I don't think you can simply "sell" customer information in the financial industry. It's a heavily regulated industry. RH can use information from the card to cross-sell its loans, if customers allow marketing communication. But I don't think they can just profit from allowing a 3rd-party access to that data. I never heard of a card issuer monetize their customer data that way. If you have an example, please do share.
If you scroll down the page of this product, you will see that the card is issued by Coastal Community Bank. It's common that a popular technology firm partners with a bank to issue credit cards.
Yes, APR is going to be 20%+ and even 30%+, but not all cardholders will revolve. Some, if not many, will be transactors and won't pay any interest at all. There is also cost of funds and losses. There is a reason why there is no other 3% cash back card on the market. The most popular set-and-forget card out there is 2% cash back.
On CCB running the card for Robinhood, that's very expected, my last paragraph was about them probably outsourcing it.
Yes, not all accounts will revolve and be charged interest, many will. credit card balances have been going up for decades: https://fred.stlouisfed.org/series/REVOLSL (This is ALL revolving credit, not only credit cards, but it's mostly credit cards). It's well over 1 trillion dollars now. Yes there are cost(s), but credit is a very strong and well run business now and is absolutely a profit center for banks. If they get too many freeloaders that don't carry balances to hit their income targets, they will add some fine print to curtail freeloader use-cases enough that they can hit their income targets. This has been going on for decades now.
I agree with you that RH may put a cap on rewards earnings or change the program later. We have seen issuers take away travel benefits before, but I haven't seen a lot, if any, cards that roll back rewards.
For me, because the RH CEO in an interview (https://www.youtube.com/watch?v=QT5OMUdaZtg) said he wanted the card to be profitable on a standalone basis, I just don't see it that way, but you can be right for all I know.
I got one part, at least it seems, wrong in my blog, that was my bad. I just want to say I did not forget about the interest income side of the card, I just don't think it will be profitable. Again I can be wrong. But thanks for the interaction.
Calling the App Store Apple's side hustle is weird as best and practically wrong. Someone's blog is a side hustle to their full-time job. Not blogging for days likely wouldn't affect their ability to make ends meet. But how would the whole Apple ecosystem function without this "side hustle"?
"To put it another way, the Epic case may have shown that Apple’s policies around the App Store were (mostly) legal, but that didn’t mean they were right; now the DOJ, looking for another point of vulnerability, is trying to make the case that Apple’s right approach in delivering an integrated experience is in fact illegal."
It is legal but it is not right, but the government is trying to prove that its right approach is illegal? What does it even mean?
There are multiple interests in this ecosystem. Consumers', Apple's, shareholders', small developers and big developers. And they have different interests, often conflicting. By "being right", right by whom? Who is to say that they know how to appease every party in this ecosystem?
I have several issues with the points made in this article
First is the Hardware cycle which the author admitted himself is a stretch. Because it is. So not sure why it is there
Second, the slower growth of AWS and Azure, how can we be sure if it's because of increased interest rates and not because of big numbers laws? AWS itself generated $21 billion in Q4 2022. How fast can you grow at that size? I am sure interest rates have some impact but it should not be the sole reason for slower growth. AWS is still growing and very profitable.
Third, claiming ATT fixed a problem that doesn't exist is not correct. Surveillance tracking without user consent is a real problem.
Last, when Jassy said advertising, did he mention mobile advertising though? Mobile advertising does not mean every type of advertising. If there is no data, how does he know ATT's impact was underestimated? Financial Times ran an article claiming that ATT's impact on FB was about $10 billion. There was no link to the research or article for that number. FB ran away with that number and made the same claim. But even if that number were true, FB still has billions of users and generates a lot of money. Plus, they already lapped the period impacted by ATT. What investors were worried about is Mark's obsession with VR and the big investments into the field. The layoff is FB's attempt to be leaner and recover investor trust. So I am not sure why ATT is even in the discussion.
> AWS itself generated $21 billion in Q4 2022. How fast can you grow at that size?
More generally there are two types of growth - market growth (new customers) and net-zero growth (taking customers from the competitor). The hyper growth generally comes from both of those being quite high, but almost by definition the net-zero growth one will eventually shrink to zero. Likewise, market growth will slow down after all the low hanging fruit for market growth are exhausted (this is generally conversion from existing older tech for efficiency gains).
This article said none of Netflix's competitors had positive cash flow. Well, at least Disney did. Disney+ is unlikely to have positive cash flow, but the Walt Disney company has a cash cow in parks and other media assets. This Stratechery article seems to conveniently ignore that unlike Netflix, other streaming services have revenue-generating assets to fund the streaming war.
It cost Disney $400 million to make the Avatar sequel and probably that amount for marketing. Yet it already has made $2 billion in box office. Netflix spent $200 million on the Gray Man. How much did the movie bring to Netflix? Disney and Warner Bros have incredible franchises. What does Netflix have in comparison?
I also don't see any mention on the fact that while competitors are increasing content spend, Netflix is doing the opposite. If it's the new content, rather than the old stuff, that attracts subscribers, should the fact that Netflix is decreasing content spend be a concern?
If Netflix's future is about creativity and content quality, why should we believe that Netflix will be better at creating quality content in the future than they have so far? What data shows that subscribers come back because Netflix content is the best? Or is it because they have the biggest catalogue? And what does it say about decreasing content spend when Netflix is stretched across markets?
I don't dispute Reed's achievements, but citing the launch of the ads tier is a bit premature and strange. Reed, for years, pushed back against the idea of an ads-supported plan. He only changed his mind only when he had to. Yes, Netflix launched the ads operations in a few months' time, but we haven't got any concrete data on it.
AppleTV+ has the highest average IMDb score for its streaming library (7.08/10), for the 2nd year running (2021 and 2022), but has the smallest library of content.
Uber Eats helped 400,000+ US merchants generate $11 billion in sales from October 2020 through September 2021. Eats facilitated 500+ million orders in the U.S, delivered by 2 million couriers. Globally, 3 million customers ordered grocery and convenience items delivered.
