July 15, 2020
what we are keeping an eye on...
empowering you with insights and information from the edge of today’s headlines
Technology
One rule of creating a new business or product is to test it with consumers, make sure they really want it or will use it. Why bother to build and release a product that no one cares about or will pay for and that might actually alienate your customers. Unfortunately, two of the most successful technology companies seem to have done just that.
Airbnb rolled out Kindness cards: a tool that was designed to let guests praise or acknowledge their former hosts. The kicker — guests were asked to make a monetary donation to the hosts. While the travel industry has been severely impacted by the pandemic, if we go back to first principles, it is because travelers (aka guests) have lost their jobs. Landlords (who by definition own property and in the long-term might be better off than renters) should be asking for rent/mortgage relief from the government not necessarily from former guests. (At least one third of Airbnb properties are owned by hosts who manage at least 25 properties, so a large section of hosts aren’t families renting out an unused bedroom.) At the beginning of the pandemic, Airbnb came under fire for allowing guests to cancel their reservations, although it later promised to reimburse hosts for some of their losses. The company seems to be attempting to rebuild its community, but we’d stay away from our pocketbooks.
On the other hand, LinkedIn tried to rip off its Brooks Brothers khakis and replace it with a little bit of SnapChat flair by introducing LinkedIn Stories. LinkedIn may be a social media platform, but its focus is business and careers. LinkedIn had already seen some backlash as users were attempting to use its platform as a dating (or trolling) site. While we applaud the idea of letting users record their names and attach an audio file, so we don’t mispronounce them on interviews, we really don’t need personal commercials while we are hunting for our next job.
US Politics
Celebrities and politics have had an interesting track record: Ronald Reagan, Arnold Schwarzenegger, Jesse Ventura and Kanye West (who just ended his presidential run) to name some of the more successful matchups. This week Chris Evans, of Capitan America fame, jumped into the race as well, but with the intention of informing the electorate.
Evans launched A Starting Point: a video-based platform for civic engagement. Evans had been active in interviewing politicians on his social media channels, and now he has branched out in an effort to aggregate political knowledge in a sea of misinformation. The platform contains short videos about policies, politicians and issues. Let’s hope the Avengers can engage a more informed electorate and bring more people to the polls.
Media
With the rise of internet news feeds, local journalism has been having a rough time finding a sustainable business model. Craigslist killed the classifieds and Facebook delivers news from your friends rather than your local newscaster. We’ve seen several billionaires step in to save prominent news brands like Jeff Bezos buying the Washington Post or Marc Benioff buying Time Magazine, but a significant number of local news outlets have been struggling and the pandemic has only increased the burden.
Hedge funds have been scooping up local newspapers, consolidating the industry. This week, McClatchy Co, which operated 30 daily newspapers, was purchased by Chatham Asset Management (which also owns the National Enquirer). Currently, over 45% of the US newspaper circulation is controlled by hedge funds or private equity. The business model for newspapers had traditionally been about investigations and information with a boost from advertising, but we now may see a shift to profits, consolidation or all digital (meaning less human reporters as well).
Adding to that uncertainty, Nieman Lab found that many local news sites are actually hyperpartisan outlets (funded by PACs or political operatives) in disguise. These sites are intensifying the partisan divide especially in swing states and may be limiting access to community information.
We are confused about: Last week, you might have heard of the “letter”: an open letter published by Harper’s Magazine, signed by over 150 media professionals, asking for an end to “cancel culture.” The letter drew severe backlash, and then was immediately followed by the resignations of Bari Weiss from the NY Times (with an open resignation letter claiming she was bullied at work) and of Andrew Sullivan at New York Magazine. While we assume that both Weiss and Sullivan have already signed new contracts, we are not sure how we feel about the public display of playing the victim when you have massive platforms to voice your views. We’ll happily celebrate that Tucker Carlson has gone trout fishing after the firing of his head writer for anti-semitic and racist comments, however.
Business Snippets
Oatly, the Swedish oat-milk company, received an additional $200M in funding from the Blackstone Group and several celebrities, bringing the firm’s valuation to over $2B. In 2018, Oatly became so popular as a milk alternative, that cartons of the popular Barista Edition were selling at prices as hight as $200 on Amazon. With the pandemic causing Americans to stock up on non-perishable items, Oatly saw another shortage (at one point in March oat-milk was outselling hand sanitizer and first aid kits).
Walmart+ will be arriving soon. Walmart’s competitor to Amazon Prime is expected to launch later this month with an annual subscription price of $98 (compared to Prime’s $119 fee). With Amazon having logistics problems due to the surge in high demand, we are not sure how Walmart will conquer these any better (or if everyone has already purchased Prime).
As Prime subscribers ourselves, we are still waiting for Prime Day to be announced. The Prime week-long sales usually focus on back-to-school savings on clothing and technology and mimic a Black Friday in July. We suspect Amazon is trying to figure out if consumers will actually return to non-essential purchases before they overload their networks.
Google is in the midst of purchasing Fitbit, and has run into antitrust concerns from the European Union. Google pledged not to use the health data as a means of delivering targeted ads, stating that “this deal is about devices, not data.” We’re not sure if the EU data will be sealed off, so Americans get ready for more ads to aid our sleep, anxiety or in losing our quarantine 15.
Lipstick sales used to be an indicator of a recession — if lipstick sales went up, it meant people were buying small, inexpensive luxuries rather than pricier, larger goods. With the onset of corona and the high prevalence of mask usage, lipstick sales have seen a global plummet: in the US sales have dropped 15%, in Japan 70% (guess that tells us something about who is wearing masks too). Maybe economists need to keep an eye on sales of home hair coloring instead.
Johnny Depp is in the midst of a libel trial in the UK, and he dropped a bizarre nugget to defend his wild mood swings. Somehow Johnny Depp earned over $650M from the Pirates of Caribbean movies and lost it by firing his business managers. We can’t decide if we are more shocked by the income he received or the colossally ignorant business practices. We’ve heard of celebrities not taking an interest in managing their money, but $650M?
Culture
Chicago’s Mayor Lightfoot wants her constituents to “saddle up and get counted” for the US Census, so she introduced the Census Cowboy. Lightfoot recruited the “Dread Head Cowboy” to ride (on horseback) through neighborhoods with low response rates to encourage them to fill out their forms (just 55% of residents have responded so far). Since the census determines the distribution of federal spending, increasing participation is key for these communities to receive much needed support for schools, libraries and other local initiatives. Lightfoot compared her plan to sending out the Bat-signal. The writers of 2020 seem to be throwing anything and everything up against the wall, so why not?
— Lauren Eve Cantor
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