Table of contents:
- Spotify vs the record labels.
- Nvidia and the new industrial revolution.
- We have become an “asset-light” economy. Quote from Warren Buffett’s annual shareholder meeting.
- FAANG stocks were crushed in October. Rally over?
- These categories of smart home technology are poised for growth.
- Public offerings: How Moderna Therapeutics wants to revolutionize drug manufacturing.
- Two signs a recession “might” be near.
- Canada is fragile.
1. Spotify vs the record labels
The above chart is Spotify’s gross margin since 2013.
As a refresher, gross margin is (Revenue – Cost of Revenue).
From an article by Music Business Worldwide:
During the last round of negotiations with the three major record labels (Universal, Sony, and Warner), Spotify was able to reduce their payout to the record labels from 55% towards 52%. Hence the bump in gross margin improvement
The reduction was granted on the basis that Spotify hit steep subscriber targets.
See the problem… The percentage Spotify pays out to the labels has a direct effect on their gross margin.