brief. Get the Morning Brief delivered straight to your inbox Monday through Friday before 6:30 a.m. ET. Subscribe

Wednesday, October 20, 2021

People want to be entertained – and that’s what matters to investors

To understand why Netflix’s (NFLX) third-quarter results completely erased market expectations in the face of a festering PR storm, it might be best to tie in a few abstruse ideas.

In the space of a month, the streaming giant has (in their words, not mine) “pierced the air of cultural time.” He’s managed to do it not once but twice: via his dystopian drama “Squid Game” – a worldwide hit topping the Netflix charts in 94 countries and drawing 142 million households – and Dave Chappelle’s polarizing comedy special, “The Closer”, who stands accused of transphobia.

Chappelle’s imbroglio has become a sort of Rorschach test of cultural warfare, in which we don’t need to delve into that space – at least not today.

However, it’s worth noting that, despite more than a week of bad press, Netflix shares are comfortably perched within screaming distance from a 52-week high at $ 646.84 – and Wall Street is as bullish as it is. ever, even though the pandemic ‘stay at home’ is over (hopefully for good).

According to the Bank of Montreal, which has a price target of $ 700 on the stock, short-term catalysts that drive the action include “new and recurring original content that drives word of mouth / social media in the community. criticism and the public ”. And Bank of America, which sees the stock hit $ 680 in the near term, cited data showing that global cancellations actually fell in the third quarter compared to the second quarter.

This all matters, because like it or not, Netflix’s constituency is literally the entire planet Earth where each region and its occupants see the world in very different terms. Not only is the “fear of missing out” (FOMO) real, it is a real eye-catcher on the platform regardless of the controversy.

The streamer now has “hit shows in Latin America, India, local markets. They have the wit and market share in those areas,” Santosh Rao of Manhattan Venture Partners told Yahoo Finance Live. Tuesday.

“What they’re doing now is really globalizing local content, as we’ve seen with ‘Squid Game’,” he added.

In short, the monster success of “Squid Game” shows how Netflix’s overall strategy can isolate the platform from local storms in a teapot like the Chappelle controversy. What may not be culturally acceptable in the United States may be perfectly acceptable in other countries such as Latin America, Asia or Africa, where social mores differ and the content may not be subject to vagaries. cultural wars.

In all likelihood, Netflix’s subscriber base will continue to grow – and by extension, so will the stock – due to two uncomfortable but unassailable truths:

  1. Perpetually aggrieved viewers are simply eclipsed by people who don’t care; and

  2. Of those who legitimately care, most want their usual dose of “You,” “Squid Game,” “The Tiger King,” or whatever pop culture trick that dominates social media discourse – even if they do. do not admit it publicly.

While last year’s controversy over “Cuties” (covered at the time by Yahoo Finance’s Allie Canal) was not enough to undermine the company’s subscriber growth, it is unlikely that any thing does. And in the interest of full disclosure, Yours truly was put off by the images of gyrating pre-teens, but I responded – you guessed it – by choosing not to watch instead of eliciting the social media outrage or canceling my membership.

The lesson of “Sense8,” a cult favorite that was prematurely canceled by Netflix due to low viewership numbers, is written in big terms. While some people were big fans, it was obvious that this just wasn’t everyone’s cup of tea (Other disclosure: I bailed out after an episode) and led the company to take the plug off.

Historical headlines aside, the norm to keep in mind is that, as a publicly traded company, Netflix’s hard core is its investors. The ax will fall on a show when it can’t reach critical viewing mass, or when the platform stops offering content that people clearly seem to want.

Not because people on the Internet are “Big Mad,” as kids say these days.

Through Javier E. David, editor of Yahoo finance. Follow him on @Teflongeek

Try Yahoo Finance Plus now.

What to watch today

Economy

  • 7:00 am ET: MBA Mortgage Applications, week ended October 15 (0.2% in the previous week)

  • 2:00 p.m. ET: Federal Reserve Releases Beige Book

Earnings

Pre-marketing

  • 6 a.m. ET: Hymn (ANTM) Expected to Report Adjusted Earnings of $ 6.37 per Share on Revenue of $ 35.39 Billion

  • 6:25 a.m. ET: Citizens Financial Group (CFG) Expected to Report Adjusted Earnings of $ 1.17 per Share on Revenue of $ 1.64 Billion

  • 7:00 am ET: Biogen (BIIB) Expected to Report Adjusted Earnings of $ 4.10 per Share on Revenue of $ 2.68 Billion

  • 7:00 am ET: Nasdaq (NDAQ) is expected to report adjusted earnings of $ 1.73 per share on. revenue of $ 830.82 million

  • 7:00 am ET: Baker Hughes (BKR) Expected to Report Adjusted Earnings of 21 cents a Share on Revenue of $ 5.34 Billion

  • 7:15 a.m.ET: Abbott Laboratories (ABT) Expected to Report Adjusted Earnings of 94 cents a Share on Revenue of $ 9.54 Billion

  • 7:30 a.m. ET: Verizon Communications (VZ) is expected to report adjusted earnings of $ 1.36 per. share of revenue of $ 33.24 billion

Post market

  • 4 p.m. ET: Las Vegas Sands Corp. (LVS) Expected to Report Adjusted Losses of 23 cents a Share on $ 1.16 Billion in Revenue

  • 4:05 p.m. ET: You’re here (TSLA) Expected to Report Adjusted Earnings of $ 1.67 per Share on Revenue of $ 13.91 Billion

  • 4:05 p.m. ET: Kinder Morgan (KMI) Expected to Report Adjusted Earnings of 22 cents a Share on Revenue of $ 3.2 Billion

  • 4:10 p.m. ET: IBM (IBM) Expected to Report Adjusted Earnings of $ 2.53 per Share on Revenue of $ 17.83 Billion

  • 4:15 p.m. ET: Equifax (EFX) Expected to Report Adjusted Earnings of $ 1.71 per Share on Revenue of $ 1.18 Billion

Politics

  • President Joe Biden will be visiting his hometown of Scranton, Penn., today. The trip – to rally support for his economic agenda – takes the president back to where he was born and lived as a child before moving to Delaware in 1953.

  • On Capitol Hill, confirmation hearings begin this morning for Biden’s choices to be ambassador to China (Nicolas burns), Japan (Rahm Emmanuel) and Singapore (Jonathan kaplan). Burns is a longtime diplomat who seems on track to be confirmed while Emanuel could have a rockier path.

  • Another hearing to watch today will focus on current bottlenecks in the global supply chain. The House Small Business committee will address the matter at 10 a.m.ET.

Top news

FTSE slips as investors digest falling UK inflation [Yahoo Finance UK]

Bitcoin ETF’s “Near Perfect” Debut Brings Spot Price Close to Record; Grayscale join the fray [Yahoo Finance]

Facebook plans to change name with new name, according to The Verge [Reuters]

United Airlines posts smaller loss, sees recovery from pandemic gain traction [Reuters]

Yahoo Finance Highlights

Are Walmart shares for sale?

Guggenheim CIO Scott Minerd: Jerome Powell No Longer Favorite For Fed Chairman

Failure Just Not An Option For Democrats’ Spending Plan, Says PIMCO Public Policy Officer

Top of all markets

Top of all markets

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, Youtube, Facebook, Flipboard, and LinkedIn



Source link

Share.

Leave A Reply