#tesla loses $71 billion

[tomorrowusa]

While Elon Musk is having fascist orgasms on Twitter X, Tesla dropped $71 billion in value.

A significant portion of Tesla's customer base consisted of upscale liberals. Musk decided that it would be fun to use his platform to attack them and their views. You don't have to be a savvy genius to understand that this would not be good for business.

Shares in Tesla plunged as much as 11% after the market opened Thursday, wiping $73 billion off the company’s market value hours after it warned of slowing growth in electric car sales and an existential threat from Chinese rivals. In an earnings presentation Wednesday, the world’s most valuable automaker said its sales growth this year “may be notably lower” than last as it continued developing the “next-generation” vehicle, likely a lower-priced model. While it reported a sizeable 38% increase in deliveries last year compared with 2022, Tesla had previously targeted a 50% annual growth rate averaged over several years. Tesla’s (TSLA) financial results for the last quarter also disappointed, with adjusted earnings per share down 40% from a year earlier, and revenue, which rose 3% to top $25 billion, coming in below market forecasts. It was the second straight quarter the company fell short of earnings forecast by analysts, following a string of better-than-expected results stretching back to the start of 2021.

Musk diverted attention from his core business so he could become a professional rightwing internet troll. Among other things, he jumped on Ron DeSantis's anti-woke bandwagon and was host for Meatball Ron's campaign launch last year – which turned into a fiasco.

[sycriptouk]

LCID Puts

Does anybody else think this is retarded ? The company is valued at 71 billion dollars ?That is WSB level of retardation in overvaluation . They PROMISE to deliver 275 vehicles by end of 2021 , they have delivered about 50 give or take . If this earning reports does not deliver the numbers Wall Street are seeking it should sink the stock price . I get it , I get it, EVs have their market cap priced in to stupid numbers , but this is absurd . They are losing 100s of millions year on year and faced increase competion in their market space . I won’t bet against Tesla , but I’m willing to bet against every other EV company that thinks it can just follow production projections . It simply is not sustainable where a company that “assuming we can meet numbers , which is a big if” is valued way over the traditional auto makers , and even they hit every single number they’ve given out , they deliver 257 vehicles this year , at guess what , a 127 MILLION dollar loss this quarter . Add on top of that that inflation numbers ,supply chain shortages , and semi shortages . People are pumping EV stocks with no revenue behind it ? Welcome to my Ted talk but I think with all the run up this stock has had I think the market realizes to stop pumping money into non-profit companies . The real catalyst is if their earnings dictates they can’t deliver the cars they promised ( side note , Tesla did that for 5 straight years , driving the stock price down ) . EV can run the world in 2030 , right now ? These market caps are ridiculous , LUCID is worth about 15 a share PRICING IN outlooks . Why does the market not value seeing results anymore ?

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[estimize]

5 Stocks to Help Beat Earnings Season Blues

With Q4 earnings season about to get underway, investors are frantically searching for stocks poised to beat or miss target estimates.  Analysts at Estimize expect earnings growth of S&P 500 companies to touch 3.2% this quarter with revenue growth hovering around 5%. This would mark the first time the index posted consecutive quarters of growth in about 2 years. So far a handful of companies look like they’ll shine in the coming weeks but none more than Etsy, Tesla, Alcoa, Nvidia and Netflix. According to the Estimize data this group of companies are exhibiting the telltale signs of an earnings beat: heavy upward revisions activity, strong history of topping analysts estimates, and consist year over year growth.

Etsy, Inc (ETSY) Information Technology – Internet Software & Services

While many online retailers have struggled to compete with Amazon, that hasn’t been the case for Etsy. Etsy’s niche marketplace of handmade arts and crafts has found its footing in the rapidly evolving retail space. Etsy has delivered better than expected results for 3 of the past 4 quarters and year-to-date the stock is up 52%. During the third quarter, management increased guidance for many key financial metrics such as gross merchandise sales, revenue, gross margin and adjusted EBITDA. This is a clear signal that its ongoing initiatives and acquisitions continue to improve financial performance. Furthermore, Etsy agreed to acquire AI startup, Blackbird Technologies, in September, a move that will bolster its search capabilities. Early estimate activity suggest Etsy will be one of the best performers for the upcoming fourth quarter. Analysts at Estimize are calling for earnings per share of 4 cents, 80% greater than Wall Street estimates and 195% higher than a year earlier. Revenue for the period is forecasted to jump 22% to $107.30 million, marking a slight slowdown from previous results.

Tesla (TSLA) Consumer Discretionary – Automobiles

Tesla surprised pretty much everyone last quarter after not only delivering a profit for the first time ever but one as large as 71 cents per share. Revenue made equally impressive strides, growing by 85% on a record number of car deliveries and production. With the Model 3 set to be released in Spring 2017, Tesla should see a new and quite possibly the biggest layer of support to the top line. Even though fourth quarter deliveries fell short of its own forecasts, the electric carmaker appears headed in the right direction. The Estimize community still believes the electric car maker can turn a profit of 5 cents per share for the fourth quarter which is surprisingly lower than Wall Street’s estimate at the moment. Revenue estimates for the period have been stagnant over the past 3 months at $2.27 billion, reflecting a 36% increase from a year earlier.

Alcoa (AA) Materials – Metals & Mining

The industrial sector saw the biggest upside following the shocking results of this year’s election. Trump has clearly stated on multiple occasions that he would bring jobs back to the United States and devote a large amount of resources to manufacturing/industrials. This could provide a meaningful boost for Alcoa that had otherwise struggled throughout this low growth environment. Third quarter results missed analysts estimates by $240 million on the top line and 4 cents on the bottom. Management put the blame on the aerospace side of the business which was down 6 percent year over year. Moving forward, Alcoa will no longer report its value added under its namesake brand but under the newly independent publicly traded company, Arconic. The separation of its value added and upstream segment will prevent a slumping aluminum business from holding back growth in faster growing plane and car parts. Analyst’s at Estimize are optimistic that Alcoa can right the ship in its first report after the split. Earnings estimates jumped 138% in the past 3 months to 26 cents per share with sales targets hovering around $5.08 billion. Shares typically don’t react well during earnings season but any sign of reversing its losing streak should send the stock soaring.

NVidia (NVDA) Information Technology – Semiconductors

Nvidia posted one of the largest percentage beats last quarter amongst all the companies in the S&P 500, so it seems fitting to find them on a list of potential Q4 winners. Earnings for the third quarter topped analysts estimates by over 50% while sales trumped those very same expectations by 18%. Management credited strong growth on the continued success of its core GPU business and significant progress made in VR, self driving cars and data center computers. NVidia has left very little reason to believe that any of these businesses will take a step back in future quarters. The biggest concern might be analysts’ and investors’ unreasonably high expectations given the company’s recent gains. Nevertheless analysts continue to ramp up forward estimates to unprecedented levels. For the fourth quarter, the Estimize consensus data edged significantly higher to 91 cents per share on $2.12 billion in revenue.

Netflix (NFLX) Consumer Discretionary – Internet & Catalog Retail

If not for NVidia, analysts would be touting Netflix as one of the best Q3 earnings plays. The video streaming service pulled out quite the surprise in the third quarter, beating analysts expectations on both the top  and bottom line. Most of the gains came from a blow out subscription number which gained 370,000 net members in the U.S. and 3.2 million internationally, handily beating the 2.3 million management forecasted. Netflix steady stream of original content and new initiatives like an offline option will continue to provide support to the top line. But the cost of rolling out new content will put pressure on the bottom line. Revisions activity following the report unsurprisingly edged higher for the fourth quarter. The Estimize community is now looking for earnings of 15 cents per share on $2.47 billion in revenue, reflecting an 93% increase on the bottom line and 34% on the top.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

Photo Credit: Automobile Italia

[williamsjoan]

The future of the media industry in the new year

2018 was a year of massive mergers and acquisitions with AT&T/Time Warner, Disney/Fox, and Comcast/Sky. The #MeToo movement made headlines, and the dominant emotion in boardroom discussions around Hollywood and beyond was fear … lots of fear in the ranks of our tech-infused world of media and entertainment (as well as in the world itself).

So what does the crystal ball predict for 2019?

Here are some of the narratives that will shape the world of entertainment next year and set the stage for the roaring 20s of the media industry.

PREDICTION #1 – Blood continues to spill in the relentless battle amongst premium OTT video giants, as Apple and Disney join the subscription video fray and add to the epic collective assault on Netflix.  In the midst of it all, smaller “niche” players either find their singular voices that attract “fandom” and broader monetization, or risk being marginalized and swallowed up by their strategic investors (for a fraction of what they would have commanded a couple years back). 

Originals continue to be the primary weapon used in the premium subscription streaming video battlefront, extending media’s new “Golden Age” for creators and further skyrocketing content-related development and production costs (including the price tags for A-list marquee talent).  Fierce premium OTT video competitors increasingly use content both offensively and defensively, like Disney withholding its crown jewels from Netflix (Star Wars, Pixar, Marvel, Princesses, X-Men, Avatar).  Netflix feels the heat, as will its investors, as the collective crew of “Netflix-Killers” put increasing pressure on its pure-play business model.

Netflix should be afraid of Disney’s OTT play

Meanwhile, the newly expanded list of virtual MVPDs (multi-channel video program distributors) fix their initial flaws, offer consumers real competitive choice, and hasten consumer cord-cutting even further.  Whereas we started 2016 with 2-3 real, viable mainstream choices in the U.S. for live television, as of 2019, consumers now can access nearly 10 (cable, satellite, Hulu Live, YouTube TV, DirecTV Now, Sling TV, PlayStation Vue, fuboTV, etc.).  And, even in these nationalistic times, let’s not forget about massive international players like Tencent, Alibaba or Baidu’s iQIYI, which went public in the U.S. markets this past year.

Amidst this battle of video giants, several smaller so-called “niche” or segment-focused video players either expeditiously find their uniquely compelling voice and build a fandom-fueled multi-pronged monetizing brand around it, or simply get lost in the noise.

FILE – This June 27, 2015, file photo, shows the Hulu logo on a window at the Milk Studios space in New York. Hulu said Monday, Aug. 8, 2016, that the company is dropping the free TV episodes that it was initially known for as it works on launching a skinny bundle of streaming TV. (AP Photo/Dan Goodman, File)

PREDICTION #2 – Media-Tech driven M&A continues to rule the day in all segments.  On the video side, both traditional media companies and undercapitalized and underperforming privately-held new media companies languish in this beyond-crowded OTT video space and become logical M&A targets.

M&A is a hallmark of the overall digital, multi-platform tech-infused transformation of the media and entertainment business.  Just like AT&T closed its acquisition of storied traditional (yet slow-moving) Time Warner ($85 billion), Disney beat back Comcast to acquire Fox’s entertainment assets in 2018 ($71.3 billion), Comcast struck back and acquired Sky ($39 billion), and SiriusXM acquired the remaining 81% of Pandora it didn’t already own ($3.5 billion), expect more massive deals in 2019, together with a number of smaller, yet still significant ones.  Viacom/CBS is one likely candidate.

And don’t just look within U.S. borders.  No virtual wall exists in our borderless new media world, which means that M&A’s pace will accelerate internationally as well.  Remember, the Comcast/Sky deal represents a U.S. behemoth’s ambitions to significantly expand its footprint into multiple European territories.  Lots of mega-companies around the globe desperately hope to expand their footprints to places where, up to now, they have never been.

To be clear, not all M&A will flow from weakness.  Sometimes the numbers offered simply will be too high to reject.  But make no mistake.  Weakness will abound amidst hyper-competition, and winners will swallow up losers in an environment of accelerating M&A.  Many of the so-called niche-focused OTT video services still primarily rely upon ad dollars (especially the younger ones), but remember, Google and Facebook already own about 2/3 of that global digital advertising market.  That means that most pure-play OTT video players simply cannot succeed on ad dollars alone.  And, for most, other means of monetization will be beyond their reach, as they fail to deliver a sufficiently compelling, differentiated and emotionally connected media experience.  So, much like Uproxx did this past year when Warner Music Group acquired it (likely for a song), expect several of the new media players to lose their Indie status.

PREDICTION #3 – The music industry’s streaming-driven turnaround continues and streaming revenues accelerate, but pure-play music services led by Spotify continue to hemorrhage money as losses mount.  Meanwhile, the giant “big box” retailers of the day — Apple, Amazon and YouTube (particularly YouTube) — brazenly march on, indifferent to that suffering with their fundamentally different underlying marketing-driven business models. 

Yes, Spotify boasts massive scale.  Yet, scale alone does not financial success make.  In fact, pure-play growth success leads to higher and higher losses due to sobering industry economics these pure-plays can’t stomach, but the behemoths can due to their multi-pronged business models.  These harsh realities mean that investors of many pure-play streaming music services will take a hard look at themselves in 2019 as they contemplate their next strategic next steps.  Many will realize that they can’t go it alone.  And that leads to more M&A, much like we saw this past year with SiriusXM buying Pandora and LiveXLive buying Slacker.  Spotify is not immune here.  Unless it successfully expands its business model and drives major new revenue streams, it too could be bought. Facebook anyone?

  NEW YORK, NY – APRIL 03: The Spotify banner hangs from the New York Stock Exchange (NYSE) on the morning that the music streaming service begins trading shares at the NYSE on April 3, 2018 in New York City. Trading under the symbol SPOT, the Swedish company’s losses grew to 1.235 billion euros ($1.507 billion) last year, its largest ever. (Photo by Spencer Platt/Getty Images)

PREDICTION #4 – Tech-driven media companies thrive and increasingly dominate the entertainment world by using data to their advantage.  They use AI, voice and machine learning to dominate further and even more broadly infiltrate our lives and impact our media and entertainment experiences.

Netflix, Amazon and Facebook increasingly mine their deep data about all of our hopes and dreams to maximize “hits” and minimize “misses” as compared to traditional media companies.  In many respects, the studios simply can’t compete.  Faced with that reality, the quest for data — and the services that provide, analyze and inform – takes on new urgency.  Further, the Hollywood establishment and creative community still have yet to understand – at least in large numbers — the power of new cost-effective tech-driven ways to test and measure new characters, stories and engagement in order to more smartly and efficiently place their big expensive bets.

Meanwhile, the new tech-driven media giants hope to increase their overall Media 2.0 dominance through the soothing voices of Alexa and Siri (sorry Google, yours is a little less so) and the overall AI/machine learning revolution.  “Virtual assistants,” “smart speakers” (or whatever you want to call them) increasingly dominate our home conversations, improve significantly over time, and serve up our favorite content via “intelligent” recommendations (as well as increasingly targeted and smarter incentives, promotions, ads and goods).  71% of us already use voice assistants at least once per day (most frequently for selecting the music we like to hear), so voice most definitely is here to stay.

More exotically, and perhaps somewhat alarmingly, AI also increasingly drives so-called “intelligent” creation.  AI already develops movie trailers that some believe approach the impact of their human-generated counterparts.  You be the judge — check out the first AI-produced movie trailer, care of IBM’s Watson, for the fittingly AI-themed 2016 motion picture thriller Morgan.  And, just imagine how much AI has advanced in just these past two years since then.  Can AI screenwriters be far behind?  Gong Yu, founder and CEO of China’s leading streaming platform iQIYI certainly doesn’t think so.  In his words, AI “will reshape the entertainment industry over the next 10-15 years, much more so than the Internet did over the past three decades.”  Just chew on that for a bit.

So, AI may become a real threat even to creative pursuits that, up to this point, most in Hollywood believe are untouchable by computers, bots, and robots.  Tesla maven and global futurist Elon Musk is downright dystopian and takes things even further, warning that AI may be an ultimate global threat to us all.  Musk tweeted in 2017 that “competition for AI superiority at national level most likely cause of WW3.”   Those were his precise words, so that was either Musk’s particular form of Twitter-speak, or his mind had become a bit hazy during one of his notorious cannabis-fueled interviews!

Amazon is releasing a software development kit that will let developers integrate Alexa into smart screen devices.

PREDICTION #5 – Behemoths Apple, Google and Facebook, together with other tech-driven media giants and deep-pocketed financiers from around the world, increase their already-massive investments in immersive technologies and accelerate mainstream adoption of AR.

AR’s gold rush means continued growth in the related wearables market and consumer adoption of AR-driven eyewear.  Investors of all stripes also continue to throw boatloads of cash into the overall immersive space to fuel the development of experiences (including real world live entertainment and storytelling, not only games) to feed these new platforms.  Expect significant investment in content.  The immersive market opportunity is still so nascent, yet its ultimate promise is so great, that the money working to capture it in 2019 and beyond will seem endless.  And, when so much money chases a market, that market becomes our consumer reality.

The onset of 5G wireless networks will only hasten the growth of extended reality (XR) in all its forms.  Speaking of 5G …

GUANGZHOU, CHINA – DECEMBER 06: Attendees look at 5G mobile phones at the Qualcomm stand during China Mobile Global Partner Conference 2018 at Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China. The three-day conference opened on Thursday, with the theme of 5G network. (Photo by VCG/VCG via Getty Images)

PREDICTION #6 – 5G Networks launch, reveal their early media and tech promise and possibilities, and begin to transform our media and entertainment experiences (as well as the overall ecosystem that supports them). 

5G networks are critical for media experiences that require low latency, including AR, VR, and eSports.  For AR, 5G reduces the size of consumer headsets, because processing is now done on the network itself rather than on the device.  That makes wearables increasingly user-friendly and fuels further innovation and adoption.  5G also accelerates more high quality video consumption on our mobile phones, thereby pushing purveyors of premium OTT video like Netflix to increasingly focus on mobile-first content experiences.

Jeffrey Katzenberg’s and Meg Whitman’s new mobile-driven Netflix-like premium video service Quibi (formerly NewTV) certainly saw this train coming, and jumped on first.

Still a year away from launch, Meg Whitman and Jeffrey Katzenberg’s Quibi keeps adding talent

PREDICTION #7 – The oft-overlooked, yet potentially game-changing, live entertainment and event plank increasingly finds itself in multi-platform Media 2.0 strategies, deepening overall brand engagement and monetization possibilities.  Expect more significant “offline”-related experiments, initiatives and M&A by both traditional and new tech-driven media companies.

Call this the “Amazon Effect,” as players across the Media 2.0 ecosystem stop scratching their heads about Amazon’s direct-to-theater film releases, brick and mortar retail expansion, and Whole Foods superstore operations – and, instead, increasingly study, respect and emulate them.  Netflix certainly did in 2018.  After trashing Amazon one year earlier for releasing its features first in theaters, Netflix announced it would begin to do the same.

Amazon understands what most still haven’t even considered – that direct, non-virtual offline consumer engagement may be the most impactful plank of them all, driving online engagement into the real world (and then back again) to create a virtual cycle of daily brand engagement and consumer monetization every step of the way.  Even traditional media company Viacom now shows signs of understanding these online/offline brand synergies.  It bought both youth-focused video industry conference VidCon and music festival SnowGlobe in 2018.

So, while MoviePass may go the way of the Dodo bird in 2019, movie theaters themselves will not die.  They simply will be re-imagined.  We humans, after all, are social creatures.  We like to get out, and we won’t be satisfied binging on Netflix alone.  Movie theater subscription services most definitely are here to stay, and Amazon will offer one soon for Prime members.  After all, in a fun fact that may surprise you, more museums populate the planet – significantly more – than McDonald’s.  See, there is hope!

ANAHEIM, CA – JUNE 23: General view of panelists at the 7th Annual VidCon at Anaheim Convention Center on June 22, 2016 in Anaheim, California. (Photo by Tara Ziemba/WireImage)

PREDICTION #8 – The #MeToo Movement continues to transform the face (and faces) of both old and new media.  And, new faces will invest new industry dollars in new (and frequently very different) content choices, bringing us new (and frequently different) stories and transforming our media and entertainment experiences.

Revelations aren’t over.  Abuse was simply far too pervasive.  Old players are gone.  New, frequently younger, tech-driven media savvy faces get a seat at the decision-making table.  They change the game of “what” and “how” we experience content.

Ultimately, #MeToo both cleanses the overall new media industry, and fills our plates with very different media and entertainment choices.

(Staff photo by Brianna Soukup/Portland Press Herald via Getty Images)

PREDICTION #9 – Fake news, fraud and breaches of privacy continue unabated and accelerate, as does marketing concern for “brand safety.”  These seemingly unstoppable negative forces continue to place downward pressure on ad-dependent open platforms. 

Make no mistake, we are in the midst of hacking wars, the likes of which we’ve never seen.  This “good versus evil” reality is here to stay, and players across the tech-driven media and entertainment ecosystem either significantly increase their investments in counter-measures and related PR, or risk the wrath of consumers and the overall ad market (much like Facebook did this past year).

Twitter cleaned 70 million fake and automated accounts in a two month span last year (and 1 million more daily), Instagram conceded that over 50% of engagements on its posts tagged as #sponsored are fake, Spotify similarly conceded prevalent ad fraud and decreased its total reported content hours streamed by hundreds of millions of hours, and competing music service Tidal faced accusations that it had falsified tens of millions of streams.  Just a few examples of how pervasive fraud and audience manipulation has become in our Media 2.0 world.  These fake accounts create, in the words of Variety, “a shadow army of followers that has comparatively little monetary effect.  But perform the same manipulation with music streams, and it constitutes fraud.”

  Image: Bryce Durbin/TechCrunch

PREDICTION #10 – Blockchain technology and crypto-currency-fueled investment and experimentation, already over-hyped and under-performing, continues apace.  Yet, once again, there will be little to show for it in the world of media and entertainment.  At least for now.

Early blockchain leaders continue to be irrationally overvalued, which is always the case with any nascent market.  But, on a happier note, the voice of blockchain technology – heard thus far mostly in investment circles with promises of “instant millions” (or even billions) – becomes increasingly heard for its more positive potential for the world of media and entertainment.  Blockchain technology conceptually holds revolutionary industry-transforming new offensive and defensive power.  On the offensive front, blockchain enables new ways to monetize content via micropayments and direct creator-to-consumer distribution sans today’s leading middlemen.  These possibilities begin to reveal themselves in 2019.  On the defensive front, blockchain promises to eradicate piracy, but that happens in years, not this coming year.

  THE BOTTOM LINE

2019 certainly will push 2018’s Media 2.0 boundaries noticeably further, driven by these and other industry meta-forces.  But, these changes will be barely noticeable compared to the seismic shifts to follow in the next ten years.

I close with Paramount futurist Ted Schilowitz’s perspective on all of this.  In our conversation, Ted points to two phenomena — the first of which he calls “the known unknown,” and the second he calls “the ten year curve.”  “The known unknown” refers to what he calls the “scary” fact that we all know that massive tech-driven change is coming, but we don’t know the “twists and turns that get us there.”  Meanwhile, “the ten year curve” refers to “big dynamic change waves” that follow ten-year cycles.  In Ted’s view, we just recently finished the YouTube and iPhone 10-year cycles, and now essentially everyone around the globe participates in those dual phenomena.

So, what’s “the next big thing?”  Ted calls it the “the evolution of the screen” – so-called “visual computing” via new forms of eyewear (wearables) that replace our smartphones.  Think Minority Report-like data and content interaction, and you get the general idea.  “Surprisingly little has changed with human/screen interaction in the past 30 years,” Ted points out.  He reminds me that while user interfaces have become more sophisticated, actual screen interaction is not massively different — comparing interaction on Mac screens 30 years ago and on iPhones today.

That is all changing right now — as you sit, read and soak in Ted’s thoughts either in print, or more likely on your own v.2019 screen.  According to Ted, we are only about 3.5 years into this 10-year visual computing cycle.  “In 2013-2014, we saw the first idea of commercializing a track-able screen, a spatial screen.  That is a massive change.  We will fundamentally change how we use our screens.  I see a very distinct future where these things will emerge from their cocoon and replace the iPhone, laptop, etc.  You will notice an evolution of 30 minutes per day, then one hour, then two hours, etc.” 

Think that overstates things a bit?  Well, Ted cautions you this way.  “It’s the exact same paradigm shift we saw with mobile phones decades ago.  Just imagine back then that you would – decades later (i.e., today) — carry a device with you almost every waking moment of your waking life.  Even Bill Gates would have said that is ridiculous.”

Yet, here we are.  Today.  In that “unimaginable” world.  That’s how fast it goes.

Ted is adamant about this inevitable “evolution of the screen” reality, and he is convincing.  “I know the next evolution is coming.  All of these experiments today are on their way to something really, really significant.  2019 will be very subtle in this revolution.  Still for the early adopter, because none of these head mounted immersive devices today will replace our smart phones.  But the constant and continuous evolution of this tech is happening

The future of the media industry in the new year published first on https://timloewe.tumblr.com/

[theinvinciblenoob]

2018 was a year of massive mergers and acquisitions with AT&T/Time Warner, Disney/Fox, and Comcast/Sky. The #MeToo movement made headlines, and the dominant emotion in boardroom discussions around Hollywood and beyond was fear … lots of fear in the ranks of our tech-infused world of media and entertainment (as well as in the world itself).

So what does the crystal ball predict for 2019?

Here are some of the narratives that will shape the world of entertainment next year and set the stage for the roaring 20s of the media industry.

PREDICTION #1 – Blood continues to spill in the relentless battle amongst premium OTT video giants, as Apple and Disney join the subscription video fray and add to the epic collective assault on Netflix.  In the midst of it all, smaller “niche” players either find their singular voices that attract “fandom” and broader monetization, or risk being marginalized and swallowed up by their strategic investors (for a fraction of what they would have commanded a couple years back). 

Originals continue to be the primary weapon used in the premium subscription streaming video battlefront, extending media’s new “Golden Age” for creators and further skyrocketing content-related development and production costs (including the price tags for A-list marquee talent).  Fierce premium OTT video competitors increasingly use content both offensively and defensively, like Disney withholding its crown jewels from Netflix (Star Wars, Pixar, Marvel, Princesses, X-Men, Avatar).  Netflix feels the heat, as will its investors, as the collective crew of “Netflix-Killers” put increasing pressure on its pure-play business model.

Netflix should be afraid of Disney’s OTT play

Meanwhile, the newly expanded list of virtual MVPDs (multi-channel video program distributors) fix their initial flaws, offer consumers real competitive choice, and hasten consumer cord-cutting even further.  Whereas we started 2016 with 2-3 real, viable mainstream choices in the U.S. for live television, as of 2019, consumers now can access nearly 10 (cable, satellite, Hulu Live, YouTube TV, DirecTV Now, Sling TV, PlayStation Vue, fuboTV, etc.).  And, even in these nationalistic times, let’s not forget about massive international players like Tencent, Alibaba or Baidu’s iQIYI, which went public in the U.S. markets this past year.

Amidst this battle of video giants, several smaller so-called “niche” or segment-focused video players either expeditiously find their uniquely compelling voice and build a fandom-fueled multi-pronged monetizing brand around it, or simply get lost in the noise.

FILE – This June 27, 2015, file photo, shows the Hulu logo on a window at the Milk Studios space in New York. Hulu said Monday, Aug. 8, 2016, that the company is dropping the free TV episodes that it was initially known for as it works on launching a skinny bundle of streaming TV. (AP Photo/Dan Goodman, File)

PREDICTION #2 – Media-Tech driven M&A continues to rule the day in all segments.  On the video side, both traditional media companies and undercapitalized and underperforming privately-held new media companies languish in this beyond-crowded OTT video space and become logical M&A targets.

M&A is a hallmark of the overall digital, multi-platform tech-infused transformation of the media and entertainment business.  Just like AT&T closed its acquisition of storied traditional (yet slow-moving) Time Warner ($85 billion), Disney beat back Comcast to acquire Fox’s entertainment assets in 2018 ($71.3 billion), Comcast struck back and acquired Sky ($39 billion), and SiriusXM acquired the remaining 81% of Pandora it didn’t already own ($3.5 billion), expect more massive deals in 2019, together with a number of smaller, yet still significant ones.  Viacom/CBS is one likely candidate.

And don’t just look within U.S. borders.  No virtual wall exists in our borderless new media world, which means that M&A’s pace will accelerate internationally as well.  Remember, the Comcast/Sky deal represents a U.S. behemoth’s ambitions to significantly expand its footprint into multiple European territories.  Lots of mega-companies around the globe desperately hope to expand their footprints to places where, up to now, they have never been.

To be clear, not all M&A will flow from weakness.  Sometimes the numbers offered simply will be too high to reject.  But make no mistake.  Weakness will abound amidst hyper-competition, and winners will swallow up losers in an environment of accelerating M&A.  Many of the so-called niche-focused OTT video services still primarily rely upon ad dollars (especially the younger ones), but remember, Google and Facebook already own about 2/3 of that global digital advertising market.  That means that most pure-play OTT video players simply cannot succeed on ad dollars alone.  And, for most, other means of monetization will be beyond their reach, as they fail to deliver a sufficiently compelling, differentiated and emotionally connected media experience.  So, much like Uproxx did this past year when Warner Music Group acquired it (likely for a song), expect several of the new media players to lose their Indie status.

PREDICTION #3 – The music industry’s streaming-driven turnaround continues and streaming revenues accelerate, but pure-play music services led by Spotify continue to hemorrhage money as losses mount.  Meanwhile, the giant “big box” retailers of the day — Apple, Amazon and YouTube (particularly YouTube) — brazenly march on, indifferent to that suffering with their fundamentally different underlying marketing-driven business models. 

Yes, Spotify boasts massive scale.  Yet, scale alone does not financial success make.  In fact, pure-play growth success leads to higher and higher losses due to sobering industry economics these pure-plays can’t stomach, but the behemoths can due to their multi-pronged business models.  These harsh realities mean that investors of many pure-play streaming music services will take a hard look at themselves in 2019 as they contemplate their next strategic next steps.  Many will realize that they can’t go it alone.  And that leads to more M&A, much like we saw this past year with SiriusXM buying Pandora and LiveXLive buying Slacker.  Spotify is not immune here.  Unless it successfully expands its business model and drives major new revenue streams, it too could be bought. Facebook anyone?

  NEW YORK, NY – APRIL 03: The Spotify banner hangs from the New York Stock Exchange (NYSE) on the morning that the music streaming service begins trading shares at the NYSE on April 3, 2018 in New York City. Trading under the symbol SPOT, the Swedish company’s losses grew to 1.235 billion euros ($1.507 billion) last year, its largest ever. (Photo by Spencer Platt/Getty Images)

PREDICTION #4 – Tech-driven media companies thrive and increasingly dominate the entertainment world by using data to their advantage.  They use AI, voice and machine learning to dominate further and even more broadly infiltrate our lives and impact our media and entertainment experiences.

Netflix, Amazon and Facebook increasingly mine their deep data about all of our hopes and dreams to maximize “hits” and minimize “misses” as compared to traditional media companies.  In many respects, the studios simply can’t compete.  Faced with that reality, the quest for data — and the services that provide, analyze and inform – takes on new urgency.  Further, the Hollywood establishment and creative community still have yet to understand – at least in large numbers — the power of new cost-effective tech-driven ways to test and measure new characters, stories and engagement in order to more smartly and efficiently place their big expensive bets.

Meanwhile, the new tech-driven media giants hope to increase their overall Media 2.0 dominance through the soothing voices of Alexa and Siri (sorry Google, yours is a little less so) and the overall AI/machine learning revolution.  “Virtual assistants,” “smart speakers” (or whatever you want to call them) increasingly dominate our home conversations, improve significantly over time, and serve up our favorite content via “intelligent” recommendations (as well as increasingly targeted and smarter incentives, promotions, ads and goods).  71% of us already use voice assistants at least once per day (most frequently for selecting the music we like to hear), so voice most definitely is here to stay.

More exotically, and perhaps somewhat alarmingly, AI also increasingly drives so-called “intelligent” creation.  AI already develops movie trailers that some believe approach the impact of their human-generated counterparts.  You be the judge — check out the first AI-produced movie trailer, care of IBM’s Watson, for the fittingly AI-themed 2016 motion picture thriller Morgan.  And, just imagine how much AI has advanced in just these past two years since then.  Can AI screenwriters be far behind?  Gong Yu, founder and CEO of China’s leading streaming platform iQIYI certainly doesn’t think so.  In his words, AI “will reshape the entertainment industry over the next 10-15 years, much more so than the Internet did over the past three decades.”  Just chew on that for a bit.

So, AI may become a real threat even to creative pursuits that, up to this point, most in Hollywood believe are untouchable by computers, bots, and robots.  Tesla maven and global futurist Elon Musk is downright dystopian and takes things even further, warning that AI may be an ultimate global threat to us all.  Musk tweeted in 2017 that “competition for AI superiority at national level most likely cause of WW3.”   Those were his precise words, so that was either Musk’s particular form of Twitter-speak, or his mind had become a bit hazy during one of his notorious cannabis-fueled interviews!

Amazon is releasing a software development kit that will let developers integrate Alexa into smart screen devices.

PREDICTION #5 – Behemoths Apple, Google and Facebook, together with other tech-driven media giants and deep-pocketed financiers from around the world, increase their already-massive investments in immersive technologies and accelerate mainstream adoption of AR.

AR’s gold rush means continued growth in the related wearables market and consumer adoption of AR-driven eyewear.  Investors of all stripes also continue to throw boatloads of cash into the overall immersive space to fuel the development of experiences (including real world live entertainment and storytelling, not only games) to feed these new platforms.  Expect significant investment in content.  The immersive market opportunity is still so nascent, yet its ultimate promise is so great, that the money working to capture it in 2019 and beyond will seem endless.  And, when so much money chases a market, that market becomes our consumer reality.

The onset of 5G wireless networks will only hasten the growth of extended reality (XR) in all its forms.  Speaking of 5G …

GUANGZHOU, CHINA – DECEMBER 06: Attendees look at 5G mobile phones at the Qualcomm stand during China Mobile Global Partner Conference 2018 at Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China. The three-day conference opened on Thursday, with the theme of 5G network. (Photo by VCG/VCG via Getty Images)

PREDICTION #6 – 5G Networks launch, reveal their early media and tech promise and possibilities, and begin to transform our media and entertainment experiences (as well as the overall ecosystem that supports them). 

5G networks are critical for media experiences that require low latency, including AR, VR, and eSports.  For AR, 5G reduces the size of consumer headsets, because processing is now done on the network itself rather than on the device.  That makes wearables increasingly user-friendly and fuels further innovation and adoption.  5G also accelerates more high quality video consumption on our mobile phones, thereby pushing purveyors of premium OTT video like Netflix to increasingly focus on mobile-first content experiences.

Jeffrey Katzenberg’s and Meg Whitman’s new mobile-driven Netflix-like premium video service Quibi (formerly NewTV) certainly saw this train coming, and jumped on first.

Still a year away from launch, Meg Whitman and Jeffrey Katzenberg’s Quibi keeps adding talent

PREDICTION #7 – The oft-overlooked, yet potentially game-changing, live entertainment and event plank increasingly finds itself in multi-platform Media 2.0 strategies, deepening overall brand engagement and monetization possibilities.  Expect more significant “offline”-related experiments, initiatives and M&A by both traditional and new tech-driven media companies.

Call this the “Amazon Effect,” as players across the Media 2.0 ecosystem stop scratching their heads about Amazon’s direct-to-theater film releases, brick and mortar retail expansion, and Whole Foods superstore operations – and, instead, increasingly study, respect and emulate them.  Netflix certainly did in 2018.  After trashing Amazon one year earlier for releasing its features first in theaters, Netflix announced it would begin to do the same.

Amazon understands what most still haven’t even considered – that direct, non-virtual offline consumer engagement may be the most impactful plank of them all, driving online engagement into the real world (and then back again) to create a virtual cycle of daily brand engagement and consumer monetization every step of the way.  Even traditional media company Viacom now shows signs of understanding these online/offline brand synergies.  It bought both youth-focused video industry conference VidCon and music festival SnowGlobe in 2018.

So, while MoviePass may go the way of the Dodo bird in 2019, movie theaters themselves will not die.  They simply will be re-imagined.  We humans, after all, are social creatures.  We like to get out, and we won’t be satisfied binging on Netflix alone.  Movie theater subscription services most definitely are here to stay, and Amazon will offer one soon for Prime members.  After all, in a fun fact that may surprise you, more museums populate the planet – significantly more – than McDonald’s.  See, there is hope!

ANAHEIM, CA – JUNE 23: General view of panelists at the 7th Annual VidCon at Anaheim Convention Center on June 22, 2016 in Anaheim, California. (Photo by Tara Ziemba/WireImage)

PREDICTION #8 – The #MeToo Movement continues to transform the face (and faces) of both old and new media.  And, new faces will invest new industry dollars in new (and frequently very different) content choices, bringing us new (and frequently different) stories and transforming our media and entertainment experiences.

Revelations aren’t over.  Abuse was simply far too pervasive.  Old players are gone.  New, frequently younger, tech-driven media savvy faces get a seat at the decision-making table.  They change the game of “what” and “how” we experience content.

Ultimately, #MeToo both cleanses the overall new media industry, and fills our plates with very different media and entertainment choices.

(Staff photo by Brianna Soukup/Portland Press Herald via Getty Images)

PREDICTION #9 – Fake news, fraud and breaches of privacy continue unabated and accelerate, as does marketing concern for “brand safety.”  These seemingly unstoppable negative forces continue to place downward pressure on ad-dependent open platforms. 

Make no mistake, we are in the midst of hacking wars, the likes of which we’ve never seen.  This “good versus evil” reality is here to stay, and players across the tech-driven media and entertainment ecosystem either significantly increase their investments in counter-measures and related PR, or risk the wrath of consumers and the overall ad market (much like Facebook did this past year).

Twitter cleaned 70 million fake and automated accounts in a two month span last year (and 1 million more daily), Instagram conceded that over 50% of engagements on its posts tagged as #sponsored are fake, Spotify similarly conceded prevalent ad fraud and decreased its total reported content hours streamed by hundreds of millions of hours, and competing music service Tidal faced accusations that it had falsified tens of millions of streams.  Just a few examples of how pervasive fraud and audience manipulation has become in our Media 2.0 world.  These fake accounts create, in the words of Variety, “a shadow army of followers that has comparatively little monetary effect.  But perform the same manipulation with music streams, and it constitutes fraud.”

  Image: Bryce Durbin/TechCrunch

PREDICTION #10 – Blockchain technology and crypto-currency-fueled investment and experimentation, already over-hyped and under-performing, continues apace.  Yet, once again, there will be little to show for it in the world of media and entertainment.  At least for now.

Early blockchain leaders continue to be irrationally overvalued, which is always the case with any nascent market.  But, on a happier note, the voice of blockchain technology – heard thus far mostly in investment circles with promises of “instant millions” (or even billions) – becomes increasingly heard for its more positive potential for the world of media and entertainment.  Blockchain technology conceptually holds revolutionary industry-transforming new offensive and defensive power.  On the offensive front, blockchain enables new ways to monetize content via micropayments and direct creator-to-consumer distribution sans today’s leading middlemen.  These possibilities begin to reveal themselves in 2019.  On the defensive front, blockchain promises to eradicate piracy, but that happens in years, not this coming year.

  THE BOTTOM LINE

2019 certainly will push 2018’s Media 2.0 boundaries noticeably further, driven by these and other industry meta-forces.  But, these changes will be barely noticeable compared to the seismic shifts to follow in the next ten years.

I close with Paramount futurist Ted Schilowitz’s perspective on all of this.  In our conversation, Ted points to two phenomena — the first of which he calls “the known unknown,” and the second he calls “the ten year curve.”  “The known unknown” refers to what he calls the “scary” fact that we all know that massive tech-driven change is coming, but we don’t know the “twists and turns that get us there.”  Meanwhile, “the ten year curve” refers to “big dynamic change waves” that follow ten-year cycles.  In Ted’s view, we just recently finished the YouTube and iPhone 10-year cycles, and now essentially everyone around the globe participates in those dual phenomena.

So, what’s “the next big thing?”  Ted calls it the “the evolution of the screen” – so-called “visual computing” via new forms of eyewear (wearables) that replace our smartphones.  Think Minority Report-like data and content interaction, and you get the general idea.  “Surprisingly little has changed with human/screen interaction in the past 30 years,” Ted points out.  He reminds me that while user interfaces have become more sophisticated, actual screen interaction is not massively different — comparing interaction on Mac screens 30 years ago and on iPhones today.

That is all changing right now — as you sit, read and soak in Ted’s thoughts either in print, or more likely on your own v.2019 screen.  According to Ted, we are only about 3.5 years into this 10-year visual computing cycle.  “In 2013-2014, we saw the first idea of commercializing a track-able screen, a spatial screen.  That is a massive change.  We will fundamentally change how we use our screens.  I see a very distinct future where these things will emerge from their cocoon and replace the iPhone, laptop, etc.  You will notice an evolution of 30 minutes per day, then one hour, then two hours, etc.” 

Think that overstates things a bit?  Well, Ted cautions you this way.  “It’s the exact same paradigm shift we saw with mobile phones decades ago.  Just imagine back then that you would – decades later (i.e., today) — carry a device with you almost every waking moment of your waking life.  Even Bill Gates would have said that is ridiculous.”

Yet, here we are.  Today.  In that “unimaginable” world.  That’s how fast it goes.

Ted is adamant about this inevitable “evolution of the screen” reality, and he is convincing.  “I know the next evolution is coming.  All of these experiments today are on their way to something really, really significant.  2019 will be very subtle in this revolution.  Still for the early adopter, because none of these head mounted immersive devices today will replace our smart phones.  But the constant and continuous evolution of this tech is happening

via TechCrunch

[fmservers]

2018 was a year of massive mergers and acquisitions with AT&T/Time Warner, Disney/Fox, and Comcast/Sky. The #MeToo movement made headlines, and the dominant emotion in boardroom discussions around Hollywood and beyond was fear … lots of fear in the ranks of our tech-infused world of media and entertainment (as well as in the world itself).

So what does the crystal ball predict for 2019?

Here are some of the narratives that will shape the world of entertainment next year and set the stage for the roaring 20s of the media industry.

PREDICTION #1 – Blood continues to spill in the relentless battle amongst premium OTT video giants, as Apple and Disney join the subscription video fray and add to the epic collective assault on Netflix.  In the midst of it all, smaller “niche” players either find their singular voices that attract “fandom” and broader monetization, or risk being marginalized and swallowed up by their strategic investors (for a fraction of what they would have commanded a couple years back). 

Originals continue to be the primary weapon used in the premium subscription streaming video battlefront, extending media’s new “Golden Age” for creators and further skyrocketing content-related development and production costs (including the price tags for A-list marquee talent).  Fierce premium OTT video competitors increasingly use content both offensively and defensively, like Disney withholding its crown jewels from Netflix (Star Wars, Pixar, Marvel, Princesses, X-Men, Avatar).  Netflix feels the heat, as will its investors, as the collective crew of “Netflix-Killers” put increasing pressure on its pure-play business model.

Netflix should be afraid of Disney’s OTT play

Meanwhile, the newly expanded list of virtual MVPDs (multi-channel video program distributors) fix their initial flaws, offer consumers real competitive choice, and hasten consumer cord-cutting even further.  Whereas we started 2016 with 2-3 real, viable mainstream choices in the U.S. for live television, as of 2019, consumers now can access nearly 10 (cable, satellite, Hulu Live, YouTube TV, DirecTV Now, Sling TV, PlayStation Vue, fuboTV, etc.).  And, even in these nationalistic times, let’s not forget about massive international players like Tencent, Alibaba or Baidu’s iQIYI, which went public in the U.S. markets this past year.

Amidst this battle of video giants, several smaller so-called “niche” or segment-focused video players either expeditiously find their uniquely compelling voice and build a fandom-fueled multi-pronged monetizing brand around it, or simply get lost in the noise.

FILE – This June 27, 2015, file photo, shows the Hulu logo on a window at the Milk Studios space in New York. Hulu said Monday, Aug. 8, 2016, that the company is dropping the free TV episodes that it was initially known for as it works on launching a skinny bundle of streaming TV. (AP Photo/Dan Goodman, File)

PREDICTION #2 – Media-Tech driven M&A continues to rule the day in all segments.  On the video side, both traditional media companies and undercapitalized and underperforming privately-held new media companies languish in this beyond-crowded OTT video space and become logical M&A targets.

M&A is a hallmark of the overall digital, multi-platform tech-infused transformation of the media and entertainment business.  Just like AT&T closed its acquisition of storied traditional (yet slow-moving) Time Warner ($85 billion), Disney beat back Comcast to acquire Fox’s entertainment assets in 2018 ($71.3 billion), Comcast struck back and acquired Sky ($39 billion), and SiriusXM acquired the remaining 81% of Pandora it didn’t already own ($3.5 billion), expect more massive deals in 2019, together with a number of smaller, yet still significant ones.  Viacom/CBS is one likely candidate.

And don’t just look within U.S. borders.  No virtual wall exists in our borderless new media world, which means that M&A’s pace will accelerate internationally as well.  Remember, the Comcast/Sky deal represents a U.S. behemoth’s ambitions to significantly expand its footprint into multiple European territories.  Lots of mega-companies around the globe desperately hope to expand their footprints to places where, up to now, they have never been.

To be clear, not all M&A will flow from weakness.  Sometimes the numbers offered simply will be too high to reject.  But make no mistake.  Weakness will abound amidst hyper-competition, and winners will swallow up losers in an environment of accelerating M&A.  Many of the so-called niche-focused OTT video services still primarily rely upon ad dollars (especially the younger ones), but remember, Google and Facebook already own about 2/3 of that global digital advertising market.  That means that most pure-play OTT video players simply cannot succeed on ad dollars alone.  And, for most, other means of monetization will be beyond their reach, as they fail to deliver a sufficiently compelling, differentiated and emotionally connected media experience.  So, much like Uproxx did this past year when Warner Music Group acquired it (likely for a song), expect several of the new media players to lose their Indie status.

PREDICTION #3 – The music industry’s streaming-driven turnaround continues and streaming revenues accelerate, but pure-play music services led by Spotify continue to hemorrhage money as losses mount.  Meanwhile, the giant “big box” retailers of the day — Apple, Amazon and YouTube (particularly YouTube) — brazenly march on, indifferent to that suffering with their fundamentally different underlying marketing-driven business models. 

Yes, Spotify boasts massive scale.  Yet, scale alone does not financial success make.  In fact, pure-play growth success leads to higher and higher losses due to sobering industry economics these pure-plays can’t stomach, but the behemoths can due to their multi-pronged business models.  These harsh realities mean that investors of many pure-play streaming music services will take a hard look at themselves in 2019 as they contemplate their next strategic next steps.  Many will realize that they can’t go it alone.  And that leads to more M&A, much like we saw this past year with SiriusXM buying Pandora and LiveXLive buying Slacker.  Spotify is not immune here.  Unless it successfully expands its business model and drives major new revenue streams, it too could be bought. Facebook anyone?

  NEW YORK, NY – APRIL 03: The Spotify banner hangs from the New York Stock Exchange (NYSE) on the morning that the music streaming service begins trading shares at the NYSE on April 3, 2018 in New York City. Trading under the symbol SPOT, the Swedish company’s losses grew to 1.235 billion euros ($1.507 billion) last year, its largest ever. (Photo by Spencer Platt/Getty Images)

PREDICTION #4 – Tech-driven media companies thrive and increasingly dominate the entertainment world by using data to their advantage.  They use AI, voice and machine learning to dominate further and even more broadly infiltrate our lives and impact our media and entertainment experiences.

Netflix, Amazon and Facebook increasingly mine their deep data about all of our hopes and dreams to maximize “hits” and minimize “misses” as compared to traditional media companies.  In many respects, the studios simply can’t compete.  Faced with that reality, the quest for data — and the services that provide, analyze and inform – takes on new urgency.  Further, the Hollywood establishment and creative community still have yet to understand – at least in large numbers — the power of new cost-effective tech-driven ways to test and measure new characters, stories and engagement in order to more smartly and efficiently place their big expensive bets.

Meanwhile, the new tech-driven media giants hope to increase their overall Media 2.0 dominance through the soothing voices of Alexa and Siri (sorry Google, yours is a little less so) and the overall AI/machine learning revolution.  “Virtual assistants,” “smart speakers” (or whatever you want to call them) increasingly dominate our home conversations, improve significantly over time, and serve up our favorite content via “intelligent” recommendations (as well as increasingly targeted and smarter incentives, promotions, ads and goods).  71% of us already use voice assistants at least once per day (most frequently for selecting the music we like to hear), so voice most definitely is here to stay.

More exotically, and perhaps somewhat alarmingly, AI also increasingly drives so-called “intelligent” creation.  AI already develops movie trailers that some believe approach the impact of their human-generated counterparts.  You be the judge — check out the first AI-produced movie trailer, care of IBM’s Watson, for the fittingly AI-themed 2016 motion picture thriller Morgan.  And, just imagine how much AI has advanced in just these past two years since then.  Can AI screenwriters be far behind?  Gong Yu, founder and CEO of China’s leading streaming platform iQIYI certainly doesn’t think so.  In his words, AI “will reshape the entertainment industry over the next 10-15 years, much more so than the Internet did over the past three decades.”  Just chew on that for a bit.

So, AI may become a real threat even to creative pursuits that, up to this point, most in Hollywood believe are untouchable by computers, bots, and robots.  Tesla maven and global futurist Elon Musk is downright dystopian and takes things even further, warning that AI may be an ultimate global threat to us all.  Musk tweeted in 2017 that “competition for AI superiority at national level most likely cause of WW3.”   Those were his precise words, so that was either Musk’s particular form of Twitter-speak, or his mind had become a bit hazy during one of his notorious cannabis-fueled interviews!

Amazon is releasing a software development kit that will let developers integrate Alexa into smart screen devices.

PREDICTION #5 – Behemoths Apple, Google and Facebook, together with other tech-driven media giants and deep-pocketed financiers from around the world, increase their already-massive investments in immersive technologies and accelerate mainstream adoption of AR.

AR’s gold rush means continued growth in the related wearables market and consumer adoption of AR-driven eyewear.  Investors of all stripes also continue to throw boatloads of cash into the overall immersive space to fuel the development of experiences (including real world live entertainment and storytelling, not only games) to feed these new platforms.  Expect significant investment in content.  The immersive market opportunity is still so nascent, yet its ultimate promise is so great, that the money working to capture it in 2019 and beyond will seem endless.  And, when so much money chases a market, that market becomes our consumer reality.

The onset of 5G wireless networks will only hasten the growth of extended reality (XR) in all its forms.  Speaking of 5G …

GUANGZHOU, CHINA – DECEMBER 06: Attendees look at 5G mobile phones at the Qualcomm stand during China Mobile Global Partner Conference 2018 at Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China. The three-day conference opened on Thursday, with the theme of 5G network. (Photo by VCG/VCG via Getty Images)

PREDICTION #6 – 5G Networks launch, reveal their early media and tech promise and possibilities, and begin to transform our media and entertainment experiences (as well as the overall ecosystem that supports them). 

5G networks are critical for media experiences that require low latency, including AR, VR, and eSports.  For AR, 5G reduces the size of consumer headsets, because processing is now done on the network itself rather than on the device.  That makes wearables increasingly user-friendly and fuels further innovation and adoption.  5G also accelerates more high quality video consumption on our mobile phones, thereby pushing purveyors of premium OTT video like Netflix to increasingly focus on mobile-first content experiences.

Jeffrey Katzenberg’s and Meg Whitman’s new mobile-driven Netflix-like premium video service Quibi (formerly NewTV) certainly saw this train coming, and jumped on first.

  PREDICTION #7 – The oft-overlooked, yet potentially game-changing, live entertainment and event plank increasingly finds itself in multi-platform Media 2.0 strategies, deepening overall brand engagement and monetization possibilities.  Expect more significant “offline”-related experiments, initiatives and M&A by both traditional and new tech-driven media companies.

Call this the “Amazon Effect,” as players across the Media 2.0 ecosystem stop scratching their heads about Amazon’s direct-to-theater film releases, brick and mortar retail expansion, and Whole Foods superstore operations – and, instead, increasingly study, respect and emulate them.  Netflix certainly did in 2018.  After trashing Amazon one year earlier for releasing its features first in theaters, Netflix announced it would begin to do the same.

Amazon understands what most still haven’t even considered – that direct, non-virtual offline consumer engagement may be the most impactful plank of them all, driving online engagement into the real world (and then back again) to create a virtual cycle of daily brand engagement and consumer monetization every step of the way.  Even traditional media company Viacom now shows signs of understanding these online/offline brand synergies.  It bought both youth-focused video industry conference VidCon and music festival SnowGlobe in 2018.

So, while MoviePass may go the way of the Dodo bird in 2019, movie theaters themselves will not die.  They simply will be re-imagined.  We humans, after all, are social creatures.  We like to get out, and we won’t be satisfied binging on Netflix alone.  Movie theater subscription services most definitely are here to stay, and Amazon will offer one soon for Prime members.  After all, in a fun fact that may surprise you, more museums populate the planet – significantly more – than McDonald’s.  See, there is hope!

  PREDICTION #8 – The #MeToo Movement continues to transform the face (and faces) of both old and new media.  And, new faces will invest new industry dollars in new (and frequently very different) content choices, bringing us new (and frequently different) stories and transforming our media and entertainment experiences.

Revelations aren’t over.  Abuse was simply far too pervasive.  Old players are gone.  New, frequently younger, tech-driven media savvy faces get a seat at the decision-making table.  They change the game of “what” and “how” we experience content.

Ultimately, #MeToo both cleanses the overall new media industry, and fills our plates with very different media and entertainment choices.

  PREDICTION #9 – Fake news, fraud and breaches of privacy continue unabated and accelerate, as does marketing concern for “brand safety.”  These seemingly unstoppable negative forces continue to place downward pressure on ad-dependent open platforms. 

Make no mistake, we are in the midst of hacking wars, the likes of which we’ve never seen.  This “good versus evil” reality is here to stay, and players across the tech-driven media and entertainment ecosystem either significantly increase their investments in counter-measures and related PR, or risk the wrath of consumers and the overall ad market (much like Facebook did this past year).

Twitter housecleaned 70 million fake and automated accounts in a two month span last year (and 1 million more daily), Instagram conceded that over 50% of engagements on its posts tagged as #sponsored are fake, Spotify similarly conceded prevalent ad fraud and decreased its total reported content hours streamed by hundreds of millions of hours, and competing music service Tidal faced accusations that it had falsified tens of millions of streams.  Just a few examples of how pervasive fraud and audience manipulation has become in our Media 2.0 world.  These fake accounts create, in the words of Variety, “a shadow army of followers that has comparatively little monetary effect.  But perform the same manipulation with music streams, and it constitutes fraud.”

  PREDICTION #10 – Blockchain technology and crypto-currency-fueled investment and experimentation, already over-hyped and under-performing, continues apace.  Yet, once again, there will be little to show for it in the world of media and entertainment.  At least for now.

Early blockchain leaders continue to be irrationally overvalued, which is always the case with any nascent market.  But, on a happier note, the voice of blockchain technology – heard thus far mostly in investment circles with promises of “instant millions” (or even billions) – becomes increasingly heard for its more positive potential for the world of media and entertainment.  Blockchain technology conceptually holds revolutionary industry-transforming new offensive and defensive power.  On the offensive front, blockchain enables new ways to monetize content via micropayments and direct creator-to-consumer distribution sans today’s leading middlemen.  These possibilities begin to reveal themselves in 2019.  On the defensive front, blockchain promises to eradicate piracy, but that happens in years, not this coming year.

  THE BOTTOM LINE

2019 certainly will push 2018’s Media 2.0 boundaries noticeably further, driven by these and other industry meta-forces.  But, these changes will be barely noticeable compared to the seismic shifts to follow in the next ten years.

I close with Paramount futurist Ted Schilowitz’s perspective on all of this.  In our conversation, Ted points to two phenomena — the first of which he calls “the known unknown,” and the second he calls “the ten year curve.”  “The known unknown” refers to what he calls the “scary” fact that we all know that massive tech-driven change is coming, but we don’t know the “twists and turns that get us there.”  Meanwhile, “the ten year curve” refers to “big dynamic change waves” that follow ten-year cycles.  In Ted’s view, we just recently finished the YouTube and iPhone 10-year cycles, and now essentially everyone around the globe participates in those dual phenomena.

So, what’s “the next big thing?”  Ted calls it the “the evolution of the screen” – so-called “visual computing” via new forms of eyewear (wearables) that replace our smartphones.  Think Minority Report-like data and content interaction, and you get the general idea.  “Surprisingly little has changed with human/screen interaction in the past 30 years,” Ted points out.  He reminds me that while user interfaces have become more sophisticated, actual screen interaction is not massively different — comparing interaction on Mac screens 30 years ago and on iPhones today.

That is all changing right now — as you sit, read and soak in Ted’s thoughts either in print, or more likely on your own v.2019 screen.  According to Ted, we are only about 3.5 years into this 10-year visual computing cycle.  “In 2013-2014, we saw the first idea of commercializing a track-able screen, a spatial screen.  That is a massive change.  We will fundamentally change how we use our screens.  I see a very distinct future where these things will emerge from their cocoon and replace the iPhone, laptop, etc.  You will notice an evolution of 30 minutes per day, then one hour, then two hours, etc.” 

Think that overstates things a bit?  Well, Ted cautions you this way.  “It’s the exact same paradigm shift we saw with mobile phones decades ago.  Just imagine back then that you would – decades later (i.e., today) — carry a device with you almost every waking moment of your waking life.  Even Bill Gates would have said that is ridiculous.”

Yet, here we are.  Today.  In that “unimaginable” world.  That’s how fast it goes.

Ted is adamant about this inevitable “evolution of the screen” reality, and he is convincing.  “I know the next evolution is coming.  All of these experiments today are on their way to something really, really significant.  2019 will be very subtle in this revolution.  Still for the early adopter, because none of these head mounted immersive devices today will replace our smart phones.  But the constant and continuous evolution of this tech is happening

Via Jonathan Shieber https://techcrunch.com

[investmart007]

NEW YORK | Banks weaken, but small-company stocks hold up well

New Post has been published on https://is.gd/tu1IQo

NEW YORK | Banks weaken, but small-company stocks hold up well

NEW YORK — Banks and other large U.S. stocks fell Thursday, but smaller companies climbed, making for a mixed finish on Wall Street. Trade issues again weighed on the market as representatives of the auto industry told Congress they opposed tariffs on imported cars and car parts being proposed by the Trump administration.

Major banks fell as interest rates decreased. Weak second-quarter results also weighed on American Express and Bank of New York Mellon. President Donald Trump told CNBC he is “not happy” the Federal Reserve has been raising interest rates, which had little effect on the stock market but did send the dollar slightly lower.

Companies that make and distribute drugs fell after the Trump administration proposed changes to government rules on drug price rebates. Aluminum producers sank after Alcoa said the U.S. tariffs on imported aluminum are costing it at least $12 million a month. Representatives of car manufacturers, suppliers and dealers appeared before Congress along with foreign diplomats. They were seeking to head off the Trump administration’s proposed tariffs on imported cars and car parts.

The U.S. imported $335 billion in autos and parts in 2017, so those tariffs could dwarf the taxes the administration has placed on imported steel, aluminum, and goods from China. General Motors and Daimler have both warned that tariffs could have major effects on their businesses.

Lindsey Bell, investment strategist with CFRA, said most consumers haven’t noticed the effects of the tariffs yet, but that will change if cars are taxed.

“It will significantly increase the price of a car and the consumer will definitely pull back” on spending, she said, adding that foreign automakers with factories in the U.S. might move those jobs overseas.

“There’s a lot of jobs that could be lost if these tariffs go through,” she said.  The S&P 500 index slid 11.13 points, or 0.4 percent, to 2,804.49. The Dow Jones Industrial Average fell 134.79 points, or 0.5 percent, to 25,064.50. The Nasdaq composite gave up 29.15 points, or 0.4 percent, to 7,825.30.

The Russell 2000 index of smaller-company stocks recovered from an early slide and rose 9.44 points, or 0.6 percent, to 1,701.31. Smaller retailers did especially well. Smaller companies tend to do better than larger ones when trade tensions flare up because they do a greater proportion of their sales in the U.S.

More stocks rose than fell on the New York Stock Exchange. General Motors said last month that tariffs on imported cars might cause it to cut jobs in the U.S. Its stock slid 1.4 percent to $39.31 and Tesla dipped 1.1 percent to $320.23. Auto parts retailer BorgWarner lost 2.1 percent to $45.03.

Second-quarter results and forecasts from U.S. companies continued to dominate trading. American Express fell 2.7 percent to $100.17 after it set aside more money to cover potential bad loans. Bank of New York Mellon lost 5.2 percent to $52.73. EBay slumped 10.1 percent to $34.53 after it reported lower sales than analysts had forecast.

The president’s criticism of the Federal Reserve was unusual, and investors wondered if it could slow the pace of interest rate increases even though the Fed is independent and Trump said he didn’t plan to get involved in its decision-making. For the day, the dollar fell to 112.46 yen from 112.84 yen. The euro fell to $1.1644 from $1.1646.

Bond yields were already falling before Trump’s comments and they fell a bit more afterward. The yield on the 10-year Treasury note fell to 2.83 percent from 2.87 percent.

Real estate investment trusts and utilities, which pay big dividends, did far better than the rest of the market. Many investors consider those stocks alternatives to bonds, so they tend to do well when bond yields fall.

Cable and internet provider Comcast said it won’t make another bid for Twenty-First Century Fox’s entertainment business and will instead focus on trying to buy European pay-TV operator Sky. Fox shareholders are scheduled to vote on Disney’s $71 billion offer next week.

Comcast gained 2.6 percent to $34.91 while Fox fell 0.1 percent to $46.65. Disney gained 1.3 percent to $112.13, and in London, shares of Sky fell 1.5 percent.

Aluminum producer Alcoa sank 13.3 percent to $41.56 after it forecast a smaller pre-tax profit. It said the tax on imported aluminum is costing it $12 million to $14 million a month. Century Aluminum skidded 12.1 percent to $13.09.

Companies that make and distribute drugs fell after the Trump administration proposed changes to government rules on drug price rebates. AbbVie fell 4.7 percent to $89.95 and drugstore and pharmacy benefits manager CVS Health shed 2.6 percent to $66.14. Benchmark U.S. crude rose 1 percent to $69.46 per barrel in New York. Brent crude, used to price international oils, fell 0.4 percent to $72.58 per barrel in London.

Wholesale gasoline stayed put at $2.04 a gallon and heating oil was unchanged at $2.09 a gallon. Natural gas added 1.8 percent to $2.77 per 1,000 cubic feet.

Gold fell 0.3 percent to $1,224 an ounce and silver fell 1.1 percent to $15.40 an ounce. Copper dropped 2.3 percent to $2.70 a pound. Germany’s DAX fell 0.6 percent, as did France’s CAC 40. Britain’s FTSE 100 added 0.1 percent.

Asian markets finished mostly lower with Japan’s Nikkei 225 losing 0.1 percent and South Korea’s Kospi shed 0.3 percent. Hong Kong’s Hang Seng fell 0.4 percent. ___

By Associated Press

[robertvasquez763]

Will the Republican Plan to Zap the EV Tax Credit Kill Electric Cars?

–

A key incentive spurring sales of electric cars and plug-in hybrids, the $7500 federal EV tax credit, is on the chopping block as part of a sweeping tax-reform proposal being tackled by Congress. And the timing couldn’t be much worse for automakers ramping up the development of electric vehicles as they clamber for a market foothold in the nine ZEV mandate states that have adopted California’s requirement to sell plug-in vehicles. 

–

The news has been jarring to an industry that has been dependent on the tax credit to make electric vehicles cost competitive with—or closer in value to—gasoline-powered vehicles. Manufacturers are particularly eager to sell EVs because starting in 2018, a certain percentage of sales—not just in the Golden State but in Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont—must be electric vehicles, plug-in hybrids, and/or hydrogen fuel-cell vehicles. Together, the ZEV-mandate states make up more than 40 percent of the U.S. new-vehicle market.

–

The Plug-In Electric Drive Vehicle Credit, as the IRS calls it, predates the rise of today’s electric cars such as the Nissan Leaf and the Tesla Model S. The elimination of the EV tax credit might not be a mortal wound for California’s electric-vehicle market, which has reached 5 percent of total passenger-vehicle sales, but it could prove a challenging headwind for selling enough EVs in those other states.

–

–

“

–

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

–

– Alliance of Automobile Manufacturers

–

”

–

With the credit nixed, the total U.S. market for plug-in hybrids and electric vehicles could be as much as 20 percent lower by 2025 than if government support for these vehicles were to stay the same, according to Navigant, a firm that makes market projections in the green-vehicle sector.

–

“Removing the federal tax credit would make it virtually impossible to meet these [plug-in sales] requirements, and it will put at risk the billions of dollars that automakers have already invested in developing EV technology,” said Navigant research director John Gartner.

–

Is This Thing Plugged In?

–

We reached out to a number of companies and organizations, as well as the National Automobile Dealers Association (NADA), for their reactions. Several automakers confessed to still being deep in assessment mode on the impact if the credit were to disappear—and, on at least one count, to being intensely frustrated by the tight time window afforded by the move (which is set to take effect with the new tax year, January 1, 2018). Others, such as Fiat Chrysler Automobiles, deferred to the Alliance of Automobile Manufacturers.

–

The Alliance released a statement that said, in part: “There is no question that the potential elimination or phaseout of the electric vehicle tax credit will impact the choices of prospective buyers and make it more challenging for manufacturers to comply with electric-vehicle mandates in 10 states.

–

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

–

–

General Motors, with its Chevrolet Volt plug-in and Chevrolet Bolt EV both positioned at the lower end of the price spectrum (and both qualifying for the full $7500 tax credit), released the following statement: “Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive.”

–

Honda, which plans to introduce several plug-in vehicles in the next few years, including the Clarity plug-in hybrid, pointed to its global targets (two-thirds of all vehicles electrified by 2030) and noted that, while the company welcomes such market stimuli, “with these long-term commitments, we’ve looked past the federal EV tax incentive.” And Volkswagen released a policy statement in opposition to the tax-credit termination, pointing to the jobs that additional EV sales support, the economic benefits to U.S. manufacturing and competitiveness, and the company’s (required) $2 billion Electrify America investment in brand-neutral EV charging infrastructure.

–

Other electric-vehicle groups are arguing to keep the credit by couching it in terms that Congress may have a harder time ignoring: jobs. The Electric Drive Transportation Association, a trade association representing manufacturers, suppliers, and energy companies, released a letter to House Ways and Means Committee chairman Kevin Brady, citing a figure from the U.S. Department of Energy: that electric-drive vehicle and component manufacturing represents more than 215,000 jobs. “Promoting investment in electric drive helps ensure that the U.S. does not lose its competitiveness in a market that we built,” the group argued.

–

Tesla’s Take

–

But not all electric-vehicle makers take a side in favor of the credit. Tesla CEO and industry contrarian Elon Musk has repeatedly asserted that the company would be better off without that federal incentive because it would help level Tesla’s playing field with full-line automakers.

–

The irony for Tesla is that as it moves to selling a less expensive sedan, the Model 3, it stands to benefit more from the $7500 tax credit, which likely will be a greater motivator for buyers in that lower-price bracket than for those shopping the pricey Model S. The automaker disclosed that the Model 3 is delayed by at least a few months; so if the tax credit is eliminated, it’s likely that very few of those more cost-conscious buyers will be eligible for it.

–

“Tesla has represented a healthy percentage of the early market, and for them the tax credit has been more of a big bonus than an actual driver,” said Gartner of Navigant, who agreed that might change moving forward.

–

December Could Be a Big Month for EV Sales

–

Automakers that have invested big in lower-priced electric vehicles have reason to be concerned about what might happen next year without the credit. A 2016 Transportation Research Board paper, cited by University of California Davis researchers, reported that the importance of the tax credit is far greater to those buying more affordable models. Researchers found that 87 percent of Tesla Model S buyers still would have made the purchase without the tax credit, but for the Nissan Leaf, that dropped to 51 percent of buyers.

–

Among plug-in hybrid shoppers, the tax credit was most important for buyers of the model with the longest all-electric range, the Chevrolet Volt. Nearly 30 percent of Volt buyers and nearly 40 percent of Leaf buyers said that without the tax credit, they wouldn’t have bought a new car at all. Separately, a California survey found that 71 percent of plug-in-vehicle buyers characterized the federal credit as either “very important” or “extremely important” in their purchase decision.

–

“Abruptly ending the credit this December will rock these purchase decisions,” said Plug In America policy director Katherine Stainken, in an alert to the organization’s membership. “This is absolutely terrible, as new makes and models of EVs will become available to more than 40 percent of the total U.S. car market in January 2018 thanks to clean-air regulations that require the automakers to sell more EVs.”

–

–

The EV market wouldn’t be entirely incentive-free, however. Some states have added their own incentives that would continue in the absence of the federal money. Oregon, for instance, earlier this year added a rebate that will officially go into effect in 2018.

–

A Phase-Out Instead?

–

As automakers lobby for the cause, one compromise could be triggering the predetermined phase-out period of January 1, 2018, instead of when automakers reach 200,000 cumulative sales, as the tax code currently specifies. That would mean that two calendar quarters later, buyers could still claim 50 percent of the credit, and then 25 percent for vehicles delivered for two quarters after that. Another strategy to soften the blow to consumers would be to establish a price ceiling—perhaps $50,000—for vehicle eligibility for the tax credit, or a limit on the number of tax credits an individual may claim per year or ever.

–

–

Price of Success: Tesla Model 3 Buyers Might Not Get Full EV Tax Credit

–

What Happens If the U.S. Government Nixes the $7500 EV Tax Credit?

–

Tesla Model 3: News, Info, Photos, More

–

–

The credit’s disappearance has the most potential to change product plans in the plug-in hybrid arena, where automakers were counting on it to reduce prices to be competitive with hybrids. With battery costs rapidly coming down and most major automakers deep into the development of all-electric platforms, the tax credit’s retirement may slow things down, particularly in the near term, but it isn’t likely to kill the electric car.

–

–

from remotecar http://feedproxy.google.com/~r/caranddriver/blog/~3/7IdxzkT_Kes/

via WordPress https://robertvasquez123.wordpress.com/2017/11/08/will-the-republican-plan-to-zap-the-ev-tax-credit-kill-electric-cars-2/

[jesusvasser]

Will the Republican Plan to Zap the EV Tax Credit Kill Electric Cars?

-

A key incentive spurring sales of electric cars and plug-in hybrids, the $7500 federal EV tax credit, is on the chopping block as part of a sweeping tax-reform proposal being tackled by Congress. And the timing couldn’t be much worse for automakers ramping up the development of electric vehicles as they clamber for a market foothold in the nine ZEV mandate states that have adopted California’s requirement to sell plug-in vehicles. 

-

The news has been jarring to an industry that has been dependent on the tax credit to make electric vehicles cost competitive—or closer in value—to gasoline-powered vehicles. Manufacturers are particularly eager to sell EVs because starting in 2018, a certain percentage of sales—not just in the Golden State but in Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont—must be electric vehicles, plug-in hybrids, and/or hydrogen fuel-cell vehicles. Together, the ZEV-mandate states make up more than 40 percent of the U.S. new-vehicle market.

-

The Plug-In Electric Drive Vehicle Credit, as the IRS calls it, predates the rise of today’s electric cars such as the Nissan Leaf and the Tesla Model S. The elimination of the EV tax credit might not be a mortal wound for California’s electric-vehicle market, which has reached 5 percent of total passenger-vehicle sales, but it could prove a challenging headwind for selling enough EVs in those other states.

-

-

“

-

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

-

– Alliance of Automobile Manufacturers

-

”

-

With the credit nixed, the total U.S. market for plug-in hybrids and electric vehicles could be as much as 20 percent lower by 2025 than if government support for these vehicles were to stay the same, according to Navigant, a firm that makes market projections in the green-vehicle sector.

-

“Removing the federal tax credit would make it virtually impossible to meet these [plug-in sales] requirements, and it will put at risk the billions of dollars that automakers have already invested in developing EV technology,” said Navigant research director John Gartner.

-

Is This Thing Plugged In?

-

We reached out to a number of companies and organizations, as well as the National Automobile Dealers Association (NADA), for their reactions. Several automakers confessed to still being deep in assessment mode on the impact if the credit were to disappear—and, on at least one count, to being intensely frustrated by the tight time window afforded by the move (which is set to take effect with the new tax year, January 1, 2018). Others, such as Fiat Chrysler Automobiles, deferred to the Alliance of Automobile Manufacturers.

-

The Alliance released a statement that said, in part: “There is no question that the potential elimination or phase out of the electric vehicle tax credit will impact the choices of prospective buyers and make it more challenging for manufacturers to comply with electric-vehicle mandates in 10 states.

-

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

-

-

General Motors, with its Chevrolet Volt plug-in and Chevrolet Bolt EV both positioned at the lower end of the price spectrum (and both qualifying for the full $7500 tax credit), released the following statement: “Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive.”

-

Honda, which plans to introduce several plug-in vehicles in the next few years, including the Clarity plug-in hybrid, pointed to its global targets (two-thirds of all vehicles electrified by 2030) and noted that, while the company welcomes such market stimuli, “with these long-term commitments, we’ve looked past the federal EV tax incentive.” And Volkswagen released a policy statement in opposition to the tax-credit termination, pointing to the jobs that additional EV sales support, the economic benefits to U.S. manufacturing and competitiveness, and the company’s (required) $2 billion Electrify America investment in brand-neutral EV charging infrastructure.

-

Other electric-vehicle groups are arguing to keep the credit by couching it in terms that Congress may have a harder time ignoring: jobs. The Electric Drive Transportation Association, a trade association representing manufacturers, suppliers, and energy companies, released a letter to House Ways and Means Committee chairman Kevin Brady, citing a figure from the U.S. Department of Energy: that electric-drive vehicle and component manufacturing represents more than 215,000 jobs. “Promoting investment in electric drive helps ensure that the U.S. does not lose its competitiveness in a market that we built,” the group argued.

-

Tesla’s Take

-

But not all electric-vehicle makers take a side in favor of the credit. Tesla CEO and industry contrarian Elon Musk has repeatedly asserted that the company would be better off without that federal incentive because it would help level Tesla’s playing field with full-line automakers.

-

The irony for Tesla is that as it moves to selling a less expensive sedan, the Model 3, it stands to benefit more from the $7500 tax credit, which likely will be a greater motivator for buyers in that lower-price bracket than for those shopping the pricey Model S. The automaker disclosed that the Model 3 is delayed by at least a few months; so if the tax credit is eliminated, it’s likely that very few of those more cost-conscious buyers will be eligible for it.

-

“Tesla has represented a healthy percentage of the early market, and for them the tax credit has been more of a big bonus than an actual driver,” said Gartner of Navigant, who agreed that might change moving forward.

-

December Could Be a Big Month for EV Sales

-

Automakers that have invested big in lower-priced electric vehicles have reason to be concerned about what might happen next year without the credit. A 2016 Transportation Research Board paper, cited by University of California Davis researchers, reported that the importance of the tax credit is far greater to those buying more affordable models. Researchers found that 87 percent of Tesla Model S buyers still would have made the purchase without the tax credit, but for the Nissan Leaf, that dropped to 51 percent of buyers.

-

Among plug-in hybrid shoppers, the tax credit was most important for buyers of the model with the longest all-electric range, the Chevrolet Volt. Nearly 30 percent of Volt buyers and nearly 40 percent of Leaf buyers said that without the tax credit, they wouldn’t have bought a new car at all. Separately, a California survey found that 71 percent of plug-in-vehicle buyers characterized the federal credit as either “very important” or “extremely important” in their purchase decision.

-

“Abruptly ending the credit this December will rock these purchase decisions,” said Plug In America policy director Katherine Stainken, in an alert to the organization’s membership. “This is absolutely terrible, as new makes and models of EVs will become available to more than 40 percent of the total U.S. car market in January 2018 thanks to clean-air regulations that require the automakers to sell more EVs.”

-

-

The EV market wouldn’t be entirely incentive-free, however. Some states have added their own incentives that would continue in the absence of the federal money. Oregon, for instance, earlier this year added a rebate that will officially go into effect in 2018.

-

A Phase-Out Instead?

-

As automakers lobby for the cause, one compromise could be triggering the predetermined phase-out period of January 1, 2018, instead of when automakers reach 200,000 cumulative sales, as the tax code currently specifies. That would mean that two calendar quarters later, buyers could still claim 50 percent of the credit, and then 25 percent for vehicles delivered for two quarters after that. Another strategy to soften the blow to consumers would be to establish a price ceiling—perhaps $50,000—for vehicle eligibility for the tax credit, or a limit on the number of tax credits an individual may claim per year or ever.

-

-

Price of Success: Tesla Model 3 Buyers Might Not Get Full EV Tax Credit

-

What Happens If the U.S. Government Nixes the $7500 EV Tax Credit?

-

Tesla Model 3: News, Info, Photos, More

-

-

The credit’s disappearance has the most potential to change product plans in the plug-in hybrid arena, where automakers were counting on it to reduce prices to be competitive with hybrids. With battery costs rapidly coming down and most major automakers deep into the development of all-electric platforms, the tax credit’s retirement may slow things down, particularly in the near term, but it isn’t likely to kill the electric car.

-

- from Performance Junk WP Feed 4 http://ift.tt/2iEknSF via IFTTT

[eddiejpoplar]

Will the Republican Plan to Zap the EV Tax Credit Kill Electric Cars?

-

A key incentive spurring sales of electric cars and plug-in hybrids, the $7500 federal EV tax credit, is on the chopping block as part of a sweeping tax-reform proposal being tackled by Congress. And the timing couldn’t be much worse for automakers ramping up the development of electric vehicles as they clamber for a market foothold in the nine ZEV mandate states that have adopted California’s requirement to sell plug-in vehicles. 

-

The news has been jarring to an industry that has been dependent on the tax credit to make electric vehicles cost competitive—or closer in value—to gasoline-powered vehicles. Manufacturers are particularly eager to sell EVs because starting in 2018, a certain percentage of sales—not just in the Golden State but in Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont—must be electric vehicles, plug-in hybrids, and/or hydrogen fuel-cell vehicles. Together, the ZEV-mandate states make up more than 40 percent of the U.S. new-vehicle market.

-

The Plug-In Electric Drive Vehicle Credit, as the IRS calls it, predates the rise of today’s electric cars such as the Nissan Leaf and the Tesla Model S. The elimination of the EV tax credit might not be a mortal wound for California’s electric-vehicle market, which has reached 5 percent of total passenger-vehicle sales, but it could prove a challenging headwind for selling enough EVs in those other states.

-

-

“

-

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

-

– Alliance of Automobile Manufacturers

-

”

-

With the credit nixed, the total U.S. market for plug-in hybrids and electric vehicles could be as much as 20 percent lower by 2025 than if government support for these vehicles were to stay the same, according to Navigant, a firm that makes market projections in the green-vehicle sector.

-

“Removing the federal tax credit would make it virtually impossible to meet these [plug-in sales] requirements, and it will put at risk the billions of dollars that automakers have already invested in developing EV technology,” said Navigant research director John Gartner.

-

Is This Thing Plugged In?

-

We reached out to a number of companies and organizations, as well as the National Automobile Dealers Association (NADA), for their reactions. Several automakers confessed to still being deep in assessment mode on the impact if the credit were to disappear—and, on at least one count, to being intensely frustrated by the tight time window afforded by the move (which is set to take effect with the new tax year, January 1, 2018). Others, such as Fiat Chrysler Automobiles, deferred to the Alliance of Automobile Manufacturers.

-

The Alliance released a statement that said, in part: “There is no question that the potential elimination or phase out of the electric vehicle tax credit will impact the choices of prospective buyers and make it more challenging for manufacturers to comply with electric-vehicle mandates in 10 states.

-

“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

-

-

General Motors, with its Chevrolet Volt plug-in and Chevrolet Bolt EV both positioned at the lower end of the price spectrum (and both qualifying for the full $7500 tax credit), released the following statement: “Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive.”

-

Honda, which plans to introduce several plug-in vehicles in the next few years, including the Clarity plug-in hybrid, pointed to its global targets (two-thirds of all vehicles electrified by 2030) and noted that, while the company welcomes such market stimuli, “with these long-term commitments, we’ve looked past the federal EV tax incentive.” And Volkswagen released a policy statement in opposition to the tax-credit termination, pointing to the jobs that additional EV sales support, the economic benefits to U.S. manufacturing and competitiveness, and the company’s (required) $2 billion Electrify America investment in brand-neutral EV charging infrastructure.

-

Other electric-vehicle groups are arguing to keep the credit by couching it in terms that Congress may have a harder time ignoring: jobs. The Electric Drive Transportation Association, a trade association representing manufacturers, suppliers, and energy companies, released a letter to House Ways and Means Committee chairman Kevin Brady, citing a figure from the U.S. Department of Energy: that electric-drive vehicle and component manufacturing represents more than 215,000 jobs. “Promoting investment in electric drive helps ensure that the U.S. does not lose its competitiveness in a market that we built,” the group argued.

-

Tesla’s Take

-

But not all electric-vehicle makers take a side in favor of the credit. Tesla CEO and industry contrarian Elon Musk has repeatedly asserted that the company would be better off without that federal incentive because it would help level Tesla’s playing field with full-line automakers.

-

The irony for Tesla is that as it moves to selling a less expensive sedan, the Model 3, it stands to benefit more from the $7500 tax credit, which likely will be a greater motivator for buyers in that lower-price bracket than for those shopping the pricey Model S. The automaker disclosed that the Model 3 is delayed by at least a few months; so if the tax credit is eliminated, it’s likely that very few of those more cost-conscious buyers will be eligible for it.

-

“Tesla has represented a healthy percentage of the early market, and for them the tax credit has been more of a big bonus than an actual driver,” said Gartner of Navigant, who agreed that might change moving forward.

-

December Could Be a Big Month for EV Sales

-

Automakers that have invested big in lower-priced electric vehicles have reason to be concerned about what might happen next year without the credit. A 2016 Transportation Research Board paper, cited by University of California Davis researchers, reported that the importance of the tax credit is far greater to those buying more affordable models. Researchers found that 87 percent of Tesla Model S buyers still would have made the purchase without the tax credit, but for the Nissan Leaf, that dropped to 51 percent of buyers.

-

Among plug-in hybrid shoppers, the tax credit was most important for buyers of the model with the longest all-electric range, the Chevrolet Volt. Nearly 30 percent of Volt buyers and nearly 40 percent of Leaf buyers said that without the tax credit, they wouldn’t have bought a new car at all. Separately, a California survey found that 71 percent of plug-in-vehicle buyers characterized the federal credit as either “very important” or “extremely important” in their purchase decision.

-

“Abruptly ending the credit this December will rock these purchase decisions,” said Plug In America policy director Katherine Stainken, in an alert to the organization’s membership. “This is absolutely terrible, as new makes and models of EVs will become available to more than 40 percent of the total U.S. car market in January 2018 thanks to clean-air regulations that require the automakers to sell more EVs.”

-

-

The EV market wouldn’t be entirely incentive-free, however. Some states have added their own incentives that would continue in the absence of the federal money. Oregon, for instance, earlier this year added a rebate that will officially go into effect in 2018.

-

A Phase-Out Instead?

-

As automakers lobby for the cause, one compromise could be triggering the predetermined phase-out period of January 1, 2018, instead of when automakers reach 200,000 cumulative sales, as the tax code currently specifies. That would mean that two calendar quarters later, buyers could still claim 50 percent of the credit, and then 25 percent for vehicles delivered for two quarters after that. Another strategy to soften the blow to consumers would be to establish a price ceiling—perhaps $50,000—for vehicle eligibility for the tax credit, or a limit on the number of tax credits an individual may claim per year or ever.

-

-

Price of Success: Tesla Model 3 Buyers Might Not Get Full EV Tax Credit

-

What Happens If the U.S. Government Nixes the $7500 EV Tax Credit?

-

Tesla Model 3: News, Info, Photos, More

-

-

The credit’s disappearance has the most potential to change product plans in the plug-in hybrid arena, where automakers were counting on it to reduce prices to be competitive with hybrids. With battery costs rapidly coming down and most major automakers deep into the development of all-electric platforms, the tax credit’s retirement may slow things down, particularly in the near term, but it isn’t likely to kill the electric car.

-

- from Performance Junk Blogger 6 http://ift.tt/2iEknSF via IFTTT

[estimize]

5 Stocks to Watch for Earnings Season Gains

With Q3 earnings season all but over, investors can rejoice in the gains that were reported during the quarter. Earnings and revenue came in higher than a year earlier with future estimates expected to build on this success. For the fourth quarter, FactSet estimates earnings growth of S&P 500 companies to touch 3.2% with revenue growth hovering around 5%. This would mark the first time the index posted consecutive quarters of growth in about 2 years. So far a handful of companies look like they’ll shine next quarter but none more than Etsy, Tesla, Alcoa, Nvidia and Netflix. According to the Estimize data this group of companies are exhibiting the telltale signs of an earnings beat: heavy upward revisions activity, strong history of topping analysts estimates, and consist year over year growth.

Etsy, Inc (ETSY) Information Technology – Internet Software & Services

While many online retailers have struggled to compete with Amazon, that hasn’t been the case for Etsy. Etsy’s niche marketplace of handmade arts and crafts has found its footing in the rapidly evolving retail space. Etsy has delivered better than expected results for 3 of the past 4 quarters and year-to-date the stock is up 52%. During the third quarter, management increased guidance for many key financial metrics such as gross merchandise sales, revenue,gross margin and adjusted EBITDA. This is a clear signal that its ongoing initiatives and acquisitions continue to improve financial performance. Furthermore, Etsy agreed to acquire AI startup, Blackbird Technologies, in September, a move that will bolster its search capabilities. Early estimate activity suggest Etsy will be one of the best performers for the upcoming fourth quarter. Analysts at Estimize are calling for earnings per share of 6 cents, 119% greater than Wall Street estimates and 198% higher than a year earlier. Revenue for the period is forecasted to jump 22% to $107.59 million, marking a slight slowdown from previous results.

Tesla (TSLA) Consumer Discretionary – Automobiles

Tesla surprised pretty much everyone last quarter after not only delivering a profit for the first time ever but one as large as 71 cents per share. Revenue made equally impressive strides, growing by 85% on a record number of car deliveries and production. With the Model 3 set to be released in Spring 2017, Tesla should see a new and quite possibly the biggest layer of support to the top line. Even though fourth quarter deliveries fell short of its own forecasts, the electric carmaker appears headed in the right direction. The Estimize community still believes the electric car maker can turn a profit of 5 cents per share for the fourth quarter which is surprisingly lower than Wall Street’s estimate at the moment. Revenue estimates for the period have dropped 5% in the past 3 months to $2.25 billion, reflecting a 39% increase from a year earlier.

Alcoa (AA) Materials – Metals & Mining

Analysts are confident that Alcoa can kick off, as it typically does, fourth quarter earnings season on a high note. The industrial sector saw the biggest upside following the shocking results of this year’s election. Trump has clearly stated on multiple occasions that he would bring jobs back to the United States and devote a large amount of resources to manufacturing/industrials. This could provide a meaningful boost for Alcoa that had otherwise struggled throughout this low growth environment. Third quarter results missed analysts estimates by $240 million on the top line and 4 cents on the bottom. Management put the blame on the aerospace side of the business which was down 6 percent year over year. Moving forward, Alcoa will no longer report its value added under its namesake brand but under the newly independent publicly traded company, Aconic. The separation of its value added and upstream segment will prevent a slumping aluminum business from holding back growth in faster growing plane and car parts. Analyst’s at Estimize are optimistic that Alcoa can right the ship in its first report after the split. Earnings estimates jumped 138% in the past 3 months to 26 cents per share with sales targets hovering around $5.13 billion. Shares typically don’t react well during earnings season but any sign of reversing its losing streak should send the stock soaring.

NVidia (NVDA) Information Technology – Semiconductors

Nvidia posted one of the largest percentage beats this earnings season amongst all the companies in the S&P 500, so it seems fitting to find them on a list of potential Q4 winners. Earnings for the third quarter topped analysts estimates by over 50% while sales trumped those very same expectations by 18%. Management credited strong growth on the continued success of its core GPU business and significant progress made in VR, self driving cars and data center computers. NVidia has left very little reason to believe that any of these businesses will take a step back in future quarters. The biggest concern might be analysts’ and investors’ unreasonably high expectations given the company’s recent gains. Nevertheless analysts continue to ramp up forward estimates to unprecedented levels. For the fourth quarter, the Estimize consensus data edged significantly higher to 92 cents per share on $2.12 billion in revenue.

Netflix (NFLX) Consumer Discretionary – Internet & Catalog Retail

If not for NVidia, analysts would be touting Netflix as one of the best Q3 earnings plays. The video streaming service pulled out quite the surprise in the third quarter, beating analysts expectations on both the top  and bottom line. Most of the gains came from a blow out subscription number which gained 370,000 net members in the U.S. and 3.2 million internationally, handily beating the 2.3 million management forecasted. Netflix steady stream of original content and new initiatives like an offline option will continue to provide support to the top line. But the cost of rolling out new content will put pressure on the bottom line. Revisions activity following the report unsurprisingly edged higher for the fourth quarter. The Estimize community is now looking for earnings of 14 cents per share on $2.46 billion in revenue, reflecting an 83% increase on the bottom line and 34% on the top.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

Photo Credit: Sam valadi

[calvinzeepeda79]

5 Stocks to Help Beat Earnings Season Blues

With Q4 earnings season about to get underway, investors are frantically searching for stocks poised to beat or miss target estimates.  Analysts at Estimize expect earnings growth of S&P 500 companies to touch 3.2% this quarter with revenue growth hovering around 5%. This would mark the first time the index posted consecutive quarters of growth in about 2 years. So far a handful of companies look like they’ll shine in the coming weeks but none more than Etsy, Tesla, Alcoa, Nvidia and Netflix. According to the Estimize data this group of companies are exhibiting the telltale signs of an earnings beat: heavy upward revisions activity, strong history of topping analysts estimates, and consist year over year growth.

Etsy, Inc (ETSY) Information Technology – Internet Software & Services

While many online retailers have struggled to compete with Amazon, that hasn’t been the case for Etsy. Etsy’s niche marketplace of handmade arts and crafts has found its footing in the rapidly evolving retail space. Etsy has delivered better than expected results for 3 of the past 4 quarters and year-to-date the stock is up 52%. During the third quarter, management increased guidance for many key financial metrics such as gross merchandise sales, revenue, gross margin and adjusted EBITDA. This is a clear signal that its ongoing initiatives and acquisitions continue to improve financial performance. Furthermore, Etsy agreed to acquire AI startup, Blackbird Technologies, in September, a move that will bolster its search capabilities. Early estimate activity suggest Etsy will be one of the best performers for the upcoming fourth quarter. Analysts at Estimize are calling for earnings per share of 4 cents, 80% greater than Wall Street estimates and 195% higher than a year earlier. Revenue for the period is forecasted to jump 22% to $107.30 million, marking a slight slowdown from previous results.

Tesla (TSLA) Consumer Discretionary – Automobiles

Tesla surprised pretty much everyone last quarter after not only delivering a profit for the first time ever but one as large as 71 cents per share. Revenue made equally impressive strides, growing by 85% on a record number of car deliveries and production. With the Model 3 set to be released in Spring 2017, Tesla should see a new and quite possibly the biggest layer of support to the top line. Even though fourth quarter deliveries fell short of its own forecasts, the electric carmaker appears headed in the right direction. The Estimize community still believes the electric car maker can turn a profit of 5 cents per share for the fourth quarter which is surprisingly lower than Wall Street’s estimate at the moment. Revenue estimates for the period have been stagnant over the past 3 months at $2.27 billion, reflecting a 36% increase from a year earlier.

Alcoa (AA) Materials – Metals & Mining

The industrial sector saw the biggest upside following the shocking results of this year’s election. Trump has clearly stated on multiple occasions that he would bring jobs back to the United States and devote a large amount of resources to manufacturing/industrials. This could provide a meaningful boost for Alcoa that had otherwise struggled throughout this low growth environment. Third quarter results missed analysts estimates by $240 million on the top line and 4 cents on the bottom. Management put the blame on the aerospace side of the business which was down 6 percent year over year. Moving forward, Alcoa will no longer report its value added under its namesake brand but under the newly independent publicly traded company, Arconic. The separation of its value added and upstream segment will prevent a slumping aluminum business from holding back growth in faster growing plane and car parts. Analyst’s at Estimize are optimistic that Alcoa can right the ship in its first report after the split. Earnings estimates jumped 138% in the past 3 months to 26 cents per share with sales targets hovering around $5.08 billion. Shares typically don’t react well during earnings season but any sign of reversing its losing streak should send the stock soaring.

NVidia (NVDA) Information Technology – Semiconductors

Nvidia posted one of the largest percentage beats last quarter amongst all the companies in the S&P 500, so it seems fitting to find them on a list of potential Q4 winners. Earnings for the third quarter topped analysts estimates by over 50% while sales trumped those very same expectations by 18%. Management credited strong growth on the continued success of its core GPU business and significant progress made in VR, self driving cars and data center computers. NVidia has left very little reason to believe that any of these businesses will take a step back in future quarters. The biggest concern might be analysts’ and investors’ unreasonably high expectations given the company’s recent gains. Nevertheless analysts continue to ramp up forward estimates to unprecedented levels. For the fourth quarter, the Estimize consensus data edged significantly higher to 91 cents per share on $2.12 billion in revenue.

Netflix (NFLX) Consumer Discretionary – Internet & Catalog Retail

If not for NVidia, analysts would be touting Netflix as one of the best Q3 earnings plays. The video streaming service pulled out quite the surprise in the third quarter, beating analysts expectations on both the top  and bottom line. Most of the gains came from a blow out subscription number which gained 370,000 net members in the U.S. and 3.2 million internationally, handily beating the 2.3 million management forecasted. Netflix steady stream of original content and new initiatives like an offline option will continue to provide support to the top line. But the cost of rolling out new content will put pressure on the bottom line. Revisions activity following the report unsurprisingly edged higher for the fourth quarter. The Estimize community is now looking for earnings of 15 cents per share on $2.47 billion in revenue, reflecting an 93% increase on the bottom line and 34% on the top.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

Photo Credit: Automobile Italia

[robertvasquez763]

Will the Republican Plan to Zap the EV Tax Credit Kill Electric Cars?

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A key incentive spurring sales of electric cars and plug-in hybrids, the $7500 federal EV tax credit, is on the chopping block as part of a sweeping tax-reform proposal being tackled by Congress. And the timing couldn’t be much worse for automakers ramping up the development of electric vehicles as they clamber for a market foothold in the nine ZEV mandate states that have adopted California’s requirement to sell plug-in vehicles. 

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The news has been jarring to an industry that has been dependent on the tax credit to make electric vehicles cost competitive with—or closer in value to—gasoline-powered vehicles. Manufacturers are particularly eager to sell EVs because starting in 2018, a certain percentage of sales—not just in the Golden State but in Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont—must be electric vehicles, plug-in hybrids, and/or hydrogen fuel-cell vehicles. Together, the ZEV-mandate states make up more than 40 percent of the U.S. new-vehicle market.

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The Plug-In Electric Drive Vehicle Credit, as the IRS calls it, predates the rise of today’s electric cars such as the Nissan Leaf and the Tesla Model S. The elimination of the EV tax credit might not be a mortal wound for California’s electric-vehicle market, which has reached 5 percent of total passenger-vehicle sales, but it could prove a challenging headwind for selling enough EVs in those other states.

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“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

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– Alliance of Automobile Manufacturers

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With the credit nixed, the total U.S. market for plug-in hybrids and electric vehicles could be as much as 20 percent lower by 2025 than if government support for these vehicles were to stay the same, according to Navigant, a firm that makes market projections in the green-vehicle sector.

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“Removing the federal tax credit would make it virtually impossible to meet these [plug-in sales] requirements, and it will put at risk the billions of dollars that automakers have already invested in developing EV technology,” said Navigant research director John Gartner.

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Is This Thing Plugged In?

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We reached out to a number of companies and organizations, as well as the National Automobile Dealers Association (NADA), for their reactions. Several automakers confessed to still being deep in assessment mode on the impact if the credit were to disappear—and, on at least one count, to being intensely frustrated by the tight time window afforded by the move (which is set to take effect with the new tax year, January 1, 2018). Others, such as Fiat Chrysler Automobiles, deferred to the Alliance of Automobile Manufacturers.

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The Alliance released a statement that said, in part: “There is no question that the potential elimination or phaseout of the electric vehicle tax credit will impact the choices of prospective buyers and make it more challenging for manufacturers to comply with electric-vehicle mandates in 10 states.

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“Eliminating the fuel cell and EV tax credits will hamper progress toward getting these very clean and energy-efficient vehicles on the road.”

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General Motors, with its Chevrolet Volt plug-in and Chevrolet Bolt EV both positioned at the lower end of the price spectrum (and both qualifying for the full $7500 tax credit), released the following statement: “Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive.”

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Honda, which plans to introduce several plug-in vehicles in the next few years, including the Clarity plug-in hybrid, pointed to its global targets (two-thirds of all vehicles electrified by 2030) and noted that, while the company welcomes such market stimuli, “with these long-term commitments, we’ve looked past the federal EV tax incentive.” And Volkswagen released a policy statement in opposition to the tax-credit termination, pointing to the jobs that additional EV sales support, the economic benefits to U.S. manufacturing and competitiveness, and the company’s (required) $2 billion Electrify America investment in brand-neutral EV charging infrastructure.

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Other electric-vehicle groups are arguing to keep the credit by couching it in terms that Congress may have a harder time ignoring: jobs. The Electric Drive Transportation Association, a trade association representing manufacturers, suppliers, and energy companies, released a letter to House Ways and Means Committee chairman Kevin Brady, citing a figure from the U.S. Department of Energy: that electric-drive vehicle and component manufacturing represents more than 215,000 jobs. “Promoting investment in electric drive helps ensure that the U.S. does not lose its competitiveness in a market that we built,” the group argued.

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Tesla’s Take

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But not all electric-vehicle makers take a side in favor of the credit. Tesla CEO and industry contrarian Elon Musk has repeatedly asserted that the company would be better off without that federal incentive because it would help level Tesla’s playing field with full-line automakers.

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The irony for Tesla is that as it moves to selling a less expensive sedan, the Model 3, it stands to benefit more from the $7500 tax credit, which likely will be a greater motivator for buyers in that lower-price bracket than for those shopping the pricey Model S. The automaker disclosed that the Model 3 is delayed by at least a few months; so if the tax credit is eliminated, it’s likely that very few of those more cost-conscious buyers will be eligible for it.

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“Tesla has represented a healthy percentage of the early market, and for them the tax credit has been more of a big bonus than an actual driver,” said Gartner of Navigant, who agreed that might change moving forward.

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December Could Be a Big Month for EV Sales

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Automakers that have invested big in lower-priced electric vehicles have reason to be concerned about what might happen next year without the credit. A 2016 Transportation Research Board paper, cited by University of California Davis researchers, reported that the importance of the tax credit is far greater to those buying more affordable models. Researchers found that 87 percent of Tesla Model S buyers still would have made the purchase without the tax credit, but for the Nissan Leaf, that dropped to 51 percent of buyers.

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Among plug-in hybrid shoppers, the tax credit was most important for buyers of the model with the longest all-electric range, the Chevrolet Volt. Nearly 30 percent of Volt buyers and nearly 40 percent of Leaf buyers said that without the tax credit, they wouldn’t have bought a new car at all. Separately, a California survey found that 71 percent of plug-in-vehicle buyers characterized the federal credit as either “very important” or “extremely important” in their purchase decision.

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“Abruptly ending the credit this December will rock these purchase decisions,” said Plug In America policy director Katherine Stainken, in an alert to the organization’s membership. “This is absolutely terrible, as new makes and models of EVs will become available to more than 40 percent of the total U.S. car market in January 2018 thanks to clean-air regulations that require the automakers to sell more EVs.”

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The EV market wouldn’t be entirely incentive-free, however. Some states have added their own incentives that would continue in the absence of the federal money. Oregon, for instance, earlier this year added a rebate that will officially go into effect in 2018.

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A Phase-Out Instead?

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As automakers lobby for the cause, one compromise could be triggering the predetermined phase-out period of January 1, 2018, instead of when automakers reach 200,000 cumulative sales, as the tax code currently specifies. That would mean that two calendar quarters later, buyers could still claim 50 percent of the credit, and then 25 percent for vehicles delivered for two quarters after that. Another strategy to soften the blow to consumers would be to establish a price ceiling—perhaps $50,000—for vehicle eligibility for the tax credit, or a limit on the number of tax credits an individual may claim per year or ever.

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Price of Success: Tesla Model 3 Buyers Might Not Get Full EV Tax Credit

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What Happens If the U.S. Government Nixes the $7500 EV Tax Credit?

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Tesla Model 3: News, Info, Photos, More

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The credit’s disappearance has the most potential to change product plans in the plug-in hybrid arena, where automakers were counting on it to reduce prices to be competitive with hybrids. With battery costs rapidly coming down and most major automakers deep into the development of all-electric platforms, the tax credit’s retirement may slow things down, particularly in the near term, but it isn’t likely to kill the electric car.

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5 Stocks to Watch for Earnings Season Gains

With Q3 earnings season all but over, investors can rejoice in the gains that were reported during the quarter. Earnings and revenue came in higher than a year earlier with future estimates expected to build on this success. For the fourth quarter, FactSet estimates earnings growth of S&P 500 companies to touch 3.2% with revenue growth hovering around 5%. This would mark the first time the index posted consecutive quarters of growth in about 2 years. So far a handful of companies look like they’ll shine next quarter but none more than Etsy, Tesla, Alcoa, Nvidia and Netflix. According to the Estimize data this group of companies are exhibiting the telltale signs of an earnings beat: heavy upward revisions activity, strong history of topping analysts estimates, and consist year over year growth.

Etsy, Inc (ETSY) Information Technology – Internet Software & Services

While many online retailers have struggled to compete with Amazon, that hasn’t been the case for Etsy. Etsy’s niche marketplace of handmade arts and crafts has found its footing in the rapidly evolving retail space. Etsy has delivered better than expected results for 3 of the past 4 quarters and year-to-date the stock is up 52%. During the third quarter, management increased guidance for many key financial metrics such as gross merchandise sales, revenue,gross margin and adjusted EBITDA. This is a clear signal that its ongoing initiatives and acquisitions continue to improve financial performance. Furthermore, Etsy agreed to acquire AI startup, Blackbird Technologies, in September, a move that will bolster its search capabilities. Early estimate activity suggest Etsy will be one of the best performers for the upcoming fourth quarter. Analysts at Estimize are calling for earnings per share of 6 cents, 119% greater than Wall Street estimates and 198% higher than a year earlier. Revenue for the period is forecasted to jump 22% to $107.59 million, marking a slight slowdown from previous results.

Tesla (TSLA) Consumer Discretionary – Automobiles

Tesla surprised pretty much everyone last quarter after not only delivering a profit for the first time ever but one as large as 71 cents per share. Revenue made equally impressive strides, growing by 85% on a record number of car deliveries and production. With the Model 3 set to be released in Spring 2017, Tesla should see a new and quite possibly the biggest layer of support to the top line. Even though fourth quarter deliveries fell short of its own forecasts, the electric carmaker appears headed in the right direction. The Estimize community still believes the electric car maker can turn a profit of 5 cents per share for the fourth quarter which is surprisingly lower than Wall Street’s estimate at the moment. Revenue estimates for the period have dropped 5% in the past 3 months to $2.25 billion, reflecting a 39% increase from a year earlier.

Alcoa (AA) Materials – Metals & Mining

Analysts are confident that Alcoa can kick off, as it typically does, fourth quarter earnings season on a high note. The industrial sector saw the biggest upside following the shocking results of this year’s election. Trump has clearly stated on multiple occasions that he would bring jobs back to the United States and devote a large amount of resources to manufacturing/industrials. This could provide a meaningful boost for Alcoa that had otherwise struggled throughout this low growth environment. Third quarter results missed analysts estimates by $240 million on the top line and 4 cents on the bottom. Management put the blame on the aerospace side of the business which was down 6 percent year over year. Moving forward, Alcoa will no longer report its value added under its namesake brand but under the newly independent publicly traded company, Aconic. The separation of its value added and upstream segment will prevent a slumping aluminum business from holding back growth in faster growing plane and car parts. Analyst’s at Estimize are optimistic that Alcoa can right the ship in its first report after the split. Earnings estimates jumped 138% in the past 3 months to 26 cents per share with sales targets hovering around $5.13 billion. Shares typically don’t react well during earnings season but any sign of reversing its losing streak should send the stock soaring.

NVidia (NVDA) Information Technology – Semiconductors

Nvidia posted one of the largest percentage beats this earnings season amongst all the companies in the S&P 500, so it seems fitting to find them on a list of potential Q4 winners. Earnings for the third quarter topped analysts estimates by over 50% while sales trumped those very same expectations by 18%. Management credited strong growth on the continued success of its core GPU business and significant progress made in VR, self driving cars and data center computers. NVidia has left very little reason to believe that any of these businesses will take a step back in future quarters. The biggest concern might be analysts’ and investors’ unreasonably high expectations given the company’s recent gains. Nevertheless analysts continue to ramp up forward estimates to unprecedented levels. For the fourth quarter, the Estimize consensus data edged significantly higher to 92 cents per share on $2.12 billion in revenue.

Netflix (NFLX) Consumer Discretionary – Internet & Catalog Retail

If not for NVidia, analysts would be touting Netflix as one of the best Q3 earnings plays. The video streaming service pulled out quite the surprise in the third quarter, beating analysts expectations on both the top  and bottom line. Most of the gains came from a blow out subscription number which gained 370,000 net members in the U.S. and 3.2 million internationally, handily beating the 2.3 million management forecasted. Netflix steady stream of original content and new initiatives like an offline option will continue to provide support to the top line. But the cost of rolling out new content will put pressure on the bottom line. Revisions activity following the report unsurprisingly edged higher for the fourth quarter. The Estimize community is now looking for earnings of 14 cents per share on $2.46 billion in revenue, reflecting an 83% increase on the bottom line and 34% on the top.

How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here!

Photo Credit: Sam valadi