Tag: Spotify

Weekly readings

Weekly reading – 18th February 2023

by MQDuongLeave a Comment on Weekly reading – 18th February 2023

What I wrote last week

Updates on Uber

Business

Exploring ALDI’s Unlimited Success With Limited Assortments. If I could buy shares of a privately held company, that’d be Aldi. I wrote about Aldi here

($) Louis Vuitton’s Formula for World Domination. “Even as it took steps to broaden its appeal, the brand put in place measures to manage the risks associated with becoming too widespread and easy to get. Its number of stores has changed little over the past 10 years, closing some as it opens others. Vuitton doesn’t sell through wholesalers and it doesn’t license its designs. There are no end-of-season sales. Its perfume production is limited to small batches, available only at Louis Vuitton retailers and on the brand’s website. Its fragrances aren’t available in the LVMH-owned retailer Sephora. Louis Vuitton has also intentionally limited supply to retain a sense of exclusivity. The brand makes small production runs for products in each collection. The idea is to always make slightly less than demand.“

How Spotify’s podcast bet went wrong. Growth at all costs and through M&A is usually not the answer for sustainability.

($) Goldman Sachs Steps Back From Bidding for New Credit Card Programs. The move to scale back consumer credit card ambitions of Goldman Sachs is surprising to me. First, they abandoned plans to have Goldman-Sachs-branded credit cards. Then, they don’t bid for co-branded portfolios. The infrastructure that they built for Apple Card (which I suspect involves a lot of concessions) only makes sense economically if it’s used for many other portfolios. I can understand if the bank is being more conservative now than it used to be, but this type of retreat seems like an over-correction at best or at worst the beginning of the end for consumer banking ambition.

Inside Flipkart, the Indian giant beating Amazon. “Krishnamurthy had a simple approach for the sale: Go all-in on smartphones. The company offered customers interest-free loans and Krishnamurthy personally visited the offices of phone brands to make exclusive sales deals. One Flipkart executive who worked with him at the time recalled him pleading with a phone manufacturer, “Give me a chance.” His strategy worked. In terms of gross merchandise value (GMV) — the total value of goods sold — Flipkart achieved a 50% market share during the sale, compared to Amazon’s 32%, according to market research firm RedSeer. Amazon was rattled. One former executive in Amazon’s payments unit told Rest of World that within the company, some leaders still regard this period as a missed opportunity to kill off Flipkart.”

Other stuff I find interesting

($) For Remote Workers, These U.S. Cities Are Great Places to Live. I am more of an office or hybrid guy myself as I believe in the value of separating work from home as well as human interaction in an office. But if remote working is your thing, this list can be valuable. I’d throw the city of Omaha to the mix as well.

Milled is a great tool to search for email newsletters by brands

The maze is in the mouse. While there are some criticisms over parts of the article, the consensus is that it reflects the culture and inner workings at Google. As a result, Google has a big problem at hand. Given the hiring frenzy, the layoff and the botched launch of Bard, one must wonder if Sundar is the right man to help Google fix these problems and once again roar in the future.

Why cash is still king in Iraq. It makes one reflect on how much banking regulations in the US protect consumers and create trust. And how often we tend to take it for granted.

Amsterdam’s airport was brutally honest about its ‘poor’ 2022 performance. How often have you read something this refreshingly honest from a company?

Why African EV startups are struggling. “Two years on, however, industry advocates believe the company’s goals are too ambitious given the high EV prices, unfriendly government policies, lack of charging infrastructure, high customs duties, and bad roads in African countries.”

Stats

Three-in-ten U.S. adults say they have ever used a dating site or app

US Credit card balances reached $986 billion at the end of 2022, a record high

Number of active monthly users of major social media platforms in Europe. Source: Politico
Weekly readings

Weekly reading – 28th January 2023

by MQDuongLeave a Comment on Weekly reading – 28th January 2023

What I wrote last week

Layoffs, accountability and leadership

Book Review: Deep: Freediving, Renegade Science And What The Ocean Tells Us About Ourselves

Business

This letter from Patient Capital on Google is a great primer on the giant tech company. While I agree with the tenet that Search is the cash cow for now and YouTube/Waymo/Cloud offers future growth, I don’t see any coverage on the threats: competition, organizational challenges and regulatory scrutiny

Amazon’s drone delivery unit hit with layoffs just as 10-year-old project finally launches. There is no guarantee that drone delivery program will be a game changer for Amazon. Even that possibility is in jeopardy as Amazon laid off hundreds of employees, including many in Prime Air, which operates the program.

Bad batteries, software glitches: VinFast’s EV drivers say they feel like guinea pigs. Despite grandiose promises, ambitious goals and loud announcements, drivers encountered serious software glitches and faulty batteries with VinFast’s EVs. As a Vietnamese, I am happy to see a national brand take it to the world stage, in an industry that Vietnam has never excelled in. The problem is that the one company that has the vision and resources to do it is not known for sustainable growth. The company tends to throw money at a problem, scaling operations up at a breakneck speed without much regard for details. It stood up resorts touted to be luxurious in less than a year. As you may imagine, such properties are not up to par in terms of quality. It’s not rare to hear complaints about how VinGroup’s residential projects deteriorated only after a few years. That’s why I was not surprised to read about their problems with EVs. I never imagine it easy to sell EVs, but the field is very competitive. What evidence is there to prove that VinGroup has the core competencies to compete and win on a global scale?

How the Spotify layoffs impact its podcasting business. It makes sense that Spotify is trying to make its podcasting business leaner and more efficient. However, there are two concerns that stand out from this article for me. The first is that Spotify replaced the head of content, who has a lot of experience and Hollywood connections, with an operations guy. That doesn’t instill much confidence in a shareholder like myself. The second is that Spotify hasn’t been able to incorporate the tech stacks of all the companies it acquired. That leaves synergies and saved expenses on the table. What’s the holdup?

Meta Embraces AI as Facebook, Instagram Help Drive a Rebound. “Indeed, for all of Meta’s efforts to rebrand itself, the core Facebook “Blue” app remains its workhorse. While outside financial analysts have generally estimated that Instagram accounts for between 40% to 50% of the company’s ad revenue, internal statistics viewed by the Journal show that Instagram generates a little more than 30%—and it isn’t rapidly catching up. Making money on Reels remains an additional hurdle. The video feature’s rapid takeoff created a near-term problem: Because ads in Reels videos don’t currently sell for as much as those sold against regular posts and stories, Reels’ growing share of content consumption was denting ad revenue. To protect the company’s earnings, the company cut back on promoting Reels, which lowered watch time by 12%.”

The oral history of how Priceline acquired Booking.com. Expedia made one of the biggest mistakes in the travel industry’s history by not purchasing Booking.com when they had a chance. In fairness, the business models were quite different, but the price to pay is too high

Other stuff I find interesting

Somebody was kind enough to compile and share a 140-slide deck on France’s tech landscape

Inside CNET’s AI-powered SEO money machine. “Under the two-year-old management of a private equity company called Red Ventures, CNET’s editorial staff has often been left wondering: was this story written by AI or a co-worker? Even today, they’re still not sure. “I don’t lay any blame at CNET’s or its masthead’s feet,” one former staffer says. “This is all due to the machinations of the greater Red Ventures machine, and its desire to squeeze blood from a stone.””

($) Little-Known Surveillance Program Captures Money Transfers Between U.S. and More Than 20 Countries. “Hundreds of federal, state and local U.S. law-enforcement agencies have access without court oversight to a database of more than 150 million money transfers between people in the U.S. and in more than 20 countries, according to internal program documents and an investigation by Sen. Ron Wyden.” I don’t dispute the role of monitoring money transfers overseas in tackling crimes and terrorism. It’s a legitimate purpose. However, it’s very disturbing when every law enforcement agency can gain access to citizens’ sensitive data without a court order. Is data even anonymized? That’s just gross negligence and governmental overreach

Welcome to Hillstone, America’s Favorite Restaurant. “It’s never going to win a James Beard Award. Or try to wow you with its foam experiments or ingredients you’ve never heard of. But it is the best-run, most-loved, relentlessly respected restaurant in America. And, oh yeah, Danny Meyer, David Chang, and Shaq all agree. Welcome to Hillstone.”

Seaweed researchers find bright future for underwater crop. It’s fascinating to learn that seaweed could help reduce carbon emissions and fight climate change.

Stats

Axios’s subscription service, launched in Jan 2022, garnered 3,000 subscribers and $2 million in revenue in the first year

7% of US households used a new streaming service in Q4’22

“Global venture funding reached $415.1B in 2022, marking a 35% drop from a record 2021.”

Source: Twitter

Weekly readings

Weekly reading – 7th January 2023

by MQDuongLeave a Comment on Weekly reading – 7th January 2023

What I wrote last week

Book Review: A.P. Giannini: The Man With The Midas Touch

Legacy Systems Can Cost Businesses Dearly

Business

How digital helps businesses serve ice cream and smiles 24/7. “Smart freezer cabinets are currently being piloted. These can capture products that are out of stock in the cabinet and send a push message to the store that suggests a quantity that can be ordered and sent automatically, drastically reducing the chance of their running out of stock. The pilot saw 1,200 trade customers offered the opportunity to make orders through a virtual sales rep via WhatsApp at any time of the day. Once the order was placed, a team at the distribution hub got it prepared in an average of 60 minutes. It was then delivered in backpacks with special cooling zones in less than four hours – a system that guaranteed product stability.”

‘They’ve gone too far’: How Spotify dug a giant hole — and how it can dig itself out. The piece pains a pessimistic outlook on Spotify’s future and it does have some valid points. The company generates almost $10 billion in annual revenue, but it hasn’t turned profitable so far. The competition is getting fiercer and fiercer every year. Spotify may have some bargaining power as a major industry player, but the label companies still have a lot of sway. It makes sense in theory to create a library of podcast content and sell podcast ads. But it’s the execution that counts and right now, some analysts and investors are not buying Spotify’s ability to execute. If they couldn’t turn a profit when the tide was high, how would they do so when the tide is retreating out?

($) Facebook Wanted Out of Politics. It Was Messier Than Anyone Expected. Facebook did try to limit the virality of some content, even more than anybody thought. I never thought that the company put that much effort into suppressing toxic yet viral content. However, Facebook was a little too late. The damage was already done. They never got rid of the image of being politically toxic. Their work on the newsfeed still didn’t address what happened within Facebook Groups. More importantly, any attempt to moderate content contradicts Facebook’s business model which hinges on engagement and ads revenue. “Views of civic content in newsfeed fell by nearly a third, internal data showed. With the company no longer amplifying posts it predicted were most likely to draw lots of replies, comments on civic posts dropped by two-thirds. Anger reactions fell by more than half on civic content, and nearly a quarter platform-wide. Bullying, inaccurate information and graphic violence fell, too.”

Apple Fitness+ unveils new offerings for the new year. My wife and I pay $84 a year for access to Apple Fitness+ and I can tell you that it’s one of the best investments we make. We exercise almost every day and there is a variety of workouts that keep us interested. With Kickboxing and a new meditation theme, consumers will have more workout options and Fitness+ content library keeps growing. I can’t think of another company that has a fitness IP this size and a popular fitness gadget like Apple Watch. This, of course, doesn’t happen overnight. It takes patience and vision. Software drives hardware sales and hardware is the tool that makes consumer lives better.

Other stuff I found interesting

Micromobility in Limbo: Takeaways from Paris and LA. Scooters are good and should be used for short trips. Cities that want to reduce car traffic must revamp their public transportation systems to accommodate longer trips. Any scooter startup that banks on and advertises the prospect of their services replacing cars deserves a rude awakening and no support from city governments.

(S) Tourism and Manufacturing Fight for the Future of Power in Europe. I get that renewables play an important role in our fight against climate change. It’s even more important for Europe to reduce its reliance on energy from Russia after it invaded Ukraine. But I do think that wind turbines don’t need to be built around historical landmarks or areas that source most of their revenue from tourism. And it is particularly baffling when local officials admit that turbines could be built in areas far away from the lands where there is protest.

How a vanished Ice Age lake shaped the past and present of Missoula, Montana. It is mind-blowing how much the climate changed over the last hundreds of years and how much our life today was shaped by it.

Meet the most powerful Uber driver in India. Salauddin has a computer science degree, drove for Uber and nowadays spends his time as a union leader for gig workers in India. What an interesting arc!

How New Lines Magazine built a home for long-form international reporting. I hadn’t heard about this magazine before, but now I have and the first couple of long articles that I read did not disappoint

Stats

Total holiday spend grew nearly 7% in 2022

150 million users are using Google TV and Android TV

“Amazon Prime Video averaged 9.6 million viewers for its first season as exclusive rights holder to the NFL’s “Thursday Night Football” package.“

Online holiday shopping topped $211 billion between 11/1/2022 and 12/31/2022

Source: CDC
Weekly readings

Weekly reading – 2nd July 2022

by MQDuongLeave a Comment on Weekly reading – 2nd July 2022

What I wrote last week

How does credit card direct mail process work?

Business

A great podcast episode on Don Valentine and Sequoia Capital. I guarantee that this is way better than Don Valentine’s profile on Wikipedia.

($) Spotify’s Billion-Dollar Bet on Podcasting Has Yet to Pay Off. “Over the next four years, Ostroff spent more than $1 billion on the business, licensing shows, buying production studios, and signing exclusive deals with celebrities, including the Obamas, Kim Kardashian, and Prince Harry and Meghan Markle. Last year, Ostroff’s research and data team asked a question that many at Spotify already knew the answer to: Had any of this spending yielded a major new hit? The team produced a report that basically said no, according to five current and former employees who didn’t want to be named discussing internal business.” A very interesting story on the development of podcasts at Spotify. They used to like Netflix making a lot of shows and movies without anything concrete in return. The new internal structure is now in place to help Spotify better at making shows. I think they may be better off by following the model of HBO and Apple. But as a company that is never actually profitable, Spotify doesn’t have the luxury that Apple or Warner Bros has.

($) The Surprising Reason Your Amazon Searches Are Returning More Confusing Results than Ever. “The problems Amazon took on once it opened up its marketplace to sellers in China have become more evident in recent years. My Wall Street Journal colleagues in 2019 uncovered thousands of banned, unsafe or mislabeled products in Amazon’s catalog, most of which came from China-based sellers. It also became apparent that Amazon sellers were gaming Amazon’s algorithms to get goods listed as high in its search results as possible, and even going so far as to bribe Amazon employees in China to help boost items’ rank. The Amazon spokeswoman says the company spent more than $900 million last year to combat counterfeiting, fraud and other abuse—an effort she says involved 12,000 people. The company stopped more than 2.5 million fraudulent attempts to create new seller accounts, she added, down from over six million the prior year.”

‘Wallets and eyeballs’: how eBay turned the internet into a marketplace. This article is actually an excerpt for an upcoming book calling for the de-privatization of the Internet. It basically calls for another version of the Internet where people would be less motivated to create their own content because capitalism and competition wouldn’t work. I haven’t read the book, so I don’t know how good it is, but it’s still cool to read up on the birth of one of the most important marketplaces we have ever had.

Lessons from an investing legend. Anyone interested in investing should have a read. Everything Peter says is similar to what I have read from some of the greatest investors

($) Inside Didi’s $60 Billion Crash That Changed China Tech Forever. It further solidifies my stance that as long as the current regime stands and it surely looks that way for years to come, I won’t buy Chinese stocks. Didi at its peak was worth $100 billion. Now it’s a shell of its former self because of actions from the government. Worse, the leaders at Didi, all Chinese and with resources to spare, didn’t understand why the government acted the way it did. Then, how could a foreign investor hundreds of miles away?

($) Draymond Green, Podcast Star, Turns an Unsparing Mic on Himself. I listened to Draymond’s podcast a few times and while it does carry a sense of disruption and fresh air, compared to the likes of First Take or Undisputed, I still want to hear more basketball analyses from Draymond. He is an intelligent player and a 4-time champion. He surely is capable of producing basketball breakdowns for casual fans like Kobe once did with Detail. I’d love to hear more about the preparation before games or during off-season. I’d love to hear about the mental struggle of players during injury rehabilitation. Dray has much to offer and I hope he will bring it instead of cat fights and trash talk against the incumbent media. On a side note, after the liquor industry, athletes are marching into the media space. With their fame, connections and insider knowledge, they are greatly positioned to make a splash in this industry.

Other stuff I find interesting

Nigerians are learning to buy now and pay later. “In a country where only 2% of the 106 million adult population have access to bank credit, credit cards are also conspicuously absent, as banks shy away from consumer lending. BNPL is becoming a rising alternative and is set for further growth, as Nigerians embrace digital credit. BNPL thrives in markets with integrated identity systems, consumer credit culture, and decent consumerism, where people are able to pay for not just essential items like food and fuel but are also willing to buy nonessential items like cars and gadgets. However, the Nigerian market struggles with efficient identity systems, over 100 million Nigerians, or a little less than half the population do not have any form of recognized ID. And following the economic slump over the last eight years, many households are barely clinging to whatever funds they have after spending on rent, food, and other necessities. A June 2021 report showed 61% of the country’s adult population suffered “severe financial distress” over the previous 12 months, forcing many to cut down on expenses.”

($) Norway Was a Pandemic Success. Then It Spent Two Years Studying Its Failures. “Norway’s government had the foresight during the first days of Covid-19 to appoint a panel called the Koronakommisjonen. Its mission was figuring out what the Norwegians did, what they could have done and what they should do. This crisis was barely under way when they began preparing for the next one. The next lesson from the Koronakommisjonen reports is the power of not pretending to know more than you do. Nobody really knew anything early in the pandemic. Anybody claiming otherwise should have known better.”

Mediterranean Diet Reduces Depression In Young Men, Study Says. One of the things I want to try till the end of the year is to try Mediterranean diet

Behind the scenes of Waymo’s worst automated truck crash. I have always believed that we are still a long way from having automated vehicles on the streets. Nothing has made me changed that belief, not even a little bit.

Stats

“Ground beef prices are up 36% from a year ago, while chicken breasts gained by a third”

Klarna is reportedly valued at $6.5 billion, down from $45 billion in 2021. Talk about a new definition of a down round

Source: Self.inc
Weekly readings

Weekly reading – 1st January 2022

by MQDuongLeave a Comment on Weekly reading – 1st January 2022

Happy New Year! No matter where you are in the world, if you come across this little blog of mine, I wish you and yours a great year ahead with lots of health, luck and happiness. Also, with Covid finally behind us! Welcome to my first post in 2022!

What I wrote last week

Review of my 2021

Super Apps

Business

Thanks to podcasts, Spotify is the fastest-growing music service in the US, according to Morgan Stanley survey. “From 2019 to 2021, the streaming giant’s share of the average American’s listening hours increased from 7 per cent to 10 per cent, well behind AM/FM radio and YouTube, but strong among younger consumers who will make up the bulk of listeners over the next decade.”

American Airlines, Saddled With Debt and Growing Pains, Turns to New CEO. “Among airline executives, Mr. Isom is known for drilling down into details. A metric known as d-zero—when flights push back from the gate exactly on time or early—became a rallying cry under Mr. Isom, though it is something American has struggled with at times. Kerry Philipovitch, who worked for Mr. Isom at American until 2019, recalled Mr. Parker and CFO Derek Kerr marveling at how early Mr. Isom arrived at a company event, pointing out his prime parking spot. Ms. Philipovitch said: “That’s Robert. He works really hard. He’s going to get there early.”

Here’s What Happened to Biotech This Year. “Below is the harsh reality laid out in a chart. While the total return of the S&P 500 Index is up 29.4% year-to-date through December 27 (as represented by the SPY ETF that tracks it), the S&P Biotechnology Select Industry Index is down -18.2% over the same period (as represented by the XBI ETF that tracks it). In fact, biotech is the worst performing of any of the 11 S&P 500 sectors this year (note: XBI is equal weighted. Within the biotech community, it is generally believed to represent the performance of typical mid-to-small cap biotech stocks)”

The Super League Debacle Forced Manchester United’s American Owners to Listen to Fans. Football or soccer as it is called in the U.S is a business in which a drought of titles and a period of mediocrity can have major implications. When a club goes without a trophy for a while, great players don’t want to spend precious years at the club. Worse, they go to the competitors to help them win more titles and inflict more pain. The vicious cycle is very hard to break. Manchester United has been in that cycle since 2013, when Sir Alex Ferguson retired. The club hasn’t won a major trophy and it has lost its mojo. Prominent players don’t consider the club in the same breadth as the elite any more. It’s all down to the American club owners who don’t have the right management skill or the football culture in them. Everything is commercial. I am extremely sad to see how the club falls from grace

Apple ditched Intel, and it paid off. Taking control of an important technology stack such as the chips is a strategic masterpiece from Apple. They no longer have to rely on a dinosaur such as Intel while deepening their moat. Who else can compete with Apple in combining one of the most iconic brands in history, hardware expertise, the total control of operating systems, the network of retail stores, the world-class capability in supply chain and now an amazingly efficient chip?

Google and Tech Rivals Tap Cash Reserves to Realize Cloud Ambitions. While Amazon relies on AWS for margin, Google and Microsoft have no shortage of profitable segments to help their cloud departments catch up with a formidable rival. If you are not a first market mover, you gotta use the tools available to you.

Facebook’s Pushback: Stem the Leaks, Spin the Politics, Don’t Say Sorry. Facebook deploying the “divide and conquer” strategy with our lawmakers successfully is just surreal.

A Look Back at Q3 ’21 Public Cloud Software Earnings. A very informative post on public cloud software companies. Have a read if it’s your cup of tea

Other stuff I find interesting

Oscars: ‘Spider-Man: No Way Home’ Team Plans Best Picture Push, Tom Holland Open to Hosting. I am glad that Tom Holland, Kevin Feige and co fought for their work and the work of their colleagues in making these Marvel movies because I find it weird that some don’t consider them “art”. Spider-Man: No Way Home is a great movie. The box office and the online reviews say the same thing. Now that it’s likely a potential for Oscar nominations, would anybody come out and say it’s still not art?

New York City bans natural gas in new buildings. It all sounds well and good on paper for environmentalists as new buildings are banned from using natural gas. However, there are second-order effects as “New York’s move to all-electric buildings could mean a higher price tag for consumers using electricity for heat than those relying on gas. This winter, the average household in the U.S. Northeast is expected to pay $1,538 to heat their home with electricity, compared with gas at about $865. Almost half of the power generated in New York State so far this year came from burning fossil fuels (45% from gas and 4% from oil), with another 24% from nuclear and 22% from hydropower, according to federal energy data.”

In Hamburg, Surviving Climate Change Means Living With Water

Japan’s Paper Culture. “Old, traditional ways of using paper are still prevalent, from the gohei (a paper offering made to gods) in shrines, to the shūgi-bukuro (money envelopes) given at celebrations, and New Year’s cards. In more modern uses, purchases are typically made with cash; important documents are faxed rather than emailed; and nearly everyone uses hanko, a personalized stamp used in lieu of a signature.”

Stats

No new homes in November 2021 were under $200,000

37% of the world’s population have never used the Internet

Holiday spending in the U.S in 2021 increased by 8.5% compared to the same period last year. eCommerce retail spending rose by 11%

“54% of adults in the United States have prose literacy below the 6th-grade level“. Prose literacy level refers to the ability to read and comprehend materials such as news stories or manuals.

Walmart drew one in four dollars spent on click and collect — with room to grow in 2022

Business

Companies on Apple’s App Tracking Transparency

by MQDuong1 Comment on Companies on Apple’s App Tracking Transparency

Apple introduced App Tracking Transparency (ATT) in iOS14.6 several months ago. The idea is that any app that wants to track users even after users stop using the app has to ask for permission. If permission isn’t granted, the app or developers can’t follow users around off premise. Such a lack of signal could result in weakened…tracking, targeting, measure and of course, advertisers’ income. Since the introduction of ATT, some advertisers and developers have voiced fierce criticisms towards Apple for abusing its power. The criticisms grew harsher after Apple debuted its own advertising network. Even though Apple doesn’t rely on 3rd party data for tracking, the move and the awkward timing make it look like Apple doesn’t do it for user privacy, but merely for its own pocket. Privacy proponents, on the other hand, praise this move by Apple as it gives the end users a choice to allow tracking or not. Both sides have strong opinions. But what do the stakeholders have to say? How have companies been affected by the change from Apple?

In this post, I’ll cite as many opinions from relevant parties in this debate as I can, so readers can form their own opinion. I’ll add my own thoughts on this debate in the end

Again, look, I think from our perspective, we haven’t really seen a negative impact of the Apple changes. As we said before, it’s beginning to become a more complex world from a data and privacy perspective.I think that makes the advice to give our clients more important. It will have an impact on individual media owners, depending on their business model. And I think those that have been impacted have been those companies that tend to have sort of a big app download business, which is linked very carefully to the ability to track what’s happening. That’s not part of the business in which we really operate, so I think accounts for the — perhaps the surprises that you saw there.

WPP CEO Mark Read – Q3 Earnings Call

Yes. So for us, it didn’t really have much of an impact. We did — like a lot of people, we’re very aware of it. We have a very big brand business which wasn’t significantly impacted at all. And the fact that we are — have a ton of first-party data with all of our users being logged into the service really helped us grow. So we didn’t really see much of an impact at all. We don’t see much going forward, although we’ll continue to monitor it. And Q4, for us, the biggest impact on Q4 will just be continued growth in podcast and in inventory. We know the demand is there. We know the advertisers are there.So for us, it’s just continuing to expand the inventory available for advertisers.

Spotify CFO Paul Vogel – Q3 2021 Earnings Call

Let me also spend a moment on ATT. We continue to see opportunities around personalization on Twitter as we better leverage our unique signal to improve people’s experience and show their more effective ads across both brand and direct response. The revenue impact we experienced from ATT in Q3 increased on a sequential basis but remains modest. The impact of ATT is likely to vary across ad platforms given the unique mix of ad formats, signal and remediations on each as well as other factors, the mitigations we put in place and the speed with which we’ve adopted new standards like the SKAdNetwork and resulting changes across our technical stack have contributed to minimizing the impact to us.

Since the launch of ATT in April, we’ve invested in supporting SKAdNetwork, opening up 30%-plus more inventory and scale on iOS and launch support for view-through attribution and SK Campaign ID management features in the Twitter ads manager. It’s still too early for Twitter to assess the long-term impact of Apple’s privacy-related IOS changes, but the Q3 revenue impact was lower than expected, and we’ve incorporated an ongoing modest impact into our Q4 guidance. We’ve seen our revenue product development, both related to and distinct from ATT, improved the performance of our products, and we expect that to continue.

Twitter CFO Ned Segal – Q3 2021 Earnings Call

In terms of the iOS 14 changes specifically, they had a modest impact on YouTube revenues. That was primarily in direct response. I think as you all know well, focusing on privacy has been core to what we’ve been doing consistently

Alphabet/Google CEO Ruth Porat – Q3 2021 Earnings Call

Rich, thanks so much for the question and share your disappointment. This has definitely been a frustrating setback for us. But I think over the long term, these privacy changes and protecting privacy for users of iOS and, of course, the Snapchat community is really important to the long-term health of the ecosystem and something that we fully support.

I think when we saw these changes coming, our primary focus was the performance of our advertising platform in the face of this signal loss. So could we still really drive advertising performance, optimize campaigns, make sure our ads were in front of the right people. And we spent the vast majority of our engineering time and effort and energy making sure our ads were still really effective. And we did all sorts of revenue back testing to make sure that we could be revenue neutral. And we were really confident in our ability to drive results with our advertising platform despite the signal loss.

But what I think we really underestimated were the tooling changes. And so what I mean by that specifically is that advertisers have essentially for a long time now, used a set of really sophisticated tools to measure and optimize their campaigns. So that allows them to test out a bunch of different creative and see what’s performing more effectively and so on and so forth. And the big change there was that with these new Apple changes, those tools were essentially rendered blind. And in their place, Apple released a new product called SKAdNetwork that allows advertisers to measure across different advertising platforms but without a lot of the flexibility that they’re used to. So for example, you can only really measure your advertising results using the success parameters that Apple is already defined. The reporting is delayed for a significant period of time and often unavailable, if you don’t hit a certain threshold of conversion. It’s very hard to see performance on a creative level.

Snapchat CEO Evan Spiegel – Q3 2021 Earnings Call

A dozen e-commerce companies interviewed by The Wall Street Journal said they now have to spend a lot more money on these ads to get the same number of sales from them that they could expect before the new feature was rolled out. They also can’t get enough data to know how effective these ads are at driving purchases. Many have reduced their ad spending on targeted-ad platforms. In a July poll of 118 e-commerce store owners by eCommerceFuel, 62% said they had decreased their Facebook ad spending since the iOS upgrade.

Source: WSJ

We’ve been open about the fact that there were headwinds coming, and we’ve experienced that in Q3. The biggest is the impact of Apple iOS 14 changes, which has created headwinds for others in the industry as well, major challenges for small businesses and advantaged Apple’s own advertising business. We started to see that impact in Q2, but adoption on the consumer side ramped up by late June, so it hit critical mass in Q3.

Overall, if it wasn’t for Apple’s iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth. And while we and our advertisers will continue to feel the effect of these changes in future quarters, we will continue working hard to mitigate them.

On targeting, we focused on improving campaign performance even with the increased limitations facing our industry. We’re building commerce tools to help businesses reach more new customers and get more incremental sales. And over the longer term, we’re developing privacy-enhancing technologies in collaboration with others across the industry to help minimize the amount of personal information we process while still allowing us to show relevant ads. Progress in these areas will take time and will be a focus for us throughout 2022 and beyond.On measurement, as we wrote in a recent blog post, we believe we are underreporting iOS web conversions. This means real-world conversions like sales and app installs are higher than what’s being reported from many advertisers, especially small advertisers. We’re making good progress fixing this. We think we’ll be able to address more than half of the underreporting by the end of this year, and we’ll continue to work on this into 2022.

Facebook COO Shreyl Sandberg – Q3 2021 Earnings Call

Kathy Huberty: And Tim, as a follow-up. We recently surveyed 4,000 consumers in the U.S. and China, and the feedback is most of them don’t want to pay for apps or services direct with the developer. They value the security, privacy, ease of transactions with the App Store. So how do you think about balancing the regulators push for more choice with a customer base that’s happy with the existing experience?

Tim Cook: The main thing that we’re focused on, on the App Store is to keep our focus on privacy and security. And so these are the 2 major tenets that have produced over the years a very trusted environment where consumers and developers come together and consumers can trust the developers on the developers and the apps or what they say they are and the developers get a huge audience to sell their software to. And so that’s sort of #1 on our list. Everything else is a distant second.

Apple Q4 2021 Earnings Call

My take

This issue features different stakeholders with varied interests. Even from the advertiser side, companies receive the change from Apple in various ways, depending on whether they are affected by it more or less than their rivals. Hence, when it comes to the question of whether ATT is a net benefit change, then we have to ask: for whom? For consumers, I do think it’s a great development. The surveillance tracking has been the standard practice in digital advertising for years. However, it doesn’t have to continue this way in the future. Consumers used to not have a say in the matter. Now they do. The choice is totally up to them and I think it’s great.

For businesses that rely on digital marketing, it’s undeniable that there is a short-term pain. As you can see above, some have to invest more money in digital ads for the same result. While I feel for them, the fact and the matter is that changes in external environments are part of doing business. Something that business owners have to encounter and overcome.

Regarding advertisers, I’ll say the same thing. The big change has finally arrived. Advertisers can either adapt to a society that is more conscious of privacy or keep complaining. Based on the commentary above, some advertisers have had little adverse impact so far from ATT. They invested in new tools, first-party data, distribution and products to overcome the obstacle. Even Facebook, the biggest whiner, also talked about how they tried to minimize the impact on their business. I don’t blame Facebook or any advertiser for vocal opposition. They do what they have to for their interest. But if millions of dollars is created in spite of violation of consumer privacy, then perhaps it’s time to change.

For Apple, even though apps and developers are important stakeholders in their ecosystems, the number one priority is still consumers. Whether you like Apple or not, the company is trusted by consumers, especially on the privacy front. For years, they have implemented services, software and hardware features that promote privacy. Because of this track record, for the time being, I believe in Apple. Of course, the company also wants to grow their highly profitable advertising network. Where Apple earns credit is that they manage to find a sweet spot that overlaps the two interests. With that being said, the introduction of Apple Search Ads after ATT plants the seed of doubt over their motive. Does it mean that what Apple did is inherently wrong? Not really. Companies exist to make money and look out for their and their shareholders’ interest. Apple is doing what it believes to be the best for their business. Is Apple a bit too much when it speaks from an ivory tower while launching its own ads network? Yeah, but that’s what every corporate Marketing department does.

Based on what I have seen so far, and I will continue to follow this issue, the advent of ATT is a significant change with big consequences in eCommerce, mobile ads and digital ads. I think a year from now, we will not decry ATT as something that wrecks peoples’ livelihood. Instead, it will bring about positive changes and innovation. Perhaps a similar move from Android within the next 2,3 quarters?

Disclaimer: I have a position on Apple, Facebook, Snapchat, Spotify

Weekly readings

Weekly reading – 7th August 2021

by MQDuongLeave a Comment on Weekly reading – 7th August 2021

What I wrote last week

I wrote about why credit card issuers should try to get into consumer digital wallets

Business

Pearson bets on direct-to-student subscription shift. I am never a fan of publishers like Pearson for a simple reason: books are murderously expensive in the U.S. In addition to the sky-high tuition fees, students have to pay easily a few hundred dollars or a thousand dollars a semester for books alone. There are ways to go around that challenge, but sometimes these guys work with professors and students are left with no choice, but to make a big splash on books. Pearson seems to be aware of the unsustainability of their current model. By going straight to students, they can establish a direct relationship and avoid relying too much on educational institutions. $15/month means students can pay $75/semester for access to all the books required. However, there are other publishers on the market. If students must get books from multiple sources, it can dilute the appeal of this new service from Pearson. I really look forward to seeing how this strategic move will pan out in the future.

Apple Is Now an Antifragile Company. A nice article on how shrewd Apple is when it comes to securing its chip supply while other struggle. I feel that not enough has been said about what a great job Apple’s management team has been doing. It takes a great deal of discipline to use billions of cash wisely quarter after quarter. The executives also have the foresight to develop their own chip M1 to keep more control of their fate and avoid being in the mercy of Intel. Additionally, the decision to make forward orders in bulk in advance has proven to superior. While others cite the struggle with chip supply as the reason for their relative subdued performance, Apple still posted strong results.

Music labels split over Spotify’s push to promote songs for lower royalties. I haven’t used the Discovery Mode yet, so I don’t know what it is like. I did have a less than stellar experience with the Spotify app; which I haven’t used for a long time. It’s not user-friendly at all. And if what is reported in the article is true, as a shareholder, I’ll be very disappointed. Sacrificing the user experience and the integrity of an algorithm like that over lower royalties and higher margin isn’t in the long-term best interest for the company, in my view.

Disney, WarnerMedia and NBCUniversal wrestle with balancing the value of cable networks and streaming services. I don’t think streaming is the best place for a newcomer with one cash cow to enter. The likes of Apple can arrive late at the part and compete because they have enormous resources and streaming isn’t their top 5 or 7 revenue stream.

The Verge interview with YouTube Chief Product Officer.

5 charts show Amazon’s growing logistics network as it puts inventory closer to consumers. Some great data and information, but I don’t think Amazon is playing the same game as Walmart. Operating huge stores with a lot of SKUs is not Amazon’s strength, at least compared to Walmart, for now. I don’t think it’s wise for Amazon to get into that arena. What I think Amazon is plowing money into is the last mile delivery. If groceries are what needs delivering, they are building out Amazon Go shops and can leverage Whole Foods footprint. However, if we are talking about non-grocery items, then Amazon is taking a very different approach to Walmart and staying at what Amazon has been great at: an online store with great customer services and unrivaled last-mile delivery network

What I found interesting

U.S. generates more plastic trash than any other nation. The amount of plastic bags in supermarkets in the U.S such as Target or Walmart staggered me. I don’t understand why they don’t implement policies that encourage shoppers to bring their own bags or boxes like Aldi does. At Aldi, you have to bring your own bag unless you are willing to pay for one every single time. I don’t think shoppers are bothered by that. If the likes of Target and Walmart can join the fight against unnecessary use of plastic, it’ll be a huge step forward given the reach and size of these retailers.

London’s Crossrail Is a $21 Billion Test of Virtual Modeling. Technology is mind-blowing. So is human imagination

Stats that may interest you

Luggage sales are up more than 460% year over year (Q1 2021)  on Amazon while swimwear sales have more than doubled year over year as of March and April 2021

From 2006 to 2021 per-capita volume consumption of juice and nectars in the U.S. declined 36%

Weekly readings

Weekly reading – 27th February 2021

by MQDuongLeave a Comment on Weekly reading – 27th February 2021

What I wrote last week

I reviewed The Spotify Play

Business

Profile of Bumble CEO

Interview with Spotify CEO, Daniel Elk

Frozen food sales have been boosted by Covid-19

When Did Generic Grocery Brands Get So Good Looking?

CBS and Showtime have a combined 30 million subscribers. Paramount+ with ads will go live with ads at $5/month in March and $10/month without ads in June

AT&T and TPG: There is No Why

What I found interesting

A COVID-19 vaccine life cycle: from DNA to doses

A look into Zuck and Kaplan’s influence on content moderation policies

Massive experiment shows why ticket sellers hit you with last-second fees

Sheryl Sandberg and Top Facebook Execs Silenced an Enemy of Turkey to Prevent a Hit to the Company’s Business

Abandoned houses in Japan can be bought for cheap as a get-away destination, but upgrading them can be very expensive

How Uber Deals with Large iOS App Size

Stats you may find interesting

Electric vehicles in the US reached 1.8% market share in 2020

This one stat is more horrifying than interesting. US exceeded 500,000 lives lost due to Covid-19

40% of Disney+ subscriber base are in the US. Because India is responsible for another 30% of the streamer’s subscriber count, the other markets such as Latin America and Europe combined make up 30% of its subscribers

86% of iPhones introduced in the last 4 years are on iOS14

Book

Book review: The Spotify Play: How Daniel Elk Beat Apple, Google & Amazon In The Race For Audio Dominance

by MQDuong2 Comments on Book review: The Spotify Play: How Daniel Elk Beat Apple, Google & Amazon In The Race For Audio Dominance

As Spotify is one of the stocks in my portfolio, I have extra motivation to read this book. To get to know more about this company that is largely shrouded by secrecy. The book was written by a couple of Swedish interviews through many interviews and investigation of filings. It’s normal to read this kind of unofficial account of a company with a grain of salt or some skepticism, but it’s far from easy to write about a company when current or former employees are shackled by NDAs and when the founders or executives refuse to cooperate.

The book covered Spotify’s history from the very beginning to when it started to increase investments in podcasts. It started with Spotify’s founders, Daniel Elk and Martin Lorentzon, who each sold a startup and became a couple of millionaires, before they even worked together on a secret idea that would later become Spotify. Back when it just got off the ground, there was no playbook for a music streaming service like Spotify, well not legally. Hence, the young startup had to engineer both an app that was user-friendly and a business model that could yield profitability and work well with music labels. As Daniel Elk insisted on, for the right reason, having a free version of Spotify, which let users stream music for free, music labels in the beginning were highly skeptical and reluctant to cooperate. The prospect of Spotify generating enough ads money on the other side of the business to pay loyalties wasn’t appealing at best or practical at least. Through negotiations with the powerful music labels, Spotify came up with their Freemium model that still exists to this day.

“Eventually, Daniel had to compromise by adding a paid service. Three people at Spotify drove him to that shift in strategy: Spotify’s “dynamic duo”—Niklas Ivarsson and Petra Hansson—and the New York-based advisor Ken Parks. After scores of meetings with labels and legal consultants, they are said to have convinced Daniel that a paid version was the only way forward. The alternative would simply cost too much, in both cash and company shares, and never lead to a sustainable business. The freemium model that would define Spotify was thus born out of a tit-for-tat dialogue with the labels, with Niklas and Petra painstakingly hammering out the details of a new template. The industry hated the free service, but was prepared to put up with it as a means to an end, with Spotify vowing to convert free users to an ad-free, premium version.”

Excerpt From: Sven Carlsson. “The Spotify Play.”

In the first few years of its existence, Spotify came close to being belly up financially a couple of times. Back in the latter half of the 2000s, Spotify’s model was a new concept to investors. An investment in Spotify without an agreement with major music labels presented a significant risk. If Spotify had operated without official licenses, it would have embroiled itself and investors’ money in a mountain of legal trouble. Yet, just before the 2008 financial crisis hit, the company labored to put together a funding deal to keep the lights on.

At the Spotify office, around forty employees toasted to the news with glasses of sparkling wine. Daniel was visibly relieved, according to one account.

“That was lucky. If we hadn’t gotten funded, you guys wouldn’t have received your salaries,” he reportedly told his colleagues afterward.

In fact, the timing was immaculate. A few months later, the investment bank Lehman Brothers filed for bankruptcy, setting off the worst financial crisis in more than seventy years.

Excerpt From: Sven Carlsson. “The Spotify Play.”

A few years later, death came close again. This time, it was the ability to see shift in consumer behavior and to react fast that saved Spotify. After the iPhone was invented in 2007, a few years later, consumers started to consume music more on their little computers that could sit comfortable in their hands or pockets. Spotify at the time only had a desktop version. The company’s analytics team found out that their customers didn’t spend enough time on the desktop version on their mobile to be converted into paid users. If they hadn’t reacted and desktop use had kept plummeted, their revenue would have dropped. Without an expansion in paid users, Spotify would have had a hard time convincing potential investors for more cash. The trouble became compounded because having a mobile version required additional licenses from music labels. Somehow, the company pulled through what Daniel Elk called “switching out the engines mid-flight”

“At Jarla House in Stockholm, the analytics team had set up a wide range of dashboards visualizing the music service’s performance in real time. Starting in early 2012, Henrik and his team watched as the inflow of new users switched from desktop—where they could listen for free—to mobile, where Spotify only offered a free trial for forty-eight hours. That clearly wasn’t enough time to convert them into subscribers. Of the new users who tried Spotify on a smartphone, only a small percent would stay on and pay for the service. The conversion rate on desktop—the backbone of Spotify’s business—was much higher. But that was of little comfort if desktop use would keep dropping dramatically.”

“During the summer of 2012, music listening on Spotify plateaued as it usually did during the season. But when fall began, a growing number of users did not return. The analytics team suspected that a large number of them were now using their computers less often, opting for their phones instead. It was an early indication that the massive shift to mobile computing was beginning to pick up speed.”

“At this point, Spotify’s licensing team had spent more than six months negotiating deals for what they called a “mobile free tier.” It was not an easy task. While the record labels were making hundreds of millions of dollars every year in payouts from Spotify, they still disliked the idea of millions of people listening to music without ever being forced to pay. Now, Spotify wanted to expand their free service to include all smartphones, not just the ones belonging to paying subscribers.”

“The data became more and more distressing for Spotify. In the late summer of 2013, more listeners went “mobile only,” by now a common term. Smartphones now appeared to have become a real alternative to computers. Gustav Söderström would later describe this period as “the summer when Europe went mobile. Spotify’s number of active users—the lifeline that kept investors funding the company—was now shrinking. Internal estimates showed that Spotify’s user growth nearly halted between the second and third quarters of 2013.”

“A few years later, Daniel would admit that Spotify would have gone bust within six months if things hadn’t changed. To him, this was one of Spotify’s crowning achievements. Originally conceived as a desktop product, the company managed to adapt to the mobile era—and they did it “mid-flight,” under constant pressure from competitors and from the music industry, which at this time still swallowed around 80 percent of all of Spotify’s revenues.”

Excerpt From: Sven Carlsson. “The Spotify Play.”

The book also touched upon various topics such as challenging negotiations with the music labels, struggle to convince artists that Spotify’s interest was aligned with them, the fight against Apple, the effort to overcome operational chaos before IPO and the negotiations to acquire Soundcloud & Tidal that didn’t come through. Personally, I was interested in the book because I liked to study businesses and as mentioned, because I own Spotify stock. This isn’t an official account approved by the company. Consequently, I am not very sure how much of what was written is true. I don’t believe the authors were out to spread rumors, but on the other hand, I cannot have 100% confidence either. The writing is nothing spectacular. The beginning of Spotify was covered at length, but its more recent history didn’t receive as much attention. Furthermore, I don’t really think the title is correct. Yes, Spotify is a known brand, especially with young audience nowadays, but it’s a long way from being the dominant force in audio. Whoever will emerge victorious in the audio streaming war still remains to be seen. Hence, I would give it a 3/5, but would not put it under the “I highly recommend” category.

“The many problems varied. Spotify had grown quickly, and its organizational structure was, in places, haphazard. Its internal accounting system would have fit a medium-sized business operating in a handful of countries, but not a global market leader with business in nearly sixty countries. If a staffer in the finance department wanted to break down marketing costs for a single country for the year 2014, there would be no way of doing it.

Moreover, it was difficult for Spotify to accurately estimate its own costs. Over the coming years, the company would retroactively write up their royalty payments by more than $60 million due to accounting errors. Spotify had a hard time forecasting how the business would perform. During some quarters, subscriber growth came in well below its own estimates; during others, the number of subscribers surged past the growth team’s targets.”

“A number of sources interviewed for this book would describe how Daniel had a hard time knowing how to handle dustups among his lieutenants. Nearly a decade after Spotify started making big-name hires, many continued to recount how Daniel would let conflicts fester until the warring parties found their own solution. It was, still, a kind of natural selection in a corporate setting. The atmosphere is toxic at times. Daniel tends to give people overlapping responsibilities, then he lets them fight over who gets to do the work,” as one person would recall.

”No one is actually accountable for anything because virtually all decisions must take place though a bewildering process of group consensus, where people who are ignorant of the topic at hand somehow have just as much of a say as the experts,” one former employee at the New York office would post in November of 2019.”

Excerpt From: Sven Carlsson. “The Spotify Play.”

Deal with Sony

“Secret internal documents, which would not emerge until the publication of the Swedish edition of this book, reveal that Sony had negotiated an option—triggered four years down the line—to purchase what would amount to 2.5 percent of Spotify at a heavy discount. The label’s payoff came in the spring of 2015, when Sony paid just under $8 million for shares that, a few months later, would become worth twenty-five times more. Largely as a result of this deal, Sony would become the label with the largest Spotify holdings by the time the company went public in 2018.”

“For the right to stream Sony’s music catalogue in the US, Spotify agrees to pay a $25 million advance for the two-year duration of the contract: $9 million the first year, and $16 million the second. The advance is to be paid in installments every three months, and Spotify can only recoup this money if it meets or beats its revenue targets. The contract, however, does not stipulate how Sony Music can use the advance money. Some industry insiders claim that advance money is generally spent on things other than payouts to artists. Others wonder what happens to the “breakage,” or the part of the advance that is left with the label, when Spotify fails to reach its revenue goals. Is it attributed to streams and distributed to artists, or kept entirely by the label?”

“The contract also stipulates that Spotify give Sony free ad space worth $9 million over three years. Sony can use that space to promote its own artists or resell it at any price they want. Spotify also promises to make a further $15 million of ads available for purchase by Sony at a discounted rate. On top of this, Spotify must also offer Sony a portion of its unsold ad inventory for free, to allow the label to promote its artists.”

“The contract also states that Spotify’s smallest payout per stream will be 0.2 cents. But this measure can’t be used to calculate how much Spotify pays for the artists’ streams. It’s only used when it results in a larger payout than the label’s regular cut of Spotify’s total revenue. In essence, it’s a type of minimum guarantee. If too many users get stuck in the free tier, and Spotify’s average revenue per user falls below a certain level, Sony Music can ask to be paid per stream instead.”

Excerpt From: Sven Carlsson. “The Spotify Play.”

Weekly readings

Weekly reading – 5th December 2020

by MQDuongLeave a Comment on Weekly reading – 5th December 2020

What I wrote last week

The three changes I made to my lifestyle during Covid

Business

Shopify’s Black Friday sales in 2020 exceeded $2.4 billion, a 75% growth year over year

Reddit now has 52 million daily active users, up by 44% YoY

An excellent piece on the longevity of some amazing small businesses in Japan. A mochi shop that has been around for more than 1,000 years? You read that right. 1,000 years, not 10, not 100, not 500. 1000! And many of them maintain enough in reserve to continue operations for 2 years in case there is an economic downturn.

Some great statistics on Spotify’s podcast ecosystem

Apple officially launched their new App Store Small Business Program. An important detail to note is that the $1million threshold is after Apple takes its cut, not before. Hence, it will give many developers more breathing room.

How Apple approached its retail stores during Covid

Technology

A deep dive into why M1 is so fast

What I found interesting

A Russian female chess player beat known male players in the 1920s and 1930s, apparently the inspiration for the series “The Queen’s Gambit” on Netflix

A horrifying account of how hospitals are struggling to keep up with the rising number of Covid-19 patients. It’s unfathomably insane to read, like a fictional story, not what actually is transpiring.

100 powerful pictures of 2020 by Reuters

The Sistine Chapel of South America. It looks utterly amazing

Derek Thomson of the Atlantic wrote about Democrats’ problems and what is wrong with the Electoral College. Read the excerpt below. If you support the GOP, then it’s good news. But if the shoe is on the other foot, as in the case for Democratic voters, saying that it is unfair is a massive understatement

The GOP currently holds both Senate seats in Alaska, Arkansas, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, South Dakota, and Wyoming. Those 11 states have 22 senators who collectively represent fewer people than the population of California, which has two Senate seats.

In the 2018 midterms, Democratic Senate candidates won 18 million more votes than Republicans nationwide, and the party still lost two net Senate seats.

One analysis of Census Bureau data projected that by 2040, roughly half of the population will be represented by 16 senators; the other, more rural half will have 84 senators at their disposal.

Source: The Atlantic