Tech Brew Ride Home - Thu. 08/08 – Would You Buy A Subscription Mouse?

Episode Date: August 8, 2024

TikTok launches Spotlight. Meta’s budget kills a VR studio. Why did everyone think Logitech was going to create a mouse you had to pay a subscription to use? And did you know how big Anime is? I did not. Links: TikTok adds in-app hubs for videos about movies and TV shows (The Verge) Exclusive: Meta is closing a beloved first-party Quest studio (AndroidConnect) UK regulator launches formal probe into Amazon’s $4bn Anthropic deal (Financial Times) Humane’s daily returns are outpacing sales (The Verge) Logitech Insists It’s Not Making a Mouse With a Subscription Fee (Gizmodo) Anduril now valued at $14 billion, set to build autonomous weapons factories (Axios) Crunchyroll Passes 15 Million Monthly Paid Subscribers (The Wrap) Crunchyroll Is Thriving Thanks to Gen Z and Appointment Anime Viewing, COO Says (The Wrap) 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 right home for Thursday, August 8th, 2024. I'm Brian McCullough today. TikTok launches spotlight. Meta's budget kills a VR studio. Why did everybody think Logitech was going to create a mouse you had to pay a subscription to use? And did you know how big anime is? I apparently did not. Here's what you missed today in the world of tech. Like Airbnb yesterday, I'm also constantly interested in how TikTok is looking to expand their thing beyond. you know, 15-second video clips. This morning, they're launching TikTok Spotlight in-app hubs for movies and TV shows that add links to applicable videos with information as to where to watch.

This was all apparently tested on the release of the most recent Dune movie, apparently, quoting The Verge. The links will show up in the bottom left corner of a creator's video, and users can tap in to view a landing page with the cast list, links to official accounts, related content and information about where to watch the title. You might have already spotted this feature on TikTok as the platform partnered with Warner Brothers Discovery to promote Doon Part 2 with a dedicated hub on the app. James Stafford, TikTok's global head of publishing, says not every video featuring a particular TV show or movie is eligible to get an anchor link to a hub.

We rely on both technology and human review to decide which videos qualify for an anchor link, Stafford said. We're looking at things like hashtags, keywords, audio, visual matching technology from clips of TV shows, and more. TikTok also considers a video's views, the creator's follower count, and whether the creator has violated any of its policies. Meanwhile, the entertainment companies that own the content can access an analytics dashboard to track trends within their fandoms. They can also see how TikTok users are using their IP and choose whether to take action. Outside of TikTok's creator rewards program, creators won't get compensated when TikTok

adds links to their videos. However, Stafford says, quote, each spotlight campaign has custom incentives for creators to participate, such as exclusive profile frames, filters, merchandise, tickets, and more, end quote. Meta is closing Ready at Dawn Studios, which they acquired back in 2020, and which produced VR games like Lone Echo and Echo VR. This is apparently in aid of meeting those new reality labs budgetary ceilings that I told you about recently, quoting Android Central. One of VR's greatest development studios is closing its doors permanently today. Ready at Dawn Studios was behind the famed Echo VR and loan Echo games, all of which received critical and customer

acclaim. But the studio hasn't launched a new game since Echo VR was ported to Quest in May 2020, and its likely sales of Loan Echo 2 could have played a part in the decision since that's a PCVR-only game. Meta first made cuts to the studio last February when it announced it would shutter Echo VR despite still having a player count in the low tens of thousands, as noted by Meta-C-Tio Andrew Bosworth at the time. It's worth noting that Meta just stated that Quest 3 sales are, quote, exceeding their expectations in the company's most recent quarterly earnings call last week. One report in mid-July said that meta was cutting its Reality Labs division budget by 20% by 2026, and an internal memo sent to meta-employees by

Geo Hunt, VP Oculus Studios seen by Android Central, supports this reasoning. A meta-spokesperson told Android Central that the cuts weren't being made to save money per se. Rather, these cuts are being made to ensure that Reality Labs stays with a new budgetary constraints, and that that Oculus Studios can make a better long-term impact in VR development. Meta also commented that this isn't a signal of wider cuts to the number of first-party games on Quest and that the company is still committed to VR development. While Reality Labs has historically spent billions per quarter on development costs of XR hardware, like the MetaQuest 3 and Rayban meta-smart glasses, VR games, and meta-AI features,

the company is starting to put a hard cap on that spending each quarter, end quote. The UK's CMA has opened a formal merger inquiry into Amazon's anthropic investment after getting what they called sufficient information about the deal, quoting the Financial Times. The Competition and Markets Authority said on Thursday that it had sufficient information about Amazon's partnership with the company behind the Claude Generative AI models to begin an investigation. It will decide whether to escalate the inquiry into a more in-depth phase two investigation by October 4th. The CMA could ultimately clear the deal, block it, or require the companies to make changes in order to obtain approval. Amazon said it was disappointed by the decision

and that its work with Anthropic, quote, does not raise any competition concerns or meet the CMA's own threshold for review. By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology, it said. Anthropic, meanwhile, said it will cooperate with the CMA, adding, we are an independent company. Our strategic partnerships and investor relationships do not diminish our corporate governance, independence or our freedom to partner with others, end quote. Thursday's move comes weeks after the CMA officially launched a formal merger inquiry into rival Microsoft's hiring of staff from startup inflection AI.

The tech giant paid $650 million in March to hire a number of the startup's staff, including its chief executive Mustafa Soleiman, co-founder of Google's Deep Mind and to license its technology. Regulators worldwide have increasingly turned their attention to the alliances being forged between big tech and AI startups that are developing the technology that has captured global attention and which advocates promise will usher in a new era of computing. The tie-ups have prompted concerns that the world's largest and most well-capitalized companies are set to wield an outsized influence over how the hugely expensive technology will develop and who the winners

from its adoption will be, end quote. I somewhat hesitated to do this one because, you know, I'm not intending to pile on here, but sources are telling the verge that at this point, daily returns of the humane AI pin are outpacing daily sales, quoting the Verge. Between May and August, more AI pins were returned than purchased, according to internal sales data obtained by the Verge. By June, only around 8,000 units hadn't been returned, a source with direct knowledge of sales and return data told me. As of today, the number of units still in customer hands had fallen closer to 7,000, a source with direct knowledge said. At launch, the AI Pin was met with overwhelmingly negative reviews. Our own David Pierce said it just doesn't work,

and Marquez Brownlee called it the worst product he's ever reviewed. Now Humane is attempting to stabilize its operations and maintain confidence among staff and potential acquirers. The New York Times reported in June that HP is considering purchasing the company, and the information reported last week that Humane is negotiating with its current investors to raise debt, which could later be converted into equity. Humane's AI pin and accessories have brought in just over $9 million in lifetime sales, according to the internal data seen by the Verge. But around 1,000 purchases were canceled before shipping, and more than $1 million worth of product has been returned. These figures, which have not been reported before, paint a better picture

of the difficult position Humane finds itself in with limited options on a path forward. The low sales figures also pale in comparison to the over $200 million that Humane has raised from notable Silicon Valley executives like OpenAI CEO Sam Altman and Salesforce CEO Mark Benioff. to date around 10,000 pins and accessories have shipped in total. Humane hoped to ship about 100,000 pins within the first year, according to a source with knowledge of the plan and first reported by the New York Times. Once a humane pin is returned, the company has no way to refurbish it, sources with knowledge of the return process confirmed. The pin becomes e-waste, and Humane doesn't have the opportunity to reclaim the revenue by selling it again. The core issue is that there is a T-Mobile limitation that makes it impossible for now for Humane to reassign,

a pin to a new user once it's been assigned to someone. One source said they don't believe Humane has disposed of the old pins because, quote, they're still hopeful they can solve this problem eventually. T-Mobile declined to comment and referred us to Humane, end quote. Logitech is running around assuring everybody that it is not making a mouse with a lifetime subscription fee, which makes me curious. Why did everybody jump to that conclusion and think that they might? Quoting Gizmodo, Peripheral and video giant Logitech is running back comments about a supposed subscription-based mouse that's supposed to be the last mouse you ever buy. Such a hardware-as-service model was quick to piss off consumers.

Company execs are now saying, no, they're not trying to build a mouse or any other PC controls with a long-term subscription fee. Last month, Logitech CEO Henneke Faber detailed her company's designs on a so-called Forever mouse. The exec told the Verges Nelai Patel that one of the company's engineers was working on a mouse that's supposed to be so good, you'd never want or need another one. She attributed it to a watch where, just because it's old, doesn't mean it still can't work with some regular TLC. How would that work in today's current buy it and toss it ecosystem? Faber suggested it may be close to a service model akin to the company's video conferencing products. Instead of paying for upgrades to the hardware, users would pay fees for software updates over time, though Faber said in the interview, that was only one monetization model they were looking at.

When asked directly if she could envision a subscription mouse, Faber replied, possibly. according to the Verge's podcast transcript, now Logitech is telling anybody who listens that, no, it's not making a subscription-based mouse. Logitech's head of communications, Nicole Kenyon, offered the same line to several outlets. There are no plans for a subscription mouse, end quote. Kenyon added in her statement that Faber's description

of the so-called Forever Mouse was, quote, not an actual or planned product, but a peek into provocative internal thinking on possible future possibilities for more sustainable consumer electronics, end quote. It's clear from Faber's original comments, that she wasn't talking explicitly about a product consumers would have in their hands anytime soon. Still, folk online were more taken aback by a CEO's first instinct to turn to a software as a service model.

We've seen how things have played out with the switch from cable to streaming subscriptions. To put it bluntly, consumers are tired of paying monthly for services. The idea of paying for hardware by this route as a mouse on a monthly basis was too much to bear, end quote. Real Industries has raised a $1.5 billion series F round led by Founders Fund and Sands Capital at a $14 billion valuation up from around $8.5 billion after raising $1.5 billion back in December 2022. Hats off to Palmer Lucky and the crew. Long before it was obvious to most, they saw that there was a new wave of tech coming for defense products. And after the drone war in Ukraine, they seemed to be well positioned to ride this wave. Quoting Axios. The knock on Anderil was always about chickens and eggs. It couldn't get orders until it proved that it could fulfill orders on time and on budget. But it built a well-sourced business development team that has helped it secure a number of recent wins, including a big one with the U.S. Air Force for collaborative combat aircraft. Major investors believe Anderil has cracked the government contract code just seven years after launch. There hasn't been a substantial new U.S. defense business in over 50 years, explains Marita Sarah Bents, a partner with Sandsk.

capital, you can't just build it and they will come. You've got to be creative and earn the right to exist. Anderil is scouting stateside locations for a future behemoth factory dubbed Arsenal One. Another could quickly follow abroad. The company expects Arsenal One to cover at least five million square feet and employ thousands of people. It also, quote, needs to be capable of producing tens of thousands of autonomous vehicles and weapons, says Chief Strategy Officer Chris Brose. Arsenal One would join existing and in the works facilities, including one in Rhode Island, that specializes in underwater drones and one in Mississippi where the focus is on solid rocket motors. The defense industry's inability to produce equipment en masse has worried both Pentagon officials and

outside analysts. Protracted wars can bleed stockpiles dry as underlined by fighting in Ukraine. A bipartisan group of national security experts in July warned a World War II-style industrial mobilization in the U.S. is not currently feasible. America and our allies don't have enough stuff, according to bros. We don't have enough vehicles. We don't have enough platforms. We don't have enough weapons. This has been true for a long time, end quote. Finally today, once again, there's a fairly big player in the streaming wars that I bet not everybody knows about. Sony's anime streaming service Crunchyroll has announced it has surpassed 15 million monthly paid subscribers up from 11 million back in July of last year, quoting the rap. For comparison's

sake, the NBC Universal-owned Peacock reportedly had 34 million paid subscribers in early 2024, considering that Peacock offers a wider array of content than the niche crunchy role, these subscriber numbers speak well of the state of the streamer as well as the growing anime market. Currently, the streamer has the world's largest streaming library dedicated to anime, including 50,000 episodes and more than 25,000 hours of anime series, films, and music. Every season, the streamer brings in between 45 and 60 new and returning series to its service. Those include series such as Demon Slayer Kemetsu No Yaiba, Jiu-Jitsu Kaysen, One Piece, Chainsaw Man, and Solo Leveling.

Last year, the streamer also partnered with Sony Music Entertainment Japan to bring anime-related music to the platform, a collaboration that has resulted in 3,300 music videos and concerts so far, end quote. More on Crunchyroll from a different piece in the rap, quoting again. And a time when Gen Z viewership and appointment viewing is in decline for most of television, Crunchyroll is bucking some of the most common negative TV trends. What we actually have seen that anime has done is bring back appointment viewing. Jida Reba Pragaada, chief operating officer for Crunchyroll told the rap at the Television Critics Association 2024 summer tour, anime is actually very correlated to the Japanese broadcast schedule,

so we'll see appointment viewing for an episode of an anime that is super exciting and highly anticipated, she said. After noticing this viewership pattern, Crunchyroll decided to experiment. Typically, the streamer airs new episodes pretty close to that shows Japanese broadcast debut, but when it came to the April premiere of the popular anime adaptation of Nalia Matsumoto's Kaiju No. 8, Crunchyroll streamed new episodes live every week worldwide at the exact same time as its broadcast in Japan. The live stream was available in Japanese, with subtitle options in English, Latin American, Spanish, Portuguese, German, and French. Many of the subscribers who tune into Crunchyroll are exactly the younger demographic that most traditional TV platforms are

struggling to capture. During Reba Purgata's TCA presentation, the COO explained that the average anime fan tends to skew younger and that Gen Z and even Gen Alpha overindex when it comes to watching anime. According to a poll conducted by Polygon, 42% of Gen Z and 25% of millennials regularly watch anime. That same poll found that 58% of Gen Z anime fans watch this content on Crunchyroll, and in February, the streamers president, Raho Perini, confirmed that Gen Z watches the platform more so than any other demographic. Having this younger audience has allowed Reba Pragaata to observe several viewership trends, some expected and others less so. On the expected side is the importance of mobile and offline viewing. What's more surprising is how new fans are entering anime these days, from video games

to Netflix and Cartoon Network. Reba Prigata noted there are, quote, more entry points than ever to become an anime fan. Another surprising trend has to do with the popularity of in-person events. This is not going to be rocket science to anyone, but what's been super interesting to me is how the in-person experience, the demand for that has gone up after COVID, Rabra Prigata said, speaking of COVID, those years spent in lockdown may have helped anime break from niche to mainstream. The way I characterize COVID is that it accelerated trends we were already seeing, Rebra Prigata said, I think what we haven't seen is it decelerate, end quote. Crunchyroll currently has 14 million monthly paid subscribers, which is nearly three times the subscribers the platform had in 2021. This sharp increase is all post-COVID growth, end quote.

Nothing further for you today. Talk to you tomorrow.