The Best One Yet - 🎁 “Never ever pay $9.99” — The 99 shopping rule. Avatar’s $2B tickets. Taco Bell’s french fry strategy.

Episode Date: December 16, 2022

Macy’s first priced something $0.99 in 1880 in a catalog, now every retailer does — but that means they’ve rounded the price up, not down. Avatar 2 is Disney’s blockbuster of the year, but it’s probably not gonna make any money. And Taco Bell is adding french fries and breakfast in a head-on attack on McDonalds, which means we have a food fight coming. $DIS $YUM $MCD $MFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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. It's Friday, the Real Friday, December 16th. And today's pod, out of every pod, we did all year, Jack, that's the best one. It's our last T-boy before a two-week mandatory semi-annual T-boy vacation. All right, Jack, I know where you're going to be. Take me up north. What's going on?

I'll be in Vermont. Okay. I'm about to get snow for the first week. Not too shabby, but then aren't you going snowbird south on us? I am. You're going to be in Florida for the second week. You're going to bring the flannel to Florida? Eh, maybe.

Hopefully not. It's gone to yourself. All right. I'm going to go hop, skipping a jump further, if that's all right. Aren't you going to be at the hotel where season three of the White Lotus is shooting? If that's where they're doing it, I want to be there. We're going to Japan. Yeties.

If anyone has a good tempore spot in Tokyo, tweeted at us. Nick's about to become a professional chopsticker. Don't get a Charlie horse on that hand there. But, Jack, before I start swimming in some sushi, do you think we should drop a couple bonus pods over the break? We have two bonus pods, one this Monday, one the Monday after. We're doing two bonus pods. Baby. In the meantime, Jack, what's our first story? Avatar 2 is in theaters right now. It is.

It's the most expensive movie ever. So was Disney's acquisition to get Avatar. For our second story, Taco Bell is adding French fries to the menu. All right. Because McDonald's. Yeah, forget market share. These guys want your stomach share. And our third and final story, if you bought a gift for anybody in the past couple weeks. Guilty. And 99 cents was at the end?

Also guilty. We have a warning for you. Because behind every. number is a story. Especially $9.99. Don't even get me started, Jack. But Yeties, before we hit that fantastic mix, there is no better mix man to end the year on. I love this mix. We are soon going to be on opposite sides of the planet. I mean, Jack, 14 time zones apart. This is going to be tough on the audio. Is it closer to be tomorrow or today? Neither. I'm a week ahead of you in Japan. One thing Nick and I are going to be doing despite being apart. We're going to be popping champagne.

We are pouring some Prosecco to celebrate the wins of 2020. Oh, and guess what? It's not just us. Yeties, we just got data that champagne sales are at the highest point since the cork. Get this. Champagne pouring just had an unprecedented performance. Bartender, cancel my espresso martini, please. Can you top me off with that tarant-é blanc-de-blanc.

This year, France, shipped 34 million bottles of champagne to the United States. That's a 64% jump from 2021. Even sparkling rosé, not technically champagne. True. Set a record too. Jack, we imported enough of that stuff to flood the Hamptons. Becky! Yeah!

My wine seller! In fact, there is so much champagne demand right now, because it's before New Year's Eve. That Moe Hennessey just issued a supply warning. Champagne, Champagne, Champagne, Champagne, Champagne paints. It's a champagne campaign. Yeties, the business stories of this year haven't been as positive as prior years. In this economy? But we hope you find a way to set.

Celebrate the wins. And make Moe-Hennessee shortage a little bit shorter. Let's hit our three stories for the last part of the year. Let's pop them, baby. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea that caused a cultural T-per-Sin. That's a fat tip. Tea Boy City on your at list.

If you know, you know, because we're ready to go. We can't wait no more, so just start the show. Start the show. For our first story, Avatar 2 is finally here. Yes. It debuted last night in theaters and we finally got the numbers. But is the biggest movie ever? The best investment ever? And you drop a spoiler? Or is it even a good investment?

Totally fair question. We don't think it is. Spoiler. But Yeties, the last time Avatar came out. Yeah. It was 2009. Where were we? What was going on? We were in college. We were juniors. We were home for winter break.

Classic. What were we doing? Do we see it? My mom took me to Latchez Theater in Brattleboro, Vermont. What did you see, Jack? Well, coming off of Titanic success, James Cameron put together Avatar, the sci-fi wonder. It's like the Lorax meets Tatooine, but filmed by the Discovery Channel. Avatar One, get this. It was number one in theaters for seven straight weeks. Seven straight weeks in number one. And then director James Cameron promised us a sequel. I think you promised us a three-quel.

Well, 13 whopping years later, we just got Avatar 2. Hope you weren't holding your breath. Yeah. The Way of Water Avatar, too, it just debuted in like over 4,000 U.S. Thiggers. There's enough CGI in this movie to blind a whale. Oh my God, your retinas, they're going to need to go to therapy after seeing this. So Nick and I followed the money of Avatar, and it actually leads back to Disney for us. Yeah, that's what's so fascinating about this story. Disney is who's kind of really behind Avatar.

Disney owns Avatar because CEO Bob Eager, he's credited with three company-changing acquisitions of Disney during his 15-year tenure. Over a decade, what were those three big deals? Disney acquired Pixar, Marvel, and Lucasfilm. And for how much money did he buy those three movie studios? 15 billion total for those three acquisitions. $15 billion for three acquisitions. Now, Jack, how much did Disney spend to buy Avatar? Nick, take the combined price of those first three amazing acquisitions.

All right, carry the one. And multiply the price by five. Get this, Yeties. Right before retiring, Bob Eiger spent $7. $71 billion in a bidding war to buy 21st century Fox. He wanted to spend $50 billion already a crazy high number. He ended up spending $71 billion to get 21st Century Fox. Let's just round up to $71 billion, man.

I got to tell you, Bob gets a lot of love for those first three acquisitions because they were amazing. Which is fair. You know, Disney ended up acquiring Toy Story, the Avengers, the Jedi. It all came to the House of the Mouse. But he spent five times that price to get just Avatar. Now, Yetis, we know what you're thinking. We'll sprinkle on some context here. Technically, by buying Fox, Disney also got a few other assets.

It got Grey's Anatomy. It got The Simpsons. It got Deadpool and it got National Geographic. But, Jack, I'm checking my TV guide. And I'm not seeing any Dr. Meredith Gray spin-offs over on the Disney channel. The Simpsons don't have like a section in Disney World down in Orlando, do they? Yeah. What have they been doing with this Avatar deal?

21st Century Fox? Yeah, Jack. It just wasn't a good deal for Disney, was it? It doesn't feel like it. So, Jack, what's the takeaway for our buddies over at Disney? When you see Avatar, you are seeing the worst business case in movie history. Bold words, but not our words. Those are the words of the Avatar director, James Cameron.

James Cameron said this about his own movie that is debuting right now. It's the worst business case in movie history. James Cameron confessed it was just too expensive to make this movie. How expensive was it, Jack? I guess that's why it took 13 years. Yet he's Jack and I jumped in T-Boy style, and we crunched the numbers on Avatar 2. It cost $10 million for each minute of this movie. $10 million for every minute that you watch.

James Cameron confess that just to break-even, he needs to sell $2 billion worth of box office. That is half a lift. Avatar 2 must be the third highest-selling movie of all time. Just to not lose money. Just to break even. Now, James Cameron does have Titanic and Avalbard. Avatar 1 under his belt. So this could end up being the top grossing movie of all time.

But just like the incredibly expensive Fox acquisition deal, Avatar 2 won't make any money for Disney. We don't think it will. For our second story, Taco Bell has more restaurants than McDonald's. Yeah. But McDonald's has more meals. Not anymore. No. Because Taco Bell just started a food fight.

All right, Jack. Can I open up to you here? This is a safe space. loved our wedding. It was fantastic. It was perfect. Full disclosure, your wedding with Molly. Yes. Just one regret I have that I have not discussed with Molly yet. What? The Taco Bell wedding thing.

The Taco Bell wedding. Oh, the missed opportunity. Taco Bell does weddings. Yet he's Taco Bell has a chapel at their Las Vegas canteen. True story. They do weddings. Do you take this Doritos Locos taco to be your meal? To have and to hold. To wrap and to fold. Yet these nuptials aside, Taco Bell's,

CEO just boasted that they've got 54,000 Taco Bell's Pizza Hutts and KFCs combined. This company is Can Taco Hut. And they think they can build 100,000 more restaurants on this planet. Yeti's Taco Bell's owner is $37 billion Yum brands, a publicly traded company that operates more restaurants than anyone on earth. They have a simple growth strategy. Add more stores. But they're changing that growth strategy. To add more meals. Last week, the CEO of Taco Bell spoke fondly of enemy number one. Yeah, I mean, Jack and I don't see this kind of thing that often, do we, Jack? He spoke admirably, openly, envious almost of McDonald's.

Taco Bell's CEO seemed hungry, thirsty for McDonald's. He said that people have more reasons to go to McDonald's than to Taco. And that's because of McDonald's all-day menu. He said that Taco Bell can compete with McDonald's on dinner and late night any day. We've all been there. You've done the late night at the Taco Bell. He said Taco Bell is way behind McDonald's when it comes to breakfast, lunch, or coffee. Would it kill them to make a churros flavored coffee?

It's that simple. Here's the solution Taco Bell proposed. Yeah. French fries. French fries. This Mexican restaurant chain is adding French fries to the permanent Taco Bell menu. Because Yeti's French fries are actually the lunchtime hero product. It's a product that draws you in.

Taco Bell's been testing French fries for a while. Customers love it and it's the only way they come there. for lunch. Oh, not only that, Taco Bell is also committing to breakfast. Committing. Like wedding. Like getting married committed. They're getting full-time commitment to breakfast food. So every Taco Bell is going to open at 6 a.m. for the breakfast brewers now. And then Taco Bell will change over to lunch menus at 1030 a.m. just like McDonald's. Taco Bell just added French fries and a breakfast sandwich on a permanent basis. The Taco Bell gung chihuahua just walked over to Ronald McDonald's house and did its business on the

front lawn. Jack, yo quiero and takeaway. So what's the takeaway for our buddies over at Taco Bell? When the food's the same, it becomes a food fight. Yet these Taco Bell and McDonald's have always competed for our bellies, but with different products. Taco Bell tempted you with tortillas. McDonald's did it with McRibs. But now Taco Bell is doing French fries and egg-based breakfast sandwiches too. They are commoditizing the calories. These menus, the food on the menus, are more similar than ever. So competition between the two restaurants is more direct than ever. All right.

So the way Jack and I see this, if the food is not the differentiator anymore, then what is the next easiest differentiator? The only way to differentiate now is price. Yeah, it's not brand, it's not marketing. It really is going to come down to price. Similar menus could make both restaurant chains drop prices to win customers. Which then leads to a price war that would be delicious for diners. I take a Doritos Locos Taco for 60 cents.

But brutal for profits. You're not making profits off a 60 cent Dorito loco. Because Yetis, no matter the industry, when the food is the same, it becomes a food fight. Now a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much prep work goes into this pot. We spend hours every morning jumping in T-boy style to earnings reports, CEO tweets, breaking news headphones. Jack and I are toggling tabs like you toggled IM Convo's in 2004. Having eight tabs open can be stressful.

fall. You don't need that, especially when invest. Robinhood offers it all in one app. Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, or you want to buy some Bitcoin on Robin Hood Crypto. You can do it all on the Robin Hood app. If you're not investing in Robin Hood yet, to get started, go to Robinhood.com slash T-Boy and choose your free stock. That's robin hood.com T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involved risk. By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story of the year. Wow.

It's the holiday shopping season. But there's one number, Yetis, that you should be wary of. Beware of the number 99. 99. The 99 cent and $99 pricing strategy is not what you think it is. What's back up to yesteryear, Yeties? Are you going back to 1880, Jack? The store is Macy's.

1880. Open up the Macy's catalog in 1880 to page 12, and you're going to see the first time ever, something was priced for 99 cents. They had like a bunch of stuff priced for 99 cents. Macy's was the first. What do I got to do to get you into this padded wagon, Jack? 999. We've all seen the 99 strategy.

From candy to cars to corduroy to cooler. We've seen it. It's everywhere. 99 for a t-shirt. Feels a lot cheaper than $10, Jack, when it's $9.99. Even though the difference is just one penny. Now, Yeties, the psychology here is pretty simple. It's all about the first.

first impression. We read from left to right. We do. So when you see a nine instead of a 10, the first impression is that it's a lower price product. Now, yet, he's Jack and I jumped in T-boy style, and this pricing strategy, it actually has a name. It's known as charm pricing. Charm pricing. A number that softens the blow. But here's what Jack and I find fascinating about charm pricing. The Wall Street Journal did a deep dive and the number 99 is deceptive in a different way than you thought. It's not a charm. No. 99's a grinch. Okay, stick with us here. Turns out that if you bought a nice slamming salmon t-shirt for $9.99, you're probably overpaid by 18%. Here's why. The last digit of every product, it's a messed up little mind game.

Yeah. When stores lower a price, they actually like to choose a random number. If a product is a good deal, it'll be priced at like 13 bucks or seven bucks. A random number stand out. They get your attention. It's something so specific. It suggests the seller had to think hard about the discount. When you see something priced 999, the company probably raised the price to that, not lower. Yeah, because something priced 99 makes us feel like it's a discount when it's actually a markup. If you see something for 1499, it probably could have and should have been 12 bucks. Bessies, if you're seeing a TV for like $399,99, it probably should have been $330. Companies round up to a 99 marker, not down to one.

And the data, the data backs this up in a pretty shock. way. Items that end in a 99, on average are 18% higher than the same item without a 99. And that's why the number 99, no offense to Gretzky, is a Grinch. It's not just a fake deal. It's a more expensive product. We sat down, stood up, and spat out our receipts too. So, Jack, what's the takeaway for our buddies who are everyone shopping in the economy right now?

Every price can tell a story. All right, Jack, this is why I love our job. This is the kind of story why I love our job. This is fascinating. Every takeaway Yeti's that we find, it's because there's something fascinating in every detail of business. Every price you see, it's not just a number. If you jump in T-boy style, there's a whole story there. For example, why does Warby Parker sell glasses for $95 bucks? Why does all birds sell sneakers for $95? Because $99 is too expected. 93 feels too random. 95 just feels fair, honest, even right down the middle. Costco does a buck 50 for a hot dog

and soda. Arizona still does $0.99 for their iced tea. those prices became brands in and of themselves. Yeties, every time you see a price this holiday season, it's not just a number. It can tell a story. Jack, can you whip up the takeaways for us for the Real Friday? Yeties, Nick and I are incredibly excited to see Avatar 2. Even though it's the worst business case in movie history. For our second story, Taco Bell is competing head on against McDonald's with French

fries and breakfast. When the food's the same, you get a food fight. And our third and final story. is 99 cents. It's known as charm pricing. It shouldn't be. No, because every number tells a story. Now, time for the best fact yet. This one sent in by Michael Nagy right here in New York City. Push and play. Hey, Nick and Jack, Michael from the Prime Barrel here. As we get closer to the holidays, have you ever wondered why do people say cheers before drinking? Well, the point is to enjoy an experience wholly. For example, when enjoying a drink, one uses their mind to see, feel,

taste, and smell, but cannot hear the sound of a drink. So by clinking the glasses and saying, cheers, we built the whole experience of the five senses. You know, it's funny. Yeah. Sound and like hearing. Totally. It's the only sense our show has. And it's the only sense drinking doesn't Alcohol doesn't let you hear anything. Jack and I only let you hear stuff. We are a one-sense experience. You cannot smell, taste, touch, or feel us on this podcast. Yeties, you looked fantastic all year.

So when you are toasting some record levels of champagne, you now know why you're toasting. Celebrate the wins, Yeties. Jack and I will see you on the bonus pods. We'll see you Monday. Have a fantastic weekend. Can't wait. And before we go, congratulations and happy birthday to Gabriel Atkins, who's jumping out of a plane in San Diego to celebrate that win.

That's a good view out there. That's a great view. And happy birthday to Helen John John Horowitz, turning 13 in Silver Spring Merrill. And Will Forcith, turning 52 down in Eugene Oregon. Happy joint birthday to Josh T. and Jake over in New Jersey. And Nurse Ingrid Cardoso, we see you having that birthday in Melrose, Massachusetts, just outside. And happy birthday to Sophia Aguirre Corswara in her ski gear down in Atlanta. And a happy birthday to Andrew Lee in McLean, Virginia.

And happy birthday, early birthday to Margo Burnett in Chicago. Oh, and Jack, Sande Pan Banerjee has a new job at the University of Minnesota. And happy birthday to Tori Halber for passing her board exams. And Jared Kayser, who operated nukes in the Navy, is now graduating from business school over in Illinois. And to anyone else, celebrating something today, make it a TV. Boy. Celebrate the wins. This is Jack. I own stock of Disney and Nick and I both own stock of Robin Hood. Now, a word about our sponsor, Robin Hood.

A lot of you listen to our show while you're driving. Two hands on the wheel. Keep it 10 and 2. You might be cruising, Chris, no rush. Stay in the right lane. Or you might be doll lane from Duncan, dotting from lane to lane. And there are different drivers on the road. They're different investors too. Maybe you're cruising down the long-term lane with stock investing, or maybe you're a more advanced full speed trader. Well, the Robin Hood app helps put you in the driver seat wherever you're at in your investing journey. If you're not investing on Robin Hood yet, to get started, go to robin hood.com

slash T-B-Boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involve risk. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robinhood. That was a perfect yeah, right? That was literally the perfect yeah. That was the perfect use of yeah. We shouldn't overuse it. It should always be like spontaneous. Totally. I mean, we haven't overused it.

I don't think we have. Yet. I just straight eyes open, walked right into that.