With all of the advances made by computer vision tech in the past few years, it might seem a little crazy that so much of the x-ray security equipment being used at sensitive locations is leaning so heavily on human workers to stop weapons from slipping through.
Synapse Technology is creating computer vision tech that can interface with existing x-ray machines through a hardware add-on that doesn’t void the warranty but does add a neural net-powered assistant to lend a second set of eyes to the items being scanned.
The startup has announced the close of a $6 million seed round led by Founders Fund, 8VC and Village Global.
While the company’s largely focused on security checkpoints for “critical infrastructure” sites like government buildings or schools, the company has key interests in getting their tech into airports, another clear market for the tech. Synapse is running a pilot program at Tokyo’s Narita airport and the company says that the scanners are pulling in 14 percent more prohibited items as a result of using their technology.
The startup has helped scan more than 5 million bags to date and is pushing to expand the scope of what they can detect. The company has been performing lab tests to detect 3D-printed weapons with their technology.
“[X-ray machines] are relying on human beings which are just fundamentally limited,” Synapse president Ian Cinnamon told TechCrunch in an interview. “With our software and AI, they can now automatically be detecting weapons with a much higher degree of accuracy.
Synapse’s tech isn’t analyzing luggage to make sure you aren’t packing toiletries over 3 oz. in your carry-on. For now the team’s really focused on detecting the more high-profile threats, such as guns and sharp objects like knives. Beyond improving the quality of life for airport security workers, the company says that their AI tech makes it easier for them to detect objects behind large electronics, meaning that Synapse tech could one day let people leave their laptops in bags without compromising security.
For airports, the list of prohibited items stretches into the dozens, so Synapse isn’t really looking to replace workers but give them fewer things to worry about. “The more that our algorithms take on, the better that humans are able to perform,” Cinnamon tells us.
The startup will be using this funding to get its product into more critical infrastructure locations and ramp up hiring.
Adobe XD, the company’s platform for designing and prototyping user interfaces and experiences, is adding support for a different kind of application to its lineup: voice apps. Those could be applications that are purely voice-based — maybe for Alexa or Google Home — or mobile apps that also take voice input.
The voice experience is powered by Sayspring, which Adobe acquired earlier this year. As Sayspring’s founder and former CEO Mark Webster told me, the team has been working on integrating these features into XD since he joined the company.
To support designers who are building these apps, XD now includes voice triggers and speech playback. That user experience is tightly integrated with the rest of XD and in a demo I saw ahead of today’s reveal, building voice apps didn’t look all that different from prototyping any other kind of app in XD.
To make the user experience realistic, XD can now trigger speech playback when it hears a specific word or phrase. This isn’t a fully featured natural language understanding system, of course, since the idea here is only to mock-up what the user experience would look like. Soon, Adobe announced during its event today, developers will also be able to use an actual Echo device from Amazon to test their prototypes on the real hardware.
“Voice is weird,” Webster told me. “It’s both a platform like Amazon Alexa and the Google Assistant, but also a form of interaction […] Our starting point has been to treat it as a form of interaction — and how do we give designers access to the medium of voice and speech in order to create all kinds of experiences. A huge use case for that would be designing for platforms like Amazon Alexa, Google Assistant and Microsoft Cortana.”
And these days, with the advent of smart displays from Google and its partners, as well as the Amazon Echo Show, these platforms are also becoming increasingly visual. As Webster noted, the combination of screen design and voice is being more and more important now and so adding voice technology into XD seemed like a no-brainer.
Adobe’s product management lead for XD Andrew Shorten stressed that before acquiring Sayspring and integrating it into XD, its users had a hard time building voice experiences. “We started to have interactions with customers who were beginning to experiment with creating experiences for voice,” he said. “And then they were describing the pain and the frustration — and all the tools that they’d use to be able to prototype didn’t help them in this regard. And so they had to pull back to working with developers and bringing people in to help with making prototypes.”
XD is getting a few other new features, too. It now features a full range of plugins, for example, that are meant to automate some tasks and integrate it with third-party tools.
Also new is auto-animate, which brings relatively complex animation to XD that appear when you are transitioning between screens in your prototype app. The interesting part here, of course, is that this is automated. To see it in action, all you have to do is duplicate an existing artboard, modify some of the elements on the pages and tell XD to handle the animations for you.
The release also features a number of other new tools. Drag Gestures now allows you to re-create the standard drag gestures in mobile apps, maybe for building an image carousel, for example, while linked symbols make it easier to apply changes across artboards. There is also now a deeper integration with Adobe Illustrator and you can export XD designs to After Effects, Adobe’s animation tool for those cases where you need full control over animations inside your applications.
San Francisco City Attorney Dennis Herrera has sent a cease-and-desist letter to Bird, Lime and Spin for operating their shared electric scooter programs in San Francisco.
“Despite previous warnings, your company LimeBike (“Lime”) has continued to operate an unpermitted motorized scooter rental program in the City and County of San Francisco (the “City”), creating a public nuisance on the City’s streets and sidewalks and endangering public health and safety,” City Attorney Herrera wrote specifically to Lime. “Lime must immediately cease and desist from unlawful conduct, as we provide further below.”
City Attorney Herrera wrote nearly identical letters to Spin and Bird. The letters say the companies have ignored warnings and operate in a way that is “creating a public nuisance on The City’s streets and sidewalks and endangering public health and safety.” Other complaints entail concerns of fall hazards and excessive use of public sidewalk space.
The letters also provide suggestions around ways to ensure people properly park the scooters. Each company has until April 30 to report back regarding how they’re going to address the complaints.
“We received the letter from the San Francisco City Attorney and we are taking his concerns and recommendations for improving Bird in San Francisco very seriously,” Bird spokesperson Kenneth Baer said in a statement to TechCrunch. “We are confident that by continuing to work with the city, we can build a framework that can make San Francisco a leader in bringing new mobility options that curb traffic and greenhouse gas emissions.”
Bird said it’s also going to start requiring riders to take a photo of where they park their Bird scooters.
“This will help Bird take action to ensure frequent violators of Bird’s parking rules are suspended or deactivated,” the Bird spokesperson said.
In the meantime, the Department of Public Works will continue to impound scooters that unlawfully block sidewalks.
Meanwhile, the SF Board of Supervisors’ Land Use and Transportation Committee heard proposed legislation and comments from the public pertaining to electric scooters today.
Electric scooters are getting closer to regulation in SF
“We have been engaging with city officials since February and were the only ones to reach out proactively before there was any legislation or deployment,” a Spin spokesperson told TechCrunch. “We applaud city officials efforts to work with us in ensuring that we can bring environmentally-friendly transportation alternatives to San Francisco, and we support Supervisor Peskin’s legislation to regulate e-scooters and are eager to continue the conversations around these regulations. We are working to ensure that we comply with any of the outlined recommendations we don’t already have in place. As the only San Francisco-based company offering scooter share, it’s extremely important to us to continue working with the SFMTA, Board of Supervisors and community interest groups, such as Walk SF and the San Francisco Bicycle Coalition, to ensure that we’re addressing public concerns.”
I’ve reached out to Lime. I’ll update this as I learn more.
Foundry Group, the Boulder, Colo.-based venture firm co-founded 11 years ago by startup whisperer Brad Feld, has raised a $750 million seventh fund to target early-stage and growth-stage companies, as well as to invest in other venture funds.
It sounds like — and is — a lot of money, though the firm notes that it encompasses all of its various investment strategies, whereas its last fund, a $500 million vehicle that it closed in 2016, was used to invest in other venture funds and growth-stage companies alone; Foundry was separately managing its early-stage bets in a different fund.
It’s a little confusing, but if you really want to know the details, Feld breaks them out in a post:
For historical reference, our early-stage funds (FG 2007, FG 2010, FG 2013, and FG 2016) are all $225 million in size. Our first early growth fund raised in 2013, Foundry Group Select, is also $225m in size. In 2016, when we raised Foundry Group Next, we approximately doubled the size of that fund to $500 million since 30% of it was going to be invested in partner funds and 70% in early growth. So, at the beginning of 2016, we effectively raised $725 million (FG 2016 and Foundry Group Next). Foundry Group Next 2018 is simply the combination of those two funds rounded up slightly.
Foundry was founded by Feld, Ryan McIntyre, Jason Mendelson and Seth Levine — “four equal partners,” as Feld describes them.
With this newest fund, he says, Foundry now has “seven equal partners,” meaning each receives the same amount of carry — or profits from the firm’s successful investments — no matter that three of the partners are newer to the table.
Foundry’s newer partners include Lindel Eakman, who joined in 2015 to help Foundry identify venture funds in which to invest. (Very meta, we know.) Eakman had previously spent 13 years with the University of Texas Investment Management Company (or UTIMCO), which was Foundry Group’s largest investor.
The firm last year also added Chris Moody, who’d been the CEO of Twitter data reseller Gnip before Twitter acquired the company in 2014 and made Moody a GM and VP of its data and enterprise business. (Foundry was an investor in Gnip.)
The firm’s newest partner is Jamey Sperans, who was as an early member and managing director of Morgan Stanley Alternative Investment Partners, where he served on the global investment and executive committees. Sperans, who joined earlier this year, has also founded five companies over the years.
In case you are wondering, yes, that is seven men. (Just remarking.)
Foundry has had at least 44 exits over the years, according to Crunchbase. Among its most recent wins: the email service provider SendGrid, which staged a successful IPO last November; and the 2015 IPO of Fitbit, the wearable device company, whose shares are trading at roughly $5.50 apiece right now but were as high as $47 in the months after the offering.
Among Foundry’s newest investments is Chowbotics, a four-year-old, Redwood City, Calif.-based company that makes a salad-making robot and raised $11 million in Series A-1 funding last month; and Sensu, a year-old, Portland, Ore.-based full-stack monitoring platform that raised $10 million in Series A funding back in April.
It has also re-upped in plenty of its portfolio companies in recent months, including Urban Airship, an eight-year-old, Portland, Ore.-based company behind a digital customer engagement platform. In June, it raised $25 million in Series F funding led by Foundry, which had also led the company’s Series B round in 2010.
The music business is littered with stories about songwriters or studio contributors and session musicians who never get the credit — or money — they’re often due for their work on hit songs.
And for every storied session musician in “The Wrecking Crew” there are perhaps hundreds of other contributors who aren’t getting their just desserts.
That’s where Jammber comes in. The five-year-old company co-founded by serial entrepreneur Marcus Cobb has developed a suite of tools to manage everything from songwriting credits and rights management to ticketing and touring all from a group of apps on a mobile phone. And has just raised $2.4 million in funding to take those tools to a broader market.
Jammber “Muse” gives collaborators a single platform to exchange lyrics and song ideas, while the company’s “Splits” app tracks ownership and credits of any eventual product from a collaboration. The company’s nStudio tracks songwriting credits to assist with chart and Grammy submission — through a partnership with Nielsen Music — and its “PinPoint” helps organize touring. The recording applications even have a presence feature so session musicians, songwriters and artists can actually be tagged in the studio while they’re working.
“I think we need to get attribution and monetization closer to the creators,” Cobb has said. “Why aren’t we doing that? The industry is growing and thriving. Are we making sure that performers and creators of all different tiers are being equally compensated?”
The answer, sadly, for many in the music industry is no. In fact, while Cobb had originally set out to make a networking tool for creatives with Jammber he wound up shifting the service to the management toolkit after visiting the offices of a music label.
Jammber chief executive Marcus Cobb
“I saw stacks and stacks of payroll checks that were returned to sender,” Cobb, told Crain’s Chicago Business. “These checks were taking three months to two years to print, and they were wrong addresses, or there were stage names instead of legal names.”
That experience convinced Cobb of the demand, but it was Nashville that gave the serial entrepreneur the crucible within which to develop the full suite of tools that now make up Jammber’s soup-to-nuts platform.
Cobb likes to say that Jammber was conceived in Chicago (where the company spun up from the city’s massively influential 1871 entrepreneurship center) and born in Nashville — the home of the multi-billion-dollar American country music industry. All of the tools in Jammber, Cobb says, were created with input from a local musician, producer, artist and repertoire person or a label executive.
In 2015, the company came down to Nashville as part of the first batch of companies in Project Music, a joint venture between the Country Music Association and the Nashville Entrepreneur Center meant to encourage the development of technology for the music industry.
For the 41-year-old Cobb, programming and entrepreneurship has literally been a life saver. Growing up in Texas and Nevada with an abusive, drug-addicted stepfather took a toll on Cobb and programming became an outlet — thanks to a particularly well-equipped computer lab at his high school. “I had moved 24 times,” Cobb said in an interview. “My stepfather was a full-blown crack addict. He would disappear with money; we got evicted a lot.”
But the experience with computers led to an early job out of high school, which launched Cobb’s tech career. He sold his first company, Eido Software in 2007 a year after launching it and has used that money to pursue other endeavors.
And while Cobb is a gifted programmer, that’s not his only interest. His next big foray into business was as the owner and lead designer of Marc Wayne Intimates, a boutique lingerie company that also provided the business-savvy Cobb with his first window into the music business — outfitting dancers in music videos for artists like Pitbull.
Cobb has invested $300,000 of his own money into Jammber and raised roughly $400,000 in early seed funding. The $2.3 million that the company raised in its most recent round came from a who’s who of music executives, including former Sony Nashville chief executive Joe Galante; Hootie and the Blowfish manager Clarence Spalding; and Kings of Leon manager Ken Levitan.
These investors know the tension at the heart of the music business better than anyone, Cobb says — which is that the creative act of making music can often be at odds with the mundanity of organizing and running an effective business to ensure that the music getting made is actually heard by an audience that then pays the musician for their work.
“The irony about making a living in a copyright industry like the music industry is you have to be very organized to make money in a timely manner or even get credit for your work,” said Cobb. “Over 40 percent of the money creators are owed is tied up by bad or wrong data because it’s very difficult to be organized while you create. These tools finally change that.”
Jammber’s services are currently in a closed, invite-only beta that will be capped at 10,000 users. There’s a basic set of services that will be available for free, with pricing for “unlimited” access to the toolkit starting at $10 per month. In addition to the applications, the company also has an online platform that integrates with the mobile suite. Pricing for that service starts at $25 per month.
“This is an ecosystem play for us. I’ve been in software for a long time and the realization for me is that it’s not just mobile-first or cloud-first anymore, it’s simplicity-first. Independent artists and record labels generated $5.2 billion in revenues last year and the sector continues to grow — all while largely using paper and spreadsheets for their back office tools,” said Cobb. “This is a massive, underserved market and we believe we’ve figured out how to provide the value they’ve been waiting for.”
Craigslist has put the kibosh on one of its most iconic sections this week, following the passage of the Senate’s Stop Enabling Sex Traffickers Act. The controversial bill, which passed with a 97-2 vote, essentially holds sites accountable for hosting content related to sex trafficking.
While Craigslist has maintained the links to sections on its homepages, clicking on them will bring up a statement alerting users that the content is no longer available for fear of putting the entire site at risk.
US Congress just passed HR 1865, “FOSTA”, seeking to subject websites to criminal and civil liability when third parties (users) misuse online personals unlawfully.
Any tool or service can be misused. We can’t take such risk without jeopardizing all our other services, so we are regretfully taking craigslist personals offline. Hopefully we can bring them back some day.
The statement goes on wish happiness to those who’ve found love through the service.
In spite of having passed the Senate with an overwhelming majority, the bill has still met with sharp criticism among both sex workers and internet rights activists, who’ve called it out for putting the onus of the user submitted content on the hosting sites.
The Electronic Frontier Foundation called the FOSTA vote, “a dark day for the Internet,” adding, “As lobbyists and members of Congress applaud themselves for enacting a law tackling the problem of trafficking, let’s be clear: Congress just made trafficking victims less safe, not more.”
NASA announced yesterday that its highly anticipated James Webb Space Telescope is delaying its launch — again.
It was announced in March that the mission would be delayed until 2020, which is already two years past its original launch date of October 2018. But after accepting the recommendations of an independent review board, NASA has announced that the launch has been rescheduled for early 2021.
According to the report, technical issues and human error have “greatly impacted the development schedule” and added $800 million to the already $8 billion budget approved by Congress.
For a mission that’s been deemed NASA’s “next big telescope,” it’s not surprising there’d be a few bumps in the road.
The telescope’s honeycombed structure of (literally) gold-plated mirrors will help scientists see further into the history of our universe than has ever been possible before. Following in the footsteps of the Hubble Telescope, Webb will have improved “sight” thanks to its abilities to see longer wavelengths, like infrared. By peering beyond the visible spectrum of light, there’s literally no telling what Webb might learn about the birth of the universe. And that’s kind of the reason NASA’s building it.
“The more we learn more about our universe, the more we realize that Webb is critical to answering questions we didn’t even know how to ask when the spacecraft was first designed,” said Thomas Zurbuchen, associate administrator for NASA’s Science Mission Directorate, in a report yesterday.
If that’s not enough pressure, the Webb (unlike the Hubble) will be too far away from Earth to be serviceable by either manned or robotic missions. So, when Webb finally reaches its orbit and unfurls (another tricky maneuver), there’s no going back.
While this mission represents an exciting new opportunity to explore deeper into space, NASA and other federally funded space agencies aren’t the only game in town any more. Billionaires like Yuri Milner, Jeff Bezos and Elon Musk are taking on the challenge in the private sector and designing new methods, crafts and rockets to explore this final frontier with a little more flexibility than NASA.
In addition to the obvious technical challenges of the Webb project, NASA has also run into problems with its primary contractor, Northrop Grumman . After encountering problems earlier this year successfully installing Webb’s sun shield, Northrop Grumman was also cited in yesterday’s report for “performance challenges” on the mission’s propulsion systems.
With NASA’s growing to-do list before Webb finally launches, it might still be awhile before we get to see the universe’s baby pictures.
UK-based travel search engine Skyscanner has expanding its offering with a train ticket booking feature that lets users of its iOS app book UK train journeys. The feature is slated as coming to UK Android users shortly.
The company’s travel booking platform already offers booking for flights, hotels and car hire. The ability to search and book rail tickets (without booking fees) is intended to capture more of UK travelers’ spending — given how many destinations aren’t served by a nearby airport.
Train travel can also of course be a preferential option for some trips and travelers.
Skyscanner says the data behind its new rail feature is powered by Trip.com, Ctrip’s new international travel booking service, which will also provide 24-hour customer service.
The Chinese online travel giant acquired Skyscanner back in 2016 for $1.74BN, though Skyscanner remains operationally independent.
While Skyscanner’s new rail feature is currently UK domestic only, a spokeswoman told us it expects to roll out to further international markets “in due course”. Doing so looks aimed at beefing up its competitive edge against the likes of multimodal travel planners, such as GoEuro.
In a statement, Bryan Dove, Skyscanner’s CTO, said: “Being part of the Ctrip group allows us to take advantage of elements of Ctrip’s technology and experience and bring that value to Skyscanner’s travellers.
“The launch of our train booking product is one such example. Our focus has always been on making travel as easy as possible and our new train feature will do just that, with the benefit of no booking fees.”
It’s been four months since Facebook launched IGTV, with the goal of creating a destination for longer-form Instagram videos. Is it shaping up to be a high-profile flop, or could this be the company’s next multi-billion-dollar business?
IGTV, which features videos up to 60 minutes versus Instagram’s normal 60-second limit, hasn’t made much of a splash yet. Since there are no ads yet, it hasn’t made a dollar, either. But, it offers Facebook the opportunity to dominate a new category of premium video, and to develop a subscription business that better aligns with high-quality content.
Facebook worked with numerous media brands and celebrities to shoot high-quality, vertical videos for IGTV’s launch on June 20, as both a dedicated app and a section within the main Instagram app. But IGTV has been quiet since. I’ve heard repeatedly in conversations with media executives that almost no one is creating content specifically for IGTV and that the audience on IGTV remains small relative to the distribution of videos on Snapchat or Facebook. Most videos on it are repurposed from a brand’s or influencer’s Snapchat account (at best) or YouTube channel (more common). Digiday heard the same feedback.
Instagram announced IGTV on June 20 as a way for users to post videos up to 1 hour long in a dedicated section of the app (and separate app)
Facebook’s goal should be to make IGTV a major property in its own right, distinct from the Instagram feed. To do that, the company should follow the concept embodied in the “IGTV” name and re-envision what television shows native to the format of an Instagram user would look like.
Its team should leverage the playbook of top TV streaming services like Netflix and Hulu in developing original series with top talent in Hollywood to anchor their own subscription service, but in it a new format of shows produced specifically for the vertically oriented, distraction-filled screen of a smartphone.
Mobile video is going premium
Of the 6+ hours per day that Americans spend on digital media, the majority on that is now on their phone (most of it on social and entertainment activities) and video viewing has grown with it. In addition to the decline in linear television viewing and rise of “over-the-top” streaming services like Netflix and Hulu, we’ve seen the creation of a whole new category of video: mobile native video.
Starting at its most basic iteration with everyday users’ recordings for Snapchat Stories, Instagram Stories and YouTube vlogs, mobile video is a very different viewing environment with a lot more competition for attention. Mobile video is watched as people are going about their day. They might commit a few minutes at a time, but not hour-long blocks, and there are distracting text messages and push notifications overlaid on the screen as they watch.
“Stories” on the major social apps have advanced vertically oriented, mobile native videos as their own content format
When I spoke recently with Jesús Chavez, CEO of the mobile-focused production company Vertical Networks in Los Angeles, he emphasized that successful episodic videos on mobile aren’t just normal TV clips with changes to the “packaging” (cropped for vertical, thumbnails selected to get clicks, etc.). The way episodes are written and shot has to be completely different to succeed. Chavez put it in terms of the higher “density” of mobile-native videos: packing more activity into a short time window, with faster dialogue, fewer setup shots, split screens and other tactics.
With the growing amount of time people spend watching videos on their social apps each day — and the flood of subpar videos chasing view counts — it makes sense that they would desire a premium content option. We have seen this scenario before as ad-dependent radio gave rise to subscription satellite radio like Sirius XM and ad-dependent network TV gave rise to pay-TV channels like HBO. What that looks like in this context is a trusted service with the same high bar for riveting storytelling of popular films and TV series — and often featuring famous talent from those — but native to the vertical, smartphone environment.
If IGTV pursues this path, it would compete most directly with Quibi, the new venture that Jeffrey Katzenberg and Meg Whitman are raising $2 billion to launch (and was temporarily called NewTV until their announcement at Vanity Fair’s New Establishment Summit last Wednesday). They are developing a big library of exclusive shows by iconic directors like Guillermo del Toro and Jason Blum crafted specifically for smartphones through their upcoming subscription-based app.
Quibi’s funding is coming from the world’s largest studios (Disney, Fox, Sony, Lionsgate, MGM, NBCU, Viacom, Alibaba, etc.) whose executives see substantial enough opportunity in such a platform — which they could then produce content for — to write nine-figure checks.
TechCrunch’s Josh Constine argued last year Snapchat should go in a similar “HBO of mobile” direction as well, albeit ad-supported rather than a subscription model. The company indeed seems to be stepping further in this direction with last week’s announcement of Snapchat Originals, although it has announced and then canceled original content plans before.
Snapchat announced its Snap Originals last week
Facebook is the best positioned to win
Facebook is the best positioned to seize this opportunity, and IGTV is the vehicle for doing so. Without even considering integrations with the Facebook, Messenger or WhatsApp apps, Facebook is starting with a base of more than 1 billion monthly active users on Instagram alone. That’s an enormous audience to expose these original shows to, and an audience who don’t need to create or sign into a separate account to explore what’s playing on IGTV. Broader distribution is also a selling point for creative talent: They want their shows to be seen by large audiences.
The user data that makes Facebook rivaled only by Google in targeted advertising would give IGTV’s recommendation algorithms a distinct advantage in pushing users to the IGTV shows most relevant to their interests and most popular among their friends.
The social nature of Instagram is an advantage in driving awareness and engagement around IGTV shows: Instagram users could see when someone they follow watches or “likes” a show (pending their privacy settings). An obvious feature would be to allow users to discuss or review a show by sharing it to their main Instagram feed with a comment; their followers would see a clip or trailer, then be able to click-through to the full show in IGTV with one tap.
Developing and acquiring a library of must-see, high-quality original productions is massively capital-intensive — just ask Netflix about the $13 billion it’s spending this year. Targeting premium-quality mobile video will be no different. That’s why Katzenberg and Whitman are raising a $2 billion war chest for Quibi and budgeting production costs of $100,000-150,000 per minute on par with top TV shows. Facebook has $42 billion in cash and equivalents on its balance sheet. It can easily outspend Quibi and Snap in financing and marketing original shows by a mix of newcomers and Hollywood icons.
Snap can’t afford (financially) to compete head-on and doesn’t have the same scale of distribution. It is at 188 million daily active users and no longer growing rapidly (up 8 percent over the last year, but DAUs actually shrunk by 3 million last quarter). Snapchat is also a much more private interface: it doesn’t enable users to see each others’ activity like Facebook, Instagram, LinkedIn, YouTube, Spotify and others do to encourage content discovery. Snap is more likely to create a hub for ad-supported mobile-first shows for teens and early-twentysomethings rather than rival Quibi or IGTV in creating a more broadly popular Netflix or Hulu of mobile-native shows.
It’s time to go freemium
Investing substantial capital upfront is especially necessary for a company launching a subscription tier: consumers must see enough compelling content behind the paywall from the start, and enough new content regularly added, to find an ongoing subscription worthwhile.
There is currently no monetization of IGTV. It is sitting in experimentation mode as Facebook watches how people use it. If any company can drive enough ad revenue solely from short commercials to still profit on high-cost, high-quality episodic shows on mobile, it’s Facebook. But a freemium subscription model makes more sense for IGTV. From a financial standpoint, building IGTV into its own profitable P&L while making substantial content investments likely demands more revenue than ads alone will generate.
Of equal importance is incentive alignment. Subscriptions are defined by “time well spent” rather time spent and clicks made: quality over quantity. This is the environment in which premium content of other formats has thrived too; Sirius XM as the breakout on radio, HBO on linear TV, Netflix in OTT originals. The type of content IGTV will incentivize, and the creative talent they’ll attract, will be much higher quality when the incentives are to create must-see shows that drive new subscribers than when the incentives are to create videos that optimize for views.
Could there be a “Netflix for mobile native video” with shows shot in vertical format specifically for viewing on smartphone?
The optimization for views (to drive ad revenue) have been the model that media companies creating content for Facebook have operated on for the last decade. The toxicity of this has been a top news story over the last year with Facebook acknowledging many of the issues with clickbait and sensationalism and vowing changes.
Over the years, Facebook has dragged media companies up and down with changes to its newsfeed algorithm that forced them to make dramatic changes to their content strategies (often with layoffs and restructuring). It has burned bridges with media companies in the process; especially after last January, how to reduce dependence on Facebook platforms has become a common discussion point among digital content executives. If Facebook wants to get top producers, directors and production companies investing their time and resources in developing a new format of high-quality video series for IGTV, it needs an incentives-aligned business model they can trust to stay consistent.
Imagine a free, ad-supported tier for videos by influencers and media partners (plus select “IGTV Originals”) to draw in Instagram users, then a $3-8/month subscription tier for access to all IGTV Originals and an ad-free viewing experience. (By comparison, Quibi plans to charge a $5/month subscription with ads with the option of $8/month for its ad-free tier.)
Looking at the growth of Netflix in traditional TV streaming, a subscription-based business should be a welcome addition to Facebook’s portfolio of leading content-sharing platforms. This wouldn’t be its first expansion beyond ad revenue: the newest major division of Facebook, Oculus, generates revenue from hardware sales and a 30 percent cut of the revenue to VR apps in the Oculus app store (similar to Apple’s cut of iOS app revenue). Facebook is also testing a dating app which — based on the freemium business model Tinder, Bumble, Hinge, and other leading dating apps have proven to work — would be natural to add a subscription tier to.
Facebook is facing more public scrutiny (and government regulation) on data privacy and its ad targeting than ever before. Incorporating subscriptions and transaction fees as revenue streams benefits the company financially, creates a healthier alignment of incentives with users and eases the public criticism of how Facebook is using people’s data. Facebook is already testing subscriptions to Facebook Groups and has even explored offering a subscription alternative to advertising across its core social platforms. It is quite unlikely to do the latter, but developing revenue streams beyond ads is clearly something the company’s leadership is contemplating.
The path forward
IGTV needs to make product changes if it heads in this direction. Right now videos can’t link together to form a series (i.e. one show with multiple episodes) and discoverability is very weak. Beyond seeing recent videos by those you follow, videos that are trending and a selection of recommendations, you can only search for channels to follow (based on name). There’s no way to search for specific videos or shows, no way to browse channels or videos by topic and no way to see what people you follow are watching.
It would be a missed opportunity not to vie for this. The upside is enormous — owning the Netflix of a new content category — while the downside is fairly minimal for a company with such a large balance sheet.
The British diving expert, who Tesla and SpaceX CEO Elon Musk called a “pedo guy” in a public attack on Twitter, is striking back.
Vernon Unsworth filed a lawsuit Monday in the U.S. District Court for the Central District of California against Musk for defamation. The lawsuit alleges that between July 15 and August 30, Musk periodically used Twitter and emails to the media to publish false and defamatory accusations against Unsworth, including accusations of pedophilia and child rape.
The lawsuit is seeking compensatory damages of at least $75,000 and punitive damages in “an amount shown to be reasonable and just under the evidence to punish Musk and deter him from repeating such conduct.”
Unsworth was one of many people directly involved in the efforts to extract 12 boys and their soccer coach from the Tham Luang Nang Non cave system located in Northern Thailand after flooding trapped the group for weeks. The rescue effort drew global media coverage, even attracting Musk, who got involved by sending a mini submarine built out of rocket parts that he thought could help.
The initial “pedo guy” attack came after Unsworth gave a critical interview to the media saying Musk’s mini sub “had absolutely no chance of working.” The diving expert ended an interview segment by suggesting Musk should “stick his submarine where it hurts.”
Musk lashed out on Twitter and insinuated that Unsworth was a pedophile. He later deleted the offending tweet and tried to backpedal — even offering an apology of sorts on Twitter. And it could have all ended there. But then Musk dug it all up again during a debate with ex-TechCrunch journalist Drew Olanoff — once again on Twitter. Olanoff had brought up the “pedo guy” attack as an example of Musk telling untruths.
You don’t think it’s strange he hasn’t sued me? He was offered free legal services. And you call yourself @yoda …
— Elon Musk (@elonmusk) August 28, 2018
Musk then took it further and exchanged a series of emails with BuzzFeed about Unsworth.
In light of some questions about my email correspondence with Elon Musk, I'm going to share all my emails with him that pertain to the reporting of our latest story. I first emailed him on Aug. 29 after learning that he was the subject of a legal threat. pic.twitter.com/c1kkBVMuqm
— Ryan Mac (@RMac18) September 5, 2018
A Tesla spokesperson could not be immediately reached for comment. A request for comment was sent to Musk via email. If he responds, the story will be updated.
Unsworth v Musk by TechCrunch on Scribd
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