Global Headlines Roundup | Russia reaches the World Cup quarterfinals; The Economist asks whether Netflix can escape the "techlash"

Global Headlines is a new QDaily column for 2018, still in its trial run — and still committed to helping you know more.

What the Agenda-Setters Are Talking About

The Economist: Can Netflix please investors and still avoid the "techlash"?

"Techlash" means what it sounds like: a backlash against technology. Late last year, the economist and Economist executive editor Daniel Franklin told CNBC that one of the world's most notable issues in 2018 would be tech giants being drawn step by step into political storms: "The tech giants have grown to a worrying size, the way they use data is not what the public wants — not to mention the question of whether the data on these platforms is being manipulated for political ends."

Half the year is gone, and Facebook and Google have indeed run into thorny controversies. This week The Economist devotes its cover story to another tech giant, Netflix, and asks how it has managed to stay out of the fray.

The five tech-stock giants known as "FAANG" are Facebook, Apple, Amazon, Netflix and Google. Together they are now worth more than the whole FTSE 100 index (a share index compiled by the FTSE Group from the performance of the 100 largest companies listed on the London Stock Exchange). Without FAANG to drive growth this year, the American stock market would certainly have fallen. Yet one after another these tech giants have been caught in the troublesome "techlash" — over data misuse, anti-competitive behavior, tax avoidance and phone addiction. Politicians who once loved them now hate them.

None of it seems to stick to Netflix. This year Netflix has produced more entertainment than any television platform; the 80 films it has made are more than any Hollywood studio's. It will spend $12 billion to $13 billion on content, a full $3 billion to $4 billion more than last year — the increase alone would pay for everything HBO or the BBC puts out. Even though it is still not allowed to operate in China, Netflix already has 125 million paying subscribers worldwide, twice as many as in 2014, and they watch more than two hours a day on average. Those rising numbers mirror the decline of traditional television: compared with 2010, Americans aged 12 to 24 now watch half as much of it.

According to CNBC, Netflix's market value briefly climbed to $152.6 billion this May on a 1.8% rise in its share price, passing Disney's $151.8 billion — the first time Netflix has been worth more than Disney. Investors and consumers, it seems, both love it.

Meanwhile the traditional media giants that used to sell Netflix content for extra income are locked in frantic competition and a wave of mega-mergers. On June 12 federal judge Richard Leon ruled that AT&T could buy the entertainment giant Warner; Disney and Comcast, America's largest broadband provider, are fighting over 21st Century Fox.

Mergers aside, the old media giants have to learn Netflix's temperament as a tech company: how to work the relationship between data and customer service in order to keep growing. Netflix is also unlike Facebook and Google in that it keeps its distance from news, sticking to entertainment alone, which spares it the fake-news storm and the election-manipulation scandals. And a subscription model that does not depend on advertising means it does not need to make money by selling user data. The bargain is simple: you pay me a monthly fee, I give you the shows you want.

One shrewd investor once said: "If Jesus were a stock, he'd be Netflix. Either you believe or you don't."

There is plenty of reason to doubt it. Netflix leans more and more on borrowed money, and has piled up $8.5 billion of off-balance-sheet debt. Chief executive Reed Hastings says this will go on for years. But if the company can raise subscription prices and add users at the same time, the strategy may work.

Netflix faces another risk. In countries with no "net neutrality" protection, the broadband firms that own the pipes will also start to control the content suppliers and extend their hold over content. Some people also worry that Netflix wants to monopolize television, in which case it will have to answer questions about the concentration and control of cultural content, and may attract the attention of regulators.

If investors, consumers and politicians are all to be satisfied, competition remains, in the long run, irreplaceable.

Besides Netflix, the June 30 North American edition of The Economist covers the political effects of the retirement of U.S. Supreme Court Justice Kennedy; how the Trump team is remaking the federal government; how Turkey's new leadership will push the country toward extremism; how the Syrian refugee crisis could bring decades of turmoil to the Middle East; and China's need for a fairer college entrance exam.

24-Hour Newsmakers

Russia knocks Spain out and reaches the World Cup quarterfinals.

CNN reporters on the scene saw the streets of Moscow roar last night; an hour and a half after the final whistle the crowds still would not go home, and threw wild victory parties.

Even Russian fans could hardly believe it. Russia, ranked 70th in the world, battled 10th-ranked Spain all the way through extra time to a penalty shootout, and won 4-3 to take a place in the last eight.

It is the first time Russia has reached the World Cup quarterfinals since 1970, when it was still the Soviet Union. Since the Soviet collapse, Russia's best World Cup result had been the group stage.

The match upset expectations from the start. Twelve minutes in, the Russian defender Sergei Ignashevich let the ball come off his own foot, an own goal that put Spain ahead 1-0.

Then, in the 42nd minute, Spain conceded a foul in the penalty area, and Artem Dzyuba took the spot kick. He scored, the game was level at 1-1, and there it stayed through extra time.

With neither side able to break the deadlock, the two teams went to this World Cup's first penalty shootout. Both scored their first two kicks. On the third, Spain's Koke (Jorge Resurrección Merodio) missed while Russia scored, and a gap opened. Both scored their fourth. But on the fifth Spain missed again, and Russia won.

Spain's defeat also meant this was the last World Cup for 34-year-old Andrés Iniesta, who is now retiring from international football. "Sometimes the ending of the story isn't as dreamlike as you'd want it to be," Iniesta said afterwards.

What Else Happened in the World

Germany's coalition government faces another crisis over refugee policy. Interior Minister Horst Seehofer, who also chairs the Christian Social Union (CSU), has decided to give up both the chairmanship and the ministry, unhappy that Angela Merkel is still taking a lenient line on refugees.

Mexico held its presidential election on July 1. López Obrador (Andrés Manuel López Obrador, commonly called AMLO), the man known as Mexico's Trump, is likely to win. Despite the comparison, the two hold opposing political positions and detest each other; with U.S.-Mexico relations strained, AMLO has proved popular with voters. But the election has been shadowed by a string of violent incidents — as of this June, 133 candidates and 8 journalists had been killed.

UNESCO added two new World Heritage sites on June 30. One is Denmark's Aasivissuit-Nipisat, inside the Arctic Circle in central-western Greenland; the other is the Archaeological Border Complex of Hedeby and the Danevirke in northern Germany.

South Korea's 52-hour workweek takes effect today. According to Yonhap News Agency, the 52-hour rule applies first to businesses and public institutions with 300 or more employees. Any such organization that makes employees work more than 52 hours a week breaks the Labor Standards Act, and offenders face up to two years in prison or a fine of up to 20 million won (about 120,000 yuan).

Canadian rapper Drake's new album breaks Apple Music's single-day streaming record. Drake's fifth album, Scorpion, drew 170 million plays on Apple Music in under 24 hours. Spotify, which put it up two hours later, recorded 130 million plays, according to Spotifycharts.

A 1997 first edition of Harry Potter, one of only 500 printed, sold at auction for 480,000 yuan. Long before Harry Potter swept the world, its first edition ran to just 500 copies, full of spelling mistakes — even the author's name was printed as "Joanne Rowling" rather than the later "J.K. Rowling." Collectors still prize these rare copies. Last September another first edition sold for 520,000 yuan, though that one carried the author's signature.

Someone Said

"Sonic weapons cannot cause concussions or white-matter disease in the brain — that is objectively impossible."

Dr. Bartholomew, who studies psychological illness, was analyzing the mysterious sickness that has struck a large number of diplomats at the U.S. embassy in China. It is "mass hysteria," he says, not the work of sonic weapons.

According to a report by ABC, 26 Americans have been affected so far, in Cuba, China and Uzbekistan. Word spread earlier of a case in Singapore, but that turned out to be wrong.

The symptoms include headaches, dizziness and temporary hearing loss, and tests found white-matter disease in every patient's brain.

Since 2016, when the first American diplomats in Cuba fell ill, the FBI has been investigating; last year it said the illness was probably the result of deliberate "sonic" attacks.

Over more than two years of inquiry, many people have come to believe sonic weapons caused it. Sharon Weinberger, editor-in-chief of Foreign Policy, who has written a book that covers sonic weapons among other things, says the diplomats' symptoms today are like those diplomats suffered during the Cold War between the United States and the Soviet Union.

"I don't think what the diplomats in Cuba and China are suffering from is mass hysteria," Weinberger said.

Dr. Bartholomew, who argues for mass hysteria, is not moved: "The people most vulnerable to mass hysteria generally don't think it could happen to them."

You Might Also Be Interested In

After a run of homophobic incidents, Paris holds its annual Pride parade as planned.

Paris held its annual Pride parade on June 30. In the run-up, though, scattered homophobic incidents were reported: a self-described far-right anti-gay activist was arrested for tearing down a rainbow flag on a Paris street, and rainbow street art was vandalized.

Afterwards the French National Assembly hung rainbow flags at its front and back entrances for the first time, "as a symbol of fighting homophobia and promoting equal rights."

The main demand of this year's Paris parade was "to fight discrimination in sport as we fight it in life." Since the parade began in 2001, more than a million people have taken part in Paris every year.

On This Day in History

July 2, 1947: Poland turned the Auschwitz concentration camp into a memorial.

July 2, 1961: The American writer and Nobel literature laureate Ernest Hemingway shot himself with a hunting rifle at his home in Idaho.

July 2, 1964: U.S. President Lyndon Johnson signed the Civil Rights Act, which barred racial segregation in the United States and made discrimination against Black people, minorities and women illegal. It ended the segregation of Black and white that had persisted in schools, workplaces and public spaces since the country's founding, and is regarded as a milestone in the progress of human rights.

July 2, 1990: The Communist Party of the Soviet Union opened its 28th Congress, at which Boris Yeltsin announced he was leaving the party.

July 2, 2012: Spain beat Italy in the final of Euro 2012 to win that year's European football championship.

Cover image: Russia versus Spain in the round of 16 at the 2018 World Cup, from Sefa Karacan / Dongfang IC.