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Situational awareness: AT&T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes are both expected to take the stand this week in the trial over the proposed $85 billion merger of their companies.
Illustration: Rebecca Zisser/Axios
Netflix stock beat Wall Street expectations for user growth and revenue in the first quarter of 2018, adding 7.41 million new subscribers to bring its total worldwide to 125 million.
Why it matters: A strong Q4 had analysts and investors worried that the streaming giant wouldn't be able to recreate its blockbuster success.
But, but, but: Netflix plans to drop a whopping $7.5 billion to $8 billion on content for 2018, with executives forecasting that free cash flow will be roughly negative $3-$4 billion in 2018. They expect this trend to continue for several years as they pour cash into original content.
The blockbuster earnings are especially important given the chaos surrounding user privacy and saturation within the digital ad market that's dominated largely by Google and Facebook.
Netflix CEO Reed Hastings told investors that his company spends more like a media company than a tech company: “We’ll spend over $10 billion on content and marketing and $1.3 billion on tech.”
"I'm very glad that we built the business not to be ad-supported but to be subscription... Just objectively, we're much more of a media company in that way than pure tech. Now of course, we want to be great at both, but again, we're really pretty different from the pure tech companies."— Hastings
The company remained tight-lipped about its M&A strategy, but noted that they are always "on the lookout for new IP."
Netflix's competition in the SVOD (streaming video on-demand) space, at this point, is still far off.
"Netflix hit escape velocity over last year and no one seems to want to compete," says BTIG media analyst Rich Greenfield. "What are we waiting for? What is Iger waiting for?"
If there's one group that could be benefiting from Netflix's success, it's the cable and satellite companies.
"These type of bundled deals really help you bring down churn," says Greenfield. "To extend a bundle in Comcast's platform where you forget you're even paying for Netflix is very complicated. Who wants to call up Comcast and deal with them to cancel?"
CBS Board Chairman and CEO Leslie Moonves asked in 2016 that he remain Chairman of the Board of a combined CBS/Viacom company and that his CBS management team "have complete and irrevocable authority to manage the combined businesses,” according to a 2016 letter from Moonves' lawyers to Shari Redstone's lawyers.
Why it matters: While the letter points to negotiations from previous merger talks between CBS and Viacom, sources say that the overall theme of the nine conditions listed by Moonves, centered around management and control, could have a common link with Moonves' feelings today that having his team oversee the combined company would be crucial for a successful merger.
The letter is included in an excerpt from Ken Auletta's upcoming book, Frenemies: The Epic Disruption of the Ad Business (and Everything Else), which has been obtained by Axios.
Between the lines: Reports this time around have suggested that negotiations regarding who would be second-in-command of a combined company, Viacom CEO Bob Bakish or CBS chief operating officer Joseph Ianniello, have held up merger talks, as well as pricing around the Viacom acquisition.
Go deeper: Read the full letter.
Tronc stock exploded yesterday after Axios business editor Dan Primack confirmed Apollo Global Management's interest in potentially acquiring distressed newspaper publisher, Tronc. (Interest was first reported by The New York Post on Friday.)
Primack also reported that SoftBank is the only other financial firm to have not run screaming from Tronc's bankers, according to a source familiar with the situation. (Fortress Investment Group, which SoftBank bought last year, is the external manager for the parent company of GateHouse Media, one of the country's largest newspaper chains.)
Why it matters: It's unclear how Apollo's interest, or Softbank's for that matter, will be affected by late Friday news that ex-Tronc chairman Michael Ferro to sell his entire 25.65% stake to privately-held McCormick Media. Ferro and Apollo co-founder Leon Black are said to be pals, and initial speculation was that Ferro was in some way facilitating Apollo's interest.
Other potential buyers:
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Sir Martin Sorrell. Photo: Francois G. Durand/Getty Images
WPP's stock was down close to 5% at market close Monday after news broke over the weekend that its longtime CEO, Sir Martin Sorrell, is leaving the company.
Illustration: Caresse Haaser, Sarah Grillo / Axios
Now that Facebook survived its congressional onslaught, it's focusing its attention towards a much more powerful threat: the EU.
New: Facebook is facing a class action suit alleging it used facial recognition software to tag people in photos, without their permission, Bloomberg reports. A judge implies in a ruling that Facebook could face damages that could amount to “billions of dollars.”
The 2018 Pulitzer Prize winners were announced Monday.
Go deeper: Full list of 2018 journalism Pulitzer winners.
Americans are still reading, but they're spreading their book consumption habits over an array of formats, according to a new Pew Research survey.
Why it matters: Book consumption by volume has remained relatively unchanged over the past five years, while consumption of digital and social media consumption has skyrocketed.
Why books are still addicting: "The order of the words are fixed on the page or on the screen, but the speed at which you read them is entirely up to you," writes Will Sehwalbe in A Resource for the Ambitious, from The Wall Street Journal. "Sure, this allows you to skip ahead and jump around, but it also allows you to slow down, savor and ponder."
Go deeper: Every top New York Times best-seller this year has been about Trump, via CNN's Brian Stelter.