Napster Sold For $207M & Canadians Are Skipping US Travel

0:00Does it ever feel like you're a marketing professional just speaking into the void? But with LinkedIn ads, you can know you're reaching the right decision makers, a network of 130 million of them, in fact. You can even target buyers by job title, industry, company, seniority, skills, and... Did I say job title? See how you can avoid the void and reach the right buyers with LinkedIn ads. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started at linkedin.com slash campaign. Terms and conditions apply. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell.

0:35Today, where are all the Canadian tourists? Why our neighbors up north are snubbing Miami for Mallorca. Then Napster, yes, that Napster, is back after being acquired for a sum of money that is much bigger than you'd think. It's Wednesday, March 26th. Let's go.

0:55If your bracket is toast in the real March Madness, here's an opportunity to start fresh. The Brews social media team led by Toby right here has rolled out a bracket challenge that attempts to answer the question everyone is asking in 2025. What was the most important business story of the first quarter of the 21st century? We're not deciding. You are. You can head to the Brew's social media pages on X and Instagram to vote on juicy first-round matchups like when Apple put U2 on all our phones versus the release of Vine or FTX collapses versus Fyre Festival. Toby, the first round of voting happened yesterday.

1:34Were there any upsets? We've already had two upsets in the first round, so we're beating Real March Madness in terms of excitement. Both came from the 2000 to 2005 region in a 5 versus 12 matchup, putting the iPod's launch versus LinkedIn's launch. The lower-seated iPod wiped the floor with everyone's least favorite social media platform. Then in an 8 versus 9 matchup, the launch of Gmail barely eked out a win over the AOL-Time Warner merger. My favorite matchup, though, was Martha Stewart's insider trading case versus Enron's collapse. that almost saw Martha pull off the upset, but alas, Enron came out unscathed.

2:11As for the next two regions of the bracket that are dropping today, I'm looking at number 13 Pokemon Go craze versus the number four Cambridge Analytical scandal. I think Pokemon can upset that one there. And then in the 2019 to 2025 region, number nine, the Ares Tour versus number eight, NVIDIA becomes the most valuable company. Brutal first round matchup. I think both of those could have made a run. But yes, as Neil said, Voting is going to run through this whole week on Morning Brews X and Instagram accounts if you want to participate. And we'll see you there. Now a word from our sponsor, Sophos.

2:44Neil, remember Fluffy, the three-headed dog from Harry Potter? Scared me to death growing up. Do you remember what Fluffy's one job was? Protecting the Sorcerer's Stone, obviously. Don't test me. Good job, good job. I want everyone listening to think of Sophos as your business's version of Fluffy, without the drooling, of course. Sophos provides three layers of cybersecurity. One head is powerful AI-driven protection that targets threats before they become threats. Another is their team of 500-plus cybersecurity experts who are ready to help 24-7. And the third is Sophos Central, where you can easily manage all your security apps in one central place.

3:19And unlike Fluffy, bad actors like three brave wizarding students can't use a sweet lullaby to put it to sleep. If you want to sign your business up for its own cybersecurity guard dog, who's better than Fluffy? Head to Sophos.com and get responsibly protected. That's S-O-P-H-O-S dot com. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs.

3:58Like a good neighbor, State Farm is there.

4:03Remember Napster? Of course you do. It made music execs lose sleep, lawyers rake in billable hours, and ushered in the concept of music streaming. That very same Napster just sold for$207 million to a company called Infinite Reality, which says it's going to transform the brand into a, quote, social music platform, according to a press release, where music lovers can hang out in virtual 3D spaces to watch concerts, join listening parties, and participate in merch drops. Yeah, somehow Napster is being resurrected as a metaverse company in 2025. Now, to be clear, Napster hasn't been the Napster you remember in a long time.

4:41It went bankrupt in 2002 after a barrage of lawsuits. And ever since then, it's been passed around like an illegally downloaded MP3 file. Best Buy owned it at one point. So did a company called Rhapsody. And most recently, it was in the hands of a consortium of crypto companies. But Napster still holds the licenses to stream millions of tracks, which made it an attractive acquisition target. So once more, Infinite Reality is trying to reinvent it, this time with a focus on building this sort of immersive music-driven 3D social space. Its new CEO, formerly the head of music at Roblox, says artists will be able to create virtual environments that match their vibe, unbound by the constraints of reality.

5:19If you remember Travis Scott's concert in Fortnite back in the pandemic, that's the vibe they are going for here. Neil, Napster back in the year 2025. Who would have thought? Well, I wasn't sure what is more surprising about this news, that Napster still existed or that it was sold for more than$200 million. That is a very large acquisition. And I think you're right that the value in Napster is not necessarily from the brand, but from this library of tracks that it has the license for. It has 110 million tracks. It's paid over a billion dollars to artists and labels over the past few decades in order to acquire that library.

5:57And that made it an attractive target for this quite large company, Infinite Reality, which just recently raised$3 billion at a$13 billion valuation. So this company is quite large, even though most of us had never heard about it. I guess they're a big player in the metaverse 3D space. And we'll see what they do with Napster. I saw a lot of eye rolling from a lot of publications because creating a metaversial company out of a company that went bankrupt back in 2000 feels just so out of date on so many levels. But they are pretty bullish on this idea of these 3D spaces where you can listen to music in a different way because the vision as the CEO of Napster described it is Clubhouse times a trillion.

6:42I don't know if you guys remember Clubhouse, but that was this app where you could hang out with each other and talk in a virtual space that was just audio only. This would incorporate visuals and 3D and merch drops and whatnot. And there have been success here because, I mean, I mentioned the Travis Scott virtual concert in Fortnite. That kind of kicked off this idea of virtual concerts. That was attended by millions of people. So there is some proof of concept. What else is going on then? It's true. It's true. It was definitely a different time, but I think that they are thinking that there is definitely proof of concept here at some level.

7:17So they're going to try to run it back with, you know, Clubhouse times a trillion. And there is a push in the music industry more broadly to let artists monetize their most loyal fans. So that is exactly what Infinite Reality is trying to do with Napster is trying to increase the engagement. Because on one hand, you have super loyal fans that want more out of their artists. They want exclusive merch. They want more time, exclusive time with the artists that they love. At the same time, artists are looking for new revenue streams. They have tours, but they're getting less from streaming companies than they did when they sold CDs.

7:53So there might be a match here. I don't know if the digital metaverse is the place for that to happen because we have seen most metaverse projects kind of fizzle out. We'll see what happens with Infinite Reality. They have a pretty successful stable of companies. They own the Drone Racing League. They own a bunch of e-sports teams as well that compete in League of Legends and Call of Duty. The guy who's the CEO of Napster was the music head at Roblox. So Roblox is this metaverse-style gaming platform that has also hosted concerts like Fortnite with folks like Lil Nas X. So we'll see what they do with Napster.

8:31Just a blast from the past. As anger boils over in Canada against the United States, Canadians are taking their vacations elsewhere and aren't apologizing for it. Airlines, tourism groups and U.S. businesses say they're experiencing a significant drop off in Canadian visitors to the United States, citing backlash from President Trump's tariff talk and frequent allusions to annexing Canada and making it the 51st state. The numbers bear it out. In the skies, Canadian residents returned from 13 percent fewer trips to the U.S. in February than a year ago, according to Statistics Canada. The decline was even more severe at land crossings, where Canadian return trips from the U.S.

9:09plunged by 23 percent compared to a year ago. An American vacation boycott by Canadians could ripple through the U.S. economy, especially in states like Michigan and New York, which have been major destinations for people living just north of the border. Canadians are the number one source of visitors to the U.S., and just a 10 % reduction in their travel could lead to$2 billion in lost spending and 14 ,000 job losses in the hospitality industry, according to the U.S. Travel Association. Toby, we've seen Canadians boycott American grocery store products, boo the Star-Spangled Banner, and now cancel that Vegas trip to play the slots in Putacana.

9:45Canadians do kind of really help out the U.S. when it comes to their economy because 20 million visitors came to the U.S. in 2024. I mean, it makes sense. They're our next-door neighbors. So, of course, they're going to just pop over the border. Some cities like Buffalo see 35 % to 40 % of their visitors come from Canada. And it's not just that Canada is feeling this anti-U.S. sentiment. They're also just kind of spreading their travel other places. They've seen an uptick in trips to South America where they're just skipping over North America altogether. together. But also a recent online survey suggested that Canada is feeling more patriotic about staying in Canada.

10:22They talked to 1500 different people and they said half said they were less likely to visit the U.S. this year and six and ten said they planned a vacation into Canada and said, which is reflecting this sort of broader patriotic by Canada movement we're seeing across the retail sector as well. So Canadians might just be skipping out on Miami and staying in Montreal instead. And it's not good for the tourism business. International travel to the U.S. is expected to slide by 5 percent this year, according to tourism economics. That could contribute to a 64 billion dollar shortfall for the travel industry.

10:55And that 5 percent slide is notable because the previous projection was a 9 percent increase in foreign travel to the United States. Tourism Economics updated, revised this forecast from a 9 percent increase to a 5 percent decrease to reflect, quote, polarizing Trump administration policies and rhetoric. And you have such a large gap between those two forecasts because it's not just Canada or Canadians who are skipping out on coming to the United States. A bunch of other countries have updated their U.S. travel advisories over concerns of, quote, aggressive questioning, detentions and denials of admissions.

11:31You've seen it in the UK. You've seen it in Germany. Canada just updated their travel guidelines yesterday. So they're warning their citizens, saying it's not particularly a safe time to visit the United States right now. Right. Atlantic flights depend usually more on U.S. travelers heading to Europe than European travelers heading to the U.S. And right now, U.S. outbound travel demand still looks like it's staying pretty consistent. But still, airlines, hotel groups, tourism, they're all kind of on watch right now because there could be that big reduction in tourism to the United States. Add a stablecoin to Trump's growing stable of crypto entanglements.

12:08The president and his sons launched a new coin yesterday called USD1 through their family company, World Liberty Financial. It's a stablecoin pegged to the U.S. dollar, and it's already live on Ethereum and Binance's blockchain. This is now Trump's fourth foray into digital currency. There's the WLFI token, which has raised over$550 million for World Liberty. There's a meme coin he dropped before his inauguration, currently sitting at a$2.3 billion market cap. Melania has her own coin, and now we've got this stablecoin, which the company says will be backed one-to-one with U.S. treasuries and cash equivalents.

12:43Stablecoins are basically crypto's version of cash. They are typically designed to stay fixed to an underlying asset, usually U.S. dollar, and provide the liquidity that makes the crypto ecosystem hum. Everyone from PayPal to Ripple to Gemini has their own version, and Trump's USD1 is the latest player in the crowded field. Though the World of Life financial team is trying to separate itself from the pack by actively promoting it as a way to expand the U.S.'s dollar dominance globally. Treasury Secretary Scott Bessent said at the White House Crypto Summit that, quote, we are going to keep the U.S.

13:16the dominant reserve currency in the world, and we're going to use stablecoins to do that. So, Neil, this launch from World Life Financial looks like it's following through on that promise. Yes, stablecoins have a very explicit promise, and that's you get none of the volatility associated with crypto because they're designed to maintain a constant value of$1. But you get all of the benefits, which is making cross-border payments faster, cheaper, and more transparent. So they're hyping up the lack of volatility and the ability to promote the U.S. dollar and U.S. dollar egemony all over the world through these cross-border payments.

13:53So that is the promise of the stable coin. And, you know, emphasis on stable because we've seen a bunch of other cryptos be volatile. Volatile. It's the opposite of a mean coin, especially because it's backed by U.S. debt and U.S. currency. So that is the promise of a stable coin. It hasn't always worked out in the past. I mean, remember crypto winter in 2022? That was caused by another type of stable coin, an algorithmic stable coin, TerraUSD, collapsed. And it brought down the crypto market entirely because$40 billion was wiped out. So there are a variety of types of stable coin here. The one that World Life Financial is hyping intends to be one of the more stable of the stable.

14:34Well done. I am glad you brought up cross-border payments there because one of World Liberty's founders said, we're offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for secure cross-border transactions. That emphasis on international payments actually raised some warning flags because then you can think about you just go down this thought slope and foreign governments could use the coin to potentially curry favor with the current administration, stuff like that. And another concern is a conflict of interest as well.

15:07There's a lot of stablecoin legislation that is making its way towards the president's desk, going through Congress that looks like it should pass before August, which technically benefits the company that just launched a stablecoin. So those are two kind of conflict of interest people have brought up. One, that foreign nationals could intervene with our government. And then two, that legislation that is being passed that supports World Liberty Financial's mission right now. Up next, let's talk about a report card for our infrastructure. The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA.

15:50Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen. And keep striving. Visit Strayer.edu slash Jack Welch MBA to learn more. Strayer University is certified to operate in Virginia by Shev and as many campuses, including at 2121 15th Street North in Arlington, Virginia. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintained skin that's still more clear at one year with monthly dosing.

16:28EBCLIS, LibriKizumab, LBKZ, a 250 milligram per two milliliter injection, is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. EPCLIS can be used with or without topical corticosteroids. Don't use if you're allergic to EPCLIS. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems.

16:56You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979. If C's get degrees, then U.S. infrastructure may snag that diploma after all. The country's ports, roads, public transit, parks and other aspects of infrastructure received an overall C grade from the American Society of Civil Engineers, which releases a U.S. infrastructure report card every four years. It may not be a report card your mom would hang on the fridge, but it is a slight improvement from the last review in 2021 when the U.S.

17:36earned a C -. The American Society of Civil Engineers said that the bipartisan infrastructure bill passed during Joe Biden's presidency, which authorized$1.2 trillion in funding for projects, was key to improving the country's GPA, as were funds doled out by the Inflation Reduction Act. As anyone who's tried to use Amtrak Wi-Fi knows, there is still a lot of room for improvement. The Society of Civil Engineers used this report card to call on the government to continue funding infrastructure projects, especially at a time when the Trump administration has put on hold some of the infrastructure bill's funds.

18:10The group claims that better infrastructure is an efficient investment of taxpayer dollars that results in a stronger economy and prioritizes American jobs. Toby, as someone who's familiar with getting C's, what do you think the U.S. can learn from this report card? I think that we're trending in the right direction, but you've got to keep this momentum going. Right now, an estimated$9.1 trillion would be needed to ensure that all 18 categories within this report would reach a, quote, state of good repair, as they call it. And right now in 2024, the AASCE estimated that only, and I stress only there,$5.4 trillion of investments will be made through the year 2033.

18:49So there is that$3.7 trillion gap between what they think we need versus what we're outlaying there. So how do you sell that, though, to American people? They said that it is efficient use of tax dollars. They think that poor infrastructure costs American households around$2 ,700 a year. and if you kind of improve on those some of those specific categories it could save americans money as well so maybe if your roads are more efficient if you're if your drinking water is more efficient if your dams are more efficient i love efficient drink i love efficient hey i mean you take it for granted but it is a big part of you know infrastructure in america so they're trying to spin it as saying that this these are dollars well spent and we need to keep spending them let's run down some of these categories so there were 18 categories reviewed the nation's ports received the highest grade of any form of infrastructure with a B and the other B, which was a B minus was rail bridges, broadband, drinking water systems, hazardous waste, waste treatment, things like public parks, all got a C plus to a C minus.

19:51And then let's roll it down to the D plus or a D dams, roads, schools, infrastructure for aviation, stormwater, transit, and wastewater all got D plus or Ds. So that's kind of where we're standing. We'd love to bump those up a little bit more. But it was very interesting to hear some criticism of this report from certain areas. And they said, these people just love to spend money. Maybe spending money is not the most efficient use to improve our infrastructure. There are other tools and levers you can pull to improve infrastructure. One of them, as an example, might be something like the New York City's congestion pricing that they've just put into place.

20:31That didn't necessarily cost a lot of money. It did not cost anywhere near into the trillions that this group wants, but it may improve infrastructure by reducing the amount of cars on the roads, leading to fewer repairs for bridges and tunnels and raising money to improve those as well. So it is, you know, you don't think necessarily of criticism of the folks who are just putting out a report card, but there might be other ways to improve infrastructure than just by spending trillions of dollars. I'm still hanging up this one on the fridge because as you said, C's get degrees and we're trending in the right direction.

21:04So put that magnet on. If LaGuardia's new terminal is any indication, that's an A plus in my eyes. Let's sprint to the finish with some final headlines you may have missed. Up first, consumer confidence in the U.S. is officially at a four-year low with the conference board's index dropping by 7.2 points in March, marking the fourth consecutive monthly decline. The expectations index in particular, which measures consumers' short-term outlook on income, business, and job market conditions, fell sharply and is now below a key recession warning threshold. Key drivers of this pessimism are pretty much exactly what you'd expect.

21:39Concerns over tariffs, rising inflation, and job security. Economists warn that continued declines in consumer confidence could pressure consumer spending, which drives two-thirds of GDP. Neil, these things can quickly become self-fulfilling. If consumers feel uncertain, they spend less. If they spend less, that causes an economic slowdown, which makes them feel even more uncertain. So this is a very slippery slope. You're going to start to hear another word creep up that you may not have heard for a few years. And that word is vibe session. That was around a lot during the Biden years when people were feeling pretty bad about the economy, but all the numbers look good.

22:14So there was this weird delta between how the vibes and the actual economic data. That's kind of what we're seeing now. The vibes are really bad, but the economic data itself, the hard data, which Jerome, what that Jerome Powell calls it, is looking pretty much fine. Strong labor market spending is okay. So we'll see whether those two converge in the months ahead. President Trump said he would launch an investigation of Tuesday's shocking revelation that the Atlantic's editor-in-chief Jeffrey Goldberg was somehow added to a signal group chat in which top officials discussed a plan to bomb houthi targets in Yemen.

22:49But the message from the Trump administration yesterday was mostly, this is not a big deal, nothing to see here, as Democrats and other national security experts warned it was a massive and extremely embarrassing breach of tightly guarded information. A legal battle kicked off after five members of Trump's cabinet were sued for violating U.S. laws meant to safeguard government records by using Signal, a commercial app for official communications signal is kind of having a moment amongst uh the federal bureaucrats in washington right now it was mostly known amongst silicon valley and honestly like global non-conformists for leaving few digital traces but now they are a lot of people within washington are embracing it as a tactic to protect their own communications the app has been downloaded more than 2.7 million times in the united states so far this year that's up 36 percent over the same period compared to last year.

23:41So I do think we are seeing this shift towards Signal, and we're going to see it start to pop up more and more because, you know, obfuscating official communications is definitely something that doesn't go hand in hand with a clear and democratic government. So I think you're going to see Signal as a name to watch this year, especially as it's being more downloaded in amongst the highest levels of our government. Up next, it looks like the main component of 23andMe's DNA is failure at this point. After the genetic testing company filed for bankruptcy on Monday, yesterday was another house of horrors as a massive influx of customers rushing to delete their genetic data caused the site to continually malfunction.