Steve Thomas - IT Consultant
In a keynote address at the Consumer Electronics Show in Las Vegas, Walmart president and CEO Doug McMillon and other Walmart execs offered a glimpse as to how the retail giant was putting new technologies, including augmented reality (AR), drones, generative AI, and other artificial intelligence tech to work in order improve the shopping experience […]
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Indian wearable startup Ultrahuman is getting into the smart home game. It has announced the upcoming launch of connected hardware that’s designed to monitor the “health” of your home, as its marketing puts it. The device, which it’s calling the Ultrahuman Home, is being shown off at CES this week — with a shipping date […]
© 2023 TechCrunch. All rights reserved. For personal use only.
Just ahead of CES, Qualcomm today announced the next generation of its Snapdragon XR platform, the aptly named XR2+ Gen 2. The new system-on-a-chip promises up to a 4.3k resolution per eye at 90 frames per second (and a slightly reduced resolution at 120 fps), as well as a 2.5x GPU performance increase and 8x […]
© 2023 TechCrunch. All rights reserved. For personal use only.
Amazon made headlines this month when the company began to work through its long-rumored 18,000 job cuts. Going, too, are a number of products and strategies as the company right-sizes for the current state of the economy, the market’s attitude to tech stocks and the current landscape as dictated by its competitors and would-be rivals.
One thing that looks like it’s here to stay, though, is the Alexa Fund, the company’s venture fund founded back in 2015 and used to back companies in spaces that are strategically interesting to Amazon itself.
Initially covering products and services leveraging its namesake, the interactive voice platform that was launched not long before the fund itself, the Alexa Fund has over the years expanded to cover other areas of AI, connected home, health, media services and more — as limitless, potentially, as Amazon itself sometimes seems to be.
Amazon is famously murky when it comes to disclosing discretionary metrics that speak to its size. That’s the case here, too, as it declines to comment on how much it has invested in aggregate through the Alexa Fund, nor anything like AUM (assets under management, or the total valuation of startups in its portfolio).
As a general marker, it has invested at least $200 million, based on an initial injection of $100 million and a further commitment of $100 million two years later. A few notable exits from the fund, and its growing scope, may well have meant more was pitched in over time.
“We invest off the balance sheet so it’s an evergreen process,” and Paul Bernard, the longtime Amazon employee and investment lead who first started the fund, in a conversation with TechCrunch. “We’re not constrained by a certain fund size.”
The fund currently lists 93 companies, but the list doesn’t include startups that might have shut down or been acquired. One estimate puts the total figure at 120.
Corporate investing is sitting in an interesting position at the moment in the venture landscape.
Traditional VC funds have tightened, and in many cases drastically slowed down, their investment process — which had become pretty fast and loose in recent, heady years with heavy competition to get into rounds, rocketing valuations, growing audiences for digital services and enough flashy exits to give everyone lots of hope.
Now, there is a much stronger focus on making sure that investments do have a more reasonable shot at returns and that they are fitting current and future market conditions. Those are also under pressure further up the food chain, with limited partners more reluctant to deploy capital, even when it’s already been committed.
All of that calculus hits differently with corporate VCs that may face their own pressures: If the parent company is struggling, or restructuring, or simply rethinking all cost centers with no stone unturned, that could impact the funds it’s willing to commit to betting on what might or might not be coming around the corner.
There is also the big question of what role those corporate investors play between the businesses and the startups. A number of startups over the years have alleged that Amazon picks up intel about what those startups are working on and then launches its own products based on that, to the detriment of the startup in question; and that the Alexa Fund effectively has operated as a Trojan horse in that effort. Amazon has always denied this and suggests that it, like other corporate funds, has long played a role aligning portfolio businesses with strategic interests, sometimes with those investments turning into acquisitions (as in the case of Ring), or partnering to develop new services (as with Ecobee).
Another example of how the fund functions as a middle-man comes in the form of Superplastic, a startup founded by Paul Budnitz that describes itself as an entertainment brand that builds and manages “synthetic artists and influencers.”
“The IP and these characters can manifest across all of our media businesses,” Bernard said of Superplastic. “We’ve got these media verticals, games, music, TV and films, but we don’t have a model for how to work with Superplastic. So we dive in and help figure that out.”
Corporate VCs have their own challenges beyond the role they play with startups, which are around their corporate profile. How responsive should and can the corporate VC funds be to the priority du jour in the C-suite. Do they scramble for the next big AI investment because your rival has inked a massive deal to fund one?
Arguably you could say that Amazon “missed out” on OpenAI, but just as easily you could say that if there is a future in generative AI (still a debatable point, not just among naysayers) we’re just in the early innings.
Being less beholden to a network of limited partners, there is a lot of potential flexibility in a corporate fund like Amazon’s to step out and make investments in areas at a time when others are reducing activity. Case in point: We’ve been hearing that deep tech is going to have an especially hard time of it in the current market climate, being even further from commercialization than so many other areas of tech. It turns out that, according to Bernard, the Alexa Fund’s just invested in a promising deep tech startup alongside another corporate VC.
All the same, it too faces pressures. “I think one of the angles on Ring is that all of our investments need to be good venture investments,” said Bernard. “We need it to be financially viable.”
Putting all this together, it’s an interesting time to catch up with the Alexa Fund. We sat down with Bernard earlier this month, before Amazon officially announced the cuts last week. In light of those, it’s worth watching how the Alexa Fund evolves.
What follows is an edited version of the conversation we had.
Alexa Fund has been around since 2015. Nearly eight years on, how has it evolved?
We were Amazon’s first venture fund. Amazon hadn’t really done organized venture investing at the time so to pitch the Alexa Fund [to promote] the Alexa service, I wrote a proposal. I was part of the corporate development team doing M&A, and I’d been doing that for a couple years. I pitched the idea and Jeff [Bezos] liked it, so I was turned into a venture investor, trying to figure that out in real time.
We came at it initially through the lens of trying to build the Alexa ecosystem. The simple idea was to invest in companies that could advance the art of the possible. At first that was integrations with Alexa, building skills and Alexa voice service (AVS) extensions.
But that was just the first stage, investing in companies that were building Alexa interfaces or integrations?
Along the way we found that we were getting pulled and there was a lot of demand for us to broaden our footprint and so that was the next extension of our work, to think more broadly about consumer electronics and smart electronics. That’s still a big, big part of our work today. Now we have this layer of ambient intelligence.
Is it part of the deal that you back companies that will eventually integrate voice even if they don’t do it now?
I would say it differently. Now, it’s more that voice is so ubiquitous that most companies that we’re going to have an interest in, in the future of smart electronics for the home or for mobility, most of the time they are considering doing a voice integration anyway.
Is the Labrador [assistive robot] Echo Show functionality an example of that? Did you invest so that they would build that?
In the case of Labrador we invested in the founders [Mike Dooley and Nikolai Romanov] before they had a product. [Our deal] was based on customer focus group videos, target customers and the problem they were trying to solve. Also they have the iRobot background… [Amazon is acquiring iRobot for $1.7 billion; the two co-founders previously held senior roles there.]
But certainly, when we think about investments, we do it through the lens of how it can advance or take advantage of services that we’re building at Amazon. Once we make an investment, there’s a team at the Fund, where all they do is interface with the portfolio. It almost becomes like extended business development.
What else are you getting more interested in?
New media: synthetic media, virtualization, the metaverse and creator economy stuff. We’re taking on working more with the media part of Amazon, as a new value proposition right now for the portfolio.
The fit with an Amazon service or experience is typically very forward leaning. We can see these things that are often first of a kind, have never been done before. It’s a strategic fund that at its core places bets on emerging areas of technology that in themselves can have future relevance; in our case mostly for our devices business, or our media business. There are some companies that cut across the board. CTRL-labs was an example. [Meta acquired CTRL-labs.]
That deal was reported at between $500 million and $1 billion when Meta bought it, but Amazon didn’t get the tech in the end, Meta did. Is that still a good outcome for you?
We need to make money and be viable, right? Financial performance is not our first priority, but it’s certainly a validation that we know what we’re doing.
Amazon is laying off big swathes of employees and rethinking product strategy in a lot of areas, including Alexa. How does that impact the Alexa Fund?
I don’t have any more nuanced talking points than what you’re probably already hearing from others, but, look, it’s a time when Amazon is making some choices about how to map what’s going on with the economy to some projects that we don’t feel like we can support anymore. There’s still a massive investment in Alexa. You could quibble about whether it is the right amount or not, but it’s still massive and I don’t think that’s changing. Our work continues to be the same, but I think more what’s probably changing is the venture market itself.
How much has the Alexa Fund invested to date?
We invest off the balance sheet so it’s an evergreen process. We’re not constrained by a certain fund size. When we announced the fund, we announced $100 million and then another $100 million, but we don’t really talk about cumulative figures. Most of the time, we’re a minority investor and not leading rounds. We have though and are doing a little bit more of that recently, especially in the area of entertainment companies that we are investing in. But most of the time we’re a single-digit percentage owner, entering in Series A and Series B, with check sizes in single millions to $5 million.
Unlike institutional investors, who work back from ownership goals where they need a certain percentage of a company, and that defines how much you need to put into it and whether the price is right to get into it, we took a different approach: get into the best deals with the most interesting companies and help them figure out how to work with Amazon, even if it means that we have to be a small investor. Because we’re Amazon, we can make our model work while being a relatively small investor.
We invested in Superplastic, which is building virtual characters. The IP and these characters can manifest across all of our media businesses. We’ve got these media verticals, games, music, TV and films, but we don’t have a model for how to work with Superplastic. So we dive in and help figure that out.
Alexa was a loss leader for a long time. When the company is trying to determine the future of that division, do they consult the fund?
There’s a sense that we’re thought leaders out in the field. We’re touching things that are beyond the three-to-five-year plan of like each of the business teams that we work the most closely with. We have a set of eyes and ears and takes on things by virtue of having these investments.
As somebody who’s looking the three-to-five-year scope, where’s voice going?
I think the companies that we invest in, they all want to deploy it as part of their systems. So more ubiquity. But what happens with these generative AI systems? Without getting into details of things I can’t talk about, these companies building on top of stuff like OpenAI’s, they’re building classes of products that are going to be conversational and integrate hardware in compelling new ways. I don’t know if you’d call it competitive to like Amazon’s take on the world, but I think it’s going to supercharge how people think about the art of the possible and the intersection of conversational system, there are going to be new kinds of devices.
Did you want to invest in OpenAI? Do you feel like you missed an opportunity there?
Ah, I don’t even know that we even evaluated it. I think with all this, I get it’s core. It’s natural language processing. We’ve got a big investment in our way of doing that.
You could argue OpenAI was built and funded to counterbalance Amazon’s way.
I think if you talk to Amazon engineers, they might say yeah, we have our own foundational models equivalent to, you know, OpenAI, Stable Diffusion and whatever else. And we are approaching it with applications that Amazon has a point of view on what the product that we want to build on them is. My take when I step back and I think about it, like, I think that the momentum, that they are going to create and the art of the possible is just going to be good for moving forward, the whole field, right?
Do you think that you might try to build voice products that compete with OpenAI?
I don’t know the answer to that question. That would be more of like an AWS question. I do think that AWS probably wants all those large foundational models to run on AWS. [Note: OpenAI has a close partnership with and investment from Microsoft; AWS works closely with Stability AI.]
In this field of generative AI, there’s a company we invested in through our media lens called Splash [the Alexa Fund co-led a $20 million round in November 2021], which builds machine learning-based music, used first in Roblox games, where their tools are used by Roblox players to create music and perform it on a stage. They’ve got millions of users doing this. What’s really interesting is that it’s democratizing music creation and empowering kids, giving them agency to create music.
What Splash is doing is fundamentally generative AI. They’ve released a beta version of text to singing tech, that works off a text prompt: I want to have a song that says “X” and their system generates the lyrics, the music and the voice. They’re working on it as a technology.
Music is a much more complicated machine learning problem than ChatGPT and generating search results. It’s going to be a complicated thing because it’s the models getting trained by IP and running on Spotify. I don’t have opinions on that other than it’s gonna be challenging.
I suspect that people will say that this sounds like crypto three years ago, but it feels usable right? It’s got customers and the utility is immediate. With crypto, you really had to spin yourself around in circles to try to understand it.
Since the Alexa fund was created under Jeff Bezos, how has that changed now that Andy Jassy is running the show?
The short answer is not much has changed. Our leadership is active and they engage and they like to hear about what we’re doing. That interest is still very much there. There’s been no shift. In fact, in some ways, it’s the opposite.
Might we do more enterprise deals? We’ve invested in some fundamental AI and science and companies and we’ve dabbled a little bit in health. And I think we may end up dabbling more. I have this theory that the consumerization of technology is affecting healthcare, both from a hardware and from a digital services point of view.
A company we had invested in last year called Nesos was building a device you put on your ear that stimulates the vagus nerve to treat inflammatory diseases. The company failed. But that kind of thing where you have consumerization of hardware as a vector, that can improve a product. That’s interesting and I could see us doing more of that kind of thing.
Given the state of the market right now, are you looking for a specific go-to-market runway right now for the companies that you invest in?
No, I think we’re fine with science. We are fine with investing in companies that are at the science stage, the research stage, where there’s enough signal that they’re on the path to a breakthrough. We’ve also recently invested in a deep tech company with Google.
Alexa Fund’s Paul Bernard talks OpenAI, what’s catching his eye and remaining relevant as Amazon restructures by Ingrid Lunden originally published on TechCrunch
Dish-owned live TV streaming service Sling TV is looking to catch up with competitors with the launch of new features like user profiles and the promise of more changes to come in 2023. The company began quietly rolling out the user profiles feature just ahead of the Consumer Electronic Show last week, initially on Android TV and Fire TV devices, with support for more platforms in the near future.
Over the past several months, it’s also expanded its newer direct-to-consumer subscription integrations with the addition of discovery+, which joins 50 other services now available through Sling. And it’s made a Sports Scores feature available across Roku, Fire TV and Android TV devices.
Sports Scores has been rolling out to users since last year, making it easier to access scores from NFL, college football, NBA, NHL, and MLB games while continuing to watch live TV or on-demand programming. Meanwhile, Sling TV’s subscription lineup, which now nears 50 services, has been available since last August.
Image Credits: Sling TV
Combined with the rollout of user profiles (which had not yet been formally announced), the changes suggest a streamer that’s again trying to innovate to attract subscribers.
Though one of the early leaders in live TV streaming, having launched in 2015, Sling TV lost traction as newer services like Hulu with Live TV and YouTube TV arrived on the market. For the first three quarters last year, Sling TV faced subscriber losses, for example. However, the company more recently reversed that downward trend in its Q3 2022 earnings in November, when it reported a total of 2.41 million subscribers after 214,000 net additions. But this figure is still down from the 2.6 million subscribers Sling TV had in the third quarter of 2021, for comparison.
Sling TV needs to do more — and faster.
TechCrunch sat down with Sling TV EVP and Sling TV President, Gary Schanman, in an interview at the Consumer Electronics Show in Las Vegas last week, to find out what’s next for the service in the months ahead.
Sling TV parent Dish hired the industry vet last year, whose experience includes pay TV with roles at Spectrum, Charter and Cablevision (now Altice USA), and in the streaming space. Most recently, Schanman served as Chief Product Officer at Common Sense Networks, where he led the launch of the kid-safe streaming service Sensical. Now he hopes to revitalize the Sling TV brand.
“Over the next number of quarters, you’ll see a lot faster innovation of the product and the product set,” Schanman told TechCrunch. “When people join our company, we expect them to be creative and innovative and be all about winning. And so we’re starting to bring a lot more people into the company to help grow that,” he said.
The company is also looking at how it can better serve the different types of streamers and their needs in the year to come.
“We’re focused on helping consumers find, consume, and engage all the content they want. And we are comfortable with a variety of different types of consumers that have different needs. And that includes…people that keep our paid service – and they’re completely subscribed to all of our add-on packs. But it could also be people that come in for a period of time and want to watch some free content,” Schanman said.
“Free is a part of our thoughts about how we think about that engagement with the customer. We want a lifelong relationship with the subscriber where they see value in what we provide — and [free content is] a piece of that,” he added.
Schanman couldn’t specifically comment on what Sling TV has in mind around any sort of free streaming plans to come.
But overall, the streaming industry has shifted a lot of its focus in recent months to serving consumers free “live TV” channels, also known as FAST channels, which appear in a grid-like guide that feels more akin to a cable TV experience rather than ad-supported video on demand. Roku, for example, has launched FAST channels via its Live TV Guide as has Amazon with Freevee, in addition to offerings from Pluto TV, Xumo and Plex. For some services, the idea is to lure in customers with free streaming — as Roku does via its free movies and TV hub, The Roku Channel — then upsell them paid streaming subscriptions.
Of course, if Sling TV were to go further down the free route, it could complicate its relationship with streaming media platforms, like Roku and Amazon, which want to direct consumers to their own free streaming products.
Beyond its plans to innovate on product, Schanman believes Sling TV has other advantages, including being simple and straightforward to use. He also touted the service’s reliability. It’s been a long time since “Game of Thrones” crashed its service, after all. But what Sling TV touts as simple could also be viewed as bare bones, depending on who you ask.
Still, the company believes that Sling TV’s bigger advantage is not necessarily the user interface, but how it organizes its programming into affordable le packages. Today, the streamer differentiates itself by way of a la carte programming packages that begin with a base subscription (Sling TV’s “Orange” or “Blue” packages) and various add-ons. Rival services, meanwhile, tend to bundle a larger number of channels into one offering, forcing subscribers to continually pay higher prices as new deals are forged.
“From the live TV perspective, we still have the best value in the market by far. We also have the most flexibility in the market. The truth is, you know, I think we’re a very pro-consumer customer offering. Most of our competitors are what I would call true one-for-one cable replacements, but they’re in some cases more expensive,” said Schanman.
The company plans to talk more about Sling TV’s affordability in the months to come, he said. That message is timely, as consumers are beginning to feel the financial impacts of having too many streaming choices and are facing a market where live TV plans are often no longer cheaper than traditional cable TV.
“We start at $40. So our flexibility and choice is a huge value proposition in the market,” the exec explained. “You can switch between packages any time you want. We have over six add-on packs that, when you add them on, are still less than what you’d have to pay on YouTube TV or Hulu TV,” he pointed out. “The more consumer choices there are, the more that our service has value in the market, because the share of wallet is challenged across the board,” Schanman said.
Sling TV rolls out user profiles, promises faster pace of innovation in 2023 by Sarah Perez originally published on TechCrunch
TikTok stars Charli and Dixie D’Amelio have been working to translate their social media success into a business empire with help from their parents, Marc and Heidi. In addition to brand deals and sponsorships, the famous family has been investing in startups through a new VC fund 444 Capital, and this past fall announced plans to launch their own fashion, beauty and lifestyle businesses, as well. Among the first of these new ventures is a women’s footwear line which is now on track for a May 2023 launch, Marc D’Amelio confirmed in an interview on a panel at the Consumer Electronics Show in Las Vegas last week.
The panel, which took place at the Variety Entertainment Summit on Friday, revealed how heavily Marc was involved in the management of the D’Amelio family empire, as he handled answering most of the interviewer’s questions about the upcoming branded products and other D’Amelio family ventures. At one point, Dixie even complimented her father’s business-savvy, explaining that “Charli and I always went to my dad for advice on deals and even long-term friendships,” and how “trusting him has been the best thing for both of our careers.”
The D’Amelio Brands initiative was launched with $6 million in seed funding and includes Autograph co-chairman and Whip Media co-founder and CEO Richard Rosenblatt as an investor and co-founder. Other investors include Apple SVP Eddy Cue, Lions Gate CEO Jon Feltheimer, Fanatics CEO Michael Rubin, and Clothia CEO Elena Silenok. United Talent Agency, which reps the D’Amelios, is also a backer.
The company will have its first board meeting at the end of January, Marc noted.
At CES, Marc explained how merchandise was “low-hanging fruit,” and, when the new products launch, all the family’s intellectual property will be owned by them.
“We didn’t try to reinvent the wheel,” he said. “We saw other creators and other people come out and own their brands 100%. So we started this company called D’Amelio Brands where the main focus is finding ideas, concepts, and products that we’re passionate about and basically incubating them — and start to create things that we own with our investors 100%.”
“We started a footwear company the under the D’Amelio last name, which will be launching in May 2023,” he added. (Earlier reports had said the debut D’Amelio brands had been set to launch by the end of 2022.) Dixie added that the family was already “pretty far along” in the design process with regard to the new brand initiative, adding that the family attends “almost every meeting” together.
The interview only briefly touched on what to expect from the business itself. Marc noted the new footwear brand will include a head designer who was previously a top designer at Jessica Simpson footwear (Lauren DiCicco), who was also from the family’s hometown back in Connecticut. Plus, Marc referenced his own history in the fashion industry, having been an independent rep in years past, he said. He also had a showroom in New York as well as his own clothing brand before his daughters’ fame took things in another direction.
Despite the plan to try to spin up a D’Amelio brand empire, Marc confirmed the family would continue to do brand sponsorship deals for third parties working with their agents at UTA. To date, the D’Amelio sisters have worked with brands like Dunkin’ and Sabra hummus, and have a clothing line with Hollister.
However, Marc explained that the idea with D’Amelio Brands was to set the family up for a future where they could find financial success outside of the content creation business.
“…Doing content creation for brands and endorsement deals, you start to get into a hamster wheel,” he said. “They’re not movie stars. They’re not doing a movie and then taking time off. It’s ‘what’s the next deal, what’s the deal, what’s the next deal?’ I think what we’re trying to do is — I’m trying to create businesses that will work; that the girls can start incubating, plant the seed. And then I would love to have it where it can survive without any of us.”
For the time being, however, the D’Amelio family is staying busy, and the D’Amelio Brands initiative is only one of several projects the family is involved with. Dixie, for example, is working on her music and just landed a song in the current season of “Gossip Girl.” The family is also starting on Season 3 of their reality show on Hulu, in a deal also brokered by UTA.
Dixie admitted they’ve had a “lot of back and forth feelings” about doing the series but ultimately believes that its ability to raise awareness about mental health issues, as related to social media fame, was worth the effort.
“We do enjoy doing it because we film the videos, and then we put our phones down. My family and I all talk a lot about mental health and how important that was. To be able to share that journey on the show has been amazing,” said Dixie. “And that’s probably something I love the most — being able to talk to people about — not just, ‘oh, doing TikTok hurts my mental health’ but…being able to realize other people relate to that has made me feel good,” she said.
D’Amelio family’s new footwear line to launch May 2023 by Sarah Perez originally published on TechCrunch
TechCrunch Live hosted a special, in-person event at CES featuring a long conversation with Ecobee CEO and founder Stuart Lombard. This was our first in-person TechCrunch Live, and I can’t wait to do more. We talked about a lot — how a startup can maximize CES, build delightful products, and how hardware startups can raising money.
Nest loomed large over a part of this interview. While Lombard and Ecobee claim to have produced the first web-connected thermostat, Nest, launched four years after Ecobee, defined the standard. After Nest burst from stealth in 2011, it forced Ecobee to retool its smart thermostat. As Lombard admits, Nest changed the trajectory of Ecobee. “[The Nest thermostat] taught us the difference between wanting to be good and actually being good,” he said, adding later, “It really forced us to retool and think about what it means to be great.”
And the early Ecobee products were not great. “We made a lot of compromises along the way,” Lombard said, showing off Ecobee’s first product to the TechCrunch Live cameras. The differences between the first Ecobee and the first Nest are striking: Where the Nest is constructed out of sleek metal and shiny glass, the Ecobee is all plastic. Sure, it worked well but it lacked the same appeal as the first Nest. He says, in short, as a startup, customers need to love your company and products.
I hear this sentiment a lot on TechCrunch Live. Great products delight in surprising ways. Where the Ecobee offered similar functionality, Lombard admits it wasn’t until the Nest hit the market that Ecobee developed a world-class user experience and design.
I hope you can take the time and watch the show. It’s embedded below, and it’s a must-hear for hardware startups. Trust me, this is one of the best TechCrunch Live events.
On CES:
Founding Ecobee: Developing a market segment and competing against Nest:
How Ecobee is still winning:
Fundraising for hardware
Ecobee CEO and Founder speaks to TechCrunch Live about CES, Nest, and finding product market fit by Matt Burns originally published on TechCrunch
In November, Netflix unveiled its long-anticipated ad-supported tier which offers customers in select markets, including the U.S., the ability to offset the cost of a Netflix subscription by allowing their viewing to be interrupted with ad breaks. At the Consumer Electronics Show in Las Vegas, Netflix President of Worldwide Advertising, Jeremi Gorman, offered some initial insight into how the product has been performing as well as the streamer’s future plans.
During an interview at Variety’s Entertainment Summit at CES, the exec said the company has been happy with the debut selection of advertisers and their diversity.
“It’s really across the board,” said Gorman, of the variety of brands participating. “We’re seeing CPG companies, luxury companies, automotive companies…[and] retail. We’re seeing a broad swath.” This is also good for the consumer experience, she noted, as it means viewers won’t be bored by one car ad after another. “There’s a wide variety of advertising types, and I think we’ll continue to see that,” Gorman predicted.
The interview also touched on some of the early complaints and concerns about Netflix’s foray into ads.
Among them is the key pushback the company has been receiving over its high ad prices, asking for what one industry exec dubbed “Super Bowl CPMs.” Gorman, however, justified the pricing but admitted the market will ultimately dictate what sort of pricing Netflix will be able to get.
“From a supply-demand perspective, the premium CPMs are reflective of two things: one is that we just couldn’t take that many advertisers. We certainly didn’t want to disappoint anybody. Then secondarily, the premium content environment in which the ads run I think warrants a high CPM.”
Whether Netflix constitutes a “premium environment” is up for debate, of course. But Netflix seems to be adjusting its expectations.
“I think we’re certainly humble enough to very much understand we’re top of market, and in addition to that, the market will more or less dictate to us what are reasonable CPMs,” Gorman said.
Another concern about Netflix’s ad-supported service has to do with which content can include ads. As the streamer wasn’t set up as an ad-supported service to begin with, many of its content deals didn’t include AVOD rights (advertising video on demand). That means Netflix has limited ad inventory, and couldn’t even run ads against some of its own “Netflix Originals” if the deals didn’t include the proper rights.
Gorman addressed this as well, saying Netflix was actively working on the licensing issues.
“That’s progressing, as we speak, day by day. We’re renegotiating deals we made a long time ago,” she said, adding that the “vast majority” of content that people watch regularly is available in the ad tier surface. In the meantime, Netflix has about 85% to 95% of its content available on the ad tier, Gorman said.
Then there’s the real concern that, from a business perspective, offering a lower-cost tier has the potential to cannibalize Netflix’s existing subscriptions as customers drop to cheaper tiers at a quicker rate that’s not offset by growth in the ads tier. Gorman, though, downplayed those concerns saying Netflix customers historically have remained on the plan they’re currently on.
The exec, unfortunately, couldn’t speak to the uptake of the ads-supported product, as Netflix is poised to announce earnings, but said “we’re pleased with the growth we’re seeing.”
At present, Netflix’s ad tier is available in the U.S., the U.K., France, Germany, Spain, Italy, Australia, Japan, Korea, Brazil, Canada, and Mexico. The company has no immediate plans to expand, but longer-term would aim to target any larger ad market. In addition to ads, subscribers on the Basic with Ads plan have to deal with lower video quality (720p HD) and are limited to streaming from one device. They also can’t download content to their devices for offline viewing.
Going forward, Netflix aims to do a bit more than just running typical ads, including things like dynamic insertion of ads near moments that are relevant to marketers, single-show sponsorships, and more. It will also later allow marketers to target ads by age and gender.
Despite challenges, Netflix says its ad tier is doing well by Sarah Perez originally published on TechCrunch
Verizon last month introduced a new subscription service aggregator, +Play, into open beta, allowing its customers to purchase and manage subscriptions to over 20 services, including Netflix, Disney+, Hulu, HBO Max, ESPN+, discovery+, AMC+, NFL+, NBA League Pass and NBA TV. But while the initial version of the service is expected to launch in the late Q1/March timeframe, exclusively to Verizon customers, the company today confirmed the eventual plan is to make +Play broadly available to all — even those who aren’t with Verizon.
Speaking at the Variety Summit at the Consumer Electronics Show in Las Vegas, Erin McPherson, Verizon’s chief content officer and head of partnerships, said the service would, “at first” be for Verizon Wireless customers, then “eventually opened up to everyone down the road. But we’re starting out with our customer base,” she said,
“We’ve got roughly 20 premium subscription services,” McPherson noted, adding that it expects to grow that number to “about 50” by the end of 2023. That growth, however, won’t continue to expand to include the long tail of smaller streamers, she clarified.
“It’s not an attempt to aggregate the world’s apps, though — that’s not what we’re about doing. It’s going to always remain a curated selection. And our hope is also to push the industry forward by creating consumer-centric bundles and offers with these services,” said McPherson.
Verizon ended Q3 with 122 million total retail connections and 25% of its consumer wireless phone customers now have 5G-capable devices, it said. Its consumer division counted 234,000 fixed wireless net additions in the third quarter and 58,000 Fios Internet net additions. The company’s main mission is to keep growing that so this is also the endgame when it comes to the company’s media and content strategy these days.
McPherson hinted that longer-term plans may include bundles of services on its platform, as well.
“Again none of this is announced yet — but think about a bundle where a customer could get a video subscription service, something to do with health and wellness — since we offer Peloton and Calm. We might start to work with delivery services — anything that’s a monthly subscription,” she said.
One of the perks of +Play is a free year of Netflix Premium for customers who sign up for a subscription — something Verizon is helping to underwrite as a marketing initiative.
“As we go on forward with Netflix, we’re going to be doing other exciting things in this space as far as thinking about where we go with next-gen — perhaps next-gen bundling and other types of offers with all of our partners. We’ve got great trials. Think of it as our way of providing our customers with more value,” she said.
These types of offerings won’t be available in the near term. Instead, when the service exits beta testing later this year, McPherson said Verizon’s focus will be on enhancing the “features and functionality, making things prettier, and taking friction points away in the buy flow.”
Reached for comment, Verizon confirmed the plan to make +Play available to non-Verizon customers had not been previously announced.
“And at this point, all options are on the table for the evolution of the platform,” a spokesperson said, adding more announcements about the platform will arrive later this year.
Verizon’s +Play subscription store to later open to non-Verizon customers by Sarah Perez originally published on TechCrunch
At CES, Delta Air Lines today announced that it will launch free WiFi for all members of its SkyMiles frequent flier program, starting February 1. This free service, which the company is launching in partnership with T-Mobile, will be available in the majority of the company’s domestic, Viasat-enabled mainline aircraft first, with full availability across its regional aircraft and on international flights by the end of 2024.
“At work, at home and everywhere in between, connectivity is essential to daily life, and your journey on Delta should be no different,” said Delta CEO Ed Bastian at CES 2023 in Las Vegas. “Our vision has long been to deliver an experience at 30,000 feet that feels close to what our customers have available on the ground.”
Unlimited, all channels excluding motion/broadcast, through January 2026. Non Exclusive. Free Wi-Fi, Wifi, Garrett Swann, Comfort+
Since more users will likely make use of this free service than ever paid for it, the airline put a lot of emphasis on hardening its systems in recent months. Delta said it worked with engineers at Viasat to test and scale its in-flight connectivity service to enable this rollout.
“We didn’t just want free Wi-Fi to offer base-level service – we wanted it to be transformative for the entire onboard experience,” said Bastian. “It is imperative all customers onboard can enjoy their favorite content just as they would at home, and we’ve put this system through meticulous tests to make that possible.”
MediaLink’s Michael Kassan and Delta’s Ed Bastian at CES 2023.
To use this service, fliers have to be members of Delta’s SkyMiles frequent flier service (though as a spokesperson told me, they’ll be able to sign up an account while on the plane, too). And even though this service is rolling out in partnership with T-Mobile, you don’t have to be a T-Mobile customer to use it.
“It’s going to be available to everyone,” Bastian said today. “Doesn’t matter what price you paid for your seat, what class of service you chose, what credit card you used, what mobile carrier you’re connected to — it’s going to be free to all and it’s something that is so important to the way. The good news is there’s no fine print. It’s free.”
One thing worth noting, as Bastian confirmed in his keynote today, the free WiFi will extend to however many devices you have with you, not just a single phone or laptop.
A lot of other airlines are also now moving in this direction, be that in a more limited form by offering free access to messaging apps (as Delta already did) or by partnering with telcos to offer free WiFi for their customers. United, for example, offers free WiFi for T-Mobile customers on most flights these days.
With this, Delta is also launching Delta Sync, its unified brand for its software, connectivity and in-flight entertainment offerings. In many ways, this builds about the company’s announcements since it first attended CES in 2018. The idea here is to offer fliers a more personalized service using, for the most part, its mobile app, as well as new airport experiences, all linked to a flier’s SkyMiles account. This includes Delta’s (optional) facial recognition-based boarding system, which it is currently trialing in Atlanta and Detroit, but also the new free WiFi offering and new entertainment offers that will only be available to SkyMiles members.
Indeed, the new Delta Sync on Demand will provide fliers with a personalized seatback entertainment system that is more akin to the smart TV they have at home, Delta promises. For now, on top of the entertainment content, this will include food and beverage ordering in first class, a new journey planned, content recommendations and real-time notifications. The airline plans to start rolling some of the initial features of this system out by the end of the year, though many of the personalization features will only launch after that.
As Bastian also today noted, Paramount+ is going to be a partner here, with free Paramount+ streaming on board Delta’s plane.
These new Delta Sync experiences will roll out over the course of 2023.
“Delta Sync elevates what it means to be a Delta SkyMiles Member by enabling a journey that fits you perfectly and grows more rewarding the more you travel,” said Bastian. “The future of travel is one where your digital and physical experiences come together in a seamless, warm and personal way, making those human travel connections even more meaningful.”
Delta launches free WiFi by Frederic Lardinois originally published on TechCrunch
Want to get a “text” from your dog when he’s hungry, wants to go outside, or wants to play? The dream of being able to communicate with your dog is coming closer to reality with the launch of FluentPet’s new app-connected talking button system. The new product is an update to the model first made popular by a dog named Bunny, whose 9 million+ social media followers landed the sheepadoodle on Forbes’ list of the top 50 social media creators of 2022.
On TikTok alone, Bunny has 8.2 million followers on the @whataboutbunny account.
At the Consumer Electronics Show in Las Vegas, FluentPet was demonstrating its new communication system for pets, the FluentPet Connect.
Image Credits: FluentPet
Like the first version, the new system involves programmable buttons that, when pressed, speak voice commands. The dog can press the buttons with its paw or nose, while hexagonal, multicolored tiles — which the company called “HexTiles” — hold the buttons in place and offer visual cues for the dogs as to the button’s location. The system can be expanded by snapping together more tiles as the dog’s vocabulary grows.
To use FluentPet, dog owners will record their voice speaking command words, like “water,” “outside,” “ball,” “play,” and others they want to teach their pet to know and understand. Dogs already know words, of course — as any pet owner will tell you — but what makes this system interesting is that the dog can press a button to communicate what it wants. The sound itself emits from a base station with a speaker attached.
Image Credits: FluentPet at CES
Some dogs are smarter than others, and not all dogs will be able to achieve Bunny’s level of success with such a system, of course.
However, the company says that over 70% of dogs using the system will get two buttons within a month — a “play” button and an “outside” button, typically. Then the dog owner may then add on an “All Done” button to signal that a play session has ended. On average, dogs learn up to 9 words with the buttons, the company has found.
Still, the findings from the sales of the original FluentPet system have been eye-opening. Since starting shipping its first-gen product in June 2020, the company has reached over 100,000 households. It surprisingly found that dogs weren’t just able to learn individual words, but were also putting together word combinations to communicate — like “water” plus “bone” to indicate they wanted an ice cube.
“Because we’ve got all of these people that are kind of co-creating this new product category with us, they’re able to communicate to us interesting new things — new button combinations that their dogs seem to use. So this is why we think of it as ‘translation,” explains FluentPet CEO FluentPet CEO Leo Trottier.
Trottier’s background is in cognitive science and A.I., he says — noting he left the Ph.D. program at UC San Diego after doing his undergrad at the University of Toronto in order to build the company that became FluentPet. Originally called CleverPet, the goal had been to build something more in the dog games space. (The other original co-founders have since left).
The data (with users’ permission) is being shared with the Comparative Cognition Lab, and soon, with John Hopkins.
Image Credits: FluentPet
FluentPet’s other co-founder Alexis Devine, is Bunny’s owner — so it turns out, Bunny’s social media across Instagram and TikTok was actually a savvy marketing campaign for FluentPet’s systems.
Work on the updated model began in 2021. This version now introduces Wi-Fi connectivity and a connected mobile app. That means when the sound buttons are pressed by the dog, their message is also sent to the app. If you’re in a different part of the house and can’t hear the sound, the app will alert you.
“There’s app notifications — you can get a ‘text’ message from your dog,” said Trottier. (It’s not really being delivered over SMS, to be clear — it’s from the app.)
The FluentPet Connect system is accepting pre-orders now. The starter pack — aka FluentPet’s “Get Started” Kit — comes with 6 connected buttons, 3 HexTiles and the battery-powered base station with a higher-quality speaker for $159. Original system owners can swap out their old buttons and base station for the new ones, but continue using their own tiles.
The pre-Series A company has raised funding from Republic.com and angel investors; 3 million+ was raised as CleverPet while another 750K came after the pivot.
FluentPet’s talking button system lets you get a “text” from your dog by Sarah Perez originally published on TechCrunch
Google today is announcing a HD version of its vehicle mapping solution. Unlike Google Maps, Google’s HD map is not a consuming-facing application, but an additional layer of data that’s served to the vehicle’s L2+ or L3 assisted driving systems through Google Automotive Services.
The additional information sits on top of Google Maps’ data and delivers details such as precise lane makers and localization of objects (road signs) to help assisted driving vehicles orient themselves on the road. The driver will not be able to see or access the HD map or data directly. It’s not clear at this time if the driver will even know if the vehicle is using the HD mapping, though, presumably the vehicle’s assisted driving skills will be improved when it’s in use.
According to a Google spokesperson, the HD mapping is initially focused on high-traffic roads like freeways, but the spokesperson stopped short of saying exactly which cities or freeways. They said Google is working with automakers to determine where the HD map is most helpful.
Google’s HD map is now available to automakers using Google Automotive Services. Volvo and Polestar announced that the HD map will soon be available in the Volvo EX90 and the Polestar 3.
Google launches HD maps for vehicles, Volvo and Polestar first to integrate by Matt Burns originally published on TechCrunch
