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   DealBook: The next big thing in streaming
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   Netflix and others are less resistant to introducing ads as subscriber growth slows.
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             April 19, 2022
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                  Going commercial?
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                  Lucy Nicholson/Reuters
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             And now, a word from your streaming sponsor…
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             Later today, Netflix will report its latest quarterly earnings. Analysts
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              do not have high expectations
             </a>
             . The streaming service’s profits are expected to drop by more than 20 percent.
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             In January, Netflix surprised investors when it said that its growth, which accelerated during the pandemic, was set to slow dramatically. The Bank of America analyst Nat Schindler wrote in a note to clients yesterday that Netflix was facing a number of challenges, including higher content costs, increased competition and the possibility that the U.S. has hit its streaming-subscription saturation point. This is not just a problem for Netflix.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Streaming video services have been struggling to sign up new subscribers.
             </span>
             To reach more people, including those grappling with rising inflation and subscription overload, some streamers are offering a deal: They will lower prices in exchange for showing ads amid their programming,
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              The Times’s John Koblin and Tiffany Hsu report
             </a>
             .
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              Netflix and other streamers once shunned ads, but that stance is now in flux:
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                Netflix
               </span>
               is no longer dismissing the possibility of a lower-price, ad-supported option. “Never say never,” Spencer Neumann, Netflix’s C.F.O., said last month.
              </span>
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                Disney+
               </span>
               will begin offering an ad-supported subscription, for a reduced fee, this year.
              </span>
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                HBO Max
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               began showing ads on its service last summer and said it had not lost premium subscriptions to the ad-supported alternative.
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                Amazon
               </span>
               doubled down on its free, advertising-supported streaming service last week, renaming it Freevee, from IMDb TV, and expanding its programming budget.
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              <span style="font-size:17px;line-height:25px">
               Other streamers, like
               <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
                Hulu
               </span>
               ,
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                Paramount+
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               and
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                Peacock
               </span>
               , have been offering ad-supported services for a while.
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              Consumers “need advertising-supported models so that they can balance their bank accounts,”
             </span>
             said Kelly Metz of Omnicom Media Group. “There’s a ceiling on what the U.S. consumer can practically afford, just like what we saw back in the day with cable television.”
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             HERE’S WHAT’S HAPPENING
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              Apollo is considering joining a bid for Twitter.
             </span>
             The private equity firm
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              may offer debt financing
             </a>
             to potential buyers, including Elon Musk, who is locked in
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              a battle with Twitter’s board
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             over his $40 billion-plus bid. Meanwhile, Jack Dorsey, Twitter’s co-founder and former C.E.O., criticized “
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              dysfunction
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             ” on the company’s board, where he remains a member.
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              Amazon will audit its workplace practices for racial bias.
             </span>
             The e-commerce giant, under pressure from shareholders, said it
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              hired Loretta Lynch, the former U.S. attorney general,
             </a>
             to lead the audit. This comes as a
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              judge ordered
             </a>
             Amazon to rehire Gerald Bryson, whom it fired two years ago after he protested safety conditions at a warehouse in Staten Island, the same one that recently
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              voted to unionize
             </a>
             .
            </p>
           </td>
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       </div>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Mask mandates are falling.
             </span>
             The largest airlines and Amtrak
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              dropped mask requirements
             </a>
             yesterday after a federal judge in Florida struck down a mandate on public transport, a ruling the Biden administration may appeal. Today, Uber also
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              dropped its mask requirement
             </a>
             , but said riders can cancel trips if they feel uncomfortable.
            </p>
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              The outlook for the global economy dims.
             </span>
             The World Bank
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
             </span>
             yesterday said the global economy would
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              grow 3.2 percent
             </a>
             this year, down from a previous forecast of 4.1 percent. (The I.M.F. will update its forecasts
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              later this morning
             </a>
             .) Meanwhile, China announced a series of
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              measures to boost economic growth
             </a>
             , after data showed a significant drop in consumer spending amid
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              pandemic lockdowns
             </a>
             .
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              A biotech firm’s stock plunges amid doubts about its Alzheimer’s drug.
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             Nine health experts
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              told The Times
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             they questioned the scientific underpinnings of Cassava Sciences’ trials for simufilam, a treatment the company claimed had improved cognition in Alzheimer’s patients. Studies of the drug by two scientists, one of whom is employed by Cassava, were flagged by journals as potentially problematic.
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             Tesla claims to be caught in an agency turf war
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             The electric vehicle maker Tesla yesterday challenged an investigation into alleged racial discrimination at its factory in California. It argued that the state’s Department of Fair Employment and Housing is “exceeding its boundaries” to advance a turf war with federal authorities. Tesla’s lawyers asked a California court to stay the state’s case against the company.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Tesla’s action comes at a trying time for California’s anti-discrimination agency.
             </span>
             The D.F.E.H. is reeling from the recent
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              departure of two top lawyers
             </a>
             amid disagreements over its gender discrimination case against the video game company Activision Blizzard, which is expected to merge with Microsoft in a $70 billion deal. The agency’s chief counsel, Janette Wipper, was terminated late last month — unjustly, she argues — and the assistant chief counsel, Melanie Proctor, resigned last week, accusing Gov. Gavin Newsom of California of trying to interfere with the case on behalf of the company. The termination came shortly after
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Activision Blizzard settled a case
             </a>
             with the federal Equal Employment Opportunity Commission, a deal that D.F.E.H. unsuccessfully tried to stay as its own claims were pending.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The state’s authorities have been sparring with their federal counterparts
             </span>
             , and
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
             </span>
             Tesla said it is caught in the crossfire.
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
             </span>
             The company’s lawyers argue that D.F.E.H. is skipping procedural steps and rushing to file lawsuits against companies to grab power from the E.E.O.C. They accused the state agency of “abruptly” advancing its investigation in January “shortly after the federal court in the Activision Blizzard matter issued its order rebuking D.F.E.H. and denying its motion to intervene.” Tesla’s lawyers also said that the California agency demanded that the company “agree to a gag order” and tried to stop it from negotiating a settlement with the E.E.O.C. or others.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Will the Activision Blizzard mess taint the California agency’s credibility in its case against Tesla?
             </span>
             Kevin Kish, the director of the D.F.E.H., declined to comment on internal personnel matters, writing in a statement to DealBook: “In recent years, under this administration and my leadership, D.F.E.H. has litigated groundbreaking cases that are a model of effective government enforcement of civil rights. We continue to do so with the full support of the administration.”
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            <h2 class="css-12n1aic el2acgh0" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             “‘This time is different’ used to be a morbid joke among investors; now people believe it.”
            </h2>
           </td>
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        </table>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-style:italic;font-size:inherit">
              — The Times’s Erin Griffith and Taylor Johnson, in
             </span>
             <span style="font-style:italic;font-size:inherit">
              <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
               a whizzy interactive feature that tracks venture-capital funding
              </a>
             </span>
             <span style="font-style:italic;font-size:inherit">
              over the past decade. Almost every time that investors in start-up land have warned that the bubble is about to burst, more money has flooded in.
             </span>
            </p>
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            <h2 class="css-12n1aic el2acgh0" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             Businesses resist merger rule rewrite
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             Antitrust regulators began the year by announcing plans to
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              rewrite merger guidelines
             </a>
             — and now businesses are pushing back.
            </p>
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             DealBook got a first look at a letter to the F.T.C. and Justice Department being filed today by more than a dozen trade associations, including the Business Roundtable, National Association of Manufacturers and U.S. Chamber of Commerce. In response to the government’s request for comment on a potential rethink of merger enforcement, the trade groups argue that a sweeping rewrite would be “misguided.”
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              “Mergers are a vital part of our economy,”
             </span>
             said Sean Heather of the Chamber’s antitrust division. “The government should not inject uncertainty into merger reviews or make mergers unduly difficult. Doing so would harm consumers and American competitiveness.” Nearly 4,500 other commenters have weighed in
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              so far
             </a>
             , and many take the opposite view, in part because
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              progressive activists have been rallying the public
             </a>
             in favor of tougher antitrust enforcement.
            </p>
           </td>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              “Abandon an unconstrained approach to merger law,”
             </span>
             the trade groups wrote. They said that the agencies’ plans are based on false assumptions about overconcentration. The trade groups cite a 2020 report from the White House’s Council of Economic Advisers rejecting research that found business to be too consolidated. But that was a different administration with a very different take on the data.
            </p>
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             <tbody>
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               <td align="center" style="width:100%;padding:0;line-height:1;text-align:center" width="100%">
                <img class="css-17i7zb3 e1aggfhi0" src="https://inboxflows.com/_/image/https%253A%252F%252Fstatic01.nyt.com%252Fimages%252F2022%252F04%252F19%252Fmultimedia%252F19db-king%252F19db-king-articleLarge-v2.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZzdGF0aWMwMS5ueSJ9:1ngm4R:b6elIM9kiiy_d5IaLEm2VRSs2O7epQCYiorNF7i_LEI" style="width:83%;max-width:500px;display:inline-block;height:auto;padding-top:15px;padding-bottom:0;line-height:0"/>
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                 <span class="css-2zlgwg e1aggfhi3" style="margin:0;font:normal 12px georgia,serif;color:#666">
                  Billie Jean King receiving an honor at the U.S. Capitol in March.
                 </span>
                 <span style="margin:0;font:normal 11px georgia,serif;padding-left:5px;color:#888;letter-spacing:.01em">
                  Evelyn Hockstein/Reuters
                 </span>
                </span>
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             Billie Jean King invests in women
            </h2>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             High-profile backers are starting a new incubator to support start-ups focused on women in sports, DealBook is first to report. The Trailblazer Venture studio, by the marketing agency R/GA, the venture capital firm Elysian Park, the Los Angeles Dodgers and Billie Jean King Enterprises, comes as female athletes and women’s leagues are seeing an
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              influx of investment
             </a>
             , although this still pales in comparison with men’s sports. “There is starting to become that tipping point that I’ve been praying for forever,” Billie Jean King told DealBook.
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              King has been fighting for equality — and funds — for a long time.
             </span>
             “The one thing I learned at a very young age,” the tennis star and
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              social activist
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             said, is “if I want any of these things to happen, it’s going to take money.” She saw firsthand the lack of resources and attention that women got compared with men in sports. “The reason people get very excited about men’s sports is that they’re constantly seeing them, they’re constantly hearing about them, they know their stories,” King said. “The only way you really are powerful is when people know who you are.”
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              How the new venture works:
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             Trailblazer is a three-month program with six to eight start-ups. Investments can range from $200,000 to $2 million. Elysium will be the main investor, R/GA will offer its branding expertise and King’s company will offer its relationships. “Everybody needs help and access to things that can really scale and make a difference,” said Ilana Kloss, the C.E.O. of Billie Jean King Enterprises. It’s not enough to say, “if you’re good enough, you’re going to make it,” she said.
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              Start-ups in the program range in focus from health to nutrition to fandom.
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             “It’s not necessarily ‘By women, for women,’” said Fielding Jamieson of R/GA, who will run the Trailblazer Venture studio. “It’s more, ‘Let me just build a product that is equal across both male and female.’”
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                FT
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               In France, the presidential hopefuls are promising tax cuts, higher wages and changes to the retirement age. (
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               Small business owners oppose a congressional proposal to redirect about $5 billion in funds that had been allocated for them to pandemic response measures. (
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