Thursday Sep.17, 2020

🍿 Mulan + Tenet = corona-flops

_Not looking forward to meeting with the film investors_
_Not looking forward to meeting with the film investors_

Hey Snackers,

Authorities have confirmed that snakeskin is not a valid face covering, "especially when still attached to the snake," after a man wore a live snake as a mask. And you thought bandanas were edgy.

The Fed signaled that interest rates will stay near 0 through 2023 to stimulate the economy. We're more likely to borrow, spend, and invest when interest rates are low (think: car loans and credit card bills). Stocks still dipped yesterday.

Watch

Mulan & Tenet: the 2 biggest pandemic movie theater releases basically failed

Antiviral opening weekend... Not in a good way. Two blockbusters dropped this month and the turnout was... underwhelming. First came Warner Bros' much-hyped thriller "Tenet." AT&T's CEO (AT&T owns Warner Bros) had bravely insisted that Tenet would have a theatrical release. The Christopher Nolan mega-flick was delayed three times before dropping at US theaters on Labor Day Weekend. The result:

  • Budget: Tenet cost $205M to produce, not including marketing costs. It needs to reach ~$400M in sales to break even.
  • Earnings: Tenet made $9M during LDW. So far, it has made less than $30M in the US and ~$200M globally — a far cry from making up its costs.

Stream it?... Disney took a different approach with blockbuster "Mulan." Instead of debuting in US theaters, Disney released Mulan on Disney+ for $30 — good call, since Mulan's global theatrical release was an epic fail. On top of the pandemic, Mulan got hit with a boycott. It has brought in just $38M from theaters but it cost Disney ~$300M.

  • Disney hasn't released the numbers, but according to a report "Mulan" made $33M from Disney+ on opening weekend. For reference: record-breaking "Trolls" made $95M within three weeks of dropping on Apple TV.
  • One research firm is estimating that as many as 9M users purchased "Mulan," a $270M windfall for Mickey. But Disney has been tight-lipped, only saying that it was "very pleased."

The world wasn't ready for theatrical releases... yet. Tenet and Mulan's theatrical flops have scared off studios. Now Warner Bros is delaying the “Wonder Woman 1984” theatrical release, and Disney is reportedly delaying the release of Marvel’s “Black Widow.” These films have mega-budgets, and it'll take a mega-turnout to turn a profit — that doesn't seem to be possible right now.

Deliver

Amazon expands its world domination plans to the suburbs

Claaassic Amazon... Amazon couldn’t fulfill its two-day delivery pledge earlier this year during the pandemic shipping surge. Its solution: take over the suburbs. The Zon has already hired 175K new workers during the pandemic. Now it's reportedly planning to open 1.5K small delivery hubs in cities and suburbs across the US.

  • The Present: Amazon packages leave from warehouses in rural, non-city/suburb areas.
  • The Future: Amazon warehouses are next to your local coffee shop, your grocery store, and inside your mall.

Out of the many things that Amazon is aggro about... it's most aggressive with delivery times. Amazon will deliver ~70% of its own packages this year from its own warehouses (sorry UPS). Being closer to you means being able to deliver faster. That's more important than ever for Amazon:

  • Walmart and Target are leveraging their thousands of stores as distribution centers for same-day delivery. Their constant proximity to you is their biggest strength over Amazon.
  • Walmart just launched its $98/year Prime competitor, aka Walmart+ — it includes free same-day delivery.

This is the next phase of Amazon's domination... Besides Whole Foods, some delivery vans, and annoying Alexa, you don't really see Amazon in your non-digital life. Instead of empty department stores in malls, we could be seeing Amazon warehouses soon. Amazon's digital empire will take a clearly visible form in our day-to-day lives.

Bank

Goldman tries to appeal to regular people with the "buy, learn, apply" strategy

Jordan Belfort has left the chat... Wall Street OG Goldman Sachs is known for investment banking and underwriting IPOs (all while smoking cigars in the Hamptons). Its clients are mostly companies, governments, and billionaires — not retail customers like us. But Goldman has been trying to get more consumer-y and #relatable:

  • Marcus: Goldman's brand for regular people. The website launched in 2016 with savings accounts and loans. Goldman finally shipped an app in 2020.
  • Clarity Money: The personal finance app Goldman bought in 2018 for $100M. It helps you track your Trader Joe's sprees and subscription spend (so relatable).
  • Marcus Insights: The free financial management tool Goldman just launched in its Marcus app. You link your other bank accounts to get a full picture of your finances (yep, like Mint).

Lizzie McGuire has joined the chat... For existing Marcus customers, the Insights tool is a value-add. Once Marcus makes it available to non-customers, it can use it as a growth strategy. Marcus could also leverage the info it gains on your spending habits from linked accounts to target you with other products. Next up on its retail roadmap: checking accounts and investing.

It's the "buy, learn, apply" acceleration strategy... Goldman could've built a tool like Clarity money itself, but buying it accelerated its roadmap to #relatability. Also: Goldman didn't want to build a whole product from the ground up without knowing if it would succeed. Now it's using its learnings from Clarity to launch insights in Marcus.

What else we’re Snackin’

  • Cold: Snowflake shares more than doubled in the biggest software IPO ever. The cloud platform went public yesterday (ticker: "SNOW").
  • Faulty: A congressional (238-page) report faults Boeing and the FAA for the 737 Max crash disasters.
  • Test: Gauss and Cellex are announcing the 1st rapid COVID-19 test that can be fully performed at home (no lab or doctors involved).
  • Play: The Big Ten changed its mind about canceling its 2020 college football season, aiming to kickoff an 8-game season in late October.
  • Wow: Oracle’s deal to be TikTok’s new “trusted technology partner” could bring it more than $1B in annual cloud revenue.
  • Cell: AT&T considers offering cheaper cellphone plans subsidized by ads — $5 to $10 less on your phone bill in exchange for your attention.

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

Thursday

  • Weekly jobless claims
  • Earnings expected from Scholastic

Disclosure: Authors of this Snacks own shares of Amazon, Walmart, and Disney

ID: 1334894

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“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.

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Meta said the 15 trillion tokens on which its trained came from “publicly available sources.” Which sources? Meta told The Verge’s Alex Heath that it didn’t include Meta user data, but didn’t give much more in the way of specifics.

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Working as a seller called Big River, a secret group of Amazon employees gained access to rival platforms, including Walmart, FedEx, and Alibaba. They used Big River email addresses and went to seller conferences as Big River employees. They even stayed hidden within Amazon itself. These employees would take screenshots of competitors’ systems that they would then show others at Amazon in person to avoid an email paper trail.

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