Facebook Streaming & Crisis Privacy
Facebook streams, Netflix rises before it falls, Snap is close to snapping and how we deal with privacy concerns in times of crisis
Hi again! Spring is in full swing in Europe, the majority of us are still stuck inside but there’s still hope, hang in there, don’t blow it now. Nevertheless, tech must go on…
Facebook ̶G̶a̶m̶i̶n̶g̶ Streaming. We’ve heard these two words together before on earnings calls over the past few years with different meanings and now we just got another one.
Social games on Facebook’s platform were all the rave a decade ago when Zynga started making products specifically for the platform and got a quasi-reboot when the new Messenger APP was launched with support for developers to build small experiences within and ‘access 1 billion people’. In reality, both platforms lost BIG as mobile gaming cannibalized virtually the entire userbase from social media sites.
After missing the target twice, Facebook launched a new game streaming service that would run inside their APP and compete directly with the likes of Twitch and YouTube Gaming. At 32 million hours of content streamed per month as of December 2019, Facebook Gaming took third place in the ongoing game streaming war behind the two incumbents, granted with nine times fewer hours streamed than YouTube at number two and more than twenty times fewer than Twitch who still enjoy more than 70% of the hours streamed in gaming today. Still, they’re better than Mixer👍
After soft-launching in SE Asia and the LATAM markets, last week Facebook launched a mobile APP for their service that focused exclusively on creating and consuming live videogames content without all the clutter of the social network and its dependencies. This last effort is a push towards getting into the highly valuable interactive entertainment market that leverages one of the company’s core strengths, facilitating social interactions.
Where Facebook’s new APP has a slight edge compared to the competition is in the fact that it allows users to stream mobile games from their smartphone without the need for third-party software and the acrobatics required to link accounts for this software to work properly. There are already a number of mobile-focused streamers out there using the existing clunky streaming solutions who will be reluctant to abandon the followers they gathered on other services but for someone just starting their career as a streamer, Facebook Gaming could be a serious option with its 2.5 billion MAUs it offers access to.
Both Netflix and Snap reported record earnings last week in what must be the most anticipated reporting season of the past five years for tech and entertainment. Now the effects of COVID will only show partially in this Q1 report covering performance from January through March since most of the cases for the first half of that were in China, but they give a relevant picture of the current environment.
Snap reported229M daily users in Q1, a 20% YoY growth, and 5M more than estimated by analysts. The amount of time spent watching content in the APP’s Discovery section has skyrocketed by 35% compared to the same quarter last year whilst half of the Gen Z population —ages 13-24— gets their news content from there. Yep, I said ‘half’ and it’s not a typo. Revenues grew from $320M in Q1 2018 to $433M in 2020 but earnings per share were 1 cent below expectations at -$0.08.
Along with all other social media platforms that rely on advertising for most of their income, Snap is bound to hit the wall of scarcity in advertising everyone is experiencing right now. While social media investors can be satisfied by growing user numbers when revenue figures are more or less on-track, Q2 is bound to see a severe drop in advertising revenue and the start of the decline in users as quarantine is lifted everywhere. We’ll have to wait and see how Snapchat will navigate that scenario then, in the meantime the company raised $750M by way of a new debt offering.
Netflix added 15.7M subscribers, almost double compared to estimates, to reach a global audience of 182M people. I know you didn’t ask, but I’m telling you 64M of them watched Tiger King. This goes to show that entertainment streaming services, with their quality of offering salvation in a time when sports broadcasting has vanished, are one of the last expenses consumers will cut in a situation of s financial downfall, and not amongst the first like many thought. You could argue that this is an edge case where people are forced to stay at home with little to do, but the fact of the matter remains regardless of the record numbers of unemployed people reaching new peaks every day in large economies.
Streaming services don’t have sports broadcasts, don’t rely on advertising or theaters for their releases, and represent the most convenient way of distributing and consuming entertainment content —along with videogames— and in the current environment where content is scarce, convenience is temporarily taking the crown with library size acting as a close advisor. This begs the question ‘Will this level of engagement last for Netflix as content dries up and the ground becomes equal?’ and the answer is yes. At least for the time being. Netflix execs said most of their big-production series expected to come out this year are already in the post-production phase that can be coordinated from home. As I see it, they have no reason to worry from the production perspective even over a longer period of time. Many countries in which Netflix already has set up production are slowly but surely reopening but, at the same time, on the demand side, things are sure to drop as quarantine measures are lifted everywhere.
Photo by NASA
The Icelandic COVID containment system is a strange one, at first sight, considering schools are still open and there’s no curfew as long as you practice social distancing in public and don’t organize in large groups. Their tech solution of tracking phone locations with an accuracy of two-meters and the small population of the country made contact tracing almost trivial but there’s no reason why the tech solution could not be scaled up to serve larger groups. No reason except privacy concerns, that is.
It’s obvious by now that accurately tracking a virus that spreads as fast as COVID-19 isn’t realistic by using the old, door-to-door, human-driven contact tracing but instead the process needs to rely on technology. Singapore, Taiwan and Hong Kong decided to temporarily relinquish privacy rights in order to avoid unnecessary deaths while wester countries wait around for big tech companies to find solutions around it, committed to dying on the sword of privacy. In the current scenario, the approach of implementing fast containment measures and dealing with potential privacy concerns once the life-threatening danger has passed adopted by the former regions appear to be superior to western solutions, at least in the short term.
In the current status quo I’d like to believe that even the most hardened privacy skeptics would be open to this type of solution if it allowed them to re-enter public life sooner, and I do realize that’s a big ‘if’. Furthermore, once established, these solutions will be easier to implement and adopt by the public in the future inevitable COVIDXX crisis with little maintenance work due to the lower barrier to entry. Will we see governments pass laws that mandate smartphone and smartwatch manufacturers to pre-install a government-developed health APP that can’t be removed on each device sold in their respective countries? It’s not the craziest thing I’ve heard and it’s safe to say the same about you.
Of course, technological solutions only go so far in their usefulness for treating a virus and the voluntary adoption rate of said technology only makes it worse. That doesn’t mean we shouldn’t try things out in the first place. The severity of privacy measures shouldn’t be constant at all given times if this means loss of human life. Investing in ways of making a system where these measures are easy to change depending on current circumstances is a much more realistic way of dealing with the inevitable crisis situations in the future than watching people.
The fact of the matter is, privacy as we know it has only been around for around 200-odd years since people started organizing in big cities, a fantastically short amount of time on the scale of human evolution. There’s just no way of knowing if this typically-human behavior is beneficial or detrimental to the success of the species, it hasn’t been around long enough for nature to root it out in the case the latter is the case. Covid-19 is the first big trial by fire for privacy and nature appears to be selecting those who worship it.
If you live in the US, this is a cool tool tracking the spread. Stay safe.
Super Mario Maker 2 added a ‘World Maker’ where users can build entire games. While the tool allows gamers to design multiple five-level worlds and string together eight worlds to create an entire experience the creation experience is limited to functionality already existing in Super Mario World. This is in no way a competitor to Roblox which allows creators to make entire games by leveraging scripting languages and a breath of visual assets but there’s definitely a trend here in creating these building tools that feel to me like a precursor to the multiverse. Some of them offer a lot of flexibility while others go for ease of use while limiting features, that’s just a question of the target audience, but intentions are clear and user-generated content will prove to be the fuel that carries us to the multiverse 🕹️🗺️🌌
I’ve been asked about Travis Scott more in the past week by people who had no idea that he existed before last month than ever before. And it was well f-ing deserved, the production of his first show tour inside Fornite was at a never-before-seen level of quality and leveraged the medium to its full potential. I’m watching the second one live as I write this and an asteroid hitting the planet while the beat drops and then being teleported into the sky while the entire skybox is turned into a projection screen is a captivating experience at least on par with the best live entertainment product one could do IRL. Add VR to this live entertainment just changed forever, mark the date. Also, everything for this event was done while working from home, so yeah, myth busted and let’s cash in🧑🎤🤯
After those rumors about looking to sell or to go public, Magic Leap fired 1000 employees last week in what they called a restructuring effort. After dismissing almost half of the workforce the company will go forwards by shifting focus from consumer electronics to enterprise hardware. Google was right in taking ‘Glass’ to the factories, who would have guessed? Nobody said that consumer electronics were an easy business to develop disruptive products in, but the fact that this is happening to a company that was considered by many a leader in AR tech just a year ago raises a lot of questions about the future release timeline for this kind of device. If the hurdles encountered by the company in bringing a product to market at a decent price point then a company like Apple or Facebook could solve that problem with their deep pockets but if it’s related to anything else —e.g. physics—, we could be in for a long wait here👓😓
HBO Max will launch on March 27th in the US with 10.000 hours of content on launch day including the entire HBO library, new original series, third-party content, WarnerBros movies, and other proprieties from the WarnerMedia family. That library of content is impressive and the $14.99 monthly price is identical to that of Netflix but whether the current enthusiasm of consumers will go beyond Netflix is still unknown. My guess is that, once content retakes its rightful throne, consumers will be drawn to the high production quality of new series along with the obvious high-value deal they get with HBO Max when compared to what HBO Now offering for the same price📺📺
Much has been said already on the difficult time being had by smaller companies relying on advertising-supported business models these days and Australia is now doing something about it now. The government is looking for a plan that will have Facebook and Google sharing their advertising revenue, data, the ranking and display of news content with the publication that originated the articles. For now, both tech giants are more or less playing along without conceding too much of their power but I don’t see a world where any of them shares any meaningful data with any third party📰💸
After offering two months for free, Stadia surpassed 1 million installs as of last week. As I’ve said in a previous newsletter, this pandemic might just be the thing that gets game streaming past the brutal early adopter phase and supercharges it into the future🎮🌎
The Michael Jordan documentary is extremely good, a very good job of putting the past in the context of the future and that archival footage looks just great. The record viewership enjoyed by the first two episodes are a testimony of that; but don’t believe the crowds, see it with your eyes🐐🏀⛹️
That looks like it was quite the operation🩺
Rewriting Hollywood history looks like a lot of fun to imagine🎥🎥
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