Horizons Newsletter – week 46 // 2019

Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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Streaming bonanza
November has become streaming video month with the highly anticipated launches of Apple+ (Nov. 1) and Disney+ (Nov. 12). In addition, AT&T provided more information on its planned HBO Max service (May 2020), and Comcast announced that it will consider making its ad-based video service Peacock (spring 2020) completely free, with a paid ad-free option. While introducing these streaming services makes strategic sense from a company perspective, they only create more friction from a consumer perspective. Consumers will have to use multiple services and pay an additional fee to get the same content. If people would subscribe to all available video services (including Netflix, Hulu and Amazon Prime), the cost would be comparable to a pay-tv subscription. However, experts claim that people will subscribe to 3-4 services at most, so providers need something to convince people to subscribe. Disney and HBO have their unique content offering. Apple+ combines content with providing easy access to other video services, a model known as content aggregation. Peacock, meanwhile, goes for ads. These strategies show that as streaming matures, it mimics the models that sustained its predecessor, TV: advertising and aggregation.

A French renaissance?
France and Germany have been the historical driver of European integration and the Eurozone’s economy, alternating who is in the lead. In the last 15 years, Germany was the pioneer, experiencing a new “economic miracle”. Until 2005, the country was considered the ‘sick man’ of Europe with chronic unemployment and weak domestic demand, but the 2003-2005 German labor market reforms have transformed Germany into the Eurozone’s economic powerhouse. However, the current global trade tensions and weakening global demand are hurting Germany’s cyclical, export-oriented economy. France, meanwhile, is proving more resistant to these circumstances and its economy is currently beating expectations. Furthermore, as Macron is emerging from a popularity slump and entering the second half of his term as President, he is set to fulfill the reform pledges of his campaign (e.g. on unemployment benefits, the pension system) after pushing through his labor market reforms at the beginning of this year. If Macron can weather new criticism and protests and push along with his reform drive, France might be poised for a similar age of outperformance that Germany experienced.

Humanizing pets and tech
Humans have an innate habit of anthropomorphizing their environment: assigning human traits to objects, especially to the ones that move and interact with them. In developed markets, where urbanization results in more people living alone and a decrease in the square meters to live in, we increasingly see small pets taking on the role of family members. The projection of human qualities and emotions on to animals is turning into a thriving industry. It results in pet spending outside the ordinary categories: pet retreats, pet fashion and pet stores filling their shelves with gluten free and vegan pet food. The trend of humanization doesn’t just apply to pets, but also to inanimate objects. As technological advances in robotics and AI enable IoT devices with greater intelligence, humans are likely to assign personality traits to electronic devices. For instance, robot pets have already proven their value in elderly care. If the trend of anthropomorphism of pets and technological devices continues, it might not be long before the pet shop will be selling batteries and spare parts.