Tuesday Sep.01, 2020

🍿 Netflix launches free streaming

_When you finally get off the parents' Netflix_
_When you finally get off the parents' Netflix_

Hey Snackers,

Happy 1st of September — time has no meaning anymore. Dunkin' is celebrating the onset of fall with a bizarre Pumpkin Spice Latte sign that confirms we have all lost our minds: "Uh Oh Spicy! Pumpkin! HAHAHAHA! Pumpkin Tasty." Weirdly, makes sense.

The techy Nasdaq stock index inched up on the wings of Tesla and Apple shares, which jumped after their stock splits yesterday. The market had its best August in over 30 years.

Stream

Netflix launches a free streaming site to reach its next 100M subscribers

Free Netflix... Not the kind where you mooch off your parents. Netflix launched a new global website offering popular movies and shows for free, no subscription required. It's the same idea as Costco free samples, if Costco gave away a full Prime Rib instead of one edamame. Bingeable titles include: Stranger Things, Bird Box, and Love is Blind. Before you break a finger rushing to cancel your subscription:

  • The catch: There are only 10 movies/shows available, though Netflix says it might shake it up.
  • The other catch: You can only watch the 1st episode of a show. Movies are available in full (because Boss Baby is important viewing).
  • BTW: Netflix still hates ads (except its own). This isn't your Spotify-style "freemium" model — the only ads you'll see are Netflix's attempts to get you subbed.

Forgot Tiger King existed... It's a smart, low-cost marketing play on Netflix's part. It allows the Flix to unlock a new segment of price-sensitive users. It's less intense than the existing free trial — you don't have to drop your credit card number or put an iCal reminder to "cancel subscription" in a month.

  • The other other catch: The content is only available on computer browsers and Android phones. Netflix isn't targeting the well-worn US market, which is saturated with iPhones (compared to the rest of the world, which is mostly Android).

Netflix is looking for its next 100M subscribers... It has 193M subscribers and added a huge 10M last quarter. But it's expecting growth to dramatically slow to 2.5M new subs this quarter. The lockdown streaming surge may have passed its peak, and streaming wars have heated up with newbies like Disney+. Netflix is looking to emerging markets like India and Brazil for its next 100M. It's hoping the cliffhanger at the end of Stranger Things S1E1 gets people subbing.

Fly

United drops its $200 flight change fee, then Delta and American (had to) follow

Pandemics, fires, and hurricanes... The chances of you having to change your flight in 2020 are... high. In August, TSA checkpoint passenger volumes hit their highest levels since March. But even at these highs, travel is still down ~60% from last year. Now airlines are turning to revolutionary (for them) ways to attract passengers:

  • On Sunday, United said it'll permanently scrap its $200 change fee for domestic flights.
  • Delta and American predictably followed suit yesterday and dropped change fees.
  • Southwest would've done it too, except it already doesn't charge them.

Why kill a profit puppy?... For decades, airlines have raked in big bucks from profitable add-ons like luggage fees. Add-on fees have 5X'd over the past decade and made up 15% of US airlines' sales last year.

  • Sounds counter-intuitive: You'd think that airlines would ramp up fees during a downturn. But in a pandemic, those change fees are sales-killers.
  • Airlines are desperate to get customers back, especially since their $25B government bailout expires on October 1st. Massive layoffs are on the horizon — American already warned it's cutting 19K jobs.

Oligopoly players move together... In a monopoly, 1 company controls a sector/service. In an oligopoly, a few dominate. In the US, 4 airlines control 80% of the flight market (#oligopular). Once United dropped its change fee, Delta and American followed ASAP. Oligopoly players can't afford to have 1 rival snag an advantage with customers. But they also maintain leverage over customers by acting together (if everyone charges fees, you have no choice). This time it worked in customers' favor.

What else we’re Snackin’

  • Zoomin: Zoom's quarterly sales more than quadrupled from last year to $663M for 1 reason that requires no further explanation.
  • KitKat: Choco-legend Nestle is buying peanut-allergy treatment company Aimmune Therapeutics for $2B.
  • Shroomz: Magic mushroom drug-backer Compass Pathways files to go public in the US.
  • Crispy: Utz, the maker of salty things you eat at sports stadiums, went public yesterday via SPAC after 99 years as a family-owned biz.
  • Droney: Amazon wins FAA approval for its Prime Air drone delivery fleet, joining UPS and Google-owned Wing in the droney skies.

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Tuesday

  • Earnings expected from Jamf

Disclosure: Authors of this Snacks own shares of Apple and Amazon

ID: 1318770

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Latest Stories

Walt Hickey
13h

When the chips are down

Super Micro Computer, which produces the kind of servers fueling the AI boom, declined to pre-announce earnings. This spooked investors and rattled the entire chips-producing sector. That sent Super Micro plunging 23%, and dragged down lots of their customers and suppliers down with it.

Markets
Bottom lines
16h
April 19: AmEx up, paint ain’t, banks sank
2024-04-19-norway-fund-site

Norway now has a wealth fund worth $290k+ for every citizen of the country

William Coulman, David Crowther19h
Sponsored by
Go Deeper with Market Depth

Nasdaq TotalView powers the need-to-know data serious investors rely on.

Read more
Scuba Diving in the Wild Blue Yonder in French Polynesia
Wind energy

More wind power capacity was installed last year than ever before

Tom Jones, David Crowther19h
World
Jack Raines
19h

Do you want to run the State Department of McDonald’s?

A couple of days ago, a tweet making fun at McDonald’s hiring a “Manager for Diplomatic Relations” went viral.

At first glance, the idea that McDonald’s, a burger franchise known for its double quarter pounders and perfectly salted fries, is expanding its diplomatic influence with policy makers in Foggy Bottom and the world at large sounds comical. But it’s actually crucial.

There are more than 40,000 McDonald’s locations spread across 115 countries around the world, and 90% of these stores are independently owned and operated franchises that pay royalties to the parent organization to operate. Tens of thousands of franchises operated by different owners with different beliefs, priorities, and values can get complicated, fast.

As we noted in Snacks in February, McDonald’s received heavy backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan after McDonald’s Israel donated thousands of free meals to IDF personnel. But it wasn’t McDonald’s, as an entity, that made the donations. It was the owner of the company’s Israel franchises, who was acting under his own volition.

Read more

There are more than 40,000 McDonald’s locations spread across 115 countries around the world, and 90% of these stores are independently owned and operated franchises that pay royalties to the parent organization to operate. Tens of thousands of franchises operated by different owners with different beliefs, priorities, and values can get complicated, fast.

As we noted in Snacks in February, McDonald’s received heavy backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan after McDonald’s Israel donated thousands of free meals to IDF personnel. But it wasn’t McDonald’s, as an entity, that made the donations. It was the owner of the company’s Israel franchises, who was acting under his own volition.

Read more
Tom Jones, David Crowther
19h
The data doesn’t lie: Taylor Swift is the biggest pop star on the planet

TOPSHOT-CORRECTION / AUSTRALIA-ENTERTAINMENT-MUSIC-SWIFT
Matt Phillips
19h

Nuke stocks up on AI excitement

For most of humanity, the thought of “nuclear-powered AI” sends a shiver down the spine. But the stock market is all for it! Just check out the list of top performing S&P 500 stocks this year. Just behind established AI plays — Super Micro Computer and Nvidia, you’ll find Constellation Energy, the largest operator of nuclear plants in the U.S. NRG Energy, which also operates nuclear plants, isn’t far behind. Bloomberg reports that CEO of power distributor Exelon — which spun off Constellation in 2022 — says in the Chicago area alone, AI could drive a 900% jump in demand for energy from data centers.

Tech
Rani Molla
20h

China makes Apple remove WhatsApp, Threads, Signal and Telegram from app store

In its latest move to restrict foreign tech, Beijing has ordered Apple to remove a number of popular messaging apps from its app store there, including WhatsApp, Threads, Signal and Telegram.

These apps had only been available through VPNs but were popular nonetheless, according to the Wall Street Journal.

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Exclusive | China Orders Apple to Remove Popular Messaging Apps

Exclusive | China Orders Apple to Remove Popular Messaging Apps

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Business
Rani Molla
21h

Tesla's recall reveals just how bad Cybertruck delivery numbers have been

Thanks to a recall of Tesla’s Cybertrucks, we now know how many of them have actually been delivered: 3,878 since the EV company began releasing them to customers in November.

In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck | TechCrunch

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

Your inbox is ready

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Markets
Millie Giles & David Crowther
21h

Cocoa hits $11,000

Cocoa prices are breaking records on an almost daily basis — with cocoa futures closing at (another) all-time high of $11,020 per metric ton yesterday.

That’s up 158% since the start of the year, and over 4x on the typical prices seen in 2022 — as crop production continues to fall short of demand.

Major cocoa-producing nations like the Ivory Coast and Ghana, which between them grow about two-thirds of the world’s cocoa, have seen excessive tree failure due to disease, changing weather patterns, and hot, dry conditions causing devastating droughts.

As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

Cocoa prices

Why the World of Chocolate Is in Crisis

Why the World of Chocolate Is in Crisis

Major cocoa-producing nations like the Ivory Coast and Ghana, which between them grow about two-thirds of the world’s cocoa, have seen excessive tree failure due to disease, changing weather patterns, and hot, dry conditions causing devastating droughts.

As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

Cocoa prices
4/19/24

Governments and companies tackle the climate crisis as damage intensifies

Jack Morse
Read
4/19/24

Extreme weather has cost the US $2.6T, and the number keeps rising

Max Knoblauch
Read
4/19/24

The cost of waste: e-junk and emerging tech add to America’s pollution prob

Nia Warfield
Read
4/19/24

The biz of electric vehicles: the EV transition hits speed bumps

Jamie Wilde
Read
Jack Morse
$10B blow
4/19/24
Bitcoin business will lose billions in the halving

Investors and miners have spent months prepping for the crypto-shattering event lying in bitcoin’s code. It’s finally arrived.

Silhouette of a bitcoin miner pulling a bitcoin logo from a hole
World
Friday, April 19th
4/19/24
What’s happening
Casey Newton
Platformer
4/18/24
Meta’s new AI paves the way for social networks where nothing is what it seems

Five ways of thinking about Llama 3, its latest large language model

Screenshot of Meta’s AI image generator, frog in a bathrobe
Power
Matt Phillips
4/18/24

World out of balance: It costs the US 3¢ to make 1 penny

The cost of producing a US penny rose 13% in fiscal 2023 to 3.07 cents. Yes, it means that Uncle Sam loses more than 2 cents for every cent it produces. (And no, you can’t make it up on volume.)

For the record, that’s the 18th straight year the penny’s face value has been below production costs, fueling calls for abolishing the lowest value denomination coin. Canada started to phase out the penny in 2013, joining Australia, Brazil, Finland, New Zealand, Norway, and Israel, according to Smithsonian Magazine.

3.07¢

Pop Quiz!

What’s the world’s busiest airport?
Don't be a sucka
Business
Rani Molla
4/18/24

Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.