Move over Hollywood—the cool kids are on YouTube (8/18/14)
Geopolitical tensions eased over the weekend, and without any major news to drive direction, the markets moved higher on recent positive earnings and economic news.
The Dow gained 175 points, with 27 of its 30 components advancing; the S&P 500 Index added 16; and the Nasdaq rose 43 to close at a fourteen-year high. Advancers led decliners by three to one on the NYSE and by five to two on the Nasdaq. The prices of Treasuries weakened. Gold futures lost $6.90 to close at $1,299.30 an ounce, and the price of crude oil fell $0.94 to settle at $96.41 a barrel.
In Other Business News:
- Dollar General, the country’s biggest dollar-store chain, has put in an all-cash offer of $78.50 a share (about $9 billion) for competitor Family Dollar, just three weeks after Dollar Tree made its own offer of $74.50 per share. If Family Dollar accepts the newest offer, the newly-formed company would have about 20,000 stores in 46 states, with sales totaling $28 billion. Shares of Family Dollar (FDO) increased nearly 5% to $79.81, which is above the latest offer price as investors anticipate a potential bidding war. Dollar General (DG) gained 11%, and Dollar Tree (DLTR) lost 2%.
- The National Association of Home Builders/Wells Fargo builder sentiment index increased to 55 in August, up 2 points from July and its highest level in seven months. A reading about 50 signals confidence from home builders. Home sales have lagged so far this year, but builders have a brighter outlook for sales over the next six months.
- Even though the economy is seeing strength in the job market, unemployment numbers continue to climb in individual states. According to the Labor Department, unemployment rose in 30 states last month and dropped in 8 states. Two-thirds of the states reported an increase in hiring. Job hunters are more optimistic about their prospects and are reentering the market, leading to the higher unemployment numbers.
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One of my favorite songs is “Internet Killed the Video Star” by The Limousines. It’s a sequel (of sorts) to the late-70s song “Video Killed the Radio Star” by The Buggles. For a while, videos did seem to be facing their demise, as MTV slowly replaced them with reality shows and other original programming. However, the Internet (YouTube, specifically) may actually be the future of videos and the entertainment industry.
Last month, “Weird Al” Yankovic released his 14th album Mandatory Fun. His record label, RCA, didn’t provide any funding for promotion or video production, so Weird Al partnered with YouTube and other websites to create and release one video a day for eight days during his #8videos8days campaign. The videos went viral and have been watched over 46 million times.
Mandatory Fun was the first comedy album to hit number one since 1963 and the first number one album in Weird Al’s thirty-year career.
Weird Al isn’t the first artist to gain traction on YouTube. OK Go has gained notoriety and millions of fans through their innovative videos, which have included dancing on treadmills, giant Rube Goldberg machines, stop-motion filming, and singing dogs. And who could forget Korean pop star Psy and his international hit “Gangnam Style”? Oh wait…everyone has by now. But not before the video hit 2 billion views. Then there’s Justin Bieber, whose “talent” was also discovered on YouTube. Well, nothing’s perfect.
Based on Weird Al’s success and a study released by Variety last month, Hollywood might have to take notice. Varietyasked American teens who they believed were the most influential celebrities. The top five names on the list weren’t A-list stars like Jennifer Lawrence or Johnny Depp (who showed up in seventh and fourteenth places, respectively). They were YouTube stars like Smosh, The Fine Bros., and PewDiePie. In fact half of the 20 names were YouTube celebrities. One theory is that the Millennial generation sees authenticity in these individuals that they don’t perceive in traditional celebrities.
The next step for these newly-minted celebrities is to monetize their fifteen minutes of fame, and some have already proven successful. PewDiePie (or Felix Kjellberg in real life) made $4 million last year by telling jokes while playing video games. Four. Million. Dollars. I may not have the next Justin Bieber in my house, but my kids can play video games like there’s no tomorrow. They’re no good, but they’re cute. I’m sure that’s all we need. Let’s grab the video camera.
