Netflix airing NFL games on Christmas will be the streaming giant's biggest test for its next area of growth
- This post originally appeared in the Insider Today newsletter.
Hello! Europe just had its largest auto show of the year, but out-of-towners nabbed the spotlight. China's EV giants like BYD, Xpeng, and Leapmoter showed off new models that turned heads.
In today's big story, Netflix's earnings report comes as Wall Street wonders if the king of streaming can keep its crown.
What's on deck:
- Markets: BNPL Klarna is exploring adding stock-trading features to its app.
- Tech: Both Trump and Harris support homegrown semiconductors, but that doesn't mean they won't impact the industry.
- Business: NYC's short-term rental ban was supposed make housing cheaper. Did it?
But first, skip intro.
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The big story
Next on Netflix
Netflix won the streaming crown. Now, it has to keep it.
The gap between Netflix and its fellow streamers is more of a chasm these days. (I'm not exaggerating. Just look at this chart comparing Netflix's stock price with its rivals.)
But life at the top just means the expectations are that much higher. Business Insider's Lucia Moses outlined investors' key questions about Netflix ahead of its third-quarter earnings call this afternoon.
One thing we do know is the subscription gravy train is slowing down. After enjoying a bump in subscribers from its password-sharing crackdown, executives have telegraphed a year-over-year drop in net additions for Q3.
But Netflix has other levers to pull for growth.
Games are one interesting avenue the streamer is pursuing. It's unclear if the investment is paying off, but new games president Alain Tascan recently shook things up by bringing in a former Epic Games executive and cutting some staff.
Netflix's other options range from straightforward (raising subscription prices) to complex (creating events tied to popular shows).
We'll get a preview of one new growth opportunity for Netflix this quarter.
The NFL is coming to the streamer this Christmas, with Netflix showing two games on the holiday. It's part of a three-year deal it inked with the NFL, joining rival streamers in buying the rights to show America's new favorite pastime.
Football games can come with an initial boost in users — Peacock reportedly nabbed 2.8 million subscribers for its NFL playoff game last season — but they don't always stick around, as BI's Peter Kafka has previously covered.
There's also a touch of reputational risk among fans who complain about needing to subscribe to yet another streamer to watch their beloved football.
The NFL isn't really about adding more subscribers for Netflix, though. The games, along with its $5 billion pro wrestling deal, are about building out its ads business.
Netflix has already tested the waters with live events with varying degrees of success. (Remember the "Love Is Blind" reunion debacle?)
But games featuring the league's biggest stars (Patrick Mahomes, reigning MVP Lamar Jackson) meant to help the NFL overtake a holiday dominated by the NBA mean the stakes are higher than ever.
Then again, Netflix is used to the spotlight.
News brief
Top headlines
- Liam Payne, former One Direction star, dead at 31 in Buenos Aires.
- Kamala Harris defends her economic plan and insists she won't be more of Joe Biden in a tense interview with Fox News.
- Apple's chief people officer, who reports directly to Tim Cook, is leaving the company after less than 2 years.
- A quant research leader from Two Sigma's vaunted 'techniques' squad is leaving for Cubist.
- Elon Musk hits the campaign trail in a key swing state after donating $75 million to a pro-Trump super PAC.
- AI sales startup Clay is raising a new funding round at a $1.3 billion valuation, sources say.
- What's next in Diddy sex-trafficking case: possible gun and drug charges, a gag order, and a bail decision.
3 things in markets
- Luxury stocks are looking like knockoffs. LVMH, the French luxury conglomerate that includes Louis Vuitton and Christian Dior, reported a Q3 sales decline that sent its stock tumbling along with competitors. The main culprit: China's recent stimulus won't be enough to boost the country's waning consumer demand.
- AI mania latest: Taiwanese chip giant TSMC posted blockbuster Q3 results Thursday. It comes after one of its suppliers, Dutch chip equipment maker ASML, posted a downbeat earnings report that triggered a sell-off. TSMC's CEO insisted demand for AI "is real" during the earnings call.
- Buy now, pay later, trade whenever. BNPL giant Klarna is exploring building a tool for users to buy and sell stocks through its app and compete with Robinhood, according to an internal Slack message seen by BI. The Swedish company is building out its product offerings as it reportedly looks to IPO in the US.
3 things in tech
- Trump or Harris? For chip investment, it doesn't matter. The US's push into semiconductors will prevail, regardless of who wins the White House in November. Both candidates think chip production is key for economic and national security reasons — but their stances on other issues, like taxes and immigration, could still affect the semiconductor industry.
- Help wanted: Elon Musk's xAI is looking for "AI tutors." The startup is on a hiring spree, having recently opened a spate of AI tutor roles. The job pays between $35 and $65 an hour and is focused on helping train language algorithms.
- What SpaceX needs to win its lawsuit against a California commission. Elon Musk's company sued the California Coastal Commission after it denied a request for more frequent SpaceX flights. Musk's lawyers accuse the commission of regulatory overreach because commissioners have criticized Musk's politics. To win their case, they'll have to show the flights would've been approved otherwise.
3 things in business
- NYC banned short-term rentals last year. It's unclear if it's helped the city's housing crisis. The ban was supposed to make housing cheaper. So far, the results are mixed: While rent-price growth has slowed and home inventory has increased modestly, it's not clear how much of that is directly correlated to the ban.
- Amazon goes Hollywood. Under the leadership of former Paramount exec Amy Powell, Amazon is looking for ways to market itself outside the traditional TV spot. Part of that includes a new show with the creator of the hit social-media series "Recess Therapy," which Amazon hopes will help portray it as a force for good.
- Inside the LinkedIn laugh factory. America's favorite social media app for humblebragging and exaggerated corporate enthusiasm has become a surprise source of corporate trolling. Comedians are satirizing workaholism so well that it can be hard to tell what's ironic and what's not. But while LinkedIn comedy might be refreshing new content, it's unlikely to change the platform's culture.
What's happening today
- Netflix and other companies report Q3 earnings.
- NATO defense ministers meet.
- "El Mayo," head of the Sinaloa cartel, is charged in US court with conspiracy and money laundering.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.