A Kodak moment

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Market Snapshot

  • The Nasdaq and Dow logged a sixth straight day of gains.
  • U.S. 10-yr yields reached a 10-month high.
  • U.S. student debt is creeping its way towards $1.5 trillion.
  • Crude hit its highest level since December 2014.



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Hulu Gains Steam...But Its Future Remains Uncertain

Like a commercial interrupting your 30 Rock episode, Hulu burst unexpectedly into our Tuesday routine with a rare disclosure: it’s up to 17 million subscribers across its SVOD (unlimited streaming at a monthly rate) and live TV platforms.

That’s up from 12 million in May 2016, a 42% increase. And although this growth didn’t exactly happen overnight, it’s positive news for a streaming service that’s clawing its way back to prominence after being stomped on by Netflix.

So what’s working for Hulu?

Its library has really good content. The original series The Handmaid’s Tale was a popular and critical hit, bringing home 10 Emmys and a few Golden Globes.

And as it’s doubling down on new programming, Hulu has become the de facto service to indulge in all the classics: Boy Meets World, Prison Break, It’s Always Sunny in Philadelphia, and others.

In all, you’ve got 75,000 TV episodes to choose from on Hulu, outpacing Netflix and Amazon Prime Video. And if you’re wondering how it built up such a powerhouse library, look no further than its parents.

Hulu is the equivalent of a trust fund baby

It’s owned in equal parts by media titans 21st Century Fox, Disney, and Comcast (Time Warner also has a 10% stake). And when you’re the child of royalty, it comes with some perks—perks which include acquiring the streaming rights to popular shows on ABC, NBC, and FOX...not to mention private school.

But along with access to a vast catalog of shows, Hulu’s lineage complicates its future. For instance, what happens when there’s a custody battle?

We’re talking the Disney-Fox deal, of course

Disney is on its way to acquire more than $50 billion worth of 21st Century Fox, giving it a majority stake in Hulu. The only problem? Regulators might not let that happen (remember, Disney is deploying its own streaming service in 2019). And Comcast might not be down with its 30% stake funding a rival’s platform.

A storm is brewing in media, and Hulu is right at the center of it all.

SpaceX’s Failed Launch of a U.S. Government “Spy” Satellite

A SpaceX rocket failed to launch a highly classified U.S. spy satellite into space. Luckily, they couldn’t keep us from reporting on it (although they’ve taken Nikki).

Details are fuzzy on the satellite’s purpose, but it appears that SpaceX’s Falcon 9 rocket malfunctioned, preventing the satellite from properly detaching and sending it plummeting to earth. Naturally, SpaceX denied any fault, but it still might end up costing the company.

The secret satellite, dubbed Zuma, was only SpaceX’s third government-contracted national security mission.

And while the other two went off without a hitch, any billion-dollar botches result in a big SpaceX RedX from the government.

It already took convincing to sway the Pentagon to break up the United Launch Alliance: a Boeing-Lockheed Martin monopoly launching all U.S. government space payloads. And this is revenue SpaceX desperately needs if it ever wants to break bread with some Martians.

Because as of last year, the company is no longer profitable or cash flow positive.

Target Smashes Holiday Targets

Hey Target CEO Brian Cornell: keep doing what you’re doing. The retailer surged past holiday season expectations, posting Q4 same-store sales growth of 3.4%. It’s a much needed boost compared to last year’s decline of 1.3%.

For all its previous struggles battling Bezos, Big Red (not an actual nickname, but let’s just roll with it) appears to be executing the 2018 retailer playbook like a well-drilled Nick Saban football team:

  • Invest in same-day delivery by acquiring Instacart rival Shipt.
  • Revamp over 325 stores, especially in urban areas, to be smaller and more flexible.
  • Ride a wave of sky-high consumer confidence.
  • Slash prices and streamline its promotional strategy.

And Target isn’t the only one feeling rejuvenated. Other big-box retailers, like Macy’s, J.C. Penney, and Kohl’s, put the exclamation point on (an otherwise dreary) 2017 with same-store sales growth in the last two months of the year.

It may be time to pump the brakes on those doomsday predictions for retail.

Kodak Is Releasing Its Own Cryptocurrency

That’s it, we’re doing it. We will henceforth go by “Morning Blockchain.”

If you shared more we wouldn’t need to. But we can’t ignore the massive growth crypto brings companies these days. Just look at Kodak, which announced its new cryptocurrency, “Kodakcoin,” and watched its stock jump 119%.

If you haven’t bought a disposable camera in the last decade, you’re not alone.

Kodak has faced its fair share of disappointment since Peter got those last 22 pictures developed. And after climbing out of bankruptcy in 2013 and selling off most of its patents to Apple and Microsoft, the photography company watched its stock steadily fall from $36 in 2014 to $3 today.

Good thing all you need is a little blockchain to get yourself out of a bind these days (looking at you Long Island Iced Tea...we mean...Long Blockchain).

The new coin will serve a purpose, the company says—it’s a “photocentric cryptocurrency to empower photographers and agencies to take greater control in image rights management.”

Sounds nice in practice, and it might even breathe some life back into this dying, 130-year-old company. But let’s be real...it’s called Kodakcoin.

What Else Is Happening…

  • A running list of announcements from CES.
  • Does CES have a diversity problem?
  • President Trump will attend the World Economic Forum in Davos, Switzerland.
  • European telecom company Altice is spinning off its U.S. operations.
  • The “first serious review” of the Tesla Model 3.
  • Steve Bannon is leaving Breitbart News.
  • ICYMI: Morning Brew’s interview with the CEO of Thumbtack.

Economic Calendar

  • Monday     Earnings: No Events
  •                     Economic Events: Consumer Credit (+)

  • Tuesday    Earnings: No Events
  •                   Economic Events: Small Business Optimism Index (-)

  • Wednesday    Earnings: No Events
  •                         Economic Events: MBA Mortgage Applications, Wholesale Trade

  • Thursday   Earnings: No Events
  •                    Economic Events: Jobless Claims, PPI

  • Friday       Earnings: BlackRock, JPMorgan, Wells Fargo
  •                  Economic Events: CPI, Retail Sales

From the Crew

It’s that time of the week again—the latest recap on quips, shenanigans, and daily work life around the Brew office. Last week, we received a few questions on what it’s like to work in a co-working space.

Short answer? Lots of AirPods.

Long answer? An open working environment with tons of other small companies, areas to plop yourself down and zone in, and all the free coffee, flavored water, and beer you can want (it’s not good beer, so you’re not missing out).

Typically we all meet up in the office by 9 am. And after a chat about last night’s game or the president’s latest tweet, we all go into our separate “holes” for the day.

That’s not to say we’re not working together or even networking with others. In fact, Tyler and Austin met up with some guys Monday to discuss all things SEO. Alex? He’ll network with anything and everything (we saw him talking to the toaster last week), but yesterday he made an awesome connection with the guys at Stadium, an up-and-coming sports streamer.

As for Michael, you’ll find him out in the main room talking crypto with the resident crypto startup.

The Breakroom

Question of the Day

Sabrina gave Samantha as many dollars as Samantha started out with. Samantha then gave Sabrina back as much as Sabrina had left. Sabrina then gave Samantha back as many dollars as Samantha had left, which left Sabrina broke and gave Samantha a total of $80.00. How much did Sabrina and Samantha have at the beginning of their exchange?

(Answer located at the bottom of newsletter)

Business Trivia

Which traditional retailer saw same-store sales grow the most during the holiday season?

a) Macy's
b) J.C. Penney
c) Kohl’s
d) Neiman Marcus

(Answer located at the bottom of newsletter)

Stat of the Day

$45—How much it’ll cost you to order a 5 lb bag of shredded U.S. currency notes worth (before they were torn apart and stuffed in a bag for no apparent reason) about $10,000. Sounds like a great buy, but it’s out of stock.

The Results Are In

Yesterday, we asked whether you would invest in Live Water, a startup selling unfiltered water for egregious prices. And nearly 700 of you shared your thoughts.

Most thought it was a dangerous scam and a recipe for E. coli.

  • 93% wouldn’t go near it.
  • 7% think Live Water is onto something.
  • 8 respondents referenced the Oregon Trail computer game.

Our favorite responses:

  • "This is elitism in its most farcical form. Additionally, there is a *reason* water is treated: it isn't always safe! Enjoy the bacteria, there's a reason Gertrude died of dysentery on the Oregon Trail."
  • "I would rather not willingly drink E. coli."

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Breakroom Answers

Question of the Day: Sabrina had $50 and Samantha had $30. (Explannation)

Business Trivia: Kohl’s

 

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