Tech Brew Ride Home - Wed. 04/24 - The Podcast Wars... Begun They Have?

Episode Date: April 24, 2019

iFixit thinks it knows why the Galaxy Fold is having issues, Wing becomes the first drone delivery operator cleared by the FAA, why Netflix has gone deep into debt and have the podcasting wars begun? Sponsors: Tech.FidelityCareers.com Tiny.Website Links: Samsung Galaxy Fold Teardown (iFixit) Here’s Why We Think Galaxy Folds Are Failing (iFixit) May to ban Huawei from providing 'core' parts of UK 5G network (TheGuardian) Google Spinoff’s Drone Delivery Business First to Get FAA Approval (Bloomberg) Kuo: Two new AirPods models in Q4 2019 – Q1 2020, one features an all-new design and higher price (9to5Mac) Snap rally fades after earnings beat (CNBC) Microsoft Paint to remain part of Windows 10 after all (The Verge) Netflix offers $2 billion more in debt to fund its content spending (TechCrunch) The Joe Rogan Experience to withdraw from Luminary (HotPod) Subscribe to the ad-free feed! 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 Wednesday, April 24th, 2019. I'm Brian McCullough today. I Fix It thinks it knows why the Galaxy Fold is having issues. Wing becomes the first drone delivery operator cleared by the FAA, why Netflix has gone deep into debt, and have the podcasting wars begun.

Here's what you miss today in the world of tech. The folks over at I Fix It, who do yeoman's work on this sort of thing, have done a teardown of the Samson's Sun Galaxy Fold, and they think they have some ideas about why the device might be having issues. Link to the tear down in the show notes if you want all of the step-by-step details, but the bottom line is, I Fix It thinks that this is just a device with a fragile build. Key issue is that there is seemingly a lack of adequate protection against the ingress of debris between the OLED screen and the bezel. Quote, OLED displays are like tiny, extremely thin clean rooms you carry around, and any intrusion or stress on them is likely to kill their

delicately balanced work. You might be able to see where we're going with this, knowing how OLEDs react to prying, moisture, oxygen, or nearly anything. It's plain to see, from reviewers' photos alone, that the fold is literally inviting trouble into its fragile innards, end quote. That would explain Dieter Bone's fold issues, the bumps that started to appear under his screen. Probably got some dust or something in there. And I Fixit notes that it's related to how the hinge works. Okay, but what about the screen protector that some of the reviewers removed? They're actually not that uncommon, it turns out.

The S-10 series has the very same screen protectors, and there's been no PR nightmare around that. Problem is, says I Fix It, because the display is so fragile to be capable of Flex, there's really nothing much between you and pressing down on the underlying OLED panel, and crucially, applying uneven pressure, which apparently is death to OLEDs. Samsung has mentioned that it tested the devices using robots that folded and unfolded devices 200,000 times. But IFIX it thinks those bots likely, quote,

are pressing with perfectly even pressure across the phone's outer plates, and opening with a similar even force grace, end quote. whereas human fingers, not so much. In essence, here is I-Fix its conclusion. Quote, why make a device with a fragile OLED layer? So little tolerance between screen and spine, and so many ways for dirt and moisture to get in? Hubris? Testing with robots instead of real humans with pockets and fingers and different ways of opening and closing things.

These are questions that may go unanswered, even if we learn the cause of the defects, end quote. The UK has apparently decided to allow Huawei limited access to help build parts of that country's 5G network and other, quote, non-core infrastructure. The decision was apparently signed off on by UK Prime Minister Theresa May and the National Security Council of which May is the chair. This decision has drawn something of a firestorm of backlash and not just from opposition politicians. One way or another, this decision is notable, of course, because other countries, including the U.S., Australia, and New Zealand have moved to ban Huawei products on upcoming domestic telecoms infrastructure. It's also probably a much-needed win for Huawei, which has been under fire from many directions, especially the Trump administration recently. But it's most notable geopolitically because this would make Britain the first of the so-called five-eyes nations of Australia, Canada, New Zealand, and the United States. the United Kingdom to allow Huawei tech in their 5G systems. The Five Eyes countries share

signals intelligence much more freely than other countries, even inside other alliance structures like NATO. As British member of parliament, Tom Tugentat tweeted, quote, allowing Huawei into the UK's 5G infrastructure would cause allies to doubt our ability to keep data secure and erode the trust essential to hashtag Five Eyes cooperation. There's a reason others have said no, end quote. Alphabet's wing has become the first drone operator to get FAA approval as an air carrier, quoting Bloomberg. The subsidiary Wing Aviation LLC now has the same certification that smaller airlines receive from the U.S. Federal Aviation Administration and the Department of Transportation. It plans to begin routine deliveries of small consumer items in two rural

communities in Virginia within months, the company said, end quote. At the moment, drone regulations do not permit flights over crowds or populated urban areas, thus the approval for these out-of-the-way communities as the first test cases. And thus, Wing had to go through extensive regulations and training routines, just the way a traditional air carrier has to. Some drone companies have complained that the hoops they are forced to jump through to receive air carrier certification are too onerous. and apparently the FAA application process took months for Wing.

But the hope is now that this first approval is out the door, it should allow the agencies to move quicker in approving other drone applicants. Noted Apple analyst Ming Chi Kuo is reporting that he expects Apple to launch two new AirPods models in the fourth quarter 2019, first quarter 2020 time frame. One of the new models will be a simple, iterative update to the AirPods, a spec bumper two, but the other could be a completely new form factor and possibly a higher price point as well, quoting from 9 to 5 Mac. The model with the same external design would apparently keep the same price point as today's second generation AirPods.

It's not clear if quote is referring to the $159 base price or the $199 higher tier model on sale today, which bundles the wireless charging case. It is possible, the two new AirPods models suggested by Quo adopt the existing $159 and $199 price points. Internally, Apple will change how both AirPods are manufactured, moving to a system in package design that can improve yield rates during assembly, save space, and lowers production costs. Unfortunately, Quo does not elaborate on any specific customer-facing new features in the future AirPods generation, apart from the illusion to an all-new design. Previously, reports have indicated that Apple is working on noise-canceling and water-resistance improvements for its truly wireless earbuds, end quote.

Microsoft has announced that its famous and beloved Paint app will still be included in Windows 10 after all, after worrying legions of paint fans by previously announcing paint was going to be deprecated. But a product program manager for Windows warned paint will only be included in the May 2019 Windows update, quote, for now. Quoting from the Verge, most of the main MSPaint functions were to be integrated into the more modern paint 3D app as part of a broader push to entice creators to use Windows 10. It's not clear if Microsoft still remains committed to paint 3D or why. There will continue to be two paint apps included with Windows 10 in the future, end quote. Snap reported Q1 revenue of $320 million, beating the $307 million,

analyst consensus estimate, a beat that represents a 39% year-over-year revenue increase. Snap also reported daily active users of 190 million people, up 2% quarter over quarter. So that's good because those daily active user numbers had been slipping, you might remember. And once again, Snap really, really wants you to know that it reaches 90% of 13 to 24-year-olds in the U.S. again, possible signs of resurgence at Snap. Of course, if we're talking about stock performance, it is a resurgence from truly dismal levels. Still, quoting from CNBC, Snap's share price is up more than 100% year to date after a fast start in 2019. Besides resurging user growth, Snap has announced a new gaming platform, new original shows, an ad network,

and more augmented reality features. The company has also completed the rollout of its re-engineered Android app. During the company's earnings call, CEO Evan Spiegel said Snapchat's Android app is now available on all Android devices, which he said creates an opportunity to increase the app's user base, end quote. Netflix announced this morning that it is raising $2 billion in additional debt to fund content production and other expenses. Quoting from TechCrunch, the streaming service says it plans to use the debt funding

for general purposes, including content acquisitions, production, and development, capital expenditures, investments, working capital, and potential acquisitions, and strategic transactions, end quote. The funds will be raised through unsecured notes that will be issued in two series in both U.S. dollars and euros, it says, end quote. So I'm noting this because I'm not sure if I've underlined it before, but Netflix is becoming a highly leveraged company. This additional raise will bring Netflix's long-term debt total to around $12.3 billion. Netflix's interest on that debt is increasing. It had to pay 135.5 million in interest expenses just in Q1 of this year. That's up 67% year over year and represents about 3% of Netflix's total revenue. And I'm bringing this up to make two points. The next few years or so are going to be a Harvard Business School case study for the ages. Can Netflix outspend its rivals to create a content library that will serve as its competitive moat? Can it it do that while also increasing subscribers enough to service this debt that is taking on to create

the moat? And can it do so in time to also maintain the pricing power to increase revenue to service this debt? And can it do all of this whilst everyone and their mother is getting into the video streaming game? It's going to be quite the balancing act. But the second point that I wanted to make is this. There is precedent for doing business this way, leveraging heavily and spending wildly and servicing the debt with the free cash flow thrown off from subscription revenue. This is exactly the way the cable TV industry was built in the 1970s and 80s. It never ceases to amaze me with the streaming wars story how everything, literally everything in the story that is old, is new again. Something, something blowing up the cable,

just to recreate it. Finally, today, at the risk of accusations of insider baseball on my part, there is some podcasting industry news to discuss. You might have heard that money is flowing into the podcast space. Mainly, it's been Spotify coming in and throwing its weight around, buying Gimlet, buying Anchor, which of course is the host of this very podcast, buying the true crime podcast studio parkast. But believe me, there is a lot of money circling the space right now, Spotify's, and a lot of these deep-pocketed players have looked at this space, looked at the model of media success of the last decade and thought, there should be a Netflix for podcasting.

Well, Luminary, which launched just yesterday, has raised $100 million in VC money, to try to do just that to create a Netflix for podcasts. For $7.99 a month, you can listen to all the usual podcasts like you can in any podcatcher inside the Luminary app, podcasts like this one, but it will also have a bunch of exclusive podcasts as well, from the likes of Trevor Noah, Conan O'Brien, Lena Dunham. Luminary has been throwing their money around two, or at least their VC's money, to try to create a hit that people will be willing to pay to listen to, their house of cards, if you will, to extend the Netflix analogy.

Now, you'll have to take my word for it, but let's just say that the extant podcasting industry is skeptical of the Luminary play. That hasn't stopped some podcast producers, including The Ringer and people like Guy Raz and Adam Davidson, hasn't stopped them from being willing to take the Luminary money and produce some exclusive shows because why not, right? If someone's willing to throw money at you, you take it, even if you're just hedging your bets. But as I said, a lot of people are skeptical to the point of suddenly withholding their podcasts from Luminary. You can't listen to the New York Times as the Daily on Luminary. Shows from Gimlet Media have been withheld.

Anchor's catalog has been withheld, which, come to think of it, can you hear the show on Luminary? We'll have to check that out soon. But now today, word came that the Joe Rogan experience is withdrawing its episodes as well, because, to quote a representative from Rogan, there was not a license agreement or permission for Luminary to have the Joe Rogan experience on their platform. His reps were surprised to see the show there today and requested it be removed, end quote. Now, good friend of the pod and podcast industry guru, Nick Kwa, says this all might just be what that last quote suggests, a dispute over licenses and rights.

Quote, in some ways, this feels like Luminary channeling inadvertently or otherwise an Ubarian-Kalinikian approach to the podcast marketplace, act first, draw attention second, form partnerships third, end quote. So maybe Luminary just needs to ask nicely to feature other people's podcasts on a platform where they will be asking listeners to pay money to listen. I can certainly see that a case could be made that if you're going to make money off of my content, I should at least have a say about that or get a taste of the action, right? Spotify, after all, wasn't able to launch just by making songs freely available without first paying up for the privilege to the record companies and the artists. But at the same time, could this also be a power play? Are people finally making moves to divvy up or at least plant defined stakes into the Wild West that was previously known as podcasting? On the one hand, successful shows like Rogans don't need additional distribution. They're doing just fine with the status quo. But also, as I said, the podcasting industry is skeptical that the industry even needs or wants a Netflix for podcasts. Some of us feel the industry is doing fine, as largely ad-supported media. So is this a move conscious and concerted or otherwise to kneecap this new podcasting platform rival by some of the most powerful existing players?

Note who is missing. Gimlet, Anchor, and also Parcast. So the podcasts nominally controlled by Spotify. And now also arguably two of the biggest podcasts in the world, Rogan and the Daily. Forget the video streaming wars Have the first shots of the podcasting wars been fired? But at the same time, I tweeted this earlier this morning from Neiman Labs, Joshua Benton, quote, Maybe I'm just an open web romantic, but a podcast,

publicly available to all via an open RSS feed, saying that a specific app can't use that RSS feed is a bad thing. It's like a website saying, Firefox doesn't have a license to show this site, pay up, end quote. That's all for today. I've been your host, Brian McCullough. Follow me on Twitter at Brian MCC. The show's subreddit, where you can tip me stories is R slash ride home. And the link to the ad-free version of the show, which lets you support the show and not listen to ads is the very last link in the show notes. Talk to you tomorrow.