Tech Brew Ride Home - Tue. 10/03 – Time To Pay For Social Media?

Episode Date: October 3, 2023

Snapchat has led the way, but are we going to see everybody in social media offering subscription plans? An interesting raise for AI investing. Satya Nadella was on the stand yesterday at the Google trial. And what’s up with Threads? Has it missed its moment? Sponsors: Nutrisense.com/ride code ride Links: Meta Plans to Charge $14 a Month for Ad-Free Instagram or Facebook (WSJ) TikTok Confirms It Is Testing an Ad-Free Subscription Tier (Variety) Frec steps out of stealth with $26M in funding, aiming to democratize sophisticated investing with AI (VentureBeat) Microsoft CEO Says Google’s Agreements With Apple Unfairly Harmed Bing (WSJ) US issues first ever fine for space junk to Dish Network (BBCNews) Instagram Looks for Ways to Revive Interest in Threads (The Information) The official podcast development partner! Uptech.team! 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 Tuesday, October 3rd, 2023. I'm Brian McCalla today. Snapchat has led the way, but are we going to see everybody in social media offering subscription plans soon? An interesting raise for AI investing. Satcha Nadella was on the stand yesterday at the Google trial, and what's up with threads? Has it missed its moment? Here's what you missed today in the world of tech. Sources are telling the journal that META has pitched a plan to the European Union to charge European Union. To charge European Union, users a subscription fee to use Facebook and Instagram without ads, starting at around 10 euro per month.

Quote, would people pay nearly $14 a month to use Instagram on their phones without ads? How about nearly $17 a month for Instagram plus Facebook, but on desktop? That's what meta platforms wants to charge Europeans for monthly subscriptions if they don't agree to let the company use their digital activity to target ads, according to a proposal the social media giant has made in recent weeks to regulators. The proposal is a gambit by META to navigate European Union rules that threaten to restrict its ability to show users' personalized ads without first seeking user consent, jeopardizing its main source of revenue. Meta officials detailed the plan in meetings in September with its privacy regulators in Ireland and digital

competition regulators in Brussels. The plan has been shared with other EU privacy regulators for their input too. Meta has told regulators it hopes to roll out the plan which it calls SNA or subscription no ads in coming months for European users. It would give users the choice between continuing to access Instagram and Facebook free with personalized ads or paying for versions of the services without any ads people familiar with the proposal said. Under the plan, Meta has told regulators it would charge users roughly 10 euros a month, equivalent to about $10.50 on desktop, on a Facebook or Instagram account, and roughly six euros for each additional linked account the people said. On mobile devices, the price would jump to roughly

13 euros a month because meta would factor in commissions charged by Apple and Google's app stores on in-app payments. Planning to launch a subscription option for core meta services is a major turnaround for the company. Meta Chief Executive Mark Zuckerberg has long insisted that his core services should remain free and supported by advertising so that they can be available to people of all income levels. Privacy conscious users in the U.S. shouldn't expect to be offered the option to pay for ad-free Instagram or Facebook soon. Meta's proposals have been pitched specifically as a way to navigate demands by EU regulators to seek consent before crunching user data to select highly personalized ads.

To be sure, Zuckerberg has also said he would be open to the idea of a paid service to cope with tougher scrutiny about privacy. And earlier this year, amid a broader tech slump and a growing trend towards subscriptions from apps such as Snapchat and X, formerly Twitter, META introduced a paid user verification service. It isn't clear if regulators in Ireland or Brussels will deem the new plan compliant with EU laws or whether they will insist META offer cheaper or even free versions with ads that aren't personalized based on a user's digital activity.

One issue for regulators, some of the people familiar with the proposals said, is whether the prices META is proposing to charge will make the ad-free service too expensive for most people, even if they don't want to have their data used to target ads, end quote. be something in the water because TikTok has also confirmed that the company is running a limited scale test of an ad-free subscription plan of its own, but says the target market is not in the U.S. and did not share the price for doing such a thing. Quoting variety. According to a report Monday by Android Authority, code in a new version of the TikTok app showed a new ad-free subscription tier, which was supposedly priced at $4.99 per month in the USA during this testing phase.

Reach for comment, a TikTok spokesperson confirmed that the company has launched a limited-scale test of a subscription plan without ads in one market, but that it is outside the U.S. The rep declined to identify where the test is currently running or how much it costs. Note that the code surface by Android Authority indicates, quote, price includes VAT or value-added tax and the U.S. does not employ a VAT on goods or services. For now, TikTok's subscription plan is just a single market test, and the company may not move forward with the offering more widely, according to the spokesperson. Tick-Tock, which says it has more than one billion monthly users, including more than 150 million in the U.S., largely relies on advertising revenue, while it also has launched shopping features in the app. Tick-Tock is owned by China's Bite Dance, and its Chinese ownership has spawned political opposition to the app in the U.S. and beyond.

Other apps have adopted ad-free subscription models, including Snap, which last month said Snapchat Plus, the $4 per-month subscription service that includes experimental and pre-release features, had topped 5 million customers in little more than a year after its launch. Elon Musk has said he wants to introduce a new premium version of X, aka Twitter, that would eliminate all ads, but so far that hasn't come to pass. Currently, the perks of X premium starting at $8 a month include the verified blue checkmark and approximately 50% fewer ads in the 4U and following timelines, according to the company, end quote. Interesting raise, because another thing that everyone has thought about using AI for

is to, you know, beat the market. Major hedge funds and others on Wall Street are deploying various things already, but say hello to FREC, which uses AI to let customers create their own investment strategies, which has come out of stealth with a $26.4 million investment in a series A round, but also there was a previous seed round led by Greylock, quoting Venture Beat. The company's artificial intelligence-based investment platform has the potential to revolutionize personal finance by simplifying complex investment strategies, historically the domain of the super rich, and making them accessible to the average investor. Founder and CEO of Freck Mo Al-Adam, told Venture Beat the startup's approach is a means to, quote, simplify the sophisticated investment

products that have been traditionally only available via expensive white glove services. Al-Adam believes this could benefit the world at large beyond the confines of wealth managers and family offices. The company's flagship product, free direct indexing, allows customers to create their own customized portfolios of individual stocks that track the performance of S&P indices, such as the S&P 500 or S&P Infotech. By owning individual stocks rather than buying an ETF, customers can take better advantage of tax loss harvesting, a strategy that involves selling stocks that have declined in value to offset capital gains taxes. According to FREC, direct indexing can generate up to an additional 2.11% in additional returns compared to investing in ETFs or mutual funds that track the same indices.

Al-Adam says that FREC's direct indexing platform uses artificial intelligence to optimize the portfolio and minimize the tracking error, which is the difference between the performance of the portfolio and the index. The platform also allows customers to customize their portfolio by adding or removing sectors or stocks and to fund their accounts with cash or stock. customers can also access a portfolio line of credit, which enables them to borrow up to a certain percentage of their stock holdings at a low interest rate and a treasury account, which offers up to 5.02% on cash. Al Adams said that Frex direct indexing platform is different from other robo advisors that offer tax loss harvesting, such as wealth front and betterment, because it gives

customers more control and customization over their passive investing. He said that Frex platform does not require customers to determine their risk level and then assign them a predefined portfolio of ETFs and bonds, but instead lets them choose and customize the index they want to track. He also said that Frex Platform is more cost-effective as it charges a flat 0.10% fee for direct indexing, compared to some robo advisors charging 0.25% for basic index investing or a financial advisor who could charge up to 1% for direct indexing, end quote. was such a Nadella's turn on the stand at the U.S. versus Google trial yesterday, and he made the assertion that Google, indeed, cemented its search dominance via that default search deal with Apple,

quoting the journal. Testifying in a packed courtroom in Washington, Nadella endorsed the Justice Department's theory that Google, a unit of parent company alphabet, cemented its dominance of internet search through agreements with Apple that have made Google's search engine the default on Apple's Safari web browser. Because of these default agreements, quote, you get up in the morning, you brush your teeth and you search on Google, Nadella said. With that level of habit forming, the only way to change is by changing defaults, end quote. Nadella said Microsoft is trapped in a vicious cycle where Google uses its roughly 90% market share to continually improve its search results and bolster its bottom line, which in turn further

reinforces its monopoly. The notion that there is real choice in the search engine, market is, quote, bogus, Nadella said, calling Google's agreement with Apple a, quote, fantastic, simple, oligopolistic arrangement, end quote. Nadella was called as a witness by the Justice Department during the third week of the trial, which could last 10 weeks. Justice Department lawyer Adam Severt questioned Nadella for about an hour. At one point, the judge jumped in to pepper Nadella with questions about whether a startup could use innovation in artificial intelligence to rest market share from Google. Nadella responded that Silicon Valley sees internet search as, quote, the biggest no-fly zone of all, that is the hardest market to crack, adding that there were

limits to how much artificial intelligence can reshape the market as it exists today. Quote, the distribution advantage Google has today doesn't go away, Nadella said. In fact, if anything, I worry a lot that, even in spite of my enthusiasm that there is a new angle with AI, this vicious cycle that I'm trapped in could become even more vicious because the defaults get reinforced, end quote. In public comments in the past year, Nadella has at times struck a hopeful tone about whether AI tools such as ChatGBTBT could transform the internet search market. Google has also pointed to such chatbots as examples of new competitors in the online search market. In his testimony Monday, Nadella suggested he may have been overly enthusiastic in his

earlier comments about ChatGPT's potential, quote, yeah, I mean, look, that's called exuberance of someone who has like 3% share, that maybe will have 3.5% share, Nadella said. Nadella was cross-examined by John Schmidtline, Google's lead trial. Council at Williams and Connolly. Schmidtline sought to portray Bing's small market share as a direct result of Microsoft's missteps in internet search. Microsoft was caught sleeping when Google introduced Chrome, which was a far superior browser, Schmidtline said. Seeming to nod to the point, Nadella responded, quote, Google did a good job of innovating in the browser, end quote. The FCC has fined DISH,000 dollars for failing to move its old Echo Star 7 satellite far enough

from other satellites up in the sky. Why are you telling us this, Brian? Because it's the FCC's first ever space junk find, something that might become a much bigger deal in the future. Quoting the BBC, space junk is made up of bits of tech that are orbiting around the earth but are no longer in use and risk collisions. Officially called space debris, it includes things like old satellites and parts of spacecraft. The FCC said that Dishes satellite posed a potential risk to other satellites orbiting the Earth at its current altitude. Dish's Ecosar 7, which was first launched in 2002, was in geostationary orbit, which starts at 22,000 miles or 36,000 kilometers above the Earth's surface. Dish was meant to move the satellite 186 miles further from Earth, but at the end of its life in

2022, had moved it only 76 miles after it lost fuel. As satellite operations become more prevalent and the space economy accelerates, we must be certain that operators comply with their commitments, said FCC Enforcement Bureau Chief Loyan Igal. This is a breakthrough settlement, making very clear the FCC has strong enforcement authority and capability to enforce its vitally important space debris rules. The more things we have in orbit, the more risk there is of collisions causing high-speed debris, said Dr. Megan Argo, senior lecturer in astrophysics at the University of Central Lancashire. This could go on and potentially hit other satellites, causing, yes, more debris and potentially cause a cascade reaction, end quote. It is estimated that more than 10,000

satellites have been launched into space since the first one in 1957, with over half of them now out of use. NASA boss Bill Nelson told the BBC in July that space junk was a, quote, major problem, which has meant that the International Space Station has had to be moved out of the way of debris flying past. Even a paint chip coming in the wrong direction at orbital speed, which is 17,500 miles an hour could hit an astronaut doing a spacewalk. That can be fatal, he said, and quote, Something, something, the movie Gravity. Finally, today, the information is reporting that Instagram is seeking to revive interest in threads by getting creators to post more, making threads a place for real-time updates about big events and more, quote, one top priority is

getting creators to post more often as a way of boosting the kind of content that might keep people coming back to the app. This month, Instagram, which created threads, will hold multiple focus groups with creators in an effort to learn what would make it more appealing, set a person with direct knowledge of the situation. Instagram's Partnerships Department, which handles non-advertising deals with media companies and creators, has targets set around getting new creators onto threads and retaining existing ones, the person said. Meanwhile, staffers are trying to figure out how to turn the app into a place where people can get information about big events as they are happening. Insiders have realized that people are still going to X, the app formerly known as Twitter,

for real-time updates about big news and sporting events, the person with direct knowledge said. Instagram has deliberately tried to steer clear of news. Instagram head Adam Maseri has described threads as a less angry competitor to X, but now the company appears to want to change course somewhat. Given Thread's current trajectory, it's in danger of becoming another failed effort by meta to expand its range of apps. met a previously abandoned IGTV, a standalone video app, and axed its new product experimentation group, which it tasked with developing new consumer apps.

Threads logged an average of 49.3 million daily active users on Android at its peak in July, according to research firm's similar web. Since then, that average has fallen to 8.6 million. Instagram chief Adam Osseri, who oversees threads, said on a recent Ask Me Anything on Instagram, that, quote, a lot of people use threads, but they don't use it as frequently as we would. would like, end quote. Increasingly, it is looking to me like threads might have missed its window. A couple of big podcast house cleaning news items for you. First of all, tomorrow's show is going to be a bit late. There's a made-by-google event happening here in New York City tomorrow at 10 a.m.

And I've been invited to cover it live, so I'll be there writing up what I see and maybe hopefully some hands-on with what they announce. But then I have to get back and, you know, actually record it. So again, show will be a bit late tomorrow. And then number two, yes, the premium feed missed an episode yesterday. It should be coming through around now, but please get in touch with me if yesterday and today's episodes do not make it into your feed. There's problems that I had to fix with Supercast, but I believe they have been remedied. Talk to you tomorrow.