Tech Brew Ride Home - Wed. 06/29 – Netflix Running Up That Hill

Episode Date: June 29, 2022

I joke its Groundhog Day, but if you’re a crypto billionaire, you probably want the repetition to end as much as anyone. Wait, is TikTok suddenly in trouble with the US government again? A new line of chips from Arm. Sony wants to play to PC gamers. And why Netflix doling out Stranger Things in portions is one of the biggest experiments being run in Hollywood right now. Links: Crypto Crash Widens a Divide: ‘Those With Money Will End Up Being Fine’ (NYTimes) Crypto crash threatens North Korea's stolen funds as it ramps up weapons tests (Reuters) U.S. FCC commissioner wants Apple and Google to remove TikTok from their app stores (CNBC) Ray tracing and 64-bit only: What you should know about Arm's 2023 CPUs and GPUs (Android Authority) Sony targets PC gamers with new hardware brand, Inzone (Washington Post) Here’s why Netflix made you wait a month to watch the rest of Stranger Things (Recode) 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 time. Tech meme right home for Wednesday, June 29th, 2022. I'm Brian McCullough today. I joke that it's Groundhog Day, but if you're a crypto billionaire, you probably want the repetition to end as much as anybody at this

point. Wait, is TikTok suddenly in trouble with the U.S. government again? A new line of chips from Arm, Sony wants to play to PC gamers, and why Netflix doling out Stranger Things and Portions is one of the biggest experiments being run in Hollywood right now. Here's what you miss today in the world of tech. Groundhog Day. Sources are saying a British Virgin Islands court has ordered the liquidation of Singapore-based Three Arrows Capital. It actually did so on June 27th. So in classic market crisis fashion, as some of the lending coins have blown up, basically due to bank runs, now the contagion has taken down a major hedge fund player, and I guess their counterparties are also in danger as well. Speaking of counterparties, I don't know if we mentioned them, but CoinFlex,

is a crypto exchange, and they froze withdrawals recently, and they now say that they plan to issue up to $47 million, what they're calling recovery value USD tokens, offering a 20% annual return to those who purchase them, all in order to pay or repay, I should say, a $47 million debt. And speaking of $47 million debts, Coinflex CEO Mark Lamb has said that crypto investor Roger Vair owes coin flex, $47 million in U.S.D.C. After Vair denied, quote, some rumors, he defaulted on a debt to a counterparty. Counterparties, contagion, risk. Yes, I say Groundhog Day, because this all keeps rolling on, but billion here, billion there, this is real money, people. And speaking of long-time crypto whales like Roger Vair, Forbes estimates the top 16 crypto billionaires lost more than $59 billion between March

in June, led by Binance's CZ, as retail investors suffer heavy losses amid the route, quoting the New York Times. The combined fortunes of the 16 richest crypto billionaires exceeded $135 billion in March. Forbes estimated as of this week, the total was about $76 billion, but most of the loss was suffered by a single billionaire Changpeng Xiao, chief executive of the crypto exchange Binance, whose $65 billion fortune shrank to $17.4 billion. Cameron and Tyler Winklewax, whose wealth stood at $4 billion apiece before the crash, were each worth $3.3.3 billion this week, according to Forbes, they declined to comment. For retail investors like Ben Thompson, 33, the reality is different. Mr. Thompson, who lives in Sydney, Australia, lost about

$45,000, half his savings in the crash. He had dabbled in crypto since 2018 and planned to use the money to open a brewery. A lot of people who seemed quite reputable had a lot of confidence, Mr. Thompson said, the smaller people get taken advantage of, and quote. Yeah, one of the things I keep hearing around the current crypto winter that has really resonated with me is this notion. You know how one of the advantages to Web 3 that folks like Chris Dixon, when he was on this very podcast, in fact, tout is the idea of that in Web 3, users have skin in the game. Users have a tangible stake in the communities and products being built. But look, starting a company and building a product people love is hard enough.

Normally, if your product fails, that concerns you and your investors, but not necessarily your customers. Your product just goes away. Traditionally, your users don't also take a financial hit along with you. How much harder is it to build products people love in a space where your earliest adopters, your first customers, face financial ruin along with you? How can you build successful products if you're constantly in danger of wiping out your earliest adopters? More color on this. Experts say the crypto crash has wiped out millions of dollars stolen by North Korean hackers, threatening a key source of funding for that country's weapons programs, quoting Reuters. The sudden plunge in crypto values, which started in May amid a broader economic slowdown,

complicates Pyongyang's ability to cash in on that and other heists, and may affect how it plans to fund its weapons programs to South Korean government sources said. The source has declined to be named because of the sensitivity of the matter. It comes as North Korea tests a record number of missiles, which the Korea Institute for Defense Analysis in Seoul estimates to have cost as much as $620 million so far this year and prepares to resume nuclear testing amid an economic crisis. Old unlaundered North Korean crypto holdings monitored by the New York-based blockchain analytics firm Chainalysis, which include funds stolen and 49 hacks from 2017 to 2021, have decreased in value from $170 million to $65 million since the

beginning of the year, the company told Reuters. One of North Korea's cryptocurrency caches from a 2021 heist, which had been worth tens of millions of dollars, has lost 80 to 85 percent of its value in the last few weeks and is now worth less than 10 million, said Nick Carlson and analysts with TRM Labs, another U.S.-based blockchain analysis firm, end quote. See what I mean? Early adopters, Holdlers left holding the bag. I'm sort of being cheeky here, but still, and hey, holdle does mean hold all right. Word today from public filings that micro strategy, that company that started buying Bitcoin at the beginning of this last crypto run to hold on its balance sheet, tripled down and purchased 480 new Bitcoin at an average of $20,000, $817 per coin from May 3rd to June 28th,

thereby bringing its total holdings now to around $130,000 Bitcoin acquired for $3.98 billion or dollar cost average of $30,000, $664 each. Dollar cost averaging. It's not just for you and me trying to make the losses in our 401ks recently look not so bad by buying all the way down. I thought we were done with this, but maybe we're not. The FCC's Brendan Carr has written to Apple and Google demanding they remove TikTok from their app stores over China-related security concerns or else provide statements to him by July 8th as to why they haven't. Like, wait a minute, could this really happen again? Could TikTok go away? I don't think so, but still, quote, Brendan Carr, one of the FCC's commissioners, shared via Twitter a letter to Apple CEO Tim Cook and Alphabet CEO Sunder Pachai. The letter pointed to reports and other developments that made TikTok noncompliant with the two companies' app store policies. Quote, TikTok is not what it appears to be on the surface. It is not just an app for sharing funny videos or memes.

That's the sheep's clothing, he said in the letter. At its core, TikTok functions as a sophisticated surveillance tool that harvest extensive amounts of personal and sensitive data, end quote. Alphabet, Apple, and TikTok did not immediately respond to CNBC's request for comment. Carr's letter dated June 24th on FCC letterhead said if Apple and Alphabet do not remove TikTok from their app stores, they should provide statements to him by July 8th. The statements should explain, quote, the basis for your company's conclusion that the surreptitious access of private and sensitive U.S. user data by persons located in Beijing,

coupled with TikTok's pattern of misleading representations and conduct, does not run afoul of any of your app store policies, he said. Former President Trump nominated Carr in 2018 to a five-year term with the FCC. The Senate confirmed in December that the commission's chair, Jessica Rosenworsel, would stay on for another five-year term. Carr's letter cited a BuzzFeed news report from earlier in the month That said recordings of TikTok employee statements indicated engineers in China had access to U.S. data between September 2021 and January 2022, end quote. Arm has unveiled new mobile arm V9 CPUs with improved performance and new GPUs, including the flagship Immortales G715, its first with hardware-enabled ray tracing, quoting Android Authority. Starting with the most capable CPU core, the Cortexx X3 picks up,

where the Cortex X2 left off. It's a performance focus core with Arm claiming a 22% next-gen performance boost compared to the latest flagship Android phones running the Cortex 2. Arm says to expect a 34% performance boost compared to the latest mainstream laptop, albeit running an Intel Core I7-1260p at 28 watts rather than a Cortex 1 or X2. However, the chip designer also notes an 11% IPC boost compared to a Cortex 2 using the same process. Interestingly, Arm didn't dish out specific claims for efficiency gains. However, it shared a graph that shows the Cortex X3 consuming less power in most cases than the Cortex X2, although a maxed-out Cortex-X3 still consumed more power, albeit with understandably higher performance 2.

The second new CPU core announced was the Cortex A715, picking up where the Cortex A710 left off. This will play the role as the medium core in triple-power domain CPU setups, where a healthy balance of power and efficiency is needed. Importantly, the Cortex A715 is now 64-bit only, while the previous A710 model retained 32-bit support. Arm says the Cortex A715 enjoys a 5% performance boost over the cortex A710 at the same power level and using the same manufacturing process.

This is a far more modest gain than the cortex A710's touted 10% boost over the cortex A78 on the same manufacturing process. Thankfully, the chip designer is also claiming a more impressive of 20% efficiency gain, which will translate into a big win for battery life. Arm also had a few GPU-related announcements to share, starting with the new flagship GPU dubbed the Immortalis G715. The addition of the Immortalis name might be warranted, though, as its arm's first graphic core to offer hardware-enabled ray tracing capabilities.

For the uninitiated ray tracing is a graphics rendering technique used to better simulate the way light illuminates a scene. The PS5 and Xbox series consoles, as well as games Gaming PCs use hardware-enabled ray tracing to deliver better-looking shadows, reflections, and lighting in video games, end quote. Speaking of, Sony has launched InZone, a brand of gaming devices aimed at PC gamers, but with tight PS5 integration, starting with 4K and 1080p 27-inch monitors and three headsets, quoting the Washington Post. We are entering the gaming gear industry with monitors and headsets at an exciting time

since gaming and e-sports have gotten even more popular over the last few years. Kazu Kee, Sony president of home entertainment and sound products, told the Washington Post, we are leveraging Sony's high-quality display and audio technologies to deliver products that will allow gamers to immerse themselves into their gaming world, end quote. The name of the brand, Key said, is meant to refer to the immersive feeling gamers' experience when they are, quote, in the zone. Admitted latecomers to the PC gaming market, Sony plans to win players over through competitively priced products. Sony plans to sell.

a $899 4K resolution monitor with a 144-hurt refresh rate available this summer and a $529.1080P monitor with a 240 hertz refresh rate coming later this year. While Sony hopes to woo PC gamers, it hasn't left PlayStation 5 users behind. Aesthetically, the monitors and headset are designed to blend in with the PS5 should users happen to own one. The two monitors work with the PS5, which will optimize screen colors once connected. The monitors also also have a switcher feature allowing users to connect a single keyboard mouse and headset to a PC and PS5 at the same time and switch between the two. Sony's approach to gaming headphones is to try to see which of their options resonate with consumers. The company will offer a wireless headset

for $299 with noise cancellation and synthetic leather, along with a paired down 229 wireless headset, no leather or noise canceling, and a $99 pair of wired headphones. He said that all three pairs will be equipped with a spatial sound field feature. Gammers will be able to hear how far opponents are from them and where they are located based on sound cues. The headphones are also designed to be less tight around the ears so that players can wear them comfortably for hours, end quote. Finally today, we know that Netflix has broken a lot of its long-standing shibbolists as it tries to face up to hitting a brick wall in terms of growth. But aside from adding ads, have you noticed that Netflix didn't release Stranger Things all in one go?

Is it over for their traditional binge-watching model? Well, Peter Kafka and Ronnie Mola say this may be the most meaningful experiment Netflix is running because of what it says about Netflix's changing strategy. Quote, new data shows that Netflix subscribers are more likely to bail on the subscription service in the first month than are subscribers of any of its streaming competitors. That's a new development, and it syncs with Netflix's stunning news this spring that it lost 200,000 subscribers in the first three months of the year and expects to lose another $2 million in the second quarter of the year. The data that suggests what kind of problem Netflix is facing comes to

recode via antenna, a research service that tracks consumer spending on subscription services. And it shows that by the end of April, 23% of Americans who signed up for Netflix had dropped the service within a month. That's more new subscriber cancellations than any other competitive service antenna tracks, including the likes of Apple TV Plus and HBO Max, which used to have higher early churn numbers but have recently improved them. And so, breaking with long Netflix tradition, in the case of a few high-profile shows like Ozark, it has released the newest season in two chunks, spaced months apart. It's doing the same thing for the new season of Stranger Things. The first seven episodes came out on May 27th, but the last two won't come out

until this Friday, July 1st. That is, if you want to see all of Stranger Things season four right away, you need to subscribe to Netflix for at least two months and likely for three. You can see the logic for that in the chart of antenna data in this piece, which tracks the churn of video subscribers who have signed up in the last three months. In this one, you can see that Netflix performs in the middle of the pack of its peers, which tend to release one new episode of a hit show every week. If Netflix can hang on to subscribers for a little bit longer, its relative performance improves. The best news for Netflix, which still has some 220 million subscribers, much more than any competitor, is that the longer someone subscribes to

Netflix, the more likely they are to keep subscribing. The company's lifetime churn rate remains better than anyone else, though it has gone up in recent months as well. But hanging on to older subscribers won't help Netflix that much if it can't keep its new ones, and it needs new ones to keep investors at bay. Netflix was worth nearly $300 billion last fall, now it's worth $84 billion, and that number could keep falling if Wall Street thinks its growth days are over. There's no single magic bullet for that, and the task may get even tougher if a recession forces consumers to cut back on entertainment spending and perhaps spend more time watching free entertainment options like TikTok, end quote.

I still have never done that thing that I promised to do of opening a file and jotting down song lyrics so I can go back and grab them when I don't have anything to say or add to at the end of shows. But that Stranger Things story gives me the opportunity to quote the song that everybody's singing this summer. Not the bit you think, though. Do you want to feel how it feels? Do you want to know, know that it doesn't hurt me? Do you want to hear about the deal that I'm making? You should be able to fill in the next bit on your own, the chorus. If you're not. Kate Bush can make a comeback. Wait until I tell the Duffer brothers about Tori Amos and the song Silent All These Years. Talk to you tomorrow.