Morning Brew Daily - Napster Sold For $207M & Canadians Are Skipping US Travel

Episode Date: March 26, 2025

Episode 547: Neal and Toby chat about the Napster revival and why it’s being brought into the Metaverse. Then, everyday Canadians are getting fed up with the trade war that they’re deciding to spend their travel money elsewhere. Also, a Trump-backed crypto venture just launched a stablecoin, plunging deeper into crypto. Meanwhile, a group of civil engineers just gave America a report card for its infrastructure…and we’re a C average student.  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. Learn more at sophos.com Get your MBD mug here: https://shop.morningbrew.com/products/morning-brew-daily-mug  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Most important business story in the 21st century? 3:00 - Napster back? 7:30 - Canadians snub US travel 11:00 - Trump launches a stablecoin 16:30 - US infrastructure barely passes 21:00 - Headlines Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, where are all the Canadian tourists? Why our neighbors up north are snubbing Miami for Majorca. Then Napster, yes, that Napster, is back after being acquired for some of money that is much bigger than you think. It's Wednesday, March 26th. Let's...

If your bracket is toast in the real March Madness, here's an opportunity to start fresh. The Brews social media team led by Toby right here has rolled out a bracket challenge that attempts to answer the question. everyone is asking in 2025, what was the most important business story of the first quarter of the 21st century? We're not deciding you are. You can head to the Bruce's social media pages on X and Instagram to vote on juicy first round matchups like when Apple put you two on all our phones versus the release of Vine or FTX collapses versus fire festival. Toby, the first round of voting happened yesterday. Were there any upsets? We've already had two upsets in the first round, so we're beating real March Madness in terms of excitement.

Both came from the 2000 to 2005 region in a 5 versus 12 matchup, putting the iPods launch versus LinkedIn's launch. The lower-seated iPod wiped the floor with everyone's least favorite social media platform. Then in an 8 versus 9 matchup, the launch of Gmail barely eked out a win over the AOL Time Warner merger. My favorite matchup, though, was Martha Stewart's insider trading case versus Enron. collapse, that almost saw Martha pull off the upset, but alas, Enron came out unscathed. As for the next two regions of the bracket that are dropping today, I'm looking at number 13 Pokemon Go-craze versus the number four Cambridge Analytical scandal. I think Pokemon can upset that one there.

And then in the 2019 to 2025 region, number nine, the Ares Tour versus number eight, NVIDIA becomes the most valuable company. Brutal first-round matchup, I think both of those could have made a run. But yes, as Neil said, voting is going to run through this whole week on Morning Bruise X and Instagram accounts if you want to participate, and we'll see you there. Now a word from our sponsor, Sophos. Neil, remember Fluffy, the three-headed dog from Harry Potter? Scared to me to death growing up. Do you remember what Fluffy's one job was?

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One-twinter, please gamble responsibly. Monopoly is a trademark of Hasbro. Hasbro is not a sponsor of this promotion. Remember Napster? Of course you do. It made music execs lose sleep. Lawyers rake in a billable hours and ushered in the concept of music streaming. That very same Napster just sold for $207 million to a company called Infinite Reality, which says it's going to transform the brand into a quote, social music platform, according to a press release, where music lovers can hang out in virtual 3D spaces to watch concerts, join, listing parties and participate in merch drops. Yeah, somehow Napster is being resurrected as a Metaverse company in 2025. Now, to be clear, Napster hasn't been the Napster you remember in a long time. It went bankrupt in 2002 after a barrage of lawsuits. And ever since then, it's been passed around like an illegally downloaded MP3 file. Best Buy owned it at one point. So did a company called Rhapsody. And most recently, it was in the hands of a consortium of crypto companies. But Napster still holds

the licenses to stream millions of tracks, which made it an attractive acquisition target. So once more, Infinite Reality is trying to reinvent it. This time with a focus on building this sort of immersive music-driven 3D social space. Its new CEO, formerly the head of music at Roblox, says artists will be able to create virtual environments that Matt survive, unbound by the constraints of reality. If you remember Travis Scott's concert in Fortnite back in the pandemic, that's the vibe they they are going for here. Neil Napster back in the year 2025.

Who? What a thought? Well, I wasn't sure what is more surprising about this news that Napster still existed or that it was sold for more than $200 million. That is a very large acquisition. And I think you're right that the value in Napster is not necessarily from the brand, but from this library of tracks that it has the license for. It has 110 million tracks. It's paid over a billion dollars to artists and labels over the past few decades in order to acquire that library. And that an attractive target for this quite large company, Infinite Reality, which just recently raised $3 billion at a $13 billion valuation. So this company is quite large, even though most of us had never heard about it. I guess they're a big player in the Metaverse 3D space, and we'll see what they do with Napster. I saw a lot of eye rolling from a lot of publications because creating a metaversial company out of a company that, you know, went bankrupt back in 2000, feels just so.

so out of date on so many levels, but they are pretty bullish on this idea of these, you know, 3D spaces where you can listen to music in a different way because the vision as the CEO of Napster described it is Clubhouse times a trillion. I don't know if you guys remember Clubhouse, but that was this app where you could hang out with each other and talk in a virtual space that was just over, you know, that was just audio only. This would incorporate visuals in 3D and merch drops and whatnot. So, and there have been success. here because, I mean, I mentioned that Travis Scott virtual concert in Fortnite. That kind of kicked off this idea of virtual concerts.

That was attended by millions of people. So there is some, you know, proof of concept. What else is going on then? It's true. It's true. It was definitely a different time. But I think that they are thinking that there is definitely proof of concept here at some level. So they're going to try to run it back with, you know, clubhouse times a trillion.

And there is a push in the music industry more broadly to let artists monetize their most loyal fans. So that is exactly what infinite reality is trying to do with Napsters, trying to increase the engagement. Because on one hand, you have super loyal fans that want more out of their artists. They want exclusive merch. They want more time, exclusive time with the artists that they love. At the same time, artists are looking for new revenue streams. They have, you know, tours, but they're getting less from streaming companies than they did when they sold CDs. So there might be a match here.

I don't know if the digital metaverse is the place for that to happen because we have seen most metaverse projects kind of fizzle out. We'll see what happens with Infinite Reality. They have a pretty successful stable of companies. They own drone racing league. They own a bunch of e-sports teams as well that compete in League of Legends and Call of Duty. The guy who's the CEO of Napster was the music head at Roblox. So Roblox is this metaverse style gaming platform that is. also hosted concerts like Fortnite with folks like Lil Nas X.

So we'll see what they do with Napster. Just a blast from the past. As anger boils over in Canada against the United States, Canadians are taking their vacations elsewhere and aren't apologizing for it. Airlines, tourism groups, and U.S. businesses say they're experiencing a significant drop-off in Canadian visitors to the United States, citing backlash from President Trump's tariff talk and frequent allusions to annexing Canada and making it the 50. first state. The numbers bear it out. In the skies, Canadian residents returned from 13% fewer trips

to the U.S. in February than a year ago, according to Statistics Canada. The decline was even more severe at land crossings, where Canadian return trips from the U.S. plunged by 23% compared to a year ago. An American vacation boycott by Canadians could ripple through the U.S. economy, especially in states like Michigan and New York, which have been major destinations for people living just north of the border. Canadians are the number one source of visitors to the U.S. and just a 10% reduction in their travel could lead to $2 billion in lost spending and 14,000 job losses in the hospitality industry, according to the U.S. Travel Association. Toby, we've seen Canadians boycott American grocery store products, boo the star-spangled banner,

and now cancel that Vegas trip to play the slots in Putakana. Canadians do kind of really help out the U.S. when it comes to their economy because 20 million visitors came to the U.S. in that 2024. I mean, it makes sense. They're our next door neighbors. So, of course, they're going to just pop over the border. Some cities like Buffalo see 35 to 40 percent of their visitors come from Canada. And it's not just that Canada is feeling this anti-U.S. sentiment.

They're also just kind of spreading their travel other places. They've seen an uptick in trips to South America where they're just skipping over North America all together. But also, a recent online survey suggested that Canada, is feeling more patriotic about staying in Canada. They talked to 1,500 different people, and they said half said they were less likely to visit the U.S. this year, and 6 and 10 said they planned a vacation in Canada instead, which is reflecting this sort of broader patriotic by Canada movement we're seeing across the retail sector as well. So Canadians might just be skipping out on Miami and staying in Montreal instead. And it's not good for the tourism business.

International travel to the U.S. is expected to slide by 5% this year, according to tourism economics, that could contribute to a $64 billion shortfall for the travel industry. And that 5% slide is notable because the previous projection was a 9% increase in foreign travel to the United States. Tourism economics updated, revised this forecast from a 9% increase to a 5% decrease to reflect, quote, polarizing Trump administration policies and rhetoric. And you have such a large gap between those two forecasts because it's not. just Canada or Canadians who are skipping out on coming to the United States. A bunch of other countries have updated their U.S. travel advisories over concerns of, quote, aggressive questioning, detentions, and denials of admissions. You've seen it in the UK. You've seen it in Germany.

Canada just updated their travel guidelines yesterday. So they're warning their citizens saying it's not particularly a safe time to visit the United States right now. Right. Atlantic flights depend usually more on U.S. travelers heading to Europe than European travelers heading to the U.S. and right now U.S. outbound travel demand still looks like it's staying pretty consistent, but still airlines, hotel groups, tourism, they're all kind of on

watch right now because there could be that big reduction in tourism to the United States. Add a stable to Trump's growing stable of crypto entanglements. The president and his sons launched a new coin yesterday called USD1 through their family company World Liberty Financial.

It's a stable coin pegged to the U.S. dollar and it's already live on Ethereum and Binance's blockchain. This is now Trump's fourth foray into digital currency. There's the WLFI token, which has raised over $550 million for World Liberty. There's a meme coin he dropped before his inauguration, currently sitting at a $2.3 billion market cap. Melania has her own coin, and now we've got this stable coin, which the company says

will be backed one-to-one with U.S. treasuries and cash equivalents. Stable coins are basically crypto's version of cash. They are typically designed to stay fixed to an underlying. asset, usually U.S. dollar, and provide the liquidity that makes the crypto ecosystem hum. Everyone from PayPal to Ripple to Gemini has their own version, and Trump's U.S. D1 is the latest player in the crowded field, though the World Life Financial Team is trying to separate itself from the pack by actively promoting it as a way to expand the U.S.'s dollar dominance globally. Treasury Secretary Scott Bassett said at the White House Crypto Summit that, quote,

we are going to keep the U.S. the dominant reserve currency in the world, and we're going to use stable coins to do that. So, Neil, this launch from World Life Financial looks like it's following through on that promise. Yeah, stable coins have a very explicit promise, and that's you get none of the volatility associated with crypto because they're designed to maintain a constant value of $1. But you get all of the benefits, which is making cross-border payments faster, cheaper and more transparent. So they're hyping up the lack of volatility and the ability to promote the U.S. dollar and U.S. dollar gemini all over the world through these cross-border and pavements. So that is the promise of the stable coin and, you know, emphasis on stable

because we've seen a bunch of other cryptos be volatile. It's the opposite of a mean coin, especially because it's backed by U.S. debt and U.S. currency. So that is the promise of a stable coin. It hasn't always worked out in the past. I mean, remember crypto winter in 2022? That was caused by another type of stable coin. An algorithmic stable coin terra-USD collapsed and it brought down the crypto market entirely because $40 billion was wiped out. So there are a variety of types of stable coin here. The one that World Life Financial is hyping intends to be one of the more stable of the stable. I, well done. I am glad you brought up cross-border payments there, as one of World Liberty's founder said, we're offering a digital dollar stable coin that sovereign

investors and major institutions can confidently integrate into their strategies for secure cross-border transactions. That emphasis on international payments actually raise somewhat warning flags because then you can think about, you just go down this thought slope and foreign governments could use the coin to potentially curry favor with the current administration, stuff like that. And another concern is a conflict of interest as well. There's a lot of stable coin that is making its way towards the president's desk going through Congress that looks like it should pass before August, which technically benefits the company that just launched a stable coin. So those are two kind of conflict of interest people have brought up. One, that foreign

nationals could intermean with our government. And then two, that legislation is being passed that supports World Liberty Financials mission right now. Up next, let's talk about a report card for our infrastructure. We're the Hartford, with decades of experience ensuring millions of unique small businesses, when it comes to your small business insurance. Thank you. One size, absolutely, does not fit all.

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The American Society of Civil Engineers said that the bipartisan infrastructure bill passed during Joe Biden's presidency, which authorized $1.2 trillion in funding for projects, was key to improving the country's GPA, as were funds doled out by the inflation reduction. Act. As anyone who's tried to use Amtrak Wi-Fi knows there is still a lot of room for improvement. The Society of Civil Engineers use this report card to call on the government to continue funding infrastructure projects, especially at a time when the Trump administration has put on hold some of the infrastructure bills funds. The group claims that better infrastructure is an efficient investment of taxpayer dollars that results in a stronger economy and prioritizes American jobs. Tobias, someone who's familiar with getting seized, what do you think the U.S. can learn from this report card. I think that we're trending in the right direction,

but you've got to keep this momentum going. Right now, an estimated $9.1 trillion would be needed to ensure that all 18 categories within this report would reach a, quote, state of good repair, as they call it. And right now, in 2024, the AASCE estimated that only, and I stress only there, $5.4 trillion of investments will be made through the year 233. So there is that 3.7, trillion dollar gap between what they think we need versus what we're outlaying there. So how do you sell that, though, to American people? They said that it is efficient use of tax dollars. They think that poor infrastructure costs American households around $2,700 a year.

And if you kind of improve on some of those specific categories, it could save Americans money as well. So maybe if your roads are more efficient, if your drinking water is more efficient, if your dams are more efficient. I love efficient drinking water. I love efficient A. I mean, you take it for granted, but it is a big part of, you know, infrastructure in America. So they are trying to spin it as saying that these are dollars well spent and we need to keep spending them.

Let's run down some of these categories. So there were 18 categories reviewed. The nation's ports received the highest grade of any form of infrastructure with a B. And the other B, which was a B minus, was rail. Bridges, broadband, drinking water systems, hazardous waste treatment, things like public parks, all got a C plus to a C. minus and then let's roll it down to the D plus or a D dams, roads, schools, infrastructure for aviation, stormwater, transit and wastewater all got D plus or D's. So that's kind of where we're standing.

I would love to bump those up a little bit more. But it was very interesting to hear some criticism of this report from certain areas. And they said, these people just love to spend money. Maybe spending money is not the most efficient use to improve our infrastructure. there are other tools and levers you can pull to improve infrastructure. One of them, as an example, might be something like the New York City's congestion pricing that they've just put into place. That didn't necessarily cost a lot of money.

It did not cost anywhere near into the trillions that this group wants, but it may improve infrastructure by reducing the amount of cars on the roads leading to fewer repairs for bridges and tunnels and raising money to improve those as well. So it is, you know, you don't think necessarily of criticism of the folks who are just putting out a report card. But there might be other ways to improve infrastructure than just by spending trillions of dollars. I'm still hanging up this one on the fridge because, as you said, Cs get degrees and we're trending in the right direction. So put that magnet on. If LaGuardia's new terminal is any indication.

True. That's an A plus in my eyes. Let's sprint to the finish with some final headlines you may have missed. Up first, consumer confidence in the U.S. is officially at a four-year. year low, with the conference boards index dropping by 7.2 points in March, marking the fourth consecutive monthly decline. The Expectations Index, in particular, which measures consumers' short-term outlook on income, business, and job market conditions fell sharply and is now below a key recession warning threshold. Key drivers of this pessimism are pretty much exactly what you'd expect, concerns over tariffs, rising inflation, and job security. Economists warn that continued

declines in consumer confidence could pressure consumer. spending, which drives two-thirds of GDP. Neil, these things can quickly become self-fulfilling. If consumers feel uncertain, they spend less. If they spend less, that causes an economic slowdown, which makes them feel even more uncertain. So this is a very slippery slope. You're going to start to hear another word creep up that you may not have heard it for a few years. And that word is vibe session.

That was around a lot during the Biden years when people were feeling pretty bad about the economy, but all the numbers look good. So there was this weird delta between how the vibes and the actual economic data, that's kind of what we're seeing now. The vibes are really bad. But the economic data itself, the hard data, what that Jerome Powell calls it, is looking pretty much fine. Strong labor market, spending is okay. So we'll see whether those two converge in the months ahead. President Trump said he would launch an investigation of Tuesday's shocking revelation that the Atlantic's editor-in-chief, Jeffrey Goldberg,

was somehow added to a signal group chat in which top officials discussed a plan to bomb Houthi targets in Yemen. But the message from the Trump administration yesterday was mostly, this is not a big deal, nothing to see here, as Democrats and other national security experts warned it was a massive and extremely embarrassing breach of tightly guarded information. A legal battle kicked off after five members of Trump's cabinet were sued for violating U.S. laws meant to safeguard government records by using Signal, a commercial app for official communications. Signal is kind of having a moment amongst the federal bureaucrats in Washington right now. It was mostly known amongst Silicon Valley and honestly like global nonconformists for leaving few digital traces.

But now there are a lot of people within Washington are embracing it as a tactic to protect their own communications. The app has been downloaded more than 2.7 million times in the United States so far this year. That's up 36% over the same period compared to, last year. So I do think we are seeing this shift towards signal and we're going to see it start to pop up more and more because, you know, obfuscating official communications is definitely something that doesn't go hand in hand with a clear and democratic government. So I think you're going to see Signal as a name to watch this year, especially as it's being more downloaded in amongst

the highest levels of our government. Up next, it looks like the main component of 23 and Me's DNA is failure at this point. After the genetic testing company filed for bankruptcy on Monday. Yesterday was another House of Horrors, as a massive influx of customers rushing to delete their genetic data caused the site to continually malfunction. Long wait times and air messages greeted customers who were trying to safeguard their sensitive information, especially those who were trying to deal with the data of a deceased family member with a lost password.

Neil 23 and me boasts it had 15 million people who provided their genetic information, saliva samples, and personal health history to their children. database, which means they now have 15 million very concerned people all scrambling to delete that data as well. And this trove of DNA from people is their most valuable asset that they have in bankruptcy. So for every person that goes to log on to delete their DNA sample, their price out of bankruptcy just keeps getting lower and lower. So, you know, I'm not a conspiracy theorist. They do have an incentive to not let people try to delete their DNA samples from this database. I assume that they are not doing this intentionally, but just the volume of people

that are going on to the website that saw 23 Amigo bankrupt. Oh, I need to go delete my my DNA sample from their database has just been huge and it overloaded their website. And you're right, it's just been a house of horrors for the last few years and it's only picked up in the last few days. Finally, here's an aviation horror story you've never heard before. On Saturday, a United Airlines plane bound for Shanghai from Los Angeles made a U-turn over the Pacific Ocean after about two hours and diverted to San Francisco. And the reason is that the pilot realized they forgot their passport. In San Francisco, the plane got a new crew and made it to Shanghai about six hours late,

but this was super embarrassing. Passengers said they began to get suspicious when the flight attendant asked, is there a photo doctor on board? Imagine watching a flight radar or something like that. And seeing this plane just do a U-turn, that must have been an electric feeling. This reminds me of when you were young and you were. going to a sporting event and you forgot your cleats or your key equipment and you had to muster up the courage to tell your parents so they would turn around. I think that's honestly

even higher stakes than this. But imagine the feeling of the pilot killing. Guys, like, I forgot my, we're going to have to turn this ship around. And the worst part is they only gave passengers a meal vouchers totaling $30 that you could use in the airport when you landed. So for all this hassle, six hours late to their destination, all they got is a measly $30 meal voucher. Just a house of horrors. My question is what were the communications from the flight deck to the people in the airplane explaining why they had to turn around over the Pacific Ocean and go back to San Francisco for a little bit?

Were they truthful about it? Did they say something a little more general or vague? Did they make up something? Did they make up something completely? Or were they just like straight out right with it and just said, actually the pilot, excuse me, the passenger, the seabelt side is on because the pilot forgot his passport. to turn around. I think there's no way they could say that because there would just been an eruption in the cabin. I think you can just make it sound very official. Like, due to a

documentation error, we're going to have to turn this puppy around. But I think you're right, egg on the face moment for United and especially this pilot. Oh, poor guy. Okay, let's wrap it up there. Thank you for starting your morning with us and have a wonderful Wednesday. This week is flying by. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer, Olivia Graham and Olivia Lake are our associate producers.

Yucinawa Ogu is our technical director. Scoop Stardaris is on audio. Hair and makeup, you get an A for skin care infrastructure. Devin Emery is our chief content officer and our show is a production of Boring Brew. Great show today, Neil. Let's run it back tomorrow. Hey, Mama. Thanks for making all my favorite recipes. Hi, Ma. Thanks for your unfiltered advice.

Hi, Mom. Thanks for always being by the phone. Hey, Mom. Happy Mother's Day. When you ship UPS Air at the UPS store, your items arrive on time or your money back. Guaranteed at no extra cost, exclusively at the UPS store UPS store U.S. retail locations. Visit the UPS store.com slash air shipping for full details. Terms and conditions apply. Send your Mother's Day gifts at the UPS store and we'll get your gratitude there on time.