Fix/Friday — October 23

new TV

Quibi founder Jeffrey Katzenberg has called it a day and is to close Quibi. In an open letter he says;

Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing.

My theory was that Katzenberg could use his network to get great content — but that never happened. Nothing became a hit and when he tried to sell the content everyone passed. But whilst Quibi is the first to go, it will not be the last. There are said to be as many as 300 streaming services — many subscription based- and all launched with preCovid math.

I think the end of Quibi also (sort of) marks the end of Hollywood. Big beasts like Katzenberg have built amazing businesses in the past, based on creativity and knowing how that town worked. The Disney reorg showed how things have changed and whilst creativity is still important, the people running newTV businesses need a different set of skills.

In the Netscape results (‘just’ 2.2m new subs), these snippet from the earnings call stood out;

… I think the folklore, and I don’t know where this data came from but it’s quoted all over the place, is that 75% of your viewing comes from the first page in terms of your recommendations. I don’t know if that’s still — if that number is true at all. But it would be great to get some context around how much of content consumption is actually driven by the recommendations that you put up on the screen versus other sources potentially.

Gregory K. Peters COO & Chief Product Officer

Yes. A very significant majority is driven by the recommendations that we present. And so I think, to your point, the model that we’re working with is that millions of people, millions of our members, show up every day to our applications, our interfaces, looking for something great to watch.

.. it’s not unusual for a Hollywood studio to spend 50%, 70%, sometimes 100% of the production budget of a film and marketing to get people out to the box office and opening weekend. We do a fraction of that for our — in terms of paid advertising for our films. And yet we’re getting 70 million, 80 million, 100 million folks turning out to watch those movies in its first 28 days, which is like a $1 billion box office in terms of cultural impact.

This is a good interview with Justin Evans, of Samsung Ads on the rapid growth in streaming

..the amount of data and insights we have access to as an industry has far outstripped our mindsets, our processes, and our habits. Fixing that has to happen through leadership.

If you missed our midweek deep dive into newTV catch up here. We covered Sport, Film, Disney and more

Snap

Snap shared great results for Q3 — almost 250m Daily Active Users and revenues for the quarter were up by 52% — over $100m higher than analyst expectations. Full details here.

There is an element of normalisation with Snap revenues — as they added the self serve tools and brands saw Facebook ad pricing peak, they shifted budget — and Snap is a natural beneficiary of this. The Facebook ad boycott helped too. There is no reason why this won’t continue and with the leap in users we can expect healthy ad revenues in the future. But perhaps the most exciting element with Snap is that their pioneering with AR looks set to pay off;

“The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us,”

Adtech

With politically inspired timing the US DOJ have started an antitrust case against Google. It’s going to take years to play out and the direction of the case depends on who sit in the White House, but it’s going to happen in some form. Most commentators agree the case seems limited in scope and — like the documents for the GAFA goes to Washington session in July — not that well informed. The UK work (from the CMA) on similar matters seems better thought through. One wonders how the UK and the US sync up their activity around GAFA? Or does Google pre-empt all this and choose to do something themselves?

This twitter thread from an Xoogler is good background. And Eric Seufert has a podcast devoted to the topic..

Ciaran O’Kane is always good for an opinion and he thinks the cookie issue is going to be good for the 20% — those ad tech people camped outside the Walled Gardens. I think time will tell. The actions of regulators seem likely to cause some break up of GAFA, which will bring more competition.

A big part of this 20% are the premium publishers and we see them acting together more. The NewYork Times, The FT and Washington Post are leading on an initiative called the General Privacy Control where users can signal — using their browser — to any website saying they don’t want their data shared. For those publishers who are rich in first party data, this is a good thing, but it does have implications for everyone else. And needs the major browsers to adopt this too. Another wild card for the post cookie conflab.

In an update on that, the Google opinion on their Sandbox experimentation is — unsurprisingly? — positive.

“We were very pleasantly surprised,” said Bindra. “This particular kind of algorithm could be a very useful substitute for third-party cookies while still providing for increased privacy.”

Still a way to go here. Share your thoughts in our Guild community.

5G

I did a talk on 5G for WPPs Kinetic last year and arrived at the view it will just give us more of what we have now. The sensational speed makes the things we do now quicker and easier; what took an hour will now take a minute and what took minutes will now take seconds. The key prediction was that this will give us more always on video — and AR glasses are likely to be the first beneficiary.

Doing some prep for a talk on China, I see China Mobile has gone big on 5G — they expect to have 160m users by year end and 5G available across all 293 of its prefectural-level cities by year end. Even Mount Everest has 5G coverage. China’s three biggest telecoms carriers are joining forces to introduce Rich Communication Services — a 5G-based messaging service to replace traditional SMS messages.

So it was interesting to see how much attention Apple paid to 5G in their event last week — with some noting the time given to Verizon. And this week TMobile announced a VC fund for 5G. I haven’t heard any VCs talking about 5G for ages — and you can see why MNOs and handset manufacturers would get excited about something that helps drive their sales.

Is this something significant? This good A16Z podcast is all about more happening in the browser — and how WebRTC and WebGL facilitates this. Does 5G speed accelerate this tech?

Merchant

Social commerce is getting more traction but Business of Fashion see some reservation amongst brands — it’s the perennial question of the pros and cons of letting the platforms handle the sale. TikTok is working for cosmetics brands — driven by organic posts from fans.

Live streaming is taking off with Levis working with Amazon over Prime and Hilfiger testing it on their own site.

Grocery is such an exciting space — and so important for any food and CPG brand. This hour long interview with the global head of grocery at Amazon is really good — lots of insight into their current offerings and plans. And the fact that Alibaba is taking a majority stake in one of the leading Chinese supermarket chains (for $3.6bn) shows how tech is becoming crucial in this sector. It is grocery delivery that is the key — although Amazon stress they are committed to in person shopping too.

This FT profile looks at how investors are ignoring Tesco whilst the Ocado market cap has almost doubled this year. Not sure investors have got that right.

Iceland is looking to up their game too, with same-day delivery with a new Swift trademark.

Creative

The latest Forrester report on Creative Technology is a quite useful look at how Modern Creative Adtech Delivers More Than Just Ad Relevancy. It covers lots of the issues brands face and how some tech firms solve for these issues — but it’s only a partial view of the market. And it groups very different businesses into one bucket — which is also unhelpful. But given many brands are yet to buy into to any/all of these use cases, it’s well worth reading.

The space is moving very quickly and Pencil is probably the most interesting, as they use Machines to create ads — a Creative AI that generates ads and predicts results. They already have some super smart brands using the technology. Automated Creative have been around a bit longer and do some interesting work too. Most of the firms in the report — and the other players they missed — can improve your ads. For example Vidmob — not in the report — have a new tool showing insights about ads so focus can switch from optimising media to optimising creative.

I am spending a lot of time on this space and happy to help tech firms and brands and agencies make the most of this huge opportunity.

3Cs

One of the things on my half term to do list is thinking through how we develop Fix and manage the trinity of Content, Community and Commerce. This enthusiastic view of curators is helpful and so is this thinking on community. More to come on this, but any thoughts welcome.

Plus +

GNI Reader Revenue Workshops — some good resources for publishers from the Google News Initiative

Following our mention of MSCHF last week a smart Fix reader reminded me of this profile of them from a few months ago — and this killer quote “It’s not necessarily marketing. We’re just creating experiences that people end up sharing”

Airbnb brings in Jony Ive to oversee redesign

TikTok battles to stay ‘apolitical’ ahead of US election

Nick Clegg of Facebook — Europe should tear down digital walls not build new ones

Instagram to crack down on UK influencers’ ‘hidden advertising’

Amazon plans to improve search

Future of Tech: Gaming Predicted to Become Next Dominant Technology Platform

Understanding How Internet Culture Works, with Taylor Lorenz

Gen Zers Say Silicon Valley Is Elitist and Exclusive. Can They Build a New System?

Good podcast from A16Z on the Present Future of Audio — Talk, Music, Video, Interactivity

The second episode of Benedict Evans new podcast is out

And there is still time to put your hat in the ring for the event Benedict and I are doing;

A fireside chat with Benedict Evans and Simon Andrews: Tech, commerce and discovery

Benedict has spent a lot of time looking at the ways that ecommerce, brands, TV and discovery are being destabilised, and I have been doing much the same but with different and overlapping perspective, coming from the world of advertising. As we go into a winter lock-down, we thought it would be interesting to do a ‘fire-side chat’ on Zoom — all the cards are being thrown up in the air, across TV, brands, retail, footfall and advertising. What can we know?

We plan to limit the audience to just 20 people and the recording will only be available to attendees. We want to curate the best mix and by filling in this form your name goes in the hat. Tickets are $500 and we will invoice you once your place is confirmed.

It should be fun — come and join us.

(Sign up for the email edition — and the mid week deep dives — here & are we connected on LinkedIn and on Twitter?)