Important Note
Tech Narratives was a subscription website, which offered expert commentary on the day's top tech news from Jan Dawson, along with various other features, for $10/month. As of Monday October 16, 2017, it will no longer be updated. An archive of past content will remain available for the time being. I've written more about this change in the post immediately below, and also here.
Amazon – Like Pandora – is Hoping Country is the Key in Music (Apr 26, 2017)
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FCC Chairman Outlines Plan to Reclassify Broadband, Remove Net Neutrality Rules (Apr 26, 2017)
This has been in the offing for weeks, with lots of reporting since Ajit Pai took over as FCC Chair about his intentions to dismantle net neutrality regulations, but today it finally become official with a speech by Pai outlining his proposed approach. For now, all that will happen is that the FCC will tomorrow publish a Notice of Proposed Rulemaking outlining plans to reclassify broadband services as Title I, and inviting public comment. The significance of that is that the 2015 reclassification of broadband as Title II was what enabled the agency to pass net neutrality rules which stood up in court, so reversing that decision would also remove the net neutrality regulations. What Pai didn’t do in his speech today was outline how net neutrality rules, which he says he broadly supports, would be enforced going forward, though reporting has suggested he favors handing enforcement to the FTC with providers drawing up voluntary codes of conduct. The providers themselves, meanwhile, have been piping up in praise of the proposal while reiterating their commitment to a version of net neutrality they can live with: not blocking or degrading competing traffic. Once again, how you feel about all this depends on what you think net neutrality should mean: if you agree with that basic definition from the providers, things should be fine, but if you think it should also mean no paid prioritization, no zero rating, and so on, then you’ll have a problem with how this plays out. Pai’s fundamental argument here is that the providers were largely self-regulating before the rules, and that they will be again. The counterargument is that the threat of rules was enough to keep the carriers in line without them, and with rules eliminated and no immediate prospect of their reintroduction, carriers would be emboldened to push the limits in a way they weren’t in 2015. Also, as I argued a few weeks back, though the proposal released tomorrow will be up for public comment, I wouldn’t expect it to change much in the face of even very strong negative feedback.
via Recode (see also Pai’s speech (PDF) on the FCC website)
★ Amazon Announces Echo Look, Which Adds a Camera and Fashion Advice to Echo for $20 (Apr 26, 2017)
Amazon has announced a new device in its Echo family called the Echo Look, which assumes a different form factor, adding a still and video camera to features of the standard device for $20 more. For now, the focus is fashion advice: the camera can take full-length photos or videos of the user, acting like a full-length mirror at a basic level but also offering fashion advice through machine learning tools trained by fashion experts. I say for now, because once you have a camera in an Echo device it could be used for many other things too – indeed, when reports and pictures of this device first surfaced people assumed it was a security camera, and there’s really no reason why it couldn’t be. And several of these devices together could be very useful for motion sensing and other tasks as part of a smart home system over time too. But Amazon’s also smart to start specializing the Echo a little, with a particular focus on women, as I would guess a majority of sales of Echo devices to date have gone to men. I’d bet we’ll see other more specialized devices in time, but also other uses for this camera as it gets software updates. And this also starts to get at a real business model for Echo, which so far hasn’t done much to boost e-commerce sales but could now drive clothing revenue through sales of both third party apparel and Amazon’s own growing line. And what Amazon learns from the Look and its associated app can be fed back into the core Amazon.com clothes shopping experience too, improving recommendations in the process. But of course all this comes with downsides: not only do you have a device in your home that’s always listening, but you now have a device with a camera, which could feasibly be hacked remotely to take pictures or video of you. And Amazon will store the images it captures indefinitely, creating a further possible source of problems down the line.
via The Verge
Instagram Announces 100m New Users in 4 Months on Day Twitter Announces 9m in Three (Apr 26, 2017)
It’s hard to avoid the sense that Facebook is trying to rain on Twitter’s parade here. It’s announced that Instagram now has 700 million monthly active users, up from 600 million in December, which means it’s added 100 million users in just a little over the time it took Twitter to add nine million. It previously announced that Instagram Stories has 200 million users, up from the 150 million it had shared earlier, and attributed the growth in the core Instagram user base in part to an improved signup flow. But Instagram has also benefited from strong adoption in emerging markets, including Brazil, which is its second largest market after the US, with 45 million users. That’s in marked contrast to Snapchat, which has emphasized primarily mature markets on the basis that emerging markets users have more constrained and expensive bandwidth and would be less likely to use a visually intensive app like Snapchat. And of course Facebook’s other apps continue to grow rapidly too: Messenger and WhatsApp are now both over 1.2 billion, while the core app will likely hit 2 billion in the next quarter or two.
via TechCrunch
YouTube Kids Now Has 8 Million Weekly Viewers, Will Expand to Smart TVs (Apr 26, 2017)
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★ Twitter Announces Best User Growth Quarter in Two Years, Revenue Declines (Apr 26, 2017)
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Twitter Aiming to Broadcast Live Video Full Time in Future (Apr 25, 2017)
This is an interesting announcement to make the night before earnings. Twitter broadcast 800 hours of live video in the first quarter, but it’s aiming to broadcast 24/7 eventually, which would be a roughly threefold increase in video just to have a single stream full time, let alone to give people options. And though this piece talks up the idea of being the equivalent to CNBC in airports, the whole value proposition of the latter is that you have nothing better to do. For Twitter to do well with live video, it needs compelling content, not just ambient content. And that’s tough to do when the vast majority of sports rights are sewn up for years to come and Twitter just lost one of the few available packages to Amazon. Beyond sports, there’s not much live content that’s compelling enough for people to tune into deliberately and importantly to watch through a commercial break. Color me skeptical that this effort will make a big difference to Twitter’s user base or its ability to monetize it. Live video still feels like an interesting complement to Twitter’s core value proposition rather than being central to it, and I don’t see that changing anytime soon.
via BuzzFeed
★ AT&T Reports TV and Wireless Subscriber Losses in Q1 2017 (Apr 25, 2017)
AT&T reported Q1 2017 results today, and it looks to have been a grim quarter across its consumer business. It reported net adds of 2.1 million, but in reality saw a drop of 641k subscribers in the quarter due to the disconnection of 2.3 million subscribers as it decommissioned its 2G network and a removal of 400k reseller subs due to an unspecified “true-up” of its reporting. On the TV side, AT&T lost a total of 233k subscribers, a worsening of the past trend, which had been close to zero on a net basis between significant U-verse losses and good DirecTV gains. Those losses mostly came from those customers taking standalone DirecTV service without a bundle, and that’s worrying because although AT&T has been offering wireless-TV bundles since the merger closed, it can’t offer a national broadband-TV bundle, which is the one consumers mostly care about. That, in turn, is going to make it hard to turn that trend around, especially given that AT&T is already offering strong incentives for customers to bundle TV with wireless, including a $25 bill discount for TV and free HBO.
On the wireless side, connected devices (such as connected cars) continue to be the salvation for its overall subscriber numbers, because its postpaid business actually shrank in the quarter for the first time ever (as did Verizon’s), while its reseller numbers dropped like T-Mobile’s (possibly because big MVNO Tracfone disconnected 1.3m subs in the quarter). The re-introduction of unlimited plans was, however, a hit, with around 4.4 million new subscribers since the change, a more than 50% increase in that base. However, AT&T characterized its position now as being more or less the same competitively as at the beginning of the quarter, suggesting it doesn’t see any kind of permanent lift from the change. Financially, things overall were a little better – AT&T has been holding costs down in wireless which has allowed its margins to expand despite revenue challenges, and although equipment revenue is dropping rapidly due to much lower phone upgrade rates, that’s effectively zero-margin revenue anyway.
via AT&T
AT&T Starts Using 5G in Marketing for LTE Services (Apr 25, 2017)
AT&T announced today that it’s bringing what it calls 5G Evolution to over 20 metro areas by the end of the year, starting with Austin. However, as I’ve said before, 5G itself hasn’t been standardized yet, so the best anyone can claim to have today is pre-5G technology. But what’s more worrisome about this AT&T announcement is that it’s actually using that 5G Evolution brand as an umbrella term that includes some technology that has nothing to do with 5G, notably the faster LTE technology in the new Samsung Galaxy S8 and S8+. What we’re starting to see is the same marketing-led muddying of the water over a new wireless generation we saw with 4G a few years back, when Sprint, T-Mobile, and AT&T all used the term 4G to describe non-standard 4G network technologies (WiMAX and HSPA+ specifically). We’ve also already seen the gigabit LTE label thrown around, and though it’s technically accurate in terms of maximum throughput, it’s likely to disappoint consumers who actually use it. While carriers might want to steal a march on competitors, this does nothing for consumers, who will likely require significant education when real 5G does launch without being further confused by labeling non-5G technology with a 5G-related moniker. It also means that when 5G does launch, consumers will wonder what they’ve been using all this time, making it hard to develop strong marketing messages around real 5G. I’m hoping this doesn’t spread, but past experience suggests it will.
via AT&T
Apple Delays Carpool Karaoke Launch (Apr 25, 2017)
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Netflix Agrees to License Content to Baidu Subsidiary iQIYI (Apr 25, 2017)
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Uber Announces Partnerships And Timelines for Testing “Flying Cars” (Apr 25, 2017)
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Alibaba Launches Program to Help US Businesses Sell Through its Site in China (Apr 25, 2017)
Alibaba is launching a program to help US businesses sell to Chinese consumers through its website. It’ll hold a conference in June at which it will offer training on all the ins and outs of doing business both through Alibaba specifically and in China generally, and all this is by way of fulfilling a promise CEO Jack Ma made to Donald Trump back in January. The US currently has a massive trade imbalance with China – exports from the US in 2015 were $161.6 billion, while imports were $497.8 billion – so rectifying that balance is a key priority for the US administration. But much of the current export volume to China is in categories that would be a poor fit for a platform like Alibaba – soybeans come top, both consumer and commercial vehicles are also major contributors, and much of the rest is made up by other commercial and industrial products. The US sells very few small consumer goods of the kind well suited to a platform like Alibaba, so any contribution made by Alibaba to reducing the trade deficit is going to be far more symbolic than material. In addition, the complexity of selling into China, where foreign-owned businesses are severely limited, will make it a fairly unappealing proposition for most US-based businesses relative to selling into the massive market on their own doorstep. I suspect this will be just another example of a Chinese tech company struggling to bring its model to the US (just as almost all US tech companies struggle going the other way).
via USA Today
Alphabet’s Waymo Starts Testing Autonomous Cars with Passengers in Phoenix (Apr 25, 2017)
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★ Google Makes Tweaks to Search to Combat Fake News (Apr 25, 2017)
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Apple Revamps Stores To Become Destinations and Sell Services (Apr 25, 2017)
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Apple Reduces App Affiliate Fees from 7% to 2.5% With a Week’s Notice (Apr 24, 2017)
I noted this change myself this morning as I’m part of the affiliate program at Apple (we’ve very occasionally linked to the App Store and iTunes Store from the Beyond Devices Podcast site). The change affects app and in-app purchases, and represents both a short notice and significant reduction to the commissions affiliates have been paid in the past, without any kind of explanation or justification from Apple. There are several possible explanations: Apple could be adjusting this cut downward ahead of a reduction in its cut on apps and in-app purchases to be announced at WWDC in just over a month; it could have decided that too many companies are gaming the system, e.g. by linking to their own apps on the store and taking a bigger cut; it may have decided that it would rather foster better discoverability on the App Store than have third parties do it; or it could be something else entirely. Hopefully the other shoe will drop at WWDC – whether in the way I’ve suggested above or in some other way – but it’s entirely possible that we’ll never know. This isn’t a great signal to send people trying to build a business around the App Store, though, because it suggests capriciousness and unpredictability. And especially because it hurts those businesses which – like Apple – have eschewed advertising as a business model largely or entirely because of the tradeoffs it entails.
via MacStories
★ Amazon Launches Subscription Hub for Content, News, Apps and More (Apr 24, 2017)
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★ T-Mobile Releases Q1 2017 Earnings, Improving Margins, Slowing Sub Growth (Apr 24, 2017)
T-Mobile released its Q1 earnings today, and there were quite a few familiar trends: strong revenue growth, improving margins, and lots of talk about how awful TMO’s competitors are. But this quarter also saw a return to the slowing subscriber growth we saw in the first half of last year, which is indicative of T-Mobile’s business today: it’s doing very well within what’s a rapidly slowing market with very little additional headroom. All four of its major customer categories (postpaid, postpaid phones, prepaid, and wholesale) saw lower net adds year on year. In the case of both prepaid and wholesale, the decline was signifiant, and wholesale net adds were negative for the first time in recent memory. T-Mobile said it did very well against AT&T in the quarter, which means for AT&T itself to have done well overall it will have had to hold its own much better against Sprint (which hasn’t yet reported) and Verizon (which has, and had a horrible quarter). T-Mobile continues to invest very heavily not just in spectrum but also in store expansion – it’s now targeting 3000 new stores this year, split evenly across its T-Mobile and MetroPCS brands, up from 2500 at the start of the year. So far, the strategy continues to work reasonably well, but there’s a ceiling on growth in the categories T-Mobile targets, especially with Verizon and AT&T getting back into unlimited, so I’m curious to see how much growth slows in 2017, though it appears margins are going to continue to improve anyway (though they’re still way below those of the two big carriers).
via T-Mobile (PDF)
Spotify is Hiring for a Hardware Project (Apr 24, 2017)
Spotify is apparently hiring a senior hardware product manager, even though it doesn’t currently make any hardware of its own. The job listing (which is as far as I can tell no longer on the Spotify Jobs site) suggests that Spotify is looking to create a hardware product, although there are no real details about what form it might take. Predictably, the focus is music and talk content, so this is likely an audio player of some kind. The fact that Spotify has now removed the listing suggests that it probably gave a little too much away (or didn’t expect any reporters to find the listing), though the attention this is getting now may well spur just the kind of applications Spotify is looking for even without a formal listing. A move into hardware does and doesn’t make sense for Spotify. On the one hand, given the difficulty it’s had in generating a profit from music services, it might see hardware as a source of margin. But hardware is a notoriously low margin business, with single digit margins even for large scale players, and with many consumer electronics companies actually in the red frequently if not permanently. As such, coming from a standing start into what’s likely to be an established category feels like a steep uphill battle for Spotify, and I don’t rate their chances highly. To top it all off, of course, Spotify currently benefits enormously from being a device- and platform-agnostic service, which makes it appealing for other hardware vendors to integrate it. If it starts to compete with those vendors, that attitude might start to change. Also worth noting is that the company seems to be hiring people with voice technology and natural language processing skills, which may be part of the same project, but also looks like a wider initiative at Spotify.
via The Verge (see also Zatz Not Funny, which was the first to spot the listings)