Congressional Comedy🎙️🕴️
This week the US Congress had a lighthearted chat with big tech👋 while big tech continued to make big money💰💰
Photo by Zac Nielson
Shallow Politics
It’s about that time of the year when I feel obligated to approach what’s slowly becoming the intertwining fate of tech and politics, at least for the near future…
The congressional hearing on competition involving the CEOs of Alphabet, Apple, Amazon, and Facebook did little to reveal new or even interesting information about the operations of either company, but it did very well to show how incompetent some legislators are when it comes to scrutinizing big tech. If the objective was to provide comic relief, consider it achieved.
How did they perform? In short, Bezos chilled for the first 90 minutes without being asked even one thing and then froze on a few occasions once the heavy hitters came out; Cook answered some tough questions but came out probably the best and with the fewest answers; Zuck and Sundar were pressed mostly on acquisitions and moderation of content on their platforms. Overall, the hearing felt a bit like a slap on the wrist with a bunch of feathers.
If the goal was to find a way to legislate and limit monopolistic business models and their negative effect on consumers now and in the future, they failed miserably. We got no closer to figuring out how o regulate these new businesses that usually offer their products for free, nothing on privacy or competition, and certainly nothing on state security.
All in all, it looked like the commission needed this hearing to have the four executives on record confirming or denying some of the known facts going into the report coming out this fall. It’s after this body of work comes out that we can see possible changes come to light, and since price regulation isn’t an option of any of the cases since all of them offer free services, the state is left with either breaking up some of these companies and/or creating new legislation to update the existing, centuries-old one.
Regardless of what they say in PR statements, there’s no incentive for companies to go from for-profit to for-the-people at this point and while the spark of change can come from individuals and small groups, long-lasting change can only be built with the help of country-wide regulation. In an era when private companies have more and more impact on how the average person lives their lives, elected officials everywhere need to step up to the plate and do the jobs we elected them for.
Quick Ca$h
The earnings reports presented last week were the first to fully reflect an entire quarter affected by the pandemic and its impact on tech and media companies is very resounding. Let’s run through the interesting parts of Q2 earnings presented by some of the big fish…
Online shopping increased during the quarantine, so Amazon's revenue and profits went up quite dramatically, with the company struggling to stay on top of deliveries. Grocery shopping increased 300% compared to the same period last year while overall revenue increased to almost $89Bn.
While most were expecting an average quarter from Apple following the logic that people have other acquisition priorities during a pandemic, the company had a record quarter. Revenue was up almost 11%, to $60Bn, despite the lockdown in many countries and closed retail stores. Sales of small mobile devices were hit hard but between iPad and Mac sales, and the services the company made up for it. New era of Apple, here we come. Tim also confirmed that this year’s iPhones will release ‘a few weeks later’ than in previous years, think October or later, and a plan to split the stock in a 4-to-1 manner. Two-trillion valuation, here we come.
In Facebook’s case revenue grew the slowest since they became public but still beat expectations making $19Bn in revenue for the quarter and MAUs across all APPs increased to over 3 billion for the first time. These analysts better get some higher expectations..
Google was the black sheep of the crowd for Q2. Although they beat analyst expectations, the Alphabet reported the first-ever year-over-year decline in revenue at -2%. If you were wondering, Google IPOed in 2004, that’s 60+ straight quarters of increasing revenue that came to an end last week.
AT&T reported a 23% loss in revenue year over year in the past quarter due to bleeding customers in their main business and a 37% drop in ad revenue, but the adoption of HBO Max appears to be doing fine, with 4 million subscribers over the first month after launch, and counting. To get to that 50 million target by 2025, they’ll have to first convert some of the 20+ million subscribers to HBO to the new service, not an easy task.
There’s a myriad of ways through which this could be achieved, like making Max even more attractive in terms of content and pricing, bundling cable subscriptions with the service, offer more support for TV streaming boxes like Amazon’s Fire devices. While Max and Disney+ have little in common in terms of the target audience and total addressable market, getting 4M subscribers over 30 days doesn’t look that good when compared to Disney’s 10M figure achieved on the first day.
Netflix will be adapting ‘Beyond Good and Evil’, a videogame IP developed by Ubisoft, into a live-action/animation hybrid movie. I remember BGE coming out and, despite having mediocre sales, becoming a favorite amongst gaming aficionados with its space pirates setting and intriguing character design, I just hope the movie can stay true to the tone of the game. If you care to see more of my thoughts on gaming IP going the path of TV and cinema, check some of the previous editions of the newsletter🕹️📺
A new retro console handheld gaming console this week? You betcha! This time it’s the Analogue Pocket, a device that will support almost 2800 games originally released for Gameboy consoles and works with cartridge adapters for other devices as well. The on-device screen resolution is an impressive 1660x1440px, it can be connected to a TV and supports up to 4 players at the same time. The only bad thing about this is that it only releases in May of next year, but on the bright side, you can pre-order now for $199!🕹️
The Roblox community of developers is expected to earn double the amount of money they made last year, or around $250M. Of course, this is not the company that made the game, but the independent individuals that develop games on top of the platform; the game itself surpassed 1.5Bn in revenue recently as well. I won’t bore you on why I like Roblox as a product, if you haven’t already, feel free to browse some of the previous editions of this newsletter🎮💰
After TikTok announced it’s setting up a $200M fund to directly pay creators on the APP, Instagram too is following suit. After a decade of social media content creation being free and fueled by advertising money, this feels very strange at first glance and very ‘right’ the more I think about it. If the likes of televisions and TV streaming services pay those creators for their content, why wouldn’t social media platforms? Up until now the answer to this was linked to profitability, but with the space getting increasingly more crowded, companies will need to offer users some reasons to join their service compared to that of a competitor👪👩👩👧👩👦👦
Spotify has been on a roll as of late, putting out several interesting new features in the past month, the last of which: Group Sessions. Premium subscribers can now listen to music simultaneously with another person everywhere else on the globe. There’s a bit of a missed opportunity on adding a chat feature so you can collab on the content to be played, but this is just the Beta version of the feature, so things might change before the worldwide release. The company also announced the service has 299M subscribers as of Q2 and listening times are back up to normal levels 🎶📻
After reports that ‘thousands’ of Twitter employees had the appropriate rights to change user account settings, last week, a 17-year-old was arrested for masterminding the attack. Immediately after the hack, (preconceived) ideas about the origin started, with China, Easter Europe, and the Middle East amongst the top candidates, it turns out the hack originated in…Florida. The article is quite the read, highly recommended👩💻👨💻
I thought I was aware of most of the ways that climate change affects us all, but this piece completely changed my perception of what ‘all’ means. Afghan poppy seed farmers are installing solar panels to pump groundwater and getting two or even three harvests a year, then some of them drop the crop and switch to traditional crops☀️🌱
I didn’t want to touch on the TikTok-Microsoft acquisition rumors since the situation is still very fluid as more parties pitch in an opinion. I’ll just say that, after the acquisition of LinkedIn, going into more consumer-focused platforms of large scale would be an on-brand move for Microsoft at this point. The $30Bn speculated sum is astronomical though💰😨
I don’t really know what to think of the upcoming ‘Tesla’ biopic, but the trailer has good music
This real-time music video was virtually produced remotely over the quarantine. ‘nough said…
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