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| Here’s your daily business briefing. - ✈️ Airport lounges in high demand
- 🔍 Deep Dive: Netflix password crackdown pays off
- 💼 Chevron buys Hess in $53B deal
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Airport lounges are gaining popularity among travelers seeking free food, drinks, and a quiet space. Access to lounges has expanded thanks to premium rewards credit cards and past spending, typically being free or discounted for elite frequent flyers and specific cardholders. More: - Major American airlines offer annual lounge memberships ranging in price from $650 to $850, with recent increases.
- The popularity of Delta Air Lines' Sky Club lounges caused overcrowding, which prompted the airline to introduce entry limitations and receive customer complaints.
- Intending to balance accessibility and exclusivity, Delta is growing and improving its network of lounges.
- Airlines such as American, United, and Delta are scrambling to fulfill the increasing demand for lounge space by constructing more extensive and luxurious lounges and designing several lounge tiers to accommodate different passengers.
- To attract and retain high-spending clients, credit card issuers such as JPMorgan Chase, Capital One, and American Express are also setting up their airport lounges that cardholders can access.
Q: How do you view the expansion of airport lounges by major airlines and credit card companies? Join the conversation here. |     | |
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What the numbers say: With 8.8 million new members during the third quarter, Netflix recorded a 10.8% rise in memberships. In the United States and a few other countries, the business is increasing the cost of its basic and premium plans. In the third quarter, Netflix brought in $8.54B in revenue and made $1.68B in profit. Relevance: Restrictions on password sharing are the reason behind the rise in subscriptions. Compared to its previous estimate of $17B, Netflix intends to invest approximately $13B in content this year. According to the business, password-sharing restrictions are expected to bring in additional customers. More data: During this quarter, Netflix's operating margin was 22.4%. As of September 2023, 5.75% of U.S. subscribers were on the company's ad-supported tier, up from 3.3% in June. Netflix intends to significantly alter its executive compensation scheme in response to shareholder criticism of the current structure. | | | |
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| 3 | | Chevron will purchase U.S. rival Hess Corp. for $53B in an all-stock transaction, providing a 4.9% premium to Hess shareholders and a total deal value of $60B, including debt. Upon closing, the combined firms expect to achieve approximately $1B in cost synergies within a year, with the deal subject to regulatory reviews and scheduled for completion in the first half of 2024. More: - The transaction is part of a trend among leading American energy companies to protect their gas and oil holdings to increase shareholder returns and minimize the risk of future fossil fuel supplies.
- The deal ramps up competition between Chevron and Exxon and brings Chevron into partnership with Exxon in Guyana's expanding oilfields, set to produce 1.2 million barrels per day by 2027.
- Recent significant transactions by Exxon include the almost $64B acquisition of Denbury and Pioneer Natural Resources.
- These strategic agreements show the financial flexibility of U.S. oil and gas giants, who kept funding fossil fuels while their European competitors switched to renewable energy sources.
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| 4 | | Disney has revised its financial reporting to offer enhanced transparency into its theme park division, which generated more than $24B in revenue during the first nine months of 2023, marking a 17% increase YoY. Theme park admissions alone contributed nearly $8B to this revenue, reflecting a robust 21% growth compared to 2022. More: - Disney has reorganized its financial reporting as part of a restructuring to provide income breakdowns by categories, such as retail and product licensing, food and beverage, and park licensing.
- Over the next 10 years, Disney intends to invest over $60B in its theme park division, representing a substantial creative commitment.
- Disney's theme park revenue is increasing despite a decrease in the attendance and hotel occupancy of the theme park sector.
- Developing new themed territories both domestically and abroad and revamping attractions are among the growth strategies for Disney's theme parks.
- Significant undertakings, such as the Star Wars: Galaxy's Edge theme parks, will cost approximately $1B each.
Zoom Out: - On Oct. 11, Disney World and Disneyland announced immediate price increases, with all-day "Park Hopper" access set to resume on Jan. 9, accompanied by higher parking fees at both parks.
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| 6 | | BeReal, the 2020-launched photo-sharing app emphasizing authenticity, prompts users to share unfiltered, unedited daily snapshots, with a majority, at least 65%, signing up in 2023. BeReal's user base has grown significantly, with a 315% rise in active monthly users in 2023. More: - The app omits filters and editing, granting users a two-minute window to post unedited snapshots of their current activities for a spontaneous and uncurated experience.
- Of the nearly 41 million installs, a significant portion, with the U.S. as the leading market, accounting for 40% of new users, occurred in the current calendar year.
- The app caters to users looking to relieve the pressure to appear flawless on other social media sites.
- BeReal's college ambassador program facilitates campus marketing, enlisting young users to host educational events about the app.
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- The U.S. Commerce Department announced on Monday the selection of 31 regional tech hubs from 370 applicants, granting them eligibility for $500M in federal funding to drive innovation in various sectors.
- Nestle, Unilever, Mahindra Group, and Volvo Cars are jointly advocating for political leaders to establish a timetable for the gradual elimination of fossil fuels during the forthcoming U.N. climate summit.
- Anhui Jianghuai Automobile Group Corp., the manufacturer of electric vehicles for the U.S.-listed company Nio Inc., is divesting assets, including a car factory, valued at approximately $615M.
- Toyota is gradually resuming production at various Japanese factories following a week-long shutdown caused by an explosion at one of its component suppliers, Chuo Spring Co.
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Term of the Day Industrial property: Industrial property, often referred to as industrial real estate, is an umbrella term that encompasses real estate used for industrial purposes. Question of the Week What's one tool or app that has significantly made your life easier at work? Join the conversation |
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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