- The Core
- Posts
- Music to Spotify’s ears
Music to Spotify’s ears
Also in today’s edition: Much ado about mosquito repellants; The days of dirt-cheap data are numbered
Good morning! It can be argued that the globe's network of undersea cables that make the internet possible runs the modern world. Those cables criss-crossing the ocean floor might as well now save the world. Six years after a scientist in England’s National Physical Laboratory proposed using undersea cables as earthquake sensors, the governments of the UK and New Zealand have announced a joint project to test the feasibility of this idea in the Pacific Ocean. If scientists are successful in predicting plate motions using the cables, we will finally have a solid way to predict the quakes that trigger tsunamis. Our fingers are crossed.🤞
Soumya Gupta, Roshni Nair, and Anup Semwal also contributed to this edition.
The Market Signal*
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Stocks & Economy: Asian equities dipped on Thursday after a disappointing outlook by US Big Tech majors. Shares of Meta, Alphabet, Amazon, and Nvidia slid due to forecasts below analysts’ expectations, mostly on the back of higher AI expenses. Meta shares dropped 15% on extended trade, knocking $200 billion off its market cap. It’s the second-worst late day slump for the company after the $232 billion plummet it suffered on February 3, 2022. Alphabet, Amazon, and Microsoft shares fell 3%, 2.6%, and 2%, respectively, ahead of results.
The US Oil Fund, the world’s largest oil exchange-traded fund, reported its largest daily outflow on thawing geopolitical risks in West Asia. The Gift Nifty indicates a negative start for Indian indices.
ENTERTAINMENT
Spotify Hears a Woo!
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Brutal layoffs done with, Big Tech is now posting fatter results. Spotify reported a profitable quarter as revenue was up 20% (pdf), with nearly equal growth in subscription and ads. Paid subscribers rose 14% year on year to 239 million. Hiking subscription prices and cutting jobs helped. Side note: CEO Daniel Ek told investors laying off 1,500 people made it challenging to run the company.
Bang for my buck: Spotify wants to give its subscribers more choice. Apart from podcasts, it rolled out audiobooks on the app this year and is working on more subscription tiers with some offering all audio and others, music-only.
Spotify is experimenting at the right time. A survey of US music streaming subscribers found 80% respondents want one app to manage all their subscriptions including music, video, and other audio entertainment. Few aggregators in the US (and India) bundle services across mediums.
PODCAST
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Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.
Today, he speaks to Sushil Choksey, MD, Indus Equity Advisors, about where Reliance Industries’ revenues and profits really come from.
FMCG
Netting The Bloodsucker
It took an agarbatti or incense stick, of all things, for shares of Godrej Consumer Products Ltd (GCPL) to hit an all-time high in February this year. The question is: is the product really all that?
Whatchu talkin’ about?: The Goodknight agarbatti with a “new and exclusive molecule” called renofluthrin or RNF. GCPL claims it’s the only government-registered anti-mosquito incense stick in India.
So?: GCPL’s flagship brand Goodknight (for that matter, even HIT) has been the market leader in the household insecticide market, but growth has stagnated. The company’s innovations in sub-categories such as mosquito coils, herbal agarbattis, and vaporisers haven’t flown. But smaller homegrown brands such as Eco BioTraps and makers of products like solar mosquito killers are finding takers. The trend of local, even unorganised players eating into FMCG giants’ margins has been around for a while, but this time GCPL is taking the fight to the challengers.
🎧 Will Godrej's anti-mosquito agarbatti "strike" gold? Also in today’s episode: Zoho’s advantage over Google. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.
TELECOM
Brace For Costly Data
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The hikes are coming. Indian telecom companies will likely raise tariffs after the elections, analysts expect. In fact, they anticipate another hike to follow in FY26.
The first indication came from Reliance Jio, which reported flat average revenue per user or ARPU of Rs 181 in FY24 but projected it to rise to Rs 200 in FY25 and then to Rs 224 in FY26. Jio said 37% of data consumed on its network was through 5G, which is currently not charged separately or higher.
That goes for Airtel too which has a competing countrywide 5G network. Vodafone Idea will also roll out 5G infrastructure after successfully raising Rs 18,000 crore in a follow-on share sale.
Meanwhile, the Centre has asked the Supreme Court if it can distribute spectrum for satellite communications without auctions. After the 2012 furore over irregular spectrum allocation, the court had cancelled 122 licences and ruled that spectrum can only be auctioned.
The Signal
Higher telecom tariffs are almost an inevitability. But it will raise costs; of e-commerce, digital payments, streaming entertainment and sports, delivering cross-border work, and so on. Faster data speeds will deepen digital transformation but higher costs could prevent it from broadening. Banks have been wanting to recover some costs of UPI-based transactions, which are currently free. India has about 1.19 billion telephone subscribers of which about 250 million are on 2G phones and are reluctant to upgrade. India nominally has cheap internet but expensive when measured for value.
FYI
Stop! The Reserve Bank of India has barred Kotak Mahindra Bank from onboarding new customers for online and mobile banking, and issuing new credit cards because of weak IT infrastructure and inadequate IT risk management framework.
Ban on: US President Joe Biden has signed a bill seeking to ban Chinese social media platform TikTok after nine months unless its owner ByteDance sells the app.
Eyeing a snap up: Investment firm KKR is mulling a $1 billion acquisition of Indian medical device maker Healthium Medtech, Bloomberg reports.
Nothing free lasts forever: Streaming platform JioCinema is planning to put Indian movies and general entertainment behind a paywall, according to The Economic Times. The plan, possibly one of several, will reportedly cost Rs 29 a month.
India-bound: Reuters reports that Goldman Sachs has tapped former Bank of America executives Sunil Khaitan and Kamna Sahni to spearhead its dealmaking business in India.
THE DAILY DIGIT
$10 billion
The assets under management of Wipro founder Azim Premji’s family office, Premji Invest. (The Arc)
FWIW
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So you think robots can dance: Wedding trends are getting excessive. If you're tired of 360° photo booths and weddings designed for Instagram, get ready for party robots. In New York, weddings now include an eight-foot-tall robot dancing on the floor. That's its entire purpose. Since no one wants to be the first on the dance floor, couples hire party robots to make guests feel more comfortable dancing. The dancing robots cost anywhere from $500 to $1,200 per hour – and both the bride and groom get to dance with the robot solo. It's quite a lovey-dovey spectacle, except for one teeny-tiny detail: the party robot is actually a human on stilts.
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