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Spotify soars to 155m subscribers amid lockdown boom – live updates

Spotify has reached 155m paying subscribers for its music streaming service, impressive growth that blew past analyst expectations. 

That figure is a 24pc rise compared to last year, indicating that the Swedish business has benefited from a lockdown boom in listeners to music and podcasts.

The company saw revenues rise 17pc to €2.17bn (£1.57bn) for the three months to the end of December. The number of active Spotify users also rose 27pc to 345m, the company said. 

Arch rival Apple hasn’t disclosed any numbers on subscribers to its Apple Music since 2019 when it said the service had 60m subscribers. Statista has estimated it reached 72m subscribers last year.

Elsewhere, the biggest news story today remains the resignation of Amazon chief executive Jeff Bezos which was announced overnight. He’ll hand over the top job at Amazon later this year to Andy Jassy, the current head of its cloud computing division.

Coming up later today, eBay and PayPal will announce their latest earnings this evening.

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12:06PM

Diving deeper into Amazon’s results 

The headline news from Amazon was all about Jeff Bezos’ resignation, but the company also announced record-breaking revenues.

Amazon brought in $125bn in revenue for the final three months of 2020 – the first time the business has blown past $100bn in a single quarter.

The company now employs 1.3m people, with 500,000 employees joining in 2020 alone.

Here’s our breakdown of the most interesting takeaways from Amazon’s news-packed earnings announcement.

11:48AM

Charting Spotify’s impressive subscriber growth

We now know that Spotify has 155m paying subscribers, impressive growth that blew past analyst estimates.

But arch rival Apple hasn’t given any statistics for its Apple Music streaming service since 2019, so it’s tricky to compare the two. 

Here’s where things stand:

11:30AM

Spotify beats Wall Street estimates as it hits 155 million paid subscribers

Spotify has hit 155 million paid subscribers as it beat Wall Street estimates for the fourth quarter of its financial year.

Premium subscribers, which make up the bulk of the company’s revenue, surged 24pc year on year. Analysts had tipped Spotify to post around 153.26 million subscribers, according to data from Refinitiv.

Spotify said total active users were up 27pc to 345 million. Revenue increased 17pc to €2.17bn (£1.57bn) for the three months to the end of December.

Spotify chief Daniel Ek

Spotify chief Daniel Ek

Credit:
AFP

10:58AM

Sony hikes profit expectations by a third as PS5 sales soar

Japanese tech giant Sony has hiked its full-year profit outlook by a third as the company was buoyed by pandemic-fuelled demand for games, movies, and other content.

The company said that it was struggling to build enough PlayStation 5 consoles to meet demand due to a global shortage of semiconductors.

Hiroki Totoki, Sony’s chief financial officer, said it was “difficult” to increase production of the PS5 but said he expected to sell more than 7.6m units of the new console by the end of March.

Sony is competing alongside a host of other businesses for chips with competition ranging from smartphone makers to car companies. The company unveiled its new console last year and has continually sold out rapidly.

Sony admits it is finding it difficult to meet demand for its PS5 consoles

Sony admits it is finding it difficult to meet demand for its PS5 consoles

Credit:
Sony

10:24AM

Kia shares soar off back of reports of EV tie-up with Apple

Shares in Kia have soared off the back of reports that the car manufacturer has reached a multi-billion dollar deal to build electric cars for Apple.

The South Korean carmaker jumped 14pc off the back of local media reports that suggest it had reached a 4 trillion won (£2.6bn) agreement with the iPhone maker.

DongA.com, a South Korean online news outlet, said that Apple would sign on to the terms of the deal on February 17, without citing any sources.

Apple will aim to produce around 100,000 vehicles per year by 2024 at the Kia plant. Both parties declined to comment when contacted by Reuters.

Shares in Kia, an affiliate of Hyundai, hit its highest level since 1997 at 102,000 won on Wednesday.

Reuters reported last week that Hyundai Motor Group has “tentatively decided” that it would want Kia to partner with Apple, citing a Hyundai insider.

The South Korean carmaker is reportedly in talks with Apple

The South Korean carmaker is reportedly in talks with Apple

Credit:
Reuters

9:48AM

Baird analysts reassure worried Amazon watchers 

Jeff Bezos


Credit:
AP

The surprise announcement of Jeff Bezos’ decision to step down as chief executive of Amazon is likely to worry some Amazon investors who banked on many more years of the founder remaining in charge.

Mr Bezos attempted to ease concerns in his resignation email to Amazon employees, but for anyone still worried about his departure, here’s what Baird analysts wrote to their clients following the news:

We continue to like AMZN, given numerous long-term growth opportunities, improving operating efficiency, and as one of the most innovative technology platforms globally. Strong Q4 results were even better than our recent estimate increase, with accelerating growth across each key e-commerce segment. Most important, Jeff Bezos will assume the role of Executive Chairman in Q3, elevating AWS boss Andy Jassy to corporate CEO – which should reduce chatter that Amazon might spin out AWS. We expect Jeff to remain active with high-level decisions, so you can sleep well tonight.

9:38AM

Jack Ma’s Ant Group agrees restructuring plan with Chinese authorities 

Jack Ma


Credit:
AFP

Ant Group, the Chinese financial technology business founded by Jack Ma, has reportedly struck a deal with Chinese regulators that will turn it into a financial holding company.

Ant Group was on the verge of floating last year in a $35bn move that would have been the largest float in the world, but Beijing pulled the plug at the last minute.

Here’s Bloomberg on what’s in Ant’s restructuring plan:

The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery, people familiar with the matter said. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure.

9:19AM

Vodafone revenues drop but it beats analyst expectations 

Vodafone


Credit:
AFP

Vodafone announced its latest earnings this morning and it saw a drop in revenues following a decline in calls from travellers and weakening Italian revenues, Matthew Field reports.

Vodafone is eyeing a return to growth after beating analyst expectations and reporting a 0.4pc rise in organic service revenues, with a return of mobile roaming in 2021 expected to provide “tailwinds”.

The FTSE 100 telecoms firm reported an overall sales decline of 4.7pc to £9.9bn, largely on the back of slump in calls from travellers.

Chief executive Nick Read said the return of some travel this year, in addition to organic improvements, would make for improvements in 2021. He said: “As vaccinations penetrate the population you could anticipate there would be a lot more movement in Europe. Still we think there will be heavy restrictions going into and out of Europe [the main profit pool for roaming]. You could expect wider travel returning from probably September and October onwards.”

The chief executive declined to comment on reports Vodafone was in talks to merge its Spanish arm with France’s Orange, but said “consolidation is probably needed in Spain as a marketplace”.

Shares rose 3pc in early trading.

9:01AM

SpaceX test flight ends in fiery crash 

The second test flight of SpaceX’s Starship prototype rocket ended in a fiery crash overnight.

It follows a similarly disastrous outcome from the first test flight which took place in December.

The rocket reached its target altitude of 10km before attempting to rotate and straighten itself up to land safely – ready for potential reuse.

But the rocket failed to properly reorient itself and ended up exploding on the Texas launch pad.

“We’ve just got to work on that landing a little bit,” said SpaceX launch commentator John Insprucker. “Reminder – this is a test flight.”

You can see the full test here (skip to 12:30 if you’re just here for the fiery crash): 

8:55AM

The other big earnings announcement last night

Google’s parent company Alphabet also announced its latest results last night, although its announcements of strong revenue growth were overshadowed by Amazon’s news.

Alphabet saw revenues rise to $182.5bn (£134bn) for 2020, a 13pc increase on the previous year, with $13.1bn of that revenue generated by its Google Cloud unit. 

It generated revenues of $56.9bn in the last three months of year, primarily driven by search engine and YouTube advertising. Google took a hit in the first half of 2020, when the businesses halted their advertising budgets thanks to economic uncertainty surrounding the pandemic. 

Here’s what Nicole Perrin, an eMarketer analyst, made of Alphabet’s announcement:

Again, all three of Google’s main lines of advert business outperformed our forecast, including YouTube, which grew by almost 46pc in the fourth quarter compared a year earlier, Google Network Member revenues, which were up almost 23pc, and search, which was up more than 17pc despite continuing low spending from travel advertisers, traditionally one of Google Search’s most important segments.The strength across all three areas suggests that advertisers are not only turning to digital video ads as a flexible and addressable way to reach consumers with sight, sound, and motion, but also to low-funnel performance ads as shoppers continue to rely on ecommerce during the pandemic.

8:14AM

Meet Amazon’s next chief executive 

Andy Jassy, the next Amazon chief executive

Andy Jassy, the next Amazon chief executive

Credit:
Reuters

Jeff Bezos will be replaced as Amazon’s chief executive by Andy Jassy, a veteran employee of the business who most recently ran its cloud computing division.

The 53-year-old joined Amazon back in 1997 and his work expanding the initially experimental Amazon Web Services product into a revenue-generating machine saw him anointed Mr Bezos’ successor.

Here’s James Titcomb on the two-man race to succeed Mr Bezos:

In 2016, Jassy and Jeff Wilke, the head of Amazon’s consumer and retail business, were given “CEO” titles for their respective businesses, a sign both that Bezos was delegating the day-to-day running of Amazon, and a nod to his two potential successors. Last August, Wilke announced he was leaving Amazon to explore “personal interests”, and the cloud boss became the heir apparent.

7:40AM

Jeff Bezos resignation fuels billionaire space feud 

Jeff Bezos’ surprise resignation from the role of Amazon chief executive will see him devote more of his time to his spaceflight business Blue Origin and could see an expansion of a recent feud with Elon Musk.

Musk recently accused Amazon of attempting to “hamstring” his satellite project Starlink. A SpaceX employee had created a presentation that alleged Amazon had been attempting to “stifle competition” in the growing satellite industry.

Amazon publicly responded by accusing Mr Musk’s business of attempting to “smother competition in the cradle.”

Now, Mr Bezos will have more time to focus on his passion for spaceflight and satellites. That could see both Amazon and Blue Origin competing more closely than ever with SpaceX’s plans.

7:31AM

Five things to start your day 

1) Jeff Bezos is stepping down as Amazon chief executive He will be replaced by Andy Jassy, head of its cloud computing unit

2) Bezos now has $188bn and time to spend on his other pursuits Here’s what could be next for him

3) The changing of the guard at Amazon shows the company moving on Providing services such as cloud computing and other infrastructure are now central to the company under Andy Jassy

4) Google reported record results Parent company Alphabet’s revenues were $183bn in 2020

5) From Musk to Bezos: the remarkable rise of the executive engineer How engineers have risen from the workbench to the boardroom

Coming up today

Spotify, eBay and PayPal deliver fourth quarter results

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