🍿 The future of entertainment

Monday, April 19, 2021 by Robinhood Snacks |
_"It's a nail-biter" [Klaus Vedfelt/DigitalVision via Getty Images]_

"It's a nail-biter" [Klaus Vedfelt/DigitalVision via Getty Images]

Last Week’s Market Moves
Dow Jones
34,201 (+1.18%)
S&P 500
4,185 (+1.37%)
14,052 (+1.09%)
$60,307 (+0.43%)

Hey Snackers,

Guess we can forget Prime Lunar delivery: NASA picked Elon Musk's SpaceX over Jeff Bezo's Blue Origin to send humans to the moon for the first time since 1972. Happy Moonday.

Stocks closed the week at record highs. Investors were upbeat about encouraging economic numbers. More on that below.

On our 15-minute pod: Jessica Alba’s Honest Co just filed to go public, and it wants to sell you a “diaper cake” (real thing).


Miss the extra butter... With the Oscars coming up on Sunday, we're taking a look at how the entertainment industry has transformed over the past year — and what's next. Pre-pandemic, tech companies were already investing big in streaming. Then everything fast-forwarded:

  • In April 2020, Universal's Trolls 2 made more $$$ in three weeks via streaming rental than the original did after five months in theaters.
  • In July, AMC slashed the theatrical window for Universal films at its theaters. Instead of waiting the usual 75 days, people could stream new flicks after 17.
  • In December, AT&T's Warner Bros. said it would release all its 2021 movies on HBO Max at the same time they hit theaters.

Lights, camera, play button... While theaters like AMC struggled to survive 2020, streamers could barely keep up with demand. Subscription streaming time soared 34% last year, to over an hour a day. Netflix, which reports earnings tomorrow, crossed 200M paid subscribers. Disney+ crossed 100M subscribers last month, just 16 months after launching.

  • Studios are becoming streamers... OG streamers face fresh competition from OG studios, which are focusing on streaming now, too. Think: Universal's Peacock, Warner's HBO Max, and Viacom's Paramount+.
  • ...and streamers are becoming studios. Case in point: Netflix's original movie "Mank" is a Best Picture nominee at this year's Oscars. Amazon spent a whopping $11B on Prime Video and Music content last year, up 41% from 2019.

The hybrid model could stick... AMC, the world's largest theater chain, reopened nearly all its US theaters last month. But the hybrid streaming/theater release model could stick around. Last week, Disney said it'll roll out Marvel's “Black Widow” and "Cruella" on Disney+ and theaters simultaneously. People will always watch movies on the big screen – but it'll be more for love of the shared experience, rather than the only way to see new films.

Zoom Out

"Revenge spending"... US retail sales soared 10% in March from February, the largest jump since May. As $1.4K stimulus checks hit bank accounts and vaccines hit arms, Americans splurged on (non-stretchy) clothes, restaurants, and travel. A whopping ~1M jobs were added last month. Now, consumer spending is expected to propel economic growth to +6.4% this year, the best rate in decades.

Shell's environmental vote... Just in time for Earth Day (on Thursday): Shell asked shareholders to endorse its clean energy transition strategy, with a vote set for May 18. Shell is the first oil giant to seek investor approval on a pivot away from oil (it's leaning into electricity). If investors ship Shell's strategy, it could push others to do the same.


Johnson & Johnson earnings... Last week, the FDA asked states to halt J&J's one-shot Covid vax, after six people developed rare blood clotting. It could be a blow to the rollout — but Dr. Fauci predicts J&J's shot will return by Friday. Earnings drop tomorrow, but don't expect a major boost from vax sales: unlike Moderna and Pfizer, J&J pledged to sell its vaccine "at cost" (read: no profit).

Snap drops earnings... Thursday. In February, Snap excited investors by saying it expects 50% annual sales growth for the next few years. But it's still unprofitable (and earns 10X less revenue per user than Facebook). Snap has been focused on growing ad revenue in non-messaging features. We'll see if it grew ads in Snap Maps, Discover, and its TikTok copycat “Spotlight."

  • Big banks, big earnings: Chase, Goldman Sachs, and Morgan Stanley scored record quarters thanks to the SPAC and IPO-palooza.

  • China cracks down: Alipay, Earth’s biggest financial app, will now be overseen by China’s central bank. China is also warning dozens of other tech companies to follow regulation.

  • Rise of "Super-apps": Singapore's Grab is going public at a ~$40B valuation, in the biggest SPAC merger ever. Grab = Uber, DoorDash, and Venmo (all in one).

What else we’re Snackin’

  • Achieve: Five interview questions that impress hiring managers.
  • Quiz: April is financial literacy month. Can you pass FINRA's famous six-question quiz?
  • Influence: To tell someone they’re wrong, first tell them they’re right.
  • Learn: 100 uncommon uses for common household items (paper towel rolls = superheroes).

This Week

  • Monday: Earnings expected from Coca-Cola and IBM
  • Tuesday: Apple press event. Earnings expected from Johnson & Johnson, Netflix, Procter & Gamble, Lockheed Martin, and United Airlines
  • Wednesday: Earnings expected from Chipotle, Verizon, Anthem, and NextEra Energy
  • Thursday: Earth Day. Weekly jobless claims. Earnings expected from Snap, Blackstone, SAP, and AT&T
  • Friday: Earnings expected from American Express, Honeywell, and Kimberly-Clark

Authors of this Snacks own shares of: Disney, Amazon, Snap, Moderna, and Chase

ID: 1609705