Business Updates: Retail Sales Jumped in January, Rebounding From a Drop
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Google said on Wednesday that it was working on privacy measures meant to limit the sharing of data on smartphones running its Android software. But the company promised those changes would not be as disruptive as a similar move by Apple last year.
Apple’s changes to its iOS software on iPhones asked users for permission before allowing advertisers to track them. Apple’s permission controls — and, ultimately, the decision by users to block tracking — have had a profound impact on internet companies that built businesses on so-called targeted advertising.
Google did not provide an exact timeline for its changes, but said it would support existing technologies for at least two more years.
This month, Meta, the company founded as Facebook, said Apple’s privacy changes would cost it $10 billion this year in lost advertising revenue. The revelation weighed on Meta’s stock price and led to concerns about other companies reliant on digital advertising.
Anthony Chavez, a vice president at Google’s Android division, said in an interview before the announcement that it was too early to gauge the potential impact from Google’s changes, which are meant to limit the sharing of data across apps and with third parties. But he emphasized that the company’s goal was to find a more private option for users while also allowing developers to continue to make advertising revenue.
As the world’s two biggest smartphone software providers, Google and Apple hold significant sway over what mobile apps can do on billions of devices. Changes to increase privacy or provide users with greater control over their data — a growing demand from customers, regulators and politicians — come at a cost for companies collecting data to sell ads personalized to a user’s interests and demographics.
The changes from Google and Apple are significant because digital advertising based on the accumulation of data about users has underpinned the internet for the last 20 years. But that business model is facing more challenges as users have grown more suspicious about far-reaching data collection amid a general distrust of technology giants.
The difference in approaches between Apple and Google also speaks to how each company makes the bulk of its money. Apple generates most of its revenue from selling devices, while Google makes its money largely from selling digital advertising and may be more open to considering the needs of advertisers.
Google said it planned to bring its privacy initiative, Project Sandbox, which had been limited mainly to reducing tracking on the company’s Chrome browser, to Android — the world’s most widely used software for mobile devices. Google has been forced to revamp its approach to eliminating so-called cookies, a tracking tool, on Chrome while facing resistance from privacy groups and advertisers.
Google said it was proposing some new privacy-minded approaches in Android to allow advertisers to gauge the performance of ad campaigns and show personalized ads based on past behavior or recent interests — as well as new tools to limit covert tracking through apps. Google did not offer much in terms of detail about how these new alternatives would work.
As part of the changes, Google said, it plans to phase out Advertising ID, a tracking feature within Android that helps advertisers know whether users clicked on an ad or bought a product as well as keep tabs on their interests and activities. Google said it already allowed users to opt out of personalized ads by removing the tracking identifier.
The company said it planned to eliminate identifiers used in advertising on Android for everyone — including Google. Mr. Chavez said Google’s own apps would not have special or privileged access to Android data or features without specifying how that would work. This echoes a pledge Google made to regulators in Britain that it would not give preferential treatment to its own products.
The company did not offer a definitive timeline for eliminating Advertising ID, but it committed to keeping the existing system in place for two years. Google said it would offer preview versions of its new proposals to advertisers, before releasing a more complete test version this year.
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Inflation in Britain accelerated in January, with prices increasing at their fastest pace in three decades, adding to concerns about a painful squeeze on household budgets a day after separate data showed wage growth wasn’t keeping up with prices.
The Consumer Prices Index rose 5.5 percent from a year earlier, the highest since March 1992, the Office for National Statistics said on Wednesday, edging up from a 5.4 percent increase in December. It was slightly higher than economists surveyed by Bloomberg had forecast as higher energy and food prices offset declines in transport and clothing.
The inflation rate is expected to keep climbing. The Bank of England has forecast the rate will peak above 7 percent in the spring, when an increase to the government’s energy bill price cap takes effect in April, and remain above 5 percent for the rest of the year. Already, the central bank has raised interest rates twice in the past two months, and higher-than-expected inflation readings are furthering speculation that policymakers will raise rates again as soon as next month.
The inflation data released on Wednesday “serves to underscore a recent global trend — higher and more persistent inflation has caught central banks on the back foot and opened the door to more interest rate hikes this year,” Ambrose Crofton, a strategist at JPMorgan Asset Management, said in emailed comments.
In the United States, prices are increasing at their fastest pace in 40 years, and in the eurozone the annual inflation rate rose to 5.1 percent in January — levels not seen since the creation of the common currency.
The governor of the Bank of England, Andrew Bailey, said this month that the interest rate increases were necessary to bring inflation back down to the bank’s 2 percent target. But the outlook for the overall economy was getting darker. The bank forecast that the economy will grow more slowly as high inflation squeezes wages and reduces consumer spending, normally a crucial driver of economic growth.
The wage squeeze has already arrived. Although employers are paying higher salaries to fill positions, in the last quarter of 2021 pay excluding bonuses fell 0.8 percent compared with a year earlier once inflation was taken into account, the statistics office said on Tuesday.
The government has been accused of not doing enough to target support to people on low incomes. The majority of British households are expected to get some relief from looming increases to energy bills, but it will cover just a fraction of the rise. Benefits are expected to go up by about 3 percent in April, less than half the expected inflation rate at the time.
The British Chambers of Commerce said businesses also needed more support to cope with inflation, especially from rising energy bills.
“Rising inflation could well be a significant drag anchor on U.K. economic output this year by weakening consumer spending power and damaging firms’ finances and ability to invest,” Suren Thiru, head of economics at the British Chambers of Commerce, said in a statement.
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CNN’s parent company said on Tuesday that journalistic lapses had contributed to the sudden exit of Jeff Zucker, who resigned as the network’s president this month after acknowledging a romantic affair with a fellow executive.
The executive, Allison Gollust, CNN’s top communications and marketing officer, resigned on Tuesday.
For nearly two weeks, WarnerMedia, which owns CNN, and its chief executive, Jason Kilar, had refused to detail the nature of Mr. Zucker’s departure. On Tuesday evening, the company released a statement after being notified by The New York Times that it was finalizing a story on the departures of Mr. Zucker and Chris Cuomo, CNN’s top-rated anchor who was fired in early December.
“Based on interviews of more than 40 individuals and a review of over 100,000 texts and emails, the investigation found violations of company policies, including CNN’s News Standards and Practices, by Jeff Zucker, Allison Gollust and Chris Cuomo,” Mr. Kilar wrote on Tuesday.
Mr. Zucker resigned on Feb. 2 after he said he had failed to disclose his relationship with Ms. Gollust, which was in violation of company policy.
“We have the highest standards of journalistic integrity at CNN, and those rules must apply to everyone equally. Given the information provided to me in the investigation, I strongly believe we have taken the right actions and the right decisions have been made,” Mr. Kilar said.
In a release on Tuesday evening, Ms. Gollust said, “WarnerMedia’s statement tonight is an attempt to retaliate against me and change the media narrative in the wake of their disastrous handling of the last two weeks. It is deeply disappointing that after spending the past nine years defending and upholding CNN’s highest standards of journalistic integrity, I would be treated this way as I leave.”
A representative for Mr. Zucker did not immediately respond to a request for comment on Tuesday night. Steven Goldberg, a spokesman for Chris Cuomo, declined to comment on Tuesday about the memo.
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On Tuesday, Shari Redstone staged her second hourslong investor presentation in two years. Both events were designed for the same purpose — to reposition her old-line media company, ViacomCBS, as a streaming giant in the making, one capable of competing head-on with Netflix, HBO Max, Disney+ and Amazon Prime Video, despite a late start.
This time, there was less snickering.
“Some of you thought we were on an impossible mission,” Robert M. Bakish, the chief executive of ViacomCBS, said during the presentation on Tuesday. “It’s not only possible. It’s happening.”
To highlight the importance of its fast-growing Paramount+ streaming service, Ms. Redstone, the company’s chair, announced that ViacomCBS would rename itself Paramount Global.
Paramount+ had 32.8 million subscribers worldwide at the end of its most recent quarter, up from fewer than 19 million a year earlier. In the three months that ended on Dec. 31, Paramount+ added 7.3 million customers, the result of offerings like “1883,” the prequel to “Yellowstone”; “Clifford the Big Red Dog”; and National Football League games. (A year earlier, ViacomCBS was adding about a million streaming subscribers a quarter.)
The company’s streaming portfolio (Paramount+ and niche services from Showtime, BET and Nickelodeon) now has about 56 million subscribers. Mr. Bakish said that number would grow to 100 million by 2024, more than the roughly 70 million the company had previously forecast. The company also raised its 2024 streaming revenue goal to $9 billion, from $6 billion.
Streaming brought in about $4.2 billion last year, including advertising sales from the free Pluto TV service.
Paramount+ unveiled a barrage of additional programming to fuel continued growth. The expanded lineup will include fresh content from franchises including “Yellowstone,” “Beavis and Butt-Head,” “Teenage Mutant Ninja Turtles,” “Real World,” “Dora the Explorer,” “NCIS,” “SpongeBob SquarePants,” “Transformers” and “South Park.” Paramount+ will be the exclusive first stop after theatrical distribution for all Paramount Pictures movies beginning in 2024. (Many previously went to Epix, a premium cable channel.)
Starting this summer in the United States, Paramount+ subscribers will be able to upgrade to receive Showtime content, including the new hit drama “Yellowjackets” and older series like “Billions.”
ViacomCBS shares declined about 6 percent in after-hours trading. Richard Greenfield, a founder of the research firm LightShed Partners, cited investor concern about Mr. Bakish’s “meaningfully stepping up spending” on content.
It may be growing quickly, but Paramount+ continues to lag behind competitors like Disney+, which added 11.8 million subscribers worldwide in its most recent quarter to reach 129.8 million. Netflix has about 222 million.
Lots of skepticism that anyone not named Disney+ or HBO Max can compete with tech giants in streaming like Netflix, Amazon & Apple
Yet, its 100% clear from today’s event that @ViacomCBS (soon to be Paramount) is not giving up, regardless of whether that is right decision $VIAC pic.twitter.com/QyQpN2C7uY
— Rich Greenfield, LightShed 🔦 (@RichLightShed) February 15, 2022
Regulators are investigating how big banks handle large stock transactions.
The Securities and Exchange Commission has sent subpoenas to Morgan Stanley and Goldman Sachs to examine their practices around block trades, four people with knowledge of the matter said. They requested anonymity to discuss an active inquiry.
Federal prosecutors in New York are also looking into the practice, three of the people said.
Companies typically arrange block trades via banks when they want to buy or sell a large amount of stock quietly, hoping to minimize sharp price movements. Banks look for buyers or sellers for that big slug of stock, pocketing a fee for their role as middlemen.
The authorities are looking into whether hedge funds or other traders approached by the banks to buy big blocks of stock improperly used the knowledge of that impending trade to make their own trades. In particular, they are investigating whether hedge funds used the information to “short” the shares, one of the people said.
To short a stock is to bet that a stock will decline in price, and make money when it does. While short-selling is legal, using inside information to make the bet is not. Since block trades flood the market suddenly with a large amount of shares, they can depress a stock’s price, even if only temporarily. Prior knowledge of a block trade, therefore, is of concern to authorities.
But proving any wrongful intent in the trading of block shares can be difficult, as banks rarely ask the hedge funds they approach to sign agreements that they won’t act on the information.
The Wall Street Journal reported the news of the investigation on Monday. The Journal reported that securities regulators had been looking into block trading by Goldman, Morgan Stanley and other firms since at least 2019.
Block trades briefly garnered attention last spring when banks made significant transactions on behalf of Archegos, a $10 billion family office, as it imploded. Although prosecutors and securities regulators have been looking into the collapse of Archegos for more than a year, it’s unclear if the latest investigation into block trading is connected to that.
Spokesmen for the S.E.C. and the Department of Justice declined to comment.
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The Super Bowl on Sunday night drew the best ratings in five years for the game, with an average of 112.3 million viewers across television and streaming, according to NBCUniversal, which aired the event.
Viewers tuned in for a matchup that had the Los Angeles Rams narrowly prevailing in the final minutes in their home stadium over the Cincinnati Bengals. The halftime show, which highlighted hip-hop for the first time at the event, attracted a bigger audience than the previous year.
Last year’s Super Bowl, which appeared on CBS, tallied 99.7 million viewers across multiple platforms — the smallest audience in years. This year’s game was shown on NBC, Telemundo, Peacock, NBC Sports Digital, NFL Digital platforms and Yahoo Sports. Television viewership on NBC peaked at 104.4 million midway through the game but averaged 99.2 million, up 4 percent from last year.
The halftime concert, with Dr. Dre, Snoop Dogg, Eminem, Mary J. Blige, Kendrick Lamar and 50 Cent, averaged 103.4 million viewers, a 7 percent increase from last year’s performance by the Weeknd. The average ad — there were 81 spots in the national broadcast — reached 106 million viewers, according to data from iSpot.
As more people seek outlets for their pandemic fatigue, National Football League games have accounted for 48 of the 50 most-watched broadcasts in the 2021 regular season, even as the league battles criticism about racism and player injuries.
Source: https://www.nytimes.com/live/2022/02/16/business/stock-market-economy-news
