Weekly reading – 7th August 2021

What I wrote last week

I wrote about why credit card issuers should try to get into consumer digital wallets

Business

Pearson bets on direct-to-student subscription shift. I am never a fan of publishers like Pearson for a simple reason: books are murderously expensive in the U.S. In addition to the sky-high tuition fees, students have to pay easily a few hundred dollars or a thousand dollars a semester for books alone. There are ways to go around that challenge, but sometimes these guys work with professors and students are left with no choice, but to make a big splash on books. Pearson seems to be aware of the unsustainability of their current model. By going straight to students, they can establish a direct relationship and avoid relying too much on educational institutions. $15/month means students can pay $75/semester for access to all the books required. However, there are other publishers on the market. If students must get books from multiple sources, it can dilute the appeal of this new service from Pearson. I really look forward to seeing how this strategic move will pan out in the future.

Apple Is Now an Antifragile Company. A nice article on how shrewd Apple is when it comes to securing its chip supply while other struggle. I feel that not enough has been said about what a great job Apple’s management team has been doing. It takes a great deal of discipline to use billions of cash wisely quarter after quarter. The executives also have the foresight to develop their own chip M1 to keep more control of their fate and avoid being in the mercy of Intel. Additionally, the decision to make forward orders in bulk in advance has proven to superior. While others cite the struggle with chip supply as the reason for their relative subdued performance, Apple still posted strong results.

Music labels split over Spotify’s push to promote songs for lower royalties. I haven’t used the Discovery Mode yet, so I don’t know what it is like. I did have a less than stellar experience with the Spotify app; which I haven’t used for a long time. It’s not user-friendly at all. And if what is reported in the article is true, as a shareholder, I’ll be very disappointed. Sacrificing the user experience and the integrity of an algorithm like that over lower royalties and higher margin isn’t in the long-term best interest for the company, in my view.

Disney, WarnerMedia and NBCUniversal wrestle with balancing the value of cable networks and streaming services. I don’t think streaming is the best place for a newcomer with one cash cow to enter. The likes of Apple can arrive late at the part and compete because they have enormous resources and streaming isn’t their top 5 or 7 revenue stream.

The Verge interview with YouTube Chief Product Officer.

5 charts show Amazon’s growing logistics network as it puts inventory closer to consumers. Some great data and information, but I don’t think Amazon is playing the same game as Walmart. Operating huge stores with a lot of SKUs is not Amazon’s strength, at least compared to Walmart, for now. I don’t think it’s wise for Amazon to get into that arena. What I think Amazon is plowing money into is the last mile delivery. If groceries are what needs delivering, they are building out Amazon Go shops and can leverage Whole Foods footprint. However, if we are talking about non-grocery items, then Amazon is taking a very different approach to Walmart and staying at what Amazon has been great at: an online store with great customer services and unrivaled last-mile delivery network

What I found interesting

U.S. generates more plastic trash than any other nation. The amount of plastic bags in supermarkets in the U.S such as Target or Walmart staggered me. I don’t understand why they don’t implement policies that encourage shoppers to bring their own bags or boxes like Aldi does. At Aldi, you have to bring your own bag unless you are willing to pay for one every single time. I don’t think shoppers are bothered by that. If the likes of Target and Walmart can join the fight against unnecessary use of plastic, it’ll be a huge step forward given the reach and size of these retailers.

London’s Crossrail Is a $21 Billion Test of Virtual Modeling. Technology is mind-blowing. So is human imagination

Stats that may interest you

Luggage sales are up more than 460% year over year (Q1 2021)  on Amazon while swimwear sales have more than doubled year over year as of March and April 2021

From 2006 to 2021 per-capita volume consumption of juice and nectars in the U.S. declined 36%

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