Tech Brew Ride Home - Wed. 02/13 - Apple's Event About Services. But Which Ones?

Episode Date: February 13, 2019

An Apple event focused on services, a former Apple Vice President charged with insider trading, the larger gaming industry is having issues, and why your GPS device might have issues on April 6th of this year. Sponsors: Tiny.website Wix.com/podcast DataDogHQ.com/ridehome Links: Apple Plans News Event For March 25 (BuzzFeed News) Publishers Chafe at Apple’s Terms for Subscription News Service (WSJ) The former Apple lawyer who was supposed to keep employees from insider trading has been charged with insider trading (CNBC) Amazon opens up Alexa store for anyone to create and publish custom skills (The Verge) Activision Blizzard cuts hundreds of jobs despite ‘record revenue’ year (Polygon) Fun fact: GPS uses 10 bits to store the week. That means it runs out... oh heck – April 6, 2019 (The Register) 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 ride home for Wednesday, February 13th, 2019. I'm Brian McCullough. Today, an Apple event focused on services, a former Apple vice president charged with insider trading, the larger gaming industry having issues, and why your GPS device might have issues itself on April 6th of this year. Here's what you missed today in the world of tech.

Late yesterday, John Paskiewiczki at BuzzFeed reported that sources were telling him, Apple is planning to hold a special event on March 25th at the Steve Jobs Theater on its Apple campus. But don't expect any major hardware announcements then. That's actually not unusual. Apple has a tendency to do sort of mini events in late March last year. The event was around using iPads and education. So there were new events that time. But this year, it seems the focus will not be on any hardware or new devices,

but on services. Quoting from BuzzFeed, sources describe the event as subscription services focused, but declined to say anything about Apple's standalone video streaming service, which is also rumored to debut in 2019. Earlier this year,

the information reported that Apple had told studios and networks to be prepared for an April launch, end quote. Okay, so Apple mini event coming up. They do tend to time hardware upgrades around these things, so maybe we will get refresh. to the iMacs or those rumored updates of iPad minis,

or maybe the second-generation AirPods, though AirPods are becoming so important to Apple that I couldn't see them announcing that without an actual on-stage demo. So if no hardware and services will be the main course, then will we finally learn something about Apple's video streaming service? Well, much more likely, according to several Apple watching venues, is that Apple might also or solely want to talk about its much-rumored magazine subscription service.

If you'll recall, it was almost a year ago exactly that Apple purchased texture, a sort of Netflix for magazines where you pay one single monthly fee and get access to a whole range of publications. However, there's one problem with that angle. Earlier yesterday, the Wall Street Journal was reporting on exactly this. Apple's attempts to entice publishers to join its subscription news service and the fact that that effort was not going very well. The publishers, in short, are not on board yet.

Quote, in its pitch to some news organizations, the Cupertino California Company has said it would keep about half the subscription revenue from the service, the people said. The service, described by industry executives as a Netflix for News, would allow readers to read an unlimited amount of content from participating publishers for a monthly fee. It is expected to launch later this year as a paid tier of the Apple news app, the people said. The rest of the revenue would go into a pool that would be divided among publishers,

according to the amount of time users spend engaged with their articles, the people said. Representatives from Apple have told publishers that the subscription service could be priced at about $10 a month, similar to Apple's streaming music service, but the final price could change some of the people said, end quote. So reminiscent of that recent conversation we had about the economics of, Spotify subscriptions. But the problem here, though, is again that not everybody is on board. Reportedly, the New York Times and the Washington Post are among the publishers who think a 50% cut is way too much. And frankly, that does seem steep, doesn't it? Makes the 70-30 split Apple gives to app developers look super generous in comparison. And heck, didn't the music industry get a

better deal than that with Apple music and even going back to the original iTunes store? As Mark German joked, Apple is also asking for four first-round draft picks, end quote. An interesting pushback, though, came from Gregory Wild Smith, who tweeted, quote, while 50% is high, remember that traditional distribution was at least this expensive, often more. So most objections you'll see to this are at best misinformed fearmongering. Or actually complaining they can't mine user data for extra revenue. I think 50% is high, but still, end quote. So perhaps this is exactly the case that Apple has been making to these publishers.

We're just coming in and replacing that old distribution cost in your business model that is, by the way, falling apart anyway, right? However, what is probably not helping Apple's case here is recent history, is ironically enough Facebook. Publishers have seen what Facebook's capriciousness has done to their business, Facebook being an erstwhile platform partner to the publishers. Publishers remember pivoting to video. Something tells me they don't feel like voluntarily lining up to be burned once again by a tech platform that is hot on their industry for a little while, only to change strategy somewhere down the road and leave them high and dry.

As Matthew Panzerino tweeted, quote, Here's the thing. This isn't just about giving Apple 50%. It's also about reconfiguring your organization to take advantage of and eventually come to rely on whatever traffic-based revenue this brings. And then what happens when Apple changes its mind, end quote. Quick late insertion here, which you wouldn't even have known if I hadn't told you about it. Late this afternoon, CNBC was reporting that Apple is aiming to launch its streaming video service in April or May,

quote, which will feature free original content for device owners and a subscription platform for existing digital services. But don't expect Netflix to be a part of it, and HBO's participation is, is also in doubt according to people familiar with the matter, end quote. So a news subscription service with possibly big partners not involved and a video subscription service with big partners possibly not involved. Should make for an event with lots of things to chew on. Who needs hardware announcements? Here's a wild headline.

The Securities and Exchange Commission has charged Apple's ex-vis president of corporate law, Gene Levoff with insider trading, alleging that he traded on inside knowledge of Apple's earnings info as recently as 2015 and 2016. Levoff was fired by Apple this past September. But here's what makes this story even more wild. Essentially, as VP of corporate law, Lev off's job was to keep other Apple executives and employees from engaging in insider trading. quoting the lawsuit filed today in the U.S. District Court in New Jersey. Levoff also had a previous history of insider trading, having traded on Apple's material non-public information, at least three additional times in 2011 and 2012.

For the trading in 2015 and 2016, Leveoff profited and avoided losses of approximately $382,000, end quote. Also, according to the complaint, Levoff allegedly disobeyed the blackout period for company insiders to buy or sell stock, and he did so to the tune of tens of millions of dollars. So he was allegedly moving tens of millions of dollars of Apple stock at the time, based on his knowledge of not yet public Apple earnings numbers. But even then, what's the best case scenario for how he could have allegedly profited from these sorts of short-term news-based pops in the stock like that? Well, as the complaint says, probably only a couple hundred thousand dollars at a time max as downtown Josh Brown tweeted and by the way downtown Josh Brown is always exceptional on Twitter he's at reformed broker

everybody well worth a follow as downtown Josh Brown tweeted quote you know this guy was making a minimum of a million bucks a year right what the hell is wrong with these people Amazon now lets users create and submit custom Alexa skills for certification and publication in the U.S. Skills Store. Quoting Tom Warren from the Verge. Amazon is now letting anyone create and publish Alexa Skills into the Alexa Skills Store.

Amazon first made it easy to create custom skills last year with its Alexa Skill Blueprints program, and it's taking those custom responses and allowing them to be published in the store for anyone to download and use. There are currently more than 80,000 existing Alexa skills in the store,

but today's announcement means the store will be growing significantly with user-generational. custom skills. Amazon is primarily aiming this new functionality at content creators, businesses, brands, and other organizations. Publications, local sports teams, YouTubers, and others will be able to broadcast their latest updates by simply adding a recorded audio feed URL to a blueprint skill directly

and then publishing it on the store. This will allow Alexa users to add these as flash briefings to request the latest information by asking AL-E-X-A, what's the news? Bloggers using WordPress with the Amazon AI plugin will also be able to automatically publish their blog posts as audio on Alexa through an RSS feed. Even universities or religious organizations could make live or recorded audio available on Alexa devices. There are a variety of skill blueprints to choose from, although you're limited to the sandbox Amazon is offering, end quote. So I guess there's no more excuse for me not having the ride home as a flash briefing on Alexa. Now I just have to find the time to do it.

Maybe this weekend. I've been seeing stories for a while now that the big video game companies, the EAs, the Take-2s, as a group, they've all been seeing their stocks get crushed lately. This is a bit outside the scope of this show to report the stock behavior of video game companies, but something really seems to be going on here. Activision Blizzard today announced a record $1.8 billion in net income in 20,000. 2018, but also said it's laying off 8% of its staff are around 800 people. Quote, while our financial results for 2018 were the best in our history, we didn't realize our full potential. Bobby Kotik, chief executive officer of Activision Blizzard, said in an earnings report, quote, to help us reach our full potential, we have made a number of important leadership changes.

These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises. our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and are extraordinarily talented employees, end quote. Well, 800 less. Extraordinarily talented employees, apparently. Video games are a notoriously hits-driven business, and a hits-driven business can always mean severe boom and bus cycles.

If you know your video game history at all, you know that. Just asked Nolan Bushnell. As I say, the gaming industry is not exactly my Ballywick. But apparently one of the things that is directly affecting Activision Blizzard in this case was a recent parting ways with a longtime partner, the Gaming Studio Bungy. It's a story a bunch of you urged me to cover on the subreddit, and now I wish I had listened. This is quoting from Allegra Frank in Polygon, quote, We saw weaker than anticipated retail demand, said President and Chief Operating Officer Collister Cotty Johnson during the call.

But, quote, we will not improve retail monetization as, as quickly as we liked, referring to the slowing sales of micro-transactions within games like Overwatch and Harthstone. According to Chief Financial Officer Dennis Durkan, Blizzard does not have a major, quote, frontline release planned for the 2019 fiscal year. This means Blizzard has no plans to release a new Diablo, beyond the already announced mobile game, or any other major game. As a result, Durkan attributed the lower income and revised guidance for the upcoming year to

disappointing returns from the Blizzard segment. of the company. Activision parting ways with the destiny property does not account for much of the restructuring this year, said Catec during the call. This past January, Bungee assumed total control of its series ending its partnership with Activision Blizzard earlier than initially agreed upon, end quote. So again, some of that sounds like the usual ups and downs, the vicissitudes of the gaming industry as it ever was, but that bit about microtransactions makes me think of the things we've been talking about when we talk about Fortnite and subscription gaming and streaming gaming. It's one thing to be caught on the wrong side of a boom bus cycle, and another thing if your

entire industry might be on the verge of some sort of secular change. I'm not sure if that's what's going on here. So I actually put up a post in the subreddit at R slash ride home. So if you know anything about the video game industry, feel free to educate me more on what exactly is ailing the industry at the moment, and then hopefully I can educate all of us more in the future. Finally today, and hat tip to listener David Belson for turning me on to this on the podcast subreddit, you would think that we had learned our lesson about things like this by now, but I guess not. Quoting from the Register UK, quote, GPS signals from satellites include a timestamp needed in part to calculate one's location that stores the weak number using 10 binary bits.

That means the weak number can have 210 or 1,024 integer values, counting from zero to 1,023 in this case. Every 1,024 weeks, or roughly every 20 years, the counter rolls over from 1,023 to 0. The first Saturday in April will mark the end of the 1,024th week, after which the counter will spill over from 1,023 to zero. The last time the week number overflowed like this was in 1999, nearly two decades on from the first epoch in January 1980. You can see where this is going. If devices in use today are not designed or patched to handle the latest rollover,

they will revert to an earlier year after that 1,024 week in April. causing attempts to calculate position to potentially fail. System and navigation data could even be corrupted, were warned, end quote. So yes, echoes here of the infamous Y2K bug. Don't worry, though, a simple software update should fix the issue, and the fix is simple. The latest CNAV and MNAV message formats use a 13-bit week number. And any modern device will have this already.

Any older device should be able to software update, of course, simply adding three bits allows you to be good to go until, I guess, the heat death of the universe or something like that. Bugs like this pop up because ages ago, kitties, every friggin bit counted when you were developing something. You saved space in code where you could. Now, theoretically, that should no longer be a problem these days, but I think one rule of thumb for all coders that they should live by is that if you have to save space somewhere, don't save it in your chronology systems. Time marches ever onward. And if there's one thing we've learned several times now,

it's that if you cut corners in chronology, it will catch up with you eventually. That is all for today. I've been Brian McCullough. Speaking of chronology, very belated public service announcement to any hopeless nerds listening to me out there, tomorrow is Valentine's Day.

Still time to save your skin and not reveal to your significant other that you're frightfully unaware of normal human conventions like calendar-mandated romantic gestures. And I am speaking to those of all gender persuasions when I say this because boorishness and absent-mindedness

know no particular category of sexuality, but they do tend to have a certain over-representation when it comes to us nerds. So don't be that incorrigible, hopeless nerd on Valentine's Day. Talk to you tomorrow.