The Best One Yet - Facebook’s new news relationship, sperm startups raise millions, and Roku’s 21% jump makes it streaming king

Episode Date: August 9, 2019

Our last Snacks episode until Tuesday 8/20 (we're off for a week for Jack's wedding). Facebook’s had a rocky relationship with the news industry, but it’s trying a major new partnership to fix what it broke. Roku is the new king of streaming after its Rudy moment. And sperm startup Dadi just raised $5M as money pours into fertility — now healthtech is the next wave of Brandicorns.Learn 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 Friday. August 9th. Went so quickly. This is the best snacks daily. We have ever done the best one yet.

This is the best one yet. Markets had a great day. It's crazy. Stocks rebounded by like 2%. Nick, they were on a cliff a couple days ago when China made the first move of a currency war. I was staring at the cliff. But things have just settled down since then. They've chilled.

They've chilled. But then they got a little eccentricly excited. We did, we did two because I'm not kidding. I really mean this. This is the best mix of stories we've ever had, Jack. What is story number one? First story is Roku. It's stock surge 20%. When it comes to cord cutters, Roku is the king of TV. I know we said content is king before. Roku is the ruler. It stocks quadrupled this year. Second story, Facebook and news companies have a very rocky relationship. But now Facebook is launching a new news product to define the relationship. This is a classic, like, broke up senior year, met up again after college, want to give this thing another shot situation. We've all been there.

A lot of forgiveness, a lot of resentment from the past. Third and final story. A booming new industry is fertility. And Daddy, D-A-D-I, just raised $5 million to help guys figure out basically if their fish are swimming upstream like they're supposed to. If you're interested in ever having kids one day, this is a story to listen to. Or if you ever have heard of kids or no kids or know what kids are. If you're not interested in kids, whatsoever, skip ahead about three minutes.

True. Snackers, we got to talk to you guys. We love you. We might take a quick one week little break, though. It's very true. It's not you, it's us. It's actually literally both of us. It's also really just a one week break.

Snackers, we are taking a one week podcast vacation. Jack is technically getting married at the end of next week. Not just technically. In reality, actually, I'm getting married next week. It's official. I know. I'm actually, I get to hold the ring. So in a way, I may be the most important person at this wedding, Jack.

It's true. The ring bear is clutch. I've got this plan that I hadn't told Jack about, but I feel like we should talk about this on the pot. Jack, I'm going to interrupt at some point and say, hey, efficient, so what's the takeaway for the two people standing on the altar right here? Snackers, somebody please like muffle this guy so he doesn't do that. Anyway, we're going to be off for a week. Great opportunity for you to check out our email newsletter, which will continue hitting the

inboxes every day next week. Jack, we're going to work on this takeaway thing. I'm telling you, it's going to be the queue. Snackers, we love you. In the meantime, listen to these keywords, and then we'll hit our awesome stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. The 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. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Right.

Snacks is digestible. Business news for you. For our financial, LLC, member Finra slash SIPC. For our first story, Facebook just asked news publishers for a second chance. Please, I made a mistake. I just want to talk. Let's walk this out. Yes.

I need a second chance. It is making a dramatic gesture to try to win back the news agency. Picture John Cusack with that giant boombox over his set. I know what you're thinking. This is classic. This is like McConaughey and Kate Hudson Gold from the mid-2000s, Jack. All right, you ready for the actual news, Nick? Pretty much, yeah, let's do this.

Well, it's courtesy of the Wall Street Journal, which reports that Facebook is launching a new news section in the app, and this time it's serious because it's actually going to pay for the news. Jack, this time it just wants to treat, you know, news companies nicely, take them out the dinner and do this right. So we need to rewind this whole thing. It started with Facebook entering news, ended with the fake news fiasco of 2016. Let's start it up.

All right, let's talk about how they met. So, like, the first time Facebook and news really hung out, got to know each other, got a nice latte, was, like, years ago when we first started using Facebook. Well, I started using Facebook in 2006, freshman year, Middlebury College. We're dating each other. It was just about pictures of friends, pretty much, right? It was adorable. It was cute. It was harmless.

And then news stories started working in, like, a couple years later. Yeah, Facebook started, actually created, like, the news feed, which had news in it. And it allowed publishers to put up, like, high-quality articles on the news feed. And Facebook was like, yo, New York Times. If you post articles, people will click on your articles in Facebook and you'll get new traffic and probably a lot of subscribers. So the deal was news. You post the articles for free on Facebook. You're going to end up getting subscribers in the end.

It's a beautiful thing. Here's the deal. None of that really happened. First of all, the news didn't really get as much traffic for advertising or subscribers as it wanted. And also, Facebook like, tweaked its algorithm. Yeah. They made a little change. News ended up getting downgraded on Facebook.

And basically, if you were a news agency that hired all these people to create a lot of content so you could be on Facebook, you had a problem because the news wasn't getting seen on Facebook. Yeah, the news got burned badly by the first relationship with Facebook. It was a bad breakup, and it's got a bad taste in its mouth. Facebook basically ghosted news. And then a few years later, things have settled down. Both sides have chatted with their friends. They've gotten a little perspective. Now Facebook is coming back as a whole new request.

So here's the deal, according to the Wall Street Journal. Facebook's approaching news agencies. They're like, I'm really sorry about what happened last time. This time it's going to be different. Baby, here's some chocolate. It's not cadaiva. This is some artisan stuff. I got flowers. They're not roses. They're renonculus. Funny, it actually wasn't chocolate or roses. Facebook is offering cash. They're offering cash this time. And they're going to start a lot more up front. Paying news agencies to license articles and treat it with a respect that news deserves. The report is they approached ABC News, Dow Jones, Washington Post, Bloomberg, all of these companies, these news agencies, received offers of millions of dollars. Right. Actually, up to $3 million a year. So Facebook's trying to like show respect to the news and

treat it as premium content. But $3 million actually feels like a pretty low number for a company making billions in profits. I know. This is kind of like you were expecting a three-course dinner date. You ended up like at Shake Shack getting a burger on the side with like a table with a semi-nice view. So Jack, what is the takeaway for our buddies over at Facebook and news trying to work this whole thing? out. Facebook is under PR pressure to undestroy the news industry. Now, to understand this, you got to look at newspapers because news companies make money in three ways. You got ads, you got licensed content like this, and then you've got subscription. Now, here's the sad story. Most of the advertising that used to go into newspapers, and even online newspapers, it's all gone. Remember it well. It's been

sucked into the Facebook and Google ad machines. In fact, they have 60% of all the online ad money there is. So newspapers don't have anything to show. So if you're Facebook, you've been blamed for crippling news and letting fake news like happen everywhere. So you've got to figure out a way to mend this relationship. So you're going for licensing. You want to license their content. Yeah, this effort seems like a way to combat those criticisms about fake news by actually paying for professional journalism and putting it on people's news feeds. So Facebook's attempt to undestroy the news and rebuild this relationship for a second shot, it's expected to hit this fall. We don't know what it'll look like. We don't know if it'll be free,

but apparently the news will be paid for. We don't even know the name. For our second story, this one's adorable. Roku, its stock just searched 21% as it officially becomes the king of TV for cord cutters. You probably heard a lot about cord cutters. You probably heard a lot about streaming and the streaming wars. You might think of Netflix or cable companies. You should know.

You got to think of Roku. It's like the Roodie Rooder of streaming. This thing is down. It is small. people counting it out, boom, it is fighting back to get on the field. Roku is not particularly athletic. It's not particularly intellectual or articulate. Not exactly.

It has taken like the number one position in this industry. This is the little streaming company that could and it just announced earnings. Now, based out of Los Gatos, California, which apparently means the cats in Spanish, it literally rents out an old Netflix building, Nick. highly symbolic, some kind of adorable thing they got going on there. By the way, this is the little dongle on TVs that just enable streaming to even happen. Yeah, you plug it into the USB drive and then you can watch Netflix on like even a dumb TV. So, Jack, I'm plugging my Roku in right now and you know what's streaming? The insane numbers out of Roku's earnings report.

You ready for this trifecta? 39% more active Roku accounts than last year. Boom. 72% more hours of TV binged. It's 59% more revenue than the year before. Boom, Jack. Give Roku a helmet and stick them on the field. Now, the reason why this company stock just surged 21%, it hit two big cord-cutting milestones

that are worth sticking up on the board and uplifting this guy to varsity. All right. Roku is the number one TV stick for streaming. So we're talking jacking into the USB drive and you can watch shows. It owns 39% of that market. I feel like that needs like a wreath around it. Jack, number one stick. in streaming. It's beating Amazon's

Fire Stick, Apple TV, and Google Chromecast, the big boys. Another milestone. It is now the number one smart TV software that gets built into TV so that you can like, you know, you have input one, input two, smart TV is like the input three. That's

Roku. I hate dealing with that. That's Roku. And it has 33% of that market. And in that market, it's beating like Samsung, Vizio, and even LG. You're ready for some more? It also offers like a free TV channel called the Roku channel generates huge ad dollars. So, Jack, what's the takeaway for our little buddy Roku?

Roku is so tiny. The competition didn't even notice it was there. Jack, it's not even just small. It's particularly unattractive as far as hardware. It's a little purple dangle thing. It's got a little kind of ugly remote with a purple tag coming out. It's not sexy. Branding hasn't changed in 10 years.

Now, if you're going to register for something for your wedding, you do the Apple TV. You don't do a Roku stick, and yet here we are talking about Roku. Because Apple, Google, and Amazon, they have been beating each other up for the last few years. The other competitors in this industry are huge and they are rivals against each other. And they have been backstabbing each other like a middle school cafeteria. Yeah, get this. Amazon refused to have YouTube on its fire stick. And then Walmart refused to sell like Amazon products.

It's a whole dramatic situation. Meanwhile, nobody cared about Roku. And Roku loved it just there. Because it just sold its products. It rise the ranks. And suddenly it became number one. I feel like Roku's just been in the gym just doing pushups for three years straight and hitting the bench press solo and now it's getting out on the field. Jack, this one stat sums it up. The stock has quadrupled in the past nine months. Roku can bench like four times its weight. For our third and final story, this one is a wild one. Sperm startups. Spirm startups are having a moment. Fertility companies are having a moment. We're talking about like the business of becoming a mommy, becoming a daddy. Yes. The market is anyone who wants to. to procreate and extend their family tree.

It even includes everyone who accuses millennials of never wanting to procreate. Please. Stop accusing millennials of not wanting to have kids. We get it. We're bumming Benflex accounts. We get it. So, Jack, to really do this story justice, we're going to have to jump back in time to back in 2009. Jack, 2009, how many women in the United States froze their eggs?

You ready for this? Yep. 475 women. That's it. Not 475,000. 475 total women. That is fewer women than there are professional baseball players in the United States. Now we're going to fast forward a little bit further to 2016. How many women are getting their eggs frozen in 2016? What is 7,300? You nailed it. Now, that's still not a huge number. It's a significant jump.

We actually got it from Polina Maranova, who writes term sheet, which is an incredible newsletter. And she's a great snacker. Right. So clearly this industry is, is, blowing up. There was 475, like 10 years ago, 7, 300, 3 years ago. I'm guessing a lot more in 2019, but we do know that $102 million of venture capital funding has gone into women's fertility startups in just the eight months of 2019 so far. We're only talking about 2019. Women's health tech specifically fertility, it is getting serious venture capital interest. Now, that could be a surprise that women's fertility is a venture funded industry, but it's started. It's starting to happen in the male fertility industry as well.

So we got some news yesterday about a company called Daddy, spelled D-A-D-I, which just raised $5 million for mail order, male fertility tests. Here's what you do. You put in your credit card info and pay $99 for a kit that gets shipped to your door, 23 and me style, like ancestry kid DNA style. I know what you mean. So then you're going to send them a sample in the mail that you get right back to them. They then are going to do this wild analysis of your sperm.

Yeah. They're going to tell you basically what percentile you are among all the other dudes on this planet in terms of fertility. In other words, how likely are you to be able to conceive if you want to have a baby? Now, the reason this is so significant is really a cultural one because a lot of times when you talk about fertility, people forget that men actually make up half of all infertility issues. Yeah, that stat is from daddy's website. Another stat from daddy's website, which is kind of alarming. I won't lie. Millennials are 50% less fertile than their father's generation.

That one hits close to home. Don't know exactly why. Maybe it's because millennials are having babies at an older age, not totally sure. It's also maybe because of just stress-related issues. But the key thing to know here that Daddy's trying to make a point about, your sperm that guys expect to have for their entire lives, they actually lower in quality and in quantity as they age. Now, I know what you're thinking.

Why do I want this report if there's nothing I can do about it? there actually is something you can do about it. Apparently, there are lifestyle choices you can make to increase your fertility. So that's why this information is valuable. A little more yoga. So, Jack, the other thing people want to know is how does this company actually make money? Well, the $99 for the kind of one-off kit that tells you your percentile, but they also have a subscription model for $9.99 a month, they will hold on to that sample,

keep it frozen just in case like in the future your fertility goes down. Classic recurring revenue moves. So, Jack, what is the takeaway for our buddies over at daddy and this entire fertility moment? The next wave of brandicorns is in the health tech industry. Brandicorns. We're talking Casper, all birds, away, Harry's, rent the runway. What else we got, Jack? I don't know, Nick, but those are all startups worth over a billion dollars that really focus on their brands and connecting with consumers.

You know those Casper boxes you get the mattress in. Those things are beautiful. I could live in one of those things. Forget taking the mattress out of it. They cut out the middleman, they focus on consumer products, and they're online first. And it turns out there's a lot of health tech that's following a similar model. We've mentioned on this pod, two companies, Roman and Hymns, both of which are dealing with kind of like male insecure health issues like erectile dysfunction, baldness, and some other stuff. Oh, also quitting smoking.

Very true. Hymns just reached unicorn status and Roman is close. Exactly. They all cut out the middleman. They're all online first, and brand is key. We're seeing that with health products like we never have before. Health is starting to go direct to consumer with these brand of corn strategies. Jack, can you whip up the takeaways for us before the weekend? Facebook is trying to start all over with news agencies by actually paying them this time.

No more empty promises, baby. Here's an envelope of cash. Let's try this whole relationship thing all over again. Okay, Makonhe, Makhani, Makhani. Second story. Roku has quietly and silently become the number one streaming enabler. Roku holds the keys to the streaming car and it's like barely old enough to like even drive the thing. Third and final story, guys can start figuring out their whole sperm situation thanks to daddy.

And that's because health tech is turning into a brandicorn. It's the next direct-to-consumer trend. Snackers, time for a snack fact of the day. We don't always talk about Samsung, but when we do... We make it a snack fact of the day. We do, we do, we do. Samsung unveiled its Galaxy Note 10 at a big event yesterday. Now, you may not know, but, you know, There's Siri. There's Alexa. You got a lot of voice assistance out there. Samsung's got one cutely named Bixby.

Yeah, and Bixby's pretty important because Samsung is the number one smartphone maker in the world. So they don't have access to Siri or Alexa. Right. And you think Bixby would have a British accent. He or she sounds British accent-ish. But how many times do you think Bixby was mentioned during this big product unveil? I'm guessing a lot of times. You'd probably assume a lot of times.

Not once. Not twice. Not ten times. Zero times. Zero. It's shocking, and it may be a sign that Bixby may not have much time left on this earth. All right, Snackers, if you go to Snacks.Robindon.com, you can sign up for our daily email newsletter. In it, we're going to talk about Uber, which also announced earnings yesterday, and like Lyft, it lost a lot of money. A lot of money, a lot of money. Now, Snackers, we miss you guys already. It's going to be a hard week without you.

In the meantime, enjoy the newsletter, but hopefully we'll see you very soon. Subscribe at Snacks.robinow.com. Next time we talk, I'm going to be a new man. It's going to be a T-B-O-Y-T-Boy. See you guys. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation

to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve. serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.