WSJ : Facebook Offers Money to Reel In TikTok Creators

Facebook Offers Money to Reel In TikTok Creators
Instagram makes lucrative offers to popular TikTok users to join its new competing service, raising stakes in social-media rivalry

Facebook Inc.’s FB -1.45% Instagram has offered financial incentives to TikTok users with millions of followers to persuade them to use a new competing service, an escalation in a high-stakes showdown between the two social-media giants.

Instagram has made lucrative offers to some of TikTok’s most popular creators to use the new service, Reels, according to people familiar with the matter. Facebook is planning to unveil Reels next month. The potential payments for some would be in the hundreds of thousands of dollars, some of the people said.

Many active TikTok users, known as creators, have gathered large followings on the platform. Companies have tried to reach these large audiences by paying popular creators to use specific songs, wear branded clothing and directly promote products in their videos.

Instagram has “approached a diverse range of creators about Reels in several of the countries where it’s currently being tested,” company spokeswoman Sarissa Thrower said. “We remain committed to investing in both our creators and their experience.”

The move is the most significant sign yet that Facebook intends for its Instagram Reels service to directly compete with ByteDance Ltd.’s TikTok. Reels is an Instagram feature that, like TikTok, allows users to share short-form video, and is scheduled to launch in the U.S and several other countries next month.

The Instagram overtures to creators are the latest in a continuing back-and-forth between the two social-media giants. In recent years, TikTok has flooded Facebook and Instagram with ads, targeting their users on the home turf of the social media company.

To counter the Instagram push, TikTok announced a $200 million fund on Thursday that will help creators on the platform “realize additional earnings that help reward the care and dedication they put into creatively connecting with an audience that’s inspired by their ideas.”

Such payments in exchange for exclusive content from top creators aren’t unheard of on social-media platforms. Last year, talent agents representing online celebrities said Microsoft Corp. likely offered celebrity videogamer Ninja tens of millions of dollars to play games live on its now-shut Mixer streaming platform.

Facebook also isn’t alone in seeking to offer its own alternative to TikTok, which has skyrocketed in popularity among younger users, with 70% of 10-year-old girls with smartphones in the U.S. using the app in 2019 according to Jiminy, an app for parents that measures the smartphone habits of children. YouTube also said last week that it is testing new features that resemble video options available on TikTok.

The outreach campaign, which has taken place in recent weeks, comes as the Trump administration and some U.S. lawmakers are weighing limiting the access of U.S. users to TikTok. The Chinese-owned social-media platform has drawn criticism due to security and privacy concerns. TikTok has previously said it has never provided user data to the Chinese government and won’t do so.

In discussions that have taken place in the past month, Instagram has told creators it hopes to launch Reels with a splashy first week with numerous exclusive posts from prominent creators, some of the people said. It is offering the most money to creators who commit to posting their videos exclusively to Reels, according to a TikTok creator who is considering taking the deal.

For creators who won’t post exclusively to Reels, Instagram is asking that they post their videos to Reels before adding them to other platforms, known in industry terms as “first looks,” people familiar with the discussions said. Instagram is also offering to cover the costs of producing their videos. Instagram has used nondisclosure agreements to dissuade creators from sharing the terms of the potential deals, one person said.

A popular teenage TikTok user with millions of followers said that he would likely join Instagram Reels after the company reached out earlier this month. He declined to discuss the details of the call, saying that the company wanted him to be discreet.

Other TikTok creators who haven’t received offers from Instagram say they plan to sign up for Reels regardless, because they are concerned about TikTok’s future in the U.S.

Devain Doolaramani, a 22-year-old talent manager who said his company oversees about two dozen influencers, said speculation about TikTok’s uncertainty has driven him to want to diversify his talent roster.

“We are going to onboard all of them to REELS ASAP!” he said in an email.

Reels appears to be the latest Facebook product with features similar to those on TikTok. Lasso, an app launched by Facebook in 2018 that, like TikTok, allowed users to post short videos and view them in an algorithmic feed, was shut down earlier this month.

“Given that Lasso didn’t catch on, it’s not surprising to see Facebook try this tactic with a copycat product tied to Instagram,” a spokeswoman for TikTok said. “No matter how you dress things up, hundreds of millions of people truly just enjoy TikTok.”

Ms. Thrower said that Instagram is “responding to a demand, and working to innovate on the user experience, and our focus here is offering choice, which we believe is a great thing for people to have.”

As Facebook and TikTok square off in a contest for popular users, Facebook continues to deal with scrutiny of its competitive behavior in the past. Snap and other rivals have complained to federal regulators about what they say are Facebook’s efforts to thwart and undermine rivals. Facebook has previously said that its acquisitions fuel innovation and its addition of new services have given consumers more choices.

Facebook Chief Executive Mark Zuckerberg is set to testify before Congress at an antitrust hearing Wednesday, joining the CEOs of Apple Inc., Amazon.com Inc. and Alphabet Inc.’s Google.

WSJ : Sotheby’s Brings Home the Bacon

Sotheby’s Brings Home the Bacon
Triptych by Francis Bacon sells for $85 million in new, online sale format


An anonymous telephone bidder paid $85 million for a Francis Bacon triptych during a marathon series of live-streamed, online auctions held at Sotheby’s on Monday that could go a long way to bolstering confidence in the art market amid a global pandemic.

The trio of works from 1981 depicting a writhing man in agony, “Triptych Inspired by the Oresteia of Aeschylus,” had been expected to bring up to $80 million.

Stakes for Sotheby’s were high heading into this sales series, as this was the first time the New York auction house had ever conducted its biggest sale of the season entirely online rather than inviting crowds to bid in its Manhattan saleroom. The Bacon was the priciest offering in a trio of back-to-back sales of impressionist, modern and contemporary art that had been postponed in May because of coronavirus-related lockdowns. Collectors must have felt some pent-up demand to spend: The sales Monday spanned more than four hours and generated dogged competition from bidders globally. Records were broken for surrealist masters like Wifredo Lam, postwar mainstays like Helen Frankenthaler and upstarts like Matthew Wong. Overall, the three sales totaled $363.2 million, meeting the house’s own expectation.

The $85 million price didn’t reset the record for works by the Dublin-born Bacon, which have sold for as much as $142.4 million at auction. But the triptych attracted a bidding war even though Sotheby’s wasn’t able to rely on a packed saleroom to lend the proceedings a measure of adrenaline.

During the sale, the Bacon was displayed on the back wall of a studio set constructed at Sotheby’s, partially obscured by auction specialists standing on several tiered rows of phone banks facing cameras, a format more commonly used during telethons. In London, the sale’s auctioneer, Oliver Barker, stood before several screens that showed these specialists submitting bids in real time from New York as well as from London and Hong Kong. Mr. Barker simultaneously watched for bids placed digitally.

In the case of the Bacon, a lengthy bidding war developed between an anonymous collector who phoned in bids and an online bidder from China who clicked in bids in $100,000 increments, reaching $73.1 million before bowing out. Those underbids, while not successful, still represented the most anyone has ever tried to spend online for a work of art.

Bacon is considered one of London’s top figurative painters of the 20th century. He is known for grouping his works in series—typically, triptychs—and had his breakout hit in 1944 with “Three Studies at the Base of a Crucifixion,” now at Tate Britain. Today, half of his 28 large-format triptychs belong to museums, and three others that have come to market over the past 20 years have each sold for more than $80 million.

Ahead of the sale, Sotheby’s felt so confident in the demand for this work that it gave the seller, a foundation tied to Norwegian billionaire Hans Rasmus Astrup, a pledge to buy the work for an undisclosed sum if no one bid more during the actual sale. Since the work outperformed, the house will collect a larger share of the proceeds.

Elsewhere in the sales, collectors paid $9.6 million for Lam’s surrealist “Omi Obini,” exceeding its $8 million low estimate. A group of works from the estate of Denver collector Ginny Williams—including Frankenthaler’s $7.9 million abstract, “Royal Fireworks”—sold for $65.5 million, over a presale high estimate of $51.7 million. In the contemporary sale, Wong’s “Realm of Appearances” sold for $1.8 million. The landscape was only expected to sell for up to $80,000.

Phillips will hold its own live-stream sale on July 2, followed by Christie’s on July 10.

FT : Retailers and landlords do battle over the future of leases

Retailers and landlords do battle over the future of leases
The coronavirus crisis has put immense pressure on property companies to link a tenant’s rent to their turnover

Capital & Counties has long enjoyed an enviably strong hand in rent negotiations.

As the owner of London’s Covent Garden market, a magnet for millions of foreign and domestic tourists who can shop and dine along streets dating back to the 17th century, the property company is not accustomed to offering concessions to tenants ranging from multinationals like Apple to independent businesses.

But the coronavirus crisis has ripped up that script. With foreign tourists staying at home and the UK economy in recession, the London-listed company is for the remainder of the year offering some tenants variable leases, where the level of rent is tied to how much turnover a business generates.

There are few starker illustrations of how the pandemic is forcing property companies dependent on the retail and hospitality industries to think what might have once seemed unthinkable. Across the world, the pandemic has unleashed a high-stakes debate over whether rents should be fixed or linked to some measure of how a tenant’s business is performing.

As rising infections in the US threaten more crippling lockdowns, fashion chain Urban Outfitters is among a growing number of retailers calling for variable leases to help them weather the pandemic. In France, the government tried and failed to mediate a bitter argument between retailers and landlords, many of whom are resisting attempts to rewrite previously sacrosanct lease agreements.

Chip Bergh, chief executive of US fashion chain Levi Strauss, is clear: “A fixed lease, especially at pre-Covid levels, could become economically punishing.”

“There could be an extended period of time where you have to limit the number of people coming into your doors,” he adds, noting that as well as lower sales, retailers also face higher costs due to cleaning and other safety measures. “That puts a financial burden on us and we’re just looking for landlords to share in that pain.”


Rémy Baume, chief executive of Zadig & Voltaire, the French clothes retailer, agrees.

“During the recovery period, we need variable rents and not fixed ones,” said Mr Baume. “This would align both sides’ interests as we come out of the crisis.”

For some property companies, the scale of the calamity that has engulfed their tenants means rewriting lease agreements and sharing the pain is necessary.

US cinema chain AMC Entertainment, Canada’s Cineplex and global fashion retailer AllSaints are among companies that have made progress towards agreements that link rents to the level of turnover.

Scores of US businesses, including Tommy Hilfiger-owner PVH and The Cheesecake Factory, have sought relief on rents. In many cases, landlords have conceded irrespective of the wording of leases, given the near impossibility of finding alternative tenants.

“It’s definitely happening a lot more,” Vince Tibone, retail sector head at Green Street, the commercial property research firm, said of variable leases in the US. For many landlords, he said, “it’s the least bad option”.

Even if some UK retailers have reported encouraging sales since the lockdown began to be eased in May, no one disputes the sector remains in the grip of a crisis. Intu, the country’s largest shopping centre owner, collapsed into administration last month. 

Although the gravity of the situation has prompted some landlords to conclude that having less rent is preferable to a bankrupt tenant, the fight over leases has sometimes turned ugly.

In April, a group of about 30 French retailers and trade associations wrote an open letter in the Les Echos newspaper urging landlords to tie rents to revenue for the rest of the year. With major French landlords such as Unibail and Klépierre refusing such demands, the French government attempted to mediate, but that process failed last month after retail trade associations rejected a proposed compromise. 



Bris Rocher, whose family-backed company owns French beauty products company Yves Rocher and kids clothing brand Petit Bateau, has been a vocal advocate for renegotiating leases.

“Decent” trading at the company’s 800 or so stores since they reopened in mid-May had softened the blow, he said, but the company decided to close a shop on Boulevard Haussmann in Paris. Fewer tourists, particularly from China, meant “we were losing money on the store. We tried to go to a variable rent but the landlord was having none of it,” said Mr Rocher. 

Whether in the US, the UK or France, retailers have so far only pushed for variable leases, which can also include a fixed one-off payment, until the end of the year. But with the pandemic turbocharging the migration of consumers from physical stores to the internet, some sense both the chance and need for a more permanent change in leases. 

“In the UK, there has been a huge acceptance among owners and occupiers that our way of occupying commercial space is broken and there needs to be radical change,” said Mark Robinson, chair of the High Streets Task Force, a government-appointed body of experts which advises on supporting and transforming local high streets. 

A survey of UK landlords by property consultancy Colliers in May found that 40 per cent would now be more likely to factor turnover, footfall or online sales into lease agreements.

Brian Bickell, chief executive of Shaftesbury, a UK-listed property company whose portfolio includes London’s Chinatown, acknowledges that the industry may be at an era-defining juncture. 

“I think landlords now are going to have to accept more risk sharing in terms of taking on turnover rents,” said Mr Bickell, who has offered turnover-linked leases to restaurants and cafés. “At the end of the day it's got to be affordable for the tenant as well.”

However, a concerted effort to make turnover-linked leases more mainstream would bring its own tensions as well as potentially radical ramifications for property companies.

For restaurants, cafés and bars, such leases would be relatively straightforward because sales take place on site. But a thorny challenge for retail landlords is establishing how much of a tenant’s revenue is attributable to a physical store.

“I don’t think anyone’s cracked how you capture online sales [when setting variable leases],” said Mr Bickell. “The brand value of having a bricks-and-mortar store in [London’s] Soho is huge, but how do you ever know which shop is driving turnover?”

Hammerson, a UK and European shopping centre owner hit hard by the pandemic, argues that any move to link store rents to the level of turnover must include online sales, too. But that would require tenants providing a level of detailed information to landlords that they have historically been reluctant to do.

“If we had a property market where we hadn’t had 50 years of mistrust between tenants and landlords it might be OK,” said Dominic Curran, property policy adviser at the British Retail Consortium. “But tenants think landlords will use it as a stick to beat them with, to drive up rents.”


If turnover-linked leases were ultimately brought in from the industry’s periphery, investors say it would also change the perception of a sector where company valuations have typically been underpinned by stable income streams and the allure of dividends.

“Investing in commercial property, you’re investing for income,” said Tim Munn, chief investment officer at Mayfair Capital, the UK arm of asset manager Swiss Life. “Accepting that rental income can go down as well as up brings more risk for risk-averse investors.”

Mr Munn and other dividend-hungry investors have no need for panic. Variable-linked leases still account for a small share of retail landlords’ income. Simon Property Group, the largest US shopping mall owner, generated $4.9bn from fixed leases last year, more than five times that it made from variable ones.

But if a significant number of consumers fail to return to shops and restaurants in the coming months, the pressure to permanently rewire lease agreements will only grow.

FT : Peugeot boss urges radical steps to cut price of electric cars

Peugeot boss urges radical steps to cut price of electric cars
Costs from offices, dealers and suppliers must come down to make battery-powered vehicles affordable, says Tavares

Carmakers need to take radical steps to lower the price of electric vehicles by cutting costs across offices, dealerships and suppliers, according to the chief executive of Peugeot owner PSA.

Carlos Tavares said bridging the gap between the cost of developing electric vehicles and selling them at a profit, which is currently only possible through subsidies, must be the first priority for carmakers.

“Affordability will be the challenge for the next five years in terms of costs,” he told the Financial Times. “Those breakthroughs need to come from real estate, distribution costs, sourcing all the components of cost structure will have to be combined to bring this affordability.”

Carmakers and consumers in the EU benefit from about €12,000 in subsidies for each electric car through incentives and other measures, he said.

“This is the gap that we need to close if we want to offer this to the biggest possible number of citizens, which means all sorts of cost reduction needs to be addressed to face this challenge,” Mr Tavares said.

PSA, which moved its headquarters from the Champs-Elysées to the outskirts of Paris to save money several years ago, intends to make even more radical moves by scaling back an office network vacated during the pandemic as staff worked from home.

“We are going to shrink our real estate footprint,” Mr Tavares said. “This will represent a benefit for employees. They will spend less money on transportation to go back and forth, and will have a better work-life balance.” PSA would maintain office spaces for teams to meet when necessary, he added

This change would enable the company to maintain its profitability, while ramping up sales of battery and hybrid vehicles to meet new emissions rules.

Mr Tavares’ comments come the day after PSA bucked the industry-wide coronavirus malaise to post a profit for the first six months of the year. It booked a net profit of €595m for the half, across a sector where most major players expect to make losses.

Like all carmakers operating in Europe or China, PSA is boosting its electric vehicle capabilities in expectation of a demand boom later into the decade.

The company on Tuesday unveiled a new platform that will be the base for all its models from 2025 onwards. This will underpin vehicles that can travel up to 650km on a single charge.

PSA’s pending merger with Fiat Chrysler, which will create the world’s third-largest carmaker by revenues, may result in the Italian-American brand shifting its vehicles on to PSA’s systems. This would be similar to the move by Opel-Vauxhall after PSA’s 2017 takeover.

“As we are two companies coming together, the assets of the two families will be available,” he said, adding that electrification of FCA’s largely North American vehicle line-up would depend on the speed of regulations in the US.

The FCA merger was agreed in December but faces close scrutiny from European competition authorities.

Although Mr Tavares has said he will be watching the cash position of the newly merged group closely, he said it was “not the right moment” to discuss FCA’s planned €5.5bn special dividend to shareholders in order to equalise the value of the two groups.

He added: “I would be arrogant if I was going to predict the future right now. The only thing we can do is to make our companies more agile, more robust and more resilient.”

Fwd:Briefing; WRAPX; After Hours Summary: FEYE +12.1%, AMD +10%, SBUX +5.7% up big on earnings; STX -7.8%, EBAY -3.1%, V -2.2% lower on earnings

After Hours Summary: FEYE +12.1%, AMD +10%, SBUX +5.7% up big on earnings; STX -7.8%, EBAY -3.1%, V -2.2% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CYH +14.1%, FEYE +12.1%, CAR +10.3%, AMD +10%, SBUX +5.7%, BYD +5.6%, TENB +4.9%, CHRW +4.8%, AMED +4.1%, WH +4.1%, PKI +3.4%, AXS +3.3%, EQR +2.9%, UNM +2.6%, MPWR +2.2%, JNPR +2.1%, NCR +1.5%, LSCC +1.1%, SSNC +1.1%, STAG +1.1%, DXCM +0.8%, FTV +0.8%, MDLZ +0.5% (also increases dividend), EIX +0.4%, KAI +0.4% (also acquires Cogent Industrial Tech), ACCO +0.3%, OMCL +0.3%, PLT +0.3%, HLI +0.2%, AFL +0.1%, CB +0.1%, CE +0.1%, IMAX +0.1%, MXIM +0.1%, RNR +0.1%, WRE +0.1%

Companies trading higher in after hours in reaction to news: LB +12.4% (announces $400 mln in annualized cost reductions; has reopened most Bath & Body Works and Victoria's Secret stores in North America), IAA +4.3% (to join S&P MidCap 400), CRTX +4.3% (presents data linking P. gingivalis infection to cardiovascular disease severity and Alzheimer's disease), BANF +3.9% (to join S&P SmallCap 600), CRS +3.8% (to join S&P SmallCap 600), HRB +2.8% (releases preliminary results for the recent US tax season), ATUS +2.5% (to sell 49.99% of Lightpath fiber enterprise business), HRZN +2.4% (declares dividends of $0.10/sh for Oct, Nov and Dec), XPER +2% (confirms favorable patent decision at the ITC), REXR +1.8% (to join S&P MidCap 400), DLX +1.1% (to join S&P SmallCap 600), AGI +1% (announces construction decision on La Yaqui Grande Project), SHOP +0.9% (files for $7.5 bln mixed securities shelf offering), MRNA +0.5% (FT reports co is pitching its COVID-19 vaccine at a price of $50-60 per course), BBIO +0.4% (files for stock offering by selling shareholders), PCRX +0.2% (announces settlement of govt investigation of EXPAREL), TSLA +0.2% (S&P upgrades to 'B+' on strengthening business position), SXI +0.1% (provides estimates related to its strategic exit of Control Devices)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: STX -7.8%, MASI -3.9%, MTDR -3.7%, OKE -3.3%, DENN -3.2%, EBAY -3.1%, V -2.2%, ENVA -1.9% (also announces deal to acquire ONDK), AKAM -1.8%, AMGN -1.5%, HA -1.3%, ATRC -0.9%, PEGA -0.8%, EEFT -0.6%, MRC -0.3%, SYX -0.2%, APAM -0.1%, ASH -0.1%

Companies trading lower in after hours in reaction to news: ARCT -5.2% (stock offering), GLDD -2.8% (signs subcontract with Bechtel), RUN -2.6% (to join S&P MidCap 400), AMC -2.1% (AMC and Universal Filmed Ent announce a multi-yr agreement), HA -1.3% (launches offering of Enhanced Equipment Trust Certificates), ALEC -0.7% (presents clinical data), ADT -0.6% (named as premier provider of smart home security by DHI)

>>> Closing Stock Market Summary

Closing Stock Market Summary

The S&P 500 declined 0.7% on Tuesday, pressured by some late selling and a cautious mindset ahead of numerous key events this week. The Dow Jones Industrial Average fell 0.8%, the Nasdaq Composite fell 1.3%, and the Russell 2000 fell 1.0%.

Negotiations for the next coronavirus relief bill will occur throughout the week and should be contentious considering House Democrats rebuffed the Senate's $1 trillion bill and Senate Majority Leader McConnell issued a tough-minded stance on CNBC. In addition, tomorrow will feature the July FOMC policy statement and the House Judiciary Committee's antitrust hearing, followed by mega-cap earnings on Thursday. 

The mega-cap stocks accelerated losses into the close after finding renewed strength yesterday, joining stocks within the S&P 500 materials (-2.2%) and energy (-1.8%) sectors as today's laggards. The defensive-oriented real estate (+2.1%), utilities (+1.6%), and consumer staples (+0.3%) sectors closed higher. 

Pfizer (PFE 39.02, +1.48, +3.9%) stood out with a 4% gain following the company's upbeat earnings results and guidance. Fellow Dow components 3M (MMM 155.33, -7.91, -4.9%), McDonald's (MCD 19624, -5.01, -2.5%), and Raytheon Technologies (RTX 61.00, -0.09, -0.2%) underwhelmed investors with their earnings reports.

Other developments that prompted some caution included the Conference Board's Consumer Confidence Index declining to 92.6 in July (Briefing.com consensus 95.0) from 98.3 in June and the Fed extending its lending facilities by three months through the end of the year. The latter was a reminder that the economy has struggled longer than hoped. 

U.S. Treasuries finished with modest gains in front of the July FOMC statement tomorrow. The 2-yr yield declined one basis point to 0.14%, and the 10-yr yield declined three basis points to 0.58%. The U.S. Dollar Index increased 0.1% to 93.77. WTI crude futures fell 1.4%, or $0.58, to $41.04/bbl.

Reviewing Tuesday's economic data:

  • The Conference Board's Consumer Confidence Index slipped to 92.6 in July (consensus 95.0) from an upwardly revised 98.3 (from 98.1) in June, as reports detailing the resurgence of coronavirus cases and efforts to pause or roll back reopenings because of the resurgence weighed on consumer attitudes.
    • The key takeaway from the report is the recognition that consumers have gotten less optimistic about the short-term outlook and "remain subdued about their financial prospects," which is a negative portent for consumer spending.
  • The S&P Case-Shiller Home Price Index for May increased 3.7% (consensus 4.1%) following a revised 3.9% increase in April (from +4.0%).

Looking ahead to Wednesday, investors will receive the July FOMC policy statement, Pending Home Sales for June, the weekly MBA Mortgage Applications Index, and the Advance June reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories.

  • Nasdaq Composite +15.9% YTD
  • S&P 500 -0.4% YTD
  • Dow Jones Industrial Average -7.6% YTD
  • Russell 2000 -11.9% YTD