April 13, 2022

Today's Topics

Hello! We have 3 charts for you today:

  • The productivity pay gap. Workers are more efficient than they used to be, but wages haven't kept up.
  • Streaming saturation. How many streaming services are too many?
  • Sonos. If you can't beat 'em...
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Yesterday the media got to run its latest monthly ritual; reporting on the US inflation data that, once again, hit a new high — this time with consumer prices rising 8.5% relative to this time last year.

Productivity vs. wages

Inflation is sort of just one side of the economic story for workers, the other of course being wages. Without matching pay rises, wages fall in real terms — which is likely to contribute to a further widening of the "productivity-pay-gap", the gap between output and pay that's been growing for decades.

Indeed, according to data from the US Bureau of Labor Statistics, the amount of "stuff" produced by a typical worker in the US per hour (what an economist would call productivity) has gone up roughly 127% since 1975, but the real compensation of workers has only gone up by around half of that amount (63%). That's a far cry from the 1947-1975 period, when those two variables moved almost in lockstep.

Advances in technology, globalization, government policy and many, many more variables have all contributed to the share of income going to labor decreasing — and soaring inflation isn't going to help.

Streaming saturation

Streaming promised a golden age of consuming media, and on some level it has delivered. But as competition has intensified, the days when you could find everything you wanted to watch on just one service are, unfortunately, long gone.

Data from Nielsen shows that in 2019, only 11% of those surveyed reported that they paid for four or more streaming services. This year, 35% of people said they paid for four or more, and a whopping 7% revealed they paid for six or more services, which was almost completely unheard of just a few years ago.

Build it, and hope they come?

CNN is one company that is starting to understand just how competitive streaming is.

The news giant has been building hype for its CNN+ product for months. The service is focused on a combination of live programming (mostly news or factual shows), coupled with longer travel pieces, documentaries and typical CNN programming and was hoping to attract 2 million American subscribers in its first year.

But yesterday news broke that it's off to a really slow start in its first two weeks, like Quibi slow. So far CNN+ is reportedly tracking at just around 10,000 daily active users, a pretty small user base for a project that has already had $300 million pumped into it. Senior execs are now planning cuts on the project, which was initially expected to see around $1 billion invested in it over 4 years.

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If you can't beat 'em...

Buy 'em.

Yesterday Sonos announced it was dropping a cool $100 million on acquiring a company called Mayht, a Dutch start-up best known for its prototype speakers that are solar-powered and ultra slim (they're quite cool).

For Sonos, this deal is all about the future. The high-end speaker maker has had a solid run, growing its annual sales at a steady clip of about 14% a year for the last 5 years, a rate that the company says it can maintain, or slightly beat, for this year at least. By acquiring Mayht, it gets access to the innovative tech, which it can plug straight into the stuff it's already good at — like production, marketing and distribution.

On the flip side Mayht has a hundred million reasons to go for this deal, and interestingly never really had ambitions to actually take its own product to market. Instead the founders pursued a strategy to innovate, and then get acquired, almost from day one. Well, mission accomplished.

More Data

1) Atlanta has once again topped the list of the world's busiest airports.

2) Show me the money — who makes it onto the bank notes on currency around the world? A great visual story from our friends at The Pudding.

3) Elon Musk is getting sued, with a Twitter shareholder alleging that the late disclosure of his stake in Twitter cost investors money, while saving Musk around $143m.

4) Most of us have never had the chance to invest in art — we didn't have a crisp $8.5m to buy an entire painting. But Masterworks is changing all that, letting everyday investors invest in masterpieces from the biggest names in art like Rothko, Basquiat, Banksy and Warhol.**

5) 70% of Americans now consider Russia an enemy of the United States, up from 41% in January, according to polling from the Pew Research Center.

6) Inflation is hitting everyone... Meta spent $26.8 million on security and private jets for Mark Zuckerberg last year, up on spending of $25m and $23m in the two previous years.

7) The Wordle clones just keep getting better. This one, called Explordle, drops you in a random place and gives you 4 options to guess where you are.

*See important Reg A Disclosures

**This is sponsored content.

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