Life

31% Of Netflix Users Are Currently Stealing The Service, Plus Your Instagram Feed Is About To Change

#Morning Brew
by Last Updated

“The Founders would be appalled” — The latest and greatest in Apple’s dramatic security face-off with the FBI. Before the Founding Fathers could side with Apple, however (as Apple thinks they would), first things first: you’d have to explain to them what phones are—and the concept of data security.

MARKET SNAPSHOT
Big Picture

  • U.S. stocks finished higher yesterday, with solid gains from oil and par-for-the-course statements from the Federal Reserve (and you’d better believe we’ll have more on Yellen and Co. shortly)

Alternatives to Watch

  • Oil, take a bow: the slippery commodity rose sharply after data showed the U.S. significantly undershot expected stockpile levels in an oversupplied sector

Market Movers

  • Shares of LinkedIn fell nearly 5% after a massive downgrade by Morgan Stanley, and it was already reeling thanks to a less than stellar earnings report and an already-plummeting stock price
  • After Citron nailed its short attack against Valeant, it’s back for more with another pharma company: Mallinckrodt took a 26% dive over a two-day period after getting hit hard with accusations of being overvalued

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U.S. MACRO

The Fed Speaks

Happy Fed announcement day! Good news for your Thursday morning? Not really. The Federal Reserve adjusted its expectations for the year down thanks to some pretty unsavory new data. Yes, that means no interest rate hike this time, and now the number of rate hikes expected this year has fallen from four to just two. Rejoice? Let’s look at the big picture first: the U.S. economy hasn’t been as lucky as hoped for this year, and don’t even get us started on the world economy. With recent stock market volatility, fear of a global recession and a fall in oil prices, the Fed’s decision doesn’t come as a shock—but it’s still not a whole lot of fun to hear it.

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CORPORATE PRIMER

Not-So-Clean 2015

People don’t like to be kept waiting…and investors? They can’t stand it. The world’s largest clean energy company, SunEdison, announced its annual report will be postponed—again, and investors are letting them have it. What’s the holdup this time? Supposedly, some accounting issues the company faced back in 2015 have yet to be resolved, causing the delay…as well as a 90% deterioration in stock price since July. You read that right: 90%. That number has investors and company leadership sweating bullets—and likely has some accountants feeling pretty guilty, too.

Like Parent Company, Like Son

The Instagram doesn’t fall far from the Facebook. The classic idiom was never truer than yesterday, when everyone’s favorite photo-sharing app announced that it will soon switch its feed display mechanism from chronological to algorithmically-curated. In layman’s terms, the app will now put the photos it thinks you’ll like most at the top of your feed, just like Facebook. The rationale is that, on average, we miss 70% of our feeds—because we can’t be (shouldn’t be) monitoring social media day in and day out. The new algorithm aims to ensure that the 30% we do see is great stuff, and will keep us coming back for more. An interesting move by Instagram, which has been on a bender of innovation lately (from Hyperlapse to non-square photos).

R.I.P.

America’s largest coal miner is at rock bottom. Say your prayers, people: Peabody Energy announced potential bankruptcy following some delayed loan payments. The firm owes a massive $71 million in interest payments and has been losing cash for nearly eight straight quarters (pause for effect). Peabody isn’t alone in its struggles: the coal industry in general has turned south due to low energy prices, new environmental regulations and declines in steel production (mainly from China). Peabody is breathing its last, and management hopes to perform a miracle reorganization to save it all.

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OTHER STORIES

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ECONOMIC CALENDAR

WE KNOW WHO YOU ARE

Netflix…who doesn’t enjoy a good binge and chill? Well, it turns out 31% of you aren’t paying for it (if you’re American), and instead are getting off scot-free with someone else’s username and password. Here’s the breakdown on this mooching trend:

  • 69% of those aged 13-17 are using someone else’s account. We’ll let this one slide since very few teens have their own source of income.
  • Half of users aged 18-24 are also using someone else’s account—meaning millennials have some generous parents.
  • That’s a lot of people, but Netflix isn’t sweating it. Though the streaming industry loses $500 million each year to mooching, Netflix claims most of them go on to pay for their own subscriptions once they’re old enough to pay. In other words, getting your own Netflix is a rite of passage.

INTERVIEW QUESTION OF THE DAY

How do you calculate fully diluted shares? (Answer)

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BUSINESS TERM OF THE DAY

Umpire Clause — The language in an insurance policy that provides for a means of resolution by an unbiased third party if an insurer and an insured cannot agree on the amount of a claim payment. An umpire clause is the same thing as an arbitration clause.

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FOOD FOR THOUGHT

$58.73: NFL quarterback Matt Cassel’s bonus salary last season with the Buffalo Bills. He was just one of 10 NFL players to receive a bonus of under $500 last season. And they say major athletes make too much money!

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Congrats to Jared H. for winning last week’s Brew quiz prize! Jared is a 2014 graduate of the University of Virginia who currently works as a Solutions Consultant at Oracle. Tomorrow’s issue will hold this week’s quiz: get pumped!

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