Issue 3b: Paying for News, Big Tech, and Startups
New launches, policies and M&A in this week's tech
From this week you will have Tech issue on Wednesday and Politics issue on Sunday. This allows me to add a few more topics into the weekly read and also go long-form on one important issue. You can find last Sunday’s Issue-3a here. Subscribe to get regular updates over email and let’s dive into this week’s tech.
Focus: Paying for News
Australia media wants Google and Facebook to pay for news shown in search or shared by users on the social network. Arguing that they provide a lot of value for consumers, but get much lesser revenue through advertising, they are proposing a law to force them to bargain for more revenue and ridiculously, provide advance notice of algorithm changes and moderation of comments on posts based on their articles. Link
Previously Spain wanted to charge Google for showing snippets of articles in Google News. Google shut the service down saying it’s a free service and they don’t make money. Germany introduced a law for companies to opt-out of Google News but news media dropped the execution when A/B showed a huge drop in clicks. Facebook to combat fake news, has introduced a news tab where they pay media for content. But clearly these things won’t save news as we know it.
Who paid for the news?
Previously it used to be for newspapers, delivered to our doorstep, paid for, and advertised in. The business model used to be of geographical distribution and targetted location-based advertising. With TV the boundaries of geography are mostly removed and a new much broader, consumer-based advertising paid for news.
But the trends are clear, fewer people paying for a physical newspaper and many youngsters relying only on the internet for media consumption instead of cable. Inherently these businesses are or will be less valuable with time and needs structural changes.
Who will pay for the news?
Advertising in the digital world is less lucrative. Subscriptions for a generalized offering like news less appealing. So companies need to innovate, specialize, and experiment with new business models to sustain in the future.
Independent, honest journalism is a great democratic institution, a public good. We should not let all news media companies die (or) fall into the hands of those already powerful like politicians and corporates. Governments can and should support such entities with policies and even taxes (BBC is public-funded). But Australia’s attempt falls short and Google/Facebook can and will drop these publishers from their platforms, which will hurt them even more.
Big Tech:
Amazon launches Health Band & Service Halo:
A monthly subscription service along with a no-screen fitness band, claims to measure your Body Fat Ratio using your phone camera, your moods using Voice (always on if opt-in), temperature, sleep, and activity rates. To ensure privacy Amazon promises on-device storage and compulsory deletion of images and voice snippets. A bit late, slightly strange set of differentiators, and remains to be seen if the subscription is worth the money. Link
Apple changes how apps track you in iOS:
In the latest iOS update, apps will have to ask user permission to allow tracking across apps from different companies to serve personalized ads. Ad providers like Facebook use such tracking to maintain identity and (re)target users, have threatened to shut this service down as very few would be expected to give permission and ads without targetting get fewer clicks and mean less value. A seemingly user-friendly move by Apple, it has implications in the larger anti-trust case as the rule doesn’t apply to Apple (all iOS and its apps are the same company!) and it is increasingly pushing for business models without ads which means more subscriptions (more 30% cut revenue). It has now pushed its implementation to early 2021 instead of this fall. Link
FB launched Shop:
In unifying the experience of different holdings, FB is introducing Shop as it did on Instagram, on FB. It means you can now checkout and complete payment of brands and products you follow, message with the said brand across any apps (Insta-Whatsapp, FB-Whatsapp, Insta-FB). FB takes a 5% cut that it is waiving it till the end of 2020, but apps will adopt it for better conversion. Link
B2B Tools at Work:
Okta, a cloud company compiled this excellent report on what tools we use at work. Covering the top 10’s in communication, email, productivity, dev, and security tools, it has quite a few interesting insights and trending companies. Look at how many Microsoft suite users have other tools (like Slack or Zoom). Link
Startup:
Zomato plans to acquire outdoor fitness startup Fitso:
Co-founder of Zomato Pankaj Chaddha was an early investor. I am flummoxed as to what the exact roadmap for integration here is, but guessing its a move to tap into the health-conscious market that it is weak at (or) acquihire to save investors money? Link
3-Way Merger in Hotel SaaS space:
Hotelogix-AxisRooms-RepUp merger will be interesting. They are small players in a market where everyone is bleeding money. Let’s see how they tackle cultural issues of a merger and if they can deliver on the value of an integrated suite for partners. Behind the scenes from INC42 here.
BoAT raises more money:
This affordable, lifestyle consumer electronics brand is generating Rs 500 Cr revenue a year and is on a great trajectory. It plans to use this funding for better quality and a broader portfolio. Link
FAU-G to replace PUBG?:
nCore Games which counts Vishal Gondal (GoQii fame) as an investor, has roped in Akshay Kumar as a partner and announced their plans to launch FAU-G (read fauji) in October. 20% of proceeds will go to Bharat Ke Veer trust. Its a timely PR masterstroke but can they deliver a great game in just 6 months while Bluehole, South Korea (who owns PUBG) tries it to wrestle PUBG out of Tencent's hands which holds 10% equity.? Link
Computer Vision:
