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Quest Means Business
Procter & Gamble Raising Prices On Household Staples; Poland Doubles Number Of Soldiers On Belarus Border; Putin To Skip G20 Summit, Will Attend Remotely Instead; Interview With French Ambassador To The U.S. Philippe Etienne On Biden-Macron Talks At The G20; Freelance/Remote Work Accelerated Due To COVID-19; "Squid Game" Now Worth Almost $900 Million; Dash To The Closing Bell. Aired 3-4p ET
Aired October 19, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CNN INTERNATIONAL HOST: So the Dow having a really good session, as are the other indices. It hasn't been an up and down day,
steady as she goes as you can see. Dow Jones Industrial average there, up by more than 130 points. Those are the markets and these are the main
Procter and & Gamble makes a price check. The consumer giant warns its products will get more expensive.
Poland is told there will be consequences over its spat with the E.U.'
And also tonight --
(BEGIN VIDEO CLIP)
ANNA STEWART, CNN REPORTER: A shortage of poultry workers in the U.K. Is Christmas stuffed? What do we think?
(END VIDEO CLIP)
NEWTON: The intrepid Anna Stewart there, she'll have that story. You'll want to see it.
Live from CNN Center, it is Tuesday, October the 19th. I'm Paula Newton, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, inflation is starting to hit home. I know I don't have to remind you, but corporations are passing on those rising costs of
shipping and materials.
Procter & Gamble one of the world's top manufacturers of consumer goods says it has to hike the wholesale price of many of its products. Now over
the next three months, that could mean higher prices for those household staples, right? Things like diapers, toothpaste, razors -- everything we
use day-to-day and more increases could be on the way. The company says it believes inflation is still rising.
Matt Egan joins us now. You know, it's a simple statement, but it means a lot. The evaluation here is that those higher costs are wide ranging,
persistent. You know, it's one of the largest consumer goods companies on the planet, saying that look, inflation is worse than we thought it would
be. How much will this erode purchasing power for consumers?
MATT EGAN, CNN REPORTER: Yes, Paula, there's no doubt that inflation is here, and it is raising the cost of living for everyday families,
especially low income families. You know, in this case, we're not talking about price hikes on luxury goods or even used cars. These are everyday
essentials that people need just to get by.
Now, Procter & Gamble is saying that it's raising prices on grooming, beauty, and oral care products. And if the supermarkets and drugstores and
big box stores that carry these items decide to pass these costs along to consumers, that's going to hit people in their wallets.
Now, we don't know which specific items will get price hikes, but an e-mail obtained by my CNN Business colleague, Nathaniel Meyersohn from P&G to a
distributor indicates that we should see price spikes on Ole moisturizers, Oral B products, and also on Crest.
And the question, of course, is how much more expensive is stuff going to get? And one distributor was told by P&G that they could expect to see
prices on moisturizers go up by 20 percent, electric toothbrushes by 10 percent, and mouthwash by up to 32 percent. So these are meaningful
Why is all this happening? P&G, like other companies, is getting hit by the supply chain nightmare and the shortage of workers. The company has raised
its estimated costs for commodities and freight by $400 million. And I think the question that everyone wants to know is, how long is inflation
going to be here? And there's a lot of debate over that.
"The Wall Street Journal" had a survey of economists who said that they think that inflation is going to remain uncomfortably high well into 2022.
Paula, it's hard to see how inflation gets back to normal until the supply chain situations get sorted out.
NEWTON: Yes, and the issue is, demand is quite high. And yet, a new study seems to double down on the Fed's view, that at least the Biden stimulus,
right, those funds that everyone got to try and boost them during the pandemic, that really, inflation isn't really much of a concern, that by
2023, demand and prices will normalize.
Is that why we haven't seen markets really factor this in and start to panic in any way?
EGAN: Well, Paula, it is a bit of a mystery why markets have been able to take all of these hot inflation readings in stride. I mean, if you would
have told me we'd have five straight months of five percent or more gains in the consumer price index, and yet the 10-year Treasury yield would be
around 1.6 percent, I would have been pretty surprised. Let alone the inflation that we're seeing in the housing market where price gains are the
biggest on record, surpassing even what we saw before the Great Recession.
EGAN: But this new San Francisco Fed research may offer some clues. The research found that the American Rescue Plan, that's the $1.9 trillion
stimulus package that was signed into law in March, it finds that law is boosting inflation, and it is boosting inflation significantly this year,
and next year. The researchers looked at a specific metric showing the strength of the job market and they found that this fiscal stimulus, is it
really increasing demand for workers at a time when there are not that many workers to be had.
But the research also said that this is unlikely at this point to cause runaway inflation and that the impact of inflation could really ease by
2023 and that really hinges on two factors. One, that the fiscal spending and the American Rescue Plan is temporary by nature, the stimulus checks,
the bailouts, the forgivable loans for small businesses, that's a one-time thing.
The other big factor here is they are assuming that inflation expectations remain in check. Paula, the risk, of course, is that if inflation
expectations get out of whack, then that could end up creating some sort of a self-fulfilling prophecy where prices go up because people expect prices
to go up.
NEWTON: Yes, absolutely. A lot riding on that prediction coming to fruition. Matt Egan there, thanks so much, and we will continue to look at
these prices because as we've been saying, prices for all kinds of goods have risen sharply from this time last year.
Some of the largest hikes have come of course at the grocery store. Meat, fish, poultry, eggs costing more than 10 percent than they did last
September. Fruits and vegetables also up three percent from 2020 and alcoholic drinks up nearly by the same amount.
I mean, even clothes that some people said would be impervious to all this, they too have jumped 3.4 percent.
Mark Zandi is the Chief Economist at Moody's Analytics, and yes, we want the economist to weigh in here. Please help us, because from a structural
point of view, let us know, is anything changing here in a fundamental way, and given inflation really hasn't been a substantive issue in decades, do
central bankers have the tools to tame it if they need to?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, I don't think this is a long term problem. I think this is a direct function of the pandemic. I
mean, the pandemic has just significantly disrupted global supply chains and the job market.
I mean, a simple example. The delta variant came along and made everyone sick in Malaysia. They had to shut down their chip plants. Because they
didn't produce chips, the global vehicle industry couldn't produce including here the -- you know, the Ford F-150, the most popular vehicle in
the United States couldn't get produced.
You have shortages and prices rise. So, you know, if that's the right diagnosis, if it's about the pandemic, then as the pandemic winds down and
the delta variant is winding down, then these supply chains should start to iron themselves out. Sick people can go back to work. People that are
fearful of getting sick can go back to work.
Parents can go back to work, take those jobs, and this all starts to work its way through now.
Now, Paula, I don't think that's next month, it may not be next quarter. You know, it may not be a straight line because this pandemic has a life of
its own. But I do think by this time next year, certainly by early 2023, we'll work through these issues and inflation will be a non-issue.
NEWTON: Which is still a long way away, and in the meantime, all production costs including labor costs continue to go up. You know, a recent Moody's
analysis said that the spike in production costs heightens the risk of what you guys call sticky inflation dynamic.
I want to ask you, given that, when you look at the Fed's position right now at the hour in terms of tapering interest rates, anything surprise you?
ZANDI: No, I think they bought into and they believe the forecast I just gave you that inflation, well you know, obviously, it is painful. I mean,
just to give you a statistic, the typical American family is spending $135.00 more a month because of the higher rate of inflation, so this is
not, you know, fun. It's not -- it's a painful thing.
But all the dynamic suggests that you know, 12 to 18 months down the road, it will begin to fade. By the way, you know, global investors think the
same thing. This is why stock prices are, you know, they're still pretty close to record highs. Bond yields are very low and the inflation
expectations embedded in those yields are right where the Fed wants to see them.
So people who put their money where their mouth is, they're saying look, you know, yes, inflation is a problem. We don't like it, but we don't like
the pandemic either. And we're going to have to get through it and if we do and when we do, you know, inflation will settle in.
So, I think the Fed, you know, has what -- it's got its grip on this -- and by the way, if we're all wrong, and you know, it is possible that we are
wrong and inflation may be more persistent. Yes, the Fed does have tools. I mean, it's pretty straightforward, right? I mean, interest rates are at
zero. So, you would raise interest rates to try to cool things off and get that inflation rate down.
ZANDI: But, you know, I think that's a scenario, it has a probability, but a pretty low probability.
NEWTON: You know, I'll push back a little bit only because before this, we haven't talked a lot about income inequality, right? When you look at those
basic goods going up five or six percent and people having to maybe take a three to four percent hike on wages, perhaps it doesn't really all come out
on the wash.
I guess what you're going to tell me is, Paula, calm down. This is strong demand, which means that there is a strong global economy backing this.
ZANDI: Yes, I mean, think about the counterfactual. What the world would have looked like if we didn't get that help? If lower income households
didn't get stimulus checks, or unemployment insurance or rental assistance, or food assistance, you know, all the things that went to help support the
households that are under severe financial stress, the low and middle- income households, and think about, you know, what the world would look like.
I mean, you know, inflation is not great. I don't like it. But I'd take that over high unemployment, underemployment, and people who can't pay
their bills who are getting evicted from their homes. So yes, I mean, it's not great, but you know, it's much better than the alternative.
And I will say, you know, if you look at the net of all of this, you know, all of the cash that went to lower income households, and the fact that you
know, unemployment -- we've created a lot of jobs and employment has come in and wage growth among low income households is extraordinarily strong.
That's where the labor market has been tightest and where we've seen the biggest pay increases.
You know, the higher inflation certainly dings the finances of low and middle income households, but I think, if you take the net of all of it,
we're probably still coming out better meaningfully better than otherwise would have been the case.
NEWTON: Yes, and it's important to have that insight into the data, right? Like you said, if you look at those income -- low income households, they
still have some pretty significant purchasing power recently what they had in 2019.
Mark, always good to see you. Really appreciate it.
ZANDI: Thanks, Paula.
NEWTON: Now, as we've just been talking about that chaos throughout the world, supply chains are causing all kinds of problems. Some you might
guess and others are actually more surprising.
The latest potential shortage. Okay, get a hold of yourselves -- Turkey -- and right before the holiday season, when of course most are looking for
them. Anna Stewart shows us around an English turkey farm dealing with a looming squeeze.
PAUL KELLY, KELLYBRONZE TURKEY FARMER: Our road is now, you know where we would be on December the 8th just because people are making sure they've
got their turkey ordered. It's not going to be, you know -- I mean, there'll be a shortage of British turkeys, but it's not going to be -- you
know, they're not -- you don't have to go into the supermarket and stop fighting for your turkey or anything like that.
STEWART (voice over): The British Poultry Association estimates there will be 20 percent fewer British turkeys on shelves this Christmas due to a 15
percent shortage in the poultry workforce.
STEWART (on camera): How much of the labor shortage in the U.K. has to do with Brexit? How much has it to do with the pandemic?
KELLY: There's no doubt that a lot of the European workers went home during the pandemic and a lot of them haven't come back, because they normally
would have come back. I think certainly, in my instance, talking to the guys that came to work for us, they don't see a future here anymore so
they've got to feel -- you know, they've got to find work in Europe and they will. There's lots of work out there, so they just don't see a future
here so they're not coming back.
STEWART: And what about the government's response that we just need to pay this labor force more? We need British people to pluck turkeys. I mean,
you're going to have to pay more.
KELLY: I don't know. You know, around here, there is no unemployment. How can I honestly expect someone to give up their full-time job to come and
help us for five weeks? That's totally unrealistic and there is no unemployment around here.
We've tried like, I say, I would dearly love to employ local people. It will be cheaper for us to employ local people. We wouldn't have the
transport or the accommodation to put up with all the hassle and everything that goes with that five weeks production, it would be -- so that's just a
crazy thing to say.
STEWART (voice over): KellyBronze says, they're managing to match last year's turkey production, but it's the first year in 20 they haven't
STEWART (on camera): Does this mean the problems we're seeing this Christmas, we're going to see them again next Christmas and the Christmas
BRONZE: If we -- if we do not get a seasonal worker scheme on turkey production, you will see the U.K. turkey business just shrink and shrink
and shrink and shrink.
STEWART (voice over): Anna Stewart, CNN, Danbury, Essex.
NEWTON: Okay, first came Brexit, then of course Brexit. Now, "Polexit." It is the next big fear in the European Union. We will explain, next.
NEWTON: The European Commission President says there will be consequences for Poland as it argues over how it deals with European law. Now, Ursula
von der Leyen said the E.U. needs an explanation after Poland's highest court ruled that some European law was incompatible with the Polish
Now, that ruling has sparked talk that Poland could move to leave the E.U. President von der Leyen said, Europe could not afford to do nothing.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: I am deeply concerned. This ruling calls into question the foundations of the European Union. It
is a direct challenge to the unity of the European legal order.
Honorable members, we cannot and we will not allow our common values to be put at risk.
(END VIDEO CLIP)
NEWTON: Meanwhile, Poland has nearly doubled the number of soldiers on its border with Belarus to deal with a stream of migrants trying to enter the
European Union. Now European leaders claim that Belarus is using migrants as a political weapon. The German Foreign Minister has called for sanctions
and there are speculation that the Belarusian national airline, Belavia, may be targeted for its role in trafficking migrants.
Fred Pleitgen has been following all of these stories for us from London.
And I will get to the German-Belarus issue in a moment. But first to the E.U. clearly being tested here and fighting back, right? Telling Poland you
are calling into question the foundations of the E.U. could this escalate further?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I certainly think at least in the short term, Paula, it could escalate further. I don't
think that anybody sees on the horizon that there could be what people -- some people call a possible "Polexit," Poland leaving the European Union
and one of the main reasons for that is that membership in the European Union is extremely popular in Poland.
It's more than 66 percent of the population, and there is no doubt also that Poland has benefited a great deal from being within the European
Union, just some of the trade that has gone on with other European countries has certainly benefited Poland a lot.
Nevertheless, it is a big problem. I think Ursula von der Leyen just laid it out there. She said that the European Union cannot stand by as Poland,
as the E.U. thinks, it is challenging some of the main fundamentals of what it means to be a member state of the European Union, which is putting
European law above national law and that's certainly something that seems to be hollowed out.
Now, there are certain sanctions that are possible. There could be funds that could be withheld, there could be legal action taken. Some of the
rights that Poland has as a member of the European Union could be curtailed at least in the short term.
Will that change Poland's course? Very hard to see that it would. But Ursula von der Leyen brought these things up today, you did see Mateusz
Morawiecki, of course the Prime Minister of Poland, who was also in Brussels today speaking in front of the European Parliament, he is saying
he is not happy with some of the tone that he is hearing from Brussels.
So there could be a short term escalation, whether or not things are going to deteriorate to a point where it becomes dicey for Poland and the
European Union. Certainly, most people believe they'll work things out before that -- Paula.
NEWTON: Yes, and what you say obviously about the E.U. being extremely popular in Poland may have reason why the E.U. feels it can push back. You
know, we were just talking that Germany is accusing Belarus of a calculated attempt to encourage those migrants to trek through Europe. Would any
proposed sanctions in that venue have any effect on Belarus?
PLEITGEN: Well, I think, certainly sanctions against the national carrier, against Belavia, probably wouldn't have any sort of effect at all because
Belavia actually is already sanctioned, can't fly to a lot of European companies and that stems back to a when the government of Alexander
Lukashenko forced that Ryanair plane to land to get an activist off that plane, who was then later arrested in Belarus.
So that airline is already heavily sanctioned. However, the European Union and specifically the Germans, because a lot of the people who are trying to
get across that Poland-Belarus border are trying to move on to Germany. I was in one of the centers where they say they've had a huge surge in people
who are getting there.
Germans say look, there are other airlines who are also flying people as well to Belarus and they are saying that, look, there are airlines that are
benefiting from that and there needs to be effective sanctions possible, at least against airlines who do that sort of thing in order to try and get
that to stop and that's also really big and really important debate actually right now in the European Union, because you have once again,
Poland, that's now saying it wants to build a border fence between itself, the outer border of the European Union and Belarus.
A lot of European countries really don't like the idea of that. So they say essentially, what they want to do is they want to threaten some of those
international airlines, some of them based in the Middle East who are flying those routes.
Beirut to Grodno, for instance, in Belarus, or, for instance, from Erbil to Minsk, threaten those airlines and hope to that way, stop the flow from
coming into Belarus in the first place to take that really weaponization of Alexander Lukashenko of migration, trying to take that away from him --
NEWTON: Yes, as you said, no easy answers there and something that has been a persistent problem in other spheres for years. Thanks for being on top of
those stories. Appreciate it, Fred.
Now, Vladimir Putin will not be attending this month's G20 Summit in Rome. The Russian President will join remotely instead and that he says is due to
the coronavirus situation in Russia. Just to remind you, Russia has reported record cases and deaths in the last week.
Now, the summit will mark the first meeting of U.S. President Joe Biden and his French counterpart, Emmanuel Macron since the fallout from the American
submarine deal with Australia. Now France's own sub deal with Australia we will remind you was scrapped as a result.
The French Ambassador to Washington was recalled only returning a few weeks ago.
And Philippe Etienne is the French Ambassador to the United States. He is right now back in Washington, and he joins us now here on QMB.
So you're back and you have said that reengagement with the goal to rebuild trust is your task ahead? And yet --
PHILIPPE ETIENNE, FRENCH AMBASSADOR TO THE UNITED STATES: Yes.
NEWTON: And yet, what would represent real progress? I'm just going to bring up one thing, right, tariffs. These are these are Trump era tariffs,
and they are still a reality in Europe.
Ambassador, I'm not sure you can hear me. Can you hear me now? Paula Newton from Atlanta.
Ambassador -- I don't know if the Ambassador can hear me. We're going to get -- we're going to give the Ambassador just a moment to get his audio in
And in the meantime, it is a big moment for Bitcoin traders and the New York Stock Exchange. Tuesday saw the launch of the first ever Bitcoin ETF.
It's run by ProShares who rang the opening bell -- you see them there -- on Wall Street this morning.
The fund will track the price of Bitcoin. Investors can get involved in the crypto market without having to own Bitcoin yourself. And in case you've
tried that, it is a pain. So this is a big deal.
Right now, the fund is up more than three percent with Bitcoin close to a record close.
Now, the ProShares investment Chief told Julia Chatterley that all investors could benefit from having some crypto exposure.
(BEGIN VIDEO CLIP)
SIMEON HYMAN, HEAD OF INVESTMENT STRATEGY, PROSHARES: Bitcoin can be a powerful diversifier in investors' portfolios. No one is saying it should
be, you know, three quarters of your portfolio, but a small amount of a thing that doesn't behave like other things -- that was Nobel Prize winning
language -- a thing that doesn't behave like other things can be really invaluable in your portfolio, whether it's an inflation hedge, an
alternative currency or virtual gold.
People are describing it in several different ways, but it really can be an important diversifier, and now, you can slot it right in there with the
rest of your investments in that same account in the same way that many investors are familiar with.
(END VIDEO CLIP)
NEWTON: And we will be right back with more news, in a moment.
NEWTON: Philippe Etienne is the French Ambassador to the United States and he joins me now from Washington. You are back in your position in
Washington. And you've said that reengagement with the goal to rebuild trust is the task ahead. And yet what would represent real progress to you
on that? I'll take just one issue and that's Trump era tariffs that are still a reality for Europe.
ETIENNE: Well, for the time being, indeed -- and thank you, first, Paula, for having me.
We are rebuilding together with our American partners, an agenda, a strategic agenda, which has been defined by the two Presidents when they
had the phone talk on September the 22nd. They defined four issues, consultations, Indo Pacific European defense and the fight against
terrorism as well.
Curious, there are other subjects which are relevant for relations between E.U., the E.U. and the United States and trade tariffs are among them, and
we hope that the last disputes which date back to the previous American mandate -- presidential mandate -- will be settled as soon as possible, in
particular, steel and aluminum.
NEWTON: And when you say steel and aluminum, just quickly, do you have any indication -- do you think that there's potential for that to be settled in
the coming weeks?
ETIENNE: No, I have no precise indication because it is being negotiated, as you know, between the European Commission and the U.S. administration.
As far as our agenda after the crisis we went through with AUKUS is concerned, we are discussing other very important issues I mentioned. For
instance -- for example, how a stronger European defense complimentary to NATO can be and it will be -- would be good news for everybody, including
the U.S. and the Transatlantic Alliance.
NEWTON: Yes, and to talk about that defense architecture. You know, your Foreign Minister recently told our Julia Chatterley that Europe will not be
a quote, "junior partner" to the United States. And I add to that the fact that your Foreign Minister also said in a recent media interview that the
United States wants to confront Russia. The E.U. wants to engage China.
On Russia, you guys have been very, very blunt. You do not share the same values or economic model. This would seem to be quite a significant
departure in relations with the United States.
ETIENNE: On China, our finance minister, who was in town, indeed, those last days and was asked about our relations, said it was more of a
And, indeed, if you listen to what has been -- since 2019, the Chinese policy of the European Union, you would see it is a combination of the same
elements you find with sometimes different weights on the U.S. side. We define China as a systemic rival, a competitor and a partner to engage on
some global issues.
It is, indeed, the same elements you find, I think, on both sides. We sometimes some different quite (ph).
NEWTON: You seem to indicate the differences are subtle. I would offer that they are not subtle. We heard from even the former Defense Secretary Robert
Gates, who told Anderson Cooper, the AUKUS deal is one of the strategic moves he's seen, a powerful message around the world for China.
Do you think in terms of doing the submarine deal, that France's opinion was, for the United States, a necessary casualty when it comes to
ETIENNE: I don't think that any casualty was necessary in this issue. Actually, some consultations or even information would have been possible.
And I must say that the American side has recognized that, which is very positive, after it happened.
And it is even the very beginning of the joint statement of President Biden and President Macron. So we have to learn from this.
As far as your question is concerned, France is and was and is still the first European, E.U. member state being present in the Indo Pacific. We
have territories, we have populations, we have permanent armed forces. We send more military assets to the region, on the top of what we have in
So I think we are a serious partner. And this issue between us and the U.S. and Australia was not a question of an industrial commercial deal. It was
really a strategic issue. And now we are building this agenda on strategic issues, including the Indo Pacific, including the presence of France and
the European Union as such in the Indo Pacific.
NEWTON: Interesting to hear you say there was contrition on the part of the United States in terms of not giving you any notice.
ETIENNE: I didn't say contrition but there were recognition that consultations are important.
NEWTON: Pardon me, a very important difference. Philippe Etienne, thank you for being with us and bearing through those technical difficulties,
ETIENNE: Thank you.
NEWTON: Tech shares are up again today, headed back toward record highs, the work from home bubble hasn't burst. A lot of people here are working
from home. American Express is the latest company to say it will let its staff work remotely up to four weeks a year. That's good news for companies
They're ramping up its pro service that lets users share large files with each other.
I don't think you have to convince many that your business model was good to start. And then the pandemic hit.
I think my question to you is, how do you remain the dominant player in the market, given all the competition that is for sure coming your way and
perhaps with new innovations?
GORDON WILLOUGHBY, CEO, WETRANSFER: So as you said, Paula, we are most well known for our iconic file transfer service. But we've become so much more
than that over the years.
And now we really are a full set of tools that enables creative professionals to really work across the whole process, enabling to
collaborate, share and deliver their work in a professional manner.
So by evolving our product and really working hard to address the use of our needers -- needs of our users, even -- we've stayed very relevant and
in fact are benefiting from three of the biggest kind of megatrends out there.
WILLOUGHBY: These would be the explosion in the amount of digital content created. We're all photographers, filmmakers or musicians today and we're
creating that content at ever higher fidelity.
Obviously the COVID pandemic has accelerated the move to freelance working and remote working. We've been building out tools that help freelancers
right from the start.
I think the third really interesting trend to come out of COVID has really been a real urgency in people asking businesses to take the lead, a demand
for companies to step up and help us address the issues we face. And as you know, we became a B corporation back in March last year.
NEWTON: You talk a lot there about financial structure. I understand that is obviously important to WeTransfer.
But when we talk about what revenue generation is going to look like going forward, there will be more competitors in the space every day. You will
have to rely more and more obviously on the so-called pro service.
What are your hopes and targets for that going forward, say a 12- to 18- month range?
WILLOUGHBY: Sure. We're growing very fast and one of the unique things about WeTransfer and one of the things that makes it such a resilient
business we have a dual revenue stream model.
So we've turned what was a freemium business, people come in on a free service and transition up to your subscription or SAS service. For us we
have an advertising business, which in a sense fully monetizes our free user base.
That really differentiates us from other freemium businesses. So our free user base is actually profitable for us; whereas, for most other companies,
it's not. And that's complementing our subscription, our SAS business.
With that we're developing out the set of tools that we offer. So we address more of the needs of creative professionals, who really aren't so
very well at the moment by the tools that are currently on the market.
NEWTON: That's where I say there is space, obviously, there, for competitors to come in.
What's the greatest challenge ahead, do you think, in terms of keeping up that share of the marketplace, not just in those people that want a free
product but the people that want to upgrade?
WILLOUGHBY: I think you're absolutely right. It's a big market. It's a growing marketplace. As I said, there are these three big trends, the
explosion in digital content, the move to freelance working and also kind of the mood to the creative industries. So it's a big marketplace.
Growing fast and it's not somewhere where it's a winner take all kind of market. There will be room for us to be very successful and also for other
I think what's unique about WeTransfer is we're very vertically focused. We focus right from the outset on serving creative professionals. We were
built by creatives for creatives. And that vertical focus gives us a real understanding of what creative professionals need to make their life
easier; in fact, to just allow them to spend more time being creative, which is what they want to do.
NEWTON: OK, Gordon Willoughby with WeTransfer, thanks so much. Appreciate it.
Netflix is set to report earnings a couple hours after the closing bell in New York, highly anticipated. The stock is trading lower ahead of the
release but not by much. Analysts expect the streaming giant to get a big bump from one show in particular. Take a listen.
(VIDEO CLIP, "SQUID GAME")
NEWTON: Now "Squid Game" has gone from surprise hit to cultural juggernaut since release last month. It's reportedly worth nearly $900 million. That's
in within the structure of Netflix. Not a bad return.
Bloomberg says that same report that it only cost -- that same report said it cost only $21 million to produce.
Even I can calculate the margin on that one. Frank Pallotta is with us from New York. Stellar numbers, obviously.
But will Netflix really get over that next mountain to climb?
They need more streaming innovations like this.
FRANK PALLOTTA, CNNMONEY CORRESPONDENT: That has been Netflix's MO since the beginning. They've always been a company that's about everything for
everyone. They want to have the ability to have so much diverse content on the streaming platform to allow people to really have an option, to sign
into the services, describe the services, it doesn't matter if you like reality TV?
Or something like "Squid Game" or prestige dramas, Netflix has it all. What is interesting about "Squid Game" is it really does show what makes Netflix
unique. It became a viral hit without promotion. That shows the scale and the strategy and the approach of Netflix, which is unlike everything else
in streaming and pretty much everything else in Hollywood.
NEWTON: In terms of the subscriber debate, this is the great subscriber debate. We have all the streaming products and people wanting to know, in
terms of what that looks like, new subscribers, can Netflix stay ahead of the pack here, given the fact there are so many new entrants in the
PALLOTTA: Think about it this way, they were the first on the scene, they have a huge head start. Disney has over 100 million subscribers, about half
of what Netflix has and it's done that in a year. But it's still figuring things out. Everyone is figuring things out.
Netflix has cornered the market on how to do streaming well. Back to "Squid Game," this was something that 1.5 months ago, two months ago, if you said
"Squid Game" to me I would have not known what you were talking about, I don't think anybody here would.
Now it's everywhere, you can't go anywhere without it. That shows what Netflix has done and can still do, even as rivals get bigger. Today
subscribers are going to have their earnings and the number they're looking for is about 212 subscribers up from 209. Above that, everyone will have a
good time; below that, that's another quarter of sluggish numbers, despite a show like "Squid Game" being everywhere.
NEWTON: The bottom line is, you have to satisfy the subscribers not only that keep coming back for "Squid Game" but the new eyeballs everyone needs.
Frank, thanks for going through that.
That is QUEST MEANS BUSINESS. I'll be back at the top of the hour as we make the dash to the closing bell. Up next, though, "LIVING GOLF."
NEWTON: I'm Paula Newton it's the dash to the closing bell, less than two minutes away. And it's been a solid debut for America's first ETF tracking
The Dow is posting -- the Dow is posting modest gains today, joining the two other major indices. You can see not so modest at the close, half a
percent, not bad. The SNP 500 and Nasdaq both set to post a fifth straight day of gains.
Some big pharma stocks are leading the way, Merck up 3 percent, Johnson & Johnson some good results and Procter & Gamble trails after announcing
those price hikes over supply chain issues.
We are waiting there for the closing bell there on Wall Street. Again, shaking off those inflation concerns.