🍿 Netflix launches free streaming
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.
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.
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.
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Tuesday
- Earnings expected from Jamf
Disclosure: Authors of this Snacks own shares of Apple and Amazon
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