Tag: Netflix

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Big Tech stares down Congress

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Congress summons Big Tech for a big chat

Top executives from Apple, Amazon, Facebook and Google were on the Hill this week, arguing that they are not monopolies and are not using customer data for competitive advantage. Data is used, said Amazon’s Sutton, to better serve customers, when asked if the company launches its own products based on what’s selling. Wired

dis-rup-shun: Everyone except for small business was a winner this week as congress persons posed as tough on tech, tech executives sounded smarter than legislators by delivering punchy but circuitous answers, and lobbyists validated their billings by offering evidence that tech is increasingly under fire by legislators. Legislators have to find the balance between an increasingly less-competitive landscape and nationalistic interests in defending against global competition, mainly from China, for next generation technology dominance.

Netflix faces first significant subscriber loss 

In Q2, Netflix faced loss of 130,000 U.S. subscribers and added only 2.7 million global subs instead of the predicted 5 million. The Verge

dis-rup-shun: Why is the unstoppable streaming service slowing down? A number of reasons, and they aren’t new competition, as Disney, Apple and AT&T’s ‘Netflix killer’ streaming services are not yet open. The reasons include saturation — with nearly 60% of U.S. households already subscribers, those that aren’t, don’t want to spend the money or don’t watch TV. Existing competition is increasing its original content, making some other services more desirable than Netflix (since House of Cards is finished), and rising inflation has been slowly taking a bite out of U.S. consumers’ disposable incomes. Netflix may be an indicator of a slowing economy.

AT&T and Microsoft form $2 billion alliance for cloud and 5G

AT&T announced that it will move much of its business computing needs to Microsoft’s public cloud, Azure. In addition, it’s 268,000 employee workforce will use Microsoft  365 applications for its computing needs. The $2 billion deal does not include AT&T outsourcing its network infrastructure, like cellular communications networks. The companies are also cooperating on development of 5G tools. Reuters

dis-rup-shun: This deal looks like a huge win for Microsoft and likely a cost-savings move for AT&T which continues to seek efficiencies as it prepares to engage in a long battle for streaming content viewership following integration of Time Warner. Microsoft Azure is cleaning up cloud services accounts from many companies that consider Amazon a competitor on various fronts including retailers (Walmart) and shippers (FedEx). Microsoft also secured additional defense against Google apps by ensuring that AT&T continues to use Microsoft’s office tools.

Maps with images only moments old

Online maps such as Google Street View feature photos of locations that are often months if not years old. Nexar’s Live Map application uses dash cam and smartphone images to refresh map images constantly, showing viewers a wreck moments after it happened. The company has been quick to address privacy concerns by stating that pictures of people, addresses and licenses are anonymized and blurred. TechCrunch

dis-rup-shun: Privacy is a big concern when a) everyone’s every move is captured on a dash or doorbell camera, and b) companies collect and store those images and promise to self-police breaches in privacy. This puts companies in a position of high liability as they are liable to shareholders to monetize data they collect, and liable to society to not use that data in a way that would compromise privacy. Big profits come to those that expose secrets.

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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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Streaming TV to look like cable you just cancelled

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How streaming TV is repeating the evolution of cable TV

Wired lists seven free streaming services with advertising that you will want to have as backups to Netflix and Amazon Prime Video accounts: IMDbTV, the Roku Channel, Kanopy, Tubi, Pluto TV, Crackle, and Vudu.

dis-rup-shun: If you are old enough to remember when cable TV was a new thing, you remember that for a reasonable monthly fee, your three-channel rabbit-ear antenna TV could become clear and sharp. Then came more channels. Then came movie channels such as HBO. Then came original content, like the Sopranos. Now that 76% of us U.S. households have Netlix and 51% have Amazon prime, we see the add on of many more streaming ‘channels’ or services. The next step will be bundling of many services into streaming packages, enabling one to access many services through a single sign-on and credit card authorization. With the pay TV providers such as AT&T driving those bundles, these new services will come from the same providers who used to offer cable TV packages. Once again we will be buying packages from big TV providers — but this time based on when we want to watch.

How apps get to the Apple App Store

Apple’s process for reviewing and approving or rejecting apps for publication on the App Store includes over 300 human reviewers who speak 81 languages, at two offices in Sunnyvale, CA with a goal to complete review of a submission within 24 to 48 hours. Each reviewer must review between 50 to 100 apps per day to ensure they run properly, are not illegal, and do not contain prohibited content. CNBC

dis-rup-shun: Apple fan or not, one must credit the company on the high quality of available apps. Apple takes up to 30% of revenues generated from sales on the app store, so the company has an incentive to provide a quick turn-around and ensure a good app experience. TechCrunch states that 2/3rds of an estimated $75 billion (2018) in app revenue is generated by Apple’s app store. The revenue gap between Apple and the Google Play Store increased last year, with Apple advancing its lead. Research firm Sensor Tower states that rising revenue disparity is driven by increasing number of subscriptions to monthly services such as Netflix, and Tinder.

Drones for humanity

Eco-entrepreneurs are developing a working drone that will biodegrade in weeks after completing its mission. Otherlab of San Francisco has built a gliding drone made now from cardboard but later to be made of a mushroom-based mycelium material. The Apsara drone is funded by DARPA who required a design that not only could carry cargo to a designated spot, but that would also decompose quickly. Wired

dis-rup-shun: Given last week’s downing by Iran of a $220 million U.S. surveillance drone, it is easy to consider drones as weapons, but this brilliant drone design will enable humanitarian aid of emergency food supplies and medicines in an effective and responsible way — likely helping to maintain populations that are caught in the cross hairs of military actions.

Kano, the Erector Set of today, will boost STEM interest

Microsoft has invested in UK youth computer maker Kano which will now run Windows 10. The $300 computer kit comes with creativity and development software which encourages kids to design 3D objects, build their own programs, computer art, and collaborate with other builders through a youth version of Teams collaboration software. TechCrunch

dis-rup-shun: Today’s youth have most often clamored for Apple to be their first device. By introducing a computer designed to engage youth prior to the age of ownership of first computer, Microsoft has seized on an opportunity to develop renewed interest from tomorrow’s newest scientists. Hopefully the move will address the shortage of science, technology, engineering and math (STEM) students by developing an early interest in computer science. 

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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.