Ad-supported online video services, excluding YouTube, have reached 100 million monthly viewers. The main drivers are the ad-only services from Hulu and traditional tv channels and not paid+ad from e.g. Netflix. It’s a volume of viewers (likely combined with attractive demographics) that allow migration from network tv to streaming for advertisers.
One fascinating thing is how much worse than the stock market an average investor is doing. Even compared to a 60% shares and 40% bonds portfolio, which did 11.1%, the average investor (in the US) underperformed with 2.4% and made 8.7%.
Good read on the Pritzker family by Neckar Substack. “Turns out some deals are actually done on napkins. In 1957, a young dealmaker sat in a coffee shop, Fat Eddie’s in Los Angeles, and did exactly that. What sounds like a scene out of Pulp Fiction was a milestone in one of America’s largest family fortunes.”
AngelList and Brex have released the report The State of U.S. Early-Stage Venture & Startups: 2Q23. According to their data Q2 was the slowest dealmaking quarter since at least 2013 (when their data starts).
The activity (startups raising capital or having an exit) was 5.25 % in Q2 and positive rounds/exits were 63 %. That is compares to ca 12 % activity and 90 %+ positive round/exits in July 2021!
Another interesting datapoint is the median valuation in the US (setting aside the problems with rounds names). For ‘pure’, i.e. not extensions or similar, valuations are higher than in the Nordics.
At a very quick glance pre-seed and seed the 25th percentile in the US seems to be more like a 75th percentile valuation in the Nordics (at least with the SEK/USD exchange rate where it is today). Series A and B seem closer to Nordics, even if a 50th percentile in the US is a 75th percentile in the Nordics.
Stock based compensation, through options and/or restricted stock units, is a good way to align founders and employees with investors. But stock based compensation is not free and has real implications as numbers of shares outstanding grows.
Elon Musk’s rebuilding of Twitter into a super app now includes changing the name to X (even if DNS changes haven’t propagated for me). Changing the name, brand and logotype doesn’t make a lot of sense to me, but that’s not the first time in the Twitter saga (before and after Musk) that is the case.
Björn Jeffery has written about it for Svenska Dagbladet (in Swedish, likely behind paywall).
An interesting read on two parts of Dell’s history with a focus on how capital can be used to enable a company to grow and help founders create value.
A big part of building a startup is securing capital to grow, and it is a very valuable tool to understand. Especially in times when equity capital is harder to get and more expensive.
Spotify is planning to increase the monthly price of a standard subscription from $9.99 to $10.99 in the US, according to the Wall Street Journal.
Previously Apple Music and other competitors have raised their prices, so Spotify will not be pricing higher than competitors. Therefore it seems unlikely that there will be significant churn from this price increase, the first in the US since launch in 2011.
In the US Spotify had about 44 million subscribers earlier in 2023. They are on a mix of plans, e.g. standard, family, and student.
I’m assuming the majority of subscribers are on standard plans, say at least 30 million subscribers (68%). That means $360+ million in additional annual revenue, of which Spotify would keep $120+ million (30%) in gross profit.
If reports are correct, it seems likely that Spotify will increase prices in Europe too with about €1 per month. Which would bring in as much as in the US, for a total of $750+ million (ca 6%) in additional revenue and $250+ million in gross profit.
Price increases combined with underlying subscriber growth, lower costs (staff and podcast content spend) and hopefully ad sales holding up could push Spotify into being more solidly profitable on both IFRS and free cash flow basis.
