Numlock News: March 12, 2020 • Rockstar, Tesla, American Dream
By Walt Hickey
PepsiCo agreed to buy Rockstar Energy for $3.85 billion with the intention of shoring up its business in the energy drink space, as its nationwide advertising campaign of “We don’t carry that, is Pepsi okay?” apparently wasn’t doing the trick. Consumers as a whole have been drinking less soda, preferring coffee, tea and caffeine-juiced beverages. Pepsi also owns Mountain Dew AMP and Game Fuel — a product that may just be a Fortnite DLC item that got Jumanji’d out of the game — while Coca-Cola owns a stake in Monster Energy, as well as Coca-Cola Energy, which sounds like it should be an oil company leftover from some ‘60s conglomerate but, nope, it’s just a new drink they’re trying out. Rockstar is the first acquisition for PepsiCo since SodaStream.
Right now companies that offer cruises are in the unique position of needing to advertise heavily for the forthcoming season, while at the same time being in the news in a way that is not exactly rad. There are thousands of people isolated on the Grand Princess off the coast of California, and news stations are naturally covering that, but it’s causing issues because right now cruise companies have committed lots of money to ads and this is leading to some ill-advised ad pairings. Norwegian has paid $10 million for digital ads this year, up from $2.4 million the same time last year. In the past two weeks $6 million in television ads from cruise companies aired. This is worse than the time I screwed up Google Ads so bad that this newsletter advertised exclusively next to Stack Overflow threads about people who ruined a project by accidentally pressing the useless Num Lock key on their keyboards.
The Motion Picture Association announced that for the first time, the global entertainment market passed $100 billion in 2019, with box office revenue accounting for $42.2 billion and home and mobile viewing jumping 14 percent to $58.8 billion, $48.7 billion of which was digital and $10.1 billion of which was physical media. In North America, 268 million people went to see a movie at least once over the course of the year, though the number of films rated by the MPAA fell to 488, the lowest in nearly a decade.
Triple Five Group is set for the grand opening of the brand new $5 billion 3-million-square-foot American Dream mega-mall in New Jersey on March 19. After two decades of development, fits-and-starts, the grand opening of the mall — which features not just dining and retail, but also a water park — right in the middle of Americans being told by government officials from President to Dog Catcher to avoid crowded spaces. The developer expects eventually to bring in 40 million people per year to the mall, but it would seem that “eventually” is doing a whole lot of work in that forecast.
Studios make lots of movies, and for a while there was pretty much one game in town when it came to releasing them: movie theaters. Sure, there were TV movies and later direct-to-DVD movies and yeah, those films have their uses (you don’t get a 401k for being Nicolas Cage). But the gulf in quality was such that there was a wide chasm between what was good for the cinema and what was good for the bin near the Blockbuster checkout. But now, all those studios have some sort of streaming service full of pretty high-quality material, so a new distribution mechanism has emerged, and lots of once cinema-bound features are now getting a streaming rollout instead. The answer is money: a theatrical feature with a global release costs at least $40 million more in prints and advertising than a streaming film. For instance, that’s probably why Melissa McCarthy’s Superintelligence was moved from a holiday theatrical release to be one of the biggest originals on HBO Max.
Tesla CEO Elon Musk announced Monday that the electric car manufacturer had produced its 1 millionth vehicle, a red Model Y crossover. The car making business is pricey and highly competitive, so the millionth car is a solid success for the all-electrical car company. The Model Y starts at $52,990, which is still priced well above peer vehicles in its model type, but a cheaper version will be available in 2021.
Travel insurance would seem to be an appealing asset to hold right about now, what with conferences being cancelled left and right and, as of last night, the institution of cancelled travel between the U.S. and Europe. The issue? Travel insurance doesn’t cover a pandemic, meaning that even customers who bought it to protect a trip can’t get a refund now. There is a special add-on called cancel-for-any-reason insurance, which would reimburse 75 percent of the trip costs. Since January 21, insurers have seen a 245 percent spike in policies that included that cancel any time option. But as it goes with risk evaluation, if everyone’s buying it then insurers are possibly going to lose a fortune on it, so some have had to discontinue the add-on.
This past week and next week I’m talking to Ben Cohen, the author of The Hot Hand: The Mystery and Science of Streaks for the Sunday paid subscriber special. The interviews are great, as is the book which just came out yesterday. Check out Ben’s work at the Wall Street Journal too, needless to say it’s suddenly a very interesting time to be an NBA reporter.
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