The U.S. Court of International Trade in its April 1 remand order gave the Office of the U.S. Trade Representative “one final opportunity” to cure its Administrative Procedure Act violations and "flesh out" the reasons why it rejected the 9,000+ comments it received in the Lists 3 and 4A Section 301 tariff rulemakings, without devising “new rationales for dismissing them,” said Akin Gump lawyers for lead Section 301 plaintiffs HMTX Industries and Jasco Products, in comments in docket 1:21-cv-52 on USTR’s Aug. 1 remand determination. “USTR’s response to that directive flunks the Court’s test,” they said.
Disney stands by its decision to raise pricing 38% to $10.99 monthly on the ad-free Disney+ offering, effective when it debuts the ad-supported Disney+ Basic tier in December (see 2208110015), CEO Bob Chapek told a Goldman Sachs investment conference Wednesday. “I think it’s what the market will bear, which is a direct reflection of price value, and I think we are way underpriced relative to the value that we provide,” said Chapek. “We owe it to our shareholders to try to get that recognized.” Disney has “lots of data” in terms of “what consumers’ intentions are,” he said. “Suffice it to say that we think we made the right move and we are still in some cases significantly under where our competitors are, which again speaks to that introductory price that we came out at.” Disney’s “whole approach” in evolving ESPN as an a la carte streaming service available outside the traditional pay-TV bundle is to “proactively prepare for that moment” without “prematurely” or “unnecessarily” disrupting the business "that it is today,” said Chapek. “Everybody knows” that the traditional cable bundle “is deteriorating over time, and we’re preparing for the moment when the consumer tells us that they are ready for such a step,” he said. “We’ve got tremendous abilities to read the marketplace and understand when it might be time to do that.” There are “significant benefits” to Disney maintaining its cable business, “but at some point, we see the writing on the wall where this is going, and we’re preparing for that,” he said. “But we’re not going to do anything rash or harsh, and we’re going to follow the consumer.”
All Corning businesses are “continuing to perform well” in the current quarter, “in line” with expectations, except for display technologies, Executive Vice President-Chief Strategy Officer Jeff Evenson told a Goldman Sachs investor conference Tuesday. Panel maker output declined in August “from already low levels” due to “rolling power outages” in China, he said. “This reduces our outlook for display glass volume in the quarter,” he said. “Consequently, we now anticipate the third quarter coming in at the bottom or slightly below” the guidance Corning gave July 26 when it said display glass volume would decline by a mid-teen percentage sequentially from Q2, he said. Corning thinks the outlook for the display market is positive over the “medium and long term,” said Evenson. “As people are doing more things at home, as they're looking to upgrade to better entertainment experiences, the use of larger, more lifelike displays, we think, will continue to be a priority.” The COVID-19 pandemic “induced a lot of advanced purchases, probably accelerated those trends, and pushed us up above the normal range of large TV units,” which customarily number between 225 million and 235 million sets a year, he said. Corning’s view is that TV unit sales for 2022 will be “in the vicinity of what they were last year” but “could be a little down,” he said. Optical communications was Corning’s “biggest growth driver” in Q2, rising 10% sequentially and 22% year over year to $1.3 billion, said Evenson. The world has installed enough glass “to go to the sun and back about 20 times” since Corning invented “low-loss optical fiber” in 1970, he said. Yet only about 19% of Americans “connect through fiber in their homes,” he said. “We believe that the industry is at the beginning of a large multiyear wave of growth.” The combination of private network and public infrastructure investments “will create double-digit market growth for passive optics over the next few years,” he said.
The U.S. Court of International Trade “bent over backwards” to allow the Office of the U.S. Trade Representative to comply with its Administrative Procedure Act obligations in its imposition of the Lists 3 and 4A Section 301 tariffs on Chinese goods when it remanded the duties to the agency for further explanation on the rationale for the actions it took in the context of the comments it received, said an amicus brief Wednesday in docket 1:21-cv-52 from the Retail Litigation Center, CTA, National Retail Federation and four other trade associations. With USTR’s “non-responsive” answer Aug. 1 to the remand order, the time has come for the court “to impose the normal remedy for unlawful agency action” by vacating the Lists 3 and 4A tariffs and ordering them refunded, it said.
The string of content cancellations at Warner Bros. Discovery, including the decision this summer to scrap releasing Batgirl on HBO Max (see 2208050006), is nothing “unusual” for when “a new team takes over,” Chief Financial Officer Gunnar Wiedenfels told a Bank of America investment conference Thursday. “We're a creative industry and one of the elements of creativity is that there's judgment and differences in the views on what the potential of a certain piece of IP might be,” said Wiedenfels. Corporate management, including CEO David Zaslav, has “really this belief in the theatrical window,” as opposed to “just producing feature films for just one streaming window,” he said. The Batgirl decision was “blown out of proportion a little bit in terms of the attention” it got outside the company, he said. Zaslav ultimately defended the decision, saying his team couldn't find an "economic case" for steering expensive feature films direct to streaming.
Comcast was one of three companies, along with Google and Microsoft, vying to partner with Netflix on its forthcoming launch of an ad-supported VOD tier, acknowledged Comcast Deputy Chief Financial Officer Jason Armstrong during a Bank of America investment conference Thursday. The contract ultimately went to Microsoft (see 2207130048). When Netflix “globally went out and said, we need to have advertising capabilities” and would look “externally” to find them, “it was down to three companies,” said Armstrong. “If you think about what Comcast brought to the table, I would say we were at or near the top of the pecking order in terms of the capability set,” he said. “We may not have been willing to write the biggest guarantee around it,” but Comcast’s “prowess” in ad sales, distribution and technology “put us right there,” he said. “That was a great sort of cross-company moment to be that far into the mix on something that was that relevant.”
When Matt Furlong joined GameStop as CEO from Amazon in June 2021, GameStop “was saddled with significant debt, decaying systems, limited employee depth and a host of other issues,” said Furlong on an earnings call Wednesday for fiscal Q2 ended July 30. “We spent the second half of 2021 and the first half of 2022 making up for years of underinvestment in modernizing the business.”
There “clearly” has been a change in expectations about the size of the PC market this year, “driven by the change in the economic environment,” HP CEO Enrique Lores told the Citi Global Technology Conference Thursday. Most of the change is happening in the “consumer space,” he said. HP’s “current expectation” is the industry will ship around 300 million PCs this year, “which is significantly lower than what we were expecting at the beginning of the year,” he said. “There are differences across segments, and also slight differences across regions,” he said. Most of the economic slowdown's impact is being felt in Europe and North America, while Asia generally “continues to perform well,” he said. “We see clearly a bigger impact in consumer than what we see in commercial, and in general, we see more impact on the low-priced categories than on the premium categories.” The situation in commercial PCs is “more complex to understand,” said Lores. On the one hand, many enterprise customers are actively investing “to improve the experience of their employees,” having not spent a lot of money on office equipment during the pandemic, he said. “On the other side, companies are also becoming more cautious in terms of how fast they invest money,” he said. “We are seeing also a slowdown in orders once we win these deals.” The “great thing,” he said, is that “the opportunity to refresh is there.”
Applied Materials, as a “direct impact” of the newly enacted Chips and Science Act, plans to apply for government grants “that will help us with R&D facilities that we've been desirous of building,” Chief Financial Officer Brice Hill told the Citi Global Technology Conference virtually Wednesday. The company supplies wafer fab production tools to chipmakers, and so is a bellwether of semiconductor industry health.
NAB takes no position on the “merits” of the 5G Broadcast technology espoused by Qualcomm for over-the-air TV content delivery to mobile devices as a complement to ATSC 3.0 (see 2208080065), said the association in reply comments Tuesday at the FCC in docket 16-142.