December 1, 2023

Today's Topics

Hello! Nepo baby billionaires are on the rise, with more new billionaires earning their riches through inheritance rather than entrepreneurship in the last year for the first time ever, according to a new UBS report. Today we explore:

  • Q3 Wrapped: Breaking down that Spotify subscription.
  • Concrete jungle: Congestion charges could be coming to NYC.
  • Gaining interest: Corporate America hasn't been hit by rising interest rates... yet.

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That’s a wrap

As we approach the end of the year, music lovers have already received one present early… Yes, as your social media feeds might attest to, Spotify Wrapped season is upon us.

While some recoil at the sheer amount of time they’ve spent on the app, averaging 118 mins per day for the typical user, others are surprised by what they’ve been listening to — so much so that 7 in 10 people are reportedly too embarrassed to share their Wrap sheets (although ‘Spotify Wrapped’ still received 400 million mentions on Twitter within 3 days of its 2022 release).

The annual ritual has become a marketer’s dream for Spotify, building buzz for a company that spends a lot of resources defending itself from critics of its low artist payouts. In Spotify's model, for every $10.99 premium subscription in Q3, the company generated another $1.69 from its ad-supported users. From that total, the company shells out nearly 74% (or $9.34 in our example) on costs related to delivering content to listeners… However, the share of the figure that ends up in the actual pockets of artists, rather than managers, record labels, or publishers, is much less clear.

Just last week, Spotify unveiled its updated streaming royalties policy, claiming it will drive an additional $1 billion towards artists and labels by cracking down on fraudulent streams. The changes will halt royalties for tracks with less than 1,000 streams, meaning that payouts to rightsholders will therefore be shared amongst more established names on the platform.

It’s tolls for thee

New York City authorities are putting the finishing touches on what could become America’s first congestion pricing program in history, with plans for a $15 toll on drivers looking to access Manhattan's busiest streets to be introduced as early as next spring.

That $15 figure, which the MTA will vote on next year, was detailed in a draft of the new proposal, with taxi surcharges, half-price fees for motorcyclists, and daily $24 / $36 charges for trucks and non-commuter buses also outlined.


Following other major cities such as London and Singapore, the congestion fees are intended to curb traffic and encourage New Yorkers to catch public transport or use other alternatives to get around the city. Indeed, while pleas from Mayor Eric Adams for workers to return to offices in the city were somewhat successful — depending on what you read — the MTA might be wondering what it will take to get their subway cars and public buses packed out to pre-Covid levels again.

On March 5th, 2020, less than a week before the WHO declared the pandemic, some 5.5 million people took the subway in NYC, while 2.2 million New Yorkers were on the bus, according to MTA ridership data — but figures have struggled to get close to those thresholds ever since. On Tuesday, for example, there were just 3.9 million subway riders and 1.1 million people taking the bus. Car usage, on the other hand, is back to normal, explaining the return of the Big Apple's “insane” gridlock.

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Anybody borrowing money recently will know that the interest rate hikes haven’t been a purely academic exercise, with mortgage rates and credit card charges soaring over the last 18 months. But, curiously, America Inc. has thus far remained largely unscathed by rising rates.

As first reported by the NYTimes, figures from the Bureau of Economic Analysis reveal that the net interest paid by corporations on debt and miscellaneous assets has actually fallen to a 45-year-low of $114 billion, as of the last quarter. Indeed, corporate leaders appear to have seized the opportunity to lock in cheap loans before rate rises took effect, while simultaneously parking any excess corporate cash in now high-yielding accounts or bonds.

Like the mortgage market, which has many homeowners tied into longer-term agreements that they haven’t yet had to renew at higher rates of interest, corporate America appears to have timed things well… so far. If interest rates were to stay at their elevated levels, you’d expect that — as a wave of borrowing gets refinanced over the next 2 years — net interest payments would soar again.

But, with inflation starting to cool, a consensus is emerging that the Fed may embark on a rate-cutting trajectory in the first half of 2024… possibly just as billions of dollars of corporate debt comes up for renewal.

More Data

Birkenstock shares have hit their $46 IPO price for the first time since the company went public in October.

• Bunny-hopped: after 3 years at the top as Spotify’s most-streamed artist, per the company’s annual Wrapped report, Bad Bunny has been dethroned by who else but Taylor Swift.

Kev again: Home Alone is the comfort Christmas movie of choice, with 34% of respondents in a Yahoo/YouGov poll citing the film as one they rewatch over the festive period.

Google has agreed to pay $100 million every year to keep using snippets and content from local Canadian news sources on its site.


• From Star Wars to Silence of the Lambs: a stat deep dive on the sort of movies that stand the test of time.

• And… From SBF to Shkreli: a list of “30 under 30s” that Forbes now regrets.

Off the charts: Which top-earning athlete now faces a $1 billion class action lawsuit for his role in promoting NFTs? [Answer below].

Answer here.

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