The Best One Yet - “TSA for Adele” — Live Nation’s 2021 strategy. Sonos’ niche need. Ford’s subscripturation.

Episode Date: November 13, 2020

Live Nation’s sales plummeted 95%, so it’s already got a plan for your summer 2021 concert game. Sonos’ latest product unveil has us thinking they should find their niche. And Ford’s newest electric van isn’t really a van… it’s a freaky software your boss loves.$LYV $SONO $FGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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, November 13th. Jack, how was the broccoli? Dude, I told you, we lost the broccoli. We had a veggie-free dinner last month. I know, I know you lost the broccoli. In the meantime, though, we got a situation here. COVID levels, they rose. Yeah, they're spiking at like an exponential rate. It does not look good.

That means markets drop. U.S. infections hit an all-time high of $145,000. In the past week, we've hit almost a million confirmed COVID cases. So stocks fell from their highest point in 2020. In the meantime, Jack and I are whipping up our best snacks daily we've ever done for you. For you, Snackers, for you. First story, Jack, what do we got? Live Nation is planning your summer 2021. Less NWA, more TSA.

For our second story, Sonos has another mediocre new product update. It's just a, they're on a roll with these things. They're so consistent. Needs to find a niche, though. That's what you need to do, Sonas. You need to find your niche. Find a little niche and just squeeze on in there. Just go in that niche.

We're going to find our third story. What do we got, Jack? Ford's new electric van. it's called The Transit, it'll yell at your plumber for wasting company time. Jack Ford's new profit puppy is like a big brother app for Bill Lumberg. Peter, how's it going? Where the TPS reports. Okay.

You're going to have to come in on Saturday. But Snackers, before we jump into that wonderful mix of stories, we just finished PSL season. We're about to hit the holiday season. And in between those two, Jack and I like to point out, it is quarterly earning season on Wall Street. And a funny thing, our buddies at CNBC highlighted. about these corporate earnings call. You know, Nick, after each earnings report, the CEO chats for like an hour with analysts.

Right, we're always jumping in snack style. But apparently the CEOs on these earnings, they're choosing words to make machines happy. That's right. There are a bunch of fancy investors who use algorithms to scan the transcripts of these calls to look for key words. Must be nice.

They determine if the earnings were good or bad. Case and point, were there more negative words that the CEO said? Probably a bad earnings report. Jack, did the CEO mention concerned six different times on the earnings. Unless it's like Jeff Bezos saying I'm concerned, I'm too rich at this point. Yeah, probably a bad earnings. You can't count that many commas.

So CEOs are apparently dropping more upbeat, more positive, enthusiastic, happy, cheery, merry adjectives, and fewer downer adjectives. That's right. They're gaming the system with their word choice to trick these algorithms to thinking the earnings reports were better than they actually were. Jack, I'm thinking you get on that earnings call. You're the CEO. You say, we've been phenomenal at losing customers. Our losses have just been tremendous. With all this stay-at-home, my wife says my margins are expanding. Is that a waste expanding joke? So in summary, here's how this breaks down. Human investors are using non-human machines to figure out what human executives really think about their companies. But those human executives are

changing their behavior to trick the machines to trick the human investors who affect their stock prices. We'll let that sink in. Let's hit our three stories. You're tuned in the 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. 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. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Jack, scary spice or sporty spice?

Sporty. Here you are more of a sporty spice. Live nation's revenues are down 95% from last year. So it's already thinking summer 2021. You can't blame them. And they're thinking in summer 2021, they want to become the TSA, the COVID-proof TSA for concerts. And so Jack and I are thinking, that makes sense because no industry has suffered worse than the live events industry. That's why we're looking at Live Nation, which owns Ticketmaster. Last fall, Nick, in 2019, they made $3.7 billion in revenue. Sounds fun, sounds great. This past year, though, that has fallen 95%.

They are reaching for positive things to mention in their earnings report. And here's what they found. Yes, they are. 83% of people who have tickets for events that got canceled this year, Yeah, are hanging on to their tickets for the postponed rescheduled date instead of asking for a cash refund. That is not even a bronze medal. That's a copper metal situation. They're barely walking away with anything there. Plus, they already sold 19 million tickets to 4,000 different concerts and festivals scheduled for next year. So like another decent sign.

Aggressively looking at the glass half full, even if there's nothing in it right now. But Nick, honestly, the stock is only down 17% for Live Nation from their peak in February. I'm surprised it's not more than that. No, Jack and I checked it out. Eventbrite, which does a similar thing, is like booking these events, its stock has fallen 50% in the same period of time. With no live events happening right now, though, corporate at Live Nation, their top initiative is, quote, unquote,

leading the return to live, which we think is a fair and ambitious thing. They're trying to be the number one industry, getting people back to number one normal. Here's the problem. A mosh pit at a Metallica concert is Anthony, Dr. Fauci's nightmare. And social distancing and mask wearing.

It's just not, it doesn't mix a concert. That's not going to go down well for most people. So Live Nation is planning, according to our buddies at Billboard magazine, to make concerts verified COVID-free zones next year. Yeah, this is how you got a picture. They want to make them like the NBA bubbles, but like for three hours, not for three months. Right.

So to get into the arena or the venue, you're going to have to either prove that you got vaccinated using a service like Clear or IBM's health pass. So let's say you can't get that. the vaccination. You could prove a negative test within 24 to 48 hours with Lab Corp or CVS. Then those organizations that did the testing, they passed the information onto Ticketmaster, which grants you the credentials on your phone to get into the venue. Which feels like a natural point at which Tinder could do a kind of plug-in thing

and therefore match couples for dates based on their COVID testing. Now, importantly, these tickets won't be transferable. So you can't find your like COVID-vaccinated buddy, ask him to get the ticket and then hand you the ticket so you get to watch. Gwen Stefani. Timmy, you better be listening to that. The other key here is that there's no testing on site because they don't want like, you know, the line where you got to take the metal and the credit cards and your shoes off, that could become like a super spreader situation.

This is how concerts are going to look next year. So, Jack, what's the takeaway for our buddies leading the way over at Live Nation? This is a market-based solution to a national problem. Snackers, if you think private enterprise should solve society's problems, you got to be a fan of this. This is what you have been waiting for. Live Nation's life as a company depends on them figuring out this problem. So they're incentivized to keep people safe or else you won't be belting out the tunes to the Gwen Stefani concert.

They're also incentivized because Live Nation could get sued if people get sick in the stadium. Not a good situation. Now, the alternative to Live Nation figuring this out would be if the government, for example, stepped in and established government rules when it comes to big events. Right. And the government is much more likely to just say no because they don't have a profit incentive. So Live Nation is motivated by profits to keep people safe now. And profit is a powerful motivator. For our second story, Sonos Stock just jumped 4%. Because it is just tired of doing only speakers, Jack. Sick of it.

They decided to jump into the streaming game. Bad for them. By the way, Snackers, founded in 2002, Sonos honestly, Jack, it is the smartest public company we've ever covered because they're the only one based in Santa Barbara, California. First decision when you start a company, Yeah, Jack. Pick a city to be headquartered in. They made the right decision. Yeah, how can we confirm this? I don't know. You know, Prince Harry and Megan Markle, they're quarantined in Santa Barbara,

California seems like the right place to be. They're working from home in the most beautiful vacation destination in the world. By the way, Jack, I'm going to just listen things off here. You got Spotify. You got Pandora. You got Apple Music. You got Title. You got Sirius XM. You got SoundCloud. Those are all streaming companies, but I think we could use one more. That sounds about right. Now, Sonos is known for its high-end speakers that, you know, You're going to put them on the wedding registry. That's the go-to. But they just launched an $8 a month premium streaming radio service with no ads called

Yeah, Jack? Sonos Radio. Oh, you always see the best for the last. Now, this thing is focused on high-definition tech. We got streaming at 16 bits per a second, not the 128 kilobits per a second you used to get with the other services. They're calling this high-fi music, but it's like, is that superior? Is it better?

Honestly, we have no idea. The kilobits, the bits, it can make no difference to us. Are Dell's vocal chords even stretchier? Speaking of fellow Snacker, Adel Jack, the content I hear its artist curated. Yes, they have stations that are curated by celebrities Jack White, Dolly Parton, and more coming. But Snackers, here's where things get both fascinating and absolutely hilarious. They already have an existing version of this over at Sonos that does have ads, and it's number four. Number four on the App Store.

Yeah, you think number four on the App Store. That'd be a huge accomplishment. No, it is the number four most listened to thing. on Sonos. On Sonos speakers. So Sonos radio isn't doing well. No. So they figured they should invest more.

Jack, this is like the New York Giants, finding out they're the fourth best team playing at MetLife Stadium right now. That's the one right there. That's the one. That's the one. Here's the funny thing we've also noticed about Sonos in 2020.

2020 has been a series of mediocre product updates, and every time Sonos is like screaming for us to cover them. It used to be the Apple of speakers, and it's products like even, look like iPods. In the meantime, however, Apple has become the Apple of speakers, which is a big problem. So, Jack, what's the takeaway for our buddies? Probably outdoors on a beach over in Santa Barbara over at Sonos. For Sonos, it's time to embrace the niche. Snackers, it is better to be number one in one luxurious profitable niche than number four in four profitable-ish areas. Apple's new

home pod speakers, they come in at like $99 to $199, and they even look like Sonos's cousins. So we're thinking Sonos should drop its whole line of mainstream $200-ish speakers that seem directly competitive with those. It's not just Apple that makes a speaker just like that. Google and Amazon do too. Instead, Sonos should focus only on the upscale niche that big tech isn't even in right now, like Sonos's new $700 subwoofer. Or like a surround sound system, or waterproof outdoor speakers for the patio, or a Netflix enhancing home theater situation. Yeah, stuff that's like really pushing the limits of what's socially acceptable on that wedding registry. I want like 7.1 Richter scale and Dolby Surround. You're going to want to have multiple people crowdsourcing to get one of these

subwoofers for you. And the evidence seems to support this idea because a great way to understand a company's future sales is to look at their back orders. Yeah, Jack and I sometimes do this. We check out the website what's actually selling, what products are available. And it turns out, Sonos' three new speakers that are its most expensive are all on back order when we jumped in snack style. Pre-orders, for Sonos's $800 arc speaker, which sounds fancy, are significantly higher than the lower-priced sono speakers. It's a sign that Sonos should abandon its mainstream options and focus on the luxury niche. For our third and final story, Ford is going to announce this month an electric version of its transit worker van. We think companies will spend $45,000 for this thing because

they could save a ton of money after that. Yeah, this gets pretty wild snackers. But first, by the way, New Ford CEO over here, Jim Farley, related to Chris Farley, resemblance uncanny. This is also a story about Jim Farley and a van, which is apropos, because you'll end up in a van down by the river. Jack, I love it when a story comes full circle like this. Now, the problem that's facing Ford right now is they're falling further and further and further behind General Motors. Ford Motor Company is a less profitable number two of the big Detroit three auto companies. I think it's worth like two lifts at this point. We could do the old lift to the GM's Uber kind of a thing, but is that too on the nose?

I feel like that's too on the nose. It's two on the nose. One area, though, that Ford Motor Company is winning is commercial vehicles. Snackers, remember, Jack, grown up, New York City, the Crown Vic, NYPD, taxis, they're all Crown Victoria. Up in Vermont, the Vermont State Troopers, in fact, in the movie Super Troopers, they're all driving Ford Crown Victors. Jack, I can still smell the plexiglass and, like, the celebrity's telling you to buckle up. It was amazing. I lived in a Crown Vic.

So Jim Farley is doing the sexiest thing with Ford's least sexy commercial vehicle. The transit van. He's working with the transit van. Right. And the transit van isn't the Saturday soccer practice fan. No, it's not. It's what Marvin Harry drove in Home Alone. You know that thing? We're talking like a plumber van here. No windows. Plenty room for the socket wrenches. And this new electric transit starts at $45,000. That's a lot. The key, though, is maintenance costs after that should be 40% less than a typical combustion van. Now, Snackers, we know what you're thinking here. This is a van. Why do I care? It's a van. It's not even a minivan. Your mom doesn't even care.

Why are we focusing on this? Because here's where it gets sexy. Electric vans require way less maintenance and oil change? Yeah. What oil change? Don't know what you're talking about, Jack. Electric car chassis. They got fewer parts to break. It's like a one giant hot wheel. What really differentiates this electric transit van, though, is the digital component. This is the groundbreaking new news. Remember, there is a company that owns this van. They're selling these to other corporations. and they put a manager in charge who can remotely check how much juice is left in the van. And then that manager can trigger that the batteries get charged in these vans when electricity rates are at their lowest to save money.

They can literally wait until rates fall and then make sure the van is actually getting charged. And let's say this manager is like a Bill Lumberg type, he can micromanage all of his workers who are driving these vans and make sure they're operating efficiently for the company. Snackers, this is where it gets wild. Ford calls this driver coaching. Jack and I were fascinated. The manager can use an app to scold the driver for going too fast or going on a lunch break. It's like the How's My Driving bumper sticker, but a disturbing, techy, big brother version. You hit 95 miles per hour and 95, boom, you're going to get a beep from your boss. Oh, and what were you doing at your boyfriend's house from 2 to 3 p.m., Linda? We see you, Linda, Linda. So Jack, what's the takeaway for our buddies over at Ford? Ford's future profit puppy isn't cars, it's apps. Snackers, $45,000, that gets you the van. But all those features, they come with a $25 a month vehicle subscription.

This new business line for Ford is called Digital Fleet Management, and it is nice, recurring revenue for a company that's used to one-time payments for its vehicle. So business owners who are buying this transit van, they actually don't care about how expensive the van is. They care about the $25 digital features because they can save a lot of money through that. In fact, let's come full circle here to our buddy Jim Farley. CEO of Ford just said, these customers like the data more than they like our vehicle. Because the car is just a box on wheels. Plus, this whole recurring revenue digital app,

that makes Ford look sassy software as a service to Wall Street. You don't want to end up living in a van down by the river. Jack, can you whip up the takeaways for us before the weekend? Live Nation's live concert business is down 95%. Now they're working on a market-based solution to a public health problem. For a second story, Sono should stop trying to cater to mainstream speaker buyers. Yeah, focus on your number one luxury niche, which is more profitable. Anyway, come on, guys.

For our third and final story, Ford Motor Company is about to launch an electric worker van. The big news is the connected Big Brother app that can save companies apparently 40%, which is like a lot of money. Linda? Except for Linda. Hopefully Linda's going to be okay. Now, time for our snack fact of the day. this one tweeted in by Zach from, as he refers to it,

snack attack Southern California. Turns out the first person to break the NBA color barrier is a guy named Wataru Misaka. Yeah, the first non-white player and first person of Asian descent in the NBA. Born in Utah, this Japanese American turned down an offer from the Harlem Globe Trotters and ended up getting drafted by the New York Knickerbockers in 1947.

But in college, he also took time to serve in the U.S. Army during the occupation of Japan where his family was originally from. Wataru Misaka, great guy. And the best move by the New York Knicks ever, actually. Snackers, before we go, Nick and I did an audio course about personal branding and how to build an audience

with a company called Noble. It's basically a master class, but on audio, like you're listening right now, it's an app called Knowable. Snackers have a fantastic weekend, and if you've got buddies not snacking yet, you know what to do. H-Y-H-Y-S-D yell it from the,

yell it from everywhere. We'll see you on day. And before we go, big congrats to Kit McCarthy Martinez, who just got born in Denver. And congratulations Maricio and Maria for getting married in Mexico City. And Patis Your Vav, happy birthday over in Ranchi, India. And happy birthday to Karen Ramirez in Houston. And Michael Yang in Queens.

And Asir Ali in San Diego. And Bill Ellis in Huntington, Long Island. And Jason Irmine in Baltimore. And Josiahas in Cleveland. And Susanna Owen in Ashe, North Carolina. Ye over in Philly and Derek Rickert in Chicago. Does Logistics and Misha Vilnihuk, happy birthday also in Chicago, 27. Happy anniversary to Suhob and Eliza in Palestine and Belize. And happy anniversary to Kristen and Machet in Weymouth Mass. And to Athena and Justin in Los Angeles. And Karen and Jared

over in Dallas. And congratulations to Sienna Applebaum for getting pregnant in Santa Barbara, the best place to make your corporate headquarters. This is Jack. I own stock of Amazon and Spotify, Nick on Stock of Apple. 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, Inc, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and 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 as the basis of any investment decision.

Robin Hood Financial LLC, member FINRA, SIPC.