Numlock News: May 15, 2019 • The Office, Apple Slices, Uber Shorts
By Walt Hickey
Five years ago, McDonald’s rolled out healthier options for their kids-focused Happy Meals, and it seems to be working. In September 2013, 37 percent of Happy Meals were served with milk, water or juice rather than sugary soda, and as of September 2018, that figure stands at 52 percent. The company said it sold 250 million sides of apple slices in the U.S. alone in 2018.
Uber is a firm that cosplays as a car service, but is effectively betting it’ll one day dominate as the private contract labor market for the future economy to come. It’s also been pretty brutalized by investors in the wake of a bleak IPO. That may be related to the fact that as a car service it’s actually pretty terrible at making a profit, who can say, invisible hands and what not. Anyway, a lot of people are betting against Uber right now: short interest of the company’s stock totals $768 million and represents 21.71 million shares of the company, or 11.51 percent of its stock. It’s no better for rival Lyft, which has lost 30 percent since March: 62 percent of the float of Lyft is shorted.
Your Job’s A Joke, You’re Broke, Your Love Life’s DOA
A new survey of adults aged 18 to 29 found that the presence of The Office, Friends, Marvel Movies and Disney shows or movies on Netflix is seriously keeping them attached to the service. Many said they’d consider cancelling their subscription if those media were removed. Well, some of that media is totally getting removed — Disney’s launching their streaming service this fall, and the rights holders of Friends and The Office are launching their own as well, if slightly later. The poll found 29 percent of those young adults who have a Netflix subscription would drop it with the loss of The Office, 17 percent if Friends left, 35 percent with the loss of Marvel films and 26 percent with the loss of the Disney stuff. Were all of those to leave, 49 percent would be cancelling. Clearly, saying they’d hypothetically cancel is not the same as cancelling, but the reality is that Netflix has yet to develop an in-house product that rivals the popularity of the syndicated series and that’s going to get them in trouble.
Impossible Foods makes a plant-based burger that, if not exactly like the real thing, certainly gets the closest anyone’s pulled off yet. As of Monday it had raised $300 million in recent funding, bringing the total raised to $750 million for a $2 billion valuation. Beyond Meat, a rival that went public in May, had a $1.5 billion market cap before its IPO, but is now worth more than $4 billion after going public. The reason for the frenzy is that the value of the global meat substitute market is projected to hit $5.81 billion by 2022, which is market-speak for “people like veggie burgers now, we just had to stop calling them veggie burgers and start branding them like video game engines or ‘60s Fantastic Four gadgets.”
New tariffs stemming from the escalation of the trade war with China are poised to seriously hit consumers unless retailers take a serious hit on earnings. The 25 percent tariff is on $40 billion worth of goods purchased directly by consumers like clothing, furniture, handbags and luggage. Analysts say retailers will have to raise prices 2.3 percent to maintain current margins, and if they don’t raise the prices retail earnings will be squashed by 39 percent.
Activists and legislators representing the more conservative, southern parts of Illinois have put forth a bill that splits the state in twain, with Chicago in one state and the lower portion in the other. There are 12.7 million people in Illinois, and 9.5 million live in the broader Chicago metro area. Windy City political dominance has some down south feeling stifled and as if they are not getting their fair share. Well, there’s absolutely an imbalance in Illinois: Southern Illinois received $2.81 in state funds for every dollar its residents paid in taxes compared to the 90 cents paid on the dollar in Cook County. So maybe it’s not that unfair.
We’re in the middle of network upfronts, the part of the entertainment calendar where the sausage gets made and enormous blocks of advertising on major American networks get bought and sold over slick presentations outlining what buyers can expect on the network in the coming Fall season. After years of cultivating relationships with the biggies, there’s a new class of consumer-focused brands that have done well and are making a splash on to network. The numbers are still in the blue chip companies’ favor — for instance, Procter & Gamble, Coca-Cola and General Motors spent $3.95 billion on TV advertising last year — but the newer digital companies are beginning to make a dent. Wayfair, Pelaton, Warby Parker, Blue Apron and Casper are increasingly buying their way into the big leagues, having spent $139.2 million collectively on TV last year. And to think, just a few years ago they were basically the Avengers of “this podcast is sponsored by…”
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