At Netflix' earnings call today, the company announced that it plans to raise its plan pricing by "one or two dollars" for new customers. Existing customers will keep their old rate for "a generous time period," but eventually the rate will probably apply to everyone. Read more here.
Audiboo, the British cloud audio platform which once competed with Soundcloud but has found a niche working with media companies, has confirmed its plans for a small public listing on the London Stock Exchange’s Aim market.
It’s achieving this via a reverse takeover of the cash shell company One Delta (which has lain dormant for some time).
The news comes after floated media company UBC and Slovar Ltd – who together hold 78.86% of the issued share capital of Audioboo – agreed to swap their investment in AudioBoo for shares in One Delta. UBC will hold about 20% of Audioboo following the deal.
The floatation will be accompanied by a £4m fundraising from Audioboo to boost its business facilitating podcasts and recordings for partners including the BBC, the Premier League and the National Trust wildlife charity.
It’s all a far cry from when AudioBoo and Soundcloud where uttered in the same breath.
This January Soundcloud raised $60m at a $700m valuation.
There is a reason it feels like everyone and anyone is raising money to build a company: They are. According to two studies, capital raised from venture capitalists by growing, private companies is at its highest point since 2001.
A study by MoneyTree pegs the total sum raised in the first quarter at $9.47 billion. By its number, that is the highest figure since the second quarter of 2001, when venture capital invested $11.5 billion. The year-ago quarter according to the study saw a more modest $6.01 billion of inflow.
A separate study by DJX VentureSource has a slightly different figure for the period, estimating total first quarter investment at $10.7 billion. It also estimates the comparative 2001 figure at $11.5 billion, however.
Regardless of which group has it more right, the trend is plain: Huge dollar amounts are up for grabs at the moment, as investors look to pour capital into companies of all stages while the NASDAQ is high, the IPO window is open, and cash-rich industry titans are more than willing to buy talent and products alike.
Bubble? It depends on who you ask, but I doubt anyone can say with a straight face that we’re living in financially conservative times. Cracks have appeared, with Square delaying its IPO, Box’s S-1 raising questions, and King’s offering struggling to find traction. But that hasn’t stopped others from going public and taking on new cash.
Signs of the times abound.
All that said, it’s important to keep scale in mind. Note the above stats indicate that we’ve reached mid-2001 levels of investment. That says nothing about how high investment was before, naturally. BusinessInsider, in a post aptly entitled “Venture Capital Funding Is Nowhere Near The Levels We Saw During The Dot-Com Bubble,” published the following chart [data is from the above-cited MoneyTree study]:
Venture capital investment is therefore at record levels when you compare backwards to any moment before the massive implosion of 2001, but remains dwarfed by prior excesses.
A few data points: Pre-2008 crash, venture investment topped out at $8.45 billion in the fourth quarter of 2007. It topped $28 billion in both the opening quarters of 2000. That’s a pace of around three times the investment we are seeing now, and funds are often going to larger, more established companies with nine-figure revenues.
The market is not in perfect balance, and there is quite a lot of stupid money bouncing around funding foolishness. But the total dollar figure for the first quarter of 2014, given how top-heavy it is toward mega deals for late-stage companies, likely isn’t a reason in and of itself to panic.
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A change in UK tax law that may take force at the start of 2015 would push the price of apps, music and other downloads and “e-services” higher in the United Kingdom.
The legal shift would see downloads in the United Kingdom charged the value added tax (VAT) of that country. Currently, The Guardian reports, companies like Apple and other digital store owners “are allowed to sell digital downloads through countries such as Luxembourg, where the tax rate is as low as 3%.”
International tax law has been good to technology companies, but this particular little riff is coming to the end of its coda.
In practice this should mean that charging a pound for a song is over, and that the cost to consumers for books, apps, and other digital content will rise at once. Naturally, a higher price will limit consumption, and likely induce some to piracy.
Why would the United Kingdon make the change? Simply put, the income. The Guardian also reports that revenue could reach as high as £300 million for the government. The app economy it appears is large enough that the state wants a piece.
How to tax online purchases is a topic of interest across the pond as well, with the United States currently wrangling with how to levy sales tax on retailers such as Amazon in a uniform, and functional way.
If you live in the UK, keep in mind that this could be your last year at a discount.
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