56 Business TheEconomistMarch19th 2022
inoilprices. Miningfirmsare,asa group,
likewiseperformingwell,buoyedbyhigh
ermetalsprices,asaresteelmakers(except
Russianones).ThesharepricesofusSteel
andTataSteel,withheadquartersinPitts
burgh and Mumbai, respectively, have
climbedby38% and11%sincetheeveofthe
invasion.Bungeandadm, twobiglisted
tradersthatspecialiseinreroutingflowsof
grain,haveoutperformedthemarket,too.
Thewardoesnotaffectallcommodities
firmsequally.RioTinto,a bigminer,an
nouncedonMarch10ththatit wouldaban
dona jointventurewithRusal,a giantRus
sianaluminiumproducer.Rocketingelec
tricity costs resulting from the soaring
priceofnaturalgas,40%ofwhichEurope
getsfromRussia,haveforcedsomeSpan
ishsteelmakerstocutoutput.
Priceyinputs area morewidespread
problemforsectorsfurtherupthevalue
chain.Justastheywerepreparingtoliftoff
aspandemictravelrestrictionsarerelaxed,
airlinesgotslappedwithrisingfuelcosts.
YaraInternational,a Norwegianfertiliser
maker,saidonMarch9ththatthecostof
naturalgashadpromptedittocutproduc
tionattwoEuropeanfactories.
Carmakers,which havenotyetreco
veredfromthepandemic’sdisruptionsto
supplychains,facefreshproblems.Volks
wagenandbmw, twoGermangiants, have
cutproductioninEuropeastheyseekout
newmanufacturersoftheharnessesthat
bundlemilesofelectricalwiresintheir
cars to replace outofaction Ukrainian
suppliers.MorganStanley,a bank,reckons
thatthe67%jumpinnickelpricesbefore
tradingstoppedrepresentedanincreaseof
about$1,000totheinputcostsoftheaver
ageAmericanelectricvehicle.
Gabriel Adler of Citigroup, another
bank, notesthat carmakers have so far
beensuccessfulinpassingtheircostsonto
consumers. Tesla, America’s electriccar
superstar,thismonthraisedprices;Elon
Musk, its boss, complained in a tweet
about“significant recentinflation pres
sure inraw materials&logistics”. Such
pricingpowerisenviable.Butit hasitslimits.Atsomepointpeoplewillnotbewilling
toabsorbanyfurtherincreases.
Incertaincases,consumersarebegin
ning to balk.American foodfirmshave
been raisingprices formonths tooffset
highercostsofenergy,transportandingre
dients.However,theyhavebeenunableto
raisethemquicklyenoughtoprotectmar
gins. The need to negotiateprices with
grocerslimitstheirabilitytodemandhigh
eroneswhenevertheydesire.Andgrocers,
inturn,areunderpressurefromshoppers.
RobertMoskow ofCreditSuisse,onemorebank,notesthatconsumershaveinthe
pastyearbeenwillingtostomachpricier
food.Butthewar’simpactoncommodities
pricescomesata momentwhentheirpa
tienceiswearingthin,especiallyinAmer
ica,whereinflationhashita 40yearhigh.
“Everyfoodcompanymustbegettinga
littlenervousthat theyarepushingthe
consumertoofar,”saysMrMoskow. Asthe
costsofinputscontinuetoclimb,itlooks
increasinglylikelythatcompanieswillbe
forced to choose between compressing
profitsanddepressingdemand.nResourceful v resourceless
Stockmarket indices, February 1st 2022=100Source:RefinitivDatastream120110100908070
February MarchS&P 500 Food, S&P 500
Beverage&TobaccoSTOXXEurope00Autos & PartsS&P/TSXGlobalMiningSPDR S&P Oil & Gas“I
t maynotbegoodforAmerica,but
it’s damn good for cbs,” said Leslie
Moonves, the tv network’s then boss, of
Donald Trump’s presidential candidacy
in 2016. Ratings soared under Mr Trump,
and slumped when he left the stage. Now
war has people tuning in again. Since
Russia invaded Ukraine, cablenews
channels’ audience share in America has
nearly doubled, to 12%, reckons Inscape,
a data firm—heights last recorded when
the Capitol was stormed in January 2021.
America’s original Cable News Net
work hopes to sate this hunger with a
new format. cnn+ will launch in Amer
ica on March 29th, with an international
rollout to follow. For $5.99 a month
viewers will enjoy live streams of on
demand news and documentaries, plus
interactive features (like the chance to
submit questions to interviewees).
The launch coincides with upheaval
at the 42yearold network, one of the
biggest names in news. cnn’s boss, Jeff
Zucker, quit in February over an undis
closed office romance; Chris Licht, an
experienced producer, takes over next
month. Meanwhile, the merger of cnn’s
owner, WarnerMedia, with Discovery, a
cable giant, is expected to close in April.
The new management prefers to
highlight cnn’s hardnews expertise, on
display in Ukraine, over the partisan
commentary in which it indulged in the
Trump years. A neutral brand suits War
nerDiscovery’s strategy. Warner plans to
bundle cnn+ with its entertainment
platform, hboMax, due to combine with
Discovery’s. That bundle cannot afford to
repel conservatives. (If it does, cnn’s new
owners may sell it.)
Nor can cnn+ afford to undermine
the cable business. Like all legacy media
firms, WarnerDiscovery is trying to
launch a streaming lifeboat without
sinking its cable mothership. So for now,cnniskeepingitsmain rollingnews
channel exclusively on cable, with sep
arate shows for cnn+ aimed at news
junkies and documentary fans.
Sceptics wonder about the size of the
new market. As for cable, it is in decline.
Just over half of American homes have it,
down from nearly nine out of ten a de
cade ago. Sport, which along with news is
the last reason not to cut the cord, is
slowly shifting to streaming. Amazon
and Apple, with no cable interests to
protect, have begun buying the rights to
big matches.
Historically lesscabled international
markets may provide a glimpse of what
comes next. cnn+ customers in Latin
America are likely to get the cnn en
Español linear channel, for instance,
while some European subscribers are
expected to get cnn International. cnn+
is a sidebet for the time being. It is also
the network’s most likely future home
when American cable is severed for good.TelevisionGood news and bad news
cnnenters the streaming business at an opportune momentcnn+ or minus?