Netflix Blames Weak US Subscriber Additions on New Chip-Based Cards

Video-streaming service provider Netflix Inc reported third-quarter US subscriber additions below its own forecast, blaming a transition to chip-based cards for the miss.

Shares of Netflix, known for its original shows such as “House of Cards” and “Orange is the New Black”, plunged about 15 percent after the bell, before clawing back to trade down 2.4 percent.

US credit and debit card companies have been shifting to chip-enabled cards ahead of the Oct. 1 deadline mandated for the switch.

For Netflix, the switch meant that many of the older cards on its file no longer worked as the companies gave new cards to their customers, leading to “involuntary churn,” as Chief Executive Reed Hastings put it in a letter to shareholders.

“It’s just the dumbest thing I’ve heard,” Wedbush Securities analyst Michael Pachter said.

FBR Capital Markets analyst Barton Crockett said the issue around the chip cards is particularly confusing, given that these cards have been around for a bit.

“It begs a million questions,” he said.

Netflix said on Wednesday it added 0.88 million US subscribers in the third quarter ended Sept. 30, compared with its forecast of 1.15 million.

“The slowdown in US subscriber growth was particularly disappointing because one would expect that since Netflix just raised rates last week, this number would have been strong,” said Crockett.

Netflix increased the subscription rate for some new members earlier this month by $1.00 a month to $9.99 in the United States, Canada and Latin America.

Internationally, Netflix added 2.74 million subscribers, compared with its projection of 2.40 million.

Netflix, which is also battling competition from streaming services such as Amazon Inc’s Prime Video service and Hulu, has been aggressively building its overseas presence.

The company said it was in the “early stages” of its China entry and said it was “still learning a lot”.

Netflix said in July its plans to enter China in 2016 could be delayed.

Netflix is being “more adventurous” on the news side, company executives said on a post-earnings conference call.

The company added it was not looking at live sports as an offering currently.

“There’s a lot of irrational bidders for sports, we’re not anxious to become another one,” Netflix’s head of content Ted Sarandos said. “Sports on demand is not as exciting as sports live.”

Netflix forecast adding about 1.65 million customers in the United States in the current quarter. It also said it expected to add about 3.50 million subscribers worldwide.

Government Orders Ban on Websites, Facebook Pages With ISIS Propaganda

Cracking its whip on terror propaganda being carried on Internet, government Wednesday ordered banning of two websites and some pages on social networking site Facebook after it was found that they contained material detrimental to the country’s sovereignty.

The decision was taken during a high-level meeting in which officials from Department of Telecom, Home Ministry and central security agencies participated. The meeting was convened by Indian Computer Emergency Response Team (CERT-In), a nodal agency under Ministry of Communications, that deals with cyber security threats like hacking and phishing.

“On the request of the IB and some police, the CERT-In has blocked two websites belonging to Islamic State of Iraq and Syria, which were spreading outfit’s propaganda, and two Facebook pages which were being run by anonymous people in Jammu and Kashmir,” a senior government officer said.

The two websites spreading ISIS propaganda had details of how to make bombs and training modules of the outfit. The officials said about 55-60 websites and social networking sites pages, related to terror activities, have been blocked by the government this year.

Earlier in the day, Telecommunication Minister Ravi Shankar Prasad said that steps will be taken to check misuse of social media platforms to disrupt communal harmony and national security.

“Well as far as radicalisation or extremism…communal or pro-terrorist views are concerned, there is a proper mechanism of coordination between Home Ministry and our Ministry,” he told a press conference.

‘Toshiba Likely to Bless a SanDisk-Western Digital Deal’

Toshiba, SanDisk’s partner in making memory chips, is more likely to sign off on a potential takeover of SanDisk by hard drive maker Western Digital than by rival memory chip maker Micron, analysts said.

Micron Technology Inc and Western Digital Corp are in talks with SanDisk Corp about a possible acquisition, Bloomberg reported on Tuesday.

The report came after months of intense speculation about imminent consolidation in the memory chip industry as a supply glut and cheaper products from China continue to drive down prices.

SanDisk will require Toshiba’s approval to consummate a deal with either party. SanDisk uses Toshiba’s foundries to make its chips and the two companies have an important intellectual property-sharing joint venture.

If Micron, which has its own foundries, buys SanDisk, Toshiba is likely to lose a lot of business. Moreover, Micron has a growing presence in the NAND-flash memory chips market and a tie up with SanDisk will immensely increase competition for the Japanese tech leader.

NAND-flash memory chips power solid-state drives, which are faster and more reliable than traditional hard drives, Western Digital’ mainstay. SSDs are used in cloud computing, data centres, smartphones and laptops.

“From Micron’s perspective … you could take out two competitors at once,” Cowen and Company analyst Timothy Arcuri said.

“If you can extricate SanDisk from the Toshiba JV, then you’ve taken Toshiba out of the NAND business and you’ve taken out SanDisk as well … this would really catapult you to number 2. status behind Samsung.”

Micron and Western Digital declined to comment. Toshiba and SanDisk did not immediately respond to requests seeking comment.

SanDisk, which had a market capitalisation of about $12.6 billion (roughly Rs. 81,647 crores) as of the stock’s close on Tuesday, has lost 37 percent of its value this year.

The company’s stock rose as much as 14 percent on Wednesday. Micron’s rose 6 percent, while Western Digital’s rose 2.4 percent.

SanDisk itself would be more amenable to a bid from Western Digital, which has strong free cash flow thanks to its cash cow hard-drive business, analysts said.

Western Digital is also expected to receive a $4 billion (roughly Rs. 25,919 crores) cash infusion from China’s state-backed Tsinghua Holdings Co Ltd, if the deal passes regulatory scrutiny in the United States.

The investment could give Western Digital the firepower to speed up SanDisk’s transition from a legacy hard drive maker to a company that makes efficient chips that run data centres.

Uber Slip Exposes Data of Some US Drivers

Uber on Wednesday confirmed that a software slip briefly exposed personal data of hundreds of US drivers.

The controversial ride-sharing company said that it stomped out the bug within a half-hour of getting word of the problem from a driver on Tuesday.

“We were notified about a bug impacting a fraction of our US drivers,” an Uber spokesperson said in an email reply to an AFP inquiry.

“We’d like to thank the driver who drew it to our attention and apologize to those drivers whose information may have been affected.”

Posts in online forums such as Reddit indicated that exposed information included driving license, tax, and Social Security data.

Uber promised to follow-up with drivers whose details were exposed.

Information regarding no more than 674 drivers in the United States was believed to have been exposed, with fewer than 1,000 individual private documents made vulnerable to viewing.

Drivers had to log in to their own documents pages to see information belonging to other drivers.

Limited information regarding some 50,000 Uber drivers in the United States was compromised early this year in a hacking incident that the California-based company is continuing to investigate.

Delivering the goods
Uber on Wednesday also unveiled a local delivery service for three US cities, aiming for a slice of the fast-growing segment.

Uber, which has been testing the service in some areas, said its new UberRush will allow consumers in Chicago, New York and San Francisco to get quick delivery of flowers, burritos or “pretty much anything in minutes.”

The new service competes with fast-growing startups like Postmates, and is aimed at helping merchants which lack delivery options to expand their consumer base.

Uber will collect fees of $5 to $6 for deliveries within one mile (1.6 kilometers), with the aim of getting the goods to consumers within minutes by car or bicycle courier.

The move came weeks after online giant Amazon began recruiting drivers for on-demand delivery of its products in its hometown of Seattle, Washington, with plans to launch in several other cities soon.

Uber’s ridesharing service has made it one of the world’s largest startups, operating in dozens of countries, but has faced regulatory hurdles in many areas and protests from established taxi operators.

Telecom Minister Asks Vodafone Group CEO to Address Call Drop Issue

Telecom Minister Ravi Shankar Prasad Wednesday asked the Vodafone Group CEO Vittorio Colao to address the call drop issue.

The chief of UK-based Vodafone met the Minister today. “I very firmly told him, call drops need to be addressed and I want Vodafone to play a very proactive role.

“Consumers are concerned and we are also concerned, and this is a priority issue and I mentioned in particular Delhi, Eastern UP, Bihar and Mumbai,” Prasad said here. The call drop problem has become acute in the last 4-5 months, but the situation has now started to improve. Colao told the Minister that the situation would improve in a month’s time.

“On the call drop issue, I spoke to the boss of Vodafone, and Rakesh Garg (Telecom Secretary) has already talked to all the owners.

“Weekly monitoring is going on and the latest which I got was that about 14,000 more towers need to be fixed,” he added. The government had earlier said that a total of 34,460 mobile sites were found to be defective, out of which 16,962 were fixed in the third week of September.

The Minister said that Colao was happy on the spectrum sharing and trading guidelines and complemented the government for the initiative on the issue of radiation. The Vodafone boss wants spectrum to be made available in bigger blocks and the Minister assured that the matter will be looked into.

Madhya Pradesh Post Offices to Sell Mobiles as Digital India Initiative

Post offices in Madhya Pradesh will sell mobile phones as part of postal department’s Digital India initiative.

The department has joined hands with state-run operator BSNL and a Noida-based private company, Pantel Technologies, to sell mobile phones through its offices in the state.

Chief Postmaster General of Madhya Pradesh Circle M E Haq Wednesday handed over the first mobile phone handset to a buyer, launching sale of mobile phones from head post offices.

In line with ‘Digital India’ initiative, India Post and BSNL have entered into an agreement with Pantel Technologies Private Limited to sell Penta Bharat Phone PF 301 through the post offices, an official said.

The phone comes with 1,999 minutes of free talk time from BSNL over a period of 18 months. It is also priced at Rs. 1,999.

To start with, these phones will be sold in all head post offices and some other major post offices in the state. The initiative will cover other post offices in due course.

Plans are afoot to launch couple of low-priced smart phones by Penta in the next few weeks, the official added.

Last week, the postal department started selling mobile phones through its head offices in the state of Himachal Pradesh.

The launch came after a pilot sale in four southern states, which the officials claimed was a big success. Over 70,000 phones were sold in a period of less than a year, and the project was being launched in other states too, a postal department official had said.

Penta PF 301 is a keyboard-operated phone that has several attractive features like – 2.8-inch wide screen, dual sim, FM radio, audio player, torch, and camera – and is Internet enabled.

Facebook Bug Shows Post View Counts for Some Users

Facebook has been reported to be hit by a bug that accidentally shows the view counts for posts shared across the social platform. The bug is said to be causing the issue only on mobile website.

According to users who reported the issue, the view counts appear below every post shared on the profile and shows just like how video counts are shows below every video shared on Facebook. A Twitter user named Marvin Ronsdorf has shared a screenshot that shows the view counts of posts shared by footballers Cristiano Ronaldo and Leo Messi.

 

facebook_post_view_count_marvin_ronsdorf_twitter.jpgThe Verge reports that the bug has been so far has not been reported to hit any desktop or Facebook app user on mobile and has been only reported to be coming from mobile site visitors. The social giant has confirmed that it is now working to remove the view counts from user posts, telling The Verge the changes should already be taking effect.

Reports of the bug on Facebook’s Facebook’s mobile site are not widespread, and may have only affected limited users accessing the social network. The view counts are appearing under the photo posts and shared links of the users themselves, and others in their News Feed. The view counts for each post can be a very easy way to see how many users actually see every single post shared with friends but at the same time it can also be a reality check on how many people actually saw the post and responded with a like or comment.

UberRush Local Delivery Service Launched in 3 US Cities

Uber on Wednesday unveiled its local delivery service for three US cities, aiming for a slice of the fast-growing segment.

Uber, which has been testing the service in some areas, said its new UberRush will allow consumers in Chicago, New York and San Francisco to get quick delivery of flowers, burritos or “pretty much anything in minutes.”

The new service competes with fast-growing startups like Postmates, and is aimed at helping merchants which lack delivery options to expand their consumer base.

“Businesses that tap into UberRush will make getting anything in your city faster, more reliable, and more affordable than picking it up yourself,” said a blog post from Jason Droege, head of UberEverything.

“It’s time to save business owners the headache, save you the trip, and save us all a bit more time.”

Uber will collect fees of $5 to $6 (roughly Rs. 325 to Rs. 390) for deliveries within one mile (1.6 kilometers), with the aim of getting the goods to consumers within minutes by car or bicycle courier.

The move comes weeks after online giant Amazon began recruiting drivers for on-demand delivery of its products in its hometown of Seattle, Washington, with plans to launch in several other cities soon.

Uber’s ridesharing service has made it one of the world’s largest startups, operating in dozens of countries, but has faced regulatory hurdles in many areas and protests from established taxi operators.

BlackBerry Priv Android Slider Smartphone Goes Up for Pre-Registration

The BlackBerry Priv, the Canadian smartphone maker’s first Android-based smartphone, can now be pre-registered via a new dedicated website. The page also confirms some of the smartphone’s specifications. The release date however, is still a secret for now. Interested users can sign-up on the page to get updates as to when the device would be reaching the shelves.

The BlackBerry Priv pre-registration page reveals the smartphone features a “stunning 5.4-inch dual-curved display”, a 3410mAh battery, touch and physical keyboards, Schneider-Kreuznach certified camera, and “extraordinary audio quality”. The Android handset would also come pre-installed with DTEK, BlackBerry’s warning system app – one that has not yet been detailed.

The pre-registration page adds the Priv will sport an “authentic BlackBerry keyboard, legendary security, streamlined communications and productivity” services alongside the access to Google Play. “It has been engineered with the world’s finest technology, and packaged in an ultra-thin, ergonomically perfect device with a keyboard hidden by SmartSlide technology,” the site adds.

Notably, the BlackBerry Priv earlier this week went through an in-depth hands-on by a website. Besides confirming the 5.4-inch screen, the website added the smartphone to sport a QHD (1440×2560 pixels) resolution display, hexa-core Qualcomm Snapdragon 808 processor under-the-hood, clubbed with 3GB of RAM, 32GB of inbuilt storage, of which the pre-installed software already occupies 10GB, microSD card expansion, Bluetooth 4.1, NFC, and Micro-USB port (USB 2.0), and an 18-megapixel rear camera.

A Reddit users also posted the image of Priv stating it to be slimmer than the Samsung Galaxy Note 5, which is 7.6mm thick, but heavier in comparison. Other claims made by the user were that it took longer for Priv to lock focus on objects in dark, and the software was smooth as the Nexus 5 withAndroid 6.0 Marshmallow.

Square Files for Keenly Awaited Stock Market Debut

Digital payments startup Square, founded by Twitter chief Jack Dorsey, announced Wednesday that it has filed with US regulators for a stock market offering to raise $275 million (roughly Rs. 1,781 crores).

The exact date Square will go public was not revealed, but the San Francisco-based company planned to trade on the New York Stock Exchange under the symbol “SQ.”

“We’ve built one of the fairest and most efficient payments businesses in the world,” Dorsey said in a letter included with paperwork filed with the Securities and Exchange Commission.

“Creating more inclusion and greater equality in the global economy is both a social need and a huge business opportunity.”

Square started out in 2009 by providing financial transactions software for smartphones or tablets along with free “dongles” that plug into devices for reading magnetic strips on payment cards.

Dorsey said that inspiration for the startup sprang from frustration experienced by an artist friend who was unable to accept credit card payments for creations.

Square recorded a loss of $77.6 million (roughly Rs. 502 crores) in the first half of this year as compared with a loss of $79.35 during the same period in 2014, according to the filing.

Revenue for the first six months of this year at Square was $560.6 million (roughly Rs. 3,632 crores) as compared with $371.9 million (roughly Rs. 2,409 crores) in revenue taken in during the same period last year.

Square warned in the filing that the rate of revenue growth was expected to drop for reasons including that major client Starbucks will switch to a rival payment system in the coming year.

“Our sellers and other users of our services have no obligation to continue to use our services, and we cannot assure you that they will,” Square said in the filing.

Battling giants
Square has been a hit with small businesses processing less than $250,000 in transactions annually, according to Forrester analyst Brendan Miller.

To thrive, Square needs to make inroads with bigger merchants, whose business is more aggressively courted by technology titans specializing in “point-of-sale” systems and powerhouses such as PayPal.

“Square has been vastly successful at attracting small merchants,” Miller said.

“If I am Square, I am thinking I need to move up-market. As soon as I do, I start competing with the giants of the world.”

PayPal was spun off by eBay in July, with the online payments group seeing a market value higher than its former parent.

Analysts at BMO Capital Markets at the time said PayPal had the potential to disrupt the market for personal and online payments.

Square has been differentiating itself by going beyond just processing payments to providing merchants with services such as financing, delivery, and ordering ahead, according to Miller.

“What gives me hope for Square is that traditional merchant service providers have not been successful at services beyond payments to merchants,” Miller said.

“I think Square is looking at services to attach to their platform; that will be the determination of their success.”

Steering two ships
Potential investors in the initial public offering (IPO) will have to decide whether they want to put their money into a company with a part-time chief.

Earlier this month, Dorsey made his job as interim chief at Twitter permanent, giving him the task of steering two major companies in the online sector.

Twitter is betting that the second coming of co-founder Dorsey as chief executive will bring blockbuster growth that has eluded its grasp and disappointed investors.

The soft-spoken Dorsey, who will turn 39 next month, ran Twitter in 2007-2008 and served as interim chief executive after Dick Costolo resigned in June.

Media reports said Square took advantage of a US law to file for its IPO on a confidential basis earlier this year. The law allows firms with less than $1 billion (roughly Rs. 6,479 crores) in revenue to put off disclosure of financial data until 21 days before the “roadshow” for investors.

In addition to the United States, Square has operations in Canada, Japan and Australia and claims to have “millions” of users around the world ranging from independent craftsmen who use its dongle to accept credit card payments to large chain stores.

Square’s plans for a stock market debut come as many startups have been able to raise cash from eager investors without heading to Wall Street for a public share offering.

Silicon Valley is home to herds of “unicorns,” startups valued at a billion dollars or more based on money pumped into them by private investors.

Privately held firms are not subject to the same scrutiny as publicly traded companies for finances and governance.