Newsletter 4th of May
4 May 2022
This week, we focus on these headlines:
- Recent updates from the world of audio
- Mixed earnings for big tech players
Recent updates from the world of audio
This past week has been eventful in the world of audio. Following Spotify’s Q1 report on Wednesday (details below for those of you who want an update), these where some of the main stories:
Meta is pulling out of the podcast arena and will close down its live audio and podcast service starting June 3rd – only one year after the launch in June 2021. The service has only been available in the US. The company will impede creators from adding podcasts to the service already this week.
Sesamy has signed a new podcast deal with Third Ear Group, which enables android users to purchase single episodes or series from the podcast company without a subscription.
Warner Music Group has announced that it will launch a podcast network. Podcasts hosted by Lupita Nyong’o and Jason Derulo are already set for its roster of shows. The company has established Interval Presents, which will produce an array of series featuring topics of music, pop culture and social impact – including both talk shows and narrative-driven episodic shows.
Spotify is set to become the first music streamer to launch on online gaming platform Roblox. The company will launch “Spotify Island,” a place where artists and fans may gather to play interactive quests, unlock exclusive content, and buy artist merchandise.
Smokehouse Pictures, a production company founded by George Clooney and film producer Grant Heslov, has announces an exclusive deal with Audible. As part of this collaboration, Audible and Smokehouse Pictures will create a slate of audio-only original projects.
Spotify shares were down -12.4% after the company posted its Q1 earnings on Wednesday last week. The company has lost more than -50% of its stock value year-to-date in 2022. This negative reaction from the market, came despite Spotify Q1 earnings exceeding expectations, except for advertising revenues.Total revenues amounted to EUR 2.7 billion in Q1 2022, representing a year-over-year growth of +24%. Premium revenues amounted to EUR 2.4 billion (+23% year-over-year) while ad-supported revenues amounted to EUR 236 million (+31% year-over-year) – representing 11% of total sales, and thereby missing the market consensus. Total premium (paid) subscribers reached 182 million (+15% year-over-year), of course affected by a -1.5 million subscriber loss from exiting the Russian market.
A few other interesting Spotify stats, not related to earnings or subscribers: 67% of the 8 million artists on Spotify have released fewer than 10 tracks in their lifetime on the platform. Nearly 80% of artists on Spotify today (around 6.3 million) – have a monthly audience on the platform that is smaller than 50 people. And approximately 61% of all tracks on Spotify has been played less than 1 000 times to date.
Mediavision’s Insikt: Ljudmarknad gives an in-depth understanding of the entire audio market; audiobooks, music, podcasts and radio. The analysis focuses on the digital transformation of both listening and consumer payments, on both aggregated and actor specific levels.
Mixed earnings for big tech players
Last week, three of the Big Tech players – Alphabet, Apple and Meta disclosed reports with highly mixed results across the board.
Alphabet reported weak earnings and revenues – with particularly weak performance for YouTube.
Total revenue growth decelerated to +23% year-over-year, resulting in total revenues of USD 68.01 billion in Q1 2022. Growth was driven by search and cloud services, while YouTube missed expectations. Revenues for YouTube grew +14.3% year-over-year, and thereby missed market expectations by –8.5%. There are three main drivers for diminishing revenue growth for YouTube: For one, Youtube was particularly beneficiary of the pandemic, causing a tough direct comparison year-over-year. Secondly, the invasion of Ukraine is causing reduced spend from European brand advertisers and, thirdly, the suspension of commercial activity in Russia. Operating margins as a percentage of gross revenue amounted to 29.5%, which beat consensus of 28.9% – but EPS of USD 24.62 missed consensus of USD 25.74.
Apple reported USD 97.3 billion in total revenues while net income hit USD 25 billion. The iPhones continues to account for the bulk of sales; USD 50.6 billion during Q2. Apple’s services division, which includes Apple TV+, Apple Music, iCloud, and the App Store, brought in USD 19.8 billion in revenues during the second quarter of the company’s fiscal year, up from USD 19.5 billion in its fiscal Q1 – representing a growth of +17%.
The Q1 earnings report was the first update to investors since the brutal Q4 2021 earnings report in February that sent the stock down -26% – its worst day to date. In contrast, Meta’s Q1 2022 report sent shares flying +18% in extended trading on Wednesday last week – as the company reported earnings that topped estimates even though revenues did not live up to market expectations.
Total revenues grew +7% year-over-year (a deceleration from +20% year-over-year in Q4) to USD 27.91 billion and missed consensus by –1.3%. However, EPS of USD 2.72 beat expectations of USD 2.56. Daily active users, that declined in the fourth quarter for the first time, bounced back a bit from 1.93 billion to 1.96 billion.
This analysis covers both the and TV- and streaming markets in the Nordic countries. It rests on three pillars: the consumers, the market, and the actors. Analysing the consumers takes us far – but not all the way. Studying the actors and the market as a whole is just as important.
Mediavision in the News
Ny strömningstjänst till Sverige – men marknaden bromsar in – SVT
Efter Netflix ras – så påverkas strömningsjättarna i Sverige – Journalisten
Spotifys börskurs i kollaps – SvD Näringsliv
Nents vd: ”Vi befinner oss i en annan fas än Netflix” – Dagens Industri
HBO Max er tilbage i dansk streamingtop efter relancering – Mediawatch
Tv-kritiker om Netflix tapp: Intryck att de testar idéer – Omni
35 procents aktieras för Netflix – jätten kovänder – Svenska Dagbladet
Netflix tappar – men växer i Sverige – Aftonbladet
Globalt tapp för streaming – så kan Telia och Nent drabbas – Dagens Industri
Bokbranschdagen: 11 May 2022, Stockholm, Sweden**
TV-Dagen: 19 May 2022, Stockholm, Sweden**
Connected TV World Summit: 24-25 May 2022, London, UK
NEM Dubrovnik: 6-9 June 2022, Dubrovnik, Croatia
MIPJunior: 15-16 October 2022, Cannes, France
MIPCOM: 17-20 October 2022, Cannes, France
* Mediavision will attend
** Mediavision will present