Tech Brew Ride Home - Thu. 05/18 – Montana Bans TikTok

Episode Date: May 18, 2023

The first official ban of TikTok by a US state is here. Unskippable tv-like ads are coming to YouTube when you’re watching on your TV. How much can be recovered when a crypto project blows up? Why is Amazon so far behind in drone delivery? And how Apple’s forthcoming headset got developed. Sponsors: Traceroute Podcast Bloomberg.com/careers Links: TikTok Ban Signed in Montana, Paving Way for First Amendment Legal Battle (WSJ) YouTube 2023 Upfront: Platform to Launch Unskippable 30-Second Ads on TVs, Roger Goodell on Hand to Tout NFL Sunday Ticket Pact (Variety) Netflix Advertising Tier Now Has “Nearly Five Million” Monthly Active Users (The Hollywood Reporter) Bankrupt crypto lender Voyager Digital predicts 35% customer payout (Reuters) Amazon’s 100 drone deliveries puts Prime Air far behind Alphabet’s Wing and Walmart partner Zipline (CNBC) Apple’s New Headset Meets Reality (Bloomberg Businessweek) 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 Thursday, May 18th, 2020. I'm Brian McCullough today. The first official ban of TikTok by a U.S. state.

Unskippable TV-like ads are coming to YouTube when you're watching on your TV. How much can be recovered when a crypto project blows up? Why is Amazon so far behind in drone delivery and how Apple's forthcoming headset got developed? Here's a Jimis today in the world of tech. Montana Governor Greg Gianforte has signed the country's first bill that bans TikTok in a U.S. state. It's set to go in effect on January 1st, 2024. I've heard that when Utah recently banned Pornhub, usage of VPNs in that state exploded, not sure if something similar can or will happen here. Quoting the Wall Street Journal.

Republican Governor Greg Gianforte on Wednesday signed the bill into law after Montana's legislature passed it last month. The legislation drew criticism from Chinese-owned TikTok and free speech advocates including the American Civil Liberties Union. The Montana ban is set to go in effect on January 1st. Any legal challenge, though, could trigger an injunction to delay the ban's start date. The law would bar TikTok from operating within the Treasure State and would also forbid app stores, such as Googles and Apples from making TikTok available to download within Montana. TikTok and app stores would be liable for fines of $10,000 a day for violating the law. Individual TikTok users wouldn't be punished. Gianforte signed a bill that infringed

on the First Amendment rights of the people of Montana by unlawfully banning TikTok, a TikTok spokeswoman said in a statement, she did not say whether the company plans to pursue legal action. It is unclear how the ban would be enforced or what would happen to Montanans who downloaded the app before the ban's January 1st start date. There also remain unanswered questions over whether Montanans could use a workaround, such as a virtual private network to make their devices look like they are outside the state. When press for specifics, the Republican state senator who sponsored to the legislation, Shelley Vance, said the onus of complying with the legislation would be on TikTok itself. The ACLU called the state-white ban unconstitutional, end quote.

YouTube has unveiled 30-second unskippable ads on top-performing videos when they're played on TVs. YouTube also said that more than 150 million unique U.S. viewers watched YouTube or YouTube TV on full-sized televisions in December of 2022. It's not just a mobile thing anymore, people. viewing will draw TV ads, and for YouTube, crucially, TV ad rates. Quoting variety. At the YouTube broadcast upfront event Wednesday in New York, execs announced the introduction of 30-second unskippable ads and top-performing YouTube content on TVs,

you know, just like the commercials that have run on broadcasts and cable networks for decades. YouTube will also start testing new pause experiences for YouTube on TV screens, showing an ad when viewers pause a video akin to the pause ads, Hulu first bowed four years ago. In their pitch to Madison Avenue types, YouTube execs also boasted of the streaming services massive reach. More than 150 million unique viewers in the U.S. watched YouTube or YouTube TV on televisions for the month of December 2020, according to Nielsen estimates. YouTube remains the number one most watch service on TV screens in America across both streaming platforms and traditional TV networks, and in April was one of the only

streamers to see month to month growth per Nielsen. More and more viewers are tuning into YouTube on the biggest screen in their home, said YouTube CEO Neil Mohan, calling it a seismic shift in the way people watch video content. Viewers, especially younger viewers, no longer make a distinction between the kind of content they're watching. When they turn on the TV, they want everything they love in one place, from their favorite creators to blockbuster movies to football, and they can find it all on YouTube. Mohan, formerly YouTube's chief product officer, assumed the top job after Susan Wajicki stepped aside earlier this year. The Upfront's presentation also highlighted YouTube's exclusive rights to NFL Sunday ticket out-of-market games package,

starting with the 2023 football season. Making an appearance to push the pact was NFL Commissioner Roger Goodell, joined by college football player turned YouTuber D String. Goodell revealed that the YouTube NFL partnership will enlist Mr. Beast, the number one individual creator on YouTube with 153 million subscribers, to create behind-the-scenes football content. The fact is, millions of football fans are on YouTube to catch all things NFL. Goodell said, this partnership will build on the success we've seen on YouTube's platforms with our most sought after content, end quote. More data on this real quick. Netflix said its ad tier has nearly 5 million global monthly

active users with a median age of 34. This comes only six months after launching this tier. And it's currently responsible for more than 25% of new signups in countries with the option, quoting the Hollywood Reporter. Netflix has been mum on how many subscribers the ad tier has. Previous reports had pegged it at about 1 million, but the monthly active users metric is a step in that direction. And co-CEO-CEO Greg Peters noted that more than a quarter of signups in countries where the ad plan is available, choose it with levels of engagement similar to those of its ad-free tiers. The signals are promising.

Engagement on our ads plan is similar to our comparable non-ads plans, Peters said. That's critical because it all starts and ends with consumers. Indeed, Netflix still dominions. most streaming ratings charts, and the company says its users watch for longer than competitors as well. It's why, despite all the competition out there, Netflix is the most popular streaming service today. To be the one to watch, you need everyone watching, and that's what sets Netflix apart, Peter said in what sounded like a subtle dig at the upcoming Max service, which uses the tagline, The One to Watch. Peter cited the Netflix effect in helping to push older songs

to the top of the charts after they appear in Netflix shows and in helping, quote, niche sports become mainstream, as footage from the Formula One docuseries Drive to Survive played, end quote. Here are some numbers that I've been wondering about as well. When a crypto exchange or fund or service or project or whatever blows up, how much can be recovered in terms of assets? I do suppose it would be on a case-by-case basis, but here's some specific data. Voyager says it expects to recover around 35% of users' crypto deposits as a U.S. judge approves its liquidation plan, letting the company return around $1.33 billion in crypto assets. Quoting Reuters, customers may be able to make withdrawals by June 1st. Voyager's official creditors committee

said any distribution beyond the initial 35% would depend on the result of future litigation. Voyager filed for bankruptcy protection in July, citing volatility in cryptocurrency markets and a default on a large loan made to crypto hedge fund Three Arrow's Capital. Two sale attempts failed during Voyager's bankruptcy. It initially sought to sell its assets for $1.42 billion to FTX, a deal that failed when FTX imploded in November. Binance.us stepped in with a $1.3 billion offer but called off the deal on April 25, citing a, quote, hostile and uncertain regulatory climate. Voyager customers' recovery hopes depend largely on the outcome of litigation with FTX, which is seeking to clawback 445.8 million in loan repayments made to Voyager before FTCS collapsed into bankruptcy.

If Voyager fully prevails in the FTX litigation, customers' expected recovery would rise to 63.74% according to Voyager's court filings. Voyager intends to repay customers with the same type of cryptocurrency they had in their accounts. For deposits held in unsupported cryptocurrencies that cannot be withdrawn from Voyager's platform, and for Voyager's proprietary VGX token, Voyager will instead repay customers using the stable coin USDC. Voyager was one of several crypto lenders to file for bankruptcy in 2022 after a boom in the COVID-19 pandemic.

Others were Celsius Network, BlockFi, and Genesis Global Capital, end quote. And more interesting numbers, though, these are not good. Apparently, Amazon so far has made just 100 Prime Air drone deliveries. After previously projecting, it would make 10,000 U.S. deliveries in 2023. Wing, in comparison, has made 330,000 deliveries, and Zipline has made 600,000. Quoting CNBC, where Amazon has stalled, other companies' drone programs have seen greater traction, particularly those that started outside of the regulatory confines of the U.S. CNBC visited Wing, a subsidiary of Google Parent Alphabet, at a drone test facility in Hollister, California.

At one point, there were 37 drones in the air at once making demo deliveries. Wing CEO Adam Woodworth said it's made. 330,000 deliveries. While thousands of those have been for partners such as Walgreens in Virginia and Texas, the company primarily delivers in Australia where it brings orders from DoorDash and the supermarket coals to homes in more than 50 suburbs. The service area that we cover there is between 70 and 100,000 people, and it's a relatively sort of geographically constrained location. Woodworth said, if you look at metrics from last year, we were seeing on the order of about 1,000 plus deliveries a day to that sort of one snapshot of the planet, end quote.

CNBC also got a glimpse of Walmart drone deliveries in its home state of Arkansas with partner Zipline, which recently announced its fixed wing aircraft has made 600,000 commercial deliveries largely of medical supplies in Africa. In March, Zipline unveiled a far different model that lowers a droid to the ground by a tether. A growing list of companies, including Sweet Green and Nutrition Retailer GNC, have signed up to deliver with the new drone when it's scheduled to come online in 2020. end quote. The article says it's unclear why Amazon's efforts are seemingly so stalled.

Finally today, ahead of WWDC, big article from Mark German in Bloomberg Business Week, outlining details of the Apple headset development. He says that there was a big shift in the development from a vision of simple eyeglasses to what he expects to see now, which are ski-goggle-like devices. Tim Cook's design involvement, apparently, was sort of limited, and also Apple is selling it at cost. Quoting Bloomberg. The device Cook will present, say people familiar with a development process that spread over seven years, has deviated far from his initial vision. Initially imagined as a pair of unobtrusive eyeglasses that could be worn all day, Apple's device has morphed into a headset that resembles a pair of ski goggles and requires a

separate battery pack. Apple began considering building a headset around 2015. It started with other products including Samsung's gear VR and the HTC vibe as the foundation for its own prototypes and experiments, giving demos to top executives and board members. Cook was adamant in his preference for augmented reality, preferably in the form of lightweight glasses. Nobody in here. Few people in here think it's acceptable to be tethered to a computer walking in here and sitting down. Few people are going to view that it's acceptable to be enclosed in something because we're all social people at heart, he told a group of students at a 2016 technology conference in Utah. Despite his strong views, Cook wasn't deeply engaged in the specific design of the headset, say people who have worked with

him. This was notably different from Steve Jobs, who was famous for imposing his strong design sensibilities onto Apple products, down to the feel of a touchscreen or the shade of blue used in a Mac app icon. Cook, in contrast, made his name overseeing operations and has never been known as a product guy. His more distant approach was consistent with his role in the development of the Apple Watch and AirPods. The closest Cook gets to product development is a demo, says one of the people. But even then, he's not the type of guy who says it should do X and not Y. He's the complete opposite of Steve in terms of having strong opinions on the minutiaeat. Still, some people involved in the headset projects say Cook's relative non-involvement has been more consequential this time

given the stakes. The budget has exceeded $1 billion annually with more than a thousand engineers dedicated to the project and the extent to which the direction of the project has changed. His approach was sometimes perceived as indecision, leading to delays and concerns about obtaining sufficient resources. Tim didn't throw his weight around the project at all, and this frustrated people, says another person who worked on the project. Other key figures in Apple's top ranks such as Craig Federigi, senior vice president for software engineering, have also kept their distance and seemed wary of the headset, according to people familiar with the project. Johnny Shrugi. Apple's senior vice president for hardware technologies has privately been a skeptic likening it to a science project.

Internally, he's warned that building the high-performance chips needed for the device could distract from new iPhone chips, which would probably drive more revenue. Shrugi's group did end up developing some of Apple's most advanced chips to date for the headset, while iPhone speed gains have indeed slowed in recent years. Dan Riccio, who was Apple's hardware leader as the headset project began, hired former Dolby Labs chief technology officer Mike Rockwell in 2015 to work on device displays before Rockwell pivoted to assemble a team, which was dubbed the Technology Development Group, or T288, to explore headworn devices. As Rockwell was getting started, Apple's industrial design team led by Johnny Ive, the chief design officer at the time, was coming off the

watch's introduction and looking for its next initiative. It too was exploring headworn devices and quickly got involved with Rockwell's team. Rockwell's and Ives' teams, quick disagreed on the project's direction. The headset team initially wanted to build a device that would display virtual reality content in video realistic form. This goal required shipping a base station the size of a Mac Mini that would beam over the most powerful graphics, enabling top-flight video games and hyper-realistic content. This setup has been a common way to increase the power of VR headsets, but device makers have increasingly sought to avoid it. Ive, who remained involved in development until about a year ago, preferred a standalone, maximally portable device,

even if this meant sacrificing some performance. He also expressed concern that Apple would end up creating a product that isolated humans from one another. Ives' vision, which hewed much closer to Cook's conception of a glasses-like device, eventually won over Apple's executive team. Ive didn't respond to an interview request. To get as close as possible to Ivan Cook's vision, the team developed a compromise, a VR device codenamed N301, that would function in some ways like an AR device.

In contrast to other augmented reality headsets such as HoloLens and Magic Leap, users wouldn't see their surroundings directly. Instead, external video cameras would capture their environment and display it on a screen when users switched the headset from VR mode to AR mode, a feature known as video pass-through. In an attempt to keep headset wearers engaged with the real world, the device will have an outward-facing display showing their eye movements and facial expressions. Apple regards this feature as a key differentiator from enclosed VR headsets. One person familiar with the device says the exterior screens allow people to interact with a headset wear without feeling as if they're talking to a robot. By the end of 2017, Apple said it believed

it could begin selling the device by 2020, but the project was slowed by challenges in both hardware and software development, as well as a lack of agreement about which applications were most likely to resonate with consumers. The onset of the COVID-19 pandemic delayed progress further in 2021, RECO, the hardware chief, left his broader position but stayed on solely to finish work on the headset debut. Apple had realized soon into the project that it wasn't feasible to build AR glasses that would be sufficiently powerful to be useful. The company's engineers determined it would have to replicate the performance of an iPhone while using only a tenth of the power in order to keep from getting too hot.

Despite this obstacle, Rockwell's team continued to describe its work as laying the foundation for AR glasses, a project internally dubbed N421 to secure resources, even as only about 10% of those resources were going toward that end. A person on the project describes a running joke that engineers were working on the hopeless N421 just to keep Cook happy. By 2019, the company had made little or no headway on developing a viable plan to make AR glasses. Yet in an all-hands meeting at the end of that year, Rockwell told hundreds of his colleagues that Apple could introduce glasses one year after it began selling the first headset, say people who were at the event. Apple eventually postponed any serious development on standalone glasses for years, all but killing the idea, according to people involved in the process.

They say that Apple is at least four years away from introducing any such product if it ever even happens. In March, Apple gave an in-depth preview of the mixed-reality headset to its top 100 executives and the company plans to begin selling it in the coming months. In many important ways, Apple has followed the path of other companies pursuing mixed-reality tech. During the planning stages, it had high hopes for a self-contained, comfortable, wearable device that would feel more like a fashion accessory than a computer-strapped your face. The engineers had faith that the technical challenges of shrinking the components while maintaining

processing power and battery capacity weren't insurmountable. As the project progressed, though, the solutions the key issues never emerged and the need to ship a product drove engineers to find the best compromises they could, end quote. A careless whisper from a careless man, a neutron dance for a neutron fan, marionette strings are dangerous things. I thought of all the trouble that they bring. That folks is the actual sound, the literal, visceral feeling of what it felt like to be alive in the fall of 1991. That's the way it goes, I guess. Talk to you tomorrow.