Good morning readers. It seems like all people want to do these days is share nude photos of celebrities on X. Topping Apple’s App Store amid a scandal, the company faces yet another viral celebrity image debacle. The #drakevideo trend ignited speculation over a racy clip allegedly featuring rapper Drake in…ya you guessed it, the nude. This comes on the tail of a recent uproar over AI-generated explicit images of Taylor Swift last week. But despite these recent blips, the app's popularity remains unscathed. And Elon, in typical Musk fashion, flaunted the achievement, brushing off skepticism with trademark confidence. X has vowed to maintain a safe platform, but concerns persist over how the company plans on moderating content since Musk took over in 2022.

Let’s jump into today’s storylines.

In today’s digest:

• Disney, Warner Bros. Discovery, and Fox launch joint sports streaming platform, shaking up the industry

• Headline Hustle: Uber posts first annual profit since IPO, Israel rejects Hamas cease-fire, Disney bets $1.5 billion on Epic games

• How Meta triumphed while Snap struggled in the latest earnings showdown

• Pulse Points: What’s Trending

MEDIA

A new era in streaming has arrived

In a move that's turning heads across the U.S. media landscape, industry giants Disney, Warner Bros. Discovery, and Fox have unveiled plans for a joint venture that's anything but business as usual. This fall, the trio are set to launch a new streaming service designed with sports aficionados in mind, breaking from the recent splurge of solo streaming platforms.

The playbook

The brainchild of this alliance promises to be a one-stop-shop for sports fanatics, granting access to a plethora of sports networks under the participating companies' banners, including ESPN+ from the house of Disney. But while the vision is clear, some intricacies of the deal remain shrouded in mystery, adding an element of suspense to the unfolding narrative.

The implications of this partnership extend far beyond the realm of sports, with potential disruptions rippling through traditional cable operators and news networks alike. The shift towards streaming alternatives poses both opportunities and challenges for established players, forcing them to adapt or risk being left behind in the world of streaming.

Things aren’t looking so good for cable TV. With speculation swirling about the impact on cable TV and the broader media landscape, one thing is clear: the game is changing. Satellite TV providers and virtual distributors may find themselves navigating a rough road ahead, while the absence of major networks from the sports bundle raises intriguing questions about its ultimate appeal.

Analysts view the joint venture as a savvy strategic move for all three companies, positioning them to capitalize on the surging demand for streaming sports content. Yet, amidst the excitement, there are nuanced considerations at play, from potential trade-offs for individual players to broader implications for industry dynamics.

Looking ahead…as this alliance unfolds, its impact on the sports and news broadcasting landscape will be closely watched. With the promise of revolutionizing how fans engage with sports, the success of this venture remains a tantalizing question mark, poised to redefine the rules of the game in media streaming.

Headline Hustle

📈 Uber posts its first annual profit since IPO. Uber Technologies achieved its first annual profit since going public, marking a pivotal shift from prioritizing growth over profitability. With a $1.43 billion profit in Q4 2023, bolstered by equity investments and operational income, Uber reported a net income after years of losses. CEO Dara Khosrowshahi hailed 2023 as an inflection point, signaling sustained profitable growth. The company's resilience, despite pandemic challenges, underscores its adaptability in a dynamic market. Regulatory hurdles, particularly in food delivery, remain a key focus amid ongoing industry evolution.

🇮🇱 Israel rejects Hamas response to cease-fire. Israeli Prime Minister Benjamin Netanyahu rebuffs Hamas's cease-fire terms, underscoring a diplomatic impasse amid U.S.-led efforts to halt the Gaza conflict. Rejecting demands for prisoner releases and other concessions, Netanyahu reaffirms Israel's commitment to its military campaign. Despite ongoing negotiations involving the U.S., Qatar, Israel, and Egypt, both sides remain distant on a viable cease-fire framework. The conflict's toll on civilians heightens international pressure for a resolution as diplomatic talks continue in Cairo.

💰️ Disney makes $1.5 billion bet on Epic Games, expanding into gaming universe. Disney announces a monumental $1.5 billion investment in Epic Games, marking its largest venture into gaming yet. Partnering with the Fortnite studio, Disney aims to forge an expansive entertainment universe where users can interact with beloved characters and stories from Disney, Pixar, Marvel, Star Wars, and more. CEO Bob Iger highlighting the strategic move in response to shifting demographic trends, emphasizing Gen Alpha, Gen Z, and millennials' growing engagement with gaming. This collaboration expands Epic's repertoire of major partnerships, promising innovative experiences at the intersection of gaming and entertainment.

BUSINESS

Snap just got big-brothered by Meta

Somebody should tell Snap digital advertising can be a real b*tch sometimes. Just make sure it’s not Meta.

The companies’ latest earnings tales unfold like a study in contrasts, highlighting the unforgiving nature of the digital advertising world. Despite sharing a turbulent 2022, marred by advertiser pullbacks and Apple's privacy tweaks, both companies have recently shown signs of resurgence. This recovery has catapulted their stocks to the top, with Meta rejoining the Trillion Dollar Club and Snap's shares soaring by an impressive 62% over three months, outpaced only by one other S&P 500 entity, per FactSet.

But as their stocks ascended, their fortunes diverged sharply.

• Meta's fourth-quarter ad revenue surged by 24% year-over-year to $38.7 billion, surpassing the high expectations and giving its stock a 20% post-earnings leap.

• On the flip side, Snap's growth sputtered to less than 5% year-over-year, falling short of analyst predictions and triggering a 33% plummet in after-hours trading.

This pattern isn't new for Snap, which has seen its share price dive post-earnings six times in a row, often by double digits.

Snap isn't without its silver linings. User growth remains robust, with significant additions in daily active users and a promising, if modest, revenue forecast suggesting a near-term uptick. Yet, these bright spots are overshadowed by the harsh realities of competing in an industry where Meta's scale and self-reliant infrastructure present formidable challenges Snap must navigate with reliance on costly cloud services.

Big picture: As Snap embarks on cost-cutting measures, including workforce reductions, the disparity in scale and infrastructure costs highlights a pivotal industry truth: not all social networks wield the same clout or allure in the advertising world. For Snap's investors, this is a critical distinction, reminding them that while Snapchat's unique user base is its strength, it also delineates its limitations in the digital ad landscape.

SNIPPETS

Pulse Points

• Bill Ackman's Pershing Square plans to launch a closed-end fund on the NYSE to invest in 12 to 24 North American large-cap, investment grade, "durable growth" companies, with no minimum investment required.

• One week after Microsoft laid off nearly 2,000 employees in its gaming division, the FTC accused Microsoft of breaching its promise to keep Activision Blizzard independent post-acquisition, filing a complaint for a temporary acquisition pause to investigate potential antitrust issues.

• Apple is eyeing its first foldable phone after release of the Vision Pro.

• SoftBank reported its first quarterly profit after four quarters of losses due to substantial gains at its Vision Fund tech investment arm.

• Arm's fiscal third-quarter earnings surpassed estimates and issued a positive profit forecast for the current quarter, causing its shares to soar up to 41% in extended trading.

• A US military strike in Baghdad on Wednesday killed a Kataib Hezbollah commander responsible for attacks on American forces, as stated by US Central Command.

• Nick Saban, the recently retired coach with the most national championships in major college football history, is set to join ESPN, according to the network's announcement on Wednesday.

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