ANTITRUST

The Epic Battle for the Digital Economy Has Begun

At a court hearing yesterday, Apple and Epic Games kicked off the most controversial debate over apps since we ordered mussels in North Dakota. 

The backstory: In August, Fortnite maker Epic launched an attack against Apple that will go down as the Lexington and Concord of this revolution. It introduced a feature that sidestepped Apple's 30% cut on in-app purchases, knowing that Apple would pull Fortnite from its App Store for breaking the rules. Then came a flurry of lawsuits. 

That removal was the subject of yesterday's hearing, but the judge is not expected to reinstate Fortnite in the App Store, according to Bloomberg.

Why it matters 

When you think about "monopolies," you probably conjure up images of industrial barons like Andrew Carnegie and John D. Rockefeller. Today's version of that, critics say, is Apple's App Store, a critical gateway to the digital economy that charges George Washington Bridge-like tolls for access. 

The rebuttal: Apple says it does a lot of dirty work, like vetting apps for privacy and security issues, and its fees reflect the services it provides to developers and consumers. Apple has knocked Epic as a "multibillion-dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store."  

Google has entered the chat

Google's not the Evil Empire in this drama, but it hasn't exactly been Switzerland, either. It also charges a 30% cut of in-app purchases, booted Fortnite off its app marketplace, and faces a lawsuit from Epic Games.

Yesterday, Google released updates meant to fend off growing antitrust concerns, most notably that the next version of its operating system, Android 12, will make it easier for users to access third-party app stores (Apple can't say this because the App Store is the only app store available on iPhones).

Bottom line: Whatever the outcome—and it could take years to resolve—the Epic v. Apple battle shows how app stores have morphed from a small icon on your phone into some of the world's most important marketplaces.

RETAIL

Amazon Invades Halloween's Turf

Prepare to be bombarded by friends showing off their Instant Pots. Amazon confirmed yesterday that its famous mega-sale, Prime Day, will be held Oct. 13–14. 

Like most businesses, Amazon had to reshuffle its calendar due to Covid, pushing back Prime Day from its typical July date. 

Unlike most businesses, the delay arose partly because Amazon was doing too well, and it couldn’t handle a further uptick in demand during the summer. The retailer is on pace to smash the $280.5 billion it did in sales last year.

The holiday experiment

Prime Day isn’t just Amazon’s day anymore—last year, an entire ecosystem of 250+ retailers offered their own discounts around the event to leverage Bezos’s star power. Now, a Prime Day in October means Amazon is pushing up the holiday shopping period for the entire industry. 

Amazon is also trying to make friends with the third-party sellers that use its marketplace. During the first day of the sale, Amazon is giving Prime members a $10 credit if they spend money on items sold by select small businesses on the site. 

AGRICULTURE

Napa Cab Sav Under Siege

On Monday, a trio of fast-moving wildfires known as the "Glass Incident" engulfed California's Napa-Sonoma region, forcing sudden evacuations and putting over 8,500 structures at risk—including the area's famed wineries. 

Talk about bad timing

The fires hit Napa halfway through the grape harvesting season. While grapes for white wine and rosé were mostly picked, red wine (Napa's most famous export) could be impacted. 

Vintners were already concerned. Weeks of fires across the West Coast have dramatically worsened air quality, which could taint grapes still on the vine. 

• California's Wine Institute association says smoke exposure is only a concern for grapes near the blazes... 
• But one winemaker has already complained of "ashy, barbecued flavor.”

Big picture: These fires are "without question the single worst disaster the wine-grape growing community has ever faced," California Association of Winegrape Growers President John Aguirre said. The state's wine industry employs 30,000+ people, and the fires could have ripple effects on hotels, rentals, and tourism. 

SPONSORED BY THE ASCENT

For Once We Are Happy to Talk About Mortgages

Typically, when homeowners see words like “refinancing” or “mortgage” or “termite damage,” they run right out onto the veranda and scream.

But we actually have good news about those first two terms (termite damage is a little out of our purview). Right now, mortgage rates are at historic lows. So refinancing with this lender could mean savings of over $50,000 over a 30 year period.

If you prefer your jaw-dropping numbers by the month, that’s savings of over $145 a month—you can take out a lot of termites with that kind of casheesh.

As is true with all good things, this refi free-for-all will not last. So if you’ve been on the backyard fence about refinancing, now’s the time.

See how much you could save right here.

WEALTH

What's In Your Wallet?

Last year, the median wealth of a typical white family ($188,200) was 5x that of a typical Hispanic family and 8x that of a typical Black family, according to the Federal Reserve’s latest* Survey of Consumer Finance. 

• *Latest = 2019...at the peak of the economic expansion and before the pandemic disproportionately affected workers of color and those with less formal education. 

While Americans’ median net worth rose 18% and median family income gained 5% from 2016–2019, slightly narrowing the income distribution, America’s cavernous wealth gap has persisted on many fronts:

• Before the current recession, the typical white family had $50,600 worth of equities they could tap in an emergency; typical Black and Hispanic families had <$15,000.

• While 70% of upper-middle income folks held stocks (and benefitted from this summer’s rally), only 31% of families in the bottom half did. 
• Two-thirds of working-age families had a retirement plan last year, a smaller proportion than in 2016. 

Big picture: Many economists fear that families who were struggling financially before Covid-19 will come out of the pandemic in worse shape. 

MUSIC

Let’s Play a Game

A company is going public soon. We’ll give you three hints, and you have to guess the company we’re describing. 

1. It raked in $500 million in revenue last year.
2. It derived 97% of that revenue from just seven people .
3. It’s successfully made the jump from Korea into Western culture.

If you answered “Big Hit Entertainment, the Korean record label of K-pop boy band BTS,” then you must have a very specific Spotify history.

Big Hit’s upcoming public offering is already the biggest South Korean stock market listing in the last three years. And 98% of the ~1,420 institutional investors participating in the offering have said they would pay the top-range IPO price or higher.

• At $115/share, the company would be valued at $4.1 billion, turning all seven members of BTS, who are shareholders in Big Hit, into multimillionaires.

Bottom line: A publicly traded company has never had as rabid a fanbase as BTS’s supporters, known as ARMY. Expect retail investors to come out in droves when Big Hit makes its trading debut on Oct. 15. 

WHAT ELSE IS BREWING

• Uber can operate in London for at least another 18 months after winning its appeal.
• The U.S. government will distribute 150 million rapid coronavirus tests to states over the next few weeks, in part to help schools reopen safely. 
• United pilots reached a deal to avoid furloughs through June 2021. 
• Devon Energy and WPX Energy, two oil and gas companies that operate in the Permian Basin, are merging in a $2.6 billion deal.
• Virgin Galactic stock shot up nearly 25% following some bullish projections from Wall Street firms.

SPONSORED BY POST CEREALS

We’ve never felt so on-brand. Today’s a big one at the Brew, because it’s National Coffee Day and the day we get to talk about the new coffee-inspired Dunkin’™ Cereals. With both a Dunkin’ Caramel Macchiato and Mocha Latte variety, you can achieve coffee superfan status by eating this cereal AND drinking your coffee every morning. Get your box of Dunkin’™ Cereal here, and keep an eye out for a lil’ surprise later in the newsletter.

FROM THE CREW

Marketing and Finance Resources That Won't Put You to Sleep

Over the past few weeks, the Brew has rolled out the first two editions in our Syllabus Series: Marketing 101 and Finance 101.

What is the Syllabus Series? We’ve reimagined the concept of the syllabus, dropping boring articles from the 1960s and adding videos, podcasts, and our favorite social media personalities to help you get a 101-level understanding of complex business topics. 

Who’s it for? Anyone, really, but especially a) people who work in these industries day-to-day but want a broader view or b) people who don’t work in these fields yet but are interested in dipping a toe in to see what they're all about. 

Check them out here: Marketing 101 // Finance 101.

Stay tuned for more in the coming weeks. Any suggestions?

BREW'S BETS

Five stock picks that we think could make you rich are in this article. That took 14 words. Yet we’ve got space for 35. So here’s a joke about turtles: Every time turtles go out, it’s a bar crawl. Ok, sign up here for the five stock picks.*

We’re taking this cereal giveaway very cereal-ously. To celebrate the most important of holidays, National Coffee Day, and the release of the new coffee-inspired Dunkin’™ Cereals, we’re giving some lucky Brew readers a chance to win a free box. Get the details here.*

Tech Tip Tuesday: You can watch the first presidential debate tonight on CBS, C-SPAN, and ABC News’s YouTube channels or through streaming apps on Apple TV, Roku, Xbox One, etc. Hardware hack: Getting a cheap TV antenna lets you watch events like this one without buying cable. 

Elon Musk: on a podcast. Talking AI. With legendary journalist Kara Swisher. You know you wanna listen.

Three infographics about coffee for National Coffee Day: 1) How to brew a perfect pour-over cup 2) all about latte art and 3) egg yolks, lemon juice, and other ways different countries dress up their coffee.

^{*This is sponsored advertising content}

COFFEE TRIVIA

It’s National Coffee Day. Our logo is literally a coffee mug. We’re doing coffee trivia.

We’ll give you the basic ingredients for five different coffee drinks; can you name the drinks?

1. Espresso with hot water
2. Espresso with a dash of frothy steamed milk
3. Espresso and drip coffee
4. Coffee, whiskey, and sugar, stirred and topped with cream
5. Finally, what country is famous for a coffee drink containing egg yolks, sugar, condensed milk, and robusta coffee? (Not eligible to answer if you clicked the link in Brew's Bets.)

COFFEE TRIVIA ANSWERS

1. Americano
2. Macchiato
3. Red Eye (there are other names for this also) ((plz don't try this one at home))
4. Irish Coffee
5. Vietnam

** A Note From Post Cereals

© 2020. Dunkin’ trademarks and logos owned by DD IP Holder LLC, used under license