Given the elusive nature of brands, determining a brand’s financial value is a difficult task.
Despite a brand’s intangibility, it’s hard to deny just how effective a strong one can be at boosting a company’s bottom line.
With this in mind, Brand Finance takes on the challenge of identifying the world’s most valuable brands in the world in its annual Global 500 Report. Visual Capitalist's Carmen Ang, Nick Routley, and Pernia Jamshed created the graphic below, using data from the latest edition of the report, to highlight the top 100 most valuable brands in 2022.
Editor’s note: This ranking measures the value of brands, which can be thought of as marketing-related intangible assets that create a brand identity and reputation in the minds of consumers. It attempts to measure this in financial terms, calculating what the brand is worth to the company that owns it. For more information on methodology, calculations, and sourcing, go to the bottom of this article.
A Full Breakdown of the Most Valuable Brands
With an increase of 35% since last year’s report, Apple retains its top spot on the ranking as the world’s most valuable brand, with a total brand value of $335.1 billion.
This is the highest brand value ever recorded in the history of the Global 500 report, which has been published each year since 2007.
As one of the world’s largest tech companies, Apple dominates the smartphone market, especially in the U.S., where more than 50% of operating smartphones are now an iPhone.
Here’s a list of the 10 most valuable brands according to the report:
After Apple, coming in a close second is Amazon with a brand value of $350.3 billion. This is not surprising, considering the tech giant has often found itself neck-and-neck with Apple in the rankings, and has even come in first place in previous editions of the report.
One other brand worth highlighting is TikTok. The social media company saw a 215% increase in its brand value year-over-year, making it the fastest-growing brand on the entire list.
Between 2019 and 2021, the platform saw its userbase skyrocket, growing from 291.4 million to 655.9 million in just two years. If this growth continues, TikTok could reach nearly one billion users by 2025, according to projections from Insider Intelligence.
Most Valuable Sectors
Over a third of the brands on the list fall into the tech and services sector. Combined, this category has a brand value of $2.0 trillion.
Media is the second most valuable sector—19% of the top 100 brands fall under the media and telecoms sector, including Google, Facebook, and WeChat.
COVID-19 is partly the reason for this, as media consumption increased throughout the global pandemic. For example, in the first nine months of 2021, Snapchat’s daily usage grew by 77%. Despite increased traction with users, it’s worth noting the company is now feeling the sting as the real world competes for attention spans once again and advertisers begin to ghost the app due to recession jitters.
As pandemic restrictions fade out around the world, and murmurs of a global recession threaten global economic growth, next year’s report could see some big shifts in brand value.
The Geography of Valuable Brands
When looking at where these brands are based, we see that the United States and China account for 73 of the top 100 brands on the ranking. Even more surprising—just six countries make up 94% of the list.
The growth of Chinese companies on the global stage is reflected in this visualization. As a point of comparison, a decade ago, only six Chinese companies made Brand Finance’s Top 100 ranking, and none of them were in the top 30 for brand value.
Interestingly, European countries only make up 14% of the list, which is a testament to just how much Europe’s economic dominance has dwindled over the last few decades.
Back in the 1960s, Europe accounted for nearly a third of the world’s total GDP. But by 2017, it had dropped down to 16%. According to a forecast by the Pardee Center of the University of Denver, the EU’s share of global GDP is expected to drop down to 10% by 2100.
Of course, if history has taught us anything, it’s that a lot can change over the span of a century. How a ranking like this will look in coming decades is anyone’s guess.
UBC Okanagan researchers hope to prevent catastrophes with next-generation sensors
As the wind and rain pound the blades of a wind turbine, UBC Okanagan researchers carefully monitor screens, hundreds of kilometres away analyzing if the…
As the wind and rain pound the blades of a wind turbine, UBC Okanagan researchers carefully monitor screens, hundreds of kilometres away analyzing if the blade’s coatings can withstand the onslaught.
Credit: UBCO
As the wind and rain pound the blades of a wind turbine, UBC Okanagan researchers carefully monitor screens, hundreds of kilometres away analyzing if the blade’s coatings can withstand the onslaught.
While this was only a test in a lab, the researchers are working to improve the way structures such as turbines, helicopter propellers and even bridges are monitored for wear and tear from the weather.
A changing climate is increasing the need for better erosion-corrosion monitoring in a wide range of industries from aviation to marine transportation and from renewable energy generation to construction, explains UBC Okanagan doctoral student Vishal Balasubramanian.
In many industries, wear-resistant coatings are used to protect a structure from erosive wear. However, these coatings have a limited service life and can wear out with time. As a result, these coated structures are periodically inspected for abrasion and breaches, which are then fixed by recoating the damaged areas.
Currently, these inspections are done manually using a probe, and Balasubramanian—one of several researchers working in UBC’s Okanagan Microelectronics and Gigahertz Applications (OMEGA) lab—is working to develop sensors that can be embedded directly into the coatings. This could take away any chance of human-caused errors and drastically reduce the inspection time. By integrating artificial intelligence (AI) and augmented reality (AR) into these embedded sensors the researchers can monitor in real-time the wear and tear of protective mechanical coatings designed to prevent catastrophic failures.
“By leveraging AI technologies into our microwave resonator sensors, we’re able to detect not only surface-level coating erosion but we can also distinguish when an individual layer is being eroded within a multi-layer coating,” explains Balasubramanian, lead author of the research recently published in Nature Communications.
Some studies suggest that metal corrosion in the United States has a cost of nearly $300 billion a year; more than three per cent of that country’s gross domestic product.
But it’s not just about money.
Erosion can cause irreversible damage to the exterior surfaces of bridges, aircraft, cars and naval infrastructure, explains Balasubramanian. History has a long list of disasters where erosion was identified as the primary reason for structural failures that have led to the loss of thousands of lives—including the 2018 Genoa bridge collapse in Italy, the 1984 Bhopal gas tragedy in India and the 2000 Carlsbad gas pipeline fire in Texas.
“Being able to proactively monitor and address equipment degradation—especially in harsh environments—can undoubtedly safeguard important infrastructure and reduce the effect on human life,” says Dr. Mohammad Zarifi, an Associate Professor in UBCO’s School of Engineering and principal investigator at the OMEGA Lab. “For several years, we’ve been developing microwave-based sensors for ice detection and the addition of newer technologies like AI and AR can improve these sensors’ effectiveness exponentially.”
The newly developed sensors can detect and locate the eroding layer in multi-layered coatings and can also detect the total wear depth of protective coatings. This information is collected and can provide a detailed understanding for engineers and stakeholders of the potential damage and danger of failures.
In the lab, the differential network device interface system was tested at varying temperatures—extreme hot and cold—and different levels of humidity and UV exposure to mimic several harsh environments. The developed system was tested with different types of coatings and its response was monitored in four different types of experimental setups that performed the desired environmental parameter variations.
“We tested our sensors under some of the harshest environments including various temperatures, humidity and UV exposures,” says Balasubramanian. “We continue to push the limits of what these sensors are able to withstand in order to stay ahead of what’s transpiring around the world.”
For his work, Balasubramanian was recently recognized with an Award for Excellence in Microsystems CAD Tool & Design Methodology by CMC Microsystems and sponsored by COMSOL. The award recognizes a graduate student who demonstrates a novel design technology advancement with the most potential for applicable improvements to microsystems manufacture and deployment.
The research was supported by funding from the Department of National Defence of Canada, the Natural Sciences and Engineering Research Council of Canada, and the Canadian Foundation for Innovation.
Journal
Nature Communications
DOI
10.1038/s41467-023-40636-9
Method of Research
Computational simulation/modeling
Subject of Research
Not applicable
Article Title
Non-destructive erosive wear monitoring of multi-layer coatings using AI-enabled differential split ring resonator based system
It is 2023, eight years after 2015, the year of flying cars and climate-controlled clothing that Marty McFly traveled to in a time machine. In our own world, the ruling elite wants to ban cars to control the climate.
How did we get here? What caused the discrepancy between our vision of a more advanced future and the reality we face now?
We had reason to expect it.
From 1860–1970, the United States grew at an average of over 5 percent per year. But starting in the 1970s, and for the last five decades since then, America has experienced an average GDP growth rate of 2.7 percent. Had the previous growth rate continued, the economy would be at least 65 percent larger than it is today. The current GDP would be an additional $15 trillion, or $45,000 per capita.
The gap in unrealized potential is massive and accounts for the discrepancy between our past visions of the future and our current reality. If people knew about the future that was stolen from them, they would be outraged. The loss of a potential that was never known usually cannot affect people, but there is a growing sense that something doesn’t add up.
In the new reality of anemic growth, a strange mix of cutting-edge technology and crumbling infrastructure is emerging. This is mirrored in contemporary science fiction, which is more likely to depict a dystopian future than one like that envisioned by The Jetsons or a Jules Verne novel. How did this happen? What sent us so wildly off the path set by previous achievements?
There is a common political narrative that the “laissez-faire” push to deregulate and cut taxes under Reagan in the 1980s resulted in a consolidation of wealth and corporate power that led to our current malaise. The main problem with this narrative is that there was no recent laissez-faire moment. Regulation and public spending continued to increase through the 1980s. When the government couldn’t raise taxes high enough to keep up with spending, it just inflated the money supply, a strategy that became easier when the gold standard was fully abandoned in 1971.
Starting in the late 1960s, the number of pages published in the Federal Register exploded (figure 1). The number of pages of the Code of Federal Regulations, which is thought to reflect the overall regulatory burden, has increased by a factor of 10, from twenty thousand to over two hundred thousand pages (figure 2).
Figure 1: Total pages published in the Federal Register (1936–2022)
The longest period of low growth in our history is also characterized by the expansion of the regulatory state. Corporate consolidation skyrocketed in the same period. In 1970, the top four companies in any given industry made up on average 20 percent of the market share. Today, the top four companies in any given industry control roughly 80 percent. Regulatory monopolies create single points from which special interests can control whole markets and enrich the wealthiest people. They are fully endorsed by the elite institutions yet sold through the pretense of keeping vulnerable consumers safe from asymmetries of power.
People who legitimately care about the poor or the environment should not support these federal agencies. The viewpoint that regulations lead to improved standards puts the cart before the horse. If the US regulation of the maximum amount of pesticide residue allowed on produce were imposed on a developing country, that country’s agricultural production would be wiped out overnight.
Reducing the use of chemicals, when done correctly, saves resources and improves soil quality and yield, but it also requires a great deal of knowledge and technology. Without being able to know exactly when insects will arrive, it may be necessary to spray every day for weeks to minimize the chance of catastrophic failure. Without knowing how to implement a system of crop rotation correctly, the soil will likely degrade over time. Without testing, mapping out, and integrating the soil into the tractor’s spray system, it won’t be possible to limit fertilizer use to the areas that need it.
The regulatory strictness of a country tends to vary directly with its level of economic development because mandates require infrastructure. Eventually, tractor components that can identify and kill weeds with an electric current will largely eliminate the demand for herbicides. A law will then be passed, with much self-congratulation, that bans herbicides, reinforcing the advantages of the bigger players and creating new barriers for the smaller.
Mining deaths dropped dramatically with the advent of electrical lighting and ventilation technology. The decline was not affected in any observable way after the creation of the Occupational Safety and Health Administration (OSHA) because the government only legally codifies standards after the relevant technology and knowledge has entered the market. They do, however, take credit for the improvement and write the standards in a way that favors the specific practice of a particular industry association or corporate cartel.
This preference often takes the form of regulations that favor scale, which is why local food supplies have shrunk while centralized supply chains run by a few companies have come to dominate the market. It is ironic that regulators claim to be protecting consumers: surveys show that 96 percent of consumers think locally produced food is “the freshest, healthiest and most nutritious food.”
Regulatory restrictions slow the rate of innovation by creating barriers to market entry but also by protecting corporations that operate within the confines of the regulatory standards from legal liability for harming consumers or the environment.
Regulatory capture was described by Lao Tzu 2,500 years ago in China.
“In the kingdom the multiplication of prohibitive enactments increases the poverty of the people” and “the more display there is of legislation, the more thieves and robbers there are.”
Such policies drastically increase income inequality, not to keep you safe but so that special interests can bring back mercantilism by controlling markets as guilds once did.
The resulting lack of options facilitates technocratic control of society. Nothing would hurt the average billionaire more than to see the average American stop falling for this ruse.
NFLX Explodes Higher After Blowout Q3 Results, Hikes Prices After Best Subscriber Growth Since 2020
After suffering a historic collapse at the end of 2021, when in the span of five months Netflix lost 75% of its value, the company has enjoyed a solid recovery over the past year when it rose by nearly 200%, from a low of $166 to a recent 52 week high of price of $481, which was the highest since January of 2022, before it lost 28% of its value in the past three months.
Curiously, the solid performance over the past year - which saw the stock down 41% from its pandemic-era all-time closing high of $610.34 on June 30, 2021 but also up 21% YTD vs the 14% increase in the S&P - continued despite several earnings reports that were at best mixed (two quarters ago NFLX not only missed on subs but also slashed guidance, last quarter the company's guidance disappointed despite blowing away subscriber estimates) which brings us to today when the OG video streamer is again trading north of $150N in market cap despite an ongoing Hollywood strike that has mothballed the company's movie and production pipeline for months.
With that in mind, bulls are are hoping for stronger revenue and subscriber growth and guidance than one quarter ago, including more than 6 million new streaming subs at a time when NFLX has cracked down aggressively on password sharing and is navigating a transition from focusing on subscriber growth to maximizing earnings through price hikes and an ad-supported service. It has little choice amid a torrent of competition from some of the world's biggest media companies. Here's what else to expect
Earnings: EPS is expected to print $3.49 a share, up from of $3.10 a share last year.
Revenue: Bloomberg revenue consensus is for $8.53 billion in revenue, up from $7.93 billion a year earlier.
Stock movement: Netflix shares typically see percentage swings ranging from the high single-digits to the mid-teens after the company posts results.
Full year projections: Free cash flow estimate $5.27 billion; Operating margin estimate 19.8%
What else analysts are watching for:
"We think Netflix is well-positioned in this murky environment as streamers are shifting strategy, and should be valued as an immensely profitable, slow-growth company," Wedbush analysts said in an Oct. 6 note with an outperform rating and price target of $525. "Even while ads are not yet directly accretive (we think they will be accretive by year-end), the ad-tier should continue to reduce churn and draw new subscribers to the service."
Meanwhile, TD Cowen analyst John Blackledge said that he expects paid net additions of 6.5 million subscribers versus a consensus of 6 million, but also sees gradual margin growth in the fourth quarter and beyond. He maintained an outperform rating but trimmed his Netflix price target to $500 from $515 in an Oct. 11 report.
Wells Fargo said that advertising is “off to a somewhat slow start” with pricing and audience delivery below initial advertiser expectations in the first half. The company recently shook up leadership of its ad sales business. “Investors have said to us, they would like to see a more aggressive push, such as automatically converting Basic subs to Basic with ads.”
With that in mind, and considering that options were pricing in a 7.6% swing after hours today, here is what NFLX reported for its third quarter:
EPS $3.73, beating estimates of $3.49, and above the $3.10 a year ago
Revenue $8.54 billion, +7.8% y/y, just barely beating estimates of $8.53 billion
Streaming paid net change +8.76 million vs. 2.41 million y/y, smashing estimates of +6.20 million
UCAN streaming paid net change +1.75 million vs. +100K y/y, beating estimate 1.22 million
EMEA streaming paid net change +3.95 million vs. +570K y/y, beating estimate +2.22 million
LATAM streaming paid net change +1.18 million vs. +310,000 y/y, beating estimate 1.15 million
APAC streaming paid net change +1.88 million, +31% y/y, beating estimate +1.41 million
Operating margin 22.4% vs. 19.3% y/y, beating estimate 22.1%
Operating income $1.92 billion, +25% y/y, beating estimate $1.9 billion
Free cash flow $1.89 billion vs. $472 million y/y, beating estimate $1.27 billion
The results visually:
The number of new subs added was the strongest since Q2 2020, the peak of the covid lockdowns. Netflix is now on track to add more than 20 million customers this year, a big jump from fewer than 9 million in 2022.
Cracking down on password sharing has been one of the major initiatives at Netflix, which is trying to revive growth after a sluggish year or two. The company also rolled out an advertising-supported version of its streaming services in 12 markets. About 30% of new customers in those markets opted for ads last quarter, the company said.
And here is the regional detail: EMEA (Europe, the Middle East and Africa) accounted for the largest share of Netflix’s growth in the third quarter. The company added almost 4 million customers in that region. The average amount Netflix makes per customers hasn’t changed much in the past year.
The company credited a strong programming slate and its crackdown on password sharing, to wit:
Revenue growth in Q3 reflected a 9% year-over-year increase in average paid memberships (8.8M paid net additions vs. 2.4M in Q3’22) due to the roll out of paid sharing, strong, steady programming and the ongoing expansion of
streaming globally. ARM decreased 1% year-over-year both on a reported and F/X neutral basis, in-line with our expectations. This was due to a number of factors, including a higher percentage of membership growth from lower ARM countries, limited price increases over the past 18 months, and some shift in plan mix.
Q3’23 operating income totaled $1.9B vs. $1.5B last year (up 25% year over year), slightly above our guidance forecast due to the revenue upside and timing of content and other spending. As a result, we delivered an operating margin of 22.4% (vs 22.2% forecast), up three percentage points vs. the year ago quarter. EPS in Q3 was $3.73 vs. $3.10 and included a $173M million non-cash unrealized gain from F/X remeasurement on our Euro denominated debt, which is recognized below operating income in “interest and other income
Netflix also said that adoption of its ads-funded plan continues to grow — with ads plan membership up almost 70% quarter-over-quarter — and 30% of sign ups in our ads countries are, on average, to our ads plan, with more work to do to scale this business.
The successful rollout of paid sharing, which lets customers purchase additional access for friends or family, has emboldened Netflix to raise prices in some of its biggest markets. Starting Wednesday, Netflix is increasing the cost of its most expensive plan in the US by $3 to $23 and its basic plan by $2 to $12, while keeping two other plans the same. It’s taking similar steps in the UK and France, two other large markets.
While the current quarter was stellar, the company's Q4 guidance was curiously on the weak side, coming below consensus for both revenue, EPS and margins:
Sees revenue $8.69 billion, estimate $8.76 billion
Sees EPS $2.15, estimate $2.17
Sees operating margin 13.3%, estimate 14%
The company said subscriber additions would be similar to the just-ended quarter, plus or minus a few million. Some more details from the company:
For Q4’23 Netflix forecasts revenue of $8.7B, up 11% year-over-year, or 12% on an F/X neutral basis. For the fourth quarter, the company expects paid net additions will be similar to Q3’23 (+/- a few million). Global ARM in Q4 is expected to be roughly flat year-over-year, primarily due to limited price increases over the last eighteen months. In addition, over the past few months the US dollar strengthened versus other currencies, representing a roughly $200M expected drag on Q4 revenue and ARM.
In terms of profitability,
And here is full 2023: thank you striking workers:
Sees free cash flow $6.5 billion, saw at least $5 billion, and above the estimate $5.27 billion: "We now expect FY23 free cash flow to be approximately $6.5B (+/- a few hundred million dollars), up from our prior forecast of at least $5B, and vs. $1.6B in 2022. This includes ~$1B in lower-than-planned cash content spend in 2023 due to the WGA and SAG-AFTRA strikes. As a result, we expect 2023 cash content spend of around $13B and, assuming the SAG-AFTRA strike is resolved in the near future, we are currently expecting cash content spend of up to ~$17B in 2024. As we said last quarter, the strikes will create some lumpiness in FCF over the 2023/2024 period, but we still plan to deliver very substantial positive FCF in 2024."
Sees operating margin 20%, saw 18% to 20%, estimate 19.8%: Netflix is updating its FY23 operating margin guidance forecast to 20%, the high end of the prior 18% to 20% forecast (based on F/X rates as of 1/1/23). This would mean that the operating margin would increase approximately two percentage points from our 18% operating margin in FY22. Assuming no material swing in F/X rates, the company currently expect an operating margin in FY24 of 22% to 23%.
Yet we find it odd for the 2nd consecutive quarter that while the Hollywood strike is boosting free cash flow, it has no adverse impact on revenue...
Netflix has returned to growth as many of its peers struggled to figure out their streaming operations. Walt Disney Co., Warner Bros Discovery Inc. and Paramount Global have all cut costs and fired staff to improve their financial performance. They have spent billions of dollars to fund new streaming services that can replace their declining linear TV networks. But most of the newer streaming services lose money.
“We’ve shown that with discipline and a focus on the long term, you can build a strong, sustainable streaming business,” the company said in a letter to shareholders.
Going back to the company's results, free cash flow in Q3’23 amounted to a whopping $1.9B compared with $472MM in the year ago quarter; this was the second highest FCF quarter on record but was largely as a result of the lack of cash spending due to the ongoing Hollywood strike.
NFLX finished Q3 with gross debt of $14B (in-line with the company's $10B-$15B targeted range) and cash and short term investments of $8B, leaving net debt at $6.5BN. During the quarter, NFLX repurchased 6M shares for $2.5BN. Since the inception of this authorization, NFLX has bought back $4.1B. In September, the board increased an additional $10BN stock repurchase authorization on top of the $1B remaining under the prior authorization.
Netflix has returned to growth as many of its peers struggled to figure out their streaming operations. Disney, Discovery and Paramount have all cut costs and fired staff to improve their financial performance. They have spent billions of dollars to fund new streaming services that can replace their declining linear TV networks. But most of the newer streaming services lose money.
And while the company's Q4 guidance was just a touch on the light side, the market was more than happy with the surge in Q3 subs and the full year cash flow guidance, and sent the stock, which is up 17T this year, 11% higher after hours; however when factoring the 2.7% drop during the regular session, most calls and puts will expire worthless: the market was pricing in a +/-8% change today and that may be precisely what it will get.
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