Wednesday 29/03/23

1. In MEDIA & LEISURE NEWS, UK broadcasting rules get a massive overhaul, Disney ditches the metaverse and William Hill gets a big fine
2. In TECH NEWS, Apple launches BNPL in the US, Twitter changes the rules, chipmakers face a dilemma and we look at which jobs are most exposed to AI
3. In RETAIL NEWS, Alibaba is to split into six, Ocado surprises on the upside, UK supermarkets face squeezed margins and Next buys Cath Kidston
4. In MISCELLANEOUS NEWS, French banks get raided, the BoE talks about banks holding more cash, FTX’s SBF is charge with bribery, Brussels’ dithering puts UK’s 2030 deadline in doubt, EV start-up Lucid cuts 18% of the workforce and Lyft judders
5. AND FINALLY, I bring you an official list of the best pizza toppings…

So UK broadcasting is to get a bit overhaul, Disney ditches the metaverse and William Hill has to pay out…

Did you know that there is a podcast to go with Watson’s Daily? In this podcast, I discuss two stories from the day’s edition in a bit more depth with a Watson’s Daily Ambassador, my mate Ralph (on the Weekly podcast) or a special guest. The idea of this is to help to give you more of an idea of what talking about this stuff could sound like 👍 You can find the podcasts on the buttons below:

In Amazon and Google told to let UK radio stations stream on smart speakers (Financial Times, Arjun Neil Alim) we see that a new media bill will be introduced in Parliament today that will encompass online streaming platforms for the first time, levelling the playing field with traditional broadcasters. It means that Ofcom will regulate streamers as well and part of the new bill will make smart speakers, including Amazon and Google, offer all licenced UK radio stations on their respective services. It will also allow state-owned Channel 4 the right to make some of its own content rather than having to licence it from other studios. * SO WHAT? * This has been a LOOOOONG time in coming, but at least this is now moving forward. Ultimately, I don’t think this is necessarily going to move the needle for that many companies in the short-to-medium term but maybe it will give Channel 4 a new impetus that may, in years to come, give it a business that it could spin-off.

Disney Eliminates Its Metaverse Division as Part of Company’s Layoffs Plan (Wall Street Journal, Robbie Whelan and Joe Flint) is a really interesting article which shows that returning CEO Bob Iger has decided to shut down a small division of the company that had

📢 JUST A REMINDER FOR YOU! I will be reviewing the business and financial markets news of March with Jake Schogger of the Commercial Law Academy TODAY, so if you want to watch/listen in, you need to register HERE. Hopefully see you there!

been tasked with developing metaverse strategies by previous CEO Bob Chapek, who believed that the metaverse was “the next great storytelling frontier”. * SO WHAT? * OK so “only” 50 jobs were eliminated (let’s face it, that’s a drop in the ocean of the company’s plans to cut headcount by 7,000) but I think it’s quite symbolic given that many companies believe that the metaverse will be the future. It seems that Iger isn’t a “meta-critic” (in fact, he invested in and joined the board of Genies Inc, a start-up company that makes tools to create avatars for the metaverse only last year) – he’s just in a phase where the company is ditching non-essential businesses. Talking about ditching things, another Chapek-directed initiative to have some kind of Disney version of Amazon Prime that brings all of Disney’s products under one subscription has been abandoned. I have to say that I think that both of these Chapel-led initiatives are not bad in themselves. Maybe Iger will revisit them in the future with some adjustments so he can take the credit.

William Hill to pay record £19.2m for ‘widespread and alarming’ failures (The Guardian, Rob Davies and Julia Kollewe) heralds a record fine for the bookie as it was hit by a fine from the Gambling Commission which accused it of “widespread and alarming” failures in social responsibility and anti-money laundering. Things got particularly bad under lockdown as bookies made a ton of money from vulnerable people and the behaviour of gambling companies is going to come under scrutiny in a government white paper due out next month. William Hill almost lost its gambling licence, but managed to hang on because it made some swift actions to address concerns.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

Apple launches BNPL, Twitter pivots, chipmakers face a dilemma and we look at whose jobs ChatGPT could take…

In Apple launches ‘buy now, pay later’ service in the US (Financial Times, Patrick McGee) we see that Apple launched its much-anticipated BNPL service in the US as it expands into the world of finance (right in the middle of a financial crisis!), pitting it against established players such as Klarna and Affirm. It is built into the Wallet function and enables users pay for goods online and in-app services in four payments over six months. The loans of between $50 and $1,000 will be made through wholly-owned subsidiary Apple Financing. * SO WHAT? * This is a major move. Klarna and Affirm seem to have “publicly” welcome the new entrant but let’s be honest – they are probably 💩ing themselves. Funnily enough, although the timing of this move may seem a bit weird given the banking crisis, it actually may turn out to be the PERFECT timing given how trusted Apple’s brand is. It may even mean that more people use its services despite the incumbents being better known in this space as consumer confidence in all things finance will have been rattled by recent events. This is also a big day from a broader perspective as it could also signal Apple moving towards becoming a bank…

Then in Twitter to promote only paying users’ tweets, Elon Musk announces (The Guardian, Alex Hern) we see that Elon Musk has now decreed that Twitter’s “for you” feed will only promote paying user content from April 15th. He says it’s to stop “advanced AI bot swarms taking over” but obviously this is part of trying to make Twitter profitable. In another canny move, he said that from April 1st, existing blue-tick users (currently known as “legacy verified”) will lose their badge unless they pay the monthly £8 fee. Time will tell whether this works – or whether users just move onto something else and Musk ends up having paid $44bn for nothing…

For Chip Makers, a Choice Between the U.S. and China Looms (Wall Street Journal, Yuka Hayashi and Jiyoung Sohn) highlights the dilemma that many chipmakers are going to have about future manufacturing in China or the US. The Biden administration proposed new rules last week (aka “China guardrails”) on the restrictions that manufacturers would face if they wanted to get a slice of the massive pile of taxpayers’ funds on offer to invest in production stateside. The restrictions would be particularly tricky for companies like Samsung, SK Hynix and TSMC that already have major operations in China. China has been open in its intentions to get access to the best chips to enhance its military capability and the US clearly wants to neutralise this. * SO WHAT? * Although the US is publicly saying that it has no problem with companies doing business with China, this latest move to impose conditions on the access to American taxpayers’ money reflects the US’s intention to steer supply chains away from China. It’ll be interesting to see who takes the Chips Act cash!

The Jobs Most Exposed to ChatGPT (Wall Street Journal, Lauren Weber and Lindsay Ellis) looks at what everyone has been talking about since ChatGPT burst into the public consciousness – who’s most vulnerable to the inevitable march of AI? A new study by researchers at the University of Pennsylvania and OpenAI shows that at least half the tasks carried out by accountants, mathematicians and writers and almost 20% of tasks of the rest of the US workforce can be completed much faster using AI. As things stand currently, cutting-edge GPTs are particularly good at translation, classification, creative writing and coding. The report did not predict potential job loss numbers but companies, schools and lawmakers are going to have to make some very big changes to adapt to the new technologies.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

Alibaba is to split into bitesize chunks, Ocado surprises on the upside, UK supermarkets face a margin squeeze and Next buys Cath Kidston…

Alibaba to Split Into Six Groups and Explore IPOs in a Departure From Jack Ma Era (Wall Street Journal, Raffaele Huang and Clarence Leong) highlights a historic moment for Alibaba as it announced intentions yesterday to split itself into six independent companies that could all have separate IPOs further down the line. The individual areas are cloud computing, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics and media and entertainment. * SO WHAT? * It sounds like we are in the final stages of the Chinese government’s tech clampdown as it takes its foot off Alibaba’s throat – something that is perhaps also reflected by former tech bad-boy and Alibaba founder Jack Ma being seen in China once more. The official reason given for this split is to improve its organisational efficiency and, given its recent anaemic performance, perhaps it needs to concentrate on its individual parts to boost performance. Historic times!

Ocado sparkles with Marks after sales surprise the City (The Times, Dominic Walsh) shows that the retail 50/50 JV that Ocado has with M&S (called Ocado Retail) has managed to buck the generally gloomy trend to deliver sales that came in above expectations. It also stuck with full-year guidance for revenues and earnings and said that it expected improving momentum in the second half. Interestingly, Ocado’s “ex”, Waitrose, also posted its best performance since 2021 over the latest quarter.

UK supermarkets: bargain-hunting will put pressure on margins (Financial Times, Lex) cites the latest research from Kantar which said that higher food prices are coming at a time when consumers are trading down and buying less, which is putting a squeeze on supermarket margins. Aldi and Lidl continued to do brisk business and take market share from the incumbent supermarkets while consumers also continue to favour own brands to save money – which is bad news for the likes of Unilever and Nestlé.

Next buys Cath Kidston brand for £8.5m with remaining UK stores to close (The Guardian, Sarah Butler) highlights Next’s latest opportunistic acquisition as it has bought the Cath Kidston brand name but ditched the four remaining stores in the latest development in Cath Kidston’s tale of woe. Next has, over the last year or so, bought the distribution rights for Gap and Victoria’s Secret in the UK along with Joules and online furnishings specialist Made.com. * SO WHAT? * Next has been pretty busy buying up well-known names for fire-sale prices – but I think it needs to harness their former glories and make a statement with either a new (and possibly separate) format that will bring them all together. TBH, I think there’s quite a lot of joined-up thinking going on here – but it all needs to be expressed and promoted in a brighter and more engaging way IMO to make the most of it all.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

French banks get raided, banks might have to hold more cash, SBF is accused of bribery, Brussels puts the UK 2030 deadline in doubt, Lucid cuts 18% of its headcount and Lyft is in a pickle…

In a quick scoot around some of today’s other interesting stories, French banks raided over tax fraud allegations (Daily Telegraph, Chris Price, Hannah Boland and Adam Mawardi) shows that France’s financial prosecutor has raided Societe Generale, BNP Paribas, HSBC, Natixis and Exane as part of an investigation into tax fraud and money laundering via dividend payments. Nothing’s come out of it so far, but it’s worth following! Banking these days is anything but boring!

Regulators could make banks hold more cash (The Times, Patrick Hosking) just reflects a knee-jerk reaction from the BoE to the recent collapse of Silicon Valley Bank. Basically, it sounds like it will be telling banks in future to hold more cash to make sure deposits could be taken out of accounts quickly – if called up to do so – and without any drama. However, there is a delicate balance to be had here because the more you hold back in deposits, the less you are able to lend out – and lending generally tends to lead to economic growth. Although governor Bailey was confident about the strength of British banks, he said that the Bank was remaining vigilant…

FTX founder Sam Bankman-Fried charged with paying $40m bribe to Chinese officials (Daily Telegraph, Matthew Field) highlights more dodgy dealings for the former poster-boy of crypto as Sam Bankman-Fried is now being accused of paying a $40m bribe to Chinese officials in order to release around $1bn in digital coins that had been frozen by Beijing in 2021. It’s just not going well in crypto and yet it is still climbing!

Net zero ban on petrol cars in chaos after Brussels climbdown (Daily Telegraph, Daniel Martin, Howard Mustoe and Oliver Gill) highlights the new vulnerability of the British deadline on the sale of new petrol and diesel cars – currently set at 2030 – as Brussels acceded to Germany’s wishes to allow combustion-engined cars to be sold beyond 2025 if they can use e-fuels. * SO WHAT? * This is the death of the 2030 deadline IMO. If everyone else around us is heading for 2035 – and a soft deadline at that given e-fuels, then there is no point in us breaking our necks to hit 2030. I think this is particularly bad news for Chinese EV manufacturers who were probably hoping that they’d be able to make relatively quick inroads into the European market. Will Jaguar now come out and delay its 2025 self-imposed EV deadline?

EV Startup Lucid Cuts 18% of Workforce, Including Some Executives (Wall Street Journal, Sean McLain) shows that the EV start-up is facing up to harsh reality as it attempts to cut operating expenses and burn cash at a slower rate ahead of the release of a second model – an electric SUV next year. * SO WHAT? * Tough times – but then again everyone else is at it as well. Rivian, Ford and GM have all announced headcount reductions recently. Buyer reservations for Lucid cars are also on the decline – which won’t have helped things either.

Lyft: Risher cannot reverse ride hailer out of market dead end (Financial Times, Lex) says that the new CEO of Lyft, David Risher, has got a real job on his hands as the two co-founders John Zimmer and Logan Green step down at a tricky time in the ride-hailer’s history. Lyft’s shares are currently a whopping 87% below their 2019 listing price. Unlike its main rival Uber, which has diversified geographically and into food delivery, it is purely dependent on its domestic market where customers are notoriously flaky in terms of loyalty. It needs new ideas – fast.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

…in other news…

What’s your fave pizza topping? For me, it depends on which pizza and from which venue. Can you guess which one was number one, though? Have a look at Best pizza topping in the world announced – but foodies say it’s a ‘sham’ (The Mirror, Julia Banim).