Tech Brew Ride Home - Thu. 06/17 – How About Some Ads On Your Oculus?

Episode Date: June 17, 2021

Facebook is bringing ads to Virtual Reality cause, why not, right? Stories are coming to the Xbox. Why is Google downsizing it’s healthcare team? Why are music artists flooding to Twitch? And is Facebook cornering the VR market like it cornered social media? Sponsors: Tovala.com/ride Cybereason.com Links: Facebook to begin testing ads inside Oculus virtual reality headsets (CNBC) Xbox’s June update adds speech-to-text chat feature (Engadget) Podcasts start coming to Facebook next week (The Verge) Amazon Appstore will reduce developer revenue cut from 30% to 20% and give 10% in Free AWS Credit (AFTV News) EXCLUSIVE: Google is downsizing its health team and moving employees to Fitbit as part of a major reorganization (Insider) Can Streaming Pay? Musicians Are Pinning Fresh Hopes on Twitch. (New York Times) Is Facebook cornering the VR market? (Platformer) 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, June 17th, 2021. I'm Brian McCullough today. Facebook is bringing ads to virtual reality because why not, right? Stories are coming to the Xbox because why not? Why is Google downsizing its health care team? Why are music artists flooding to Twitch? And is Facebook cornering the VR market like it cornered social media? Here's what you missed today in the world of tech. Facebook says it will begin testing ads on Oculus headsets. though it claims it won't use data stored on those devices to target the ads, it promises, quoting CNBC.

The Oculus headset ads will first appear in the shooter game Blaston from Resolution Games. Ads will also begin appearing in two other Oculus apps over the coming weeks, Facebook said. Oculus headset ads could be a significant step for Facebook, which derives more than 97% of its overall revenue from advertisements. Currently, those ads are primarily shown to users within. the company's Facebook and Instagram's social networks. Facebook also said these ads could provide new ways for software developers to generate revenue. The ads will follow Facebook's advertising principles and give users the same control they have

on Facebook. This includes the ability to hide specific ads or hide those from specific advertisers. Users can also select, why am I seeing this ad to access more information about the ads they are shown. Facebook added the advertisements won't be based on any data that's stored locally on users' headsets, such as any images from their devices sensors or any images of their hands from the hand-tracking feature, end quote. Quoting Joe Ab on Twitter, Ah, cool, Oculus is inserting ads into games you've already paid for, end quote. And as Buck's CEO Aaron Levy tweeted, but then deleted, this is definitely what VR was missing for mass adoption, end quote. Speaking of things you may or may not want in your gaming environment,

In Xbox's June update, Microsoft has added text to speech and speech-to-text accessibility features, but also a stories-like feature for the Xbox mobile app, quoting a gadget. Now that they're part of the Xbox operating system, you can find both accessibility features in the ease-of-access setting tab under the Game and Chat transcription. With speech-to-text transcription, your Xbox will transcribe and display what your party says on an adjustable overlay. With text to speech, meanwhile, a synthetic voice will read anything you type into a party chat. Parents, meanwhile, will find that they have more control over who their kids can play with online. If your little one has an Xbox child account, they'll have the option to ask you

for your permission to play cross-platform games like Minecraft with people who play it on other online gaming services. You can approve or decline these requests either through the Xbox Family Settings app or the console itself. Microsoft has also tweaked the Xbox's group feature, which allows you to create lists of your favorite games and apps. You can now reorder your groups as you see fit. Outside of those tweaks, Microsoft has updated the Xbox app on Android and iOS to add a stories-like feature. Over the next month, you'll start to see official posts from your favorite games. As with Instagram, you can like, share, and comment on them, end quote. But back to Facebook real quick. In an email to creators, Facebook says it will launch

its podcasting platform on June 22nd. Podcasters can link up RSS feeds now and decide if users can clip shows going forward. Quoting the Verge. According to an email sent to podcast page owners and viewed by The Verge, hosts can link their shows RSS feed up to Facebook, which will then automatically generate news feed posts for all episodes published moving forward. These episodes will show up on a podcast tab that doesn't appear to be live yet, but that the company teased in a wider announcement about audio initiatives in April. Pod News first reported the date earlier this month and At the time, Facebook confirmed with the verge that a limited number of page owners would have access.

However, emails are still being sent to additional page owners suggesting the rollout may be wider than initially anticipated. Facebook will be the place where people can enjoy, discuss, and share the podcasts they love with each other. The company says in this email, podcasters who publish on the platform will also be opting into Facebook's podcast terms of service. It's a relatively standard agreement, although it doesn't have clear limits around what exactly Facebook can do with the podcast distributed on its platform. For example, it grants Facebook the rights to make derivative works, which may be necessary for distributing shows in certain formats, but also might alarm podcasters who are protective over their IP. Along with the option to distribute their show through Facebook, podcasters can decide whether to enable clips, which the company says will be created by listeners and last up to one minute in length. These may help increase visibility and engagement, the email says. Presumably, these will be easily shareable outside of the podcasters page, short form,

clips have been a key way for Twitch streamers to share their moments from their lengthy streams, and Facebook seems to hope the same idea can apply to podcasts. Broadly, though, this update comes as the company begins a legitimate push into audio. Mark Zuckerberg hosted the first live audio room in the U.S. yesterday, and in April, the company also announced plans for a feature called Soundbites, which will live within the news feed. The idea behind Soundbites is to give users a sound studio in your pocket and allow them to create short, shareable clips.

With podcasts, Facebook is seemingly banking on the fact that podcasters already use the platform to foster conversation with their listeners and to promote their shows. Directly publishing to the platform might make it easier for them to accomplish those goals, while also giving people a reason to never leave the Facebook app. It's also possible Facebook sees potential in podcast advertising, which Spotify has focused its efforts on as it launches exclusive shows and its own ad network, end quote. Amazon's App Store has unveiled a new program that reduces its share of developer revenue from 30 to 20 percent for developers earning less than $1 million per year, starting in Q4, quoting AFTV News. The new terms which Amazon is calling the Amazon App Store Small Business Accelerator program will also provide developers with AWS promotional credit in an amount equivalent to 10% of the developer's revenue if they earn less than $1 million in revenue per year. If a developer chooses to use those AWS credits, that brings their total Amazon App Store revenue share up from 70% to an equivalent of 90%. This changed by the Amazon App Store brings its revenue share more closely in line with the new policies of Apple's App Store and Google's Play Store. However, if smaller Amazon App Store developers don't use the

extra 10% in AWS credits, which expire 12 months after being earned, they will not benefit as much from Amazon's new policy as they would from Apple or Google's new policies. Conversely, for developers that already spend more than 10% of their annual revenue on AWS fees, the new Amazon App Store program will be more beneficial than Apple or Google's programs. Developers must link their AWS accounts to their Amazon App Store accounts once the new program launches in order to receive the extra 10% AWS credit, end quote. Given yesterday's scoop about Apple's healthcare ambitions, I thought this was interesting. Sources are telling Insider that Google is downsizing its health team, which was working on sensors and health records and the like, and moving the team to Fitbit as part of a major reorg.

Quote, more than 130 employees inside Google Health have been moved under Search and the newly acquired Fitbit group. Those remaining at Google Health have been consolidated into three teams, none of which will focus on consumer-facing products. In March, Google Health had around 700 people working on research, imaging, clinical tools, health sensors, and more. That number has dropped to almost 570 as of this week, a near 20% cut to its headcount, according to internal data obtained by Insider. The changes should improve the group's impact and execution speed, Dr. David Feinberg, the head of Google Health, said in an email on May 5th seen by Insider, they should also support Google's broader work at a time when the company is expanding its focus on health and

wellness, he said. The division was created by a company-wide effort to combine many of Alphabet's disparate health projects under Feinberg in 2018, its mission has been to make people's health information broadly accessible and useful in a world where finding a doctor, analyzing clinical data and diagnosing conditions, can be made easier by technology. But Google has run into roadblocks, many of them internal in the years since. A deal between the tech giant and the health system Ascension, inked in 2018, stirred a public uproar and a federal investigation over the amount of patient medical records it gave Google access to. For the majority of the time since,

addressing the coronavirus pandemic has been a big focus of Google's health work. Reorganizations are common at Google, but in recent years, the company has made a more concerted effort to consolidate parts of the business and increase collaboration between teams. The call to restructure Google Health did not originate with Feinberg, a former employee said, end quote. Interesting trend piece from the New York Times. Music artists seem to be flocking to Twitch which of course is better known for video game streaming, because apparently even niche music artists can make thousands of dollars per month by cultivating fans on Twitch.

Quote, live streaming apps are a dime a dozen these days, but what makes Twitch stand out, particularly for music, is how it fosters connections between performers and their audience and allows those connections to be efficiently monetized. Fan interactions which pour across the screen in a river of song requests, inside jokes, and emotes, Twitch-specific emoticons are as much a part of the show as the artist on screen conveying the sense of a tightly knit mutually supportive community.

Since January 2018, Matthew K. Heafi, the guitarist and lead singer of the metal band Trivium, has kept a strict Twitch regimen, streaming nearly every weekday at 9 a.m. and 3 p.m. For up to three hours at a clip, he practices guitar riffs, pedagogically breaking down his technique for student fans who inquire in the chat, jams with his band and plays first-person shooter games. Heifie has about 220,000 followers on Twitch, and well over 10,000 people may be watching him at any moment. All that attention, he said, keeps him motivated, quote, even if I don't feel like practicing, I know people are going to be there who want to hear

a couple hours of their favorite trivium songs, Heif he said, so I make sure I'm there to make their day good, end quote. Central to Twitch's popularity among musicians is its economic model, which is quietly revolutionizing the business by providing an alternative to the winner-take-all system of on-demand services like Spotify, Apple, music, and YouTube. Twitch is an alternate music universe, where even niche artists can make thousands of dollars a month by cultivating fan tribes whose loyalty is expressed through patronage. With its interactive chat threads and internal economy of channel subscriptions and bits or donations, Twitch would seem to fulfill the long, hyped but elusive promise of creative commerce on the

internet. Yet the platform may work well for only some kinds of artists. It is enormously labor intensive, after all. Its relationship with rights holders is also strained. And though it got a boost during the pandemic, Twitch may soon face a reckoning once artists and their fans emerge from their cocoons and return to in-person events. But for those making a living on the platform, it has been a revelation. Its potential was highlighted in a recent report by Will Page, the former chief economist of Spotify, which compared musicians' earnings and audience reach, on Twitch versus on-demand audio services like Spotify and Apple Music. The numbers, while anecdotal, are striking.

According to Page's report, Laura Shingahara, a composer of video game music, last year, earned an average of about $700 a month from audio platforms, but $8,000 a month on Twitch, where she sings and plays piano in a cozy room filled with anime-style stuffed creatures. In 2019 and 2020, Heifie's four-man band, Trivium, collected an average of $11,000. a month from the audio services, while his own Twitch channel generated nearly as much just under $10,000 from an audience that was about one-tenth the size. The band Assasus, a married couple in Austin, Texas that specializes in acoustic covers, earned 70% of their income in 2019 and 2020 from Twitch. Just 6% came from audio streaming services and bandcamp, the online indie music store.

There's just something about being able to directly support an artist that you are enjoying and being able to see that support accepted by that artist and get an immediate thanks, said Travis Assasus, who plays bass and makes the microphones that he and his wife, Ali, who sings and plays guitar, used for their streams. Both are in their early 30s and use only their first names professionally. Tracy Patrick Chan, Twitch's head of music, said that of the musicians who can earn $50,000 a year there, their median viewership, the number of people watching their stream at any given time is only 183. By comparison, it takes 5 million to 10 million streams to yield the same payout from major audio streaming platforms, according to most estimates of those services per stream

rates, end quote. Something, something, the new creator economics. Finally today, we opened today with Facebook and Oculus, so this seems fitting. Also, because we spoke a little bit about this on last night's Twitter space. And sure enough, like it's out there in the zeitgeist or something, Casey Newton has a piece in his newsletter this morning that makes the point that Chris and I poked at last night. By acquiring promising VR games and software companies, Facebook seems to be cornering the VR market, reminiscent of its Instagram and WhatsApp acquisitions, which sort of locked down the social media market. So the question is, are the antitrust crusaders trying to make-up for failures of the last war, while the next war is already being settled right before our

eyes. Quoting for Platformer, imagine that over the past year, Facebook had managed to acquire the Battle Royale game Fortnite, the Kid Focus Game Creation Engine Roblox, and the best-selling game of 2020, Call of Duty, Black Ops, Cold War. For many reasons, such a spree of acquisitions would never happen. One of the biggest is that antitrust scrutiny has made it increasingly difficult for Facebook to acquire anything that resembles a social network. And yet, if you look at the virtual reality landscape, Facebook has made a series of acquisitions that are roughly analogous to the fictional shopping spree I describe above, if on a much smaller scale. Alex Heath, a reporter at the Verge, who has closely covered the rise of AR and VR technologies observed on Twitter recently, that Facebook's acquisitions

in the space resembled its most famous bets on nascent technology from years ago, the purchases of Instagram and WhatsApp, which helped the company cement its position as the Facebook. The company cement its position as the dominant player in social networks. Facebook is going to probably have a near monopoly in VR software before it even matters, Heath tweeted. Facebook will have literally reinvented itself for a new paradigm shift in computing by the time regulation gets around to addressing it in its current state, end quote. Let's say you believe Facebook's acquisitions of Instagram and WhatsApp set back the consumer internet for a few years until TikTok emerged anyway. Wouldn't you want to apply as much scrutiny to Facebook's current shopping spree as you're applying to moves it made as long as nine years ago?

The answer to that question likely depends on how large you think the market for virtual reality headsets and its attendant software ecosystem will someday become. Currently, the market is small. Facebook's Oculus platform had sold fewer than 10 million units as of January. The PlayStation 4, by contrast, has sold 114 million units over its lifetime. Apple sold nearly 80 million iPhones in the last quarter of 2020 alone. If you think VR will grow to roughly the size of a major console gaming platform, maybe you're not concerned how many studios Facebook is buying.

Console manufacturers buy game studios all the time. Microsoft's acquisition of Zenni Max Media, owner of Bethesda Software and its many popular franchises was last year's mega deal in the space, and no one seems to have too many concerns that any one console is developing a monopoly. If, on the other hand, you think Oculus could grow to a size more closely resembling a major desktop computer manufacturer like Dell, perhaps you would eye its acquisitions with more scrutiny. To lay my cards on the table, I think it eventually will, end quote. I'll have last night's Twitter space up on the spacecast's feed a few hours after this episode

posts. For the first time Chris and I started last night's space without an agenda. And wow, did we go into some interesting areas probably because of that. It was the longest space we've ever done, ranging from the recent news about A16Z officially launching their media platform to a deep dive on Stripe as the hottest startup in the land and the entire payments space more broadly. It's sort of like if you've ever been in therapy and sometimes you go to a therapy session and you're like, I've got nothing to talk about. Inevitably, that ends up being one of the most interesting sessions you ever do. It was sort of like that last night.

Check it out. Talk to you tomorrow.