There are corporate winners and losers in the current pandemic, and then there are companies that are both winning and losing.
Take Walt Disney. It revealed on Tuesday profits fell 91 per cent in the first quarter. It scrapped guidance for the rest of the year and suspended its dividend. Yet, while its movie business and theme parks are dark, its Disney+ streaming service looks a winner for the long term. Coronavirus lockdowns have helped it to nearly 55m subscribers after six months, when it initially predicted it would take four years to reach 60m.
Airbnb is also looking at short-term pain and longer term gain. On Tuesday, chief executive Brian Chesky told staff he was cutting the workforce by 25 per cent, with revenues this year expected to be half those in 2019. But he also told the FT that there had been an unexpected jump in bookings in Europe as the lockdown eased, getting up towards normal levels in Denmark and the Netherlands. Experiences, where hosts lay on activities for travellers, such as cooking classes, was going to be a massive business, he said.
Match, which runs more than 40 dating services including Tinder, said revenue growth slowed in April but messaging boomed on its platforms, suggesting there is pent-up demand for dating and bigger profits ahead when the lockdowns lift.
Video game publishers are clear winners. Activision Blizzard, which has recorded 60m players of its recently launched Call of Duty: Warzone online game, reported quarterly revenues of $1.52bn, well ahead of the Wall Street consensus of $1.32bn. Electronic Arts also beat expectations as users downloaded more of its games to occupy their time at home.
The Internet of (Five) Things
Uber cuts as California sues
Uber is to cut 3,700 jobs, roughly 14 percent of its corporate workforce, due to the hit from coronavirus. In a staff memo seen by the FT’s Dave Lee in San Francisco, CEO Dara Khosrowshahi warned additional cuts would be announced in due course as the company made “difficult adjustments” to match “the reality of our business”. In another blow, California is suing Uber and Lyft in the most aggressive move yet to force the rideshare giants to reclassify their drivers as employees.
Shopify bags big revenue increase
Here’s a Canadian winner. Shopify reported today quarterly revenues increased 47 per cent year-on-year to $470m, as the ecommerce enabler saw more retailers being forced to go online during the coronavirus crisis.
How publishers lose out on ad money
Publishers receive just half the money spent on their digital ads by premium brands such as Unilever and Nestlé, according to PwC research which lays bare the fees taken by adtech companies and untraceable middlemen. In the TV world, UK broadcaster ITV reported a 42 percent fall in advertising revenues in April as the financial fallout from the pandemic forced companies to cut spending.
Libra appoints its first CEO
The foundation behind the Facebook-created digital currency Libra has unveiled HSBC legal chief and former George W Bush-era terrorism finance tsar Stuart Levey as its first chief executive. His appointment is seen as a key step in Libra’s bid to operate independently from Facebook.
Sony’s chief sees mobility as next megatrend
This week’s Tech Scroll Asia newsletter features a rare interview with Kenichiro Yoshida, chief executive of Sony. “The megatrend after smartphones will be mobility, and we will contribute to its evolution from the perspective of safety, security and entertainment,” he said.
Reference: Financial Times.
