Tech Brew Ride Home - Tue. 11/01 – Twilight Of The Blue-Checks?

Starting point is 00:00:00 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, November 1st, 2022. I'm Brian McCullough today. Will charging for Blue Checks actually helped Twitter monetarily or, frankly, in any way at all? Amazon has expanded ad-free music. YouTube is bundling streaming services, why Uber Eats is interesting inside of Uber's earnings, and is it time to start worrying about Sony's strategy with the PlayStation? Here's what you miss today in the world of tech. Well, today in Elon and Twitter news, Bloomberg says Twitter froze some staff access to content moderation and policy enforcement tools, raising worries about a misinformation spike on the platform before the U.S. midterm elections next week. Sources told Axios that Elon told Twitter engineers to work on a Vine reboot that may be ready by the end of 2022.

Starting point is 00:01:25 You might remember that Twitter acquired Vine back in 2012 and shut it down back in 2016. Quote, Twitter engineers already have been assigned to look at Vine's old codebase, which hasn't been changed or updated since the shutdown. One source says it needs a lot of work. Twitter has introduced new video features since 2016, but reviving Vine could give video creators a platform that sits somewhat apart from general Twitter discourse. Musk is said to have discussed Vine in the months leading up to his Twitter acquisition, and on Sunday launched a Twitter poll asking if he should bring it back. responses were running about two to one in favor as of this writing. Popular YouTube star Mr. Beast tweeted in response, quote, If you did that and actually competed with TikTok, that'd be hilarious to which Musk replied,

Starting point is 00:02:11 what could we do to make it better than TikTok, end quote. Now, contrary to doing new things, sources also say that Twitter is planning to end the ability of Twitter blue subscribers to access ad-free articles from hundreds of publishers as part of the Twitter Blue monthly subscription. So potentially taking away the value proposition of Twitter Blue to a degree while also talking about raising prices. More on that in a second. According to an SEC filing, Jack Dorsey rolled over his remaining 2.4% stake in Twitter worth around a billion dollars, rolling it into Elon's X holdings, quoting Insider, the value of Dorsey's roughly 18 million shares is a little over $1 billion, according to the filing. That represents money.

Starting point is 00:02:56 that Musk did not have to come up with to acquire the company. Although it was rumored Dorsey would invest in Musk's takeover of Twitter, he had yet to confirm any plans to do so or roll over his shares. According to the filing, Dorsey agreed to the rollover back in April when Musk signed the merger agreement with Twitter. Dorsey formally rolled his shares on Thursday, the same day Musk officially became the owner of Twitter, end quote. So I guess Jack is all in on this working out. He has to be. And look, there has been lots and lots of discussion around the whole idea. of monetizing Twitter, especially, as I said, that Twitter blue slash blue check slash verified idea, people continue to point out that even if they charge $20 a month and said that you had to pay that to be

Starting point is 00:03:41 verified, that would only bring in marginal revenue at best. And at worst, it might actually make the bot and span problem on Twitter worse. Like, the idea is if you pay to be verified, in theory, you get more reach and more attention on the platform, right? Wouldn't Spammers love that. Like, isn't that by definition a plan that would incentivize people who have a monetary interest in expanding their reach being willing to pay up? So basically the spammers. As friend of the show, Parker Thompson tweeted, quote, there are less than 500,000 verified accounts, and charging will probably reduce that number by 50 to 90%. At $20 a month, that's $10 to $45 million a year, or 0.1 to 0.4% of revenue. This is why you don't fire your CFO lightly.

Starting point is 00:04:26 people, I really don't understand the plan here. You can't make real money on this because most users won't pay, and it's unclear why spammers and those who take delight in trolling would not have the most willingness to pay if they get more reach for it, end quote. But tweeting the contrary opinion, I guess from the war room, Jason Calacanis tweeted, quote, having many more people verified on Twitter while removing the bot armies is the quickest path to making the platform safer and more usable for everyone. These are not the only ways to make Twitter safer and more usable, but they will have a quick and dramatic impact. If you have other ideas to make things better, please reply here with details and or write up a blog post and share the link. Increasing the quality of discourse and

Starting point is 00:05:07 making things safer is priority number one, end quote. I'd say this, though, until now the blue check was a coveted sort of mark of status, right? I'm important enough to be verified, although me, Brian, has never been verified, by the way. But going forward, if everyone knows you paid to be verified, doesn't that come off as thirsty? Wouldn't the halo of importance go away to be replaced by a halo of, I don't know, desperation? Like, can someone explain to me how after it's only a subscription thing this does anything other than destroy the value of the thing that you're trying to charge for? YouTube has rolled out what it is calling primetime channels in the U.S. shows and movies from 35 partners, including Paramount Plus and Epics, and has plans to add NBA

Starting point is 00:05:59 League Pass soon. Quoting the Verge. Streaming services are coming to YouTube. The company is rolling out a new feature called Primetime channels that will bring shows and movies from more than 30 services directly into the YouTube interface. It's a big bet for YouTube that it can be the cable bundle of the future, and that its unparalleled audience will make streaming services buy into the idea. YouTube has signed up 35 partners for the launch from big-name streaming services like Paramount Plus and Epics to niche offerings like The Great Courses and Magnolia Selects. Another service NBA League Pass is coming soon. Each one will operate essentially like any other YouTube channel with a curated homepage and a bunch of videos.

Starting point is 00:06:38 Those videos will show up in the movies and TV section of the YouTube app, as well as in search results, recommendations, and elsewhere around the platform. You'll be able to leave a comment and like or dislike the video. is view counts. Really, the movies and shows only have one distinguishing characteristic. A neon green button that says watch now if it comes from a service you subscribe to or a pay to watch if you're not signed up. It's all extremely YouTube-y, as if YouTube just turned a bunch of movie studio executives into creators, which is precisely the idea. For a number of reasons, for one thing, quote, it is frustrating to have to hop from app to app to manage your subscription across

Starting point is 00:07:16 Apps, says Aaron Teague, the head of sports movies and shows at YouTube and the leader of the Primetime Channels Project. This is a line you hear a lot from a lot of tech executives. Streaming is too complicated. We can fix that. But YouTube's case is stronger than most. Two billion people already use the service every month. Most already have a Google account. Many have already connected their credit cards. And YouTube can simplify everything else. It's also a natural fit for YouTube where people already spend time watching trailers, recaps, and all manner of other content about their favorite shows and movies. You'll watch trailers on YouTube and leave YouTube to go start from scratch on the streaming service, Teague says. So we were like, what would happen if we just

Starting point is 00:07:56 collapsed that experience and made it convenient to watch all this content in one place, end quote. It's all a bit confusing from YouTube's own perspective, though. YouTube has touted YouTube TV as the bundle of the future and the product's head, Christian Osling, told me earlier this year that he has identical aspirations to re-bundle the streaming services. So why isn't primetime channels a YouTube TV feature? When I ask Teague, she offers two answers, well, one and a half. The one is that YouTube is global in a way that YouTube TV isn't, and that she sees a huge opportunity for primetime channels outside the U.S., quote, where some of the companies haven't reached scale. The half answer seems to be that YouTube and

Starting point is 00:08:37 YouTube TV are different products with different teams, and in classic Google fashion, they don't seem to work all that closely together. There's also the unspoken other answer, which is that while YouTube TV is growing nicely, it's 5 million users are barely a drop in the overall YouTube bucket. YouTube's distribution will likely be a compelling hook for lots of streaming services, but Paramount Plus, which has been very open about using partnerships to catch up to the Giants quickly, is the biggest name on YouTube's list so far. Can the company win over the bigger players, the Netflix's, and Disney Pluses and HBO Maxes of the world? Teague says it's going to be tough in the U.S., quote, because everyone sort of has a really good experience already, end quote.

Starting point is 00:09:16 Astronaut pointing gun at other astronaut meme. It's a cable bundle. Always has been. Amazon has made its around 100 million song library available to Prime users without ads, quoting TechCrunch. The company said it will now offer Prime subscribers a full music catalog with 100 million songs instead of the previously more limited selection of just 2 million songs, and will make most of the top podcasts on its service available without ads. In addition, the Amazon Music app is getting a revamp, which includes a new podcast previews feature that will allow customers to listen to short clips as a way to discover new podcasts they may like.

Starting point is 00:10:00 The move is a direct shot at streaming music competitors, especially Spotify, which has been moving in the podcast market as a means of generating additional revenue. But Spotify's paying subscriber base is growing frustrated with the fact that they still have to listen to podcast ads, despite paying for the service. Amazon Music's promise of ad-free podcasts, along with a full music catalog, could make for a compelling alternative, the retail giant hopes. In addition to the expansion of the service and ad-free podcasts, the Amazon Music app will gain a new look, most notably with the launch of the new podcast preview feature. This allows customers to listen to a short soundbite from a podcast episode to help them make a decision as to whether it's something they would like.

Starting point is 00:10:40 Prime members will also use the main Amazon Music app to access the full music catalog, Amazon says. The app also offers standard features like the ability to shuffle, play, any artist, album, or playlist, stream personalized playlist, download songs for offline listening, and more. While Prime members won't be able to stream music on demand without upgrading to the paid tier, the larger catalog may make sense for more casual music listeners who prefer a more lean-back experience. The company's previously broader music service, Amazon Prime Unlimited, is not going away. The service, which costs $8.99 per month or $89 a year, will give users access to all songs on-demand in HD quality across all devices. Plus, this premium tier offers millions of

Starting point is 00:11:22 songs in the spatial audio format, end quote. So you're getting something extra for that recent Amazon Prime price raise, I guess. A couple of interesting earnings details to put on your radar before we end today. Uber stock opened up almost 14% this morning after Uber reported Q3, revenue rose 72% year-over-year to $8.34 billion, beating $8.1 billion, which was the estimate, as gross bookings rose 26% year-over-year to $29.1 billion, including $13.7 billion from Uber Eats. And that last bit is what I wanted to focus on. But first up, quoting Bloomberg. Right now, frankly, we're not seeing any signs of consumer weakness. Chief Executive Officer Darikos Roshahi said in a conference call with analyst Tuesday,

Starting point is 00:12:13 he added that strong ridership was driven by city's reopening, travel booming, and a continued shift of consumer spending from retail to services. October is tracking to be our best month ever for mobility and total company gross bookings, he said. Uber reported its ride-hailing driver base at the end of the period on September 30th was, quote, on par with September 2019 levels, and the increased driver engagement continued into October. The improvement is a sign the company is moving past a protracted shortage of drivers that has also affected rival lift. resulting in higher fares and wait times for customers. Both ride-hailing giants have spent millions to lure drivers back to their respective platforms and recruit new ones to meet resurgent rider demand. Uber's food

Starting point is 00:12:53 delivery arm, Uber Eats, generated $13.7 billion in gross bookings during the quarter, a decline from the previous period and missed the $13.9 billion, analysts expected. The unit, which offers delivery across restaurants, groceries, and alcohol, has grown to make up about 33% of the company's total revenue, end quote. Except that's not how I count. or how the math seems to work for me. If Uber did $29 billion in revenue and Uber Eats accounts for $14 billion of that, isn't that almost half? Although I know Uber does funny math in all sorts of ways. Gross bookings represents everything of which sales of $8.34 billion represents what? Do they make more sales on ride-hailing gross bookings than Uber eats gross bookings?

Starting point is 00:13:36 All I'm trying to get at, for all of the ways certain things were drawn forward during COVID times only to recede again afterwards, sometimes quite dramatically after everything opened up. I'm looking at you, Peloton. What if Uber is the one big exception to that? What if COVID Times actually solidified Uber Eats as the second big pillar of Uber's entire business model? And finally, interesting to note that in their earnings, Sony reported PlayStation Plus subscribers declined to 45.4 million in Q2, down from 47.3 million subscribers in Q1 and PlayStation Network monthly active users dropped to 102 million in Q2 from 103 million in Q1. This appears to be Sony's lowest monthly active users figure since it began reporting this data in early 2020.

Starting point is 00:14:28 Sony did say that they have sold 25 million total PlayStation 5 units, and supply chain issues are loosening up there, but let me point out why that drop in PlayStation network usage is worth noting. In their recent earnings, Microsoft said their Xbox games, GamePass is profitable and accounts for around 15% of Xbox's content and services revenue. They also shared that PC GamePass subscriptions rose 159% year over year. The point here is if gaming is clearly moving from a consoles and disk model to a subscription and play on various platforms model, is it time to start worrying about PlayStation falling behind? Quoting Video Games Chronicle.

Starting point is 00:15:09 Sony's gaming division is making more money per subscriber than it was before, potentially reflecting the uptake of the more expensive subscription tiers introduced by PS Plus. Asked about the decline in an earnings call on Tuesday. Sony's CFO Hiroki Totoki blamed declining third-party game and PlayStation 4 sales and, quote, more people going outdoors. The execs said he expects subscriber numbers to recover during the company's next quarter, partly due to the impact of Call of Duty Modern Warfare 2 and God of War Ragnarach. Last week, Sony claimed Modern Warfare 2 was the biggest PlayStation store launch ever for a Call of Duty game, including pre-orders and day one sales, end quote.

Starting point is 00:15:47 So this is either a blip, you know, games are a hit space business, or it's something to keep our eye on. Jenny said when she was just about five years old, you know my parents are going to be the death of us all. Talk to you tomorrow.

Tech Brew Ride Home - Tue. 11/01 – Twilight Of The Blue-Checks?

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