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🧢 Netflix pulls a Disney


Waiting for a "Stranger Things" themed ride [kali9/E+ via GettyImages]

Last Week’s Market Moves
Dow Jones
34,480 (-0.80%)
S&P 500
4,247 (+0.41%)
14,069 (+1.85%)
$39,089 (+8.59%)

Hey Snackers,

The Statue of Liberty is getting a little sister — and the age gap is huge. 137 years after sending the original, France is shipping another Lady Liberty to the US as a gift of friendship.

Consumer prices spiked 5% in May from a year earlier, the highest annual inflation rate since 2008. Stocks still closed the week at a record, with gains led by the tech-heavy Nasdaq index.

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Netflix launches an online merch shop — here's why it could be pulling a Disney

Lupin Season 2 just dropped… Next up: Lupin pillows ($60 each). Last week, Netflix launched, an ecommerce site for flix-branded merch. Think: caps, hoodies, jewelry, and even furniture related to your favorite shows. The shop will sell exclusive, limited-edition merch for shows like Stranger ThingsMoney Heist, and The Witcher.

  • Old flix: Netflix already has licensing deals with retailers for apparel based on its original shows (think: "Hawkins Lifeguard" tee at H&M).
  • New flix: This is Netflix's first owned-and-operated retail shop to sell products directly to flixers. It could become a top destination for super fans.

Trying to beat the DPF blues… DPF = demand pulled forward. Netflix saw explosive growth last year, as we hibernated with laptops and ramen. But that led to subscription saturation (#subscripturation) — and slowing growth: Netflix added less than 4M subs last quarter, compared to nearly 16M in the same quarter of 2020. And Unlike Hulu, HBO Max, and others that show commercials, Netflix relies almost purely on subscription bucks.

  • Merch is a new way to boost sales in the face of slowing growth — and growing rivals. Disney+ has already crossed 100M subs (half a Netflix).
  • Merch potential: Global sales of licensed products tied to shows, movies, and characters were $128B in 2019 — and $49B in the US alone. The merch master = Disney.

This is Netflix’s 1st step in Disney-fication… because it may have hit peak streaming. Disney makes $$$ off its characters in movies, Disney+ series, and spin-offs — and through merch, theme parks, and toys (Elsa-themed everything). Netflix could benefit from a similarly self-reinforcing IP ecosystem. After merch, a next step could be show-themed video games or even Stranger Things theme park rides. Nintendo, which hit peak console during the pandemic, is Disney-fying itself with the upcoming Super Nintendo World theme park in Japan.


Coming up this week…

Diaper cakes FTW… Jessica Alba's Honest Company drops its first earnings report as a public company on Wednesday. Honest sells "clean" baby, beauty, and household products (including: cakes made of diapers). Total sales grew 28% last year, with "Household and Wellness" sales more than doubling (think: prenatal vitamins, refillable cleaning kits). Buuut: the ten-year-old company is still unprofitable. Honest shares have dropped 20% since last month's IPO.

Earnings on Aisle 5… Grocery giant Kroger delivers earnings on Thursday. Kroger and other grocers thrived last year as we swapped menu meals for pantry classics. Since then, Americans have been swapping grocery bags for doggy bags: restaurant sales reached a new pandemic peak in May. Meanwhile, packaged food prices are rising (#inflation), and workers are in short supply. Now, Kroger plans to raise wages. TBD if these factors hit its earnings last quarter.


Stories we're watching…

Crypto's tender moment… Last week, El Salvador became the first country to approve Bitcoin as legal tender. Businesses there will be required to accept Bitcoin as payment, and Salvadorans will be able to pay taxes and bank loans in BTC. This could be a valuable experiment for developing countries considering crypto as legal tender, since it can be a cheaper way to move $$$ across borders. But analysts worry about the economic risks posed by BTC’s extreme volatility.

Big vax headlines… The US will donate 500M doses of Pfizer's Covid vaccine to 100 countries, in an effort to stem the pandemic. Globally, Covid deaths this year have already exceeded 2020’s toll, as cases surge in poor and developing countries (see: The Great Divide). Meanwhile, the US halted new shipments of J&J's one-shot Covid vaccine as states deal with too many expiring doses. Developed nations are on track to vaccinate 72% of their citizens this year, versus ~30% for developing nations.


Highlights from last week…

  • BNPL: "Buy now, pay later" is booming — Europe's biggest private fintech Klarna just hit a $46B valuation.
  • Historic: The G7 agreed that multinational companies should pay a minimum tax rate of at least 15% in each country in which they operate.
  • Un-ransomed: Crypto prices dropped after US officials recovered a large chunk of Bitcoin that was paid as ransom to the Colonial Pipeline hackers.

What else we're Snackin'
  • Chill: The simple trick to making your weekend feel longer.
  • Read: The 50 hottest new books to dive into under the summer sun.
  • Live: Four science-backed ways to identify and stop negative self-talk.
  • Sleep: How to end the cycle of "revenge bedtime procrastination."

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The Snacks Daily Podcast

"Everyone calls it the Uber of China — but it could become the Amazon of the world."

Chinese ride-hailer Didi Chuxing just filed to go public, in what could be one of the biggest IPOs everTune in to hear why Didi is more than just a ride app.

This Week
  • Monday: Earnings expected from Hexo Corp
  • Tuesday: Earnings expected from OracleH&R Block, and La-Z-Boy
  • Wednesday: Earnings expected from Honest Co and Lennar Corp
  • Thursday: Weekly jobless claims. Earnings expected from Kroger and Adobe
  • Friday: Group stage soccer continues in the Euro 2020 tournament, which is being held one year later than planned

Authors of this Snacks own shares of: Uber and Disney, and Bitcoin

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