Tech Brew Ride Home - Fri. 09/10 – Even Under App Store Pressure, Apple Still Unwilling To Play Ball With Epic

Episode Date: September 10, 2021

Even under pressure over the App Store, Apple is still willing to give Epic Games the finger. Also, Apple is putting the pedal to the metal in terms of new TV shows and original movies, while also attempting to solve the streaming industry’s problem with DJ Mixes. Food delivery platforms are suing NYC. And of course, the weekend longreads suggestions. Sponsors: Masterworks.io/ride Otter.ai code RIDE Links: Apple won’t let Epic bring Fortnite back to South Korea’s App Store (The Verge) Apple Music is using Shazam to solve the streaming industry's problem with DJ mixes (TechCrunch) Grubhub, DoorDash, Uber Eats Sue New York City Over Fee Caps (WSJ) Weekend Longreads Suggestions: The Screen in Your Car Is Beckoning (Slate) Russia Influences Hackers but Stops Short of Directing Them, Report Says (NYTimes) How Amazon’s cloud business generates billions in profit (CNBC) When the Techies Took Over Tahoe (Outside) Adult Swim: How an Animation Experiment Conquered Late-Night TV (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech Meme Right Home for Friday, September 10th, 2021. I'm Brian McCullough today. Even under pressure over the app store, Apple is still willing to give Epic Games the finger. Also, Apple is putting the pedal to the metal in terms of new TV shows and original movies, while also attempting to solve the streaming industry's problem with DJ mixes. Food delivery platforms are suing New York City and, of course, the weekend long read suggestions. Here's what you miss today in the world of tech. Overnight, Epic formally asked Apple to reinstate its Fortnite developer account in South Korea after the passage of that bill that we discussed, which forces App Stores to allow alternative payment systems in Korea.

And this morning, Apple said, no, quoting the verge. Apple says it won't let Epic games back in the App Store until they agree to play by the same rules as everyone else. Earlier today, Epic asked Apple to reinstate its developer account so it could re-release the iOS version of Fortnite in South Korea, which recently passed a bill forcing Apple and Google to allow alternate in-app payment systems. Apple, however, maintains it's under no obligation to let Epic in the App Store at all. Quote, as we've said all along, we would welcome Epic's return to the App Store if they agree to play by the same rules as everyone else. An Apple spokesperson says in a statement to the verge, Epic has admitted to breach of contract. of now, there's no legitimate basis for the reinstatement of their developer account, end quote.

The South Korean legislation has not yet gone into effect, but if and when it does, according to Apple, that wouldn't have any bearing on the company's process for approving developer accounts. Until Epic agrees to comply with the App Store's app review guidelines, Apple isn't going to consider its request, end quote. Actually, look, it's one of those days where half the news stories just happen to be about Apple, so let's just burn through all these headlines in one big segment. First up, Ming Chi Quo says Apple has resolved its Apple Watch Series 7 production issues and will thus start mass production in mid to late September with shipping set for late September. So that's good news ahead of Tuesday's big Apple event.

Next, the information is reporting that Apple intends to significantly up its output of new TV shows and movies on its Plus streaming platform to at least one new thing a week next year. Sources are also telling Mark German that Apple has appointed longtime Apple Watch and health software chief Kevin Lynch as the new head of its Apple Car project after Doug Field's departure, which we discussed earlier this week. Then remember when we talked about how Apple is facing a rolling employee revolt around alleged pay discrimination, while Apple has apparently fired senior engineering program manager, Ashley Jovich, for allegedly leaking confidential information.

Jovich has been one of the more prominent Apple employees tweeting about workplace issues. And finally, Apple Music says it will use Shazam's technology to properly identify and compensate all of the individual creators involved in making a DJ mix, quoting TechCrunch. Using technology from the audio recognition app Shazam, which Apple acquired in 2018 for $400 million. Apple Music is working with major and independent labels to devise a fair way to divide streaming royalties among DJs, labels, and artists who appear in the mixes. This is intended to help DJ mixes retain long-term monetary value for all creators involved, making sure that musicians get paid for their work even when other artists iterate on it. Historically, it's been difficult for DJs to

stream mixes online, since live streaming platforms like YouTube or Twitch might flag the use of other artists' songs as copyright infringement. Artists are entitled to royalties when their song is played by a DJ during a live set, but dance music further complicates this, since small samples from various songs can be edited and mixed together into something unrecognizable. Apple Music already hosts thousands of mixes, including sets from Tomorrowland's digital festivals from 2020 and 2021, but only now is it formally announcing the tech that enables it to do this, even though Billboard noted it in June. As part of this announcement, Studio K-7's DJ K-Sarchive of mixes will begin to roll out on the service, giving fans access to mixes that haven't been on the market in over 15 years.

Quote, Apple Music is the first platform that offers continuous mixes where there's a fair fee involved for the artists whose tracks are included in the mixes and for the artists making those mixes. It's a step in the right direction where everyone gets treated fairly. DJ Charlotte DeWitt said in a statement on behalf of Apple, quote, I'm beyond excited to have the chance to provide online mixes again, end quote. DoorDash, Grubhub, and Uber Eats are suing New York City for its new law which caps the amount of commissions that such delivery apps can charge restaurants. All the companies say the law is harmful government overreach, quoting the Wall Street Journal. The limit on fees has cost the companies hundreds of millions of dollars combined through July,

they said in the suit. A permanent cap will likely require them to rewrite contracts with restaurants, reduce marketing in the city and raise fees for consumers, the companies said in the complaint. The companies are seeking an injunction that would prevent New York from enforcing the fee cap ordinance adopted last month, unspecified monetary damages and a jury trial. Councilman Mark Jonedge, Chairman of the City Small Business Committee, which has pushed for more oversight on the apps, said the council intends to move forward with the fee limits and other regulation of the services. The laws simply seek to bring fairness to a system that all too often lacks it, Mr.

John Edge said in a statement Thursday evening. The companies are suing New York amid heightened scrutiny from local regulators across the U.S. after the COVID-19 pandemic fueled a broad consumer shift to the platforms. Many restaurants adopted app delivery to stay afloat last year, and some cities instituted guidelines around fees to help them survive. The food delivery companies say they are seeking to prove the illegitimacy of the caps more broadly, alleging that they are unconstitutional and interfere with negotiated contracts. They also question capping marketing services charged by the apps when the city doesn't do so for other online platforms that provide advertising to companies. Left unchecked, the ordinance sets a dangerous precedent, the company said in the complaint.

Now that restaurants can operate their dining rooms again, the New York City ordinance, quote, bears no relationship to any public health emergency, the company said. It also, quote, interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates, they said. The apps can charge restaurants commissions as high as 30% per order. New York City temporarily capped what apps could charge restaurants during the pandemic. Last month, it made the cap permanent, saying that food delivery companies are prohibited from charging restaurants more than 23% of an order, 15% for delivery, 5% for listing on apps, and 3% for credit card processing

fees. That means Grubhub, which often relies on restaurants fulfilling deliveries received on its app, would be limited to an 8% commission on such orders. Many of those caps expired as COVID-19 cases lessened earlier this year, but some lawmakers have sought to extend them, given complaints about the charges overall. San Francisco's board of supervisors enacted a permanent 15% cap per order on food delivery fees in June, the first city to institute a ceiling with no end date. The apps have also filed suit there, end quote. What all of these companies, I'm sure, know, but what you might not, if you're not a local, is that the bar and restaurant industry is incredibly powerful here in New York City, like one of the biggest lobbying forces around.

Good restaurants, a good nightlife. That's half the reason people live here in the first place, and a lot of the reason tourists come here as well. And that's why even in neighborhoods that tourists rarely see, there are still restaurants on literally every corner here. Something tells me, at least here in New York City, the restaurants are likely to win this battle. They're a meaningful segment of our tax base, and these platforms are not. Time for the weekend long read suggestions. For several years now, infotainment systems have become a big selling point in new cars, big giant screens, increasingly crowding out space for attention in your cabin.

And I was surprised to learn via this piece in Slate that this is sort of a Wild West situation. This sort of tech is less regulated than you might think, considering the distraction, potential it poses, quote. The problem isn't necessarily that infotainment displays are now a standard feature of all new vehicles. In theory, at least, they're preferable to drivers squinting to read a phone while operating a vehicle. But these systems are rapidly becoming glitzier, more complicated, and just plain bigger, with some resembling supersized tablets attached to your car console. Meanwhile, they're essentially unregulated. Staff at the Federal National Highway Traffic Safety Administration are aware of infotainment's risk of distraction, and they have advised carmakers to avoid egregiously

dangerous designs and functionalities. But carmakers know that infotainment presents one of their best chances to stand out from competitors. When you go to a dealership, it's almost a given that the car will have a five-star crash rating and that it accelerates and breaks quickly, says Kelly Funkhouser, the head of connected and automated vehicles at Consumer Reports. Quote, what makes a difference in the car you actually pick is the infotainment system, end quote. That becomes even more true in a world of electric vehicles, which lack much of the sound and feel that seem to confer a unique character on cars with internal combustion engines. Motor Trends ranking of the model year's best exhaust sounds doesn't work for electric vehicles

that emit no exhaust. Eager to differentiate carmakers are constantly updating their infotainment systems with new and flashy designs, with touchscreens that look and feel like an iPad, Tesla, come with a redundant control wheel next to the cup holder, Genesis, and claim the ability to read hand gestures, BMW. They're all trying to define their separate worlds for how to do stuff, says Cliff Quang, a user-experienced designer and author of the book, User Friendly. That may be a compelling business strategy, but it introduces new distractions and makes it harder to build muscle memory across vehicle models. The more complex the infotainment systems get, the less people

understand them, Quang says, end quote. Next, the New York Times doesn't invent. investigative report about something I've been wondering about. Bottom line, according to this report, the Russian state does have relationships with the hacker gangs operating in their country, likely has strong influence on them, but stops short of actually directing their activity or their targets. The report by the Cybersecurity Company Recorded Future backs up the assessments of American officials who have said Russia does not directly tell the groups what to do, but is aware of their activities and asserts influence. The Russian intelligence agencies both recruit talent from the groups and can set some limits on their activities, some American officials said.

Russian intelligence officials have longstanding ties to criminal groups, the report found, quote, in some cases it is almost certain that the intelligence services maintain an established and systematic relationship with criminal threat actors, it said. In recent months, recorded future has also published interviews with Russian hackers involved in ransomware attacks against the United States. In this regard, the Russian government's relationship with criminal hackers is different than that of other adversarial powers like China or North Korea, end quote. CNBC did an interesting thing, breaking down division by division, product by product, how they think Amazon Web Services generates those billions of dollars and profits for Amazon,

since Amazon is not keen to actually break out the financial specifics. Quote, Corey Quinn, who helps companies lower their AWS costs as chief cloud economist at the privately held Duck Bill Group, estimated that more than 50% of AWS revenue comes from the EC2 computing service. It essentially lets customers rent virtual slices of physical computer servers in Amazon data centers. Add in the elastic block storage and simple storage service, data storage services, the relational database service for storing and serving up data and data transfer fees, and that brings the total above 70% of revenue, Quinn said. Revenue and profit are probably not evenly distributed among the millions of AWS customers.

If 20% of AWS customers deliver 80% of revenue, then the widest margins are coming from the small and medium-sized customers in the remaining 80%, said Joe Kinsella, founder and former Technology Chief of Cloud Health, a startup VMware acquired in 2018, whose software helps companies tune their cloud usage. Larger customers can access more meaningful discounts. Bernstein's analysts estimated that in 2019, AWS had a 61% gross margin overall, end quote. Outside magazine takes a look at the tech workers who have taken advantage of COVID times to truly work remotely, and in this case, by moving to Lake Tahoe, which is a mere four hours away from Silicon Valley, depending on traffic. So how are things going over there?

Quote, summer turned to fall, which turned to winter, which became spring, and the newcomers are still here. It's not just the tourists anymore whose numbers have ebbed and flowed with lockdown restrictions and the weather and whose trash has gone from wet towels twisted in the sand to plastic sleds split in the snow. There's another population of people who came and never left, those freed by COVID from cubicles and work commutes. They migrated laptops and tow to mountain towns all over the west, transforming them into modern-day boom towns that some are aptly calling Zoom towns. All told, 2020 saw more than 2,000. 350 homes sold across the Tahoe Basin for a boggling $3.28 billion up from $1.76 billion in 2019, according to data analyzed by Sierra Sotheby's. That $3 billion stat is on a par with 2020

home sale revenues in Aspen, Colorado, albeit there, the latest average home sale price came in at $11 million. The trend is in line with real estate records being shattered from Sun Valley, Idaho, to Stowe, Vermont. And according to a just-released market update, it hasn't stopped. In the first quarter of 2021, median prices for single-family homes increased by an astronomical 70% year-over-year in Truckee, 72% in South Lake and 81% in Inclined Village. It's the wildest time, says realtor Katie Brandenburg, who works on Tahoe's Nevada side. For her and other realtors around the lake, the autumn of 2020 felt like winning the lottery, quote, I paid off a lifetime of debt, 28 years of loans, college, credit cards, and cars in three months, end quote. And finally, it's the 20th anniversary

of the beginning of Cartoon Network's Adult Swim programming lineup. It began with my favorites Space Ghost and Brack, if you'll recall, but it went on to become something that conquered the late-night TV programming slot overall as traditional late-night TV programming disintegrated, quote, By all accounts, it was a minor miracle that Adult Swim ever made it off the drawing board 20 years ago. Money was next to non-existent. The editor of Cartoon Network's first original series worked from a closet. A celebrity guest on that series unaware of the weirdness he had signed up for walked out mid-taping. In retrospect, it seems right that one of modern TV's most consistent generators of bizarreo humor and cult followings had origins that were themselves pretty freewheeling.

It was really just a labor of love, Mike Lazo, who oversaw programming for adults, Swim before he retired in 2019 said, I think the audience could tell that and responded to it, end quote. We wouldn't have fit in anywhere else, said Tim Hidecker, who, along with Eric Werheim, created awesome show and has worked on several other adult swim series since. Quote, there's no other place on TV that made sense for us, and maybe that is still the case, end quote. All right, a whole slew of housekeeping items for y'all.

First of all, tomorrow, you will be able to. to hear that Twitter space that Chris and I did this Wednesday, where none other than Kvon Bakeport, the guy leading the product revolution at Twitter, came on himself and gave us way more of his time than we probably deserved. But if you want to deep dive into what Twitter is up to from the dude himself, here you go. Next, don't miss the hashtag World Cup of Entrepreneurs voting this weekend because we're really hitting the crunch time for this contest. This is where the meat of the competition is going to happen. Today in the quarterfinals, your vote is between Bill Gates and Patrick Cullison.

Saturday will be Steve Jobs versus Larry and Sergey of Google. And then Sunday, our first semi-final matchup when Elon Musk goes up against Jeff Bezos. Come on, you can't miss a vote like that. Every day around noon Eastern, I will post the new poll, so check the pinned tweet on the at TechMeme podcast Twitter account. And finally, more than 130 of you submitted your soft interest in the ride home rolling fund. I had a dollar figure in mind that I wanted to raise for the fund, and this means that we've more than exceeded that. So I'm moving forward with Angelus on the next steps. I'll be working on writing a fund memo this weekend. So those of you who

submitted, thank you, and you should be getting an email from me in the coming weeks. It is a rolling funds so you can still submit your interest until we actually formally close things. So keep that in mind. Enjoy your weekend. Talk to you on Monday.