The Drum's Daily Briefing: Peloton's uphill struggle, Guardian job cuts & Nokia revamp
Our quickfire analysis of the brand, marketing and media stories that might just crop up in your meetings and conversations today.
Peloton boss quits as subs sales slump
Peloton loses CEO as sales tumble
Home fitness brand Peloton has lost its CEO Barry McCarthy and is slashing 15% of its workforce to tackle a post-pandemic slump in demand for its connected fitness equipment.
Sales at Peloton had boomed during the pandemic as gyms closed and people tried to stay fit from home. However, despite aggressive marketing and advertising sales collapsed as the world reopened and McCarthy attempted to revamp Peloton as a subscription business.
Peloton has not made a net profit since December 2020 and the brand expects connected fitness members for the year to be between 2.96 million and 2.98 million, lower by 30,000 members from the prior forecast.
Once valued at over $50bn, the company is now worth just $1.1bn.
McCarthy is a former Netflix and Spotify executive and joined Peloton in February 2022, replacing co-founder John Foley. Under McCarthy, Peloton tried numerous tactics to revamp its business. The company ended its app’s free membership option, expanded into corporate wellness and brokered deals with brands including Lululemon and Hyatt hotels.
Guardian cuts jobs as revenues tumble
A sharp slowdown in advertising revenues has led The Guardian to launch a redundancy program as it looks to cut costs by up to 5%.
Editor-in-chief Katharine Viner sent an email to staff outlining plans for a “small number of voluntary redundancies” as it seeks to cut its costs.
The note said an “advertising recession and challenging market conditions are impacting negatively on all media companies, including the Guardian”. Viner’s email added that The Guardian was now 60% funded by its readers through sales and donations, cutting its reliance on advertising and newsstand sales.
However, she said the business still had to make “difficult decisions” over budgets after warning the ad slump would drive the business to a £39m loss in 2023.
The company employed 1,014 journalists last year, up from 860 in 2019, while staff costs increased by more than £30m over the same period.
Apple sales fall, but bosses remain positive
Apple is reporting its biggest losses in a year, but boss Tim Cook is remaining bullish about the outlook for the tech giant.
Sales slumped 4% year-on-year in the first three months of 2024 to $90.8 billion (£72.5 billion), weighed down by a sharp drop in demand for iPhones.
Executives said the results were distorted by Covid-related supply disruptions, which led to unusually strong sales during the same period last year. They said sales would return to growth in the months ahead, noting upcoming product launches and investments in artificial intelligence (AI).
At Apple, quarterly sales of iPhone dropped more than 10% year-on-year and sales slipped in every geographic region except for Europe, with the firm's critical greater China market seeing a fall of 8%.
"I couldn't be more excited about the future we have ahead of us," said Cook.
Sony and Apollo make $26 billion offer for Paramount
Sony Pictures and Apollo Global Management are understood to have made a $ 26 billion offer to buy troubled media brand Paramount.
Paramount is home to some of the world’s biggest media brands including Paramount Pictures, CBS, MTV, the UK’s Channel 5 and Australia’s Channel Ten. The movie studio’s blockbuster hits include the Mission: Impossible franchise and The Godfather.
But Paramount has struggled with the transition to streaming media and has been hit by internal power struggles. Bob Bakish, Paramount’s chief executive and one of the longest-serving media bosses in the US, was ousted amid reports that he had clashed with Shari Redstone, Paramount’s current controlling shareholder, over her plans to sell the company.
Paramount has been considering a merger with Skydance Media, a production company led by David Ellison, the producer, and son of Larry Ellison, the billionaire tech tycoon.
Skydance has backed Paramount movies such as Top Gun: Maverick, but the deal has reportedly infuriated some shareholders who have argued it short-changes shareholders and is too generous to Redstone. Skydance has now increased the amount of money that could go toward Paramount’s balance sheet to $3bn, from $1.5bn.
Nostalgic Nokia phone to get a reboot
The retro Nokia mobile phone is to get a reboot and the new phone will once include the addictive game Snake.
HMD has recently launched its own mid-range smartphones, but that doesn't mean it's exiting the Nokia nostalgia business as a leak has revealed its imminent reboot of one of Nokia's most-loved phone models.
The Nokia 3210 was launched back in 1999 and became known as the 'mobile' that virtually everyone owned. HMD recently hinted on X (formerly Twitter) that it'd be rebooting a Nokia classic soon.
Expected to be more colorful than the functional grey phone we all remember, the reborn Nokia 3210 will be officially launched on May 8 (with an on-sale date of May 15). The design isn't exactly a faithful replica – there are similarities in the button layout, but it's otherwise arguably closer to a Nokia 3310 from the early 2000s.