NBC's Peacock = The "flaky friend" of streaming
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NBCUniversal unveils streaming service Peacock – it's good, but intentionally not *too* good
A bird of many colors... NBCUniversal (owned by Comcast) just unveiled details on the 271,366,768th player in the streaming wars, Peacock. Here's how much you'll pay/get with NBC's streaming option:
- Basic version: A free, ad-supported service with lots of shows, including live sports/news (and all seasons of The Office, which leaves Netflix in 2021)
- Premium version: Double the number of shows/movies as Basic (also ad-supported). But free for Comcast/Cox cable subscribers and $5/month if you're not. This one gets you the Olympics and late-night talk shows too (Basic doesn't).
- Extra premium: For an extra $5/month (for both cable subscribers and cord-cutters) the ads go away.
Catch 'em all... Peacock is a play to offer great streaming, but not so great that Comcast's cable customers cut the cord. Great-ish. Peacock's entering a crowded pool:
- Streaming Natives: They've been streaming since the start (Netflix, Quibi, YouTube TV).
- Cable Dinos: Traditional media companies that are transitioning to the streaming world (Comcast, Disney, AT&T, CBS).
- Perk Bait: These companies' core products have nothing to do with TV, but they offer streaming shows/movies as a perk to lure you into their main products/services (Amazon, Apple).
Trying to keep everyone happy... is like spending an hour at 3 different parties (on the same night). Streaming Natives like Netflix are 100% committed to streaming. Perk bait like Amazon Prime doesn't disrupt Amazon's core product. If NBC went all in on streaming, it would disrupt its main biz (Comcast's cable TV) by accelerating cord-cutting. Disney is willing to lose its cable TV biz by going all-in with Disney+ — Comcast wants it all (cable and streaming). We'll see if the strategy works.
China holds German car companies hostage in the 5G battle
To build or not to build... a Huawei-powered 5G network. That's what Germany's asking itself — China just threatened "consequences" if Germany doesn't partner with the Chinese-owned tech giant Huawei to build its 5G future. Some context:
- Germany is big on cars (think Volkswagens, BMWs, Mercedes).
- And the German brands sell more cars to China than anywhere else on earth.
- But the US is pressuring Germany to not work with Huawei.
- Now China's threatening to hit Germany's car industry if this Huawei deal gets frozen out.
Feeling the pressure... The US is leaning on Europe to avoid Huawei — it's worried the tech company is acting like a Chinese gov spy on American/Euro communications (so it's threatening fresh tariffs). But now that China's pressuring Germany's prized auto industry, German chancellor Angela Merkel faces an even tougher decision: US or China.
Between a rock and China... Despite the influence of US pressure, the global economy is also heavily dependent on China: (cough, 1.5B people and the world's 2nd largest economy, cough). China's increasingly using that size to pressure not just industries, but entire countries. Here's where else we see it:
- Big Hollywood studios often won't produce movies critical of China — The last Avengers brought in $614M in China alone.
- British soccer team Arsenal distanced itself from a player who was critical of China’s treatment of Muslims.
- And over in hospitality, airlines and Marriott hotels have apologized (profusely) for listing Taiwan as a separate country.
Gap reverses plans to spin off Old Navy into separate company
After a walk down memory lane... '90s hoodie legend Gap decided yesterday that it won't spin off Old Navy into a separate company. Gap shares spiked 9% on news of the breakup reversal (awkward, because the stock also jumped on the breakup announcement last Feb). Looks like investors changed their minds about this relationship (and sometimes stock moves don't make sense).
The initial idea... was that Gap and Old Navy would be better able to serve their distinct customers and business needs by operating as separate companies (i.e., break up to fulfill their own unique growth paths). It changed course for two main reasons:
- Cost: Breaking up is hard, and sometimes expensive – Gap said that the costs/complexity involved in the split wasn't worth it.
- Revelation: While Gap was prepping for the breakup, it noticed areas for improvement and inefficiencies in Old Navy's biz that they can now work on.
- FYI, reality: Gap is the slowest growing and least profitable of all its brands (Banana Republic, Athleta, Hill City...), so it can still piggyback off Old Navy — but now Gap shareholders won't earn a payout from selling off their top brand.
2020 could be the year of relationship re-evaluation... Big clothing retailers were looking to split off their best/worst brands throughout 2019 — Gap's move could change that trend.
What else we’re Snackin’
- Big T: Google's parent, Alphabet, hits a trillion-dollar valuation for the 1st time — welcome to the Big T Club with Apple, Amazon, and Microsoft
- WeOut: WeWork's leasing activity has fallen 93% since its failed IPO (only 4 landlords signed with the coworker last quarter)
- Eco-Soft: Microsoft is boldly saying it will go "carbon-negative" by 2030 (i.e. not only reduce its emissions, but actually help remove carbon from the atmosphere)
- Pod Life: Apple sold nearly 60M Airpods in 2019 (almost 2x as 2018) – it now dominates 71% of the wireless earbud market
- Wiki-Back: Turkey brings back Wikipedia after a 2-year ban (the Turkish gov didn't like Wikipedia's description of it)
Friday
- Earnings from State Street
Disclosure: Authors of this Snacks own shares of Volkswagen and Amazon
ID: 1061755