No Buffer for Streamers

Plus: This Japanese CEO really owes it all to his company. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

February 9, 2023

Read in Browser

Good morning.

How do you know your AI isn’t as cool as the other guy’s? Look at your stock price.

Shares in Google parent Alphabet closed down 7% on Wednesday after the company held an event debuting its new conversational AI named Bard, a direct competitor to Microsoft’s ChatGPT. Alphabet didn’t help matters by releasing a promotional video that featured Bard botching a handful of fact-based queries. Both tech giants have announced that they will integrate the software into their search engines, but Wall Street seems to be placing its bets on the bots out of Redmond.

Morning Brief

•

Warner-Discovery is not streamlining its streamers.

•

Masayoshi Son can’t PowerPoint his way out of this one.

•

A third airport for an overcrowded Dallas?

Streaming

Warner-Discovery Still Can’t Settle on a Coherent Streaming Strategy

The state of the Warner-Discovery union is… we wish we could tell you.

After WarnerMedia folded into Discovery last year, the newlyweds made the merger of Discovery+ and Warners’ HBO Max sound as straightforward as seating Tony and Carmela Soprano next to HGTV’s Chip and Joanna Gaines at a dinner party. Now, the company says it intends to merge-but-not-quite-merge the two platforms in the latest example of an increasingly unstreamlined streaming landscape.

It’s Not TV, It’s [The-Yet-To-Be-Named Warner-Discovery Streaming Service]

In the old world of television, anyone paying an extra few bucks to add HBO to their cable bundle was almost always also sending a few bucks a month in carriage fees to Discovery for access to its suite of channels like HGTV, TLC, and the Food Network – even if they were hardly ever washing down an episode of Boardwalk Empire with an episode of Dr. Pimple Popper. It was a mutually beneficial status quo for just about every media company involved; carriage fees were the cake, ad revenue was the frosting. Then Netflix squashed said cake with a sledgehammer, cord-cutting ate into passive income, and media companies were forced to spend big to convince customers to sign-up for their various à la carte streaming slices.

Harkening back to the old days, the Warner-Discovery merger promised a titanic streaming service flush with an unrivaled content library, roping TV watchers of all stripes into a slightly more expensive bundle (the company has hinted the expected combined streamer will have a monthly price tag a little higher than HBO Max’s current $15.99). But on Wednesday, the company announced it is shifting course, slightly, as it navigates the same streaming shoals facing rivals:

•

While a (still unnamed) service combining HBO Max with most of the Discovery+ library remains on the horizon, the company announced it will still offer Discovery+ as a standalone service under the assumption that a sizeable portion of its current 20 million subscribers would not convert to a more expensive plan (Discovery+ currently runs just $4.99 per month with ads, and $6.99 without).

•

Viacom took a different tack last week when it announced it would merge its two services, Paramount+ and the streaming version of Showtime, into a single service, with a price hike likely on the way. In Disney’s earnings call on Wednesday, the House of Mouse declined again to merge its trio of streaming services — Disney+, Hulu, and ESPN+ — while announcing a 2.4 million Disney+ subscriber loss thanks in large part to a recent price hike (its traditional linear TV segment still largely buoys the company, posting $7.3 billion in revenue last quarter).

Churn and Burn: “The biggest difference between cable bundle vs. streaming is, it’s much easier to cancel a streaming service,” HBO and HBO Max chairman/CEO Casey Bloys said in an interview with The Ringer’s TV-focused The Watch podcast last week. “That dynamic, that churn, is really really problematic. And that’s a big reason why it’s hard to make money in streaming.” And nobody, Bloys explained, knows how much they must spend on content production to keep subscribers paying month to month. If you’re feeling PTSD about locked-in, year-long contracts, we sympathize.

– Brian Boyle

Wealth

SoftBank CEO Owes His Own Company $5 billion

You know how some chief executives cut their own compensation when things aren’t going swimmingly if only to signal they “get it”? Masayoshi Son, CEO of SoftBank, doesn’t really have that option. And therein lies a story.

Son owes his massive Japanese holding companies an astounding $5.1 billion on side deals he made with the aim of complimenting his salary, Bloomberg reports.

Silicon Valley’s Sugar Daddy

SoftBank is famous for two things: busting out ostentatious slideshows with cartoon unicorns at its earnings calls, and bankrolling half of Silicon Valley through its “Vision Fund.” Son spearheaded the Vision Fund’s tech-enamored strategy, leading the charge on investments including Uber (which is actually doing okay at the moment, although SoftBank dumped all its shares last August) and WeWork (which hasn’t been doing well, maybe ever).

With the tech industry’s fortunes looking much shabbier than in previous years, the Vision Fund has been taking a serious beating. This week it posted a net loss of $5.9 billion for Q4, its fourth quarterly loss in a row. Not only were there no cartoon unicorns this quarter, but Son himself also did not attend the company’s earnings call for the first time ever.

While he was pouring billions into US tech, Son was also taking personal stakes in the companies SoftBank was investing in, borrowing against his SoftBank shares to do so:

•

Son holds stakes in three separate vehicles at SoftBank of 17.25%, 17.25%, and 33%.

•

The personal stakes have raised eyebrows in the past, but Son has advocated for side deals on the basis that they give a way to beef up executive pay packets, which are much lower in Japan on average than elsewhere.

Of course, there’s still time for Son’s investments to turn around, and according to Bloomberg, there’s no upcoming deadline for him to pay back the debts.

Wage Against the Machine: While Son was able to artfully plump his compensation, Japan’s workers have been dealing with a worrying case of stagflation, with some not seeing a raise in 30 years. Last month Prime Minister Fumio Kishida urged companies to ratchet up their employees’ wages. Fashion retail giant Uniqlo was quick to respond with a raise of as much as 40% for some workers in January, and this week Nintendo followed suit with a 10% raise despite profits looking like they got hit with a Mario Kart blue shell.

– Isobel Asher Hamilton

Sponsored by The Motley Fool

The Motley Fool’s 2023 Top Stock Picks Have Been Announced

And you can get them right here.

What makes this batch of picks special? Well, besides the potential of the actual stocks themselves, we’ve got two words for ya:

Buying opportunity.

When you have a year of returns as dismal as 2022, it’s easy to get discouraged… but, in the eternal words of Warren Buffett, “the best chance to deploy capital is when things are going down”, and with the market where it is now, the opportunity to buy low and hold for the long haul has never been better.

Best of all, the companies selected by Stock Advisor cover all your bases:

•

3 top dividend stocks, so you get paid back as you go

•

3 high-potential stocks that Stock Advisor thinks could 10x in time

•

3 value stocks for low-risk investors

…not to mention additional picks for specific categories like energy and more.

Ready to get in on the proverbial stock sale?

Get Stock Advisor’s Best Stocks for 2023 right here.

Travel

Dallas Is Getting A Third Airport

(Photo credit: Michael Zanussi/Flickr)

Everything’s bigger in Texas, except for airports. There’s just more of them.

Dallas, the Lone Star State’s third-largest city, looks ready to welcome its third airport thanks to northern suburb McKinney, Texas voting to approve the construction of a brand-new commercial terminal at its single-runway airport.

A Lone Star, But The Airports Are Plenty

Between Dallas/Fort Worth International Airport, the world’s second-busiest airport, and Dallas Love Field, a robust regional hub and home base for Southwest Airlines, the metro area already played host to about 89 million passengers last year — seemingly more than enough for any large city. So it says something that the McKinney City Council voted unanimously on a $200 million bond package to retrofit their airfield, used mostly for private air travel, into the Dallas area’s third option.

McKinney, with a population of just over 200,000 (or roughly the same amount of travelers that pass through DFW on an average day), is located about 30 miles north of Dallas, making it a suburb of a metropolis that is now the fifth-fastest-growing city in the US. Residents of McKinney will have noticed that things are getting a little tight in The Metroplex, and they are looking to capitalize:

•

Thanks to low income taxes, corporate reorganizations, and Covid migration, more than 97,000 people moved to the Dallas/Fort Worth area between June 2020 to July 2021, according to data from UNC Chapel Hill. That’s the most robust growth the area’s seen since 1950.

•

In addition to Southwest, AT&T, and ExxonMobil, 16 other Fortune 500 companies call Dallas home, which speaks to job creation in the area.

Dallas might not be done. “This region will support not just a third, but a fourth airport, and over time, probably a fifth,” McKinney Mayor George Fuller told Bloomberg on Wednesday.

Wall Street, or Plano? Even a bank synonymous with New York City is hiring in North Texas. JPMorgan Chase’s $300 million state-of-the-art Plano campus now has almost 30,000 employees on-site and America’s Banker is not done adding to his Lone Star headcount. “There are more JPMorgan Chase employees in Texas than any other state outside of New York,” JPMorgan CEO Jamie Dimon said in 2019. “I’m sure it will be No. 1 soon.”

– Thornton McEnery

Extra Upside

•

Microblogging no more: Twitter expands its character limit to… 4,000.

•

Food delivery challenge: ByteDance is testing a DoorDash rival on the Chinese version of TikTok.

•

Did someone say, “comfortable retirement?” This $1 billion startup, founded by a Princeton alum, is carving a new path to this hallowed goal. If you’re one of the whopping 110 million Americans above the age of 50, or just a wise Millennial looking to get ahead, SmartAsset’s simple no-cost tool will connect you with up to 3 vetted financial advisors serving your area. In just five minutes, you can be on the path to stable financial longevity. Get your matches today.*

*Partner.

Just For Fun

Tough return to office.

New moving technique.

ADVERTISE // CAREERS

No longer want to receive these emails? Unsubscribe here.

//campaignmonitornewsletter.everestengagement.com/ea/BntD2QJCyg/?e=postie@btcnews.com.au’ width=’1′ height=’1′ style=”margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !important;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !important;padding-right:0 !important;padding-left:0 !important;border-width:0 !important;height:1px !important;width:1px !important;-ms-interpolation-mode:bicubic;” />