17th October 2019
Written by Aidan Reid, Associate
Edited by Harriet Moll, Creative Director
Just as businesses can rise with breakneck speed, so too can they fall fast and hard. In 2000, the film rental firm Blockbuster had become, over 15 years, a giant of the growing home entertainment industry. It had thousands of stores globally and annual revenues of more than $2 billion. It was a one stop entertainment shop and seemed set to be a challenger to terrestrial TV in the UK and beyond for a long time to come. Now Blockbuster is merely a 90’s kid signifier. For former employees like myself, it is a brief and nostalgic point of conversation. Its shops are long vacant and its business model has been overtaken by technology and by the firm it once tried to buy for $50 million, Netflix. Much like its former rival, Netflix has simply taken advantage of the latest home entertainment trend. There follows from this success an expectation that Netflix and its competitors pose a major threat to terrestrial TV. Much like the rise in rentals, the theory goes that greater choice means people turning off BBC One and STV. They undoubtedly have changed the landscape. The Crown was originally pitched to the BBC before Netflix swept in with a budget five times the size. The potential for terrestrial channels to lose valuable content to more nimble competition isn’t likely to go away. However, in Scotland and across the UK, the ‘traditional’ channels are showing they can adapt to the new world of endless online content. STV’s audiencegrew last year across all age groups thanks largely to the stellar growth of its online STV player and production revenues also grew by 60% as investment in new content began to bear fruit. STV and the other publicly available channels make up 53.6% of all Scots’ TV viewing time. Far more than many who read the last rights for these channels would have expected. They are also preparing to play Netflix at their own game, with the BBC and ITV jointly launching the beta version of its BritBox streaming service this week. For now though, Netflix is still growing. Its quarterly update yesterday revealed a further 6.8 million subscribers had been added, taking its total to over 158 million. This was a fall on the previous quarter, however, and comes before the ominous emergence of serious global competitors in the form of Apple and Disney. Though it is hard to imagine now, we may well be talking of Netflix as we do of Blockbuster in the future, all the while still tuning into the stalwarts of UK television. Stranger things have happened.
One of the leaders of Hong Kong’s pro-democracy movement, Jimmy Sham, has been taken to hospital with serious injuries after being attacked in the street. It follows the suspension by the chief executive of the Hong Kong administration of her annual address after it was disrupted by protests from opposition politicians. NASA officials have said it expects the first all-female space walk to take place today. It will be conducted by Christina Koch and Jessica Meir from the International Space Station and follows previous delays due to the lack of correctly-sized space suits. The US president, Donald Trump, has defended his decision to withdraw troops from Syria. He argued following a meeting with his Italian counterpart, Sergio Mattarella, that the decision had “nothing to do” with Turkey’s invasion of Northern Syria. He also claimed sanctions on Turkey were a more effective way of stabilising its conflict with Kurds based in the region. The likelihood of the prime minister’s Brexit deal passing through Parliament has fallen significantly after the DUP stated they couldn’t support the deal “as it stands”. It comes as Boris Johnson travels to today’s EU Council summit to seek approval for the draft legal text which will be used as the basis of a new withdrawal agreement.
Business & Economy
The high street camera store, Jessops, is expected to call in administrators for the second time in six years. Its owner, Dragons Den entrepreneur Peter Jones, has announced he will seek a CVA with creditors after the firm suffered from a widespread rise in rental costs for retail firms. The IMF has flagged its concerns for the global economy in its annual financial sustainability report. The report raised fears that low interest rates were encouraging investors to take significant risks for returns. It also argued for regulations introduced for banks following the financial crisis to be mirrored in the asset management and investment sectors. The People’s Bank of China announced a surprise $28 billion injection into the Chinese banking system amid fears over a 30-year low in the country’s economic growth. It has been suggested policymakers are seeking to encourage greater lending to firms, which they believe can offset the impact of China’s trade war with the USA. (£)
What happened yesterday?
You might have thought light at the end of the tunnel down which EU and British negotiators have headed would have seen the markets respond positively. The resulting rise in the pound’s value by 0.3% against the dollar, though, appeared to discourage investors. Both the FTSE 100 and 250 indexes saw overall falls in value by 0.61% and 0.04% respectively. The insurance firm, Hiscox, was one of the biggest fallers after a briefing note from Barclays claimed the firm may issue a profit warning due to claims from those affected by Typhoon Hagibis. It saw its shares fall by more than 5%. The US markets showed similar losses. The Nasdaq and S&P 500 saw a 0.2% and 0.3% fall in value, in part due to weaker than expected US retail sale figures. These results raised continued concerns over the country’s longer term economic growth.
Whats happening today?
Avangardco Fiske Nakama Group Tlou Energy Watches Switz
Final ex-dividend date
Grit Real Est. Hend.euro.
JPMorgan Emerging Markets Investment Trust Smiths Group
UK Economic Announcements
(09:30) Retail Sales
Columns of Note
The gap between what was said and the political reality is the focus of Alex Massie’s piece in the Spectator on the SNP Autumn Conference. While the tone of the first minister’s speech was felt to be aspirational and featured calls for a second independence referendum next year, Massie also highlights that much of the conference dealt with the reality that this is unlikely to be granted. This patient approach, in which the SNP turn to the 2021 Holyrood elections for an unignorable mandate, is perceived by Massie to be the preference of Sturgeon. He also claims this plan faces the twin flaws that her party members are unlikely to be willing to wait and even then, Brexit will not be fully settled. Nonetheless, it is suggested outside the conference hall that a thawing of opposition to independence is taking place due to the “pull” of the idea being matched by the “push” from events at Westminster. Amy Davidson Sorkin discusses Tuesday’s Democratic candidate debate for the New Yorker. She highlights the collective view of all candidates that impeachment proceedings against their eventual opponent, Donald Trump, were now necessary. She was critical of attempts by Kamila Harris to downplay the difficulty of pushing through an impeachment process. In contrast, Andrew Yang and Pete Buttigieg were praised for acknowledging the difficulty of being the post-Trump president. (£)
Did you know?
In honour of the Great British Bake Off’s pastry week, the world’s largest meat pie was produced in Warwickshire in 1998. It stretched out to 9.75 metres and featured more than nine tonnes of meat.
House of Commons
Oral questions International Trade (including Topical Questions) Women and Equalities Debate on the Address 4th day of debate on the Queen's Speech Adjournment Economic case for the Eden North Project in Morecambe - David Morris House of Lords Debate on the Address Economic affairs, business, agriculture, environment, energy and transport - Baroness Vere of Norbiton, Lord Gardiner of Kimble Debate Motion pursuant to the Northern Ireland (Executive Formation ect) Act 2019 - Lord Duncan of Springbank Scottish Parliament In recess. TOMORROW
House of Commons No business scheduled. House of Lords No business scheduled. Scottish Parliament In recess.