Content – Page 4 – Tech Narratives

Backchannel has a piece out this week which argues that the iPhone’s declining market share in China is due to the poor competitiveness of its services, notably Apple Music and Apple Pay. The piece is well worth reading, but it offers few real answers. It states that Apple fails to compete effectively with its music and payment services in China, but then also says that the music and payments markets in China have been sewn up by strong local competitors, with music rights in particular subject to exclusives from Chinese services. As such, it’s really not clear what Apple could have done differently in these categories. At the end of the day, Apple’s lack of competitiveness in services in China is a symptom of a much broader issue, which is that Apple doesn’t bend much to local custom when it comes to pricing or service structure (see also India). It does localize content stores, and indeed is one of the strongest players in that respect globally, but China is such a massive market, has so many homegrown competitors, and is run by a government which is not afraid to disadvantage foreign interlopers, that it’s hard to see how Apple could compete effectively there on services. As such, I think it’s smart to compete more on its devices, its growing retail presence, and its non-content software and services. But that does mean that the ecosystem Apple has built elsewhere is missing some of the appeal it has elsewhere.

But all that is to ignore the central premise of the argument being made here, that it’s this services weakness that’s at the root of the recent decline in iPhone market share in China. I think that’s debatable at best, and it’s worth remembering that that decline isn’t about ownership but sales, and Apple went through a massive cycle earlier off the back of the iPhone 6 in China, and then came down to earth over the ensuing year, so that change in market share is reflective of cyclical rather than permanent trends, with some signs of recovery recently with the iPhone 7. So overall this piece feels like it makes some interesting points, some of them legitimate with regard to Apple’s services competitiveness in China, but overdoes the narrative about its impact.

via Backchannel

Apple is Doomed

Apple News is Starting to Generate Decent Traffic for Some Publishers (Apr 20, 2017)

I recently shared an item about Facebook struggling to help publishers monetize their traffic through Instant Articles, and this article now suggests that Apple News is actually doing fairly well in generating traffic (though not much revenue) for publishers. That gels with what I’ve heard from other sources, who say Apple News is now bringing them decent sized audiences, but isn’t giving them all the tools they need to monetize their content on the platform (analytics and integration with third party services like Nielsen are still pretty rudimentary). I think Apple News has made big strides, and arguably gives publishers a lot more control over how their content appears, while also being the only one of the three big proprietary news formats (Apple News, Facebook IA, and Google’s AMP) to allow for paid subscriptions. It’s got a long way still to go, and those subscriptions are still only open to very few publishers, but it sounds like it’s making some decent progress in building an audience which is willing to consume news content through the app.

via Digiday

Apple Doesn't Get Services

Apple Acquires First Movie at Tribeca Film Festival (Apr 20, 2017)

This didn’t get a ton of attention, but it’s symbolically important. Apple has so far mostly commissioned content rather than acquiring existing content, while existing online streaming companies Netflix and Amazon have been bidding up prices for movies at festivals for several years now. But Apple has now acquired its first festival film, a documentary about the live of Clive Davis, a music executive. As such, even though the format and origin of the content is different, the subject matter of music is very much the same as Apple’s other original content, suggesting that it still sees Apple Music as the home for this stuff. But Apple is also testing out different models for original content, which will stand it in good stead if (when) it eventually decides to launch its own video streaming service.

via Variety

Disrupting TV

YouTube Algorithm Changes Hit Legitimate Creators’ Ad Revenue (Apr 19, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

Advertising Sustainability

Google Crushes Site Traffic By Scraping Content (Apr 18, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

★ Netflix Reports Q1 2017, Gains 5m Subs, Makes First Profit Internationally (Apr 17, 2017)

Note: this is my first piece of commentary on Q1 2017 earnings. The Q1 2017 tag attached to this post will eventually house all my earnings comments for this quarter, just as the Q4 2016 tag does for last quarter and the earnings tag does for all past earnings comments. Netflix is also one of the dozen or so companies for which I do quarterly slide decks as part of the Jackdaw Research Quarterly Decks Service. See here for more.

Netflix today reported its earnings for Q1 2017, and the results were mostly good, with a few possible red flags. This year, the new season of House of Cards will debut in Q2 rather than Q1, and that makes some of the year on year comparisons tough. One of the results was much weaker Q1 subscriber adds this year than a year ago in the US, worsening what’s already been a trend of slowing growth for several years. Netflix is projecting something of a recovery next quarter, however. In some ways, the biggest news was the first quarterly profit for the international business, which has neared profitability in the past but been plunged deeper into the red by market expansions every time it did so. Now that Netflix is in essentially every country it can be, that won’t be the case anymore, so although it’s projecting a return to small losses next quarter, it’s now saying it wants to be judged partly on growing revenue and margins globally over time, which is a big shift (previously it wanted to be judged on sub growth and domestic margins only).

There were a couple of mild admissions of failure: customer satisfaction in Asia, the Middle East and Africa is not what it could be, and the company’s Crouching Tiger sequel didn’t achieve its goals for original content. Marketing spend will be up at least a little in 2017, and content obligations continue to grow. The company also made clear that the big free cash flow losses caused by its investment in original content will continue for “many years”, though it also said that it will eventually throw off significant cash when it hits a “much larger revenue base”, giving I think the clearest indication yet of what a long-term project positive free cash flow will be. In the meantime, it will continue to borrow to fund that growth. Domestically, profits are growing very rapidly, and the theory continues to be that eventually the International business will reach that level of maturity too and deliver decent margins. But in the meantime, a bet on Netflix continues to be a bet on continued high growth, something which certainly isn’t guaranteed in the US and may end up being tough long term internationally too.

via Netflix Shareholder Letter (PDF)

Netflix

Netflix is Spending Too Much on Content

Facebook Takes 3 Hours to Remove Video of Murder (Apr 17, 2017)

A Facebook user apparently committed a murder on Sunday and claimed to be in the process of committing several more while streaming on Facebook Live video, but Facebook failed to take the video down for three hours afterwards. This certainly isn’t the first time something gruesome has been live streamed on Facebook, and the company has dealt with past situations both poorly and inconsistently. On the one hand, it’s clearly against its policies to broadcast something as disturbing as this, so taking the videos down should be simple from a policy perspective. But in some cases, it’s been accused of taking down videos which – despite their content – were enormously newsworthy, and therefore engaging in censorship. In this case, it seems baffling that Facebook didn’t take the video down much sooner, but it raises much bigger issues about how to police live video, which by definition has often done its damage before anyone at Facebook is even aware of it. Given YouTube’s recent struggles with monitoring non-live video for inappropriate content, one can only imagine the challenges involved in monitoring video in real time. Certainly, Facebook needs better tools for flagging such content and faster response times when videos are flagged, at the very least.

Update: Facebook has now responded, and says it’s going to do exactly what I said in that last line: that is, improve its flagging tools and shorten response times. It also posted a complete timeline. Worth a read.

via Fortune

Facebook

Facebook's Power

LeEco Kills EcoPass Video Streaming and Services Subscription Plan (Apr 14, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
LeEco

Chinese Expansion

TV Channel Owners Consider Offering a Bundle for Non-Sports Fans (Apr 13, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

Disrupting TV

Facebook faces increased publisher resistance to Instant Articles – Digiday (Apr 11, 2017)

There’s some good reporting here about publishers starting to pull their content back from Facebook’s Instant Articles. When it first launched, I think publishers were at the very least keen to experiment with it, and in many cases felt they had little choice but to participate out of fear that non-IA content would be deprioritized by Facebook’s News Feed algorithms. That publishers (including the New York Times) are starting to pull back is a sign both that the format is underperforming badly and that content owners have confidence that they can buck Facebook’s first party platform without negative consequences. That’s a good counterpoint to all the stories about Facebook’s power and how little choice content owners have about publishing to Facebook natively. It remains to be seen whether these publishers will see the same monetization and traffic now as they did before IA debuted, because if that’s the comparison organizations are making they may be disappointed. But all this also explains why Facebook has been working so much harder lately to cater to news publishers in particular, with its Journalism Project, new calls to action and subscription (though not paid subscription) options, and listening tours. It’s clearly worried that it’s losing the battle here and needs to do more.

via Digiday

Facebook

Facebook's Power

Comcast Is Planning a Netflix Rival Using NBC Shows – Bloomberg (Apr 10, 2017)

I wrote a piece last week for Techpinions about the fragmentation in the TV market as everyone launches their own streaming services, and here comes yet another example of that. It sounds like Comcast is working on a service that would combine content from NBC and the NBCU cable networks into a single subscription package, although the conditions on the Comcast-NBCU merger make it unlikely that it will debut in the next 18 months or so. But we’ve already seen the premium cable networks (HBO, Starz, and Showtime) go over-the-top, along with broadcaster CBS and NBC itself with a comedy subscription service called Seeso. As cord cutting and cord shaving eat into cable network subscriber numbers, we’re going to see lots more of this direct-to-consumer stuff. In principle, that sounds great for consumers, who will now be able to pick and choose just the content they want, but in practice they’re likely to end up spending more and dealing with multiple bills, user interfaces, and content models to get it, which is in turn going to lead to an opportunity for re-aggregation down the road.

via Bloomberg

Comcast

Disrupting TV

Gear VR Most-Used Headset, Daydream Barely Registers at VR Porn Site – Variety (Apr 6, 2017)

It’s unfortunate that we have to rely on stats from a porn site to measure VR market share, but beggars can’t be choosers. Obviously, there may be reasons why the usage this site sees isn’t representative of the market as a whole, but the numbers here are far from surprising: Gear VR is by far the largest chunk of usage, which absolutely aligns with the numbers we’re seen in terms of devices sold / in use. Google’s Daydream, meanwhile, has a tiny fraction of the market, which is also unsurprising given its relative newness and the limited distribution of headsets and compatible phones. Gear VR has become the de facto standard for Android VR and mobile VR more broadly, and Daydream VR will only do well if essentially every other Android vendor supports it in their handsets and pushes it aggressively to consumers. So far, that hasn’t happened, with predictable results.

via Variety

AR vs VR

Facebook will use photo matching to stop revenge porn from being shared – The Verge (Apr 5, 2017)

This is probably about as much as Facebook can be expected to do on an issue such as this – there’s no easy definition for revenge porn as such, and therefore no way to train a computer to look for it, so the only way Facebook can police it is to match images being shared with ones it’s been told about in the past. That’s obviously far from solving the issue, but it’s a start and should help with cases where the same images are being shared over and over.

via The Verge

Facebook

Facebook's Power

Facebook Shows Users More Content Which Doesn’t Come From Your Friends – TechCrunch (Apr 3, 2017)

Almost exactly two months ago, I wrote in my Techpinions column that Facebook’s next big opportunity was finally stepping beyond the idea of showing users only content shared by their friends, and using AI and machine learning to show them other content like content they’d previously engaged with. Doing this, I said, would dramatically expand the amount of interesting content that could be shown to users, thereby keeping them on the service for longer, and giving Facebook more time and places to show ads. And as I wrote almost exactly a year ago, this is just another consequence of Facebook becoming less of a social network and more of a content hub. Today, we’re seeing Facebook not only roll out a video tab (and a video app for TVs) with suggested videos, but also now testing a dedicated tab for recommended content of all kinds in its apps. This is yet another extension of Facebook’s increasing absorption of activity from across users’ lives into its various apps in an attempt to capture more of users’ time and advertisers’ dollars, and I suspect it’ll work pretty well if it’s managed right. Of course, it’s demonstrated several times lately that it’s somewhat lost its touch in that department, so it will need to proceed carefully in pushing forward in this area to avoid alienating users.

via TechCrunch

Facebook

Facebook's Power

Google says its YouTube ad problem is “very very very small” but it’s getting better at fixing it anyway – Recode (Apr 3, 2017)

There are one or two interesting data points in here, with the most interesting probably being that videos big advertisers “had flagged received less than 1/1000th of a percent of the advertisers’ total impressions” – in other words, the problematic videos were around one in 100,000 or less of the videos where ads appeared (it’s worth noting that this number only relates to the videos flagged by brands – there may have been quite a few more they didn’t find). The other interesting thing here is the suggestion Google exec Schindler makes several times that there’s some unnamed person behind the recent attention this issue is getting: there was a report recently that someone who developed detection technology for videos was pushing the story as a way to get attention for that technology, and I wonder if Schindler is hinting at that without being explicit and thereby drawing more attention to the issue. The last thing worth noting is that Google is now allowing outside firms like DoubleVerify and comScore to start auditing ad placement, which is something that third parties have been wanting. The issue is definitely fading from the headlines as the stream of advertisers announcing boycotts dries up, but it certainly hasn’t been dealt with definitively, and as I’ve argued, as an issue it goes well beyond just YouTube and affects programmatic buying more broadly as well.

via Recode

Advertising Sustainability

Snapchat Makes Stories Searchable – Mashable (Mar 31, 2017)

We’re seeing a shift among the social networks from making accessible only content shared by friends to opening up a much wider range of content from others, whether that content is exposed through recommendations, curation, or, as in this case, search. Given how much social networks have become essentially content hubs, the amount of time people spend on them today is much less about spending time with friends as spending time with content, and so the more content can be surfaced, the longer they’re likely to spend there. Snapchat is now adding search as a way for people to find Stories not shared by their own friends but which might relate to their interests, whether those are sports teams, venues, cities, or other interests (like “puppies”). That should help users both find more content but also potentially discover new accounts to follow on an ongoing basis, all of which should deepen and lengthen engagement. In some ways, this is analogous to the recent work Facebook has done with recommending videos in both its mobile and TV apps – both companies are looking beyond the social graph for ways to surface interesting content for their users. Snapchat, of course, already has its Discover tab for content created by brands and professional outlets.

via Mashable

Snap

Snapchat is Maturing

Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results – The New York Times (Mar 30, 2017)

This is a great illustration of the broader fallout from the recent YouTube / Google backlash from advertisers: in this case, JP Morgan is dramatically narrowing the number and range of sites on which it will advertise, and it’s about to do the same thing with YouTube as well. In both cases, it’s taking that action itself to whitelist sites and channels rather than relying on any Google tools to do so. In other words, even if Google doesn’t choose to solve the problem by limiting ads to a smaller number of sites or YouTube channels, advertisers may go ahead and do so anyway. That’s going to be bad for the long tail of creators and sites, who may see both overall ad volumes and prices drop significantly. This isn’t nearly over, and even if Google and YouTube address some advertiser concerns, I suspect we’ll see ongoing fallout and a narrowing of where big brands advertise going forward. See also this post from music video service Vevo, which is making a pitch that its YouTube channel and videos are a safe space within the platform.

via New York Times

Advertising Sustainability