These are stories Report on Business is following Friday, Dec. 13, 2013.
Having just “binged” on everything from The Good Wife to Sons of Anarchy, I can identify with a study from Netflix Inc. this morning that says “binge-watching” is the It thing this year behind “selfies.”
Mindless couch-potato behaviour aside, it’s something that traditional broadcasters should be watching closely, and no doubt are, as potatoes like me get hooked on a series available on Netflix or elsewhere online, or make repeated trips for DVD rentals. Though, yes, occasionally there’s pay-per-view, as well.
“‘Selfies’ may be the official new word of 2013, but binge-watching was a runner up for a reason,” Netflix said.
Here’s what the survey of some 1,500 American “TV streamers” by Harris Interactive found:
- Among these online American adults who stream TV shows at least once a week, binge watching is “widespread behaviour,” a regular pastime among 61 per cent.
- Almost 75 per cent define the phenomenon as viewing between two and six episodes of a show in a marathon-type sitting. With no “guilt.”
- More than 75 per cent see it as a “welcome refuge from their busy lives.”
- Almost 80 per cent find their favourite shows are “more enjoyable” when watched that way.
- Some 76 per cent see streaming TV shows “on their own schedule” is the best way to watch.
And, ouch, 80 per cent would prefer a good show to a “friend’s social media posts,” which (my words here) is the equivalent of not answering a friend or relative’s phone call in the middle of Lost.
Here's how Oxford Dictionaries describes it ("binge-watch" is the verb, by the way): "The word binge-watch has been used in the circles of television fandom since the late 1990s, but it has exploded into mainstream use in 2013. The original context was watching programs on full-season DVD sets, but the word has come into its own with the advent of on-demand viewing and online streaming."
Cisco invests in Canada
Cisco Systems Inc. is making a major bet on the province of Ontario, with investment plans for up to $4-billion to build research and development facilities that will create up to 1,700 high tech jobs in the coming years, The Globe and Mail's Tavia Grant reports.
he job creation expected over the next six years will be centred on R&D, with the potential to grow further to 5,000 employees by 2024.
The Ontario government is kicking in up to $220-million as part of the initiative.
The move comes amid rapid shifts in Canada’s most populous province, with job growth in some sectors, such as health care, offset by declines in others, such as manufacturing which saw the announcement of two more factory closings this week alone. The provincial government is hoping this agreement positions the province as leader in technology innovation and R&D.
Debt burden climbs
Consumer credit growth may be slowing in Canada, but the key measure of household debt has hit a record.
That measure, household credit market debt to disposable income, climbed in the third quarter of the year to 163.7 per cent, from a revised 163.1 per cent in the previous three-month period, Statistics Canada said today.
At the same time, the net worth of Canadian families rose 2.2 per cent, buoyed by rising stock markets and property values.
On a per-capita basis, net worth among Canadian households rose in the latest quarter to $211,400, though that masks the income inequality across the country.
“Shares and other equities grew on the basis of the rebound in domestic and foreign equity markets,” Statistics Canada said.
“The increase in household net worth was also supported by a 1.5-per-cent gain in the value of household real estate.”
Where debt is concerned, such a source of angst among Canadian policy makers, credit growth has been on the decline. Though, given the rise in incomes, the debt burden is still higher.
That could well spell trouble for some families when interest rates inevitably rise, though the Bank of Canada is believed to be more than a year away from such a move.
Lululemon slips again
Shares of Lululemon Athletica Inc. sank again today – though it was nothing like yesterday’s rout – as analysts cut their price targets on the yoga wear retailer’s stock in the wake of its disappointing third-quarter results.
Its shares were down by a further 2.3 per cent in early trading, on the heels of the 11-per cent kick they took yesterday.
As The Globe and Mail’s Marina Strauss reports, Lululemon posted a better-than-expected quarterly profit, but its outlook for the fourth quarter and the year in general spooked investors.
As Mr. Strauss writes, Lululemon now projects it won’t see the same double-digit growth in same-store sales of the past in its key quarter.
Yesterday, Lululemon posted a gain in third-profit, to $66.1-million (U.S.), or 45 cents a share, from $57.3-million or 39 cents a year earlier. Sales gained 20 per cent.
But Lululemon also cut its sales forecast for the year to between $1.605-billion and $1.61-billion, and its earnings-per-share estimate to between $1.94 and $1.96, down from its earlier range of $1.94 and $1.97. It also cut its forecast last quarter.
“We view it as increasingly likely that recent quality issues and communication missteps, as well as the increase in availability of lower-priced knock-offs of their core assortment are holding back demand,” said analyst Christian Buss of Credit Suisse, who slashed his target price on the stock to $59 (U.S.) from $78, and cut his rating to “neutral.”
“This suggests a structural change in the demand equation and suggests caution is in order going forwards.”
He did delve into those “communication missteps,” but his statement comes in the wake of comments from Lululemon founder Chip Wilson, who has since resigned as chairman after telling a TV interviewer that “some women’s bodies just actually don’t work” for its trademark yoga pants.
There’s that whole “rubbing through the thighs” thing, which sparked a backlash.
Lululemon’s setbacks certainly go far deeper than Mr. Wilson’s affront to women, such as competition and a tough retail environment.
But at least one analyst believe he played a role.
“We surmise that generally poor mall traffic (-5 per cent in November and –10 per cent in December thus far), exacerbated by the poor comments by founder Chip Wilson, is at play rather than competition taking share from LULU,” said CanaccordGenuity analyst Camilo Lyon, referring to the company by its stock symbol.
Having said that, Mr. Lyon sees Lululemon as a “premier athletic retailer whose current setbacks, while frustrating, are transitory.”
He has cut his target on the stock to $82 from $90.
“While Lulu’s growth potential remains vast, it must begin to show progress on the investments it is making or risk alienating more of its customers,” Mr. Lyon added, saying that should happen next year, and is the reason he still rates the stock a “buy.”
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