Raphael Stevens

Netflix Co-CEO Ted Sarandos is scheduled to cap off a week of panels with a talk on Thursday at the Cannes Lions festival.
In April, Netflix said it would offer a cheaper ad-supported option after it reported losing subscribers for the first time with competition intensifying in the streaming space.
Netflix has met with Google, Comcast and NBCUniversal, and Roku to discuss potential marketing partnerships, sources told CNBC.

LOS ANGELES, CALIFORNIA – JUNE 12: CEO of Netflix Ted Sarandos attends Netflix’s FYSEE event for “Squid Game” at Raleigh Studios Hollywood on June 12, 2022 in Los Angeles, California. (Photo by Charley Gallay/Getty Images for Netflix)
Charley Gallay | Getty Images Entertainment | Getty Images

CANNES, France – As the world’s biggest advertising conference gets underway here this week, all eyes will be on Netflix for clues on how the streaming giant plans to break from its ad-free business model to offer a cheaper subscription for the first time.
Netflix Co-CEO Ted Sarandos is scheduled to cap off a week of panels with a talk on Thursday at the Cannes Lions festival, which is returning after a two-year hiatus during the pandemic and has named Sarandos its “Entertainment Person of the Year.” The panel comes amid expectations that demand will grow for cheaper, ad-supported streaming subscriptions as inflation pressures people to cut costs.

Attendees will also be looking for clues on who Netflix will partner with for its foray into the advertising world, which it plans to ramp up quickly to start selling ads as early as the fourth quarter. Sources told CNBC that Netflix has met with Google, which makes most of its revenue from ads. It has also met with Comcast/NBCUniversal and with Roku to discuss ad-sales partnerships, as previously reported by The Information. NBC Universal and Google declined to comment.

“We are still in the early days of deciding how to launch a lower priced, ad-supported option and no decisions have been made. So this is all just speculation at this point,” Netflix said in a statement.
The company is looking to secure a marketing partners in the next two to three months and quickly hire a senior executive and assemble a team to manage the relationship with its partners, according to a source who requested anonymity.
Making the ad dollars flowing into streaming entertainment is top of mind for many festival attendees. In April, Netflix said it would offer a cheaper ad-supported option after it reported losing subscribers for the first time with competition intensifying in the streaming space. Sarandos’ talk at Cannes was scheduled before Netflix announced its coming move.
Read more: Netflix reconsiders the ideas that made it unique

Disney+ is also preparing to launch an ad-supported service later this year. Paramount+ has an ad-supported tier and free ad-supported Pluto. The newly merged Discovery Warner Brothers with a combination of its streaming services expected, and Roku, with its growing ad business. CNBC’s parent company NBC Universal also already offers a cheaper ad-supported subscription for its Peacock service.
The company will need to weigh the advantages and disadvantages of each of the potential partners. Google, for example, has the advantage of being the world’s largest ad giant, but has less experience with entertainment content despite its recent push into the space.
Comcast does not have the global reach as Google, but its NBC Universal unit is a leader in selling ads for that premium TV content. The cable giant’s Freewheel ad tech platform is also used by many media companies and could offer Netflix its programmatic ad-buying tools. Plus, NBC Universal just expanded partnership with Apple to sell its ads, establishing precedent for it partnering to sell ads for premium content at scale.
Read more: Netflix’s binge-release model is under new scrutiny
Another option is Roku, a longtime partner of Netflix that was previously spun off from the streaming giant. As the largest TV operating system in the U.S., Roku has the advantage of its scale in the U.S., Canada and Mexico and its insight into ad-supported subscription trends.
The potential partnerships would continue a long history of rivals teaming up in the media industry. As a content distributor and an entertainment company, for example, Comcast regularly strikes distribution deals with rivals to its NBC Universal. And Roku partners with streaming apps while offering its own free ad-supported alternative in the Roku Channel.
The stakes are high for Netflix. Its stock is down nearly 50% since it warned of its contracting subscriber base. Offering a cheaper ad-supported service is one way to stop the cancellations from continuing as people look to trim costs, but Netflix has to ensure the advertising experience won’t turn off viewers.
Disclosure: CNBC is owned by Comcast’s NBCUniversal.

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Lowe’s is offering customers a chance to use metaverse assets to help visualize building projects.
The home improvement retailer is making 500 assets available for free on its own metaverse hub.
“There is just a huge appetite from our customers to use emerging technology,” Lowe’s executive Seemantini Godbole told CNBC in an exclusive interview.

Lowe’s Metaverse Open Builder.
Courtesy: Lowe’s

It seems like every company is getting into the metaverse these days. Lowe’s doesn’t want to miss out on the opportunity to use it to help builders imagine projects. 
But unlike other retailers that chose a particular virtual platform or game like Fortnite or Roblox, Lowe’s metaverse assets – including free downloads of 500 product assets, including items such as chairs – are available on its own hub.

“It’s all emerging, and it’s all up for exploration,” Lowe’s executive vice president and chief brand and marketing officer Marisa Thalberg told CNBC in an exclusive interview. The retailer decided not to choose one metaverse platform but rather “a kind of an agnostic and kind of democratized approach,” she said.
While other brands have found immediate ways to make money in the metaverse, even on an experimental basis, Thalberg said “this isn’t about immediately jumping in and trying to make an event or immediately commoditizing it.”
Rather, she told CNBC, “our goal really is to take this new frontier and help people use their imaginations and help them make their virtual spaces as exciting and inspirational and enjoyable as their real world spaces. And that’s the only benefit we seek to obtain at this point.”
At least that’s the only stated benefit. As the first major home improvement retailer to enter the metaverse and make its applicable assets available for free, no doubt a key goal is watching consumer behavior to eventually capitalize on the opportunity that might exist. The assets are based on real products the company currently sells online and in its stores. 

Lowe’s Metaverse Open Builder.
Courtesy: Lowe’s

Analysts see a big breakthrough coming for the metaverse. By 2026, a quarter of consumers will spend at least one hour per day in the metaverse, said consulting and research firm Gartner estimates. Morgan Stanley estimates the total addressable market for advertising and e-commerce opportunities could be worth $8.3 trillion in the metaverse, with $697 billion in home and home related spending. The firm lists walking through “home renovation plans” as an example.

“Just last year, it was estimated that about $100 billion were spent on virtual goods inside gaming platforms. That doesn’t even include NFTs,” said Futures Intelligence Group CEO and chief metaverse officer Cathy Hackl.
Metaverse participants have, in some cases, already paid thousands of dollars for unique non-fungible tokens to outfit aviators from luxury and fashion brands like Gucci, Balenciaga, Dolce & Gabbana and Ralph Lauren. Gucci saw 19 million visitors to its Gucci Garden on Roblox. Dolce & Gabbana sold an NFT called “The Glass Suit,” with an accompanying physical garment, for over $1 million.
For its part, Lowe’s is releasing a free, limited NFT collection of boots, hardhats and other related accessories for builders on the Decentraland platform to the first 1,000 participants.
Seemantini Godbole, Lowe’s executive vice president and chief information officer, told CNBC in an exclusive interview the retailer is applying many of the principles it currently uses for shoppers for this metaverse project.
“What we have noticed in our current mediums like Lowes.com and in our stores … people like to experiment and while they’re shopping and getting inspired they like to put things together in the virtual world before they start their project,” she said. “It’s the same idea for the metaverse. That you want them to experiment, feel and understand how it’s going to look before they start the project in the real world.” 

Lowe’s Metaverse Open Builder.
Courtesy: Lowe’s

Godbole said many of these metaverse assets had already been created as 3D digital versions of physical products available for purchase, to help online shoppers visualize the real-life dimensions and features. Lowe’s is already using virtual and augmented reality technology to allow shoppers to design an entire kitchen online or map their home’s floor plan using their smartphone as examples.
“There is just a huge appetite from our customers to use emerging technology” like the VR and AR tools Godbole said. “We are applying some of those lessons in the metaverse.”
Right now, Lowe’s isn’t offering a physical good with the purchase of a virtual one, or any link back to its website from any metaverse platforms, Godbole said. But that could change.
“In the future, we could absolutely think about, how do all these different things link, and make sure that [metaverse users] are able to shop these items on Lowe’s dot com or in our stores,” she said.
Thalberg acknowledged that the typical metaverse participant “skews really young,” likely younger than the typical Lowe’s shopper or homeowner today.
“But if you look at kids who’ve used platforms like Minecraft and Roblox, a lot of what they do there, is fascinatingly enough, build and design. This idea of being able to build and decorate and design and improve is kind of core to how these spaces are emerging,” she said. “And so if we catch them young, that’s great, but we see a real utility too, as we look to a huge wave of millennial new homeowners who aren’t afraid of technology.”

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Naomi Osaka is launching a media production company in partnership with The SpringHill Company, a media conglomerate created by Lebron James.
The production company, called Hana Kuma, will produce scripted and nonfiction content.
An announcement says Hana Kuma will highlight “empowering” and “culturally specific” stories.

Tennis Player, Naomi Osaka poses for a photo with LeBron James #23 of the Los Angeles Lakers after the game on April 4, 2019 at STAPLES Center in Los Angeles, California.
Andrew D. Bernstein | National Basketball Association | Getty Images

Four-time Grand Slam winner Naomi Osaka is launching a media production company in partnership with The SpringHill Company, a media conglomerate created by Lebron James.
The production company, called Hana Kuma, will produce scripted and nonfiction content, starting with a New York Times documentary about Patsy Mink, the first woman of color elected to U.S. Congress, according to a press release. The announcement says Hana Kuma will highlight “empowering” and “culturally specific” stories.

“There has been an explosion of creators of color finally being equipped with resources and a huge platform,” Osaka said in the release. “In the streaming age, content has a more global perspective. You can see this in the popularity of television from Asia, Europe and Latin America that the unique can also be universal. My story is a testament to that as well.”
The SpringHill Company, founded by NBA star James and business partner Maverick Carter, will provide production and strategic resources to Hana Kuma, the release said. Hana Kuma also has partnerships with crypto exchange platform FTX and health platform Modern Health.
In May, Osaka launched an athlete representation agency called Evolve.

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All 41 Broadway theaters in New York City will adopt the “mask optional” policy.
Audience members are still encouraged to wear masks in the theaters.
The policy will be reevaluated monthly and a protocol for August will be announced in mid-July.

The audience is given phantom masks to wear during the re-opening night performance of”Phantom Of The Opera” on Broadway at The Majestic Theatre on October 22, 2021 in New York City.
Bruce Glikas | Getty Images

Broadway theaters will drop their audience mask mandate beginning July 1, the Broadway League announced Tuesday.
While all 41 Broadway theaters in New York City will adopt the “mask optional” policy, audience members are still encouraged to wear face coverings in theaters.

The organization said the policy will be reevaluated monthly and a protocol for August will be announced in mid-July.
“Millions of people enjoyed the unique magic of Broadway by watching the 75th Tony Award Ceremony recently. Millions more have experienced Broadway LIVE in theatres in New York City and throughout the U.S., since we reopened last fall,” Charlotte St. Martin, president of the Broadway League, said in a press release. “We’re thrilled to welcome even more of our passionate fans back to Broadway in the exciting ’22-’23 season that has just begun.”
The heavily trafficked Manhattan district went dark in March 2020 as part of public venue restrictions related to Covid-19. The first shows to return took the stage roughly 18 months later, with vaccine and mask mandates in place for most audience members.
Broadway dropped vaccination checks for audience members on April 30 as other facilities likewise loosened restrictions. The group of theaters hosted roughly 240,000 attendees the week ended June 12.

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Artificial intelligence-driven IRS voice bots can now assist taxpayers by phone with setting up or making changes to payment plans.
However, some tax professionals are doubtful about the newly expanded automated service, saying it may further aggravate callers.

Westend61 | Westend61 | Getty Images

If you get a tax bill and want help from the IRS to set up a payment plan, newly expanded voice bots may make for faster phone service, according to the agency. But some tax professionals are doubtful about the new plan to reduce wait times. 
Artificial intelligence-driven IRS voice bots can now assist taxpayers by phone with setting up or making changes to payment plans.

“For the first time in 160 years, this agency is able to successfully interact with a taxpayer using artificial intelligence to access their account and resolve it, in certain situations, without any wait on hold,” IRS deputy commissioner Darren Guillot said on a press call. 
Callers, however, may still speak with an agent if needed.
That might be easier said than done.
Officially, the average phone wait time was 23 minutes in 2021, according to the National Taxpayer Advocate. But the agency has been struggling with staffing and increased call volumes. In its 2021 report to Congress, the National Taxpayer Advocate called out phone service as one of the most significant issues, noting that the agency only answered 11% of calls during fiscal year 2021.
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How voice bots can solve some taxpayer problems

Here’s how the voice bots work: When you get a bill from the IRS, you can call the agency and follow voice-prompted steps to verify your identity. By providing the caller ID from your IRS letter, the bots may share payment plan options and assist with setting one up.
You may qualify to use the service with a tax balance of $25,000 or less, which is the majority of IRS payment plans, according to agency officials. 
The IRS has used phone-answering voice bots since January, answering basic payment or notice questions to cut back on long wait times. However, the latest upgrade is the first opportunity for voice bots to resolve a taxpayer’s issue.
Of course, complex problems, such as penalty relief or hardship, may still require a live agent, the IRS said.
The agency plans to expand voice bot capability to allow authenticated callers to receive tax transcripts, payment history and the current balance due.

Tax professionals remain ‘skeptical’ about voice bots

While the IRS expects the newly expanded features to be fully deployed this week, some tax professionals are still iffy about the voice bots.
Dan Herron, a certified financial planner and CPA with Elemental Wealth Advisors in San Luis Obispo, California, said voice bots are a good idea for “very simple things,” such as balance due questions. But he’s “very skeptical” about bots setting up payment plans with multiple moving parts. 

Does anyone actually get anything settled by AI voice bots for any company, let alone the Internal Revenue Service?

Adam Markowitz
Vice president at Howard L Markowitz PA, CPA

What’s more, voice bots without answers may trigger further frustrations among callers, said Adam Markowitz, an enrolled agent and vice president at Howard L Markowitz PA, CPA in Leesburg, Florida. 
“Does anyone actually get anything settled by AI voice bots for any company, let alone the Internal Revenue Service?” he added.
Phyllis Jo Kubey, a New York-based enrolled agent and president of the New York State Society of Enrolled Agents is optimistic about the expanded voice bots and applauds the agency for “more sophisticated automated taxpayer assistance.”
However, she worries taxpayers may “bite off more than they can chew” and agree to unrealistic monthly payments when setting up a plan through the automated system.
“I hope the IRS has its AI set up to query the taxpayer about whether they can afford the monthly payment on which they agree,” she said.
CNBC has reached out to the IRS for comment.

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A days-long rail walkout that is causing severe travel disruption across the U.K. could be just the beginning of a summer of strikes, U.K. workers’ unions have warned.
Forty-thousand Network Rail staff and workers at 13 train operators will strike Tuesday, Thursday and Saturday after a dispute over pay failed to reach an agreement.
Labor unions say the strikes have been supported by staff in other sectors, and could galvanize them to step up action as the salary stalemate between public sector workers and the government intensifies.

Forty thousand U.K. Network Rail staff and workers at 13 train operators have staged walkouts over pay in Britain’s biggest rail strike in 30 years.
Jeff J Mitchell | Getty Images News | Getty Images

LONDON — A days-long rail walkout that is causing severe travel disruption across Britain could be just the beginning of a summer of strikes, U.K. workers’ unions have warned, as numerous professions consider industrial action over pay.
Around 40,000 Network Rail staff and workers at 13 train operators went on strike Tuesday in the first of a series of planned strikes. This came after talks between operators and Britain’s RMT union failed to reach an agreement on pay, working conditions and possible redundancies.

Just 20% of rail services in England, Scotland and Wales were running Tuesday, with further cancellations due on Thursday and Saturday, resulting in major disruptions for millions of workers and holidaymakers ahead of the peak summer travel season.
London Underground tubes were also running at limited capacity Tuesday as staff went on strike.
Labor unions say the rail strikes — the worst in a generation — are supported by staff in other sectors, and could galvanize them to step up action in an intensifying stalemate between the government and public sector workers.
That could lead to similar walkouts by teachers, health care workers and local government staff, the TUC, Britain’s main movement for organized labor, told CNBC Tuesday.
“Many public sector workers are waiting to hear what their pay offer will be. Unions in education, the civil service and other parts of the public sector have already been clear that if the offers are substantially below inflation they will ballot their members for industrial action,” TUC’s Deputy General Secretary Paul Nowak said.

It comes as the U.K. suffers its worst cost-of-living crisis in decades, with wages failing to keep up with rising food and energy prices.
U.K. inflation jumped to a 40-year high of 9% in May — a figure the Bank of England has forecast could hit 11% in October. Still, the government has sought to hold public sector pay increases well below that.

‘Existential crisis’ for public sector workers

Britain’s teaching union has said that the profession is on the brink of an “existential crisis” as workers struggle to make ends meet.
NASUWT has now said that it will ballot members for national industrial action in November if the government does not meet is demands to increase pay by 12% this year.
“Teachers are suffering, not only from the cost of living crisis, which the whole country is grappling with, but 12 years of real terms pay cuts which has left a 20% shortfall in the value of their salaries,” General Secretary Patrick Roach said in a statement Sunday.
Nurses are similarly seeking a 15% pay increase, with a spokesperson for nurses union RCN telling CNBC Tuesday that pay was a “crucial factor in recruiting and retaining the nursing workforce.”
TUC said any decision to strike would not be taken lightly, but urged the government to do more to support those facing pay freezes and real-terms pay cuts.
“It’s our hope that industrial action will not be necessary,” said Nowak. “But we need this Conservative government to recognize the harm they have done by holding down public sector pay for so long. It has pushed working people to the brink. We have teachers and nurses relying on foodbanks — that can’t go on.”

Britain’s rail strikes have resulted in major disruptions for millions of workers and holidaymakers ahead of the peak summer travel season.
Bryn Colton | Getty Images News | Getty Images

Talks between Network Rail and RMT fell apart Monday after the workers’ union rejected proposals, including for a 3% pay rise, in exchange for changes to workplace practices.
RMT leader Mick Lynch accused the government of “shackling” rail operators’ pay offers, calling instead for a 7% to 8% pay increase and warning that industrial action would last “as long as it needs to” until workers’ demands are met.
The U.K.’s Transport Secretary Grant Shapps said the standoff had been “manufactured” by unions and said workers were striking under “false pretenses.” However, he again on Tuesday dismissed calls for the government to step in on negotiations, saying it was “the job of the employers to meet with the unions.”

Implications for other industries

The strikes come as the U.K. economy struggles to get on its feet following the coronavirus pandemic and Brexit-related supply issues. New figures released last week showed the country’s economy unexpectedly shrank by 0.3% in April, adding to concerns of a forthcoming recession.

Business leaders have said that the walkouts could have major implications for other sectors, particularly those already hard hit by Covid-19 restrictions.
This week’s rail strikes alone could cost Britain’s leisure, theater and tourism industry more than £1 billion ($1.22 billion) as more people stay at home, according to trade body UKHospitality.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the rail strikes have turned ongoing operational headaches into a “fully blown migraine” for the hospitality industry.
“Restaurants, bars and hotels were already struggling under the strain of sky-high energy prices, supply chain disruption and the ongoing labor crunch, and now the mass walkouts are set to cause fresh financial pain,” she said in a note Tuesday.
“As the transport network seizes up, bookings are expected to plummet as the lucrative lunchtime crowd stay at home, and night-time revelers cancel reservations whilst fearful they won’t be able to get home at the end of the night,” she added.

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