Tech Brew Ride Home - Mon. 07/25 – NFL+

Episode Date: July 25, 2022

NFL+ arrives, and at the end of the show, we’ll take a deep dive into sports rights as the great free radical in the streaming wars and the evolution in sports in general. In between that, people accuse Sam Bankman-Fried of lowballing them. More details on the so-called Apple Watch Pro. And if I told you there’s a global shortage of fiber optic cable, would you be surprised? Sponsors: Ramp.com/techmeme ZocDoc.com/techmeme Links: NFL+ Enters Sports Streaming Wars As League Launches New Service (The Hollywood Reporter) Voyager Responds to FTX’s Offer, Calling It a ‘Low-Ball’ Bid (Bloomberg) Apple Begins to Show Rare Vulnerability Ahead of Economic Slowdown (Bloomberg) Intel bags deal to make chips for MediaTek, that other Android processor designer (The Register) Global shortage of fibre optic cable threatens digital growth (FT) Why Big Tech Is Making a Big Play for Live Sports (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 Monday, July 25th, 2020. I'm Brian McCullough today. NFL Plus arrives. And at the end of the show, we'll take a deep dive into sports rights as the great free radical in the streaming wars and the evolution in sports in general. In between that, people accuse Sam Bankman-Fried of low-balling them, more details on the so-called Apple Watch Pro.

And if I told you there's a global shortage of fiber optic cable, would you even be surprised? Here's what you miss today in the world of tech. The NFL has launched its NFL Plus streaming service, offering a $4.99 per month tier and a $9.99 per month premium tier with full game replays, quoting the Hollywood Reporter. In a launch that NFL commissioner Roger Goodell is calling, quote, an important day in the history of the National Football League, the TV Juggernaut is launching a streaming offering called NFL Plus on Monday, hoping to entice fans to subscribe with features built around smart. smartphones and tablets. The first game available on NFL Plus will be the Hall of Fame game on August 4 featuring the Jacksonville Jaguars and Las Vegas Raiders. NFL Plus will have two subscription tiers, a base tier for $4.99 per month or $39.99 per year. That includes live, local, and national primetime games on mobile devices and out-of-market pre-season games on all devices.

The service will also include Home, Away, and National Game Live Audio. for every game of the season and some NFL library programming. The NFL plus premium tier will cost $9.99 per month or $79.99 per year and will add on full game replays and condensed game replays going back to 2009 and coaches film all ad free. It will live within NFL.com and the NFL app serving as an add-on service for regular consumers of NFL content. The service gives the league more direct economic exposure to its fan base, with NFL programming by far the most popular programming on linear TV and serving as a sale point for other streaming services like Amazon Prime Video and Paramount Plus. NFL Plus is being built around the live mobile game rights previously held by Verizon and Yahoo, which include local and some national games depending on where the user was geolocated. Verizon's rights ended after this year's Super Bowl. But the current product is being viewed. as a starting point, the NFL says, with the league hoping to evolve the service over time. The NFL already has an out-of-market video offering that includes streaming. It's NFL Sunday

Ticket. Those rights are currently on the market with digital companies like Apple and Amazon among the bidders alongside existing partners like Disney. NFL Sunday Ticket is available on all devices, including connected TVs and streaming sticks with NFL Plus's in-market video and live audio really built around mobile consumption, end quote. More on all of this at the end of the show. Remember how Sam Bankman-Fried of FTX fame has been running around investing in distressed crypto platforms and projects as a way to prop up the overall crypto market, sort of how J.P. Morgan famously did all the way back in the 1907 crash on Wall Street. Well, another way to describe this sort of activity would be bottom feeding.

the role of lender of last resort to scoop up assets on the cheap. Both things could be true at once, and people are noticing that, especially Voyager, quoting Bloomberg. On Friday, crypto billionaire Sam Bankman-Freed proposed a restructuring deal to Voyager publicly. Under the plan, Alameda, Bankman Freed's trading firm, would buy all of Voyager's digital assets and digital asset loans, other than loans to Three Arrow's capital in cash at market value. Meanwhile, FDX, His crypto exchange would offer customers of Voyager an option to receive their share of claims by opening a new account at FTX. The Alameda FTX proposal is nothing more than a liquidation of cryptocurrency on a basis that advantages Alameda FTX. Lawyers for Voyager said in response to the bid in a court

filing submitted Sunday, it's a low ball bid dressed up as a white night rescue, end quote. Voyager will entertain any serious proposal made under the bidding procedures, but the bid from FTCX and Alameda was, quote, designed to generate publicity for itself rather than value for Voyager's customers, they wrote. It undermined a competitive process, declared no value in Voyager platform and intellectual property, and ignored tax consequences, among other things, they said. We submitted what we think is a generous proposal, Bankman Fried said in an emailed comment. It appears that Voyager's consultants are attempting to stall out the process, increasing their fees. We feel for the customers who have lost significant funds and are waiting to receive those that remain.

end quote. In his newsletter this weekend, Mark German has more details on the forthcoming so-called pro-apple watch that we should see released in a matter of months at this point. Sources say the new Pro Watch will have a roughly 7% larger screen, a new design, and a new case with more durable, probably titanium to make it more rugged. As I've written several times, the new high-end Pro Watch will pack in a larger display, longer battery life, perhaps multiple days on one charge via the new low power mode, and a body temperature sensor. There's more, though. I'm told that the high-end model is going to be a good bit bigger than the standard Apple Watch, big enough that it might only appeal to a subset of

customers. The screen will be about 7% larger, and the device will have a fresh look. The first time the company has introduced a new Apple Watch design since 2018. It will be an evolution of the current rectangular shape and not circular. It also won't have those rumored flat sides for those who will undoubtedly ask. In terms of materials, the watch will have a more durable formulation of titanium to make it extra rugged. In a rare move, Apple issued a 59-page report to proclaim its leadership in health technology. The company this past week put out an in-depth report detailing every health and fitness-related feature its launch to date for the iPhone and Apple Watch. The underlying message were a strong contributor in the health space and anyone who says otherwise is wrong. I've never seen Apple put out a report like

this, and it raises the question of who the audience is supposed to be. In any case, the Apple Watch has a lot of potential as a health tool. The Holy Grail will be for the company to introduce a watch with a body temperature sensor, glucose monitor, and blood pressure checker. That will take time. The temperature feature should appear in this year's models, but the blood pressure technology probably won't arrive until 2025, and the glucose feature may not be ready until near the end of the decade. Intel plans to manufacture chips for Taiwanese chip designer MediaTech, the first major partnership that Intel has been able to score for its new Intel Foundry Services Initiative, quoting the register. The American X-86 Giant is expected to announce Media Tech as a marquee customer for Intel Foundry Services Monday,

more than a year after the chipmaker rebooted the business to compete with Asian Foundry Giants, TSMC, and Samsung as part of CEO Pat Gelsinger's comeback plan. MediaTech was the fourth largest fabulous chip designer in 2021, larger than AMD, but smaller than Broadcom, Nvidia, and Qualcomm. Its revenue was $17.6 billion last year, a 61% annual increase largely thanks to smartphone chip sales, as well as Android handsets. MediaTech also designs chips for cars, Chromebooks, tablets, network products, plus IoT and smart home devices. MediaTech executive NS Tsai said the move, which will involve chips for smart-edge products is part of its multi-sourcing strategy. This means the company will continue to

use rival foundries such as TSM for other products, end quote. A global shortage of fiber optic cable has driven up prices and lengthened the lead times, especially in Europe, India, and China, casting a shadow over global 5G rollouts. Quoting the Financial Times. Europe, India, and China are among the regions most affected by the crunch, with prices for fiber rising by up to 70% from record lows in March 2021, from $3.70 to $6.30 per fiber kilometer, according to Crew Group, the market intelligence firm. Although the pandemic prompted some of the biggest tech and telecoms groups to slash their CAPEX, there's been a surge in demand for internet and data services leading to a shortfall and availability of the crucial but often overlooked material. Companies such as Amazon,

Google, Microsoft, and Facebook owner Meta are expanding their data center empires to meet storing demand, including laying vast international fiber networks under the ocean. Meanwhile, governments have set ambitious targets for the rollout of superfast broadband and 5G, both of which require vast quantities of fiber optic cable to be laid under the ground. Total cable consumption increased by 8.1% in the first half of the year compared with the same time last year, according to crew estimates. China accounted for 46% of the total, with North America representing the fastest growing region at 15% year-on-year. Underpinning the shortage are rising prices of some of the critical components that go into fiber optic technology,

in which light is carried along flexible fibers with a glass core. There has been a shortage of helium, a crucial component in the manufacture of fiber optic glass, in part caused by plant outages in Russia and the U.S., which has caused prices of the element to increase by 135% over the past two years. Meanwhile, prices of silicon tectr chloride, another key component of fiber production, have increased by up to 50% according to crew. In my professional career, I've never seen anything like this. Inflationary Crunch, said Wendell Weeks, chief executive of Corning, the biggest producer of fiber optic cable in the world, which played a significant role in inventing the technology in 1970, end quote.

Finally today, back to the sports story. Ever since I've been watching this space closely, I've wondered why sports don't just do their own apps and cut out the middlemen, like every media player has done recently. Best as I can tell, and longtime listeners know that I've poked at this a ton. It all comes down to the fact that as long as legacy media exists, and sports is the number one remaining draw for live over the air content, the sports leagues know that they have the most leverage there so they can make the most money there as long as it lasts. But is that finally changing, as we've reported on just at the start of the show today?

Is the damn finally breaking? The New York Times has a look at how Apple, Amazon, and Google are trying to win live sports streaming rights by persuading skeptical leagues to switch from traditional TV and cable networks. Think about it. If you're a league, this would be the next logical step. Maybe you do deals with the streamers for the better part of this decade and learn what you can, and then maybe you strike out on your own, right? Quote, emboldened by their deep pockets and eager to boost viewership of their streaming subscription services, Apple and Amazon have thrust themselves into negotiations for media rights held by the National Football League, Major League Baseball, Formula One Racing, and college conferences. They are competing to replace direct TV for the rights to NFL Sunday

ticket. A package the league wants to sell for more than $2.5 billion annually, about $1 billion more than it currently costs. According to people familiar with the process, eager not to miss out, Google has offered a bid from YouTube for the rights, beginning in 2023, the people familiar with the offer said. The tech company's interest is a thrill for sports leagues and a terror for media companies that fear competition from rivals that collect tens of billions of dollars from dominant positions in other businesses. Last year, sports accounted for 95 of the 100 most viewed programs on television. The NFL Sunday ticket package, which shows out-of-market Sunday NFL games that aren't being shown on local television, is available because DirecTV chose not to

bid. It has been losing as much as $500 million annually on the package, though it has also benefited from a reliable base of about 2 million subscribers. Apple is considered the frontrunner, according to a dozen people in the sports, media, and tech industries, but a final deal has been delayed by negotiations over a concurrent sale of NFL media assets, including the NFL network, Red Zone Channel, and NFL Plus, a new subscription service that provides access to live games on mobile devices. Apple has made winning the package a priority. Tim Cook, Apple's chief executive, has met with league officials and influential team owners like Jerry Jones, who owns the Dallas Cowboys and the Kraft family, who own the New

England Patriots, according to three people familiar with the process. Apple declined to comment. Still, Amazon, ESPN Plus, and YouTube, which explored a bid for the rights in 2014, remain in the hunt, some of these people said. Brian Rolap, the NFL's chief media and business officer said in a statement that the league expects to finalize a deal in the coming months. A number of companies are in strong position to potentially land Sunday ticket, but we still have a ways to go in this process, Mr. Rolap added. Fans will still be able to access all the games on Sunday regardless of who wins the rights, but they will probably pay a premium to add the service to their Apple, Amazon, ESPN

Plus, or YouTube service, some of the people said. It's not yet clear if that premium would be more or less than the $294 that DirecTV charges for a year they added. Apple and Amazon are trying to position themselves for a future without cable. Since 2015, traditional pay television has lost a quarter of its subscribers, about 25 million homes. As people traded cable packages for apps like Netflix and Hulu, according to Moffat-Nathanson, an investment firm. that tracks the industry. But the price of live sports rights is only projected to increase. The biggest media companies, including Disney, Comcast, Paramount, and Fox are expected to spend a combined $24.24. According to data from Moffat Nathanson, nearly double what they spent a decade

earlier. The fragmenting of decades-old distribution models has created an opportunity for Apple and Amazon. The companies want to expand deeper into media by selling subscriptions to Apple TV Plus and Amazon Prime. Besides containing their own exclusive shows in sports, those services double as portals, selling additional streaming offerings like Stars and HBO Max, which pay Apple and Amazon 15% or more of each subscription sold. Amazon generates more than $3 billion annually from third-party subscription sales, according to estimates by the Investment Bank, BMO Capital Markets. To make the business model work, Apple and Amazon must attract more viewers and sports

are the most powerful draw in media. The companies may be willing to lose money on Sunday ticket to expose new customers to other parts of their business, the same calculation that DirecTV historically made. The challenge for Apple and Amazon will be persuading somewhat skeptical sports leagues that they can produce high-quality broadcasts, flawlessly stream games for millions of concurrent viewers, and serve sports fans accustomed to flipping between games with a remote, not navigating to a new app. Their interest marks a departure for the streaming industry. For years, many executives agreed with Reed Hastings, the chief executive of Netflix,

who said that his company was not interested in sports or news because it was watched just once live and never watched again. But many streaming companies are reconsidering, as competition for subscribers intensifies, stock prices have tumbled and profitability for many remains out of reach. Their newfound interest in sports was on display last Monday during MLB's home run derby at Dodger Stadium in Los Angeles, where executives from Apple, Amazon, Google, and Facebook socialized with sports leaders crashing a party historically monopolized by the television industry, and quote. Weird sort of payment snafu with Apple over my MacBook air delivery this weekend. It's not resolved yet, so I'll save a rant for when and if they actually can't resolve this.

Let's just put it this way for now. Apple does not make it easy to actually apply credits that they give you for trading in or recycling your old hardware. A $524 credit for my old iMac is currently missing. Anywho, hopefully know more on this because hopefully they'll fix it, but who knows? Talk to you tomorrow.