Tech Brew Ride Home - Wed. 04/19 – The End Of Netflix’s Red Envelopes

Episode Date: April 19, 2023

That Netflix ad tier seems to be paying off. But it’s also the end of the road for those famous red envelopes. We’re about to see a foldable Pixel phone. More layoffs from Meta. More links in bio for Instagram. And forget data being the new oil. What if data was the new fertile farmland to be rented out to LLMs for harvesting? Sponsors: Grammarly.com/techmeme leadership.oregonstate.edu/cic Links: Netflix Adds 1.75 Million Customers in Q1 2023; Grows to 232.5M Globally (The Streamable) Netflix Gains 1.75 Million Subscribers, Axes DVD-Rental Business (WSJ) Google to launch its first foldable phone, the ‘Pixel Fold,’ in June (CNBC) Meta has started its latest round of layoffs, focusing on technical employees (CNBC) Instagram takes on Linktree and others with support for up to 5 ‘links in bio’ (TechCrunch) Reddit Wants to Get Paid for Helping to Teach Big A.I. Systems (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Tech meme right home for Wednesday, April 19th, 2020. I'm Brian McCullough today. That Netflix ad tier seems to be paying off, but it's also the end of the road for those famous red envelopes. We're about to see a foldable pixel phone, more layoffs from meta, more links in bio for Instagram, and forget data being the new oil. What if data was the new fertile farmland to be rented out to LLMs for harvesting? Here's what you miss today in the world of tech.

Netflix kicked off tech earnings season. by revealing revenue was up 4% year-over-year to $8.16 billion, but only $1.8 million in paid net subscriber editions versus the $2.06 million that was expected. Although global streaming paid memberships were up 5% year-over-year to $232.5 million. But remember, Netflix makes more average revenue per user in North America than in other markets, so kind of a flat quarter for them, all at all, but also why it was interesting. That. based on the numbers they shared, it looks like Netflix is making slightly more ARPU from users on its ad-supported tier than it does on its ad-free tier. Remember, the ad-supported tier

costs $6.99 per month, and you still get the ads that they can sell to you. But if you run the numbers, the ad tier seems to be producing more ARPOO than the $15.49 per month that Netflix charges for that, you know, base-level tier. Quoting Rehard Jark on Twitter, not that long ago, Netflix was an endless cash-burning business. Today they reported $2.1 billion in free cash flow in Q1. With the crackdown on password sharing, ad tier maturing, and AI helping reduce costs of content production, the business might become a cash printer, end quote. To that end, news that Netflix has upgraded its ad-supported plans video quality from 720P to 1080P and is now letting subscribers to the ad feed watch two streams at once, starting with Canada and Spain. So,

They're bringing the ad tier more up to parody with the ad-free tier. Also, it's the end of an era. Netflix announced plans to ship its last red DVD envelope by mail in September 2023 after 25 years of mailing shows and movies to subscribers and paving the way for streaming, quoting the Wall Street Journal. Netflix built its business on dispatching DVDs, and for years, the company's streaming platform was more of a side business. But as the company pushed further into original programming and

built a bigger streaming library, a growing subset of its subscribers opted to watch content that way rather than order discs to their mailboxes. House of Cards, which was released in 2013 and became Netflix's first original program. That's not true, right? There was that one with the guy from the Sopranos in some sort of Scandinavian country. Anyway, wasn't initially available on DVD. Netflix said it shipped more than 5.2 billion discs over the life of the business. The first red envelope the company mailed in March 1998 contained Beetlejuice. And the most popular DVD rented by mail was The Blindside, a 2009 sports drama featuring Sandra Bullock. Mailed DVDs, quote, paved the way for this shift to streaming, Mr. Sarandos said in a blog post announcing the change.

Our goal has always been to provide the best service for our members, but as the business continues to shrink, that's going to become increasingly difficult, end quote. The company plans to wind down its DVD.com website later this year, end quote. As recently as 2013, Netflix still made more than $900 million a year from mailing you DVDs. Last year, that was barely $150 million. As Lucia Moses tweeted, quote, hard to believe, but once upon a time, you had to decide Wednesday what movie you were going to watch on Friday, kids, end quote. But Michael Avolio tweeted what occurred to me as well, quote, awful news for movie lovers in the U.S. Netflix's mail service is shutting down in September. Their selection is broader than any streaming service. This is a huge blow to those of us who like a

wide variety of films. Countless films will be harder to see, end quote. Yeah, countdown to when Hollywood stops producing physical media entirely. We're going back to the battle days of the 1980s people when you simply couldn't watch certain movies if they hadn't come to VHS yet. Soon, if a movie you want to see is not on a specific streamer. It kind of won't exist. CNBC has seen Docs suggesting that Google plans to unveil the long-rumored foldable pixel phone on May 10th, offering a 7.6-inch main screen, a 5.8-inch outside screen, and Tensor G2 chip launching in June for upwards of $1,700. Quote, Google plans to announce the device at its annual developer conference Google I.O. on May 10th, the pixel fold, known internally, by

the code name Felix will have, quote, the most durable hinge on a foldable phone, according to the documents. It will cost upward of $1,700 and compete with Samsung's $1,799, Galaxy Z Fold 4. Google plans to market the pixel fold as water-resistant and pocket-sized with an outside screen that measures 5.8 inches across, according to the documents. Photos viewed by CNBC show that the phone will open like a book to reveal a small tablet-sized, 7.6 inch screen, the same size as the display on Samsung's competitor. It weighs 10 ounces, slightly heavier than the Samsung Galaxy Z Fold 4, but it has a larger battery that Google says will last for 24 hours or up to 72 hours in a low power mode. The Pixel Fold is powered by

Google's TensorFlow G2 chip, according to the documents. That's the same processor that launched in the Pixel 7 and Pixel 7 Pro phones last year. While hardware is a small fraction of Google's revenue, the pixel fold is the most expensive phone in the company's Google Pixel family. Google has been working on the software, including Android, and its App Store Google Play for third-party devices made by companies like Samsung, the current folding phone market leader. The Pixel Fold will give Google a chance to show what a fully Google-made foldable phone experience is like. Other pixels, for example, have exclusive features that aren't available on all Android phones, like photo editing options that are powered by the tensor processor.

The launch comes amid questions about Google and Samsung's relationship. Earlier this week, Alphabet shares fell more than 3.5% Monday after a Times report said Samsung is reportedly considering changing its default search engine from Google to Microsoft's Bing for its lineup of smartphones, which drives an estimated $3 billion in annual revenue to Google, end quote. Meta has begun another round of layoffs impacting technical teams, apparently. According to a source, meta will possibly lay off around 4,000 people in this round. out of the previously planned 10,000 number, quoting CNBC. Employees with technical backgrounds like user experience, software engineering, graphics programming, and other roles announced on LinkedIn that they had been let go by the company on Wednesday morning. A meta-spokesperson confirmed to CNBC the cuts had started. One employee impacted by the layoffs told CNBC Wednesday's layoffs also hit product-facing teams and that meta plans to cut business-facing roles such as finance, legal, and HR beginning in May. The employee who spoke under condition of

of anonymity, said meta suggested tech teams who weren't impacted by Wednesday's cuts may also be included in layoffs next month. LinkedIn posts indicated that multiple people who worked as gameplay programmers were also affected by the layoffs. Gameplay engineers work on virtual and augmented reality products, according to a meta job listing. I woke up this morning to the unfortunate news that I was one of the many laid off from meta today, a Facebook business program manager wrote on LinkedIn. With ad revenue slumping last year and its stock price and free fall, Facebook's parent announced its first round of layoffs in November, affecting some 11,000 workers. Meta CEO Mark Zuckerberg then declared 2023 the year of efficiency and proceeded towards a plan

of an additional 10,000 job cuts in March, resulting in restructuring costs of between $3 billion and $5 billion. As Zuckerberg said at the time, the new round of April layoffs targets technical workers. Zuckerberg said cuts in the business groups would take place in late May. Wall Street has applauded the downsizing. Meta shares have soared 81% this year after losing about two-thirds of their value last year. Revenue has declined for three straight quarters, and analysts are projecting another quarterly sales drop when Meta reports its first quarter earnings next week. The company's previous guidance called for sales of between $26 and $28.25 billion,

which means the streak of revenue drops could end if meta reaches the top end of the range, end. And Mark Zuckerberg himself announced yesterday that Instagram now lets users add up to five links to their account bios. So, you know, Link Tree, Beacons, all you other Lincoln bioservices. Y'all knew you were on borrowed time, right? Quoting TechCrunch. The company says the feature has been a top request among creators, but in reality, it's also an example of how Instagram's failure to adapt to the needs of that community has allowed alternative solutions to thrive. LinkTree and others came into existence largely because of platform limitations like those on Instagram and other social networks, which had for a long time prevented users from adding multiple links to other

sites in fear, they would be helping to direct users to content outside their own apps. The platforms would rather keep users trapped inside Instagram or their own network rather than potentially lose users' time and engagement. Instagram wasn't alone in making this choice. TikTok today even limits clickable links in its bios to only those with business accounts, making it harder for regular users and creators to direct fans and followers to other websites. is decision to now, after all these years finally address creator demand for increased access to links in bio may actually be due to the complaints over TikTok's stricter limitations.

The company likely sees how expanded access to links could be seen as a competitive advantage, potentially luring creators back to its app. In fact, Instagram calls out that its ability to add multiple links to a profile will be available to all accounts, including business and creator accounts. To use the feature, users will tap edit profile, then links, then add external link. They can then drag and drop the links in the order they want them to appear. In testing the feature briefly, we didn't have trouble linking to competing platforms like TikTok or YouTube, for example.

In addition, below the option to add multiple links to other websites, Instagram also allows users to add a link to their Facebook profile with a dedicated linking option. This link has a more professional appearance with a rounded Facebook icon and text that reads Facebook profile. External links don't include any social customizations like small icons. Meta says users are allowed to link to any URL that abides by its community guidelines in terms of service, and links are scanned to ensure they're within those guidelines and not harmful. It does not plan to block LinkTree links or those from other Linkin bio platforms.

In fact, as LinkTree pointed out in a tweet, Meta's own account is using one of its links at present, end quote. And finally today, Reddit has announced plans to start charging companies to access its API, which they're doing because many folks have been using Reddit content to train these new AI tools. The API will stay free for developers building apps for Reddit users, but basically Reddit wants to start getting paid for helping train these large language models, quoting the New York Times. Reddit has long been a hotspot for a conversation on the internet. About 57 million people visit the site every day to chat about topics as varied as makeup,

video games and pointers for power washing driveways. In recent years, Reddit's array of chats also have been a free teaching aid for companies like Google, OpenAI, and Microsoft. Those companies are using Reddit's conversations in the development of giant artificial intelligence systems that many in Silicon Valley think are on their way to becoming the tech industry's next big thing. Now Reddit wants to be paid for it. The company said on Tuesday that it planned to begin charging companies for access to its application programming interface or API, the method through which outside entities can download and process the social network's vast selection of person-to-person conversations. The Reddit corpus of data is really valuable, Steve Huffman, founder and chief executive of

Reddit said in an interview, but we don't need to give all of that value to some of the largest companies in the world for free. The move is one of the first significant examples of a social network's charging for access to the conversations it hosts for the purpose of developing AI systems like ChatGPT, OpenAI's popular program. Those new AI systems could one day lead to big business, but they aren't likely to help companies like Reddit very much. In fact, they could be used to create competitors' automated duplicates to Reddit's conversations. Reddit is also acting as it prepares for a possible initial public offering on Wall Street this year. The company, which was founded in 2005, makes most of its money through advertising and

e-commerce transactions on its platform. Reddit said it was still ironing out the details. of what it would charge for API access and would announce prices in the coming weeks. The underlying algorithm that helped build BARD, Google's conversational AI service, is partly trained on Reddit data. OpenAI's chat GPT cites Reddit data as one of the sources of information it has been trained on too. Other companies are also beginning to see value in the conversations and images they host. Shutterstock, the image hosting service, also sold image data to OpenAI to help create Dali, the AI program that creates vivid graphical imagery with only a text-based prompt required. To keep improving their models, artificial

intelligence makers need two significant things, an enormous amount of computing power and an enormous amount of data. Some of the biggest AI developers have plenty of computing power, but still look outside their own networks for the data needed to improve their algorithms. That has included sources like Wikipedia, millions of digitized books, academic articles, and Reddit. Reddit believes its data is particularly valuable because it is continuously updated. That newness and relevance, Mr. Huffman said, is what large language model algorithms need to produce the best results. More than any other place on the internet, Reddit is a home for authentic conversation, Mr. Huffman said. There's a lot of stuff on the site that you'd only ever say in therapy or AA or never at all, end quote.

Imagine a near future where a growing new value of owning a social platform is just renting off the valuable corpus of your user's interactions, sort of like how a landowner rents out a field for farming. I saw Lon Cheney walking with the queen doing the werewolves of London. I saw Lonchaney Jr. walking with the queen doing the werewolves of London. I saw a werewolf drinking a pinia collada at Trader Vicks. His hair was perfect. Have I done that one before? Anyway, talk to you tomorrow.