Company / division: Other Companies
Cable Network Owners are Culling Underperforming Networks (Mar 21, 2017)
Today, both the Wall Street Journal and Variety published in-depth pieces on the way major cable network owners are culling some of their underperforming networks, either shutting them down entirely or shifting investment to their more successful properties. Both articles have lots of good history, and each also features an interesting graphic with lots of detail that helps readers see which are the worst performing networks. All of this is, of course, a reflection of several trends impacting the TV industry, from cord cutting to cord shaving to increasing content costs and a shift from linear live viewing to VOD and streaming. For now, the focus is on these underperforming channels, and the pieces seem to suggest there are magic subscriber numbers above which the problems are either smaller or don’t exist at all. But the reality is that even big networks like ESPN are struggling. As I argued in a my weekly Variety piece last week, the only thing keeping most cable networks from seeing negative growth is contractual rate increases, which won’t last forever. Interestingly, though, cable networks continue to be some of the most lucrative segments of the overall TV market, with high margins relative to pay TV providers and broadcasters.
Tag Heuer Connected Modular 45 hands-on review – Wired (Mar 17, 2017)
Earlier in the week, I wrote about Swatch’s smartwatch operating system and components, and in passing referred to Tag Heuer’s Android strategy. It’s now in the second phase of that strategy, with a highly modular and customizable approach this time around, and a modest goal of selling 150,000 of these watches, compared to just over 50,000 of its first attempt. That’s obviously a tiny fraction of the overall smartwatch market, and it’s hard to see how it’ll make money at this scale with this much customization. Apple has offered the most customization of any tech-centric smartwatch to date by far, but this Tag watch seems to take the concept much further, which may be appealing to potential customers, though the watch itself looks incredibly thick and bulky, even for a Tag.
It’s fascinating to think about this move in the context of the history of Swatch. Though the company incorporates much older brands, the Swatch name and brand arose in the early 1980s out of the Swiss watch industry’s previous crisis: quartz watches from Asia. Those watches caused a massive decline in the Swiss watch industry as cheap, highly accurate watches from Asia flooded the market. The Swatch brand was created to compete with these quartz watches, offering a simpler mechanical watch with cheaper materials that could compete with the new entrants, and it worked. Now, it appears Swatch wants to defend against the new crisis – smartwatches eating market share – with its own entrant, based on technology co-developed with a Swiss university that specializes in miniaturization. I may be biased, but suspect it’s easier for the tech industry to learn about watches than it is for watchmakers to get really good at technology, even with some help. I’m skeptical that this move will work out, but given how poorly Android Wear has fared, it certainly can’t hurt, and may well do better than competitor Tag Heuer’s Android strategy.
For all the hyberbolic references to monopolies that sometimes afflict the tech industry, here’s a case where one company really does have what appears to be a monopoly, and on a critical component for autonomous vehicles: LIDAR. LIDAR is the same visual radar technology at the heart of the Waymo-Uber lawsuit, because they’re two of only a very small number of companies currently attempting to make their own, while everyone else buys them from Velodyne at $30-40,000 a pop. The global market for LIDAR is currently in the thousands, and the company expects to ship around ten thousand this year, but it and others would obviously have to ramp to tens of millions a year to supply the global automotive industry in the longer term. And those prices will come down massively – Waymo has supposedly reduced the cost dramatically for its own units.
via The Information
This effort has been underway for some time, but mostly among smaller players at the periphery, not the big studios. But it now appears that major movie studios are becoming more open to the idea of at-home rentals within weeks of theatrical openings for at least some of their movies. The thinking is apparently that the studios have to give consumers what they want or they’ll find it illegally, though I’m not sure that $50 at-home rentals two and a half weeks after opening is exactly “what consumers want”. Unless you have a large group, that’s going to be significantly more than you’re paying for movie tickets, and you’ll still have to wait 17 days. Of course, theater owners make far higher margins on concessions than they do on showing movies, and that revenue goes away entirely under this scenario, so the studios are having to promise to compensate cinema chains for any lost revenue, which is partly why the cost is so high. Lots of evidence here that, though the industry understands the need for change, it’s still resistant to really giving people what they want, largely because the existing value chain is so entrenched, which is very similar to the dynamic in the closely related TV industry.
Caavo’s $400 streaming box unites Amazon, Apple, and everything else into one TV interface – The Verge (Feb 14, 2017)
This feels like an absurdly large, heavy, and expensive (albeit attractive) box for simply switching inputs on your TV. That’s a shame because the device has a great pedigree, but this is just inserting yet another box between all your various boxes on the TV. This Variety piece actually does a better job of explaining the user interface than the Verge one, but it still doesn’t sound like nearly enough to justify the price and size here. The problem here is we’re still trying to solve this problem in the same way – by pulling together multiple inputs rather than creating a single input that does everything you want natively. That’s still a long-term hope rather than a proximate reality at this point, but several boxes are getting closer and I think we’ll see more progress this year.
via The Verge
This is really just an addendum to yesterday’s item about the amicus brief filed by (then) 97 tech companies, as some 30 additional companies added their names to the brief yesterday afternoon. Among them were some of the Elon Musk-controlled holdouts from the initial set, Tesla and SpaceX as well as a number of smaller companies which simply don’t seem to have been looped in to the initial effort. The remaining holdouts are increasingly conspicuous by their absence, though it remains more consumer- than enterprise-focused as a group (HP did sign on later in the day, but IBM, Oracle, and other enterprise heavyweights are still missing), and the telecoms carriers and cable companies are all missing as a group too.
When most of your news about AI comes from the tech world, it’s easy to imagine that big tech companies are the only ones doing interesting things in the field, but here as in autonomous driving there’s also lots of amazing work being done in academia, as in this case. Carnegie Mellon researchers have developed a poker-playing AI which combines three different methods for learning the game and ultimately beating human players. The piece is worth reading for the details of how this was done, but it’s also a good reminder that neither any single tech company nor the tech industry as a whole has a monopoly on big breakthroughs in AI.
Chalk another one up to either the Hardware is Hard or Android is Hard narratives (I’ve tagged this against both). Another Kickstarter-backed hardware company which had an intriguing approach to an established category and got lots of interest from tech bloggers and reporters calls it quits and gets bought by a bigger existing hardware player. I was always skeptical on Nextbit – it just didn’t feel like its few unique features and design were enough to overcome the massive barriers to entry that exist around scale, distribution, and dominant existing players in the Android market. I can’t say I’m surprised to see it fail, though it’s disappointing because the team had some interesting ideas and the design was definitely more interesting than your average phone. Razer seems an unlikely buyer – this Recode piece says the group the Robin team is going to has been focused on gaming, so it doesn’t sound like we’re going to get a Razer phone from these guys anytime soon.
Leslie Miley, who has been director of engineering at Slack, is working with Venture for America to start a program that will take employees of coastal tech companies and place them for one year at a time in new locations in the US, especially in minority communities, with salaries paid by their employers. Yelp and LinkedIn have signed up already. The initiative aims to break down a couple of facets of the tech industry’s lack of diversity, opening up opportunities for those in the communities served who may come from underrepresented groups, but also hopefully exposing the Silicon Valley types who participate in the program to new ways of thinking and lifestyles. This seems like a great initiative which should benefit both groups, and we should also see more from coastal tech companies investing in non-traditional locations in the US by putting offices and employees there. There are already several smaller tech hubs outside the traditional ones (including where I live in Utah), and they’re often able to attract great employees who don’t want to put up with the cost and other downsides of a Silicon Valley lifestyle.
Target plans to introduce its own smartphone payment service in stores later this year – Recode (Jan 24, 2017)
The fragmentation of mobile payments continues – following in the footsteps of other big retailers, Target is going to roll out yet another proprietary mobile payment system in its stores, rather than merely supporting the two or three store-agnostic mobile payments systems that already have decent traction. The motivations are obvious – control the user experience, capture the data, and drive loyalty – but the user benefits are always minimal, and uptake has generally been minimal too. We’re still at an early stage in mobile payments with no obvious winners yet, but it’s already fairly clear that this kind of store-specific approach isn’t going to be part of the eventual solution.
This is Target’s preliminary press release for fourth quarter sales, which provides November/December comparable sales data in percentage growth terms, and the picture isn’t great. Comparable store sales were down 3% year on year for the last two months, and even though digital (online) sales were up 30%, that couldn’t make up the difference, and total transactions were flat while fourth quarter revenue will be down. The reason is that digital sales still make up only a tiny minority of Target’s overall sales – 5% in the 2015 holiday season, so a lower share than e-commerce’s overall share of US retail sales. That number will certainly be higher for 2016, but it highlights the challenge all big brick and mortar retailers have to face in Amazon: even if they’re able to match its strong growth in online sales, their physical retail operations still take an even bigger hit.
Andy Rubin, the creator of Android and its leader at Google for many years, is now apparently about to get back into the smartphone business, or more accurately into the ecosystem business, with a smartphone and potentially several other devices fleshing out the portfolio. On the one hand, this makes sense – few people want to buy just a phone anymore – they want to know that it comes with services and potentially other devices which will increase its value. On the other hand, creating such an ecosystem from scratch is incredibly tough and costly, as we’ve seen with LeEco recently too, so the prospects for success when trying to get there in one big leap are slim. The other big question about all of this, of course, is which operating system the Essential phone will run…
The specifics of this story aren’t as important as the trend that’s emerging ever more clearly – almost any device that’s connected to the Internet is potentially susceptible to hacking, and the more critical the device’s intended function is, the more serious any potential breach can be – in this case, life threatening. The challenge is that most of these devices – along with cheap web cams and many others – were not designed with watertight security built in, and it’s almost impossible to add that on after the fact. So we’ll see lots more of these stories in the coming years, which will put off potential customers, while giving an advantage to IoT and smart home vendors who prioritize security.
It’s good to see Ellen Pao land in another venture role, but also one where she’ll be able to continue to push for more diversity in tech now that she has a high profile in this area. Funding is one of several bottlenecks at which diversity is stripped out of the Silicon Valley ecosystem, so having her and her new partners working on improving things should be helpful.
I’ve tagged this one against the Hardware is Hard narrative, because it seems the perfect illustration – thin margins in the face of aggressively priced competition from China is the perfect encapsulation of much of what ails the hardware industry. On the other hand, it’s also notable that Parrot is heading deeper into the enterprise drone market and pulling back from the consumer side – that seems an entirely sensible move in the face of the competition, and should work out better for the company. DJI, though, seems increasingly dominant here, while I’m curious about how GoPro will fare – it faces the same issues as Parrot across its entire business, and may well see similar results in drones specifically.
This is yet another story about IoT security, and the many vulnerabilities that exist in a variety of connected devices in the home. The difference this time around is that this isn’t some low-cost Chinese vendor, but D-Link – one of the larger router manufacturers, and the FTC claims its gear suffers from some of the same basic flaws that enabled the Mirai botnet attack a while back. We could still see far worse attacks taking advantage of these vulnerabilities, and with the growth of home automation gear there will be even more attack vectors. All this makes it even more important that those selling connected gear from the home bake in really serious security protections and educate users on the risks.
Energous still isn’t delivering truly wireless charging, but says it’s coming later this year – The Verge (Jan 4, 2017)
Energous and its version of wireless charging has always been far more interesting to me than the standard, mat-based version, because the latter is actually less flexible in some ways than cable-based charging. Charging over distance is the real innovation here, but no-one has cracked and released it yet in a mass market product. The big question about Energous specifically is whether Apple is or isn’t the mysterious partner it frequently refers to – if Apple puts this technology in products and it works well, that will be game changing for a whole range of products from iPhones to Watches. But if it isn’t, Energous appears to be stalling indefinitely on technology that never seems quite ready.
Canvas — Project Alloy Executive Summary (Dec 28, 2016)
This seems like an admirable effort aimed at increasing diversity in the tech industry by sponsoring people from underrepresented backgrounds to attend conferences. Nice to see someone come up with a logical and realistic solution, and one that allows those already in the industry to put their money where their mouths are.