Morning Brew - ☕ Breaking the internet

How fighting in the Red Sea is impacting the internet...
March 05, 2024 View Online | Sign Up | Shop

Morning Brew

SmartAsset

Good morning. You know when a character says the name of the movie in the movie? That’s called a “title drop,” and a new analysis of the phenomenon shows how common they are: 36.5% of films released from 1940 to 2023 contained at least one.

Maybe not a huge surprise, but Barbie had the most title drops (267) of any movie examined over 83 years. And what about movies where the title is spoken just once? Those include Interstellar, Amadeus, The Dark Knight, The Princess Bride, and Saving Private Ryan.

With stats that invigorating, who needs a…morning brew?

—Sam Klebanov, Cassandra Cassidy, Molly Liebergall, Abby Rubenstein, Neal Freyman

MARKETS

Nasdaq

16,207.51

S&P

5,130.95

Dow

38,989.83

10-Year

4.219%

Bitcoin

$67,218.72

Dogecoin

$0.17

*Stock data as of market close, cryptocurrency data as of 4:00am ET. Here's what these numbers mean.

  • Markets: Rallies from AI-related companies weren’t enough to keep the major indexes from falling yesterday. Meanwhile, bitcoin continued its journey toward the moon, getting close to an all-time record. And it wasn’t the only cryptocurrency having a banner day: memecoins like dogecoin, pepe, and dogwifhat (yes, its image is exactly what you’re picturing) all soared.
 

INFRASTRUCTURE

Houthis could literally be cutting off the internet

Undersea internet cable A rendering of an undersea internet cable. Serg Myshkovsky/Getty Images

Singaporeans struggling to send memes to their pals in Paris might have Yemen’s Houthi rebels to blame. The militant group that’s been attacking cargo ships in international waters off the coast of Yemen is now being accused of disrupting global internet traffic.

Four underwater internet cables in the Red Sea were cut recently, Hong Kong telecoms company HGC Global Communications said yesterday.

  • Just as with shipping, the Red Sea is a major passageway for the internet, with more than 15 undersea cables connecting Europe, Asia, and the Middle East.
  • The cuts worsened internet connection in India, Pakistan, and East Africa, internet network analyst Doug Madory told WSJ. Though internet providers have rerouted traffic, repairs won’t begin until at least next month, and HGC said about a quarter of online data that passes through the the affected area.

While the Houthis have denied involvement and experts say a ship might’ve caused the damage, Yemen’s government-in-exile warned last month that the insurgents could target the cables. No matter the cause, the incident is a reminder that the Red Sea is what Wired once called “arguably, the internet’s most vulnerable place on Earth.”

Internet chokepoint

A few cables may sound minor, but despite the hype around Starlink’s satellite-enabled internet, physical subsea wires still make the online world go round, as they’re the cheapest and fastest way to send data.

  • Over 99% of internet traffic between continents is transmitted via hundreds of undersea cables, according to CNET.
  • Tech giants like Google, Facebook, and Microsoft have been building new ones, which can cost up to $350 million a pop, per the NYT.

The Red Sea is a big part of that: It sits at the nexus of a global sea-floor cable network, with its shallow waters serving as a conduit for about 17% of global internet traffic, per Data Center Dynamics.

Looking ahead…the cable cuts cast a shadow over the six additional sub-Red Sea cables that internet infrastructure expert Tim Stronge told the Associated Press are currently being built to expand the network.—SK

     

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WORLD

Tour de headlines

Donald Trump Win McNamee/Getty Images

SCOTUS rules states can’t kick Trump off primary ballots. The US Supreme Court overturned a Colorado court’s decision that former President Donald Trump was ineligible for the state’s presidential primary, ruling that individual states don’t have the power to keep candidates off the ballot under a constitutional clause barring insurrectionists from holding office. The ruling effectively shuts down efforts to keep Trump off several state ballots just as we head into Super Tuesday today, with 16 states holding their primary votes. Trump is expected to dominate the Republican contest.

JetBlue and Spirit call off $3.8 billion merger. In a victory for the Biden administration’s aggressive antitrust enforcement, and possibly for travelers between Atlanta and Fort Lauderdale, the airlines terminated their agreement to merge yesterday, weeks after a federal judge found the deal anti-competitive and blocked it. The companies said that even if they could win an appeal of the decision, they didn’t see a path to getting regulatory approval in time to close the deal. JetBlue will pay Spirit $69 million for bowing out of the merger. The news sent JetBlue’s stock up and Spirit’s down.

Ex-Twitter execs sue Elon Musk for severance. Four former Twitter executives who were fired when Musk took over slapped him and the company that’s now called X with a lawsuit, claiming they’re owed more than $128 million in severance. The group includes former CEO Parag Agrawal as well as the company’s former CFO, chief legal officer, and general counsel. Their suit claims Musk won’t pay them as revenge for his being forced to buy the company after he tried to back out of it, and that in order to avoid paying up, “he simply fired them without reason, then made up fake cause.”

TECH

Apple fined $2b over music streaming competition

Photo illustration of Apple Music NurPhoto/Getty Images

In a time when antitrust regulators go after Big Tech companies as regularly as Love is Blind cast members break up, Apple is the one tech mammoth that’s largely escaped penalty. Regulators are making up for it now.

Yesterday, the European Commission hit Apple with a €1.8 billion ($1.95 billion) fine after concluding that the company used its dominance to restrict music streaming competition.

European regulators determined that for a decade, Apple prevented music streaming services (read: Spotify) from telling iPhone users that they could get cheaper subscriptions outside of Apple’s App Store, which resulted in users paying higher prices. The fine is the third-largest penalty ever levied by the EC against a company.

Apple got spicy in response. It called out Spotify—whose 2019 complaint against Apple prompted the investigation that led to the penalty—as “the primary advocate for this decision—and its biggest beneficiary,” claiming that the Sweden-based company is the one with a monopoly in the music streaming market. Apple plans to appeal the fine.

Zoom out: On Thursday, the EU’s Digital Markets Act, a law aimed at ensuring that smaller companies can compete with tech giants like Apple, Meta, Google, and Microsoft, goes into full effect. Meanwhile, in the US, the DOJ is soon expected to file a sweeping lawsuit accusing Apple of trying to suppress competition.—CC

     

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RETAIL

Big-box retailers are going small

Large Macy’s store from outside Xinhua/Dan Tian via Getty Images

Best Buy and Macy’s are the latest major retail chains to announce that they will try to boost in-person business in the post-pandemic online shopping era by livestreaming Subway Surfers in every aisle opening smaller, streamlined locations.

Here are the plans:

  • On top of the 24 big stores Best Buy shuttered last year, the electronics chain said it will close 10 to 15 more large locations over the next fiscal year and open a number of small stores in places where it has no prior physical presence.
  • Amid declining sales at department stores, Macy’s announced it will close 150 locations and, by the end of 2025, open 30 smaller ones, which will measure 30,000 to 50,000 square feet (20% of a mall Macy’s).

Other stores going ant mode include…Nordstrom, Bloomingdale’s, Target, Kohl’s, Whole Foods, and even the originator of getting lost indoors: Ikea. They’re betting that smaller locations with slimmer inventories and (theoretically) easier order pickups/returns will satisfy the contemporary shopper’s desire for Amazon Prime-level efficiency. Best Buy and others are also expanding small stores into rural and suburban areas that wealthy families moved to during the pandemic, according to the Washington Post.

Zoom out: Last year, new leases on 25,000+ square-foot spaces hit their lowest share of all retail space since CoStar Group started tracking in 2006.—ML

     

GRAB BAG

Key performance indicators

A gif of a SpongeBob Squarepants character saying SpongeBob Squarepants/Nickelodeon via Giphy

Stat: It’s not just you—coming into the office really is more of a pain than it used to be. That’s because lots of people now live twice as far from work as they did before hunkering down for the pandemic and getting used to folding laundry during camera-off Zooms. The average distance between people’s homes and their workplaces was 27 miles in 2023, up from 10 miles in 2019, the New York Times reported based on a forthcoming study by Stanford economists using data from payroll provider Gusto. In 2019, only 0.8% of people lived more than 50 miles from where they worked, but now that’s jumped to 5.5%. The shift has happened mostly among white-collar workers making more than $100,000 who are able to throw up a WFH Slack message, the study found.

Quote: “It’s only too poetic I found my career being fulfilled in the City of Brotherly Love. I knew that relationship all too well.”

Philadelphia Eagles center Jason Kelce, better known to some corners of the internet as Taylor Swift’s boyfriend’s brother, announced his retirement. The seven-time Pro Bowler spent 13 years in the NFL, all with the Philadelphia Eagles. Over the years, Kelce became as central to Philadelphia as the Liberty Bell, helping the Eagles win their first and only Super Bowl in 2018 while becoming a fan-favorite player. It seems almost certain that Kelce will be inducted into the Hall of Fame, and many expect the Eagles to retire his No. 62 jersey. We hope that in retirement, he’ll keep cheering on his brother out the window of a luxury suite.

Read: Plastic recycling is a scam. (Heated)

NEWS

What else is brewing

  • American Airlines has ordered 260 new planes to meet growing travel demand. It’s also leaning into luxury by adding more first-class seats.
  • Haiti declared a state of emergency after armed gangs broke 3,700 people out of prison. Gang leaders are demanding the prime minister’s resignation.
  • France became the first country to include the right to abortion in its constitution.
  • Panera Bread isn’t exempt from California’s new minimum wage law for fast-food workers after all, the governor’s office said after facing criticism for the apparent carve-out and claims it benefited a political donor.
  • Unions could call for another Hollywood strike if crew members don’t get a good deal from studios.
  • Trader Joe’s recalled its steamed chicken soup dumplings, which might contain hard plastic from a permanent marker.

RECS

Tuesday To Do List

Get clean: A microbiologist explains how often you should wash your sheets and towels.

Schmooze better: How to level up your small talk.

Capture the moment: These photos were snapped at just the right time.

Play: The NYT is testing out a new word search game for when Wordle isn’t enough.

Rep the Brew: Rock our Classic Brewing Tee for 25% off while supplies last.

Up to $2k off every flight…for life: Dollar Flight Club’s lifetime membership is just $129 (was $1,690) and offers rates like Paris from $299. Offer ends in 12 hours, so don’t wait.*

*A message from our sponsor.

GAMES

The puzzle section

Brew Mini: Know who wrote Mastering the Art of French Cooking? Great—you’re 20% done with today’s Mini. Finish the rest here.

Presidential succession trivia

If the US president becomes incapacitated, dies, resigns, or gets removed from office, the country has a list of government leaders who will replace them as commander-in-chief. This is called the presidential order of succession.

Can you fill in the missing position on the list?

  1. Vice President
  2. Speaker of the House
  3. President Pro Tempore of the Senate
  4. ?
  5. Secretary of the Treasury

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ANSWER

Secretary of State

Word of the Day

Today’s Word of the Day is: mammoth, meaning “something immense of its kind.” Thanks to Alex from Denver for the monster suggestion. Submit another Word of the Day here.

✢ A Note From SmartAsset

1. The Journal of Retirement study, winter 2020. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in The Journal of Retirement study.

         
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