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TMT Weekly: SHOP, INTU, NFLX, and the Stories We Sell

Austin Moorhead | September 14, 2022

It seems like I should know a lot about fantasy football based on my resume: 15+ years experience and multiple championships, including winning a 32-team league full of fantasy football sharks, some of whom work in actual NFL front offices. I’m currently the commissioner of a 14-team, salary cap keeper league with rules so arcane that we have to run it on a custom website. I can sell you a story about my fantasy football knowledge, especially if I leave out the part where I spent August studying fixed wireless instead of NFL depth charts. I still look good on paper, but my fantasy teams are terrible because my knowledge is stale. Which brings me quite naturally, even elegantly, to a core benefit of the Stream by AlphaSense expert call transcript library: fresh experts.

For compliance reasons, the experts in our library have to be at least six months removed from a prior job in a public company (for some firms, the minimum time is longer and/or restrictions more expansive, which we also accommodate). The maximum time that we allow is 2.5 years, meaning our expert calls are both fresh and compliant. You can confirm this fact for yourself with a 14-day free trial.

Below you’ll find the top 10 expert call transcripts published Sept 1-9 on Stream in Information Technology (software, IT services, and hardware) and Communication Services (telecom, media & entertainment). The list is determined by total engagement (roughly, transcript quality multiplied by number of readers).

Top 10 Expert Call Transcripts – Information Technology

  1. SHOP (Shopify Inc) – Former Unit Head Thinks TWLO and SendGrid Have Cornered the Market and Believes Attentive’s Days Are Numbered
  2.  ADI (Analog Devices Inc) – Former Manager Believes GaN Is Going to Be Used Widely in Multiple Applications With Data Center Being a Primary End Market
  3. MCHP (Microchip Technology Inc) – Former Manager Is Bullish on MCHP and Sees Slower Growth Due to Lack of Focus on Innovation and Automotive Applications
  4. MDB (MongoDB Inc) – Former Director Thinks There Is Still a Lot of Market Share and Momentum for MDB Specifically
  5. LRCX (Lam Research Corp) – Former Order Manager Thinks LRCX Is Strategic Has Strong Foundations and Will Do Great in the Long Run
  6. NOW (ServiceNow Inc) – Former Business Head North India Thinks NOW Differentiates Itself by Building Everything on One Platform
  7. SQ (Block Inc) – Former Competitor Thinks US Neobanking Market Competition Is Heating Up Rapidly With Consolidation Expected in the Coming Years
  8. PAYX (Paychex Inc) – Former Customer Believes ADP’s Service Quality Is Lacking and Thinks PAYX Often Offered Inaccurate Information
  9. TEAM (Atlassian Corporation PLC) – Competitor Thinks Work Management Marketing Spend at Times Was Probably Irrational
  10. ZBRA (Zebra Technologies Corp) – Former Regional Director Believes ZBRA Offers Solutions That Help Companies Compete in the Modern World by Lowering Costs and Driving Better Customer Experience

That SHOP transcript title certainly gets my attention. Attentive is a text-based marketing startup that has raised $400 million, but this expert is not optimistic about their chances against CRM and ADBE. That’s interesting, but I’m not sure how investable that is. This expert’s thoughts on INTU’s acquisition of MailChimp are more promising:

Mailchimp getting acquired by Intuit is a good win for Klaviyo. It’s the same thing when we saw Adobe buy Marketo and HubSpot. It’s just like, ‘Okay. They’re now going to be focused on integration and becoming an Intuit company and innovation is just going to go out on the wayside.

The Shopify investment in Klaviyo is scary for Mailchimp because close to half of their revenue is [ecommerce]. Now that Klaviyo and Shopify are together and Mailchimp had that breakup with Shopify, it’s not a good look.

Klaviyo – Sales Executive (Prior)

Here’s a timeline:

Mailchimp revenue included in Online Services was $265 million… revenue was slightly below our expectations. During the quarter, we focused on product innovation to improve conversion ahead of peak season…”

Intuit, Michelle M. Clatterbuck, Executive VP & CFO (Q4’22 Earnings Call)

What to make of this? On the one hand, we have an expert who expects that half of Mailchimp’s revenue is at risk from the Klaviyo-SHOP partnership, and that Mailchimp will no longer innovate. On the other hand, we have INTU management saying that MailChimp revenue was “slightly below our expectations” because they focused on product innovation. I don’t know which story to buy right now, but I’m pretty sure that I’ll know by this time next year. I’ll keep an eye on it. I hope it’s clear that none of this is investment advice.

Top 10 Expert Call Transcripts – Communication Services

  1. NFLX (Netflix Inc) – Former Director Is Bullish on NFLX’s Pivot to Advertising
  2. META (Meta Platforms Inc) – Customer Has Seen Sharp Drop In ROI With META Ads And Is Looking Into New Channels
  3. META (Meta Platforms Inc) – Industry Expert Sees META SNAP PINS and Linear TV as Market Share Losers and TikTok as a Share Taker
  4. DIS (The Walt Disney Company) – Former Exec Believes DIS Is Better Positioned Than Other Streaming Peers
  5. DIS (The Walt Disney Company) – Former Visual Development Manager Thinks DIS Has Large Advantage With IP And Sees Continued Growth For its Franchises
  6. RBLX (Roblox Corporation) – Partner Bullish On Partnered Experiences With RBLX And Other Virtual Platforms
  7. TTWO (Take-Two Interactive Software Inc) – Previous Competitor Thinks Adding Web-Based Payment Methods to Circumvent App Stores Is Likely Adding Too Much Friction to the Gaming Experience
  8. TTWO (Take-Two Interactive Software Inc) – Former Technical Director Believes TTWO’s Acquisition of ZNGA Can Easier Keep Gamers Within Its Ecosystem and Guide the Mobile Customers With Its Knowledge the the Western Markets
  9. ZI (ZoomInfo Technologies Inc) – Former Sr. Account Manager Believes ZI Is in the Strongest Position in the Industry and Can Gain Further Share in Building a One-Stop Shop
  10. IPG (Interpublic Group of Companies Inc) – Former Chief Digital Officer Sees Ad Agencies Well Placed to Navigate a Complex and Fragmenting Media Landscape

The #1 NFLX transcript has very high engagement. There’s some great stuff about NFLX culture, and prior failures and learnings, but I’ll focus on the headline: the potential pivot to advertising:

“[Netflix] makes strategic bets. They say, ‘This is probably an area we want to go,’ and then they will test it rigorously. They’ll experiment, but they won’t expand unless it’s obviously showing strong success. Given how they think about pricing and different tiering, they’re probably thinking about how to open up the opportunity to be Netflix members to a whole tier of people who otherwise couldn’t afford it. I think the ad-supported model probably offers that…

Netflix has the talent in order to be able to do ads well. They understand advertising deeply. I was part of that, so I know that they deeply understand how targeting and measurement effectiveness work.”

Netflix – Director (Prior)

The analyst is a little skeptical. Why would skill in marketing NFLX’s product translate to skill in advertising other brands within the platform?

“…the bench was really strong because the network’s programmatic team isn’t just people with ad tech backgrounds. They would work with economists and data scientists to develop measurements that help Netflix understand… the actual causal impact of the advertising.

Did people sign up because they saw our ads or was it just correlated? I think that that kind of measurement and understanding is very challenging and very forward-thinking… From that point of view, I think Netflix has the advantage because it can really understand the effectiveness of advertising. I think if it kept that, if it is possible to tap that for advertisers on Netflix, I think that would be an incredibly strong asset.

Google have tried to offer some of this view as well, because they can. If Netflix could offer that kind of view to advertisers just so transparently, advertisers could see where they’re performing, which is miraculous.”

Netflix – Director (Prior)

One NFLX story may have come to an end, but perhaps there’s a new story of NFLX challenging GOOGL for a slice of the digital advertising pie. This reminds me of a previous TMT weekly GOOGL transcript, in which the expert highlighted GOOGL’s desire to create a short-form video platform. That data point, plus NFLX potentially entering the online video advertising market, makes me wonder about the health of YouTube. As they say in the biz, to be continued…

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