Morning Brew Daily - Brazilian Users Panic After X Ban & Ticketmaster Fumbles Again?

Episode Date: September 3, 2024

Episode 401: Neal and Toby discuss Brazil’s Supreme Court upholding its ban of X in the country and how it’s caused millions of fans to find a new place to post their thoughts. Then, the hotel industry is shaken up by a massive strike that occurs during one of the busiest weekends of the year. Next, fans looking to score tickets to Oasis’ reunion tour are running into trouble on Ticketmaster…Déjà vu? Also, the carriage fee dispute between DirecTV and Disney hits a boiling point as programs go dark for many viewers. Meanwhile, does the US have a penny problem? Lastly, the biggest news you need to know in the week ahead.  Visit https://www.massmutual.com/ for all your financial planning needs Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Intro 02:20 - ‘X’ banned in Brazil  08:00 - Hotel Strike  11:20 - Carriage Conflict  16:30 - Oasis vs Ticketmaster 21:00 - Penny Value  24:20 - Week Ahead  Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning brew daily show. I'm Neil Freyman. And I'm Toby Howe. Today is X going to give it to you? Not in Brazil

where the social media app has been shut down. Then is momentum building to finally abolish the humble penny. It's Tuesday, September 3rd. Let's ride. Welcome back to real life. We hope you had a wonderful long Labor Day weekend. One of the

important things we can remind you of is that it is Tuesday, even though it feels like a Monday, and this confusion will probably last through the week, and you just have to embrace it. Yes, if you're having the Tuesday scaries and you want to go back in time to the long weekend, check out the Labor Day episode we published, which was an interview with the economic educator and author Kyla Scanlan. It was a very fun conversation. We touched on everything from the vibes that drive the economy to poetry by the end. So if you find yourself yearning for better days today, go give that a listen. But also got us looking forward to some of the holidays we have coming up, Thanksgiving, et cetera, when we want to do more of these interview episodes. So if you

have any people you'd like to hear us talk with, toss us an email today. Yeah, and don't worry, we've already got feelers out to Caitlin Clark and Janet Yellen. We're hoping that ship comes in. Time for a quick word from our sponsor Mass Mutual. So after college, like a lot of you listening, I had no idea what I wanted to do with my life. I was living in Portland, Maine at the time, and at one point I actually talked to a Brown alumni who worked at Mass Mutual. So, Neil, in another life,

I could have been a financial professional. Yeah, something tells me your financial habits wouldn't have impressed too many clients. Way too much avocado toast and coffee purchasing in your diet. But honestly, you missed out. Mass Mutual is committed to wealth management and offers financial professionals, the best of both worlds,

top-notch resources and the freedom to run their own business their way. It would have been sweet, but I guess they're better off with someone who's not as obsessed with brunch. Maybe one day, Toby. If you've got a passion for helping people secure their financial futures, Mass Mutual might just be the perfect fit. Check out MassMutual.com slash wealth to learn more. Own it all.

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responsibly. Monopoly is a trademark of Hasbro. Hasbro is not a sponsor of this promotion. The screen time reports for people living in Brazil were way down over the long weekend after X was blocked in the country following a legal dust-up between Elon Musk and a Supreme Court Justice. X got the axe after refusing to appoint a local legal representative to handle requests to ban users from the platform. But it was the culmination of a monks-long tiff between Elon Musk and Justice Alexandra de Mores that dates back to the spring when DeMorres ordered X to block dozens of

account allegedly spreading misinformation. But many of the targeted accounts were associated with. Brazil's ex-president Bolsonaro, so Musk and some critics viewed DeMarias's order as an attempt to weaponize the legal system to stifle political speech, and Elon is not a big fan of stifling speech. He initially complied with the order, but then reversed course, accusing the government of attempted censorship. Things have devolved into some name-calling sense with Musk deeming the judge to be an outright criminal of the worst kind and calling him dictator de Voldemort.

but caught in the crossfire are 40 million monthly ex-users in the country who are now turning to VPNs to try and access the site, despite the judge threatening fines of up to $9,000 a day for trying to skirt the ban. It is a complete mess, Neil. Totally. I mean, we should just be clear about this. This is a very extreme move for the Brazilian judge. First of all, he could do it by himself. He was granted powers a few months ago to unilaterally order social media companies. to shut down certain accounts, which was also a bit of an extreme move by the Brazil's judicial

system to grant him this amount of power. And then he goes and shuts down X after a back and forth with Elon Musk. Even internet law professors call this the most extreme judicial decision out of a Brazilian court in 30 years of internet law in Brazil. One of the most dramatic things that the judge did was fine people. was order a fine of people for using VPNs and VPNs are ways that you can access certain sites by scrambling your geographic address and these fines are huge. I mean almost $9,000 a single day for downloading a VPN and using it to access X. The average Brazilian makes $530 a month. So it is far in excess of the monthly wage. But the battle lines are being drawn because a panel of justice actually voted unanimously

in favor of the ban on Monday to withhold his ban. And then the other thing that Dame Reyes did recently, too, is freeze the bank accounts of Starlink, which is Elon Musk's internet satellite company, to ensure that Elon's social media network X would pay the fine. So that's where some people are saying, okay, now you're overstretching, going after Elon's business empire,

just because they share a CEO, even though Starlink has nothing to do with this particular attempt to block X in the country. Starlink has 250,000 customers in Brazil, so they're caught in the crossfire as well. But it also just shows the amount of leverage that Elon Musk has in general. He can take on nations in a sense because he can also say, like, I will just pull coverage of Starlink in Brazil if you come after my social media company. So it is a very heavyweight dispute right now. Elon Musk has called for ending US foreign aid to Brazil.

He's trying to get the very highest levels of government involved. But yeah, so you are just seeing just the sheer heft of Elon Musk's business empire and then also the ideological heft of this particular judge in Brazil. And Brazilians are famously very online. They spend an average of nine hours and 32 minutes online every single day, which is the second highest rate in the world after South Africa. So yes, Elon Musk has maybe some leverage here with his business empire. But at the same time, he's losing a lot of revenue, a lot of users because, Twitter, while maybe not was the, wasn't the biggest social media app in Brazil, was its sixth largest market. So this is definitely not good for his business as long as this dispute keeps going.

You see a lot of Brazilians going to other social media platforms. The biggest beneficiary of this band does appear to be Blue Sky, which is the ex-rival. Since Saturday, about one million Brazilians have signed up for Blue Sky, which is equivalent to about one-sixth of the platforms total users before the ban. So they are seeing an influx. Threads is another ex-competitor from META that is seeing an influx, but maybe not as much as blue sky. You see a lot of Brazilians complaining about Threads algorithm with one person saying,

it's like an all-you-can-eat restaurant where the waiter keeps serving things. I would never order. So maybe Zuck has to do a little rejiggering with his algorithm to make it a little bit better. So this has wide-reaching ramifications, and it's only just one of a spat between government. and social media companies that we've been seeing over the past few weeks. Right. And Elon Musk has a little bit of a spotty track record when it comes to enforcing this. Because since he's taken over X, he has removed content critical of ruling parties in Turkey and India.

But then at the same time, he's resisted those same calls in countries like Brazil and Australia. So people are, Elon Musk says he's a proponent of free speech. And yet he's having a difficult time determining which countries he actually listens to and which ones he is a little bit more. headstrong against. While many Americans spent the long weekend checking into hotels across the country, the people who work in those hotels were checking out. More than 10,000 hotel union employees in at least 25 U.S. cities from Honolulu to Boston went on strike beginning on Sunday for higher pay, increased staffing, and reduced workloads.

The initial wave of strikes involved mostly Hilton, Marriott, and Hyatt employees, but the union representing the workers, unite here, said more cities, and hotels could follow, potentially amounting to the largest hotel workers strike in U.S. history. So what's behind this labor turmoil on Labor Day? Hotel workers say that everything for them changed for the worst during COVID. Hotels cut staff when no one was traveling and launched cost-cutting efforts, such as eliminating daily housekeeping that many have not brought back. Employees claim they're not being paid a living wage while working more to cover for positions that haven't been rehired.

The hotel chains have responded that workers' wages have increased over the past couple of years, and they are committed to negotiating in good faith to reach a fair agreement. Still, this massive nationwide strike left them scrambling over the busy weekend and threatens to only grow from here. Right. Some union members said that since COVID, they're expecting us to give five-star service with three-star staff. COVID disrupted the hotel industry maybe more than any other industry out there.

housekeeping in particular has emerged as this key issue around this strike because during the pandemic, a lot of hotels cut staffing. They cut the typical maybe daily housekeeping and room service. And that did two things, which is one, it caused people to lose income because they were cutting workers, but then it also created a much heavier workload for the remaining workers as well. So that's definitely a hot button issue. It just doesn't seem like the hotel management has kept up with the changes that have emerged in the travel industry, which has been a much more return to normal levels of travel. And yet the staff is still overwhelmed because they're still running on like COVID era kind of head count and just a amount of work that they have to do.

Yes, staffing is not back to 2019 levels. There are 196,000 fewer workers than in February 2019 than now in the hotel industry, hotel staffing. per occupied room fell by 13% from 2019 to 2020. So these workers are saying, you're not bringing enough staff. We are overworked. This daily housekeeping thing that you eliminated actually amounts to more work for us because somebody living in their room for three to four days and us not keeping it, us not keeping it clean. It's just making more work for us on the back end.

Plus, we're losing the tips that come with that as well. The hotel industry has responded saying, yeah, we're willing to negotiate in good faith. Let's come to the table and talk this out. They say that, you know, 86% of their hotels have increased wages and that the overall since the pandemic and that the average worker in the hotel industry has seen a pay bump of 26%. Still, workers say that's not enough. We have to work two jobs to make ends meet. I'm making $16 an hour here at the Baltimore Marriott. And I still have to drive Uber at night.

Plus, this is very physically demanding work as well. and we need to reach a compromise for us to get more wages. If you are a DirecTV subscriber looking to catch the plethora of American men and women marching towards the finals of the U.S. Open, you were met with disappointment this weekend after ABC, ESPN, and a few other Disney-owned channels abruptly went dark on Sunday. The reason for the frustrating blackout was that Disney and DirecTV failed to come to an agreement on a new distribution deal. Both are pointing their fingers at each other.

DirecTV wants to offer more flexible packages to its customers and blames Disney for being greedy and, quote, hurting customers away from network TV onto its own streaming services. But Disney has fired back saying, listen, our channels are worth a lot. They cost a lot to produce. If you want them, pay up. Neil, to make matters worse, week one of the NFL season is looming this weekend, so it's injected some added urgency to a CARES dispute

that has left 11 million direct TV customers in the lurch. I'm having deja vu because literally the same exact thing happened last year when Disney and Charter Spectrum, which is another large pay TV provider, also had a dispute that led to a blackout of Disney-owned channels last year over Labor Day weekend during the U.S. Open, and there was this scramble to get it back for Monday Night Football, which we, you know, which we all watched Aaron Rogers get injured on. So everyone, they did resolve the dispute by then two weeks later, but this also, this blackout happened 10 minutes before the LSU game on Sunday night.

So that was another big sort of problem that led to a lot of complaints by DirecTV subscribers. And yeah, you said it. Like Disney wants to charge more for its channels. Direct TV is saying we don't think they're worth that much. And you're also being inflexible because at this time of people cutting the cord, they're balking at high prices. Meanwhile, you have all these streaming services, offering more a la carte options.

If you want family programming, you'll go to Disney Plus. If you want sports, you can go to ESPN. And there's just more ways you can slice and dice it. Media companies have not allowed distributors like DirecTV, like Charter, to do that according to those companies. And they want to do more genre-based bundle programming, like a family package, like a sports package, like a particular skinny bundle,

so they can charge less and offer fewer channels. They say Disney and like are trying to say, are trying to smush everything together. Like, you need National Geographic. You need ESPN. You need FX. And that way they can charge more to DirecTV. Right.

Direct TV is trying to remake itself in the image of streaming TV by offering these flexible skinnier bundles. But Disney does not want to budge. It is just, these things happen. Like, we talked about it. It happened literally a year ago. they, Disney and the like kind of time their deals to end during these periods of peak demand,

which is during the U.S. Open right before the NFL season. So usually it incentivizes a deal to happen. The last blackout ended after 12 days. So it was relatively a long time. But again, football kind of trumps all. So Disney is saying that DirecTV hasn't exactly negotiated in good faith as of yet, but there's something about the lure of football that makes everyone kind of. fall in line. Up next, Ticketmaster has managed to take off the entirety of the United Kingdom.

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to see the 90s legends live were met with many of the same frustrations as Americans trying to scoop up Taylor Swift's tour tickets two years ago. When trying to buy Oasis tickets on the three websites selling them, including Ticketmaster, fans encountered hours-long wait times, error messages, bots, and prices that were much higher than advertised. People trying to buy tickets on secondhand sites experienced even more sticker shock. There, prices climbed to $10,000 per ticket 70 times the original price, even though those won't even get you in the door. Ahead of the ticket release, Oasis reminded fans that tickets can only be resold at face value through two authorized online sellers, that tickets appearing on other secondary sites are either counterfeit or will be cancelled.

As people complained on social media, government officials didn't take long to join the pig pile. The culture spokesperson for the UK's liberal Democrats said it was scandalous to see our country's biggest cultural moments turned into obscene cash cows by greedy promoters and ticketing websites. Toby, was this the least surprising news item we've ever covered? Oh no, if it isn't the exact thing that literally everyone is. could see coming. Yes, we knew that this OASIS reunion tour was going to have absurd demand. We knew Ticketmaster was not going to be well equipped to handle it because we've seen it happen literally time and time again. The real issue is that, I mean, OASIS did their best. They tried

to put these guardrails in place to be part of it was that they released some tickets via pre-sale where fans literally had to submit a ballot correctly answering questions. They gave them a quiz about the band. And if you answer them correctly, then you got approved for the presale. But even with trying to spread out some of that demand, make it so it wasn't just this huge crush of people, it still happened anyway. And the problem is that Ticketmaster says that these tickets have essentially surge pricing attached to them. When there's times of peak demand, the price goes up. The same thing when you're waiting for an Uber on maybe a rainy day. Same thing happens under Ticketmaster. So they're trying to say, like, we're not behind the price rises. Ticketmaster's

trying to say, too, that this was pre-agreed to before the tickets went on sale. So no one is really pointing fingers at themselves saying, like, we're the problem here. But the people who are left out to dry are the people who just want to go see Oasis and not pay up to $10,000 for that. The big problem here does seem to be the dynamic pricing. And that is what the UK government is going to investigate upcoming this fall. Let's talk about that. Ticketmaster does say that they do not set prices that the artists do. And you can, as an artist, you can elect to have dynamic pricing or not dynamic pricing. And you can say, you know, dynamic pricing is that surge pricing. It's just another word for it. So they are saying that OASIS said we want dynamic pricing because

that they say this does two things. First of all, it just is the market. It matches supply and demand at any given moment. It also, according to proponents of dynamic pricing, prevents scalpers and bots from coming and scooping up all of the tickets at a low price and then selling them on second end sites for a much higher price. This dynamic pricing in the live ticketing industry has come under scrutiny before. I remember a few years ago, Bruce Springsteen actually employed dynamic pricing and was criticized pretty heavily for that when fans logged on to see that they were paying $600, $700 for a ticket. But this does appear to be coming under scrutiny by the UK government, just as it has in the United States, where the DOJ has sued Live Nation and Ticketmaster to try to break them up after their merger was approved over a decade ago.

That was joined by 30 attorneys general in various states as well. And the UK is like, well, I kind of understand why it happened. I should say it's not just Ticketmaster that was selling these tickets. There were two other sites as well. Yeah, it was very funny. you see the politicians piling in as well because they were in the queues, they were waiting for tickets, they want to see Oasis. So they're like, suddenly, we must solve this issue because I need to go see, you know,

the Gallagher brothers back on stage. So I know it's the Tuesday after a long weekend, but I need you all to listen up so we can solve one of the great conundrums currently affecting American society. Why the heck are we still making and using pennies? Seriously, think about it. Each penny costs more than three cents to make and distribute, so the U.S. men is losing money while making money. People don't use pennies, either billions of dollars worth are just catching dust in coin jars or under couches across the country. But we can't just ditch them.

It's what the New York Times reporter Katie Weaver calls the recursive and maddening logic of penny making. We have to keep making all these pennies because no one uses them. Since essentially no one uses pennies to buy things, there would be a penny deficit when a cashier tries to give you change after you pay a dollar for a 99 cent of Arizona iced tea. So over the years, the U.S. Mint makes an extra few billion pennies to replace the ones everyone just loses. Neil, this article from Katie Weaver was almost 8,000 words long, digging into every aspect of how pennies continue to persist. They are like cockroaches, unkillable. I mean, it just doesn't make any sense, does it? There is such a status quo bias here, and there is no really good reason, according to Katie

Weaver, that we don't get rid of the penny. It's just that, you know, we just have not taken upon ourselves to solve this problem. Maybe it's not the most pressing thing in the world. It's not really affecting anybody's daily life or making anybody's daily life that much worse. But other countries have eliminated the penny pretty recently. Canada got rid of their one cent coin in to 2013. and, you know, I was just in Canada this weekend. They're still alive. They're still going.

And what they did was interesting. They did not eliminate the concept of one cent. They still, prices at the store still come in one cent intervals. But if you pay in cash, they do a round up or a round down situation. So if it's, you know, $20.2, then you only pay $20 when you pay in cash. Meanwhile, if you swipe your card, which most people do, then you are charged that full of. amount. But yeah, Canada's still around. They got rid of the penny. Maybe we should too. Maybe we should too. The sheer amount of pennies just out there, though, is staggering. Some of these

statues blow my mind. A conservative estimate is that there are around 250 billion pennies lying around the United States right now. So that is about $7.24 for every man, women, and child that lives in the United States since the U.S. first started issuing one cent coins back in 1793. The United States has produced about half a trillion of them, which if you're keeping count, is more than the number of stars in the Milky Way galaxy. This is my favorite fact, though. The penny is the most produced coin in any history of civilization, which also means that the portrait of Abraham Lincoln on the penny is the most reproduced piece of art on Earth.

So so many pennies out there, it is just a kind of a byproduct of political inertia at this point. It is worth one cent. So if you go to your representative and say, let's talk about abolishing the penny, you're just going to get waived off because it's just literally not worth the time of day. So we keep making pennies. It keeps chugging along. And maybe we just need to take a road trip to Canada, see how the better half lives. Here's what you need to know for the week ahead, most importantly, that it's a short week.

First, America's long national nightmare is over because the NFL returns this week. And the league's takeover of every single day on the calendar will, be on full display because the Ravens and Chiefs kick things off on Thursday night. Then the Eagles and Green Bay will play in Sao Paulo Brazil on Friday, the NFL's first regular season game in South

America. There will be a full slate of games on Sunday, too, so prepare your couch accordingly. Toby, if the last NFL season will be remembered as the Travis Kelsey Taylor Swift show, what do you see as the major storylines heading into this fall? Well, first of all, Tom Brady is back

in the broadcast booth, though. Thank you. the Lord. He had that giant 10-year contract worth $375 million with Fox. So we'll see how he does. Is he as good in front of a mic as he is under center? We'll see. In the financial world, earnings reports have just about wrapped up for the quarter. And the next test for Wall Street arrives on Friday with the August jobs report. This one's a biggie because remember last month, the jobs numbers came in much lower than expected, contributing to a market crash the following Monday and leading some people to start throwing around that R-word.

Stocks have fully recovered since that meltdown, but investors will be paying close attention to signs of a weakening labor market. Here's where I'll plug our episode with Kyla Scanlon. Again, we talk a little bit about that last jobs report. We talk about the current state of the economy right now. So if you want some additional context around this jobs report, go listen to that episode. And it is the final jobs report before the Fed rate cut meeting, hopefully later this month. So whatever happens at that jobs report will maybe determine the size of that rate cut.

Over in the entertainment world, 36 years after the original was released, the Beetlejuice sequel will open in theaters. Called Beetlejuice, Beetlejuice, it's bringing back spooktastic director Tim Burton and actors Michael Keaton, Catherine O'Hara, and Winona Ryder to reprise their roles, plus the addition of Jenna Ortega, the star of Netflix's Wednesday. We were talking about this this morning. You're saying it's projected to gross $90 million. the box office. I was saying I'll take the under. I just am not a Tim Burton fan, so I'm definitely just projecting onto this movie. They're saying that it's going to have a little bit of nostalgia there for a big audience. A little bit. A lot of nostalgia. I just don't have that nostalgia. I never saw the original. So I get it. And I'm just going to say it. Beetlejuice,

beetle juice, beetle juice. See, nothing happens. I'm not scared. All right. That is all the time. We have. Thanks for starting your day with us and have a wonderful Tuesday. For any feedback, questions, comments on the show, send an email to Morningbrewdaily at Morningbrew.com and help spread the word. If there's anyone in your life who you think would enjoy Morning Brew Daily, tell them about it. Toby, who should our listeners share the pod with today? I want you to share this episode with someone you hung out with this long weekend. I'm sure you got some quality time with friends and family. So what better way to show you're still thinking about them than by sending a brand spanking new episode of MBD their way. Let's roll the credits. Emily Milliron

is our executive producer. Raymond Lue is our producer. Olivia Graham is our associate producer. Yucenoa Ogu is our technical director. Billy Minino is on audio. Hair and makeup thought it was a four-day weekend. How convenient. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Not loving your AT&T or T-Mobile bill? Yeah, we've been hearing that a lot. Good news. Bring your AT&T or T mobile bill to Verizon and we'll give you a better deal. So get away from that unfortunate phone bill and get to Verizon. Run, ride, canoe. Whatever it takes, we'll be here. Bring your AT&T or T mobile bill to a Verizon store today and we'll give you a better deal on the best network. A better deal. No surprises.

That's Verizon. Best network based on route metrics, best overall mobile network performance U.S. second half 2025, all rights reserved. It must provide a recent consumer mobile bill in the name of the person regimen the deal. Additional terms, conditions, and restrictions apply.