Tech Brew Ride Home - Fri. 12/04 – CRACK! Warners Blows Up The (Traditional) Hollywood Business Model

Episode Date: December 4, 2020

Another monumental crack across the land as Warner Brothers has maybe signaled the death of the business model Hollywood has relied on for 100 years. Is Stripe signaling it wants to completely rewire the global monetary system? Have Chinese scientists achieved Quantum Supremacy? Would you be interested in deep sea tourism? And of course, the weekend longreads suggestions. Sponsors: Fundrise.com/techmeme VistaPrint.com/techmeme Links: Warner Bros. will release all of its new 2021 movies simultaneously on HBO Max (The Verge) WarnerMedia’s CEO explains why he’s blowing up the movie business (Recode) Stripe to Offer Banking Services in Deal With Goldman Sachs, Citigroup (WSJ) Stripe: Platform of Platforms (Stratechery) China Stakes Its Claim to Quantum Supremacy (Wired) Triton's latest submarine puts six people in a bubble, 3,300 feet under (New Atlas) Weekend Longreads Suggestions: Hollywood’s Obituary, the Sequel. Now Streaming. (NYTimes) Why Most Newsletters Fail (What Went Wrong) These Tech Startups Want to Sell You Their Life Insurance (WSJ) A.A. to Zoom, Substance Abuse Treatment Goes Online (NYTimes) An oral history of the hamburger icon (by the people who were there) (invision) 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 Techmeme ride home for Friday, December 4th, 2020. I'm Brian McCullough today. Another monumental crack across the land as Warner Brothers has maybe signaled the death of the business model Hollywood has relied on for 100 years.

Is Stripe signaling it wants to completely rewire the global monetary system? Have Chinese scientists achieved quantum supremacy? Would you be interested in deep sea tourism? And can I interest you in the weekend long read suggestions? Here's what you missed today in the world of tech. All right, it's official. This is Hollywood's Napster moment. Not in the sense that suddenly piracy or something is bankrupting the industry,

but in the very real sense of movies and TV are taking the leap and taking their business models digital. Warner Brothers announced that it will release every single movie on its 2021 slate simultaneously in theaters and on HBO Max, at least in the U.S. The first-run films will stream there for one month before being taken down again for a period of time while still remaining in theaters, quoting Julia Alexander in The Verge. The plan is to run this experiment for one year. For people who don't have access to HBO Max in their market, it appears that theatrical releases will still be the go-to option. The movie's Warner Brothers is planning to release for now include The Little Things, Judas and the Black Messiah, Tom and Jerry, Godzilla versus Kong, Mortal Kombat, Those Who Wish Me Dead, The Conjuring, The Devil Made Me Do It, In The Heights, Space Jam A New Legacy, The Suicide Squad, Reminiscence, Malignant, Dune, the Many Saints of Newark, King Richard, Cry Macho, and Matrix 4.

These titles could change depending on delays. All films will be released on HBO Max in 4K Ultra HD and HDR. The movies will also likely help Warner Media reach an agreement with Roku after months of fighting over a deal. WarnerMedia is also offering a limited deal, making HBO Max 22% cheaper for people who sign up for six months. The $69.99 price works out to just under $12 a month instead of $15, end quote. So with this news, Wither movie theaters over at Recode, Peter Kafka interviewed WarnerMedia CEO Jason Kallar, the dude who's actually pulled the trigger on this really earth-shattering decision. And Kallar said this. Kafka asked about Warner's and their relationship.

with their movie theater partners, who, one would imagine, are maybe less than thrilled about this news, quote, putting myself in the shoes of a theatrical distributor right now, one of the things I believe could be helpful to them and their business is a steady stream of new great movies. And that's what we're stepping up to do, which, by the way, not everybody is stepping up to do. I think that has weighed very heavily on this decision. What can we do to serve a number of different constituents? First and most importantly, the fans, but also exhibitors and talent, directors, actors, storytellers, et cetera, and a host of other considerations. And we think a lot about exhibition because really, 10 years from now, 15 years from now, we are going to be in the exhibition business because

consumer, because customers want it and it's a great experience. I do it a lot myself. With that in mind, where we netted out is that giving a steady stream of big budget great movies to movie theaters over the next 12 months can be very, very helpful to their business, end quote. Also, it would be very, very helpful to a company trying to launch a streaming service in a very crowded marketplace. In one fell swoop, HBO Max has gone from possibly also ran in the market to clearly a market leader. So normally this is the point where I would lay out for you the various angles of the story, the various takes and implications and context, but guess what? I spoke this morning with Peter Kafka about all of this. So much more about this monumental story

on the weekend bonus episode coming out tomorrow afternoon. In its own way, this might be no less a monumental story in the end. Stripe yesterday launched a new product, Treasury, to allow its customers to offer checking accounts and other business banking services. Among the first partners to sign up to offer this, Shopify, beginning next year. This comes on top of news from earlier in the week that Stripe Capital, its business lending service, was also being extended to other online platforms, thereby allowing anyone to offer end-to-end lending APIs to provide customers with financing options. To understand why this is a big deal, we knew Stripe was the big unicorn in the payment space, but what is blowing a lot of people's minds is what

Stripe seems to be signaling. It wants to be the biggest player in the money space, all of money, full stop. Like with these two products, Stripe is basically planting its flag in a huge swath of the entire fintech space. There are literally dozens of startups who have raised money to be the Stripe but for X or Y, banking or lending or whatever. Now have they all been made redundant by Stripe? Ben Thompson, as is his want, went deep on these announcements this week, and let's just say he's blown away. Quote, this broader understanding of Stripe's ambition became clear to me earlier this week with another announcement, Capital for Platforms. Stripe Capital itself is not new. Launched in 2019, the service lends money to businesses that use Stripe's

payments processor. As the industry has become more digital, PayPal, Square, and even Amazon, have introduced small business lending programs, as have a slew of startups, including SoftBank Group-backed cabbage and public company on-deck capital. Though lending poses risks, Stripe, much like other payment services, says the extra data it has on customers will give it a better idea of whether borrowers can repay loans. The company believes that edge will protect it from significant losses during an economic downturn. Stripe Capital seems both obvious and, as the article notes, rather unoriginal. This week's expansion, which was announced with a 29-word blog post, makes it clear it is much more. Carefully read this tweet from founder

and CEO Patrick Collison, quote, mundane, though it sounds, access to capital is the primary bottleneck that limits the growth and expansion of most small businesses. So we built capital for platforms. Help your customers grow faster by using our lending infrastructure, end quote. Note the word Patrick Culleson emphasized, your. Capital for platforms is not for Stripe's customers, but rather the customer of Stripe's customers, which is to say, Stripe is asserting itself as the platform of platforms. Go back to the news that Shopify balance will be powered by Treasury. Stripe does not have a customer relationship with all of the shops on Shopify. That is exactly what Shopify is good at, so why would they? Instead, Stripe is focusing on what it is good at, providing that API layer to banks that will never have the capability to serve Shopify shops and exposing said layer to Shopify to incorporate into their products. Stripe is 10 years old now, but the ambition implied by these announcements explains why the founders claim they are just getting started. The company is busy building.

well, exactly what it has said it was building all along. Economic infrastructure. And I will freely admit, until this week, I didn't completely appreciate just how mammoth an undertaking that was, end quote. Yeah, when I talk to smart folks in VC, in tech, in the startup ecosystem lately, the two unicorns everyone is most excited about at the moment are Roblox in the gaming space, but also Stripe. And especially Stripe lately. Uber for transportation, Spotify for music, Shopify for non-Amazon commerce. All cool markets to try to own, but what if you could own money? Not by disrupting Wall Street, that's small stakes, but by fundamentally rewiring the global financial system itself. Chinese scientists are claiming quantum supremacy, that much Ballyhooed

yardstick that lets us know when traditional computing has been supplanted by quantum computing. the researchers claim they have a quantum system that calculated in mere minutes, something that they said would take current state-of-the-art supercomputers two billion years to calculate. Quoting Wired. Last year, Google won international acclaim when its prototype quantum computer completed a calculation in minutes that its researchers estimated would have taken a supercomputer 10,000 years. That met the definition for quantum supremacy the moment a quantum machine does something impractical for a conventional computer. Thursday, China's leading quantum research group made its own declaration of quantum supremacy in the journal Science. The two systems work differently. Google builds quantum circuits using super-cold, superconducting metal, while the team at University of Science and Technology of China in Hafei recorded its results by manipulating photons, particles of light. No quantum computer is yet ready to do useful work, but the indications that two fundamentally different forms of the technology can outperform supercomputers will buoy the hopes.

and the investments of the embryonic industry. Google's experiment used a superconducting chip dubbed sycamore, with 54 cubits cooled two fractions of a degree above absolute zero. One cubit broke, but the remaining 53 were enough to demonstrate supremacy over conventional computers on a carefully chosen statistical problem. It's unclear just how many cubits are needed for quantum computers to do useful work. Expert estimates range from hundreds to millions. The Chinese team also used a statistical test to state.

its claim of quantum superiority, but its quantum data carriers take the form of photons traveling through optical circuits laid out on a lab bench guided by mirrors. Each photon read out at the end of the process is equivalent to a cubit, revealing the result of a calculation. One difference between the Chinese system and Google Sycamore is that the photonic prototype is not easily reprogrammable to run different calculations. Its settings were effectively hard-coded into its optical circuits. Christian Weidbrook, CEO and founder of Toronto Quantum Computing startup Zanadu, which is also working on Photonic Quantum Computing,

says the result is still notable as a reminder that there are multiple viable paths to making quantum number crunching work. It's a milestone in Photonic Quantum Computing, he says, but also good for all of us, end quote. I'm all for space tourism. I'd for sure love to vacation on the moon someday, if that were possible and practical, but I'd also be just as excited to go under seas for my tourism. That might be closer than you might think, as the submarine startup Triton has unveiled its latest submarine

that can take six people 3,300 feet under the waves in a cool little bubble. Having conquered the deepest recesses of the ocean with its DSV limiting factor deep sea elevator and delivered its first 24-seat Deep View tourist submarine in Vietnam, Triton has turned its attention back to the luxury sector with a new six-person sub designed to launch from the garage of your megayot. The 3,3006 is so named because it has achieved a certified depth rating of 3,300 feet or 1,000 meters, with the ability to carry six people in a surprisingly close facsimile of comfort. Triton achieves this with the use of the world's largest spherical acrylic pressure hall, a giant transparent bubble, two and a half meters or 100 inches in diameter, at the center of the sub.

Optically perfect and free from distortion, this bubble offers panoramic views for the front five seats and a great opportunity to see some backs of the heads from the sixth, which is the least comfortable looking of the lot, and strangely enough where the pilot sits. Triton will happily fit it out with just four seats if you want to give everyone a bit more legroom. It's air conditioned, which is a must in submersibles where the lack of fresh air tends to be very noticeable and lunch menus need to be well planned in advance of a group dive. You hop in and out via an access hatch behind the bubble using the pilot seat as a step ladder to add a touch of insult to the injury of getting the worst seat in the house. Whatever, it's hard to feel too

sorry for anyone whose job is driving people around in luxury submarines and to even the score up a bit. The pilot gets access to a very serious-looking battery of gauges and controls that'll look badass and selfies. It might be a long way down, but 3,300 feet is only about a third as deep as the wreck of the Titanic. Still, it's far farther down than you can go with scuba gear. No less an authority than Wetsuit Warehouse tells us the record for the deepest scuba dive was set in 2014 at 109 feet or 307.6 meters. It took this gent just 12 minutes to get that far down and 15 hours to come back up while safely decompressing. There will be no such issues in the pressurized bubble of the 3,306, which carries enough air and battery for 10-plus hour undersea excursions, end quote.

Well, 10 hours. What about bathroom breaks? I don't see a toilet in any of these pictures. But if you're interested, many more technical details in the link to the piece in the show notes. Time for the week on long read suggestions, a handful of which tie in directly to what we've been talking about this week. This first one is a week old, so it's already outdated, given the news of the last 24 hours, but the New York Times has a long piece up looking at how never has so much upheaval arrived so quickly and on so many fronts as it has for Hollywood in the year of our Lord 2020.

Quote, leaving many writers, directors, studio executives, agents, and other movie workers disoriented and demoralized, wondering in complete darkness, as one long-time female producer told me, these are melodramatic people by nature, but talk to enough of them and you will get the strong sense that their fear is real this time. have streaming, the coronavirus, and other challenges combined to blow away, finally, unequivocally, the last remnants of Hollywood. The last nine months have shaken the movie business to its bones, said Jason Blum, the powerhouse producer, whose credits range from the Purge series to Black Klansman, end quote. Next, the What Went Wrong newsletter on Substack, interviewed other writers of newsletters on Substack to find out the realities of trying to make a living on Substack. substack isn't exactly exploiting the labor of writers who should know the deal they are signing up for,

but it's not a service that changes the bad math of freelance writing. There will always be an upper crust of pundit journalists who go on TV and bring in six figures for a Bradshaw-esque amount of work. What is lacking are the decent full-time jobs that constitute a normal career. For many people out here in the substacker freelancer unwashed masses, a regular paycheck from journalism counts as a coveted prize. A substack, in other words, is a lottery ticket, but journalism has become an industry with too many lottery tickets, end quote. By the way, this is also something that Peter Kafka and I talk about at length on this weekend's bonus episode, so again be on the lookout for that. Next, maybe Stripe will get to this eventually. The Wall Street

Journal takes a look at the fintech startups wanting to sell you life insurance, quote, Until now, life insurance startups have largely collaborated with traditional carriers rather than competed with them. Many functioned as online agents to attract customers or used algorithms that draw on third-party databases to help insurers more speedily assess the risk of applicants and set their premiums. The moves by Besto and Day Forward signal that startups are confident now they can overcome the hurdles of low profitability and regulation that have kept them out of the life insurance carrier business in the past, end quote. A New York Times piece notes how things like AA and other 12-step substance and addiction recovery programs have moved online because of the pandemic, and they claim, for the most part, it is all worked out. Though online rehab rose as an emergency stopgap measure, people in the field say it is likely to become a permanent part of the way substance abuse is treated. Being able to find a meeting to log into 24-7 has welcome advantages for people who lack transportation,

are ill, juggling parenting or work challenges that make in-person meetings tough on a given day and may help keep them more seamlessly connected to a support network. Online meetings can also be a good stepping stone for people just starting rehab. There are so many positives. People don't need to travel. It saves time, said Dr. Andrew Saxon, an addiction expert and professor in the Department of Psychiatry and Behavioral Sciences at the University of Washington School of Medicine. The potential for people who wouldn't have access to treatment easily to get it is a big bonus. and quote. And finally, my usual bit of tech history to share with you, how about an oral history of the hamburger icon from the folks who developed it? Quote, we started figuring out that there was

a hierarchy of recognition. When someone looked at the screen, they would scan it for a particular shape and then hone in on details of that shape, much like seeing a diamond shape road sign before you see the symbol within it. We wanted to make sure you had a limited number of objects to search for. Every pixel mattered. There was no extraneous information, no decoration, everything had a purpose. And those limitations meant we had to design something as elegant as it was simple, a timeless design style, end quote. As I say, the weekend bonus episode interview with Peter Kafka coming out tomorrow is super timely. We had scheduled it for yesterday, as you'll recall, to talk about digital media in the year of COVID, the substack stuff, the TikTok stuff, and podcasting stuff.

And then the Warner Brothers News dropped right when we were scheduled to record, so we pushed it to this morning, and I'm glad we did. Deep dive on Hollywood's digital transformation coming at you tomorrow. Talk to you again on Monday.