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The streaming wars are over (already)

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Streaming wars already over, says Diller

The big studios, AT&T’s Warner, Disney and NBCUniversal are launching Netflix-killer streaming services in the next few months. Netflix enjoys an advantage of 150 million subscribers and 22 years. The upstarts are trying to bring down the streaming giant by pulling their content, programs such as the Office and the Disney catalog, from Netflix. Media magnate Barry Diller says there is no way to catch Netflix.  CNBC

dis-rup-shun: Diller is a smart man, but if Netflix cannot keep producing original content hits and if the studios get on a hot streak of new content, which can be monetized by both streaming subscriptions and network TV (which Netflix cannot access), Netflix could lose its luster. In the Internet economy, the speed of change is faster than most expect, and Netflix has yet to make a profit, claiming that its deficit spending on original content will eventually pay off. It now has big competitors with multiple revenue sources and is locked into a spending battle with media conglomerates.

Why billionaires are launching rockets as fast as possible

Richard Branson’s Virgin Orbit is yet another billionaire’s rocket launch company, using a 747 to ferry rockets into high altitudes. Wired

dis-rup-shun: Branson joins Bezos, Musk, (late) Paul Allen in the battle for space travel. While certainly egos are involved, access to the stars is similar to building the ports for the first steamships to ply oceans and rivers. Two behemoth markets for space craft are telecommunications and defense. Companies that can secure spots in space for communications satellites can cost effectively provide broadband to any corner of the Earth without stringing wires. Companies that can launch defense equipment will have some large paying customers in world governments. Space entrepreneurship puts the U.S. in the lead over China and Russia as those nations’ space deployments are mostly government programs.

Mashup: YouTube on Amazon and Prime Video on Google Chrome

Further blurring the lines between all sources of TV, both streaming and broadcast, Google and Amazon have buried the hatchet and will make their TV sources available on one-another’s hardware platforms. TechCrunch

dis-rup-shun: Another data point confirming that new TV services will soon look like old TV services, one will soon be able to access most streaming services from a single provider as various services essentially become channels within an uber provider, such as AT&T or Comcast or Apple or Amazon. These super-streaming providers will also offer access to cable and broadcast channels and watching TV will be simpler again, and will become more expensive as a few storefronts consolidate the goods.

Europe sends a $350M warning to Facebook, Google and big tech

Europe took the lead on data privacy in 2018 with the implementation of privacy standards known as GDPR. The EU just fined British Airways $230 million and Marriott $123 million for fumbling the security of customer records. Facebook and Google are under investigation by the EU now. CNBC

dis-rup-shun: The EU is showing that, as designed, the government has the teeth to make big corporations respect the laws in place to protect citizens. Hey U.S. Congress, are you watching?

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When tech giants become property developers

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Alphabet, Google’s parent, plans a smart city in Toronto

On Monday, Alphabet’s subsidiary, Sidewalk Labs, released plans for its $1.3 billion smart city on the Toronto waterfront. The plans boast private investment of $38 billion by 2040, and the creation of 44,000 jobs and $4.3 billion in annual tax revenue. Locals are mixed on support of the venture, which is yet to win full support of urban planners and city leaders. The Verge

dis-rup-shun: Tech giants’ disruption of real estate markets in places like Seattle, San Francisco, and Austin have previously been with the help of the usual brokers, financiers and builders. Alphabet is making its own rules in Toronto and showing that it is more powerful than the local establishment. On the one hand, established city leaders are suspicious of grand ambitions backed by big money and the arrogance associated with big tech. On the other hand, the smart cities vision will take decades to evolve organically unless accelerated by a visionary company that just builds it.

 

Facebook’s future inside a ringed fence

Facebook has been the PR whipping post for all that is wrong with the Internet, social networks, and disclosure of personal data. Despite all the bad press and example making by regulators, its subscriber count is up 9% and its revenues, 30%. Forrester researchers say that the company’s undoing will not be public opinion or legislation, but will be its own shift to focus on private messaging as this move will stall growth of social networks, and will prevent the company from selling more personal information to advertisers. Meanwhile, the watchful eye of regulators will make it very difficult for the company to acquire new companies. Forbes

dis-rup-shun: The notion that Facebook has painted itself into a corner is hard to fathom, as statements of direction can change in the blink of a CEO’s eye. The fact that Facebook continues to grow, and continues to be an important source of news and information for its 2.3 billion monthly users portends that, despite bad press, it will be the virtual water cooler for years to come. It’s $540 billion market cap means the company can spend a great deal on public relations and congressional lobbying. 

 

How to slice up big tech

Kara Swisher shares thoughts on competition and how big tech is too big to challenge. The Recode editor shares thoughts on how regulators might break Google, Apple or Amazon into some logical pieces and encourage new entrants into markets that have been ceded to the giants. The Verge

dis-rup-shun: January 1, 1984 was the day that AT&T’s monopoly ended and baby bells were created. While the decision was rough on AT&T, many of the bells thrived by merging, acquiring, and entering into new businesses. The action accelerated communications technology, including wireless telephony, and spurred the strongest tech economy in the world. History has shown competition to be economic lifeblood and dominance to lead to stagnation.

 

Industry leaders reply

In response to Should Facebook’s currency be blocked? Former Lowe’s Iris Smart Home VP and GM Kevin Meagher replies: In the UK in the 18th and 19th century single large employers (mill owners/mines/steel mills) in towns and regions created and issued their own currencies to pay staff.  This currency was only recognized in businesses owned by the companies and their partners so what was paid to employees eventually came back to the company.  It was a great way to squeeze competition out of the town and hold everyone hostage to what was in effect a feudal system.  I’m pretty sure this happened in some early settlement in the US.  How the wheel goes round!

 

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Why the laws of competition don’t apply to tech giants

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Monopolies, duopolies, and the role of regulators

The network effect, which states that the value of components in a network increase as the members increase, makes tech giants such as Facebook, Google and Apple almost impossible to slow down once they gain critical mass. The more users of a platform (iOS, for example), the more apps are developed for the ecosystem, making the ecosystem more valuable. Competing with that platform becomes extraordinarily difficult as exponentially rising network value creates insurmountable barriers to entry. Microsoft’s failed mobile OS is an example (see next article). The Verge

dis-rup-shun: As The Verge states, competition is good for the consumer and good for the economy. If the forces of competition are not able to scale the barriers to entry into network-based businesses, then it is the job of government regulators to level the playing field, or at least monitor the powers of those that control the network and access to its markets.

Microsoft’s biggest error ever

Speaking to Village Global venture group, Bill Gates said the biggest mistake in Microsoft’s past was missing the opportunity to be the alternative (to Apple) mobile OS provider – an opportunity lost to Android, which Google purchased in 2005 for the purposes of defeating Microsoft’s mobile strategy. The Verge

dis-rup-shun: For those that tried Microsoft mobile phones, you recall that the company really blew the customer experience opportunity. At the time, there were Blackberry, Motorola, Nokia and upstart iPhone. Microsoft’s error was to think it could squeeze the bloated WinCE operating system into a phone form factor. Rather than looking at the opportunity as a fresh, new ecosystem, Microsoft (Steve Ballmer) saw mobile phones as tiny Windows devices. The error launched Google’s fortunes in the Android business, both in licensing software and building handsets, while missing, likely forever, a future in mobile for both Microsoft and close partner, Intel.

Smart products suffering from lack of intelligence

TechCrunch reports on Samsung SmartThings’ release of a new camera, smart plug and smart bulb. The products work as expected but are described as not very exciting.

dis-rup-shun: Unfortunately much of the smart home industry is still competing on devices — expecting the white box or switch with the most features or protocols to prevail. Machine learning, however, is the competitive differentiation that will make smart homes intelligent homes. By using data profiles of users and ‘understanding’ habits, as well as deviations from those habits, connected products will operate for users, not by users, and will become ubiquitous in new homes and buildings. Connected products that do not use data and data analytics for their operation will remain lackluster to the markets.

Hackers have infiltrated over 10 mobile carriers

According to cyber security firm Cybereason, hackers have infiltrated over ten global wireless carriers and, prior to detection, could have shut the networks down at any time. The firm says none of the carriers are in the U.S., but spread around the globe. CNet 

dis-rup-shun: Global infrastructure, including energy grids, wireless networks, and banking networks are dangerous prizes for hackers. With escalating tensions with Iran and ally, Russia, the West can expect a sharp increase in cyber attacks, and the future of defense will increasingly involve hardening networks and scanning for breaches.

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How Amazon will wreck the pharmacy industry

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How Amazon will wreck the pharmacy business

Amazon quietly entered the pharmacy business in 2017 and introduced PillPack, a direct to home prescription drug business that packages pills by daily dosage, with dates and times to take the medicine printed on the package. The retail pharmacy heavyweights currently play middle man by negotiating discounts from drug makers for large health insurers, creating special pricing for insurance networks. By selling directly to insurance companies, Amazon will cut out the retail pharmacy giants. CNBC

dis-rup-shun: Amazon’s disruptive move will benefit the consumer with lower drug prices and, possibly, lower health insurance premiums, but will destabilize the retail pharmacy industry by forcing it to rely more heavily on the sale of non-drug products, a battle it is already fighting against Amazon.com and Prime. One answer is for retail pharmacies to move more aggressively into care clinics, a trend well underway, putting further pressure on doctor and hospital chains to become more consumer-friendly as they are forced to compete with retail pharmacies for walk-in healthcare.

Direct share offerings will put a squeeze on bankers

Collaboration tool vendor Slack went public this week without assistance from investment banks, gaining 50% value in its first day. The capital raise puts valuation of the company at $23.1 billion. Compare this to Uber’s IPO last month which, by absolute dollar valuation, was the worst performing IPO in history. Both Lyft and Uber have recovered somewhat from a bad initial offering. Gizmodo

dis-rup-shun: Two large IPOs, Slack and Spotify in 2018, were direct (limited banker involvement) offerings. Both companies have enjoyed strong value growth since IPO. Uber and Lyft were heavily hyped by investment banks and crashed after offering. Before we conclude that bankers are bad, it is important to note that Uber and Lyft’s business models do not show profitability in the near term, and seem to be in multiple businesses. On the other hand, Slack is facing stiff competition from tech giants. If we assume that the market is sophisticated enough to understand the competitive landscape ahead of the IPO, then one conclusion is that bankers may be over-promoting offerings and that a more informed market later corrects. Expect direct offerings to become more commonplace, eventually forcing a correction in the fees charged by banking firms.

Zuckerberg outranks Tim Cook

Glassdoor’s anonymous survey of former employees’ views on their CEO has a number of tech CEOs ranking in the top 10. Ranking in the lower half of the 100 ranked are Facebook’s Zuckerberg at 59 (#1 is the best) and Apple’s Tim Cook at 69th place. ZDNet

dis-rup-shun: Interesting to see Cook at the bottom of the heap, especially after a brutal year for Facebook’s public image. Does the secrecy inherent in Apple’s culture create distrust inside the family? Despite Facebook’s missteps, Zuckerberg has been quite penitent in public, perhaps gaining employee’s respect. It is rare for a company as successful as Apple to not become an arrogant empire, and perhaps more transparency would engender more employee admiration.

Netflix will eventually include advertisements, says industry

Netflix, with its 150 million subscribers, faces significant costs from developing original content. Industry insiders predict that Netflix will break its vow of no advertisements as production costs increase and the value of its audience reach soars. CNBC

dis-rup-shun: Netflix continues to pursue a unique strategy — using debt to finance a very large catalog of original content that it can monetize over coming years. As other streaming services are launched from companies including Disney and AT&T’s WarnerMedia, Netflix subscriber growth will be challenged. The barriers to entry for streaming services have become original content — a very expensive barrier. As John Penney, CSO of 29th Century Fox has been telling the industry for years, there is simply not enough non-movie theater revenue in the TV distribution chain to support the costs of original content. The company’s stock price, however, continues to show confidence in the company’s ‘think different’ strategy.

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Should Facebook’s currency be blocked?

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The implications of a non-government financial currency

On Tuesday Facebook and the Libra consortium officially announced their new financial currency. Already, government regulators are seeking to press pause on the project until some big questions can be answered. U.S. Representative Patrick McHenry , the top Republican on the House Financial Services committee, has asked for an inquiry, and European regulators have immediately expressed concern. Wired

dis-rup-shun: Policy makers’ concerns about a privately controlled currency are many, including how to handle fraud, how to prevent money laundering, how to ensure stability of existing financial systems, and how to maintain the ability to influence monetary policy when buyers and sellers could move to another system if it was more favorable. We can liken this privatization effort to creating a private version of the TSA in other parts of the airport, creating alternative mail carriers (think UPS and FedEx), building alternative power grids on new poles next to existing, or creating private armies that will be deployed when corporate interests dictate. Sometimes a private currency would be favorable, and other times disastrous, but what is certain is that it would greatly undermine governments’ abilities to manipulate currency and the economy through fiscal policy. The irony is that before Facebook got involved, cryptocurrencies have been operated under fairly shady circumstances and now that a well organized entity is entering the fray, governments are ready to take action.

U.S. gaming market larger than China’s

Since 2015, China’s gaming market has been the largest. Given a 9 month ban by China’s government on approving any new games, the $37 billion U.S. market will again exceed China’s in total value. ZDNet

dis-rup-shun: China seeks to change its citizenry’s high rate of addiction to gaming with the temporary ban. Chinese leaders, however, are failing to see the high correlation between video gaming and technical fluency among youth. China is focused on becoming the global leader in technology and therefore should encourage youth to immerse themselves in Internet and console gaming, where technical creativity may blossom.

Smart plugs are easy, cheap and powerful

To experience the power and potential of a smart home, one can easily start with a voice assistant and their choice of an inexpensive smart plug – a device controlled through an app or voice assistant which can turn off appliances based on rules set by the user.  CNET offers a guide to smart plugs and their apps.

dis-rup-shun: Smart plugs are a powerful way to experience the convenience, extra sense of security, and energy savings of home automation. Having lights turn on and off when you are away from home, or turning off an always-on cable box in the wee hours can make a difference on the power bill. Most all appliances, in their next generation, will offer built in control features, but in the interim, smart plugs are highly effective.

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Facebook enters the currency business

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Facebook launches digital currency

Facebook and 27 other companies — many that are familiar brands in the finance, telecommunications and venture capital markets — are launching a digital currency called Libra. Unlike several popular currencies such as Bitcoin, Libra will be backed by a reserve of assets, will not be decentralized, and cannot be mined. Facebook assures the public that it will not use personal identification of Libra holders for advertising. Gizmodo

dis-rup-shun: Facebook is already one of the largest countries in the world by population, so having its own currency is a natural evolution. The company is a long way from repairing its reputation for respecting privacy, making some suspicious about its monetary instrument. Crypto-currencies, however, have often been perceived as shady and a bit mysterious. Facebook, being a familiar brand despite recent events, is seen as far more regulated and will likely be seen as a safe dealer in new forms of currency, especially given the alliance it has formed with recognized brands.

U.S. approach to 5G will exclude rural coverage

5G is the future of telecommunications and the Internet of Things. The U.S. is fighting for leadership of the 5G build out as it will have implications for the country’s economy, defense and education. The U.S., however, has allocated only high band spectrum for 5G, whereas other countries are reserving mid-band spectrum for their future infrastructure. High band spectrum is more difficult and expensive to transmit. Wired

dis-rup-shun: Providing communications infrastructure for rural or sparsely populated areas has always been a money loser, requiring regulation and subsidies to offset costs. By building 5G on less efficient bandwidth, the U.S. costs for serving all of its population will be on average, higher, likely creating a greater divide between urban and rural populations. Space-based broadband, from networks of low orbit satellites being launched as we speak, could be a means for serving rural areas, but may also be a high cost solution.

Comcast adds gaze control to its TV platform

The ability to control a device by moving one’s eyes is gaze control — a new form of gesture control which serves people who are not able to use a remote control or speak to a smart speaker. Gaze control is now offered in Comcast’s Xfinity X1 remote control software. TechCrunch

dis-rup-shun: Gaze control joins gesture control (moving hands) and voice control to make computing highly accessible to everyone, opening up new job possibilities for people with disabilities but also changing the way we interact with devices in our lives. If our hands are full, the room is noisy, or we wish to interact with devices without others noticing, we will choose alternative ways of device interaction. Expect many control and entertainment devices to offer multiple interfaces for interaction.

Palm offers unlocked tiny smartphone

Whatever happened to Palm? The company now offers a tiny-sized Android smartphone with fewer functions and shorter battery life for $350. The Verge

dis-rup-shun: With smartphone penetration nearly 80% in the U.S. and nearly 50% worldwide, the maturing markets are ripe for niche products. Going for a bike ride? Take your tiny phone. Going to the beach in just your bikini? A job for the tiny phone.  A black tie affair? That’s a job for a smartphone by Rolex or Gucci or… you get the picture.

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Is your privacy worth paying for?

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Privacy browsers catching a wave

The public is increasingly weary of sharing personal information with the tech giants. Privacy browsers generally don’t allow cookies and provide information on what data is being requested of the user. Wired suggests six privacy browsers or plug-ins to your existing desktop browser that maintain your anonymity, to varying degrees: DuckDuckGo, Ghostery, TOR Browser, Brave, Firefox, Safari.

dis-rup-shun: Thanks to Russia and to Facebook, consumer awareness of personal information sharing is at an all time high. Apple is using privacy as a differentiator, seeking to further engender audiences and shame Google and Facebook for their aggressive harvesting of personal information. The campaign appears to be working. If our society moves to reduce the amount of data we allow tech giants to collect, will we be happy when free services become limited or require payment since maintaining our privacy renders advertising to be less effective?

 

Willo is going to change the way you clean your mouth

Startup Willo has raised $7.5 million from Kleiner Perkins to revolutionize the way you clean your mouth, claiming that the brush is an inferior solution that only cleans 46% of dental plaque. Details are not available, but the picture offered shows a different approach to dental hygiene. TechCrunch

dis-rup-shun: It is likely that this toothbrush replacement will collect data on our brushing habits and offer weekly emails to rate our dental care performance, because that is what every connected device seems to do, despite the fact that most of us aren’t that interested. What will be helpful, however, is to displace the annoying task of spending an hour with a dental hygienist twice a year. That value proposition will be well received.

 

Samsung Fold foldable phone ship dates undetermined

TechCrunch reports that AT&T and BestBuy have cancelled early orders of Samsung’s huge, foldable, $2000 phone that was originally scheduled for release on April 26th.

dis-rup-shun: The foldable phone will be a big hit among those that are willing to pay $2000 to have something no on else has. Having a device the size of a small tablet that will fit in a pocket will be great for travel, and if Samsung is able to add its latest Galaxy photo technology, it will be an amazing way to share digital photography.

 

Highlights from E3 gaming conference

E3 is the biggest gaming industry conference in existence, and 2019’s event just ended. Here are some highlights:

Microsoft’s next Xbox console will launch for holiday 2020 and will feature 8K games and 120 frames per second. It will be backwards compatible with prior generations, if anyone really wanted to play yesterday’s games.

Steaming services are coming. Physical disks are going the way of the Bluray movie disk…unwanted. A large number of streaming services are vying to do for gaming what Netflix did for movie watchers.

dis-rup-shun: The big three console makers have had an effective lock on the gaming space, but that’s about to change when premium content can be streamed to any connected device. Tether a Bluetooth game controller that is not limited to a console architecture to your iPad, smartphone, PC or smart TV, and high performance gaming breaks its traditional bounds. The Verge

 

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You generate 1.7MB of data every second

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Each person, by 2020, will create 1.7MB per data per second

Given that each person’s location is constantly tracked by their smartphone, simply standing still creates data. Driving, however, generates an enormous amount of data that can be mined not only by car makers, but by many parties who can benefit from our patterns, our routes, our entertainment choices and our shopping habits. The auto makers are in an ideal position to benefit from data management, but will likely lose this advantage to FAANG tech giants. TechCrunch

dis-rup-shun: Technology companies, especially Google, Facebook, Amazon, Uber and Lyft, understand that the car is an extension of the mobile phone — simply a service platform that offers not only driving services, but entertainment and communications as-a-service. The automakers will struggle to abandon the legacy model of “selling” 1.97 shiny new autos to each new house for an average ownership period of 6 years, and will find their core business eroded by tech giants and their subsidiaries.

Google providing on call and in-home support team

Google wants to be your device provider and has a team on standby to prove it. If you need consultation on what, where or how to install a home product, a Google support person is on the ready on the phone, or ready to come to your home. Android Police

dis-rup-shun: The good people at Google are playing catch up to Amazon, who not only has the best selling in-home smart speakers and doorbell cameras (Ring), but has had in home support and sales staff, Amazon Home Services, since 2015. Free home service consulting offerings are not profitable, and therefore the people already coming to your homes — the home electronics dealers and installers — are reticent to get into this business while retailers struggle to sell many smart home products that require a lot of explanation and often, installation. In home consultants are filling a gap that will eventually be closed when products are simpler, easier to install, and more familiar to consumers.

Watch a robot pull a plane

The Italian made HyQReal robot is capable of pulling very heavy loads horizontally at low speeds. It is impressive. TechCrunch

dis-rup-shun: If robots will replace jobs performed by humans, then people who pull heavy loads at low speeds should be worried. That would be operators of tractors, bulldozers, forklifts and heavy equipment. But since autonomous trucks and cars are coming, then we should place all drivers on the endangered species watch list.

Facebook continues to clean-up its act

In the first quarter of this year, Facebook reports that it eliminated 4 million examples of hate speech from its site. The company has formed a group of moderators to scrub the population of posts for those items it defines as unsavory. Gizmodo

dis-rup-shun: When a company has more customers and more revenues than many countries on the planet, it has to emulate successful countries and implement its own police force to keep the population in compliance with the nation’s rules. Since politicians have begun to invoke antitrust laws and suggest that the Facebook nation has become too large and must be broken up, expect Facebook’s self-governance to grow quickly and publicly.