LT Weekly: Dec 20, 2024

Before we close out 2024, we are excited to share our latest LionTree’s Lens: Sector Insights & A Look Ahead, Winter 2024 deck. 

Developments in the TMT and consumer sector have accelerated at an incredible pace since our last update in September, and 2025 is setting up to be a dynamic year as well.

** For the ~25-minute video presentation of the deck as well as the standalone slides, CLICK HERE **

Below is the table of contents.

-> We are more than happy to arrange calls with company executives or investment teams to delve deeper into any of these themes. All feedback and thoughts are always welcome and greatly appreciated.

1. Macro & Markets

• The Market’s Hot Streak Has Continued… But Valuations Are High
• Investors Have Been Diversifying Beyond Big Tech
• Recent KPIs Point To A More Resilient Than Expected Macro Picture
• Holiday Shopping Reports Also Reflect Consumers’ Willingness To Spend
• Expect Select Large IPOs To Define The 2025 Market
• The Low Hanging Fruit For Cost Cutting Is Getting Harder To Find
• Growing Profitability Looks To Remain A Priority In 2025

2. Top-Down Themes

• The Upcoming TRUMP 2.0 Era Likely Brings Opportunities & Challenges
• M&A Speculation & Chatter Is On The Rise
• Regulatory Pressure On Big Tech Has Been Mounting Across The Globe
• How Much Longer Can The AI Frenzy Last?
• 2025 Should Reflect A Broadening Of Gen AI Use Cases
• Big Tech & Last-Mile Are Revving Up Efforts W/ Autonomous Vehicles
• Music Has Several Chords Of Growth In 2025
• The Digital Audio Advertising Opportunity & TAM Is Under-Appreciated
• Sports Streamers Are Stacking Up Better In The Battle Between Reach & Monetization
• Anticipate More Milestones & Strong AVOD Growth In 2025 But Off A Small Base
• Pay-TV Provider Are Repositioning To Adapt To The Times
• Cable Made A Comeback In Q3, But The Telcos Are Reloading FWA & Fiber Initiatives
• Wireless Business Customers Will Be A Targeted Growth Area In 2025
• Live Entertainment – Premium & International Will Be Key Drivers In 2025
• New Theme Parks & Experiences Are Expected To Drive A Turnaround
• OTAs – Competition Is Picking Up In Alternative Accommodations

3. Wall Street Sentiment

• Wall Street’s Top TMT Picks & Pans
• Wall Street Sees A Lot Less Upside To Company Share Prices Vs In August

The hailstorm of AI-related updates that hit the tape last week (see Theme #5 from 12/13/24 Weekly) largely carried into this week, with OpenAI and Google, in particular, seeming to continue to race neck-and-neck to see which company can roll out the most AI features before the end of the year. Since releasing ChatGPT to the public two years ago, OpenAI has certainly been setting the tone for the industry with its new innovations, and the second week of the company’s “12 Days of OpenAI” event saw it launch even more cutting-edge features, including a new ability to call ChatGPT as well as updated features for the ChatGPT MacOS app. Notably, OpenAI also announced that the ChatGPT search engine feature is now available to all users, posing a significant challenge to Google’s search business, and made the full version of its o1 reasoning model accessible to certain developers. In turn, Google responded by introducing some products that will directly compete with OpenAI’s products. Google Deepmind’s new, next-generation video-generating AI model, Veo 2, will rival OpenAI’s popular Sora model, and Gemini 2.0 Flash Thinking Experimental has been designed to operate similarly to OpenAI’s o1 reasoning model. Given this competitive dynamic, it makes senses that both companies are focused on finding novel approaches to refining generative AI models as a means of creating differentiation moving forward.

Beyond OpenAI and Google, this week featured some interesting AI-related news from Salesforce and Apple as well. Along with introducing Agentforce 2.0, the next-generation version of its enterprise digital labor platform, Salesforce announced that it now plans to hire 2,000 salespeople dedicated to its AI products, which is double the number that the company previously communicated last month. For its part, Apple has reportedly been engaged in early discussions to use Tencent and ByteDance’s AI models in its iPhones in China.

See below for more details on all of this week’s key AI updates.

OpenAI’s “12 Days of OpenAI” Has Seen A Plethora Of New Features, Products, & Demos

• For context: The “12 Days of OpenAI” started on Dec 5 and will conclude on Dec 23 (only runs on weekdays), w/ this week consisting of days 8-12
• This week’s major updates –
  • ChatGPT is now available for phone convos (link): Users can now call ChatGPT in the US for up to 15 minutes for free using 1-800-CHATGPT; They can also use WhatsApp to use ChatGPT to send out messages globally; The feature was part of a project that started just a few weeks ago
    • The 15-min limit is per phone number per month: Meaning that users could use multiple Google Voice numbers to get as much time as they want w/ the feature
    • The phone number is powered by OpenAI’s Realtime API: While the WhatsApp feature is built on OpenAI’s GPT-4o mini via an integration w/ the WhatsApp API
    • The svs represents a simplified version of ChatGPT vs the web-based version: The phone number feature represents a “low-cost way to try [ChatGPT] out through familiar channels”
  • ChatGPT’s search engine feature is rolling out to all users, posing a challenge to Google (link): The feature originally launched to paid subscribers in Oct and is now available for free users; The functionality is available across ChatGPT platforms, including iOS, Android, and desktop apps for macOS and Windows.
    •  The feature determines when to include search results based on users’ queries:Though users also have the ability to manually trigger web searches
  • OpenAI is rolling out the full version of its o1 “reasoning” model to its API for certain devs(link): Earlier this week, o1 was released out of preview for devs in OpenAI’s tier 5 usage category
    • The requirements for Tier 5: To qualify, devs have to spend at least $1,000 w/ the Co and have an account that’s older than 30 days since their first successful payment
    • The full version of o1 allows for more customizability: Including new features like function calling (which allows the model to be connected to external data), developer messages (which lets devs instruct the model on tone and style), and image analysis
      • O1 also has an API parameter called “reasoning_effort”: This enables control over how long the model “thinks” before responding to a query
  • OpenAI introduced new features for the ChatGPT macOS app (link): The latest update enables support for even more third-party apps, including note-taking and coding apps
    • The new “Working w/ Apps” feature allows ChatGPT to access apps on users’ Macs to better understand them and then provide better assistance based on those insights
• Prior releases from the event (link) –
  • The improved o1 model was launched out of preview to all users,
  • A new $200 ChatGPT Pro subscription
  • Advanced voice mode
  • Text-to-video generator Sora
  • ChatGPT in Apple Intelligence
  • Real-time video capabilities for ChatGPT  The rollout of Canvas

Google Introduced New Offerings That Will Directly Compete With OpenAI’s Products

• Google DeepMind released Veo 2, a next-gen video-generating AI, as a competitor to OpenAI’s Sora (link/link): Veo 2 can create two-minute-plus clips in resolutions up to 4k (4096 x 2160 pixels), representing a 4x increase and over 6x the duration that OpenAI’s Sora can achieve
  • However, Veo 2’s advantages over Sora are only theoretical… for now: Given that Google has capped videos made w/ its experimental video creation tool, VideoFX (where Veo 2 is located), at 720p and eight seconds in length
  • Veo 2’s improvements over Veo 1: Include the ability to generate clips in a range of styles, an improved “understanding” of physics and cameral controls, as well as the ability to produce “clearer” footage
    • Veo 2 can also more realistically model motion: As well as fluid dynamics (like coffee being poured into a mug) and properties of light (such as shadows and reflections)
    • BUT “coherence and consistency are areas for growth”: This was per a VP of Product at DeepMind, who explained that “Veo can consistently adhere to a prompt for a couple minutes, but [it can’t] adhere to complex prompts over long horizons
  • ”There is a waitlist to access VideoFX: In response, Google plans to expand the number of users that can access the tool
    • Google will also make Veo 2 available via its Vertex AI dev platform: The model is still becoming “ready for use at scale”Google DeepMind released Veo 2, a next-gen video-generating AI, as a competitor to OpenAI’s Sora (link/link): Veo 2 can create two-minute-plus clips in resolutions up to 4k (4096 x 2160 pixels), representing a 4x increase and over 6x the duration that OpenAI’s Sora can achieve

-> Google also made several improvements to its AI-powered image generation tools this week; The Co’s Imagen 3 model now generates brighter, better composed images; It can also now render more diverse art styles w/ greater accuracy — from photorealism to impressionism, from abstract to anime; The Co also released Whisk, a new tool that leverages the Imagen 3 model to enable users to use prompts to create images that visualizes their ideas and then remix them in unique ways (link)

• Google released Gemini 2.0 Flash Thinking Experimental, a new “reasoning” model (link): The model is used “best for multimodal understanding, reasoning, and coding,” w/ the ability to “reason over the most complex problems” in fields such as programming, math, and physics
  • Gemini 2.0 Flash Thinking Experimental appears to be designed similarly to OpenAI’s o1: Reasoning models fact-check themselves, helping them to avoid hallucinations that other AI models experience; However, reasoning models often take longer to respond
  • Google’s new reasoning model explains its reasoning for answers: TechCrunch provided the example of asking Gemini 2.0 Flash Thinking Experimental how many Rs are in the word “strawberry”; See below –

Source

There Were Also Some AI-Related Updates From Salesforce And Apple This Week

• Salesforce annc’d a slate of AI-driven developments this week –
  • Salesforce plans to hire 2,000 people to sell AI products to clients (link): This was per CEO Marc Benioff at a corporate event earlier this week; The 2,000 openings represents double the number of people the Co said it would add a month ago; The Co has already received 9,000 referrals for the 2,000 roles
  • Salesforce launched Agentforce 2.0, the newest AI version of its enterprise digital labor platform (link): This introduces a new library of pre-built skills and workflow integrations for rapid customization, the ability to deploy Agentforce in Slack, and advancements in agentic reasoning and retrieval augmented generation
  • AI is pacing to drive $200bn+ in holiday sales, a +12% y/y jump, per Salesforce (link): Since Cyber Monday, retailers’ usage of gen AI and agents has grown +23% w/w, as Cos that have used AI during the holiday season have seen higher engagement (38%) than bizs that didn’t (21%)
• Apple is reportedly in discussions to incorporate Tencent and ByteDance’s AI models into iPhones sold in China (link): These talks are at a very early stage, per sources cited by Reuters; China’s regulatory requirements have effectively forced Apple to seek local partners for its AI features
  • Apple has also held talks to use Baidu’s AI model in China: However, The Information reported earlier this month that the discussions faced setbacks due to technical issues, including disputes over using iPhone user data to train AI models
  • The lack of AI capabilities could exacerbate Apple’s struggles in China: Apple briefly fell out of China’s top five smartphone vendors in Q2 before recovering in Q3, while Huawei launched its Mate 70 series of phones featuring AI capabilities in Nov

-> Baidu shares fell -3.1% in reaction the news, closing the week down -5.5%; YTD, Baidu stock is trading down -28.0%

Optimism around a more active M&A environment has already started bearing fruit in the media, entertainment, and technology sector. After last week saw Omnicom and IPG announce a major merger within the ad agency holding company space (see Theme #2 from 12/13/24 Weekly for more detail), this week saw M&A activity percolate within the music industry, as UMG’s Virgin Music Group announced the acquisition of Downtown Music, one of the biggest companies in the independent music world. Co-CEO of Virgin Music Nat Pastor remarked that this transaction marks the next step to building a “next-generation music company” and represents “an investment into the global independent music ecosystem.”

Separately but related to the theme of growing momentum in M&A, this week TPG was reportedly in advanced talks to buy tower operator Crown Castle‘s fiber business for ~$8bn (link), and Lumen Technologies was reportedly seeking to sell its consumer fiber operations in a potential $6-9bn deal (link).

Not too much detail was provided on UMG’s purchase of Downtown Music, but see below for some additional color.

-> UMG shares were relatively ~flat in reaction to the news and ended the week down -0.4%; YTD, UMG stock is trading down -5.6% and WMG stock is down -12.9%, while Spotify is up +145.3%

• UMG’s Virgin Music Group agreed to acquire Downtown Music for ~$775mn in cash (link)
  • The acquisition is expected to close in H2:25, though the deal is still subject to regulatory approvals
• Virgin Music and Downtown will offer a “broadened and enhanced suite of svs” to clients: Including digital & physical distribution, release mkting, biz intelligence, neighboring rights, synchronization, as well as royalties & rights mgmt
• Background info on Downtown – 
  • Downtown collectively serves 5,000+ biz clients and reaches 4mn+ creators & artists in 145 countries
  • The Co has four divisions, including Publishing, Distribution, Artist & Label Services, and Royalties & Financial Services
  • Downtown clients were recently recognized w/ nearly 150 nominations for the upcoming 2025 GRAMMYs
    • Notable artists include: Smino, Miike Snow, Cydni Lauper, White Denim, Cold War Kids, and Santigold
  • The Co has been one of the most acquisitive independent firms: Having bought FUGA, Curve royalties, and CD Baby during its 17-yr history

There was quite a bit out this week regarding the app economy, whether that be downloads, spend, and top apps. Appfigures published some interesting statistics that show that total global app downloads fell -2.3% y/y in 2024 to 110bn, BUT global consumer spending on mobile apps grew ~+16% y/y to reach $127bn during the period. These increases were all driven by Apple’s App store, as Google Play spending declined y/y.

See below for more of the key statistics from Appfigures this week and note that Apple also put out its Top Apps for 2024 – see Theme #5 for more on that…

Total Global App Downloads Declined Y/Y With US Downloads Falling At A Greater Rate…

• Total global app downloads fell -2.3% y/y to 110bn
  • Global iOS downloads accounted for 28.3bn installs, a decline of -1.1% y/y
  • Global Android app downloads on Google Play were 81.4bn, down -2.6% y/y
• Google cracked down on spam and other low-quality apps this past year, leading to a significant -60% reduction in the release of new apps on Google Play
• US. app downloads fell -3.4% y/y to 10.6bn, mostly due to iOS falling off
  • US. iOS downloads fell -5.3% y/y to 6.1bn
  • US. Google Play app downloads fell -0.7% to 4.4bn.

Source

• The top global app downloaded across platforms = Instagram w/ nearly 640mn installs: It was also the most searched-for app in the U.S. 
  • The Top US app downloaded across platforms = Temu w/ ~48mn installs

BUT Total Global Consumer Spending In Mobile Apps GREW NICELY With Apple’s App Store & The US Being Drivers

Source

• Total spending on global apps grew a strong +15.7% y/y to $127bn in 2024, all due to strong growth in iOS 
  • Global app spending on Apple App Store was up +24% y/y to $91.6bn (accounting for 72% of the total)
  • Global app spending on Google Play declined -1.5% y/y to $35.7bn
• The US accounted for 37% of total global app spending, reaching $47.6bn and was up +11% y/y
  • Apple App Store accounted for $34.4bn, up +18.4%
  • Google Play’s US revenue declined -4.7% to reach $13.2bn in 2024
• The top 10 earning apps globally generated 13.7% of all consumer spending, up +1.2% from 12.5% in 2023
  • By consumer spending, the top app globally was TikTok, with an estimated $2.5bn across platforms, excluding app stores in China

In addition to Appfigures’ stats on global app downloads and spending across ALL platforms (see Theme #4), it is always interesting to take a look at Apple’s annual rankings for App downloads on its App Store. We looked at the TOP TEN Most Downloaded Apps and Most Downloaded Games, both free and paid, on the App Store. We also compared the list vs 2023 to understand which apps moved up (in GREEN), moved down (SOLID RED), were new to the list (BLUE), or fell off the list from 2023 (DOTTED RED). Those that held their place have no color.

In general, there was much more movement among the top FREE apps/games vs the top PAID apps/games.

See below for the charts…and for the link to Apple’s full list beyond just the top 10 CLICK HERE.

Top iOS Global App Downloads

• FREE: Temu remained #1 overall; Surprise, surprise, ChatGPT was new to the list this year, while Max fell off the Top 10 list
• PAID: The top 3 apps, Shadowrocket, HotSchedules, and Procreate all maintained their positions

Top iOS Global GAMING App Downloads

• FREE: There was a lot of movement amongst the top 100 with Block Blast moving up from #7 -> #1 and Roblox moving down from #2 -> #3 among other moves, and several new games hit the list
• PAID: The top 3 apps, Minecraft, Heads Up!, and Geometry Dash all maintained their positions

Satellite-based connectivity has been picking up momentum lately, and this week saw several noteworthy developments unfold within the space. In the US, T-Mobile took one step closer to making direct-to-satellite service widely available to its customers by launching a beta program that leverages the company’s exclusive relationship with Starlink. For now, the program only offers users the ability to send and receive text messages in “dead zones,” though voice and data capabilities are coming in the future. Other headlines from this week suggested that Starlink’s position atop the industry might not be safe for long, as the EU and a consortium of satellite companies announced that they will commit €10bn over the next 12 years to create a rival to Starlink, while Amazon’s Project Kuiper is in talks to work with Taiwan and was seen as the “most mature in [its] development stage” by the country’s Technology and Science Minster. Net-net, all signs point to satellite connectivity becoming more mainstream. It is no longer a matter of “if” this will occur, but more of a question of “when” it will. See below for more details:

• T-Mobile opened up registration for a beta program for T-Mobile Starlink, a direct-to-satellite svs (link): The svs will provide coverage for the 500,000 square miles of land in the US not covered by earth-bound cell towers
  • All T-Mobile customers can access the beta launch: Including bizs and first responders; T-Mobile is prioritizing the latter group, specifically, for the beta program, given their role in safeguarding our communities
    • The beta program is free for all T-Mobile postpaid voice customers w/ a compatible device
  • T-Mobile Starlink will only support texting initially: Voice and data capabilities are “coming in the future”
    • The svs is designed to be more user-friendly than other satellite messaging offerings: B/c Starlink’s direct-to-satellite constellation is “specifically designed for integration with the T-Mobile terrestrial network”; For example, users will not need to hold their phone up to search for a signall
  • “Reciprocal roaming agreements” are also a means of achieving “global connectivity”: T-Mobile highlighted KDDI (Japan), Optus (Australia), One NZ (New Zealand), Salt (Switzerland), Entel (Chile & Peru), and Rogers (Canada) as other telcos that have joined its alliance for direct-to-cell tech
• The EU and a group of satellite operators are investing €10bn to create a competitor to Starlink (link): The aim of the IRIS2 project is to create a highly secure space program for the EU that can be used by Europe’s national govts, military, and commercial clients
  • The SpaceRISE consortium is now contracted to build hundreds of satellites under IRIS2: The contract w/ the consortium, which includes key backers SES, Eutelsat, and Hispasat, will cover a 12-yr period
  • The EU will invest $€bn into the project…: However, the current EU budge only covers ~one-third of that amount; New cash will flow from EU budgets between 2028-2035, and €55mn will come from the European Space Agency
    • … While SES, Eutelsat, and Hispasat, will contribute €4.1bn: Eutelsat will invest ~€2bn, SES ~€1.8bn, and Hispasat ~€600mn
  • The build and launch schedule is “highly aggressive”: The structure calls for –
    • 264 new satellites in 1300 km orbits (anything below 2,000 km is considered LEO), where two satellites would always be in view
    • 18 satellites at 8,000 km altitude (a medium-Earth orbiting fleet), of which one would always be in view over Europe; Each satellite will use 5G equivalent software and use laser tech to connect w/ others; SES is financing 50% of this portion and will have access to 90% of its capacity
    • 10 satellites at 400-750km: These low-orbiting satellites will be paid for by the EU and target new industries and start-ups
    • Eutelsat’s existing OneWeb fleet of 600 satellites will be the forerunner of “next-gen” versions
  • Expectations are high for the program: Over the period of the 12-yr concession, Eutelsat expects to generate $6.5bn in revs from EU customers, while SES anticipates that its IRR on the project will exceed 10%
• Taiwan is in talks to collab w/ Amazon’s Project Kuiper satellite svs (link/link): This is part of the Taiwanese govt’s efforts to build communication resilience and prepare for a possible conflict w/ China
  • The bandwidth for Taiwan’s existing OneWeb satellite svs is “too small for real applications”: This was per Technology and Science Minister Wu Cheng-wen; He also noted Eutelsat’s “financial problems” and delays in developing second-generation satellites
  • Taiwan is also considering other Western satellite Cos: However, Wu didn’t provide specifics on names
    • BUT “Amazon’s Kuiper is the most mature in the development stage so far,” per Wu: Amazon’s Project Kuiper doesn’t offer commercial svs yet, but the Co plans to have a constellation of 3,000+ LEO satellites and begin offering svs next yr
    • Starlink isn’t an option for Taiwan: Given Musk’s biz ties to China and his Co’s refusal to relinquish control in a joint venture
  • Taiwan has also been sending its own satellites into space: Thus far, the country has used rockets made by foreign Cos, but eventually, it wants to fire them into space using its own rockets

The debate over TikTok’s future in the United States reached a critical juncture this week, as the Supreme Court said that it would take up a challenge to a law that would ban TikTok in the US. This comes after a federal appeals court ruled that the ban should stand and after an appellate court ruled against delaying the ban a week later. Now, in seemingly a last-ditch effort, TikTok is making its case to the Supreme Court, which agreed to hear the case on an expedited timeline.

The clock is certainly ticking for TikTok, with less than a month before the app is scheduled to be banned. See below for the latest update. (link/link/link)

• The US Supreme Court has agreed to decide the constitutionality of a law that would ban TikTok in the US if the app doesn’t get rid of its Chinese ownership
• How did TikTok get to this point? 
  • Back in April, Congress passed a law, as part of a foreign assistance package, that gave TikTok nine months to sever ties with ByteDance, its Chinese parent company, or lose access to app stores and web-hosting services in the US
    • President Biden signed the bill into law, and it is set to take effect on Jan. 19, with the possibility of a one-time 90-day delay granted by the president if a sale is in progress
  • On December 6th, a panel of three judges from the DC Circuit denied TikTok’s bid to overturn the law
  • On December 13th, the appeals court denied TikTok’s request to delay the law from taking effect pending a Supreme Court review
• Upcoming hearings timeline – 
  • TikTok asked the Supreme Court to rule on its request to pause the law by Jan. 6
    • If there’s no ruling by Jan. 6, TikTok requested the Supreme Court issue an order that temporarily blocks the law to ensure the law won’t take effect while the court is deliberating
  • Two hours of arguments will be heard on Jan. 10, an expedited timeline that allows for the Supreme to consider the issue before the law takes effect on Jan. 19 (the day before President-elect Trump takes office)
• If the court doesn’t delay or lift the ban…the new incoming administration may take a more favorable view: President-elect Donald Trump tried to ban TikTok during his first term in office, but reversed his position during the presidential campaign and said he would “save” the app
  • Trump said on Dec 16th that TikTok played a role in helping him win the youth vote and that he would “take a look at TikTok”
  • Trump has been in talks with TikTok CEO: “I have a warm spot in my heart for TikTok,” Trump said, and on the same day, Trump met with TikTok’s CEO Shou Chew at his Mar-a-Lago estate
  • Trump does have avenues to lift the ban: While Trump can’t unilaterally wipe away an act of Congress, the law does allow the president to lift the ban if his administration determines the site is no longer under Chinese control
• TikTok reacts to Supreme Court taking the case (link): “We’re pleased with today’s Supreme Court order. We believe the Court will find the TikTok ban unconstitutional so the over 170 million Americans on our platform can continue to exercise their free speech rights”

After announcing a series of expansions across Miami, Los Angeles, Austin, and Atlanta in 2024, Waymo is now going worldwide, and its first stop is Tokyo. Not only is the capital of Japan Waymo’s first international rollout, but it also marks the Co’s first in a left-hand traffic market.

See below for the details. (link/link/link)

• The launch is part of Waymo’s development program or “road trips” that involve bringing its technology to a variety of cities and testing it, with each city having different challenges 
  • Until now, those road trips have focused on approx. a dozen US cities, usually to test out specific conditions or environments
    • I.e., rain in Miami or extreme heat in Death Valley, California
  • Tokyo is Waymo’s “first international road trip”
    • In Tokyo, Waymo robotaxis will learn and adapt to left-hand traffic and new driving nuances associated with operating in one of the world’s most densely populated urban environments
• Partnering locally with Nihon Kotsu and GO: Nihon Kotsu is Tokyo’s largest taxi company and will oversee the management and servicing of the Waymo vehicles; Go is a taxi-hailing app
• The first Waymo, all-electric Jaguar I-PACEs will arrive in Tokyo in early 2025 
  • Initially, Nihon Kotsu drivers will operate the vehicles manually to map key areas Tokyo, including Minato, Shinjuku, Shibuya, Chiyoda, Chūō, Shinagawa, and Kōtō
  • Data from the manned test drives will help train the company’s AI systems
  • The vehicles will fall under Level 4 of Japan’s five-level rating system for autonomous vehicles, which allows for completely autonomous operation without a driver in limited areas
• Waymo isn’t the only AV player making moves in Japan 
  • Local startup Tier IV and ZMP, is a robotics Co that is testing delivery vehicles and buses in Tokyo
  • Monet Technologies, which is partly owned by Toyota, annc’d plans to test a self-driving taxi service in Tokyo’s Odaiba district earlier this yr

Price increase across the sector have become somewhat of a regular occurrence over the past year, and we saw a couple more trickle in over the last week. On the payments side, PayPal is updating prices for its merchants, while on the video streaming side, Discovery+ and AMC+ announced a bump up in their prices.

See below for the details.

• PayPal to raise price for merchants (link)
  • “Updated” prices for US merchants that use its PayPal and Braintree svs, affecting its PayPal Pay Later, alternative payment methods, advanced credit/debit payments and virtual terminal starting Jan 13th
    • Increasing the amount it charges merchants to offer its BNPL svs to their customers to 4.99% of the transaction plus 49c, from 3.49% plus 49c, starting Jan 13th
      • Still lower than other BNPL players, including Block (owns AfterPay and Square), which charges 6% per transaction plus 30c, and Klarna which, per a May 2023 pricing sheet, charges 5.99% of the transaction plus 30c, in addition to individually negotiating its contracts
    • Increasing the price it charges merchants for alternative payment methods and for advanced card transactions to 2.89%, from 2.59%
    • Increasing the amount charged for use of its virtual terminal to 3.39%, from 3.09%
  • Why the price increase? According to a PayPal spokesperson, “To better align with changes in the economic landscape, while incorporating the enhanced features delivered for customers, we have updated our US pricing, applicable to US PayPal business accounts and US Braintree accounts”
• Discovery+ add-on price on Sling TV will increase in January (link/link/link)
  • Will increase price of ad-free tier by +$1/mo, from $8.99/mo to $9.99/mo, effective Jan 14th, 2025
  • Only seems to be impacting ad-free version: In an email sent to customers, Sling TV only specified that the ad-free tier would be seeing a price hike; The ad-supported version remains at $4.99/mo
  • Comes on the back of SlingTV increasing its overall price: Back in November, Sling TV announced that it would increase the price of its base packages by $6/mo, starting Dec. 20th; The Sling Orange and Sling Blue plans are now $46/mo, and the Sling Orange-and-Blue tier has jumped to $61/mo
    • But Sling TV isn’t the only Live TV svs to increase prices in 2024: Fubo, Philo, Hulu + Live TV, DIRECTV STREAM, and YouTube TV all announced price increases this year
• AMC+ announced price increase on both ad-supported and ad-free tiers (link)
  • Will increase price of ad-free tier by +$1/mo, from $8.99/mo to $9.99/mo
  • Will increase price of ad-supported tier by +$2/mo, from $4.99/mo to $6.99/mo
  • Also increasing price of ad-free annual plan by +$12/yr, from $84/yr to $96/yr
  • Impacts both new and existing customers: Effective immediately for new customers; Existing customers will see the price increase in their next billing cycle post January 15th
  • Why the price increase? AMC said the new rates help “to continue delivering a collection of world-class originals, award-winning series, and exclusive movies from AMC, Shudder, Sundance Now, and IFC Films Unlimited”

• EA Sports College Football 25 is now the best-selling sports game of all time in the US by dollar sales (link): This was per mkt research firm Circana; College Football 25 surpassed NBA 2K21 to achieve the milestone
  • The title is the biggest selling game of the year so far in the US: College Football 25 briefly fell out of the Top 10 monthly charts in Oct, but price promotions helped drive the title back to the #4 spot in Nov; Competition from Black Ops 6 has been a headwind
  • College Football 25 is among the top 50 best-selling games of all time, based on its dollar sales: The title ranks #43 on the top 50 list, while the top spot still belongs to GTA V “by a lot”
  • Other gaming industry stats on Nov from Circana – 
    • Spending on video games content, including software, subscriptions and more, dropped -9% y/y to $4.5bn: Console content was the biggest source of decline, down -29% y/y
    • Hardware spending was flat at $927mn: A +15% y/y uptick in PlayStation 5 sales helped counter a -29% and -3% y/y respective declines in Xbox and Switch sales
      • 2.4mn consoles were sold, a +4% y/y increase: However, YTD console sales are tracking below last yr at 9.4mn units compared to 11.8mn
• President-elect Donald Trump and Softbank CEO Masayoshi Son annc’d a $100bn investment into the US (link): Softbank’s investment will occur over the next four yrs and aim to create 100,000 jobs in field such as AI; However, details about specific investments were unclear
  • Son’s investment decision was directly tied to Trump’s win in the presidential election: “My confidence level [in] the economy of the US has tremendously increased w/ his victory,” remarked Son
    • The commitment doubles a similar pledge made after the 2016 election: Then, Softbank had promised to invest $50bn into the US and create 50,000 jobs; This promise was kept “in every way, shape, and form,” according to Trump
  • Trump has “bold reforms” planned for when he takes office: A spokesperson indicated that a central focus will be ensuring that “AI, emerging technologies, and the other industries of tomorrow are created, built, and grown in the US”
  • Some believe that Son has a larger move at play: Analysts point out that part of the rationale for Softbank’s 2016 pledge was to gain a blessing for the Sprint-T-Mobile merger; Now, some see this as Son effectively choosing the West and America over China, as the geopolitical landscape changes
• Threads reached 100mn DAUs, per Meta CEO Mark Zuckerberg (link): Zuckerberg also shared that Threads has 300mn+ MAUs, a +9% increase from the 275mn reported in Nov
  • This is the first time that Threads has ever revealed daily active user figures: Meta has been more proactive about sharing stats as rival social platform Bluesky has gained prominence w/ 25mn+ users
  • Threads has attempted to attract users w/ consistent new feature updates: Including custom feeds, Starter Packs of accounts for new users to follow, and an option for users to change their default feed