The Times - UK (2022-02-03)

36 2GM Thursday February 3 2022 | the times

Business

Under-fire

Spotify takes

another hit

The number of active users of Spotify reaching a record high could not prevent the audio streaming service suffering yet another blow on Wall Street last night. Shares in the company, which is embroiled in a high-profile row with some of its stars over Covid-19 mis- information, tumbled in after-hours trading after it failed to meet every expectation among analysts. The Stockholm-based Spotify, which was listed in New York in 2018, said that its fourth-quarter revenue had risen to €2.69 billion from €2.17 billion a year earlier as its total monthly active users rose by 18 per cent to a record 406 million. However, it also predicted paid subscribers of 183 million for the current quarter, below forecasts of 184 million. Revenue is expected to meet estimates of €2.6 billion. That sent the shares

plan to reduce, but not stop, its bond- buying programme. Although core inflation slowed last month, it remained above the ECB’s target and also beat market expectations by a wide margin. Inflation excluding food and fuel prices, closely watched by the ECB, fell to 2.5 per cent last month, from 2.7 per cent in December. A narrower measure

rates several times this year to keep a lid on rising prices. However, the ECB has stood firm, arguing that increasing borrowing costs would imperil the recovery and that tepid wage growth will ensure that core inflation remains under control. The central bank is expected to keep interest rates unchanged at negative levels tomorrow while sticking with its

additions were generated by its news products. The group, which also owns Wire- cutter, a product review website, is trying to develop other products and services to attract paying users. On Monday it snapped up Wordle, the viral online game created by Josh Wardle, the British software engineer, in a seven-figure deal that it said would give “millions more people around the world another reason to turn to” its platform. Assurances that the puzzle would remain free to play at the time it moves to The New York Times prompted some users to express concern that in future it could be placed behind the newspaper’s paywall. The purchase of Wordle was the latest in a steady stream of acquisitions by the company, which gained 1.2 million subscribers through its takeover of The Athletic, a sports news outlet with a sizeable British division, which was announced last month. Before the deal was closed, The New York Times finished last year with 8.8 million subscribers, the vast majority of those

online and 784,000 for the printed newspaper. Digital subscriptions rose by 18.9 per cent in the year, while print fell by 5.9 per cent. Meredith Kopit Levien, president and chief executive of The New York Times Company, said: “Our perform- ance in 2021 demonstrated the power of our digital-first, subscription-first approach as we posted our second best year ever for net subscription additions and strongest operating profit and adjusted operating profit in many years.” Subscription revenues are expected to grow by between 18 per cent and 21 per cent this year, or between 23 per cent and 28 per cent when including The Athletic. Advertising sales, ac- counting for the sports site, are projec- ted to increase by 21 per cent. The company’s history with big-tick- et acquisitions is chequered. It bought The Boston Globe for $1.1 billion in 1993 but sold it two decades later for $70 million. In recent years the group has bol- stered its growth through smaller takeovers, such as those of Wirecutter and Serial Productions, an audio studio.

1

Monzo, the digital-only bank, will allow long-serving employees to take three-month paid sabbaticals as it joins a growing number of businesses that are revamping their working practices after Covid-19. Staff at Monzo, which has its headquarters in London, will be able to take career breaks after they have worked for the company for four years. Page 2

2

The Bank of England looks set to revise up its forecasts for inflation for a fourth consecutive time when it updates its outlook today. The central bank’s monetary policy committee is expected once again to raise its projections for inflation in its quarterly monetary policy bulletin — previously called the Inflation Report — in light of unexpectedly high price pressures. It is due to be published after the Bank’s interest rate meeting today. Page 35

3

Glencore and Britishvolt, the gigafactory developer, are to build a plant to recycle lithium-ion batteries. Up to 400 jobs could be created through the facility at Glencore’s Britannia Refined Metals site in Northfleet, Kent, which is expected to be in operation by the middle of next year. Page 35

4

Inflation in the eurozone jumped to a record high last month, defying expectations for a fall and piling added pressure on the European Central Bank to stem the seemingly unstoppable rise in the cost of living. In the 19 countries that share the single currency, inflation rose to 5.1 per cent in January from 5 per cent, according to official data.

5

The New York Times Company, which owns The New York Times, has surpassed ten million subscriptions after its $550 million takeover of The Athletic sports news website.

6

Nick Read, chief executive, said that Vodafone was in talks with “multiple parties” over potential deals in Europe as it seeks to drive greater shareholder returns amid pressure from Cevian Capital, a European activist investor. Page 38

7

Despite losing a third bidder in two months, shares in Playtech jumped by 6.3 per cent to 613½p at one point yesterday despite confirmation that investors had blocked a recommended £2.7 billion bid from Aristocrat Leisure, of Australia. Page 40

8

Three warehouses close to Wembley Stadium are the latest addition to the campaign by British Land, the property company, to become a leading player in urban logistics. Page 41

9

Most of the £130 million accidentally handed to customers by Santander UK on Christmas Day through a technical problem has been clawed back by the bank. Page 42

10

Buyout firms spent a record sum acquiring mid- sized British companies last year, with takeovers defying uncertainty caused by the pandemic to hit the highest level ever. Page 43

Need to know Rising prices

put pressure

on eurozone

interest rates

Simon Duke

Inflation in the eurozone jumped to a record high last month, defying expectations for a fall and heaping further pressure on the European Central Bank to stem the seemingly unstoppable rise in the cost of living. In the 19 countries that share the single currency, inflation rose to 5.1 per cent in January from 5 per cent, according to official data. The measure of consumer prices had been forecast to fall to 4.4 per cent, but soaring energy and food bills pushed up prices at an unprecedented pace. The unexpected jump will unsettle ECB policymakers, who have been criticised for underestimating the inflationary pressures afflicting the bloc. For months the central bank, which hold its monthly policy meeting today, has shrugged off data showing prices climbing rapidly in the belief that the present rise in inflation will prove temporary. However, minutes from last month’s meeting showed that splits were beginning to emerge, with some members of its policy- making committee express- ing reservations about the eurozone’s ultra-loose monetary policy. If it becomes en- trenched, inflation

could become a political problem for the ECB, as fuel and food price rises have an immediate impact on people’s living standards. Inflation has been climbing steadily over recent months as economies enjoyed a strong recovery from the depths of the pandemic. As govern- ments eased Covid restrictions, con- sumers dipped into their savings and started spending again. Supply strug- gled to keep up with demand, pushing up the cost of goods and services and creating shortages of raw materials. Bottlenecks in logistics networks added to the upward pressure on prices. Inflation is rising at twice the ECB’s 2 per cent target and its track record in monitoring the cost of living is coming under mounting scrutiny. The ECB, which has been led by Christine Lagarde since November 2019, would have to “recognise there are up- side risks and the [inflation] path they laid out in Dec- ember looks too benign”, according to Dirk Schumacher, a eurozone economist at Natixis, a French bank. “Underly- ing price pressures remain high and put the ECB in an awkward posi- tion.” The US Federal Reserve has ditched its previous view that inflation would be transitory and is expected to raise

The owner of The New York Times has surpassed ten million subscriptions after its $550 million takeover of The Athletic sports news website. The New York Times Company has now set a new target of 15 million subscribers by the end of 2027 as it invests heavily to persuade online customers to pay for its news, recipes and games. The group’s revenue rose 16.7 per cent to $594.2 million in its fourth quarter, beating expectations on Wall Street. Net profits jumped from $10 million to $69.9 million in the final three months of 2021 as advertising and subscriptions “more than offset” higher costs. Shares in the group rose by 30 cents, or 0.7 per cent, to close at $41.56 in New York last night. The New York Times Company, which is valued at $7 billion and has 4,700 staff, is trying to transform the 170-year-old New York newspaper into a premium digital platform. Digital subscriptions rose by 375,000 in the quarter, but less than half of these net

Callum Jones US Business Correspondent

New York Times hits subscriber goal

2012 13 14 15 11 17 18 19 20 21

6%

5 4 3 2 1 0

-1 Source: Eurostat

Euro area EU

Annual inflation rate

The Times - UK (2022-02-03)

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