The airline that’s not like most airlines is reversing course after 50 years of being different. Southwest announced yesterday that it’s getting rid of open seating, a hallmark of the company, in response to slowing profits.

Southwest’s decision is twofold:

• The change means it can charge customers more for premium seats with amenities like extra legroom.
• The airline thinks customers will like it. In a survey conducted by Southwest, 80% of its fliers favored assigned seats, while the No. 1 reason they switched to a competitor was because of seating, the company said.

Southwest will keep the current seating model—opening the cabin doors and yelling “scatter” as people run to window seats—while it retrofits planes with the new seating and waits for regulatory approval, which is estimated to come sometime next year. The airline will also begin offering red-eye flights in 2025, but don’t worry, loyalists: Southwest is keeping its policy of free checked bags for now.

Turn and face the strange

Southwest’s momentous strategy shift comes as the company reported lackluster earnings, including a 46% drop to $367 million in Q2 profit despite record revenue. The company said it sold too many summer tickets too early and lost out on the last-minute profit squeeze afforded by procrastinating travel-bookers.

Other airlines are feeling the turbulence. Delta and American both reported disappointing Q2 profits despite high revenue and record demand—but those airlines’ premium ticket offerings, like first-class and economy plus, help offset higher labor and fuel costs.

Plus…like an angry boss looking over your shoulder when you’re trying to fix a #VALUE! error, Southwest is dealing with the activist investor Elliott Investment Management, which wants to overhaul Southwest’s strategy, though Southwest CEO Bob Jordan said that pressure didn’t impact the open seating change.—CC

What’s your fave Olympic event? Swimming? Soccer? Or maybe you’ve always been about intense table-tennis showdowns. Whatever sport gets you hyped, you’re gonna wanna make sure you don’t miss a minute of the 2024 Paris Olympics.

And you’re in luck: AT&T In-car Wi-Fi can keep you and your passengers connected to this summer’s competition while you hit the open road. Mm-hmm—hyper-fast Wi-Fi inside your whip, starting at $10 per month* with an eligible Unlimited plan.

Even better? You won’t miss a minute of the action since AT&T In-car Wi-Fi covers more roads than any other carrier.* All the streaming, video, audio, and everything in between at top-notch speeds all across the great wide open.

Get connected.

Wildfires are burning through North America. Approximately 25,000 people were forced to evacuate this week from the popular resort town of Jasper, Alberta, in the Canadian Rockies as a blaze ripped through Jasper National Park, causing catastrophic damage, officials said. Meanwhile, wildfires in Oregon, California, and other parts of the Pacific Northwest scorched hundreds of thousands of acres due to strong winds and high temps. Scientists say human-induced climate change has led to more extreme wildfires in recent decades.

OpenAI is launching a search engine. Why google your concerning health symptoms when you can “SearchGPT” them? That’s the name the artificial intelligence company is using for its new search function, marking its most direct challenge yet to Google. It’s unclear when SearchGPT will be officially launched, but in the meantime, OpenAI is allowing some users to test the feature, which can answer questions (and follow-ups) and link out to sources. The prototype version will be available as a standalone product in web browsers, but OpenAI hopes to integrate it into ChatGPT eventually, Bloomberg reported.

⏸️ Kroger and Albertsons hit pause on their merger amid antitrust scrutiny. The Great Supermarket Merger of 2024 is on hold after the grocery giants agreed to a temporary injunction while state and federal regulators look into the proposed $20 billion deal. The Federal Trade Commission has argued that the merger of two of the US’ largest supermarket chains would drive up food prices, while the companies say their team-up is necessary to compete with Amazon and Walmart. The companies have already agreed to sell 579 locations in the hopes of placating regulators.

The American economy should be wearing a leotard in Paris right now: A knockout commerce report released yesterday indicates that the US is likely to pull off the feted “soft landing”—a Simone Biles-level recession-avoiding maneuver—for the first time since the 1990s.

Growth is up: Gross domestic product (GDP)—a broad measure of US goods and services—increased 2.8% annually from April through June, shattering forecasts of 2.1% and doubling the economy’s pace from the first quarter of the year, according to the Commerce Department.

That was driven by:

• An acceleration in household spending (which accounts for two-thirds of GDP) despite rising unemployment and cost-consciousness.
• Corporate and government spending. Business investment hit its fastest rate in nearly a year, Bloomberg reported, while increased defense budgeting also boosted GDP.

Inflation continues to slow: The Fed’s preferred inflation measure, which excludes volatile food and energy prices, rose at a 2.9% annual rate last quarter. That’s a big chill from its 3.7% rate in Q1, but also a bit higher than estimates.

Looking ahead…one economist called this “a perfect report for the Fed,” which is broadly expected to start cutting interest rates in September after months of positive economic readings.—ML

Marketing Brew Summit is brat. Get ready for the Marketing Brew Summit on Sept. 12, where innovation, performance, and people unite in one electrifying day! We're spotlighting the industry's brightest minds to uncover how brands harness cutting-edge tools and generative AI to outpace an ever-evolving market. This is your backstage pass to the latest trends, performance-driven strategies, and people-centric approaches reshaping the marketing landscape. Grab your ticket now for a day of inspiration and transformation!

If you only know “sigma” as a Greek letter, then you might need a 10-year-old to help you decipher what’s coming next: Skibidi Toilet has officially caught Hollywood’s eye.

Huh? The viral YouTube Shorts series has become a Gen Alpha cultural touchstone with its video-game-like graphics of distorted human heads popping out of toilets to fight humanoid TV robots and sing the absurd Skibidi song. While some parents wonder if it’s turning their kids’ brains into mush, Transformers director Michael Bay and former Paramount Pictures President Adam Goodman recently told Variety they’re in talks to adapt Skibidi Toilet IP into a movie or a TV show.

Skibidi Ohio rizz, fellow kids

The duo is betting that elevating Skibidi Toilet to the big screen might be the entertainment industry’s best chance to get anyone born after 2010 to watch a video longer than 15 seconds.

• The 76-episode series has amassed 17 billion YouTube views since its 24-year-old Georgian creator, Alexey Gerasimov, started dropping episodes last year.
• It also firmly lodged the pseudo-word “skibidi” into the Gen Alpha lexicon and inspired fans to create video games played by millions.

Big picture: Skibidi Toilet isn’t the only YouTube-born IP that Hollywood hopes can command the big screen like Marvel’s superheroes. A feature film spawned from the channel Ryan’s World is coming to theaters soon, while the cartoon series CoComelon is reportedly getting made into a movie.—SK

Universal Music Group is straight up not having a good time, and Big Tech is largely to blame. Shares of UMG, which represents megastars like Taylor Swift and Drake, sank more than 23% on the Amsterdam Euronext exchange yesterday after the record label said its subscription and streaming revenues grew just ~4% in Q2, well below expectations of 10%. The company relies on licensing revenue from Spotify, YouTube, Apple, and Amazon, but UMG executives implied that the latter two are not pulling their weight following a surge of growth during the pandemic. They also said that a recent policy change at Meta to stop licensing music videos is depriving UMG of a huge revenue stream. Swift might be preternaturally powerful, but she can’t stop the changing economics of music streaming.

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to when your Strava jockey sets a new personal best.

It’s that satisfying. Ace the quiz.