Morning Brew Daily - Airbnb Gets Into Luxury Lifestyle & ESPN's New Streaming App

Episode Date: May 14, 2025

Episode 582: Neal and Toby talk about the latest inflation report that shows the CPI rate slowing down despite tariff worries. Then, ESPN revealed some details about its standalone streaming service. Also, tech companies may have a spy problem as they think they’re hiring remote workers but actually North Korean operatives. Plus, Airbnb is luring back customers from hotels by offering bougie services such as personal chefs and personal trainers.  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit endthecampaign.com for more Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note  Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today watching sports will never be the same after ESPN unveiled ESPN the streaming service. Then Airbnb is going through a midlife crisis,

unveiling a new offering that goes beyond short-term rentals. It's Wednesday, May 14th. Let's ride. Bilbo Baggins went there and back again. in The Hobbit. And the S&P 500 just did the same. After being down more than 17% for the year at one point, the index has climbed all the way back to close yesterday in positive territory for 2025.

Toby, along with the 2004 Red Sox in the ALCS and Jennifer Coolidge in the White Lotus, this has to be one of the greatest comebacks of all time. Well, first of all, Jennifer Coolidge never lost her fastball. But how about this stat from Bloomberg's Lisa Abramowitz? The SB 500 is now positive on the year after being down more than 15%. That is just the ninth time since World War II that the index has climbed out of a 10% plus hole before the year end, which I should remind you all that hole was created on April 8th. It's only May 14th right now, so it was quick.

And if you want to get even crazier, it's just the fifth time we've erased a decline of over 15% by years end. Again, it's May, which either means it's going to be a very long and crazy year or the market. It's going to be up 1 million percent by December. Not financial advice. I don't know which one of those outcomes is going to come to fruition. And now a word from our sponsor, Iterable. Neil, you know when you're watching what you thought was a live sporting event, and someone next to you casually drops a spoiler from a minute ahead

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There is nothing more beautiful in this world than a cooler than expected inflation report. Okay, maybe Michelangelo's David or Glacier National Park at sunset. But still a good inflation print is in the conversation and we got one yesterday with the headline inflation rate for April falling to 2.3% on an annual basis, the lowest since the spring of 2021. prices started spiking. The Consumer Price Index reading showed that tariffs announced on April 2nd had a minimal impact on how much Americans paid for things, which is a sign that businesses decided not to pass on those extra costs, or more ominously, they haven't infiltrated the supply chain quite yet. But let's stick to the good news for now and hit the numbers. In April,

headline inflation ticked up 0.2% from the previous month the same amount as core inflation, which is considered a more accurate indicator because it strips out. the volatile energy and food categories, both headline and core inflation came in below estimates of 0.3%. What led to this cooling off? Well, you probably experienced less sticker shock at the grocery store because supermarket prices fell 0.4% for the month the most since 2020. And perhaps even did a little jig at the egg display because prices tumbled 12.7%, the biggest drop in over 40 years. services also contributed to the decline with prices in the category increasing 2.7% year over year, the slowest pace since 2021. Toby, taken together with the U.S. and China tariff reduction over the weekend,

the inflation report is an encouraging sign that America is maybe stepping back from the economic brink. Yeah, it looks like this report highlighted two differing dynamics that are going on in the economy at the same time. Goods categories, which are things probably more exposed to tariffs like cars, apparel. they did see some of the price increases that some economists were expecting to come through the pipeline as of now. That also means that on the flip side, though, those goods didn't increase at the rate that a lot of people were expecting, which means that a lot of those retailers are absorbing the extra costs or they imported a bunch of products ahead of time. So it's probably a little combination of both. And then the other thing that this report revealed is that there's definitely some weakness in

services categories. As you mentioned, those prices rose at a slower than expected rate. So categories like travel, recreation, suggests that consumers are actually pulling back on some of those discretionary spending things like going on vacation, like leisure activity. So goods and services are telling two different stories right now. If you check Google flights and look at airfare for this summer, I think you'll be surprised at how cheap they are. We've had all of those airlines come through recently in earnings report saying we're not seeing as much demand at all for this year that we expected. So we're reducing our prices. So if you're looking for a cheap flight to the Midwest or something, maybe to see the Pacers play,

that will be super cheap. But you're right, we didn't see a big impact of tariffs. And we don't know exactly why that's happening. Is it that retailers are absorbing the cost, which they said they weren't going to do, but maybe they are? Or is it that this front running that we saw this historic amount of shipping goods ahead of tariffs to get into warehouses and stores on U.S. soil was actually a plan that worked out well because those goods don't have tariffs on them, and retailers can sell them sort of at the same price as expected without these tariffs. So overall, a pretty optimistic inflation report. Again, there's a huge caveat saying we don't think that the tariff impact has fully worked its way

through the economy just yet, and that the most important inflation report is the next. one. I know, we keep saying that, but also don't listen to what we're saying. Listen to what companies are saying because Procter & Gamble, which is this big consumer goods company, said that they're probably going to start raising prices by July. Mattel, the maker of Barbie, also said they're going to need to raise prices on some of their toys to offset tariff costs. But on the other hand, you could look at tariffs almost like a sales tax of sorts. It makes everything more expensive, which actually means that people have less disposable income to spend on goods and services, which could eventually force businesses to lower their prices in order to generate

sales. That's kind of a reliable economic impact of a sales tax. So if you look at tariffs in that vein, maybe it won't be as inflationary as you're expecting. But then on the other hand, if they remain very high and very broad, they could disrupt supply chains. And that could lead to shortages, which would actually end up driving up prices. So again, I feel like... You just argued with yourself on five different perspectives. That's pretty impressive. That's what we're supposed to I'm supposed to give both pathways and then let you guys at home determine which one that you care about. Let's move on. Airbnb CEO, Brian Chesky, has been teasing a big announcement for the short-term rental giant all week. And yesterday we found out it has nothing to do with lodging.

In fact, it has something to do with a much more valuable commodity time. Airbnb launched a redesign app that allows customers to book services like catering or personal training from vetted purveyors alongside its' job. traditional home rentals? What if people monetize their biggest asset in their life, which is not their house, but their time, Chesky said yesterday. Most of those time monetizers on the app fit into 10 categories, including things like personal chefs, photographers, masseuses, and even hair and makeup. While Airbnb mainly envisions these services as add-ons during your home stays, say you're in town for a wedding and want to bring the spot to you, you can also reserve anytime, even without a vacation booked. Chesky has previously said new business lines like services and experiences

could generate over a billion dollars annually for the company as it looks to diversify its offerings to offset slow in growth in its core rentals business. Airbnb also recently lowered its second quarter revenue forecast due to weakening travel demand and intensifying competition from hotels, so it's trying to pull some different growth levers here. Neil, Brian Chesky framed this in a post on X as Airbnb's next chapter. Is this a chapter that you think is going to work for them? We'll see. I mean, at one point, no one ever thought they'd buy anything else from Amazon besides books

and men would never have thought they would go shopping at Lulu Lemon. So extending your company for growth is a tried and true playbook for many of the largest companies in the world that want to grow their services. We'll see what happens here with Airbnb. It'll be a true test of trust in their platform where you go, you have gone there for one thing, one very specific thing. You don't go on Airbnb a lot, maybe two or three times a year, to book that vacation house. Now, with services, they want you to book a lot more and be on that app a lot more frequently, and people just may not have that behavior with Airbnb. It'll be a big test.

Brian Chesky, though, views it as rentals are just a service. So why do I need to stop in this pigeonhole of the rental market? He does think that that trust aspect that you mentioned is going to be a big differentiator for something like services because Airbnb has proved its bonifies in vetting things like homes where you go and stay on vacation. So if that level of trust is there, when you go to have an experience like an Eiffel Tower tour, you trust Airbnb because it's served you well in the past. If you want a at-home chef, you trust them as well because they've served you well in other aspects of the curation. So that curation aspect is something that I think will separate it from other, you know, travel aggregators like VATOR or any of these other

Get Your Guide these companies that provide a lot of experiences but don't necessarily vet them. They think that vetting process is what is going to make it different. We'll see. I mean, they're these services that they're offering. I mean, they don't have a single home somewhere besides maybe Craigslist. So maybe that fractured market of where you get a hairdresser or where you get a wedding photographer or where you're getting a chef. There's no one home base for all of those. So maybe by aggregating all those together, that's where Airbnb thinks it can have an advantage because it is a very fractured market. You have to go to various platforms or make a lot of different calls to get those things that they're offering. ESPN has been teasing a new flagship streaming service for months down. It's finally ready to unveil what it's been working on, starting with the name, which are you ready for this? It's going to be called Sports Brew Daily. Nah, it's going to be called ESPN. Literally the same thing it's always been called.

We kept coming back to our four letters, ESPN, the network's chairman, Jimmy Patero, explained yesterday. There's power in our name and there's trust in our name. Despite the unoriginal nomenclature, Disney execs thinks they've cooked up something that sports fan will love. The news service, which is coming out sometime before the NFL season, will be the first time you can access the entire suite of ESPN's networks from the American Cornhole League down to college football without a cable subscription. And given that, it's pretty pricey. As a standalone service, it will set you back $30 a month or $36 if you bundle it with Disney Plus and Hulu's ad-supported tiers. As cord cutting accelerates, one of the only things keeping people tied to their cable subscriptions was live sports, but now a major domino has fallen.

With ESPN giving sports lovers who don't have traditional cable subscriptions and outlet to watch, not a whole lot of reason to hang on to that subscription anymore. Well, to counter that, Bob Eiger, the CEO of Disney said, if you have ESPN as part of your cable package, then you can get this new ESPN service for free. So that really calmed all of these pay TV providers who were worried that everyone would just cancel en masse if there was an ESPN service separate from the cable package. So Bob Eiger kind of played nice with them and said, okay, if you're already subscribing to ESPN on your cable, then you, or satellite, then you still get access to this. ESPN streaming service for free. So it's kind of a wash. But still, it does, it is a landmark moment that shows the passage of time in the media industry, not to get all professor here. But at one point, ESPN was the shining star of the cable package. It brought in more than $1 billion per month

through cable fees and advertising. I mean, this was the profit center of Disney's entire portfolio. But times have changed. They had 100 million subscribers at 1,000. one point now they have about 65 million streaming does appear to be the future for TV broadly, but also sports. We've seen Peacock and Fox just rolled out a, you know, a dedicated sports and news app as well. So this is the direction the industry is going and ESPN execs are calling it their biggest move in more than four decades. But it is interesting, though, because Disney seems like it's trying to keep one foot in both

the new world and the old world because you're right. Old time TV networks are fading away, but they're also. still profit centers for a company like Disney. So they are trying to, you know, assuage fears that they are ditching this cable subscription that is lucrative while also saying, hey, we're investing in the future with streaming like that as well. And it's definitely something that you can look at two ways. On the one hand, $30 per month for just ESPN may seem pretty hefty if you're already have, you know, cable subscription or these other subscriptions or if you're paying, you know, $100 a month for your cable subscription and you really only watch sports on it, maybe you can

save $70 by, you know, moving to this $30 a month fee. So it depends on where you're coming from if that price seems too high or if it actually seems like you're saving a lot of money. And you also might be wondering if you're listening to this, doesn't ESPN already have a streaming app? And that is ESPN Plus. And the difference between this new ESPN and the ESPN Plus that exists is like ESPN Plus is very paired down. You're not getting a very robust opportunity to watch a bunch of different sports. Maybe it's like Northern Montana State versus Western Arkansas tech, you know, in football. ESPN will have everything that ESPN offers like US Open Tennis, Monday night football, college football that you actually want to watch. No offense to

Northern Montana State. But it'll be much more comprehensive than ESPN Plus. They're going to keep ESPN Plus. It's a much cheaper option. Up next, we're going to talk about a crazy North Korean hacking scheme. Today we helped a Latte for Sam Coffee shop Get an insurance quote Simply and easily

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During a recent media briefing, the CTO at Google Cloud's Mandian said, I've talked to a lot of chief information security officers at Fortune 500 companies, and nearly every one that I've spoken to about the North Korean IT worker problem has admitted they've hired at least one North Korean IT worker, if not a dozen or a few dozen. Fortune explains how the scam typically works. Train North Korean IT workers, swipe American identities, use generative AI to make LinkedIn profiles, and then get hired in remote jobs where they can fly under the radar,

collect a big tech salary, and send that money back to their country's military. It is astonishingly lucrative. The UN says this IT worker program generates between $250 million and $600 million per year for Kim Jong-un. Tech leaders don't like to talk about this because it's frankly very embarrassing, but the taboo seems to be wearing off and more have gone public in the last few weeks, sharing their stories of getting duped. I mean, I'm not even going to say that this is not a little bit impressive in order to create this fake LinkedIn profile to pose as American Job Seeker, but where it gets to just the

next level is that they make it to an interview stage, and oftentimes they use deepfake. So it's not even just like an AI generated LinkedIn profile. It's literally actively deepfaking you as you're on a interview stage and tempting to impersonate a person in real time. This is very high level espionage right here. And then the next thing that they do, too, is oftentimes when you get hired, even as a remote worker, you get sent a company laptop.

And if you are a North Korean operative and you're not in America, you need kind of someone in America to receive that laptop and pretend you're logging in. I mean, we've talked about mouse jigglers, but these operations actually have laptop farms operated by American citizens where the feds have kind of come in and busted up to, laptops in one room with one person just going around and making the mouse look like it's active. So this has many layers to it. And you're right. It is an egg on the face moment for a lot of

these companies who are hiring these fake employees. Yeah, apparently this affects pretty much every Fortune 500 company. And they're starting to slowly talk about it because it, you know, it's pretty shameful. The cybersecurity firm Sentinel One is one of those companies that recently went public about being targeted by this scheme. They just released a report revealing that they received around 1,000 job application linked to this North Korean IT workers program. You can see that a lot of different trends happening in the economy, in technology right now, are enabling this scheme to be implemented because of remote work. It's very easy to get hired and go under the purview of an HR person who's maybe not trained to,

you know, identify whether you're a real person or an IT North Korean agent, generative AI, another huge one that allows you to impersonate identities and get through interviews. But it does look like the feds have been cracking down in recent years. They seem to be pretty successful going after these laptop farms, making indictments. So now the North Koreans are trying to have to get a little more creative to conduct their espionage because does feel like big tech has finally wised up to this. The issue, though, that even if you do suss out these workers, they usually are tech workers or IT workers, which means that they have been able to grant access to very sensitive systems within companies.

So they've planted malware in them. And then they extort them even after they've been fired because, say, hey, I know you fired me. I know you found me out. But also, I put a little bug in your code. If you want me to remove that, then you're going to have to pay me X amount of dollars. So they really are adaptive and they don't necessarily end their schemes once they've been caught. I mean, this is insane.

We read this story and we're like, holy moly, even just the first sentence. alone, it's just a crazy concept to wrap your head around. All right, let's sprint to the finish with some final headlines. President Trump had a busy newsmaking first day during his business trip to the Gulf. He announced a $600 billion commitment from Saudi Arabia to invest in the U.S., including a $142 billion defense partnership. And in a move that drew widespread praise among Arab leaders, he also said he would lift sanctions on Syria following the fall of the Assad regime in order to give their economy an opportunity

to grow under new leader, President Ahmad al-Shara. Next stop, Qatar, where that controversial new Air Force One gift awaits. Yeah, Saudi Arabia really rolled out the red carpet, or I really should say they rolled out the golden arches because the Saudi royal court brought in a custom McDonald's trailer just to honor Donald Trump's visit. Ronald McDonald's literally being used as a foreign policy tool at this point. But yes, this whole trip showcases Trump's willingness to embrace foreign dealmaking

as president and also how U.S. industry is hopping on board as well. The Trump administration said that they want to give the UAE an option to pursue their AI ambitions and U.S. tech companies like NVIDIA, like AMD, are planning to spend billion dollars to help fund those efforts as well. United Health Group, the largest healthcare company in the U.S., lost its CEO yesterday after Andrew Whitty stepped down immediately from his role, citing personal reasons. He'd been at the helm since 2021 and been in the driver's seat as the company worked to navigate following the murder of United Health Care CEO Brian Thompson last year. While not much else has been shared regarding Whittie's decision, it has been a rough period for the company. Yesterday, United Health Group also suspended

their financial outlook for the year, causing shares to drop 18%. Timultuous, to say the least, so far, Neil. Yeah, they're bringing back Stefan Hemsley, who was the CEO of United Health Group, built it up to this. massive health care colossus. He was there for more than a decade, ending in 2017. This echoes maybe the playbook of some other companies, some more consumer-facing companies like Starbucks, bringing back Howard Schultz, three times as CEO, Bob Iger returned to Disney when they were having troubles back in 2022. But this company's stock plunged another 17% yesterday. It is the largest component in the Dow Jones Industrial Average. It is a absolute colossus.

It's going through some absolutely crisis moments right here. its stock has shed maybe 50% in the last couple of months at just multiple things coming at it. Maybe this new CEO can turn things around or this new old CEO can turn things around. But investors didn't think so because the stock drops so much. Usually when you have a new CEO that's going to come in to save your company, investors think, you know, they send your stock up, but this didn't happen here. I mean, just bad, bad times for United Health Group. The Cannes Film Festival kicked off yesterday.

and one thing you for sure won't be seeing is too much of the attendees. The French organizers drop the hammer on people dropping their draws and banned nudity from the red carpet. The proclamation comes after sheer and nude dresses have become all the rage, while some like Kanye wife's wife,

Bianca Sensori, took things way too far at previous awards shows. The aim is not to regulate attire per se, but to prohibit full nudity on the red carpet in accordance with the institutional framework of the event and French law, the festival said. It also cut down on voluminous outfits and those large trains. So, Neil, while you're planning your fit for next year, just avoid wearing too much and too little. These guys are a little uptight. I mean,

this is granted the most closely guarded red carpet in the world, but back in 2018, they also banned selfies. So these guys that can just really don't want you to be the star. They want the movies to be the star. So anything that would, you know, cause controversy, or go viral other than the movies themselves and the artistic works. You know, it's kind of the opposite of the MacGala. Finally, fans of Nutella, I've got some exciting news. You're getting your first new flavor in the brand's 60-year history. Nutella announced Nutella peanut for the U.S. market,

a peanut-infused version of its ultra-addictive cocoa hazelnut spread. They stressed it's not peanut butter, just peanut-infused Nutella, which, for example, makes it more conducive to after-excused. afternoon snacking, then lunch. The new product will arrive in spring 2026 after taking more than five years to develop, and the demand could be insatiable. Nutella has remarkably doubled sales since 2020. Toby, you excited? I am so excited for this because my favorite sandwich in the world is a Nutella peanut butter sandwich, so we'll see if I just can skip out one of those steps right there. But not only is Nutella just crushing it in America right now, peanuts are crushing

it in America as well. Peanut consumption has doubled, or it's peaked since the COVID-19 pandemic, and nearly 60% of peanuts go towards peanut butter. So it's clearly a fan favorite. Actually, peanuts are responsible for 65% of all U.S. nut consumption. So it really is just a confluence of factors right here. But I can't think of a product more situated directly in my wheelhouse than peanut-flavored Nutella. Okay, let's wrap it up there. Thanks so much for starting your morning with us. and have a wonderful Wednesday. If you have any thoughts on the show, and I bet you do, send an email with questions, comments,

or feedback to Morning Brew Daily at Morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer. Our associate producers are Olivia Graham and Olivia Lake. Garrett Peck is on audio. Hair and makeup might try to hop on this new air B&B platform. Devin Emery is our president

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