HBO + Friends = HBO Max

Wednesday, July 10, 2019 by Robinhood Snacks | Disclosures

When Phoebe loses her HBO password

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10-Yr US Treasury

Hey Snackers,

Taco Bell is suffering through a tortilla shortage. Burger King just added $1 tacos. Coincidence?

Markets barely budged Tuesday as investors prep for Fed Chairman Jerry Powell — he'll spend the next two days testifying to Congress on the central bank's policy plans.

1. Pepsi's earnings report just showed us it's obsessed with sparkling water

Pepsi's earnings weren't shocking... Revenues inched up 2.2% and soda sales hardly grew. Then something happened in the press conference after the report's release — the CEO couldn't stop talking about how much he's into Pepsi's new sparkling water brand, Bubly. Really into it.

  • Could be one of our next $1B brands
  • We're super happy, really, with this opportunity
  • Huge opportunity ahead of us in Bubly in creating a whole new category of beverages

It's all about the bubbles, baby... Over the past year, Bubly has more than doubled its share of the sparkling water market, from 2.3% last year to 6.5% now. Here's how Pepsi's drinking into LaCroix and Perrier's market:

  • It acquired home-spritzing seltzer system SodaStream for $3.2B last year.
  • It launched Millennial-eye-candy-branded sparkling water Bubly, recently expanding to 12 flavors.
  • It spoiled Bubly with a Super Bowl commercial as a first birthday gift.

This is about Millennial moms... Pepsi's CEO described them as Bubly's true target. The next generation of moms is more educated, more employed, and expected to spend more money than the last. Pepsi's ditching plastic bottles and putting Bubly in more environmentally-friendly cans, hoping Mom will buy it for herself and the kids. That's how you raise the next next generation of customers.


🚀🚀🚀🚀... Sir Richard Branson wants to be your interstellar concierge — his space travel startup Virgin Galactic is going public. Technically it's not an IPO — a public company called Social Capital Hedosophia already exists and will merge with VG (the name Virgin Galactic will stay when the deal closes this year). It's the 1st time Earth-bound humans will be able to own stock in a space exploration company.

Three very rich men are racing to space... But they're not all the same. The big difference is the cargo.

  • SpaceX = "FedEx for space": Elon Musk's space company sends rockets skyward, usually carrying satellites and space equipment for NASA and other space agencies.
  • Blue Origin = "Uber for space": Jeff Bezos' company plans to shuttle people out to space, and eventually bring natural resources from other planets back.
  • Virgin Galactic = "JetBlue for space": Unlike Jeff and Elon's rockets, which shoot straight up, Richard's is more airplane-ish, taking off and flying to an altitude of 50 miles. It's had two successful flights and plans to take tourists up soon.

Virgin Galactic's following Tesla's growth strategy... Tesla and VG both started by catering to the ultra wealthy, eventually hoping to lower costs and become mainstream. Virgin Galactic's also shockingly bullish, thinking it'll become profitable by 2021 as it collects $300K/flight from thrill-seeking millionaires who want to mid-orbit for the 'gram.


"Storytelling" is the star... The word was dropped a disproportionate 4 times in the AT&T press release about HBO Max, the new streaming service launching in the spring of 2020. The storytellers — including Nicole Kidman and Reese Witherspoon — will create original shows for HBO. But the real unspoken highlight is the unoriginal.

Reruns are HBO Max's differentiator... AT&T acquired HBO's parent, Time Warner, last year. So it now owns (and will include in HBO Max) a wealth of "the-one-where-she-did-BLANK"-style episodes.

  • Time Warner icons: Warner Bros, TNT, TBS, Cartoon Network, Adult Swim, Looney Tunes.
  • HBO legends: Game of Thrones, The Sopranos, The Wire, Sex and the City, Curb Your Enthusiasm.

Reruns are Netflix's Achilles heel... Netflix has poured billions annually into original content, but this stat reveals a dramatic problem: 8 of the top 10 shows on Netflix aren't Netflix originals. It's definitely losing its #1 and #2 most-streamed shows — The Office to NBC in 2021 and Friends to HBO Max in 2020 — just as HBO Max reruns itself.

What else we’re Snackin’
  • Staring: Zoom's conference call tech may have a serious flaw: letting hackers hijack Mac cameras
  • Unfit: Levi's falls 7% after blaming its expensive IPO for lower-than-expected profits
  • RIP: Apple kills off its $999 MacBook Air and 12-inch MacBook in a laptop version of "The Red Wedding"
  • Situation: Victoria's Secret parent L Brands drops because of ties between its CEO and sex offender Jeffrey Epstein
  • Fresh: Quip, the direct-to-consumer toothbrush disruptor, just launched a dental insurance alternative
  • Winning: Hedge funds just enjoyed their best 1st half of a year since 2009
Snacks Daily Podcast

Today's 15-minute Snacks Daily pod:

  • Biting deeper into Virgin Galactic's public flight, Pepsi's Bubly obsession, and AT&T's anti-Netflix HBO strategy
  • Earnings from Bed Bath & Beyond
  • Fed Chairman Jerry Powell testifies to the Senate on the central bank's interest rate plans
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