Waymos Stall During SF Blackout & Avatar Fizzles at the Box Office

0:28The best B2B marketing gets wasted on the wrong people.

0:35good morning brew daily show i'm neil freiman and i'm toby howell today when the going gets tough waymo stops working then the third avatar movie made a lot of money but not as much money as expected it's monday december 22nd let's ride

0:56Good morning and happy Monday. Give yourself a pat on the back because you've made it through the darkest timeline. Yesterday in the Northern Hemisphere was the winter solstice, marking the astronomical start of winter and the shortest day of the year in terms of daylight. There will now be a little more sunshine every single day until June, so that's something to look forward to. And one of these years, I got to make it to Stonehenge for the solstice celebration. Thousands of people dressed as pagans and druids make the pilgrimage to the stone circle every summer and winter since the monument was built to align with the movement of the sun on the solstices.

1:31I think you could pull off being a druid, Neil, or a pagan, either or. We are so back, though. I looked this up. Amongst the middlest latitudes, a.k.a. not near the poles, we are getting an extra 20 to 30 seconds of daylight now that the solstice has passed, which is plenty of time for activities. I'm talking one additional golf swing depending on your pre-shot. Maybe two points in pickleball if you have a good serve. And I think you could get an entire ski run in if you don't turn. I don't recommend that, though. So make sure you budget that additional time effectively. We've made it through the darkest timeline.

2:07And now a word from our sponsor, Public. All right, Neil, big milestone. I opened an account with Public. Incredibly responsible of you, Toby. I'm impressed. And get this, they have generated assets which allow you to turn any idea into an investable index with AI. You can literally type in any prompt from renewable energy companies with high free cash flow to semiconductor suppliers growing over 20 % and put the AI to work. So it screens thousands of stocks to build a one-of-a-kind index? That's pretty great. And it will even backtest your idea against the S &P 500 so you're making decisions with real context.

2:44Get started at public.com slash morningbrew and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash morningbrew. Paid for by public investing, full disclosures, and podcast description. It was a scene from a dystopian novel. Large swaths of a major American city suffering a power blackout. Traffic lights were down. Hundreds of self-driving robot cars malfunctioned in the middle of the street, creating gridlock. But this wasn't science fiction. It was San Francisco on Saturday. A power blackout hit around 125 ,000 homes and businesses in SF, impacting about a third of the city due to a fire at a substation at Pacific Gas and Electric Company.

3:26But this being 2025 and the most tech forward U.S. metropolis, the blackout had some bizarre knock on effects like rendering Waymo's self-driving cars inoperable. On Saturday, people shared tons of viral videos of Waymo stalled out at busy intersections, one after another, causing major traffic jams behind them. As of last night, Waymo had resumed its robo-taxi service, but the reputational damage was done. The company said that its problems stemmed from all the traffic lights going down. A spokesperson said, while the Waymo driver is designed to treat non-functional signals as four-way stops, the sheer scale of the outage led to instances where vehicles remained stationary longer than usual to confirm the state of the affected intersections.

4:09This contributed to traffic friction during the height of the congestion. It's not a good look for a startup that was just starting to win hearts and minds in San Francisco and beyond after working hard to overcome initial skepticism from human drivers. Toby, this debacle will only fuel the critics who say robo-taxis aren't ready for prime time. The debacle is even more confusing because Waymo vehicles are explicitly designed to handle situations like this. They are supposed to continue functioning even if they lose access to wireless networks. They are not supposed to depend on real-time communications links to function properly.

4:44They have batteries. They have their own self-contained power systems. So it begs the question, a lot of experts are looking at it and saying, what the heck went on here because there this is not a marginal you know fringe use case that they just stumbled upon they say that traffic lights do tend to go out in san francisco because of you know weather conditions so it is programmed into waymos to deal with them as you said i think it was just the sheer scale of the fact that you reach an intersection there's no stop lights up they're all doing the spider-man pointing meme like are you going are you going it was just too many cars not knowing what to do at the same time.

5:21Now, this isn't going to help matters when it comes to broader skepticism around self-driving cars. There was a survey by AAA in early 2025 that showed that 66 % of drivers in the United States felt fearful and 25 % felt uncertain about autonomous vehicles. I do feel like Waymo had earned a little more respect from San Francisco and several other of the cities that it's operating in because it's published these safety statistics showing that it's so much safer than human drivers. And the rollout of robo-taxis could lead to tens of thousands of live saves. Waymo's own data says that it's 80 to 90 percent safer than human drivers.

6:00And I feel like it had built up a little credibility. But this incident, along with another incident in San Francisco, when it killed one of the Waymo's actually killed a bodega cat that was beloved around the city, it's kind of backsliding a little bit. And who was there to capitalize on Waymo's misfortune? None other than Elon Musk. He posted on X during the blackout that Tesla robo taxis were unaffected by the SF power outage. Of course, they're not operating any robo taxis in San Francisco, so it was a little tongue in cheek. But it does beg the question, because remember, Waymo and robo taxis rely on different technologies to function.

6:36Robo taxis use cameras and AI to find their way around. Waymo uses a suite of sensors, radar cameras, and detailed maps that are uploaded and regularly updated. Remember, Elon Musk thinks his approach is far superior. He thinks that Waymo's approach is too static and over the long term it's not going to scale effectively. Maybe this adds fuel to that argument saying that when certain environmental cases change, Waymo's don't operate as effectively as maybe an AI-powered camera-based system would. again take it with a grain of salt because clearly he has a vested interest in Waymo failing and RoboTaxi succeeding.

7:15And this might be the final time we talk about RoboTaxis this year. It is a blemish but overall I think this was a banner year for self-driving cars. Waymo rolled out a bunch of new services. We had Tesla rolling out its RoboTaxi service in Austin as well as in the Bay Area of San Francisco. So I think you have to say overall this was you know maybe an A, A minus year for robotaxis exceeded all expectations in terms of how fast and how safe they were on the streets of the United States. I think next year is going to be even more of an explosion in people as far as Boston, New York, Atlanta, Los Angeles, places that don't necessarily see robotaxis right now are going to see them in 2026.

7:55Moving on. Well, it's almost time for another winter tradition involving the whole family sort of reluctantly coming together for an evening that is expensive and just not as fun as when you were a kid. I'm talking about going to see the new Avatar movie. James Cameron is back with the third installment in his Avatar franchise with Fire and Ash hitting theaters over the weekend. He went bigger and bluer than ever this time with Disney spending an estimated$500 million making and advertising the film that comes in at a whopping three hours and 15 minutes, the longest in the franchise so far. The question is, did Cameron pull an Aaron Judge and finally strike out after taking three massive, massive swings.

8:37As of right now, the jury is still out. Fire and Ash brought in$88 million at the domestic box office over its first weekend, trailing behind the$134 million box office haul of the previous Avatar movie, Way of Water. That 34 % drop is cause for concern, but not overly so because the movies debuting the week before Christmas tend to have more staying power, so Jake Sully should have some legs. Also, Avatar seems to be very popular overseas, where it opened as the number one movie in every major market save for Japan, bringing in$345 million globally. Neil, even so, that weak domestic opening begs the question, have we reached peak Avatar?

9:20And if so, what does that mean for the box office as a whole? And when you look at the number of people who actually saw this movie, the gap was even greater than the dollar amount suggests. Around 5.2 million domestic moviegoers went to see Fire and Ash this past weekend. That is a huge decline from the 8.7 million that went to Way of the Water three years ago. And I think the thing with Avatar is it relies a lot on just casual fans. And you can't even call them casual fans because let's look at the actual fans of Avatar. And for that, you can go to Reddit and subreddits because that's where the hardcore people live for these kinds of movies.

9:57The Avatar subreddit has about 200 ,000 members who post about 6 ,000 times a week. Okay, let's go to the Star Wars subreddit. Almost 1.5 million users with 33 ,000 weekly posts. The Marvel subreddit has 771 ,000 users who post 12 ,000 times a week. Avatar's account on X has barely any people for this kind of franchise. 360 ,000 followers. Star Wars has 6.4 million. And Marvel over twice that. So in terms of true fans, Avatar doesn't seem to have that many. And commercially, it always punches above its weight. It has two of the top five highest grossing movies of all time. So it really relies on those recreational fans who are coming out over Christmas.

10:38And we'll see so far, it doesn't feel like it's happening for this third movie. Yeah, the knock against Avatar is that it never leaves any cultural trace. And the argument I saw for why that is the case is that a person I follow on Twitter, Trunk Fan said, it is a fully embodied experience in the theater. It's like a theme park ride. Could you describe what it feels like going on a roller coaster to someone? No, you cannot. It's a kind of thing that you have to be there and experience. It doesn't really spawn a lot of memes. Part of that is because the dialogue is a little lacking sometimes. Some of the character arcs are a little forgettable, but the visuals are what bring people out.

11:14And it's what James Cameron is after. He wants it to be the sort of thing that you bring the whole family out. You have this three-hour experience where you feel like you're getting bang for your buck as movies get more expensive. So it is just a weird liminal space that Avatar exists in where it has a lot of haters and detractors, and yet it has brought in over$5 billion over the course of its franchise, and this probably is on its way to becoming another billion-dollar movie. One final note about Avatar or fun fact is that Una Chaplin, who is kind of the star, I won't reveal too much, but she's kind of the main villain in the movie.

11:50She is Charlie Chaplin's granddaughter. And a lot of people said you can see this kind of through line through filmmaking where it's another franchise pushing the boundaries. But also she has this very physical performance. Charlie Chaplin is very famous for his physicality on screen. so it is cool to have a through line from grandfather all the way through to granddaughter still kind of carrying on this tradition of physical filmmaking. Moving on, welcome to our winners of the weekend, the segment where Neil and I pick two things that had a better weekend than the person in charge of taste testing the batter while Christmas cookies are being made.

12:28I won the pre-show game of golf, carding an even par 72 over the weekend, so I'm up first, and my winner of the weekend is Michaela Benthouse because the 33-year-old aerospace engineer just became the first wheelchair user to ever travel to space. She hits a ride on a Blue Origin rocket for a short 10-minute flight, experiencing several minutes of weightlessness after crossing the Karman Line, the internationally recognized boundary of space. The flight itself was unique not just for its passengers, but because of its crew or lack thereof. There was no pilot in charge of the craft. It was fully automated, which Blue Origin thinks is the future of space tourism.

13:07As for how Bent House said the ride was, she told the New York Times she laughed during the ascent and called it the coolest experience she's ever had. And joins Gayle King, Katy Perry, and Jeff Bezos as fellow passengers on Blue Origin's New Shepard program. Neil, I was surprised by this. Blue Origin has sort of quietly flown 92 people total to space across 16 missions. It generated a lot of headlines when Katy Perry got out of her capsule and kissed the ground. But as Benthouse's trip shows, the program is expanding to include a lot more people and people beyond the rich and famous. Yeah, I thought this was pretty cool that they didn't actually have to make a lot of adjustments to the spacecraft to accommodate her, according to the company.

13:50And that's because they said they designed the capsule with accessibility in mind. They also mentioned that they've taken other maybe nontraditional astronauts to space through this particular program. They took two 90-year-olds, becoming the oldest people to ever go to space, and others with limited mobility and impaired sight or hearing. So pretty interesting to see that they didn't have to make so many tweaks or accommodations to fit this wheelchair user. And as for Michaela, she said her goal was not only to make space accessible to disabled people, but to improve accessibility on Earth, too.

14:25You know, putting her space flight side by side with Katy Perry's. And first of all, it's crazy that Katy Perry's was this year because that seems like an eternity ago. Seems like Blue Origin has a little bit of a PR win with this. And they've kind of kicked up their entire organization into high gear. They were always known as a very slow and deliberate culture, very by-the-book engineering process. But now a new CEO has come in and said, hey, we've got to iterate a little bit faster here. And they want to go toe-to-toe with SpaceX, specifically when it comes to the moon. They think that obviously SpaceX dominates in the launch cadence.

15:02It dominates in space transport. It's been dominating crewed missions so far. But the one area where they think they can weasel their way into NASA's plans going forward is the moon. So they're saying that, hey, we have a blue moon test, blue moon Mark one, which is a near term test to reach the moon in 2026. They want to land a small lunar cargo lander there. They also want to invest in technology that will lead to a longer term presence on the moon where they've been developing solar cells. They've been developing power transmission wires that do well on the lunar surface saying like, hey, we're your moon guy.

15:41SpaceX can do everything else. But, you know, look to us when it comes to, you know, the lunar surface. All right. We're going to take a quick break and come back with Neil's winner of the weekend. This message is a paid partnership with Apple Card. I'm a person who really appreciates simplicity. And when it comes to credit card rewards, the simpler, the better. That's one of the many reasons I have in Apple Card. The rewards are super straightforward. I earn up to 3 % daily cash back on my everyday purchases. There are no points to calculate, no limits or deadlines. Plus, it's super easy to access my card and make payments from the wallet app of my iPhone.

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17:31The Japanese entertainment conglomerate Sony announced it was paying$450 million to take control of the Peanuts franchise, doubling its existing stake from 39 % to 80 % and valuing the franchise at over$1 billion. They better be a good parent because there aren't many characters more beloved than The Peanuts Kids and Canine. First published in comic strips in 1947 by cartoonist Charles Schultz, Peanuts appeared in newspapers daily until his death in 2000. Over that period, the Peanuts empire expanded all over the globe. The comic grew to appear in more than 2 ,600 newspapers in 75 countries, delighting more than 350 million readers.

18:12But that was just the start. The comic spawned movies, TV shows, toys, games, rides, and other experiences. You can't imagine Thanksgiving or Christmas without the Charlie Brown holiday special or the music. And Snoopy, that pop has taken on a life of his own, even appearing as the face of the insurance company MetLife for three decades. Toby, 78 years in, and the Peanuts franchise has arguably been never more popular. Sony's got a lot to play with. They have such cross-generational brand trust. It is not an ordinary circumstance for one mascot to serve as the spokesperson, the representative of an insurance company for three decades.

18:52And that is not even associated with MetLife. But at this point, since they've been licensing the character of Snoopy for so long, it evokes feelings of trust. That is exactly what they want to do as an insurance company. So in terms of durable IP, Snoopy and co. can go toe-to-toe with anyone out there. For Sony, why are they buying this? Why are they investing in this? They want to spin up a little bit of an entertainment flywheel a la Disney. They want games to feed into TV, to film into movies, to film into merch, to go into experiences. That is the flywheel that they want to build. And they recently just got a taste of it too.

19:30They proved this playbook with The Last of Us. That is a video game that they own that moved into the prestige TV world, which turned into this big cultural event. So they're saying like, huh, what else could we do this with? Let's go shopping. Peanuts seems up for grabs. So Peanuts did have a movie back in 2015. It made$200 million. It did well. But we got to get another one because we're so close to EGOT status in terms of the Peanuts franchise. They've won two Grammys, four Emmys, and two Tonys. They've only got one Oscar nomination, though, a boy named Charlie Brown in 1969. So Sony, let's get an epic Peanuts movie out there so we can get this EGOT for Snoopy and Co.

20:11If you are looking for Peanuts TV, though, this doesn't have to do with Sony. Peanuts struck a licensing deal with actually Apple TV+. That was renewed through 2030. They're going to make original Peanuts content over there on Apple. So a little bit of bifurcation in this franchise, but I hope Sony puts a lot of money and interest in behind Peanuts because they have been successful with a bunch of these other franchises and we'll see what they do with Peanuts. And Peanuts is interesting because even though you said we need a new movie coming out, you don't actually need a blockbuster or a hit to make money off of Peanuts because it's just so consistent.

20:45It has great licensing revenue streams. Again, I go back to this MetLife deal that they had for over 30 years. It always becomes relevant again during the holiday. So it has it's almost like the Mariah Carey effect where every time Christmas rolls around, you know, Charlie Brown Christmas comes into people's minds again. So you don't necessarily need to have a blockbuster movie come out every single year in order to make your money back. It kind of is this self-turning mechanism at this point. And let's just admire how prolific Schultz was. Right. So it came out in 1947. It was called Lil Folks.

21:18It wasn't even called Peanuts. Apparently he hated the name Peanuts, but they had to change it three years later. So I don't know how the history would have changed if this thing was still called Little Folks. But over those decades, he produced 17 ,897 peanut strips, 15 ,000 daily ones, and 2 ,500 Sunday ones until his death in 2000. He died the day before the final comic strip came out. All right, it's Monday. So here's what you need to know to stay ahead in the week ahead. It's here, the culmination of the winter holiday season, Festivus. Tomorrow, as introduced in an iconic episode of Seinfeld, families will gather around the aluminum pole and tell them all the ways they have disappointed each other over the past year.

22:00That airing of grievances is, of course, followed by the feats of strength, and I really hope you put up a better fight than Jake Paul. Toby, let it out. What problems do you have with me? Neil, if we're in the trust tree here, I never knew what Festivus was. I always hear it mentioned, and I've heard it mentioned by you, But before literally today, I did not know that Festivus involved, you know, an aluminum pole and all these rituals around it. So if it's about airing grievances, though, I do have one. I'm just kidding. I'm not going to put that on the air. We'll wait for tomorrow for that. And I hope you are SVP to my Festivus dinner.

22:35It's a very quiet week on Wall Street with the stock exchanges closing early on the 24th and staying shut for Christmas. Trading is expected to be thin until investors return from their deer park vacations in the new year. We came off a hot Friday in the last full trading week of the year. The AI trade kind of got some wind back in its sails. And a lot of peripheral AI companies did really well. Now it's kind of the holiday season. Nothing really happens on these shortened trading days. So, yeah, expect a little bit more quiet. Of course, as soon as I say that, something crazy is going to happen.

23:06And it doesn't feel like it, but the S &P 500 is up 16 % this year. That's three straight years of double-digit, very healthy gains. Federal government workers are also going to have a chill week. Last week, President Trump issued an executive order naming Christmas Eve and the day after Christmas federal holidays, giving employees those days off this year. That doesn't mean your company will necessarily do the same. Private firms often follow the federal holiday calendar, but they aren't legally obligated to. Overall, about 11 % of employers granted staff the full week off between Christmas and New Year's in 2024.

23:40And if you are trying to plan ahead to next year and, you know, have a bigger vacation around this time, you can't necessarily do that because this does not mean that they are designated as a federal holiday in perpetuity. To do that, legislation must pass through Congress and then be signed into law by the president. So this is just a temporary one-year thing for now, although maybe next year he'll do the same exact thing. And next year, I just looked it up, Christmas is on a Friday. So that means people are going to be working like Monday through Wednesday. day, whereas this year it's more in the middle of the week.

24:12Yeah, you want like a Wednesday or Thursday Christmas because that's kind of a two-week thing if your employer is feeling generous. Christmas on a Friday, you know, you're working the 20th and the 21st. All right, the sports world this week will be anything but quiet with the NBA and NFL hosting games on Christmas. The NBA used to own this holiday, but the NFL is encroaching on its turf with three matchups on December 25th. You know, the only thing Christmas Day sporting site is missing, Jake Paul falling all over and rolling around in the ring with a professional fighter. I could really use a little more Jake Paul in my life this Christmas.