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Netflix Heads Into Q2 Earnings With Something To Prove: Does Wall Street See Another Revival?

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Netflix is in regrouping mode heading into its second-quarter earnings reveal – a very familiar place for the company.

The streaming giant, which will report financials Thursday afternoon after the close of trading, has already signaled that the quarter is unlikely to be a barnburner. That was the takeaway of many Wall Streeters in April after the company declined to raise its full-year guidance.

Netflix have skidded to an 18-month low, down 40% over the past year and 21% in 2026 to date, as skepticism lingers about the company’s user engagement, competitive set and M&A aspirations.

“There’s a lot riding on Q2 as Netflix faces no shortage of near and longer-term questions – from Q2 engagement trends and potential revisions to 2026 margin guidance to the broader challenge of sustaining growth amid evolving consumer preferences and viewing behavior,” Bernstein analyst Laurent Yoon wrote in a note to clients.

Apart from Harlan Coben’s I Will Find You, there weren’t many no-doubt hits during the April-to-June quarter, and some viewership was also siphoned off in June by the World Cup. More disconcerting to investors was a report by Bloomberg that many series are experiencing increasingly steep dropoffs in viewership between their first and second seasons.

The company has taken steps already to shore up overall engagement, adding vertical video, podcasts and live sports to create a more comprehensive programming lineup. It is also reportedly considering more significant moves, like potentially expanding on the live broadcast partnership it formed in France with TF1 or possibly the addition of a free tier or even substantial M&A to bolster its IP library. Given lingering questions about the end of its merger agreement with Warner Bros., as well as recent reports the company is taking a look at acquiring Letterboxd, it is likely that execs will be asked yet again about potential deals.

John Blackledge of TD Cowen acknowledges the fretting over engagement trends as a major theme for investors, but he believes that angst ignores significant upside in the company’s growing ad business. “We expect the burgeoning ad tier to help drive member growth and support margin expansion over time as the biz scales,” he wrote in a note to clients, also pointing out that Netflix was the No. 1 choice of consumers Cowen’s surveyed about living room viewing.

Sean Diffley of Morgan Stanley, in a report headlined “We’ve Seen This Movie Before,” said the company has had a lot of experience with comebacks. “With many asking where shares could bottom, we would look to 2022 as the last major period of growing pains for Netflix that saw subs go negative for the first time in 10 years,” wrote. In the end, however, “We think it all comes back to pricing power, and our survey work suggests they still have the best perceived original content and the strongest breadth & depth, along with viewer intention.”

The rope-a-dope dynamics of past quarters, where the bar is set low and the company overdelivers and the stock jumps, could make a return on Thursday, according to BofA Securities analyst Jessica Reif Ehrlich. “Given the recent pullback in shares, we believe investor sentiment remains muted and a beat-and-raise quarter could go a long way in assuaging several of these investor concerns,” she wrote. “Conversely, should fundamentals indicate a further deceleration in trends, that would only amplify these bearish concerns and weigh on the multiple going forward.”

Consensus forecasts among Wall Street analysts are for revenue in the quarter of $12.58 billion and earnings per share of 79 cents. Both metrics are close to the company’s own internal projections.

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Ella Anderson Joins Hulu Legal Drama ‘Conviction’ (Exclusive)

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EXCLUSIVE: Ella Anderson (Song Sung Blue) is the latest addition to the main cast of Conviction, Hulu‘s upcoming series starring Elisabeth Moss, from 20th Television.

Anderson is set as a series regular in the legal drama, joining Moss, who also executive produces, and previously cast Jimmi Simpson, Kevin McKidd, Sebastian De Souza, Adam Godley and Linda Emond.

Written by House and The Good Doctor creator David Shore, Conviction follows criminal defense attorney Neve Harper (Moss), a confident lawyer who finally has her shot at a career-making case: a high-profile murder where the husband is accused of killing his wife by setting their home on fire. But when a mysterious stranger begins blackmailing Neve, she is forced to compromise every legal, moral, and ethical obligation to gain an acquittal — or else risk her dark secrets being exposed.

Details about the rest of the characters are not being disclosed.

Conviction is based on the 2023 book of the same name by Jack Jordan who is executive producing alongside David Shore and Erin Gunn via Shore Z Productions; Moss and Lindsey McManus via Love & Squalor Pictures; Warren Littlefield, Ann Johnson and Lisa Harrison via The Littlefield Co.; and Bert Salke via Co-Lab21.

Anderson, known for her role as Piper Hart on Nickelodeon’s hit series Henry Danger and the feature Henry Danger: The Movie, most recently appeared in Focus Features’ Song Sung Blue opposite Hugh Jackman and Kate Hudson. She completed filming Jesus Land, directed by Saila Kariat, in which she stars opposite Juliette Lewis. Anderson, whose film credits also include Suncoast, The Boss and Mother’s Day, is repped by WME, Gilbertson Entertainment and Yorn, Levine, Barnes.

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Paramount Seeks Recusal Of Judge On State AGs’ Antitrust Challenge

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Paramount is seeking to have the judge assigned to the state attorneys general challenge to its merger with Warner Bros. Discovery recused from the case, arguing that he has an “appearance of bias” because of his prior legal work for the Writers Guild of America.

In a motion filed in federal court on Wednesday, Paramount’s legal team wrote that U.S. District Judge P. Casey Pitts previously was in private practice for Altshuler Berzon LLP and served as “long standing labor counsel” for the WGA. They noted that the WGA has filed a related case, and that the guilds had expressed support for the state AGs lawsuit.

Paramount’s legal team asked that the case be reassigned to Judge Araceli Martínez-Olguín, who is overseeing a lawsuit that was brought by a group of consumers in April.

Pitts, appointed to the bench by President Joe Biden in 2023, was randomly assigned the case on Tuesday.

Paramount’s legal team, led by Jeffrey Kessler, wrote, “WGA is not merely an interested observer in this action; it is an active litigant whose interests are directly aligned with those of the Plaintiffs in this litigation and directly adverse to Paramount’s interests. Judge Pitts’ prior long-standing representation of WGA—a vocal opponent of the proposed merger that has publicly committed to working with regulators to block it—creates precisely the type of appearance of impropriety that Section 455(a) seeks to prevent.”

More to come.

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‘The Odyssey’ Reviews Roundup: What Critics Are Saying

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The time has come: reviews are in for Christopher Nolan‘s highly anticipated epic The Odyssey.

Following the success of 2023’s Oppenheimer — which earned Nolan his first Academy Awards for best director and best picture — the filmmaker turned his attention to adapting Homer’s ancient Greek epic. The Odyssey also made history as the first feature film shot entirely with Imax 70mm film cameras.

As of midday Wednesday, the film holds a 98 percent critics score on Rotten Tomatoes, currently the highest of Nolan’s career, and is tracking for a massive opening weekend.

Starring Matt Damon as Odysseus, the film follows the legendary Greek king’s long journey home to Ithaca after the Trojan War as he attempts to reunite with his wife, Penelope (Anne Hathaway), and son, Telemachus (Tom Holland). The ensemble cast also includes Zendaya, Robert Pattinson, Lupita Nyong’o, Jon Bernthal, Elliot Page, Travis Scott, Charlize Theron and more.

While anticipation has remained high, the film has also faced online criticism in recent months. Nolan recently brushed off that backlash as “irrelevant,” saying many of those criticizing the movie had yet to see it.

Ahead of the film’s Friday release, here’s what critics are saying about The Odyssey.

The Hollywood Reporter’s David Rooney is among those praising the cast and impressive production: “While The Odyssey is uneven, and no match for the sure-footedness and intellectual complexity of Oppenheimer, it’s elevated by the blindingly charismatic ensemble,” he wrote. “Damon is superb, going to dark places seldom if ever explored in his previous roles; Hathaway is a model of steely self-possession masking vulnerability … Work on the craft side unsurprisingly is top-notch. Van Hoytema fills the giant frame with imposing images shot in evocative international locations, grand and powerful in scale.”

But he adds: “One of the issues is that the writer-director never finds much balance between the parallel journeys of Odysseus and Telemachus, making the movie feel structurally clumsy. It doesn’t help that Holland, while always an appealing screen presence, is wrong for the role. Like Pattinson, the Brit actor plays his character with an American accent. But he comes across as, well, Peter Parker in a tunic, sapping the gravitas from Telemachus’ path to maturity.”

The Guardian’s Peter Bradshaw, wrote, “This is a film with thrilling ambition, boldness, seriousness, generosity and flair. There are some broad-brush moments in the dialogue, yes, but even these are applied with a muscular flourish. It has gasp-inducing, Imax-sized landscapes of loneliness shot by cinematographer Hoyte van Hoytema — who, incidentally, avoids the sea’s traditional cliched color — and full-tilt battle sequences and fight scenes accompanied by the throbbing and thrumming of drums.”

IGN’s Scott Collura wrote, “A must-watch cinematic experience, an epic film version of an epic poem that adapts many of the out-there concepts of Homer through a new eye that frequently brings a sense of horror and existential angst to the story — and even a bit of humor too! Matt Damon is fine as the title character if not revelatory, but the extensive supporting cast frequently prop up individual moments, as do some of Nolan’s unique additions to the story. While Odysseus’ emotional journey here can be as choppy as a rough day at sea, and the ‘civilization is eroding’ theme is undercooked, the film’s bigger observations on the effects of war on those who are forced to participate in it are well met. The Odyssey isn’t perfect, but it’s a pretty great moviegoing experience all the same.”

Empire’s John Nugent wrote, “The scale and scope here is, frankly, jaw-detaching. It is filmmaking at a magnitude few modern directors could ever realistically imagine, demand or execute. Yet what is most striking about this film is its quieter moments … Samantha Morton’s Circe, meanwhile, provides the closest Nolan has come to full-on horror, an astonishing sequence full of shocking fury and sadness at the baseness of men.” He added: “It may be set in a mythical universe, but Nolan is again raging at the folly of a humanity we might recognize — on an enormous, IMAX-sized canvas. Nobody does it better.”

The Telegraph’s Robbie Collin wrote, “Nolan and his collaborators have constructed a strange, fearsome and trailblazing machine of a movie — by some distance, the best of the year so far. Its creator is known for playing tricks with time, and this may be his grandest yet: turning one of the oldest stories in literature into a vote of confidence in blockbuster cinema’s future.”

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