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| Happy Monday, Insiders!! Today’s Business newsletter covers: - 📺 Amazon to add ads to Prime Video
- 🔍 Deep Dive: Intel uses glass to boost AI power
- 🎢 Theme parks gear up for busy fall
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading for Quick Hits and the Knowledge Hub. Thank you!! Shriram
p/Shriram | |
| 1 | | Amazon's Prime Video will introduce ads in its TV shows and movies starting in early 2024, beginning in the U.S. before expanding to other countries. Customers in the U.S. can opt for an ad-free experience by paying an extra $2.99 per month, while live events and sports content will continue to include ads in the ad-free tier. More: - Amazon stated, "It aims to have meaningfully fewer ads than linear TV and other streaming providers."
- By providing an ad-supported option, Prime Video is following the example of other streaming services like Netflix, Warner Bros. Discovery's Max, Hulu, and Disney+.
- Customers now have a more affordable option, and Amazon is also getting a new source of income from this decision.
- In the competitive streaming industry, streaming providers are looking into several strategies, including advertising, to turn a profit.
Q: Are ads necessary for streaming services to remain profitable in an increasingly competitive industry? Join the conversation here. |     | |
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What the numbers say: In comparison to several of its competitors, Intel has upped its yearly R&D investment to around $18B. The value of the worldwide chip market is $580B. Relevance: Intel is using glass-based substrates to address the communication issues of complex processors, particularly in AI applications. As part of a larger strategy, Intel is expanding its foundry operations to draw in outside clients and focusing on glass packaging technologies to replace traditional substrates as chip complexity rises. More data: Glass substrates have the potential to solve issues like warping and provide finer data routes, both of which are essential for modern devices with tens of billions of transistors. Intel is aggressively seeking a source of affordable and high-quality glass and perfecting handling procedures to reduce the material's propensity to break, with some 4,200 personnel working on packaging processes and related innovations, most of whom are based in Chandler, Arizona. | | | |
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| 3 | | To recover from a summer season impacted by extreme weather, theme park operators like Disney, Cedar Fair, Six Flags, and SeaWorld are turning to Halloween and Oktoberfest events to bolster attendance. With attendance at major regional park chains still below pre-pandemic levels, the autumn season is viewed as a critical opportunity for rejuvenation, and these parks have been embracing Halloween events, a long-standing trend in the industry. More: - Despite obstacles like children returning to school and competing in autumn activities, autumn events have become significant revenue generators for theme parks.
- With evening events becoming more adult-oriented and boosting sales of cocktails and beer, parks frequently sell separate tickets for daytime and midnight Halloween events.
- Theme parks also use these occasions to advertise and market season passes for the upcoming season, aggressively discounting tickets to draw in new visitors.
- Although financial difficulties, including rising interest rates and student loan repayments, influence consumer purchasing, Americans still expect to spend a lot on Halloween festivities.
- Soft attendance in the spring and summer could signify consumer reluctance, making season-pass sales for the next year an essential sign of consumer health.
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| 4 | | The U.S. Commerce Department has finalized regulations to stop China and other countries that threaten national security from gaining subsidies for semiconductor production. According to the "Chips and Science" law, which allots $52.7B for U.S. semiconductor production, research, and workforce development, these requirements are essential for allocating $39B in subsidies for semiconductor production. More: - The guidelines provide "guardrails" to prevent recipients of American aid from boosting semiconductor production in nations considered problematic, such as China and Russia.
- The incentive funding recipients' ability to collaborate on research projects or license technologies with unreliable foreign organizations is likewise restricted.
- The Commerce Department may revoke government awards due to violations of these limitations.
- Gina Raimondo, the secretary of commerce, emphasized the significance of ensuring that none of the financing advances China's technological development.
- The final regulations limit cleanroom area and production line expansion above 10%, preventing considerable expansion of semiconductor manufacturing capacity in foreign countries of concern for 10 years.
Zoom Out: - To halt Beijing's scientific and military advancements, the government released new export rules in October 2022 to shut off China from specific semiconductor chips produced with American machinery.
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| 5 | | Lego decided against utilizing recycled plastic bottles to make bricks since the carbon impact was determined to be higher than when using ABS plastic made from oil. The decision highlights the difficulty businesses have juggling several environmental objectives, such as cutting back on carbon emissions and ceasing the use of fossil fuels. More: - By 2030, Lego originally planned to completely phase out all polymers derived from petroleum, though some materials have already been replaced.
- Tim Brooks, Lego's head of sustainability, said, "Using recycled and bio-based materials during manufacture, Lego aims to make ABS more environmentally friendly while overcoming the difficulties of substituting recycled PET (RPET) for the robust ABS."
- CEO Niels Christiansen stated that by 2025, the corporation wants to spend $3B a year on sustainability, a threefold increase.
- He added, "Lego wants to employ sustainable materials and cut emissions by 37% in 2032 compared to 2019."
- Lego's future projects will facilitate the recycling and reuse of old bricks through programs like the Replay program (currently active in the U.S. and Canada).
Zoom Out: | | | |
| 6 | | Rite Aid is now negotiating a bankruptcy plan with its creditors that calls for significant shop closings. Although there is disagreement with bondholders about the precise number of outlets to be liquidated, the pharmacy chain plans to close 400 to 500 stores as part of this strategy. More: - Rite Aid faces many federal lawsuits relating to the opioid oversupply and has over $3.3B in debt.
- Most Rite Aid complaints involving opioids have been combined into a multidistrict action in Ohio.
- Due to the long-term leases in some stores, filing for bankruptcy is a way to eliminate them.
- Rite Aid plans to hold an auction to sell its Elixir pharmacy division and other critical corporate assets.
- Rite Aid would be the first pharmacy business to declare bankruptcy under Chapter 11 while dealing with claims involving opioids.
- To end the opioid litigation they were facing, three pharmaceutical manufacturers — Purdue Pharma, Endo International, and Mallinckrodt — filed for bankruptcy in recent years.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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