The Best One Yet - 🕹️“A video game team... stock” — FaZe Clan’s eSports. Spotify’s hub-tastic plan. Facebook’s 2 threats & 1 weapon.

Episode Date: October 27, 2021

Spotify’s earnings are today, but we think the bigger story is their new merch store… because Spotify could create the 1st true hub for the Creator Economy. FaZe Clan is taking their eSports team public for $1B thanks to Pitbull and 350M pairs of eyeballs. And Facebook’s facing 2 threats with 1 weapon: A “Reality Lab.”$FAZE $SPOT $SHOP $FB $BRPMGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Wednesday, October 27th. Crazy day yesterday. Google and Microsoft both just announced record earnings. Cloud, SaaS, cloud, enterprise, more cloud, extra cloud. And then Twitter announced a surprise loss.

Monthly active users. Daily active users, freakishly active users. You know what? We didn't cover any of those stories. No, we didn't because Jack and I, we found three way better stories for you. Today's pod is the best one yet. It's a TVOI, Jack. For a story.

What do we got? Spotify. announces their earnings today, Wednesday. Wall Street will be focused on the number of subs. We were focused on its creator hubs. For our second story, Phase Clan would make Yogi Bear's head explode. And Face Clan is going pop.

I love that name. Phase Clan is the New York Yankees for video games. If the New York Yankees played multiple sports and multiple video games. For our third and final story, Facebook headlines recently have made the company look absolutely awful. Our headline today is that the company is completely transforming starting today. This is a great mix.

Before we hit that mix, though, Nick. Fantastic mix. Let's talk about another mix. Candy corn, the most polarizing confectionary on the planet. Jack, Candy corn was pumpkin spice before pumpkin spice was even a thing. Three colors for candy corn, but two reactions to candy corn. You love candy corn or you hate candy corn. Some people eat candy corn like they were cattle,

munch and feed from a bag. Does candy corn have any relation to popcorn, though? Other people experience a gag reflex when it comes to candy corn. I mean, I guess it doesn't, but it's definitely related to corn syrup, which feels like it's related to corn. Big problem, naked candy corn world. After a hundred twenty three years, that confectionery is still dominated by just one company. One company, that company is Ferraro. They dominate the candy corn.

They own it. That's right. One factory in the city of Chicago makes about 85% of all of the world's candy corn. Yeah, this one factory in the middle of Chicago. has been churning out seven billion pieces of fake caloric kernels every single year. That's what they do. Now we got a bigger problem to tell you about. A huger problem.

That critical candy corn factory just got hacked. They were hacked. Now they are cooperating with specialists to restore impacted systems as expeditiously as possible. Translation, they're trying to fix it. Yeah, they're basically trying to fix it so you can get more candy corn as soon as possible. But we are offended. This is not a cyber attack on a candy corn. This is a cyber attack on Halloween.

Now, though, cyber attackers ransom demand was probably to shut down the factory because they hate candy corn like your aunts. Snackers, if you love candy corn, remain calm. Please do. The factories actually back up to near capacity. Candy corn. It's so unpopular, it's actually become more popular. Happy four days before haul. Let's hit our three stories.

It's snacks about to hear ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, we're not recommending any securities. No. It's not a research report or investment advice. Not an offer or sale of a security.

Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Spotify announces earnings today. Big day, big earnings. But we're more focused on what Spotify's been doing the entire past year. The whole year, what have they been building? We think they've been building it.

A creator hub. Are we going with Creator Hub, Jack? Or should we go with Creator Mecca? Creator Hogwarts, creator home base, like a Death Star. It's like a Death Star. It's like a Death Star, minus the civilization annihilation, maybe. Like a nice version of the Death Star, like a kind, gentler Death Star. Nick, it's a hub for creators. Let's stick with that. It's a hub. Let's go with Hub. Spotify earnings are today. The key metrics, they're expected to grow about 25% revenues and paid users. Last quarter, Spotify had 345 million global users. And get this, they have more than double

the number of American users as Apple Music does. That's a big deal. But we're what Jack and I think was a bigger deal was actually what Spotify announced last week. A partnership with Shopify, the anti-Amazon tech e-commerce enabler. People went to say Shopify Spotify-partnership for like years. Now, Snackers, here's how this is going down. Artists and podcast hosts on Spotify can now connect their Shopify online stores natively to their Spotify pages that you listen to. On Friday, Ed Sheeran's new album drops, you can listen on Spotify, And you can buy an equals t-shirt also on Spotify. Fantastic.

Or Jack, let's say maybe someone's listening to Snacks Daily. They get two minutes into the podcast today. What could they get a push for? They might be thinking, I love this pod so much. This is such a T-boy. I demand some merch. And I want to wear this podcast. Well, you could potentially buy a size medium T-boy t-shirt.

That's a T-shirt you buy through Spotify. If only Nick and I would get our act together, make that happen. But we're preparing this podcast every single day. Snackers, there is a wild issue that Jack and I have noticed. It's that creators in the creator economy are nomads. They need a home. We got nowhere to go.

It's a Jack Kerak situation. They're on the road. They need a place. Where are you going to be? You got to have some place to settle down. Put your head. Snackers, you have heard of the creator economy. It's surge during the pandemic.

It's when people quit their corporate job to launch like a hot sauce Instagram show where they're making ad somehow. Right. Then they launched a bunch of spin-off hot sauce like newsletters and podcasts and three other things. But Nick and I can tell you, creators are constantly forced to move between like a dozen different revenue-generating platforms they depend on. Yeah, for example, if you're creator, you're probably sending out a newsletter on substack and you're writing articles on Medium and you're publishing a podcast for Apple Podcasts. But you need video. You're putting long form on YouTube, short form on TikTok. But Jack, you also need to make money. So you're doing shoutouts on the cameo app.

you're selling merchandise on Shopify and you're accepting tips via Patreon. Oh, wait, what's your website? Yeah, that's right. You need a website on Squarespace, but here's the thing. Yeah. It's just to house the links to all those other platforms we just mentioned. You need a home to put all your things and that website's just taking you to the other things. At least you need like a U-Haul.

Something. So, Jack, what's the takeaway for our buddies over at Spotify? Spotify could become the first hub for creators. Snackers, Spotify's CEO, Daniel X, said that they have. an audio company, not a music company. But Jack and I think that Spotify is really now a creator company. We just told you that podcast host can now connect their merch store within the Spotify app. Well, you know what else? Spotify launched last week. Musicians can now post videos on Spotify without ever leaving the Spotify app. Kind of a YouTube be moved by Spotify. Jack, remember over the

summer when Spotify launched live audio, kind of like Clubhouse? It basically zucked Clubhouse. Yeah, they call it Green Room. Well, Spotify could start selling tickets for. virtual events or even in-person events all within the Spotify app. Spotify's end game shouldn't be all things audio. We think it should be all things creator. For our second story, wait, do you like candy corn or you don't like candy corn? I'm into it. Okay.

Which side do you eat? The white part first or the orange part first? Apparently makes a difference. Oh, I definitely eat one color at a time. It makes it a game. Yeah, that's the key. Apparently like 60% of people do. All right, second story, Phase Clan is taking its e-sport team public for a billion

$1, Esports, Fais Clan. This is the New York Yankees of e-sports, and they've created a new business model. Face Klan. All right, first of all, the year, 2010, great year. Jack and I were probably studying for some exam somewhere. We thought we were being productive and doing the right thing with our lives. Meanwhile, a few dudes were creating a YouTube channel that would lead to a billion dollars of valuation.

Yeah, apparently we should have taken the blue pill, Jack. In 2012, that group of friends in their YouTube channel put together. a competitive team playing call-of-duty video games, and that was their first e-sports team. And they eventually became a company called Phase Clan, which is the New York Yankees of competitive online video games. But if the New York Yankees played multiple sports and had multiple teams competing in all those sports. All video games, though, not real sports.

All video games, yeah. And if the New York Yankees owned a streetwear brand and if they were all the players, vloggers at the same time. All right. Let us help you try to understand what Phase Clan. is they have a bunch of teams. Yeah, it's like the Yankees crossed with Supreme Sweatpants with a little bit of Kylie Jenner.

They have one team of video gamers who just play Fortnite competitively. Yeah, and then they got another team of video gamers who are playing Battlegrounds. And yet another team of video gamers. These guys all get salaries, by the way. We're talking pros who play Call of Duty. These are blue chip video gamers born with controller in each hand. We're talking Jungle Cat reflexes. Go to Faze Clan's website.

You'll see a roster, which is full of players, but not like Derek Jee's. and his thousand RBI. No, no, not that. Astro with his thousand never died. And you're going to watch six minutes of Astro owning his rival because his rival didn't come to play. And any team's website has a statistics page and they'll show that Astro, whose real name is Leo, by the way. Yeah, we should point that out. Has 50,000 YouTube subscribers.

Those are the stats that matter to these players. Yeah, this is the key data. They also show his Twitter followers, his Inster followers, and basically every other channel where you can watch this guy. All right. So it's a squad of competitive video gamers. that is now becoming a stock, publicly traded stock, because it got acquired by a SPAC. Now, when it comes to Phase Clan's competitive advantage, it isn't like proprietary information or some special software. Basically, it's hype. Their competitive advantage is hype.

I was thinking their competitive advantage was cheat codes. Up down, up down, left, right, AB, AB, up down. Astro, let us know the cheat code. Snackers, it's really hype. They announced that they were going public, Phase Clan, in a three-minute hype trailer-like video. Yeah, and in this three-minute video, they're hyping up their growth of their business, how they become a consumer lifestyle brand. But they only made 50 million in revenue last year. That's one of the smallest revenues we've ever covered on this pot. And they say what differentiates them is that they've hyped up this one billion dollar valuation. But there's another public e-sports team that's only worth $40 million.

That team, by the way, it's Denmark's Astralist. Fantastic team. And the hype is capped off by Pitbull, Dale, who is a backer and investor in this cover. And Pipple is the ultimate hype beast of them all. So here's the big question I wish I had a cheat code for. Will people want to buy stock of a roster of video gamers who monetize through ads and merchandise online? And then on top of that, do you think that roster of video gamers who monetize through ads and merch and the key players an employee named Astro is worth a billion dollars? That's the question.

We'll see on Wall Street tomorrow. So, Jack, what's the takeaway for our buddies playing games over at FaceClan? FaceClan's pioneering a new business model, the audience industry. Snackers, here is what separates. Faze Klan from all the other esports teams, the other video games and all the other media companies out there. They have a huge audience. Huge. 350 million fans who will watch whatever Fais Klan's players post online.

And here's what Jack and I find fascinating. Only 20% of Fase Klan's revenue actually comes from competitive video games. The rest of their money comes from selling things to 350 million people in their audience. So 20% comes from like an award for winning a big call of duty tournament. Congratulations. The rest is selling. that fame of the players. Yeah, because most of the 350 million human being audience for Fays Clan is under 18, which is a coveted demographic for advertisers. That's why McDonald's

sponsors a couple Faze Clan e-sports teams. That's why General Mills launched a video series with Faisclan to promote pizza rooms. FACE Clans, athletes, can I say that, have hustled on YouTube. They've done streetwear drops. They've done events for e-sports. And that has got Faisclan, 350 million pairs of eyeball. Now they're going public because investors want a piece of those eyeballs of that audience. For our third and final story, is this candy card factory going to be back online or what? Facebook has had more news in the past two weeks than any company. Honestly, we've ever seen.

And we just learned it has two big fears and one big weapon. Facebook, I mean, Jack, brutal. They basically had a pinata month getting smacked around for the last few weeks. Imagine being a pinata at Jose Canseco's birthday party. Not like pre-steroid Jose. We're talking post-steroid Jose. Now, it started with an anonymous former Facebook employee who leaked a bunch of docs that fueled great bombshell reporting from the Wall Street Journal. Then she revealed herself dished dirt to Congress, ditched it to Parliament to a dozen major news organizations.

All about Facebook. And that dirt that she dished resulted in dozens of articles being published, which all ripped into Facebook's dozens of hugely consequences. sequential failures. But here's the situation Jack and I have seen like a hundred times. It's the Facebook phenomenon. It happens every single time, Jack. Its reputation gets crushed, but its profits emerge unscathed. Vala. Snackers yesterday, Facebook's earnings revealed a record, third quarter profit of $9 billion. That's half a lift. Because both sides of the Facebook platform are hooked. Advertisers and scrollers are addicted to Zuck's social networks. We're talking 3.6 billion people have used Facebook apps monthly. And Jack, when you take into account the $9 billion in profits,

how much money are they making off of all of us? They made $2.72 per month on 3.6 billion people. It's half of the world. But Snackers, here's what Jack and I find fascinating about the Facebook phenomenon. The Facebook phenomenon is something that Facebook doesn't think is going to last. Yeah, the easy money printing days of their ad sales business is slowing down. And that's why Zuck just announced a new thing called Facebook. reality labs. This is a new business line that he's investing with $10 billion to hire a whole bunch of coders and a whole bunch of designers. Because, Zuck, he wants you to quit scrolling your iPhone and start living in an alternative reality instead, which happens to be an alternative reality that Facebook would create.

And an alternative reality, which requires Facebook's Oculus virtual reality goggles. Interesting. So they would control both the hardware product and the software that you'd be using. Starting this quarter, you'll expect to see Facebook moving huge. huge money from yesterday's profitable advertising business to tomorrow's hopefully profitable virtual reality business. We're also expecting Facebook to officially change its name at Thursday's big Facebook event. Jack, are we going with CubaSaf? Are we going with meta?

What are we going with on this? The money's on Metaverse. Facebook backwards just works on so many levels. So, Jack, what's the takeaway for our buddies over at Facebook? Facebook's two biggest threats are teens and Apple. We've been saying for years that Congress is a threat to Facebook would be the number one threat to Facebook. But we've seen no sign for years that the government is capable of putting a check on the immense power of Mark Zuckerberg. But here's the funny thing. Facebook thinks that teens

may actually be the threat to Facebook. That's right. As part of those leaks, Facebook insiders say that their inability to attract teens to Facebook apps is an existential threat to the future. Yeah, because the kids these days aren't into Facebook or Instagram at all. They prefer TikTok. They prefer Snapchat. Facebook actually projects a drop of 45% more over the next two years from teens on their apps. And teens aren't the only threat to Facebook. Facebook also depends on Apple to do its business. So Apple is actually the second threat to Facebook.

And Apple just tweaked their iOS iPhone operating system, which hurt ad sales for Facebook last quarter. Zuck hates that Tim Cook can affect his entire business at the simple flick of an iPhone switch. So if teenagers and Apple are the threats to Facebook, what is the solution? Yes, the solution, Jack. It's the metaverse. The Metaverse, a virtual universe that attracts young people with something completely new and completely digital. A virtual universe that neither Apple's iPhone nor Google's Android have any role in.

So teenagers and Apple, those are Facebook's two greatest fears. The Metaverse would be their biggest weapon. Jack, can you whip up the earnings? I did it again. Jack, can you whip up the takeaways for us over there? Spotify announces earnings today, but already announced a partnership with Shopify. Spotify, not Shopify, could become the first hub for creators. Phase Clan is a first that we've ever seen, a publicly traded video game team.

They're in the business of monetizing their audience because they're in the audience industry. Facebook just announced record profits despite record bad PR. Teens and Apple, those are its two greatest threats. The Metaverse, that would be Facebook's greatest solution. Now, time for our snack fact of the day. this one sent in by Morrow Barron from Brea, California. If you were to spell out the numbers, like one, two, and three. Letters with numbers, or numbers with letters, rather.

Like, O-N-E, T-W-O-T-H-R-E. Perfect for three. You'd need a lot of letters to write out those numbers. But here's the wild thing that Morrow notice. You wouldn't use the letter A until, like, for a very long time. The letter A does not appear in the writing out of the numbers until, you hit the number 1000. Exactly, because the letter A does not appear in numbers until the word thousand, like T-H-O-U-S-A-N-D. The number eight sounds like it starts with an A, but it doesn't actually.

It's going to mess with your headjack. Ironically, the number Z doesn't come up until bazillion, which as we all know is the last number in the number hemisphere. Snackers, whether you like candy corn or you hate it, we know it's either one of the two. Have a fantastic day. Nick and I will see you tomorrow. Can't wait. H-Y-H-Y S-Date. Have you had your snacks daily? If you know, you know.

And before we go, shout out to Snacker and Air Force cadet Jeffrey Howard, who came up with the best weather term we had ever heard when we asked for one in Tebow, Tuesday. Instead of a meteor shower, which sounds kind of fun, Jeffrey calls it a Stardust hurricane. Which just sounds absolutely lovely. Happy birthday to Isaac Faldmo in Santa Barbara, California. And happy birthday to Maggie Chain in San Francisco. who's going up to Napa to celebrate accordingly. Happy birthday to Kelly Seipoll in Summerfield, North Carolina. Happy birthday to Vina down in Dallas, Texas.

And Olivia Collini in Brentwood, California. And Tracy and Melissa White just got their first home in Virginia. The supply chain couldn't stop them. And to whoever else is celebrating something today, make it a T-Bull. Celebrate the wins. This is Jack. Nick owned stock of Spotify, Shopify and Apple, and I own stock of Amazon and Spotify.

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Inc. Robin Hood Financial LLC or any of their subsidiaries or affiliates. All investments involve risk, including loss of principal and past performance, does not guarantee future results. Robin Hood Financial LLC, member FINRA, SIPC. Updown, up down, left, right, AB, AB, up down.