There have been big bets taken on streaming. Then there has been an Amazon size big bet on streaming, and it might have missed. Apple continues to push forward and just be Apple. And some costs are coming down and that might be good news for us. We dig into these topics and a bit more!
There have been big bets taken on streaming. Then there has been an Amazon size big bet on streaming, and it might have missed. Apple continues to push forward and just be Apple. And some costs are coming down and that might be good news for us. We dig into these topics and a bit more!
Yo, what is going on guys? Welcome to the life finance in between Podcast. I'm Eddie Thomas is brought to you by wealth management services in Hershey, Pennsylvania. It's been a minute, it's been a minute since I've been on here recording is definitely if you're watching on YouTube, it's definitely been a while since I've done a YouTube part of this. So trying to set up the camera and the lighting and the mic and trying to make sure stuff looks halfway decent is tough. I keep checking my watch to see if it's still recording, because last thing I want to do is think I'm recording and then not be. But we'll see how it goes. We will see how it goes really the end of the day. So hope the lighting looks good, a bright, you know, turn this light off here. Still, it's good enough, I guess. So if you're watching so far, you've seen me kind of mess around with the setup. But here we go. Sorry, if you're listening, that was clearly a visual thing. But let's dive into it. Guys, let's dive into it. A lot of news coming out of a lot of companies lately. And the interesting thing and I don't want to dive in anything too serious today, this is really just saw a couple of things I wanted to talk about. I haven't made one of these in a while. So I wanted to be something that I enjoy. I hope you guys enjoy it. So there's two things about specific companies. And there's one thing that's actually gonna help us all out as consumers. As we know, we're in this super high inflationary period, things cost more at the pump at the at the store, whatever you name it. So the last bit of news I got is actually really good news towards that. So we'll go through three things today. We'll get through them, we'll wrap it up. And we'll be on our way. And until next time, I'm going to try I've said this a lot of times, I'm going to try to be more consistent. I really am. I really, really am. I'm hopeful this time, it's just tough. It's just really tough, honestly, because the the day to day aspect of what I do, doesn't really require me to make this content and it's something I really enjoy doing. I don't love video editing, but I love I like sitting down and talking. And although it doesn't always go super smooth. And I'm definitely still getting used to it. It's something I do really enjoy. And I think as I get more used to it and put actual time and effort into it, which I really haven't yet. I think all enjoyed that much more. It's just I got to find the time. And in this past month, I really have in between things going on just traveling or things going on my life or obviously the markets down again this this past month. So it's it's been a pretty hectic time. And like I said the day to day doesn't really require me to make this or do this. So something I enjoy doing. So I'm going to try to find more time for it. I'm going to try to be more transparent. For you guys listening I very much so appreciate all the listeners and people that that come to this. And yeah, just enjoy, kind of listen to me ramble on about some things for a while. So without further ado, let's let's jump into it. The first piece of news that I saw come out this past week. And it's actually funny because this is very much so exactly how I felt when doing when doing this certain activity was Amazon's Lord of the Rings series came out I think they'll rings Amazon's Rings of Power series came out. It's a Lord of the Rings spin off thing. It's a prequel. And they launched it on Prime Video. How did it do? Not good? Good at all. So I was watching it with my girlfriend. And disclaimer, I was never really super into the Lord of the Rings movies. Regardless, I tried watching them over quarantine like a year ago and I just I just couldn't do it. And I appreciate it. I think it's super cool. I think maybe the books would be more interesting. But my God, I could not watch the movies. I really cut it again appreciate it. Whoever does like it more power to you. Just not my thing. Not my thing. It's the first movies three hours and nothing. The second and third movie really isn't a whole lie. It's, I don't know, just not for me. But I thought maybe as TV show form, it'd be a little bit better. So sat down, decided i Let's give this let's give this show a go here. Let's let's see how it is. And so watch the first episode. And it was so much like the movies and how boring I found it. It was actually insane. I could not believe it. I didn't know what to expect at all. Like really at all. And sitting down for it. I was like I can just gonna be interesting. It's gonna be in short form, it's gonna be a bit more fast paced to have more time more effort. They have a ton of money into this and I'll dive into all those numbers. So I really thought okay, this is going to be something and I fell asleep during it like three times and I got that wake up and come to and it'd be bold. morning I'd fall asleep again. But so after I watched this I had I got to think I think that there's no way Amazon would put out something that they know is going to be a failure like this that they think even there's a partial chance at failing. At least I didn't think. And obviously, they didn't put this out to be not good. So I got I dug into it. And I kind of wanted to see the review and the fallout from it. Because I want to know if I was alone, if everyone else liked it a lot. If people loved it, I really wanted to see what was going on there. So I dug into it, I Googled what I could, researched what I could. And the reaction of it is actually hilarious. So I'll jump into the reaction of it. Why No, I'm not wrong. But then I'll jump into kind of what I thought Amazon's strategy was with this, and how much money they actually put into this entire thing. And do I think it's gonna work for him in the long run. But following releasing of this show, which this is, the funniest thing to me, was Amazon, banned reviewing shows on their platform Prime Video, for three days after release. There were so many people that went onto the platform and reviewed it poorly, that Amazon felt the need to go on there and say, Okay, you can't review things for three days, until after the release. And I don't know if it's a play to have people actually digest it before they have the gut reaction. Or if it's legitimately the reason that okay, even if it's bad, people aren't going to wait three days to come back and tell us how bad it is. So hopefully, we get better reviews because of that. I'm not sure which one it was. But so they put that three day ban and sorry if you heard that my cats meowing in the background. They put the three day ban in. And then I was like if it was that bad. What are the reviews, and I'm not really surprised to see this if I'm honest. Of course, Lord of the I mean, Lord of the Rings is obviously incredibly popular. So any sort of show that follows that's gonna have a cool story, it's gonna have a lot of fan favorite part of it. And on Rotten Tomatoes, I got an 84% Okay, that's a really good score. A lot of times Rotten Tomatoes. Those critics, in my opinion, go for the more like story building, world building aspect of things. And I appreciate that and I get it. It's not for me, but whatever I get it. But the audience score is really what it came down to the audience score. Remember rotten tomatoes at 4%. The audience score was 36%, three 6% Compared to 84 on Rotten Tomatoes. And you look at IMDb and they got a 6.2 out of 10 25% of the reviews on IMDb were one stars. one star reviews 25%. It just had a ton of world building and seeming no point. And again, this isn't like a review of this. But I just had a I had to give the preface of why exactly I'm talking about this because I watched it I did not like it. And it turns out a lot of people had the same idea. But so what was Amazon trying to do? Also sidenote had 25 plus 25 million plus viewers on day one. So a bunch of people were hyped up and wanted to watch this a bunch of people. Let's dive into the numbers for it, shall we? So what do I think? What I thought the numbers were not exactly at all what they were they were actually way higher way higher than Amazon spent on this all in on Lord of the Rings in this series. Amazon has $715 million invested in this project 715 million from that 250 million is for the Lord of the Rings like naming rights. So you obviously have to buy the brand you have to buy the name to use it as as the story goes on. So they bought 250 million on that. The next 465 million is from the eighth episode production 465 million to produce this show. Over eight episodes. You do the math on what that is per episode it's pretty high. What I'll say is the show aesthetically is amazing. The world they have the creatures in it the people the bad like small battle scene you see all that stuff is amazing. So they knocked it out of the park with the aesthetic of the show. Storyline plot character element actual acting left something to be desired, but the actual production was was really really good so I could see where the 46 5 million comes into play, especially if the next eight episodes or seven episodes are down On the same kind of alley with the actual production of it, but 700 or $715 million into this, to give you some sort of reference and it did this myself, I wanted to look at what okay what our competitors are spending on their type of content. Obviously, we know Netflix has a huge, huge, huge series. Most recently stranger things coming out that's a massive series for them. HBO Max just dropped house of dragon, the prequel to Game of Thrones. I'm watching that and I love it. So what are they spending on that? There's a lot of questions. Stranger Things for cost $270 million for Netflix all in house of dragons costs roughly 200 million all in. I looked up a movie just to see exactly what the most, most pretty much what you're looking at high end movie wise. The most popular movie this year is definitely Top Gun Maverick. So I use that number. That's roughly about 170 Millions of produce all in Amazon spent again $715 million to produce this. And this show, if we're going off episode one won't even come close to creating the kind of fandom and cult like fans that you need if you're a streaming platform as Stranger Things for as house of dragons and obviously talking to movie so take that one out of it but Stranger Things foreign house the dragons won't even in my opinion won't even come close. So why did Amazon do this? What do I think the strategy is? Do I think they can fix it? Yes. I think they can fix it. This this season. They might they might be a wash. They had to bring it back for season two. I don't know again, that was episode one. It could get really good. And I could be looking back on this in like three months. I'm looking like a moron. It is what it is. But if you compare it so far to Stranger Things and Game of Thrones again they had prequels I helped them out a lot but or the house a dragon sorry, but they had prequels. I helped them out a lot. What I think Amazon was going for in this was they're trying to create that Colette falling behind their their Prime Video. When you think Amazon, you don't think Prime Video, you don't think they're streaming service whatsoever. And rightfully so it's really not all that great. When you compare it to the Netflix of the world, the Hulu's, the Disney plus the Apple TVs, you name them, they're you're comparing Amazon streaming platform to another streaming platform. It's very much so lacking. It's lacking in content, it's lacking the user interface and it's lacking in subscribers. Obviously, that instrument subscriber growth is going to be inflated because you get it when you have Amazon. What's the well, the paid subscription for Amazon, you just have it when you have Amazon Prime, wow, I cannot think of that for the life of me. When you have Amazon Prime, you get Amazon Video. So you're really never getting a true subscriber count. But I'd venture to believe if they spun it off on Amazon Prime. I mean, the Amazon Video side of things, I don't think they'd have many subscribers there, their platform just doesn't really match up. And you're surely not going to buy Amazon Prime just to get the video aspect of it. So I think buying the Lord of the Rings name and producing this incredibly expensive, well produced, hopefully popular show, was trying to take the first step into coming up real player in the streaming space and competing with the Netflix and competing competing with the Apple TV. And the Hulu's. It really was a big step in that and an HBO max. And do I think I think it's gonna work out it's yet to be seen do I think it was a really, really, really bold, big step forward, I actually think Amazon probably thought they have a really popular name that they know the movies did incredibly well. So the step four, they're taking, yes, expensive, but not all that much of a reach, because they know they're gonna have people that want to watch it. After the first episode and seeing the reactions on that I have to believe that Amazon's kind of thinking maybe they spent a little too much on doing this. Again, they could save it. Maybe this wasn't the best first step into it maybe picks another show maybe something original, I don't know what the answer would have been. But potentially finding themselves in a position where they had a ticket in The Lord of the Rings series. And they dropped the ball. We'll see. It's gonna be interesting to see how that works out on their streaming platform. It's gonna be interesting to see how long term the show plays. And if it pulls anyone into Amazon Prime and Amazon Video. I don't. I personally don't think it will. But we'll see. We'll see. Again, I wasn't a fan. But again, they have a long season. They have more shows they can produce. I think this first big step of trying to become a streaming player, though, was a little bit of a mess. So I had to talk about that as I watch that show. I just had to second piece of news second business will go through the Apple event that just came out. I'm a big Apple fan. I keep checking my watch to see if my iPhones recording and my maximum I left on my hand in front of me with my notes. So I'm very much so part of the ecosystem. Why am I bringing this up? Well, you Really Apple has this event where they dropped the new iPhone, the new air pods, and they brought the new watches into this as well. I'm not someone who buys Apple products every year, if you are That Good Good on you, I don't think I don't see the value in buying new ones every single year, I max a number of years old my phones a number of years old, my iPad, a number of years old. And my watches is broken because I dropped it. So again, I'm very much a part of the ecosystem. But I don't really get why people upgrade every year. However, people do. And that's why Apple puts on these events. And they have these new phones a year after year after year and new watch year after year, positive year after year. So what is overall their strategy with this event with their ecosystem, it's very much so to keep people once you buy an iPhone, it just makes sense to buy air pods. Once you buy airpots. And iPhone, if you need a laptop, it makes sense to buy a Mac, if you have all three of those and you want a tablet, it just makes sense to buy an iPad, it makes sense. And they keep releasing new products. What they came out with this time was the Apple Watch Ultra well for like extreme sports athletes. 800 roughly $100 a little expensive, obviously, for a watch, I don't really know how it's gonna be received, we'll see probably their biggest step into watches yet. But again, if you look at their iPhones, their Apple watches and their air pods. In all three of those categories. They're category leading. If you're an investor in this company, you love that, that they're still innovating, they're still bringing out more if you're a consumer in this company, maybe you don't love the price tags. But when you want to upgrade, you know what's there. So you love that. Again, price tag is one thing, but availability is another. What Apple's doing is creating a company that as long as they innovate, as long as they stay in front of you, as long as they come out with new products. They're they're building, and they already have built but they're continuing to build upon themselves as the number one consumer driven company in the world. And they're doing that year after year after year, and good luck catching up to their competitors. So again, if you're an investor, you love that if you are a consumer, you love that. There's a lot of people out there that aren't anti apple, and I'll good use Google or Samsung, whatever you want to use. But Apple by far is the best ecosystem. So after watching this yearly review, or this yearly event, I decided look into okay, what exactly the numbers look like, honestly, sales wise, revenue wise, we're seeing a lot that companies are getting beat up by inflation again beat up by changing consumer from goods and services. We've talked about this roughly in the like briefly in the past. But we've seen that these companies maybe are gearing up for a downturn and then China shut down. So manufacturing was off this is Apple getting infected by affected by this. As an investor as a obviously someone who follows these companies I wanted to know, I've never really I didn't really dig into their last quarterly report. I'll be honest, I just didn't. And the third quarter and 2022. It looks like Apple's revenue was June my second quarter. Let me double check this a lot in the last quarter. Apple's iPhone revenue that they brought in was 40.6 7 billion, which is up 3% year over year. And then their wearables. So their, their air pods or watches was 8,000,000,008.0 8 billion that was actually down 7.8%. So up on iPhones down on wearables for if you take everything into consideration, wearable services, iPhones, laptops, everything, they have 83 $83 billion profit $19.4 billion of revenue. They are incredibly powerful company. They sell a lot of things. This is this is not really a surprise. And if you are an investor, you love these numbers. The wearables is interesting. I think they actually came out with new air pods. And they're coming out with the new watches. And I think they're trying to find they're trying to carve their niche into that. And I think a lot of it comes to price point that they don't have. They're not up year over year. A lot of those things are very discretionary. And once you buy them, you're not renewing, you're not buying new ones every year. So you'll buy air pods and four years later, you'll buy a new pair you'll buy watch same thing four years later, so so I'm not really surprised that that's down year over year because a lot of the extra expenses that people were buying these just because I had extra money are going to the wayside because obviously inflation is taking a toll on consumers. But when iPhones up over 3% year over year, you're finding that while yes, they have one branch of their company not doing as well being down the other half the bigger half the biggest half apple has the iPhone is doing incredibly well still. And I don't see that really changing anytime soon. So if you're an apple consumer, if you're an apple investor, all this event showed you is that they're still saying incredibly innovative, they're still staying on the front end of technology, they're still picking and choosing their spots to upgrade certain things and to make sure they're getting other things right before they bring into to consumers. Apple is notorious for Samsung coming out with something first and an apple copying it three to five years later. And that's not because Apple slow, they know what's on the next they know the next step. They know the next move. what Apple does is they wait until they can get it perfectly right. I sound like a fanboy right now. But they do. They wait until you get it perfectly right. And then they roll it to consumers. And almost always a hit. Almost always, they've definitely had the failures in the past and are going to have their fails in the future. But they wait and they make sure they have something very quality to give you my saying Samsung doesn't but Apple just does it in a different type of way. And the patience has paid off incredibly well. And for the company to be doing as well and be down 12% year to date shows you the kind of climate that we're in right now as far as investing goes, a company like Apple is not going anywhere. A company like Apple is going to continue to innovate and sell and if anything, this last event showed you that so it'd be down 12% along with their other peers that are down as well. It just shows you the climber and he just kind of have to sit tight. When a company they apples down that much. You just know what's more macro than micro, and things are gonna be okay on the other side of it. So into the third point here, and this is the biggest thing for us as consumers. And probably the best news we could have had, honestly, at least partly is and it's something actually before I jump into it, it's something that we never think of. It's it's as consumers, I mean, some people might vote for them, mass mass majority of us never ever think about this as consumers, and it has a massive impact on us. And we've seen how much of an impact it has in the past year and a half, especially last eight months. But freight costs are finally coming down. And they're projected to continue to come down over the next year. So And okay, why does this matter? Well, when you're at the store, and you're anywhere Target, Walmart, grocery store, whatever, wherever you are, and your thing cost more, whatever you're buying, sometimes that's looped into what that cost that company to get from point A to point B so in China produces something and then it gets to the US, they have to pay for obviously the gas to get to here the shipping to get to here, and then to put it in front of you. So when the freight itself, the main way it gets from point A to point B, cost more, you're going to spend more as a client as a customer because that cost gets passed down to you. And that's what we've seen in the past year, year and a half the the freight costs to get from point A to point B across oceans, or just from point A to point B in general, has ramped up significantly. Now, we're in a spot where that's starting to come back down. So I'm gonna last a year shipping companies have made an incredible profit turn incredible profits, because things cost way more to get they were benefiting from the extra cost that it took from point A to point B, the reason they were able to charge more is because the demand for ships was higher than the supply that was there. So there wasn't as many ships to get from point A to point B as as many as we needed. So they're able to charge more because it's a premium now and you're gonna pay for that premium. Why is this changing? Why is this reversing? What does this mean for us? Well, it's changing because of supply and demand is starting to shift. companies like Walmart, Walmart, Target Costco, at pretty much any sort of company, you can think of that hold inventory, they over ordered inventory, not anticipating a shift of consumers going from goods base to service base, like we've seen in the past year. So they're all holding extra inventory in the in their, in their stock. So they're not ordering as much, which means the chips aren't getting as full, there's not as many needed. Secondly, there's going to be a pretty significant influx of chips in the in the CS column next year, more than the research I was doing. New chips are expected to float with a significant increase over the next couple of years. What that's going to look like I think it's like roughly a 10% increase in chips that are available now or are going to be available in the future, which very much so helps with the supply and demand even if the demand of chips needed increases. If the supply is increasing as well, we're going to be in a good spot. So the cost stays relatively stable might take up a little bit but it should stay relatively stable, which is good. For instance, the trip from China to the US as far as the freight costs one is down 60% year to date, for that cost. That's a significant decline anything down 60% is a significant decline. It's been going, I think, all right now we take gas down 60%. Unfortunately, it's very cost now 60%. What does this mean, as consumers? Why is this such a good thing, this means that we're starting, we're starting to see, we're going to start to see the costs of things that we were buying, that was incredibly inflated, and still, it's going through inflation starts to come down, because the point A to point B is starting to be significantly less expensive for companies. So we're going to start seeing our costs come down as consumers, we're going to start seeing inflation come down because of this. And hopefully, as a result, we start seeing the market, start to take this information as good news, and continue to start to do well here. And then in the later half of this year, and going into 23, and 24. But the big thing, like I said as consumers is things are going to cost or costs are gonna start coming down, things will cost less over time. Again, this won't be an overnight thing. It's going to be very slow, very subtle, as companies aren't ordering as much as not as many ships are coming across. And as more ships start to become into the supply of needed ships. So again, won't be overnight isn't something that 99% of us never think that I didn't think about it until I saw this headline. I was like, Yeah, that sounds interesting. Let me research it. And I want to tell you guys about it. And that's why we're here. So I didn't think about it. But here we are, I knew they were kind of up. I didn't know they're that much up. And now we'll as consumers will start to reap the benefits are those costs coming back down. So again, won't be overnight, it will take some time. But that's finally some good news for consumers. that inflation is starting to come down. freight costs are starting to come down. Won't be overnight, but 2324 We should be in a better spot here. So that's uh, that's really it for today. I just want to talk to you about those couple things. I saw him and I was kind of scrolling through and thought they'd be interesting to talk about and haven't been on here in a while and I surely haven't been on YouTube in a while. So I hope you guys have enjoyed it. It won't be this long until the next one. But until then, stay happy, stay healthy, and I'll see you. Securities offered through securities America Inc. Member FINRA slash SIPC. advisory services offered through securities America advisors Inc. Wealth Management Services and securities America are separate entities. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at anytime based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.