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Netflix Looks Strong Again; Twitter Revises Guidance


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Net’ Benefits

Netflix investors have been worried about its high costs, unprofitability and increased competition. But that same balance sheet is starting to look like a safe harbor. “In fact, Netflix’s liquidity position and the tailwinds from social distancing combine to give the company significant advantages versus competitors, especially the upstart services from legacy media companies,” according to a blog post by LightShed Partners. Disney, for instance, has to deal with the short-term disappearance of its resorts revenue, the loss of live sports for ESPN and a halt on movie production. Netflix has none of the anchors that are weighing down media giants such as Disney, AT&T and Comcast. Netflix has stockpiled months of new programs, whereas Disney Plus, NBCU’s Peacock and other newer services have less in the pipeline. Social distancing is also a boon for Netflix. “With Netflix in a unique position to offer fresh content to a global audience that is hungry for in-home entertainment, we believe gross adds are increasing and churn is falling.” More.

Wounded Wings

Twitter is revising guidance as the coronavirus pandemic puts a damper on ad spending. That could be a bad sign for digital media companies that are trying to convert a surge in user engagement to actual ad dollars, The Wall Street Journal reports. Media consumption is up, but that doesn’t actually increase demand, even if there’s more inventory. And during a recession, ad spend is one of the first line items to get cut. Twitter will post an operating loss in the first quarter, the company said, and sales would decline “slightly” from a year ago. Wall Street was expecting growth for both metrics, and shares were down 1.86% in after-hours trading on Monday. It’s unclear how Twitter’s new outlook will impact its deal with activist investor Elliott Management, which allows CEO Jack Dorsey to remain in his role as long as Twitter delivers consistent growth. And though Twitter was one of the first to update investors about its expected revenue shortfall due to the health crisis, every other ad-based public company will likely do the same. More.

New Kid On The Block

Mozilla launched a monetization product called Firefox Better Web. Mozilla’s Firefox browser is offering the deal through a partnership with Scroll, an ad-free site subscription service. The idea is that users pay a flat monthly rate (typically $4.99 per month, though there’s a half-off deal to start) and get ad-free browsing with trackers blocked and a better web experience, since ads and trackers slow down sites. Scroll partners with news sites such as BuzzFeed, Vox and Slate, and distributes each user’s monthly allotment based on which publishers are most heavily trafficked, TechCrunch reports. Scroll said in a blog post that it’s seeing RPM (revenue per thousands page views) at an average of $30-$40 among Firefox beta users. “Users care a great deal about supporting journalism,” Mozilla said in a statement. “Many users intentionally choose not to install ad-blockers because of the impact that it would have on publishers.” More.

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