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AT&T Loses 1 Million Customers In Last Three Months – But Claims Profits

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Tech company AT&T lost one million TV customers in the last three months — but the company has some plans up their sleeves.

What We Know:

  • In their second quarter, the company had a decline of 946,000 total TV customers as well as 168,000 subscribers drop to their streaming service “DirecTV Now.”
  • This drop in customers seems to be due to their price jump for their services ($50-$85 from $40-$75 dollars starting in April 2019).
  • Their total customer rate is 23 million (2.5 million less than the year before). However, with the company taking ownership of  Time Warner (now called WarnerMedia) last June, they are planning on launching “HBO Max” with a limited release later this year for customers to stream HBO and Warner Bros. content.  The price has not officially been announced but it is expected to be more than $15, the price of “HBO Now”, HBO’s own personal streaming service.
  • Despite the loss of customers, the company’s revenue increased by 15.3% to $44.96 billion in the second quarter due to the Time Warner acquisition.
  • It will have plenty of competition with Netflix and Amazon as top competitors and big names launching their own streaming services soon like Disney’s streaming service, “Disney+” for $7 a month in November.
  • There is also AT&T TV. Instead of using a satellite dish like with AT&T’s DirecTV, customers will get a device in the mail that plugs into their TVs. The company will test the new, internet-based product later this summer.
  • AT&T Chief Executive Randall Stephenson stated that AT&T TV “will be the workhorse over the next couple of years”. He said it will allow the company to lower prices for customers, since it won’t need to send a truck and a worker to install a satellite dish.

Hopefully these next projects give the company a needed boost.

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Business

Consumer Prices Increasing at Quickest Rate Since 2008

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For the second month in a row, consumer prices are increasing at historically significant rates following a spike in demand with shortages on the supply side.

What We Know:

  • In May 2021, inflation reached 5 percent, a level that erodes consumer purchasing power. With a short supply of products, everything from chicken wings to lumber, there is a higher demand than supply for products, which leads to inflated price levels. Consumers are forced to pay the higher prices set by companies for the same products.
  • During the pandemic, manufacturers cut production. The end of the pandemic means people are once again traveling, shopping for clothes, dining out, and driving to work. Manufacturers are now struggling to keep up.
  • Grocery stores saw a spike in prices during the initial March 2020 lockdown and have not gone back down to pre-pandemic levels since. Compared to last year, the food price index is up 2.2 percent. “Across a wide basket of the most popular 5,000 items, shoppers are paying +0.4 pts more for groceries in May of 2021 vs May of 2020,” said Phil Tedesco, vice president of retail intelligence analytics at NielsenIQ.

Source: NielsenIQ
Graphic: Robin Muccari / NBC News. Changes in grocery costs for the US.

  • The White House came out and addressed the inflation issue, considering the price hikes temporary. The Federal Reserve additionally addressed inflation, permitting the 5% inflation rate to help the US reach full employment. The Federal Reserve also signaled that ending some bond purchases will help tighten the monetary supply. The chief economist of Deutsche Bank, David Folkerts-Landau, however, expressed concern. “While it is admirable that this patience is due to the fact that the Fed’s priorities are shifting towards social goals, neglecting inflation leaves global economies sitting on a time bomb,” warning of a potential recession.

The White House, Federal Reserve, and economists have different approaches to the issue. That said, for the time being, consumers can expect to see higher prices and fewer goods.

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Business

Twitter Rolls Out New Subscription Service ‘Twitter Blue’, Includes Undo Tweet Function

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Photo by Twitter. Twitter's new subscription service allows subscribers to undo tweets, save bookmarks, consolidate text, customize the app, and reach specialized support teams.

Twitter, traditionally funded through advertisement revenue, is experimenting with new forms of income generation, including a monthly subscription service offering unique amenities.

What We Know:

  • Twitter made $3.7 billion in revenue in 2020 from advertising alone. Like many other social media platforms, Twitter profits by offering a free service and authorizing brands to advertise products on the platform. CEO Jack Dorsey doesn’t foresee a shift, stating, “We want to make sure any new line of revenue is complementary to our advertising business.”
  • Accordingly, the free version of Twitter remains, with Twitter Blue acting as a fully opt-in experience. Users are not required to sign up, Dorsey even suggesting that Twitter Blue is simply an early-stage test to determine what users want. It developed in response to user requests and complaints about the current platform.
  • Twitter Blue includes an “undo Tweet” function which permits subscribers to edit a tweet for up to 30 seconds before it is published on the platform. In other words, the 30-second window gives users the opportunity to correct or edit a post prior to public exposure.
  • Other features include the bookmark function, text consolidation, app design customization, and premium access to a customer support team. The bookmark function allows users to organize saved tweets into folders for later reference while “reader mode” consolidates long threads into easy-to-read paragraphs. Twitter declares it will “listen to feedback and build out even more features and perks for our subscribers over time,” a move that incentivizes users to pay the monthly subscription fee.
  • In Canada and Australia, the service costs $3.49 CAD and $4.49 AUD, respectively. It is not currently available in the United States and a roll-out timeline has not been announced.

The response to Twitter Blue in Canada and Australia will likely determine the roll-out timeline for other regions.

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Biden Reverses Trump’s Ban on TikTok and WeChat

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President Joe Biden signed an executive order that reversed and replaced former President Donald Trump‘s ban on TikTok and WeChat.

What We Know:

  • Biden’s new order instructs the Commerce Department to carry out a national security review of 10 apps with foreign ties. The Commerce Department must state what they consider as “unacceptable risks” and draft a report with recommendations on how to protect Americans’ data. Biden’s new executive order replaces the three executive orders signed by Trump in August 2020.
  • TikTok is a video-sharing app owned by Beijing-based ByteDance, and WeChat is a messaging app owned by Shenzhen-based Tencent. Both apps were under heavy scrutiny by the Trump administration, with the former president forcing U.S. companies to stop doing business with the Chinese ones. Trump also ordered ByteDance to sell TikTok to a U.S. company or risk the app being banned from all U.S.-based app stores. However, due to the challenges he faced with his executive orders, the ban was never enforced.
  • The Biden Administration has similar reservations as the Trump Administration, in that they believe China is trying to retrieve Americans’ information through measures that violate our national security. When questioned by the Trump Administration, TikTok maintained that their app doesn’t utilize the Chinese government, and all the data gathered on U.S. users is stored in the U.S. and Singapore.

“The Biden Administration is committed to promoting an open, interoperable, reliable, and secure Internet, protecting human rights online and offline and supporting a vibrant, global digital economy,” the White House voiced in a statement.

  • Biden’s new executive order does not affect the negotiations that TikTok is currently having with the Committee on Foreign Investment in the United States on various ways to protect U.S. user’s data. His administration has decided to suspend efforts to force the sale of TikTok and await the recommendations made by the Commerce Department.

Biden’s hope with his executive order is to protect all Americans’ data from collection and utilization by U.S. rivals.

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