‘Mad Money’ Host Jim Cramer Wants Netflix Removed From ‘FAANG’

In the world of high-profile Wall Street analysts, CNBC’s frenetic “Mad Money” host Jim Cramer has helped define a cottage TV industry of fast-talking  personalities targeting consumer and business investors.

On CNBC’s “Squawk on the Street,” Cramer said Netflix should be removed from a basket of top-performing tech stocks, dubbed “FAANG” (Facebook, Amazon, Apple, Netflix and Google).

Speaking Oct. 3, Cramer said that with Netflix’s stock down 29% in 2019, compared to a 18% rise for Microsoft, the subscription streaming video pioneer’s status should be re-evaluated.

“We gotta get Netflix the hell out of FAANG,” Cramer said. “I tell you that right now. I don’t know how to do it.”

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Cramer contends Microsoft should replace Netflix (and apparently Google too), thus rendering the tech group “FAAM.”

Tough love from an analyst who just five months ago penned an article in high praise of the streamer and co-founder/CEO Reed Hastings.

“Netflix is about something to talk about Monday morning,” he wrote in April. “It’s about not feeling like a stooge when everyone watched Bird Box. You can’t be a stooge! In other words, as ethereal as it sounds, Reed Hastings is right when he says ‘the real metric is can we keep our members happy.'”

Apparently keeping subscribers and investor happy can be mutually exclusive. That’s because investors care not so much about subscriber happiness, but rather subscriber growth, according to Cramer.

And Netflix laid an egg of sorts during the last fiscal period when it failed to meet sub growth projections worldwide — including losing domestic subs for the first time in more than five years.

“I’m not a Netflix fan, here,” Cramer said, alluding to the pending arrival of SVOD competition from Disney, Apple, AT&T and Comcast — the latter parent to NBC Universal’s CNBC network.

“There’s too many competitors,” he said.

Netflix reports third-quarter (ended Sept. 30) financials on Oct. 16.

 

Congress Seeks Greater Copyright Protection for YouTube Videos

A bipartisan group of U.S. lawmakers has sent a letter to Google CEO Sundar Pichai asking the tech giant to expand copyright infringement protections to a greater number of content creators.

The letter, spearheaded by Senators Thom Tillis (R-N.C.) and Chris Coons (D-Del.), co-chairs on the Judiciary Subcommittee on Intellectual Property, addresses “YouTube Content ID,” Google’s copyright infringement software aimed at preventing illegal uploading of movies, music and other copyrighted content on YouTube.

Other signees of the Sept. 4 inquiry include Rep. Jerrold Nadler (D-NY), chairman of the House Judiciary Committee and Rep. Doug Collins (R-Ga.) ranking member of the committee, as well as Democratic ranking member of the Senate Judiciary Committee, Dianne Feinstein (D-CA).

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Launched in 2007, Content ID informs content holders when their copyright protected material is uploaded to YouTube. Content holders are then given the ability to block access to the video or recoup any ad revenue generated by the infringed content.

Specifically, the letter questions the parameters of Content ID and why it isn’t applied to smaller content holders.

Sen. Marsha Blackburn (R-TN), whose constituents include music artists in Nashville, said limiting the use of Content ID to larger players such as movie studios and record labels “hinders copyright holders with smaller catalogues from reaping the benefits of its actions.”

“Talented creators, including Nashville’s song-writing community, are disproportionately at risk of infringement,” Blackburn wrote in the letter.

While anyone can bow video content on YouTube, Google doesn’t begin to monetize content without a minimum number of users, or “subscribers” who click to join the channel.

The letter alleges that certain copyright holders have been denied access to Content ID and at a “significant disadvantage” to prevent the repeated uploading of content previously identified as infringing.

“They are left with the choice of spending hours each week seeking out and sending notices about the same copyrighted works, or allowing their intellectual property to be misappropriated,” read the letter.

Google, per its website, says Content ID is applied to content holders with “a substantial body of original material that is frequently uploaded.”

Congress contends copyright industries in the United States provide more than 5.7 million jobs and generate $1.3 trillion toward the country’s gross domestic product, accounting for 6.85% of the U.S. economy.

“Does Google plan to provide access to Content ID to a larger number of rights holders? If so, when? If not, what challenges prevent you from doing so?” read the letter.

The lawmakers asked Pichai to respond by Oct. 31, with a planned roundtable with Google representatives to address the issues to occur before the end of the year.

FTC Fines Google $170 Million for Profiting on YouTube Children’s Videos

Google and its subsidiary YouTube will pay a record $170 million to settle allegations by the Federal Trade Commission and the New York Attorney General that YouTube illegally collected personal information from children without their parents’ consent.

The settlement requires Google and YouTube to pay $136 million to the FTC and $34 million to New York for allegedly violating the Children’s Online Privacy Protection Act (COPPA) Rule.

The $136 million penalty is by far the largest amount the FTC has ever obtained in a COPPA case since Congress enacted the law in 1998.

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In a complaint filed against the companies, the FTC and New York Attorney General alleged that YouTube violated the COPPA Rule by collecting personal information — in the form of persistent identifiers that are used to track users across the Internet — from viewers of child-directed video channels, without first notifying parents and getting their consent.

YouTube, according to the FTC, earned millions of dollars by using the identifiers, commonly known as cookies, to deliver targeted ads to viewers of these channels, according to the complaint.

The COPPA Rule requires that child-directed websites and online services provide notice of their information practices and obtain parental consent prior to collecting personal information from children under 13, including the use of persistent identifiers to track a user’s Internet browsing habits for targeted advertising.

In addition, third parties, such as advertising networks, are also subject to COPPA where they have actual knowledge they are collecting personal information directly from users of child-directed websites and online services.

“YouTube touted its popularity with children to prospective corporate clients,” FTC Chairman Joe Simons said in a statement. “Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids. There’s no excuse for YouTube’s violations of the law.”

The YouTube platform allows Google account holders, including large commercial entities, to create “channels” to display their content.

According to the complaint, eligible channel owners can choose to monetize their channel by allowing YouTube to serve behaviorally targeted advertisements, which generates revenue for both the channel owners and YouTube.

In the complaint, the FTC and New York Attorney General alleged that while YouTube claimed to be a general-audience site, some of YouTube’s individual channels—such as those operated by toy companies—are child-directed and therefore must comply with COPPA.

The complaint notes that the defendants knew that the YouTube platform had numerous child-directed channels. YouTube marketed itself as a top destination for kids in presentations to the makers of popular children’s products and brands.

The FTC said Google and YouTube told Mattel, maker of Barbie and Monster High toys, that “YouTube is today’s leader in reaching children age 6-11 against top TV channels” and told Hasbro, which makes My Little Pony and Play-Doh, that YouTube is the “#1 website regularly visited by kids.”

Several channel owners told YouTube and Google that their channels’ content was directed to children, and in other instances YouTube’s own content rating system identified content as directed to children.

In addition, according to the complaint, YouTube manually reviewed children’s content from its YouTube platform to feature in its YouTube Kids app. Despite this knowledge of channels directed to children on the YouTube platform, YouTube served targeted advertisements on these channels.

According to the complaint, it even told one advertising company that it did not have users younger than 13 on its platform and therefore channels on its platform did not need to comply with COPPA.

In addition to the monetary penalty, the proposed settlement requires Google and YouTube to develop, implement, and maintain a system that permits channel owners to identify their child-directed content on the YouTube platform so that YouTube can ensure it is complying with COPPA.

In addition, the companies must notify channel owners that their child-directed content may be subject to the COPPA Rule’s obligations and provide annual training about complying with COPPA for employees who deal with YouTube channel owners.

The settlement also prohibits Google and YouTube from violating the COPPA Rule, and requires them to provide notice about their data collection practices and obtain verifiable parental consent before collecting personal information from children.

 

Digital Media Companies, Trump Unite Against New French Tax

Digital media companies, including Amazon, Apple, Google and Facebook, are getting an unlikely assist from President Trump against a proposed 3% tax in France on revenue derived from digital ad services and user-to-user transactions.

Specifically, the tax targets revenue derived in part off of French consumer online activities, including ecommerce, streaming video and audio.

Trump & Co. are crying foul since the tax largely applies to about 30 American companies generating at least €25 million ($27.8 million) in France and €750 million ($842 million) worldwide.

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France, which has tried unsuccessfully to secure European Union support on the move, argues the traditional system doesn’t work on these companies since they operate internationally with little physical presence in the country.

“This is a concern for international trade and the wider economy if countries follow the [Digital sales tax] model and select specific sectors and groups of foreign companies for targeted tax policies,” Nicholas Bramble, trade policy counsel at Google, said in a statement.

“The French tax is unjustifiable in that it infringes international agreements, and unreasonable in that it is discriminatory, retroactive and inconsistent with international tax policy principles.”

“They shouldn’t have done this,” Trump told the media in July. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’”

France contends the tax would help level the playing field.

“These digital giants use our personal data, make huge profits out of these data then transfer the money somewhere else without paying their fair amount of taxes,” said French finance minister Bruno le Maire.

Roku Remains Top Streaming Media Device in U.S.

Roku’s streaming TV platform accounted for more than 30% of U.S. sales of connected TV devices in Q1 2019, further increasing its lead in streaming TV platforms, according to the latest data from Strategy Analytics.

The British research firm finds that there are more than 41 million Roku-based devices in use, including branded set-top devices, HDMI sticks and smart TVs, accounting for 15.2% of all media streaming devices.

Roku now has a 36% lead over the next major platform, Sony PlayStation, in terms of devices in use. The report predicts that this lead will stretch to 70% by the end of the year, largely as a result of the success of Roku’s smart TV partner strategy.

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Other key findings from the report include:

Amazon’s Fire TV OS was the second-most-sold streaming TV platform in Q1 2019, with 12% of sales, followed by Samsung’s Tizen at 11% and Google (Android TV and Chromecast) at 9%

By the end of 2019 more than 52 million Roku-powered devices will be in use, accounting for 18% of all connected media devices

“Roku had another strong quarter in Q1 and continues to hold a commanding lead in streaming media platforms in spite of Amazon’s growing influence in the living room,” David Watkins, director at Strategy Analytics and the report’s author, said in a statement.

Watkins said Roku’s firs-mover status (it co-pioneered subscription VOD with Netflix), content offering of third-party streaming services, comprehensive search function and simple and intuitive user interface have contributed in its success.

The analyst cautioned Roku is less well-known outside of the U.S. and to succeed on the international stage would need to “face down” the challenges of building brand awareness and drawing users away from well-established players such as Amazon, Apple and Google.

“There was record growth in the smart TV market in the first quarter of 2019 and Roku and TCL have proved to be a great partnership in this rapidly growing segment,” added David Mercer, principal analyst at Strategy Analytics. “Roku is set to become the U.S.’s top smart TV platform this year in terms of sales share, and Google and Amazon clearly have their work cut out to stay in touch with the market leader.”

YouTube TV Offering Free Showtime This Summer

YouTube TV, the Google-owned social video behemoth’s online TV platform, reportedly is offering select subscribers free access to Showtime through Sept. 5.

The special offer for the CBS-owned premium channel — first reported by 9to5Google.com — was emailed to “longtime” friends of YouTube TV, which launched in 2017 for $35 monthly fee. In April, Google upped the fee to $49.99.

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YouTube TV currently charges subscribers a $11 monthly surcharge for Showtime and other premium channels, including HBO.

The platform reassured subs it would not automatically begin billing them for Showtime once the promotional period ended.

YouTube Expands MLB Partnership with Live-Game Streaming

YouTube April 30 disclosed it has expanded its relationship with Major League Baseball that includes the right to live-stream 13 games for free during the second-half of 2019 season in the United States, Canada and Puerto Rico.

The deal mirrors last year’s deals between MLB, Amazon and Twitter that brought the national pastime to social media and beyond the league’s MLB.tv subscription streaming service.

Google-owned YouTube’s first-ever streaming deal with MLB follows previous deals that included Google Assistant serving as the presenting sponsor of the 2018 American and National League Championship Series.

That promotion marked Google’s first-ever presenting partnership around a U.S. professional sports league’s postseason event for its voice-activated technology.

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Previously, online TV subscription service YouTube TV served as the presenting sponsor of the 2017 and 2018 World Series.

YouTube TV also partnered with MLB on a season-long sponsorship — “First Pitch” – that showcased the YouTube TV brand during the first pitches of games on MLB Network and MLB.tv, and on MLB.com and MLB social channels.

In 2017, MLB’s engagement and content strategy on YouTube generated over 1 billion views.

“From live programming morphing into a YouTube TV spot, to prominent in-stadium placements, our innovative partnership [with MLB] allowed us to build awareness for YouTube TV,” Angela Courtin, global head of YouTube TV & originals marketing, said in a statement last year.

Spotify Music Streaming Service Tops 100 Million Subs; Ups Fiscal Loss

SpotifyTechnology S.A. April 29 announced its branded music subscription streaming service reached 100 million paid subscribers in the first quarter, ended March 31.

That beat the previous-year period with 75.5 million paid subs. It also nearly doubled Apple Music with 50 million subs.

Average monthly users grew 26% to 217 million (which includes free ad-supported music users), slightly lower than the company’s 215-220 million guidance range.

“Outperformance was driven by a better promotion plan in the U.S. and Canada,” founder/CEO Daniel Ek and CFO Barry McCarthy said in a statement, alluding to a 23% price reduction ($12.99 to $9.99 monthly) for the “Spotify Premium + Hulu” promotion in the U.S.

McCarthy was Netflix’s CFO from 1999 to 2010.

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Spotify launched India in late February expanding its global market footprint to 79 countries. More than 1 million users signed up for Spotify in the first week in India. The company now has more than 2 million users in India.

Regardless, the streaming service reported an operating loss of €47 million ($52.4 million) on revenue of €1.5 billion ($1.67 billion), which was up 33% from revenue of  €1.1 billion ($1.22 billion) last year.

 The service, along with Pandora, Google and Amazon Prime Music, remains embroiled in a royalty dispute with songwriters.

Last month, the Register of the Copyright Office approved upping songwriters’ royalties from music streaming services from 10.5% to 15.1%  through 2022.

It was biggest rate increase granted in CRB history, according to the National Music Publishers’ Association.

Spotify & Co. are appealing the hike, claiming it “harms music licensees and copyright owners,” among other issues. Apple Music is not appealing the ruling.

Verizon and Google Partner for YouTube TV Access

Faced with no proprietary over-the-top video offerings, Verizon April 23 announced a partnership with Google to bring YouTube TV to Verizon subscribers across all platforms, including Fios TV and pending 5G.

YouTube TV is a standalone online TV service that just raised its monthly subscription price to $49.99 from $39.99.

“As we pave the path forward on 5G, we’ll continue to bring our customers options and access to premium content by teaming up with the best providers in the industry and leveraging our network as-a service strategy,” Erin McPherson, head of content strategy and acquisition at Verizon.

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The partnership affords both wireless mobility and Fios broadband subs to stream YouTube TV. Verizon will also offer YouTube TV promotions to customers across platforms.

“With this partnership, we’re making it simple and seamless for Verizon’s customers to sign up to enjoy YouTube TV on-the-go on their mobile phones or tablets or at home on their big screen devices,” said Heather Rivera, global head of product partnerships at YouTube.

YouTube TV offers cable-free live TV that can be watched on any screen (phone, tablet, TV, computer). It includes more than 70 networks such as ABC, CBS, Fox and NBC, in addition to cable networks HGTV, Food Network, TNT, TBS, CNN, ESPN, FX and on-demand programming.

A YouTube TV membership includes six accounts per household, each with its own unique recommendations and personal DVR with no storage space limits.

Amazon, Google Bowing Apps on Competing Streaming Media Devices

In a first, Amazon and Google April 18 announced the two companies will launch the YouTube app on Amazon Fire TV devices and Fire TV-enabled smart TVs, as well as the Prime Video app to Chromecast and separately-enabled devices.

Fire TV, Google Chromecast, Apple TV and Roku dominate the streaming media device market.

Google Chromecast

Prime Video will also be available across Android TV device partners, and the YouTube TV and YouTube Kids apps will also come to Fire TV later this year. Google owns Android TV.

The YouTube app will be the easiest way for users to watch YouTube content on Fire TV. Users will be able to sign in to their existing YouTube account, access their full library of content, and play videos in 4K HDR on supported devices. In addition, standalone YouTube TV and YouTube Kids apps will also launch later this year on Fire TV devices and Fire TV Edition smart TVs where available.

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Amazon Fire TV Stick

“Bringing our flagship YouTube experience to Amazon Fire TV gives our users even more ways to watch the videos and creators they love,” Heather Rivera, global head of product partnerships at YouTube, said in a statement.

Chromecast, along with Android TV users, will have access to the Prime Video catalog, including the latest seasons of Amazon Originals “The Marvelous Mrs. Maisel,” “Hanna,” “Homecoming,” “Bosch,” “Catastrophe” and “The Grand Tour,” along with Amazon Original movies such as Donald Glover’s Guava Island, and Academy Award-nominated films The Big Sick and Cold War. 

With Prime Video users can also rent or purchase titles or choose from more than 150 Prime Video Channels, including Showtime, HBO, CBS All-Access, Cinemax and Lionsgate-owned Starz.

“Whether watching the latest season of ‘The Marvelous Mrs. Maisel,’ catching teams go head-to-head on Thursday Night Football or renting a new-release movie, customers will have even more ways to stream what they want, whenever they want, no matter where they are,” said Andrew Bennett, head of worldwide business development for Prime Video.