Weekly Digest from the West
Jean-Baptiste Piron
Cultural Attaché I Attaché culturel I Québec Office Los Angeles
-Disney to Offer Streaming Bundle of Disney Plus, ESPN Plus and Hulu for $12.99: Disney disclosed Tuesday that it will offer a streaming bundle of Disney Plus, ESPN Plus and the advertising-supported version of Hulu for $12.99 a month. The bundle of Disney direct-to-consumer properties will be available for purchase on Nov. 12, the day that the ambitious Disney Plus service is set to bow in the U.S. Disney chief Bob Iger revealed the plan for the bundle during Disney’s quarterly earnings call with Wall Street analysts. Disney’s fiscal second quarter numbers came in below expectations, a shortfall Disney chalked up to lower than expected performances by key divisions of 21st Century Fox, which Disney formally acquired in March. “Nothing is more important to us than getting this right,” Iger said of Disney’s aggressive move into direct-to-consumer streaming. Iger also disclosed that Disney is in talks with Apple, Amazon and Google to distribute Disney Plus and presumably the newly disclosed bundle on their platforms. “We think it’s important to achieve scale relatively quickly and they’ll be an important part of that.” Iger said consumer marketing for Disney Plus will start to emerge later this month. On the tech side, the Disney Plus team is devoting considerable energy to making it easy for prospective subscribers to sign up. “We know how important it is to create a friction-less experience,” he said.
-You’ll Soon Be Able to Watch Free Hulu Shows and Movies on Delta Flights: There’s nothing like a good movie or TV show to make a long flight fly by — and it seems Delta Air Lines is well aware of that. In line with the airline’s quest to provide flyers with superior onboard entertainment, the airline announced yesterday that starting in August passengers can watch Hulu Originals on board, thanks to a new partnership between the airline and the media streaming giant. The announcement comes as Delta installed their 700th aircraft with seat-back screens, meaning passengers won’t need to drain their phone battery or stare at an overly small screen when they catch up on their favorite TV show. And that’s good news, since the lineup of in-flight entertainment on Delta is better than ever. Award-winning Hulu Original content including "The Handmaid’s Tale," "The Act," and "The Mindy Project" will be available for viewing on Delta flights starting next month. The partnership with Hulu expands the airline’s extensive entertainment selection, which already includes more than 3,000 movies, TV shows, and music selections.
-Tech beyond Silicon Valley: Five years ago, Fast Company published a profile of entrepreneur Tristan Walker, a Foursquare veteran who was building a shaving and skincare business called Walker & Company. Written by contributor J.J. McCorvey, it was a candid portrayal of an African American founder trying to make his way in Silicon Valley, a place with a grim record on racial inclusion, despite the fact that so many of the iconic companies founded there consider themselves to be models of meritocracy. McCorvey revealed the complexities of navigating Sand Hill Road while black: Did the venture capitalists throwing “entrepreneur-in-residence” offers at Walker really value his potential as a founder, or were they looking for a quick way to diversify their ranks? For Walker, was it reckless of him, after earning a Stanford MBA, to bypass steady, lucrative gigs in management consulting for the uncertainty of startup life? “As a black man, you don’t take risks like that,” Walker’s wife, Amoy, told McCorvey. She also admitted to him that Silicon Valley was not her first choice as a location to put down roots. “We would have fit into Atlanta like a hand fits into a glove,” she said at the time. So when Walker recently decided to relocate his family and his business (now part of Procter & Gamble) to Atlanta, McCorvey caught up with him to learn why—and to investigate what is happening within the city’s robust entrepreneurial ecosystem. McCorvey’s story, with photos by Paper Monday and Matt Odom, is encouraging, though there are tough issues facing the black business elite. How do they keep Atlanta from resembling the Bay Area, where wealthy tech carpetbaggers are displacing longtime residents? Do founders of color have an obligation to make sure that job opportunities and wealth are more equally distributed? These aren’t merely theoretical questions: If the community’s business and political leaders can figure out a way to ensure that its growth is truly inclusive, other cities could follow suit. “There should be 50 Atlantas,” Walker tells McCorvey. We couldn’t agree more.
-Why Airbnb, Target, and Walmart are betting on the experience economy: Consumers are increasingly choosing to spend their money on experiences rather than material goods. To keep up, retailers are trying to sell their customers both. More U.S. malls are sparing space for experiential offerings then ever, and now, the already revolutionary Airbnb is helping travelers get out of the houses it provides them with and into the world with Airbnb experiences and Airbnb Adventures. Here are the trends in the market that makes memories.
-HBO Launches ‘Recommended by Humans’ Streaming Site in Dig at Netflix: Netflix has for years touted its algorithm-driven TV and movie recommendations. Now HBO is taking a subtle swipe at the streaming rival and other services that push computer-generated content suggestions with the launch of “Recommended by Humans.” HBO’s new marketing site is stocked with paid fan testimonials for around 50 shows, movies and documentaries that lets users sample them for free. “[T]he best recommendations come from real people,” HBO said Tuesday in announcing the site, available at humanreco.hbo.com. The site lets users scroll through a canvas on a desktop or mobile browser to watch 36 video testimonials and more than 150 Twitter recommendations from HBO fans. Featured titles range from recent series like “Game of Thrones,” “Succession,” and “Chernobyl” to older shows like “Sex and the City,” “The Sopranos,” “The Wire” and “Curb Your Enthusiasm.” For the campaign, HBO issued a casting call for viewers “who were so excited about their favorite shows they were willing to go on camera to recommend them,” according to a rep. The participants were free to choose which program to recommend and what they wanted to say about it. On the site, the premium programmer says, “We paid them for their time because we’re not monsters.”
-Exclusive: A first look inside Google’s top-secret design lab: There’s a building on Google’s Mountain View, California, campus that’s off-limits to most of the company’s own employees. The 70,000-square-foot Design Lab houses around 150 designers and dozens of top-secret projects under the leadership of vice president and head of hardware design Ivy Ross, a former jewelry artist who has led the company’s push into gadgets ranging from the groundbreaking Google Home Mini speaker to the playful line of Pixel phones. Inside the lab—and away from the cubicle culture of the engineering-driven Googleplex—industrial designers, artists, and sculptors are free to collaborate. “Google’s blueprint for how they optimize is great for most people [at the company],” says Ross. “Designers need different things.” Each space in the lab was constructed to help Ross’s team marry tactile experiences (understated, fabric-covered gadgets that feel at home in the home) with digital ones (Google’s unobtrusive UX). “Essentially the first thing I said was, ‘We need light,'” recalls Ross. “Where in some buildings, [programmers] need darkness for screens, we need light.” The lab’s entrance is a two-story, skylit atrium, filled with soft seating and cafe tables for casual meet-ups.
-Snap is raising $1 billion to invest in content, AR, and possible acquisitions: Snap on Tuesday said it will raise $1 billion in short-term debt and plans to invest in more media content, augmented reality features, and may also buy other companies. The parent company of the popular disappearing messaging app Snapchat has revived its user growth and stock price after a rough 2018. It introduced mobile gaming within Snapchat and developed its AR features such as lenses that overlay bunny ears on a user’s photo, but faces competition from larger platforms like Facebook and newer social media apps like TikTok. — “We will continue to focus on developing our content, gaming, and augmented reality platforms to enhance the Snapchat experience for our community,” Snap Chief Executive Evan Spiegel said in a memo to employees seen by Reuters. Snap will offer $1 billion in convertible senior notes that will mature in 2026, at which point it will choose to pay investors in cash, stock, or a combination of both. Spiegel said the current low-interest rate environment gives Snap a good opportunity to complete the offering. He noted investor demand for convertible notes is strong, adding that the company expects the fundraising to close later this week.
-Cord-Cutting Speeds Up as TV Providers Scramble to Boost Profits: The number of Americans who are cutting the cord on their cable, telco and satellite TV services continues to accelerate, according to a new forecast from eMarketer released Tuesday. The findings come as the tipping point for cord-cutting has arrived as traditional TV providers look to boost profits by offering fewer promotions and Disney, WarnerMedia and Apple get set to join Netflix and Amazon Prime in the streaming arena. eMarketer reports that by the end of this year the number of pay TV households will fall by 4 percent to 86.5 million and the number of households with a traditional pay TV subscription will fall below 80 million by 2021, with more than one-fifth of households by then having become cord-cutters. The research firm in its latest survey of the U.S. pay TV market said the number of households without a traditional pay TV subscription is quickly approaching the number of those that have one. The report predicts that, by 2023, the number of pay TV households will stand at 72.7 million, while the number of those without a pay TV package will number 56.1 million. eMarketer found in its report that the accelerating pace of cord-cutting is caused by TV providers themselves as they put improving profit margins before revenues. « That is coming at the expense of subscribers, who often drop services when prices rise and promotional deals don't get renewed," eMarketer argues in its report. AT&T during its latest financial quarter saw its entertainment division, which includes satellite TV provider DirecTV, lose 83,000 subscribers as they left the service when introductory price promotion plans lapsed. Rival Charter Communications is also losing subscribers as, rather than cut package prices as cord-cutting grows, promotional plans are ending as higher-margin customers are pursued.
-Apple’s AirPods Business Is Bigger Than You Think: Apple’s AirPods wireless earbuds may be small in size, but they're a huge business. This year, the company will sell 50 million AirPods, at $159 for a pair, according to Wedbush analyst Dan Ives. That would translate into nearly $8 billion in revenue. Apple released its first AirPods in 2016 at a time when the iPhone was still soaring. In the past year, however, iPhone sales have started to trail off and Apple has sought other sources of revenue to offset those declines. AirPods, a ubiquitous accessory for people walking to work and strolling to class, are partly filling that role. The question is whether AirPods, combined with another hot business, services, which includes Apple Music and iCloud, will be enough. What is clear is that Apple is crushing the competition with AirPods. Last year, it accounted for 60% of the global wireless earbuds market, easily surpassing Jabra’s Elite Active 65t, which had a 10% share, according to Counterpoint Research. n an interview with Fortune, Creative Strategies analyst Tim Bajarin said that the AirPods’ momentum can be directly attributed to its design and $159 price, which by Apple standards, at least, counts as affordable.
-AT&T employees bribed with $1M to unlock millions of phones: AT&T employees unlocked millions of mobile phones to plant malware and remove the phones from the provider’s network — all for thousands of dollars in bribes. The details were revealed after the US Department of Justice (DoJ) opened a case against Muhammad Fahd, who has been accused of running a fraudulent operation to disable AT&T’s proprietary software that safeguards phones from being unlocked. The ultimate objective, the DoJ’s indictment reveals, was to sell the illegal software to the public, so that they could switch to a different network of their choice and deprive AT&T of the payments owed as per the contract terms. According to court documents, Fahd is said to have paid off employees to identify “other employees who could be bribed and convinced to join the scheme.” Fahd, a 34-year-old Pakistani citizen, and his coconspirator Ghulam Jiwani — now believed deceased — allegedly paid one employee $428,500 over a period of five years between 2012 and 2017. The operation, in its initial stages, involved the two men approaching AT&T employees through telephone or Facebook messages. Those who agreed to their demands received batches of international mobile equipment identity (IMEI) numbers, which they unlocked in return for money. But when most of the insiders helping Fahd were fired by the company in 2013, the duo switched their modus operandi to bribe employees to install malware on AT&T’s network at the Bothell call center. In total, Fahd and his partner paid over $1 million to AT&T employees to unlock more than two million phones in this manner. The DOJ said they operated three companies named Endless Trading FZE, Endless Connections Inc., and iDevelopment Co. But it isn’t immediately clear if their intent was to run an illegal phone unlocking enterprise.
-Meet Glow.fm, which wants to do for podcasters what Shopify did for Kylie Jenner: So far this year we’ve seen some of the biggest, most award-winning podcast producers get acquired to become smaller parts in much larger media operations. Six months ago, it was Spotify buying up both Gimlet Media and Anchor. This week, radio giant Entercom snatched up Pineapple Street Media and Cadence13. Despite the ongoing consolidation, there are still plenty of independent producers—and Seattle-based Glow.fm wants to make it easier for them to make money. Launched in public beta in June, Glow is optimized for mobile and only takes three taps for a listener to sign up and start supporting their favorite podcast via a monthly subscription. It integrates with Google Pay and Apple Pay and offers a custom landing page for members. Podcasters receive a backend membership management system as well as the ability to offer free trials and gift subscriptions. “It’s about making monetization as easy as possible, so the podcaster can focus on the actual podcast instead of telling listeners they have to go to a separate website,” says CEO Amira Valliani, who today announced that she’s raised a $2.3 million seed round, led by Greycroft, with participation from Norwest Venture Partners, PSL Ventures, WndrCo and Revolution’s Rise of the Rest Seed Fund. Notable other investors include rap artist Nas and Electronic Arts CTO Ken Moss. “We want to make it easy to test different value propositions. And where I want to go is to make it as easy as possible for creators to test new ideas. That flexibility is important.”