You're hired

MARKETS

• U.S. markets: With Veterans Day keeping activity subdued, the Dow squeezed out a record even as its peers slipped lower.
• Geopolitics: There's a power vacuum in Bolivia following the resignation of former President Evo Morales, a socialist. It's not clear who will lead the country next.

MEDIA

Disney Adds a Streaming Service

On this day, Nov. 12, 2019, World War Stream began. Netflix and Apple had a skirmish earlier this month, but now Disney's joined the fight with its own streaming platform, Disney+, backed up by battalions of Avengers, Stormtroopers, and Buzz Lightyears.

The origin story

In 2005, Bob Iger took over as CEO as the "safe-but-dull" choice...though his tenure has been anything but. He took Disney on a series of 10-figure adventures, including acquisitions of Pixar (2006), Marvel (2009), Lucasfilm (2012), and 21st Century Fox assets (2019).

• The cumulative price tag for those deals: $87 billion.

But nobody was saying "Disney and chill" (granted, it is known for kids movies). So Iger set out to build Disney a platform to distribute its world-leading content.

• In 2017, Disney bought full control of streaming company BAMTech to help build that platform.
  The Fox acquisition gave it a controlling stake in Hulu, which it's offering in a bundle with Disney+ and ESPN+.
• At launch, Disney+ has distribution partnerships with Apple, Google, Microsoft, Amazon, and more.

Why this could work

For $6.99/month, users get access to 500+ movies and 7,500+ TV episodes. Within five years, that'll grow to 620+ and 10,000+, respectively.

To build that library, Disney's spent the last two years pulling content from other platforms (losing out on hundreds of millions in licensing fees). It's betting fans will follow their favorite franchises to the greener pastures of Disney+.

Fact: fans follow franchises. Don’t tell Scorsese, but since 2015 the top two movies at the global box office each year have been Star Wars or Marvel features.

• With new superhero content exclusive to Disney+, Disney is betting fans will pay to stay ahead of story arcs.
• Disney+ is also launching The Mandalorian, the first live-action Star Wars TV series.

The outlook, per Bloomberg: "The consensus now is that Disney+ will easily meet its hopes for 90 million subscribers globally by 2024, and that ESPN+ and Hulu will add to their totals, bringing the company to as many as 160 million streaming customers."

Stay tuned for more Disney+ content this week, including a look at Disney's path to streaming, a breakdown of this business model, and the constellation of competitors.

RETAIL

Walgreens Keeps the Party LBO-ing

Fresh off its World Series championship, Walgreens Boots Alliance has reportedly been formally approached by private equity giant KKR about taking the pharmacy chain private.

It would be the biggest leveraged buyout ever. Walgreens is worth more than $55 billion and has $16.8 billion in debt. With a premium to butter up Walgreens’s shareholders, KKR’s bid could easily top the current take-private record of ~$45 billion.

It would be a giant red W for Walgreens. Whereas rival CVS acquired health insurer Aetna to become a vertically integrated one-stop healthcare shop, Walgreens has kept its focus on in-store retail.

• Investors don’t love that strategy, especially with Amazon nipping at Walgreens’s heels. Walgreens shares are down 8.5% in 2019.

It would be hard to justify the math. Walgreens projects “roughly flat” earnings for the 2020 fiscal year. Its retail-first attitude hasn’t generated the meaty profits private equity firms typically target. And last week, private equity rival Stephen Schwarzman of Blackstone said a Walgreens buyout was a “stretch.”

C-SUITE

The Next CEO of WeWork Could Be Lege—Wait for It—re

WeWork, the Icarus of the almost-public class of 2019, is reportedly in talks with T-Mobile CEO John Legere to lead the company now that eccentric co-founder Adam Neumann is all but excommunicated.

WeWork needs: an adult in the room. Fresh off a nearly $10 billion SoftBank bailout last month, the company is looking for a seasoned vet who can possibly take the company public in the future. It wants someone to join as soon as January, per the WSJ.

Legere has: the chops. In six years at T-Mobile, Legere pulled the company from a distant fourth place among U.S. wireless carriers to third. Then, he brokered a pending merger with Sprint.

• He also fulfills the WeWork CEO’s only two real job requirements—fantastic hair and an affinity for brightly colored t-shirts.

And that about sums up his personality. Legere’s been called a “trash-talking executive” with “a pugnacious style” and an “unpredictable and antagonistic public persona.” But we’ll wait until Legere struts barefoot through NYC to call him Neumann 2.0.

SPACE

Another Round for the SpaceX Table

Productivity gurus tell us to reduce big tasks into small, manageable chunks. When your big task is to provide internet connection to the entire world, that means sending 60 satellites into the stratosphere.

Yesterday, SpaceX launched its second round of internet-beaming Starlink satellites in under a year. The company has plans for 24 more launches next year and eventually hopes to blanket the sky with 30,000 satellites. After yesterday, it's got around 120 in orbit.

• As any cheerleader can tell you, the base is just as important as the flyers. The reusable SpaceX Falcon 9 rocket booster made its fourth landing yesterday, a milestone for the company.

The backstory: In 2012, SpaceX’s board realized its flashier business—rocket launches—made peanuts compared to commercial satellites. CEO Elon Musk estimated Starlink could generate 10x what the launch business can muster.

One group that isn’t cheering: astronomers. The NYT reports they’re worried that the satellites might affect their ability to stargaze and conduct #science.

• SpaceX said it would try to mitigate any problems, even offering to paint the Earth-facing bases of the satellites black. But scientists still think they’ll confuse telescopes.

E-COMMERCE

Stats That Make You Go "Wow"

Chinese e-commerce leader Alibaba reported a record $38.3 billion in gross merchandise volume (GMV) sold on Singles Day. Or as we Brew writers like to call it, every day.

Let’s put that in perspective. $38 billion is a 26% increase from last year’s Singles Day shopping extravaganza. It’s also more than 5x what Amazon sold during its 48-hour Prime Day event in July and about 10x the size of Burundi’s economy.

• GMV topped $12 billion in the first hour of sales. Within 90 minutes, Alibaba's sales beat the total from Singles Day 2016.
• The U.S. was the second-largest seller to China by GMV.

But GMV is kind of a mess. The metric is supposed to illustrate the total value of orders on Alibaba’s platforms. But the numbers go unaudited, there’s no standard measurement, and Alibaba’s Singles Day financial metrics have been the target of U.S. regulators before.

PODCAST

Risk It All: Business Casual Takes on the Streaming Wars

Int. Morning Brew office, editorial team weekly check-in:

[Writer 1] Question: What kind of streaming service is best?

[Writer 2] That’s a ridiculous question.

[Writer 1] False. Black bear.

Any fan of The Office recognizes that reference. And any fan of business news knows the streaming wars are fundamentally changing the way you watch TV.

Today on Morning Brew’s weekly podcast, Business Casual, we pick apart what’s made the streaming wars just that—wars, from Disney to Netflix, Apple to Amazon.

How have subscriber counts, ad dollars, and content spend contributed to the most thrilling business battle of the decade? Matt Ball, verified media guru and former global head of strategy for Amazon Studios, has the answers. Plus...

• How Amazon has impacted the media landscape.
• When we’ll know who owns the future of streaming.
• Why Netflix is still the one to beat.

WHAT ELSE IS BREWING

• Boeing said the grounded 737 Max could restart commercial service in January. Shares gained nearly 5% on the news.
• Google’s “Project Nightingale” is reportedly collecting troves of personal health data from millions of consumers in 21 states.
• Southwest allegedly flies over three dozen jets without being able to prove they are in keeping with mandatory federal safety standards, the WSJ reports.
• Travis Kalanick, Uber’s co-founder and ex-CEO, sold over $500 million worth of stock after the company’s lockup period expired last week.
• Apple, not content with the AirPods Pro, reportedly wants to release an augmented reality headset in 2022.

WHAT'S TRENDING

Every year around this time, a search term on Google spikes in popularity, and 2018 was its most popular year yet. What is the one-word term people are searching?

Breakroom Answers