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Disney+ sees smallest subscriber growth since launch in battle with Netflix

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November 11, 2021

By Lisa Richwine and Nivedita Balu

(Reuters) -Walt Disney Co on Wednesday reported the smallest rise in Disney+ subscriptions since it launched the streaming video service to take on Netflix Inc, missing Wall Street targets and driving shares down nearly 5% after hours.

Profits from Disney’s theme park division fell well short of analyst projections, despite the quarter being the first time all parks were open since various pandemic closures. Capacity limits remain in place.

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The stumble in both the theme parks and streaming divisions https://tmsnrt.rs/3n60OoZ highlights the challenges Disney faces in the pandemic. Questions remain about how and when customers will return to public entertainment and whether that limits watching at home.

Disney is banking on new programming next year to boost streaming subscribers. Theme parks will benefit from the United States opening its borders to many vaccinated international travelers and more U.S. children getting the COVID-19 vaccine.

During the just-ended quarter, Disney+ picked up 2.1 million customers, less than half the subscribers Netflix added in roughly the same period. Analysts had projected Disney+ would add 10.2 million, according to Factset estimates.

Speaking on a conference call with analysts, Chief Executive Bob Chapek stuck by the company’s previous forecast of 230 million to 260 million Disney+ subscribers by the end of fiscal 2024.

Some investors are not convinced Disney will meet that projection, said Haris Anwar, an analyst at Investing.com.

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“The company seems to be hitting a roadblock when it comes to subscriber growth for its streaming service,” Anwar said. “Investors feel the company could miss its target of reaching 260 million subscribers by 2024, creating doubts that its service can create a serious challenge for the market leader, Netflix.”

As of early October, paying subscribers to Disney+ reached 118.1 million. Including Hulu and ESPN+, the company’s streaming customers totaled 179 million.

The company previewed a wide-ranging slate of streaming programming in development. Chapek said most of the marquee titles from the Disney, Marvel and Star Wars brands would arrive on Disney+ from July to September next year.

“This represents the beginning of the surge of new content shared last December,” he said.

Disney also sees an opportunity to bring in more subscribers with new programming for preschoolers and is investing in that area, Chapek said.

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Disney’s streaming media division, known as direct to consumer, continued to lose money as the company paid for new TV shows and movies, marketing and other costs. The unit reported an operating loss of $630 million in the quarter.

Attendance and spending rose at Disney’s U.S. parks. Disney does not expect a “substantial recovery” in international visitors to U.S. parks until the end of 2022, Chief Financial Officer Christine McCarthy said.

Overall, the media company posted diluted earnings per share of 37 cents, below analyst projections of 51 cents, according to IBES data from Refinitiv. Theme park division income reached $640 million, short of Wall Street projections of $942 million.

This week, Disney is offering the first month of Disney+ for $2, down from the usual $8, and other promotions.

On Friday, Disney will debut adventure movie “Jungle Cruise,” Marvel film “Shang-Chi and the Legend of the Ten Rings,” a new “Home Alone” movie and a batch of other programming on streaming.

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Disney also missed analysts’ estimates for quarterly revenue, which rose to $18.53 billion in the fourth quarter from $14.71 billion a year earlier.

Net income was $159 million, or 9 cents per share, compared with a loss of $710 million, or 39 cents per share, a year earlier.

(Reporting by Lisa Richwine in Los Angeles and Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker)

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Apple starts legal action against Russian regulator in App Store dispute -RIA

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December 6, 2021

MOSCOW (Reuters) – Apple has started legal proceedings against Russia’s anti-monopoly regulator in a dispute concerning alternative payment options on its App Store platform, the RIA news agency reported on Sunday citing court filings.

Russia opened an antitrust case against Apple in late October, accusing it of failing to allow app developers to tell customers about alternative payment options when using its App Store. It said Apple could face a fine based on its revenue in Russia if found guilty.

In documents published on Dec. 1, the Moscow Arbitration Court listed Apple as a claimant and Russia’s Federal Anti-monopoly Service (FAS) as a defendant in “economic disputes over administrative legal relations.”

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Apple, which did not immediately respond to a Reuters request for comment, demanded that additional documents be added to the case on Dec. 2, RIA reported.

Forbes Russia cited a FAS representative as saying that the proceedings related to a warning it issued on Aug. 30 over Apple’s alleged failure to inform users they could also pay for purchases outside the App Store.

The FAS did not immediately respond to a request for comment.

Apple faced pushback over its App Store rules in the United States in September when a federal judge issued a ruling forcing the company to allow developers to send their users to other payment systems.

(Reporting by Alexander Marrow; Editing by Andrew Osborn)

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Weaker foreign demand sinks German industrial orders in October

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December 6, 2021

By Michael Nienaber

BERLIN (Reuters) -Weaker demand from abroad drove a much bigger than expected drop in German industrial orders, including cars, in October, data showed on Monday, further clouding the growth outlook for manufacturers in Europe’s largest economy.

A pandemic-related scarcity of microchips and other electronic components has caused massive supply bottlenecks and production problems in Germany’s mighty automobile industry and other important sectors of the economy.

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Orders for goods ‘Made in Germany’ dropped 6.9% on the month in seasonally adjusted terms after a revised rise of 1.8% in September and a plunge of 8.8% in August, figures from the Federal Statistics Office showed.

A Reuters poll of analysts had pointed to a smaller decline of 0.5% on the month in October.

“After incoming orders climbed to an all-time high in mid-2021, the index has lost more than 16 points in recent months,” the economy ministry said, adding that the second sharp decline within three months put a further damper on the economic outlook.

Excluding distorting factors from bookings for big ticket items such as planes, industrial orders were still down 1.8%, the data showed.

The drop was driven by a decline in foreign orders of more than 13% on the month, with demand from countries outside the euro zone such as China particularly weak. Orders from domestic clients rose 3.4%.

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“New lockdowns in Asia are slowing industry in Germany,” VP Bank analyst Thomas Gitzel said. He added that the current wave of coronavirus infections across the globe was putting a renewed burden on the world economy.

Gitzel said that domestic demand should remain strong, helped by the new ruling coalition’s commitment to massive investment in the green economy.

“The decarbonization of the economy requires major investments in new technologies. German industry can and will benefit from this,” Gitzel said.

The weak orders data suggest that manufacturing will hamper overall economic growth in the coming months, with analysts expecting stagnation at best in the final quarter of this year.

(Reporting by Michael Nienaber, editing by Kirsti Knolle and Philippa Fletcher)

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Marketmind: Chasing the Omicron dip

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December 6, 2021

A look at the day ahead from Julien Ponthus.

Buying the dip triggered by the Omicron COVID-19 variant across global markets has proven a costly strategy so far. But some investors seem determined to have another go.

European and U.S. stocks futures are trading sharply higher after ending last week on a sour note and notwithstanding a dismal day in Asia where an MSCI index of Asia-Pacific shares outside Japan lost about 0.9%.

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The region has seen a series of corporate setbacks after ride-hailing giant Didi decided to withdraw from the New York stock exchange last week.

Shares in China Evergrande, the world’s most indebted developer, plunged 14% after it said there was no guarantee it would have enough funds to meet debt repayments.

Another giant, Alibaba dropped 5% after announcing it would reorganise its international and domestic e-commerce businesses. And U.S. regulatory opposition to the sale of Softbank-owned chip firm Arm pushed the Japanese conglomerate 8% lower.

But the mood is lighter already across Europe, allowing 10-year Treasury yields to claw back some of Friday’s falls which took them below 1.4% for the first time since late September.

There are five trading sessions left before Friday’s U.S. consumer price report which some reckon will provide the green light for the Federal Reserve to accelerate its tapering of bond purchases.

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Oil prices too rose by more than $1 a barrel after Saudi Arabia raised prices for its crude sold to Asia and the United States.

And if the market mood is perking up, there is no sign of that in Bitcoin which has fallen further and is now at $48,244 — some $20,000 below peaks hit a month ago.

Key developments that should provide more direction to markets on Monday:

-Vivendi is open to discuss with Rome over state control on TIM’s network

-Alibaba overhauls e-commerce businesses, names new CFO

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-Swiss National Bank Vice Chairman Zurbruegg to retire in July 2022

-Weaker foreign demand sinks German industrial orders in October

-CBI cuts UK economic growth forecasts on supply chain hit

-Euro zone finance ministers to discuss 2022 draft budgets, euro summit

– Russian President Vladimir Putin visits India

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– UK construction PMI/new car sales

-Euro zone finance ministers to discuss 2022 draft budgets, euro summit

BOE deputy Governor Broadbent, ECB Governor Lagarde and board member Panetta speak:

(Reporting by Julien Ponthus; editing by Sujata Rao)

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