Netflix tumbles into the Upside Down

[Bloomberg]( Today’s Agenda - Netflix’s [rocket ship]( to Planet Profit [is sputtering](. - Turkey is creating a [dilemma for NATO](. - The Iran situation needs [more than a hasty deal](. - Amazon may have a [genius legal strategy](. Netflix Chilled One of the sharpest FAANGs is suddenly much duller. Netflix Inc. tumbled 10 percent today, losing about $16 billion in market value as of this writing, after the great Eater of Bandwidth reported an unprecedented drop in streaming-video subscribers in its latest quarter. It also signed up far fewer new total subscribers than expected. The “N” in the “FAANG” grouping of premier tech stocks has always had the smallest market valuation of the bunch, but its stock has often been the hottest performer. Today it was scorching in the wrong direction. The company called this a temporary setback, but Shira Ovide isn’t so sure. The Netflix story has long been a familiar one, of burning money to fuel a rocket ship to a distant Planet Profit. That [suddenly sounds more like science fiction](, Shira writes. Netflix lost subscribers partly because it tried to raise prices, and partly because all its spending couldn’t keep its entertainment fresh enough to lure subscribers. Meanwhile, old-school media rivals such as Walt Disney Co., long envious of Netflix’s star power, are mounting direct challenges to its streaming dominance, notes Tara Lachapelle. And they’re taking away some of Netflix’s most popular offerings, further eroding its ability to lure viewers. In that, [Netflix is getting a taste of old-school media worries](. It may have to get used to it. Turkey Turns Frenemy We’ve all had that problematic friend; you know the type: They were fun to hang out with in college or whatever, but at some point they started hitting on people’s spouses or selling snakeoil or something, and you had to decide whether to intervene or cut them off. Turkey is that friend to NATO these days. It recently defied its allies and took possession of a Russian air-defense system. It’s drilling for oil in waters off Cyprus, over that country’s objections. Recep Tayyip Erdogan is cracking down on journalists, judges and opposition leaders. Bloomberg’s editorial board says [NATO needs to get tough with Turkey](, starting with sanctions, and be willing to kick Turkey out of the Circle of Trust altogether. Leonid Bershidsky argues it would be more [constructive to cut a deal with Erdogan]( over the Cyprus dispute than to sanction it. This approach helped Europe deal with its refugee crisis a few years ago. And kicking Turkey – with its large, well-trained army – [out of NATO would be a huge mistake](, warns James Stavridis. It won’t be easy, but everybody in the alliance should work together to sway Turkey away from the dark side of Russian influence. Hotter Water in the Persian Gulf Tensions with Iran keep rising, meanwhile. President Donald Trump said the U.S. Navy [shot down]( an Iranian drone in the Strait of Hormuz. And the U.S. [demanded]( Iran release a tanker it captured this week. Trump has recently signaled he’s willing to talk to Iran about a new nuclear deal, but Iran keeps showing no sign of backing down, Bloomberg’s editorial board writes. It urges [Trump to hold firm and resist]( what may be his natural urge to cut a quick deal. Before we stumble into war with Iran, [Congress must revisit the Authorization for Use of Military Force]( it passed back in 2001, when some of our youngest soldiers weren’t even born yet, argues Rep. Max Rose, a Democrat and Afghanistan veteran from New York. Eighty percent of Congress has turned over since that AUMF passed. We can’t let this ancient authorization be used for more wars. Further Iran Reading: Rand [Paul wants to be Trump’s emissary]( to Iran. He should ask John Kerry how that went for him. – Eli Lake Amazon Plays Nice When confronted by German regulators about its treatment of third-party sellers, Amazon.com Inc. responded by … being nice? Doing what the regulators asked? What is this strange and promising new business practice? Unless it’s some kind of clever ruse, Leonid Bershidsky suggests this approach [could help Amazon avoid years of legal hassle]( and billions in fines other tech companies have endured. Amazon has also recently become [a smidgen less reticent about its numbers](, Shira Ovide notes. This helps investors, even if these particular numbers also help Amazon by making it look much less like a retail-killer and more like a kindly middleman helping third-party retailers sell stuff for a (high and rising) fee. Telltale Charts Heat waves like the one hitting the Northeast this weekend usually boost natural-gas prices because of all the air-conditioning. But when [producers can barely give away gas](, the market doesn’t work like it used to, Liam Denning writes. Commercial paper demand suggests [companies increasingly lack confidence]( to borrow for long periods, writes Robert Burgess. That's not a great sign for the economy. Amtrak’s long-haul service is [painfully slow and unprofitable](, writes Justin Fox, who recently experienced it firsthand. Further Reading George Orwell would have recognized [Trump’s North Carolina rally and its “Send her back](” chant. – Cass Sunstein Nancy Pelosi may be [closer to impeaching Trump]( than we think. – Jonathan Bernstein Even relatively strong Honeywell International Inc. [isn’t immune to an industrial slowdown](. – Brooke Sutherland The best long-term bet for Goldman Sachs and Morgan Stanley is to [hunker down in wealth management](. – Brian Chappatta Much is riding on a successful [unwinding of Deutsche Bank’s $83 billion]( in “bad” assets. – Ferdinando Giugliano China is [increasingly the developing world’s payday lender](; the West must prepare for rescues. – Mihir Sharma Rock-bottom interest rates have [fund managers increasingly betting]( on opaque, illiquid private assets. – Mark Gilbert Alaska [cutting funds to its state university]( represents a lack of ambition. – Tyler Cowen [Moon-landing sites]( need preservation. – Faye Flam ICYMI Michael Cohen comes [back to haunt Trump]( again. Jeffrey Epstein was [denied bail](. Cellphone [signals are a danger]( in some Boeing Co. jets. Kickers Florida town blasts “[Baby Shark” at homeless people](. (h/t James Greiff) The world suffers from a [loneliness epidemic](. Earth once [had two moons](, maybe. A moonlight portrait of [Apollo 11 software engineer Margaret Hamilton]( is bigger than Central Park. Note: Please send cellphones and complaints to Mark Gongloff at mgongloff1@bloomberg.net. New to Bloomberg Opinion Today? [Sign up here]( and follow us on [Twitter]( and [Facebook](. [FOLLOW US [Facebook Share]]( [Twitter Share]( SEND TO A FRIEND [Share with a friend] You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022