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Equity Monday: Two early-stage rounds, grocery delivery and SoftBank’s bill
Good morning friends, and welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week.
Before we jump into today’s show, don’t forget that the long-form Equity that started in the unicorn era and continue in today’s changed world still drops on Friday. We had a blast last week, so make sure to catch up.
That said, there was a lot to go over this morning, so let’s get into what we had to discuss:
- Global spend patterns are changing, helping some startups and slowing others. But notable in the mix is how well grocery delivery is doing; if the change will be enough to turn uncertain bets like Instacart into sure things, however, is not yet clear.
- Earnings are finally nearly here. We’ll see the big names start to disclose results next week. In the next three weeks or so we’ll hear from Apple, Microsoft, Facebook, Netflix and Spotify. The results will help us understand how the market is doing; and, by proxy, how startups are performing.
- Quoting from our script this morning: “Would it be great to know how startups are doing without resorting to our chronic use of public proxies? Yes. Any startup who wants to kick off that trend can send in reports of how their Q1 went and what they expect in Q2 and the other two quarters of 2020 to EquityPod@TechCrunch.com. That’s probably the easiest way to get your company on the show, so, please do write in with specifics.”
- We took a look at the latest rounds from Kargo and Pangea.app.
- Finally, SoftBank’s huge Vision Fund bill is coming due. I almost can’t believe these numbers. What a mess.
And that’s the show for today. Stay safe, and we’ll be back Friday morning to cap off whatever this week winds up becoming.
Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Quibi is the anti-TikTok (that’s a bad thing)
It takes either audacious self-confidence or reckless hubris to build a completely asocial video app in 2020. You can decide which best describes Quibi, Hollywood’s $1.75 billion-funded attempt at a mobile-only Netflix of six to 10-minute micro-TV show episodes. Quibi manages to miss every trend and tactic that could help make its app popular. The company seems to believe it can succeed on only its content (mediocre) and marketing dollars (fewer than it needs).
I appreciate that Quibi is doing something audaciously different than most startups. Rather than iterating toward product-market fit, it spent a fortune developing its slick app and buying fancy content in secret so it could launch with a bang.
Yet Quibi’s bold business strategy is muted by a misguided allegiance to the golden age of television before the internet permeated every entertainment medium. It’s unshareable, prescriptive, sluggish, cumbersome and unfriendly. Quibi’s unwillingness to borrow anything from social networks makes the app feel cold and isolated, like watching reality shows in the vacuum of space.
In that sense, Quibi is the inverse of TikTok, which feels fiercely alive. TikTok is designed to immediately immerse you in crowd-vetted content that grabs your attention and inspires you to spread your take on it to friends. That’s why TikTok has almost 2 billion downloads to date, while Quibi picked up just 300,000 on the day of its big splash into market.
Here’s a breakdown of the major missteps by Quibi, why TikTok does it better and how this new streaming app can get with the times.
What Hollywood thinks we want
Quibi feels like some off-brand cable channel, with a mix of convoluted reality shows, scripted dramas and news briefs. Imagine MTV at noon in the mid-2000s. Nothing seemed must-see. There’s no Game of Thrones or Mandalorian here. While the production value is better than what you’ll find on YouTube, the show concepts feel slapdash with novelty that quickly fades.
Chrissy Teigen as a small claims court judge? The tear-jerking “Thanks A Million” does skillfully multiply the “OMG” gratitude moment from makeover programs to happen 4X per episode. But a cooking show where blindfolded chefs have to guess what food was just exploded in their faces…(sigh)
The catalog feels like the product of TV writers being told they have 10 seconds to come up with an idea. “What would those idiots watch?” The shows remind me of old VR games that are barely more than demos, or an app built in a garage without ever asking prospective users what they need. Co-founder Jeffrey Katzenberg may have produced The Lion King and Shrek, but the app’s content feels like it was greenlit by, well, Hewlett Packard Enterprise’s leader Meg Whitman, who indeed is Quibi’s CEO.
Quibi CEO Meg Whitman
Despite being built for a touch-screen interface, there’s little Bandersnatch-style interactive content so far, nor are the creators doing anything special with the six to 10-minute format. The shows feel more like condensed TV programs with episodes ending when there would be a commercial break. There’s no onboarding process that could ask which popular TV shows or genres you’re into. As the catalog expands, that makes it less likely you’ll find something appealing within a few taps.
TikTok comes from the opposite direction. Instead of what Hollywood thinks we want, its content comes straight from its consumers. People record what they think would make them and their friends laugh, surprised or enticed. The result is that with low to zero production budget, random kids and influencers alike make things with millions of Likes. And as elder millennials, Gen Xers and beyond get hooked, they’re creating videos for their peers, as well. The algorithm monitors what you’re hovering over and rapidly adapts its recommendations to your style.
TikTok is fundamentally interactive. Each clip’s audio can be borrowed to produce remixes that personalize a meme for a different demographic or subculture. And because its stars are internet natives, they’re in constant communication with their fan base to tune content to what they want. There’s something for everyone. No niche is too small.
TikTok screenshots
The Fix: Quibi should take a hint from Brat TV, the Disney Channel for the YouTube generation that gives tween social media stars their own premium shows about being a grade school kid to create content with a built-in fan base. [Disclosure: My cousin Darren Lachtman is a Brat co-founder.)
Take the Chrissy’s Court model, and shift it to stars who are 20 years younger. Give TikTok phenoms like Charli D’Amelio or Chase Hudson Quibi shows and let them help conceptualize the content, and they’ll bring their legions of fans. Double-down on choose-your-own-adventures and fan voting game shows that leverage the phone’s interactivity. Fund creators that will differentiate Quibi by making it look like anything other than daytime TV. And ask users directly what they want to see right when they download the app.
No screenshots
This is frankly insane. Screenshots of Quibi appear as a blank black screen. That means no memes. If people can’t turn Quibi scenes into jokes they’ll share elsewhere, its shows won’t ever become fixtures of the cultural zeitgeist like Netflix’s Tiger King has. Yes, other mobile streaming apps like Netflix and Disney+ also block screenshots, but they have web versions where you can snap and share what you want. Quibi never should have structured its deals to license content from producers in a way that prevented any way to riff on or even let friends preview its content.
TikTok, on the other hand, defaults to letting you download any video and share it wherever you please — with the app’s watermark attached. That’s fueled TikTok’s stellar growth as clips get posted to Twitter and Instagram — and drive viewers back to the app. It has spawned TikTok compilations on YouTube, and a whole culture of remixing that expands and prolongs the popularity of trending jokes and dances.
The Fix: Quibi should allow screenshots. There’s little risk of spoilers or piracy. If its deals prohibit that, then it should offer pre-approved screenshots and video clips/trailers of each episode that you can download and share. Think of it like an in-app press kit. Even if we’re not allowed to set up the perfect screenshot for making a meme, at least then we could coherently discuss the shows on other social networks.
Sluggish pacing
On mobile, you’re always just a swipe away from something more interesting. It’s like if you watched TV with your finger permanently hovering over the change channel button. Ever noticed how movie trailers now often start with a fast-forward collage of their most eye-catching scenes? Quibi seems intent on communicating prestige with its slow-building dramas like The Most Dangerous Game and Survive, which both had me bored and fast-forwarding. And that’s watching Quibi at home on the couch. While on the go, where it was designed to be consumed, slow pacing could push users with a minute or two to spare to open Instagram or TikTok instead.
None of this is helped by Quibi not auto-playing a trailer or the first episode the moment you scroll past a show on the home screen. Instead, you see a static title card for two seconds before it starts playing you an excerpt of the program. That makes it more cumbersome to discover new shows.
Where TikTok wins is in immediacy. Creators know users will swipe right past their video if it’s not immediately entertaining or obviously revving up to a big reveal. They grab you in the first second with smiles, costumes, bold captions or crazy situations. That also makes it easy for viewers to dismiss what’s irrelevant to them and teach the TikTok algorithm what they really want. Plus, you know that you can score a dopamine hit of joy even if you only have 30 seconds. TikTok makes Quick Bites feel like an understaffed sit-down restaurant.
The Fix: Quibi needs to teach creators to hook viewers instantly by previewing why they should want to watch. Since tapping a show’s card on the Quibi homepage instantly plays it, those teasers need to be built into the first episode. Otherwise, Quibi needs a button to view a trailer from its buried dedicated show pages to the preview card most people interact with on the home screen. Otherwise, users may never discover what Quibi shows resonate with them and teach it which to show and make more of.
Anti-social video club
Quibi neglects all its second-screen potential. No screenshotting makes it tough to discuss shows elsewhere, yet there’s no built-in comments or messaging to discuss or spread them in-app. Pasting an episode link into Twitter doesn’t even display the show’s name in the preview box. Nor do shows have their own social accounts to follow to remind you to keep watching.
There’s no way for friends to follow what you’re watching or see your recommendations. No leaderboards of top shows. Certainly no time-stamped, live-stream style crowd annotations. No synced-up co-watching with friends, despite a lack of TV apps preventing you from watching with anyone else in person unless you crowd around one phone.
It all feels like Quibi figured advertising would be enough. It could run contests where winners get a Cameo-esque message or chat with their favorite stars. Quibi could let you share scenes with your face swapped onto actors’ heads, deepfake-style like Snapchat’s (confusingly named) Cameos feature. It could host in-app roundtables with the casts where users could submit questions. It’s like if Web 2.0 never happened.
TikTok, meanwhile, harnesses every conceivable social feature. Follow, Like, comment, message, go Live, duet, remix or download and share any video. It beckons viewers to participate in trending challenges. And even when users aren’t itching to return to TikTok, notifications from these social features will drag them back in, or watermarked clips will follow them to other networks. Every part of the app is designed to make its content the center of popular culture.
The Fix: Quibi needs to understand that just because we’re watching on mobile, doesn’t make video a solo experience. At first, it should add social content discovery options so you can see which friends opt in to share that they’re watching or view a leaderboard of the top programs. Shows, especially ones dripping out new episodes, are more fun when you have someone to chat about them with.
Eventually, Quibi should layer on in-app second-screen features. Create a way to share comments at the end of each episode that people read during the credits so they feel like they’re in a viewing community.
Can Quibi be more?
What’s most disappointing about Quibi is that it has the potential to be something fresh, merging classically produced premium content with the modern ways we use our phones. Yet beyond shows being shot in two widths so you can switch between watching in landscape or portrait mode at any time, it really is just a random cable channel shrunk down.
Youths act in front of a mobile phone camera while making a TikTok video on the terrace of their residence in Hyderabad on February 14, 2020 (Photo by NOAH SEELAM / AFP) (Photo by NOAH SEELAM/AFP via Getty Images)
One of the few redeeming opportunities for Quibi is using the daily episode release schedule to serialize content that benefits from suspense, as Ryan Vinnicombe aka InternetRyan notes. Bingeing via traditional streaming services can burn through thrillers before they can properly build up suspense and fan theories or let late-comers catch up while a show is still in the zeitgeist. Cliffhangers with just a day instead of a week to wait could be Quibi’s killer feature.
Suspense is also one thing TikTok fails at. Within a single video, they’re actually often all about suspense, waiting through build up for a gag or non-sequitur to play out. But creators try to rope in followers by making a multi-minute video and splitting it into parts so people subscribe to them to see the next part. Yet since TikTok doesn’t always show timestamps and surfaces old videos on its home screen, it can often be a chore to find the Part Two, and there’s no good way for creators to link them together. TikTok could stand to learn about multi-episode content from Quibi.
But today, Quibi feels like a minitiaturized and degraded version of what we already get for free on the web or pay for with Netflix. Quibi charging $4.99 per month with ads or $7.99 without seems like a steep ask without delivering any truly must-see shows, novel interactive experience or memory-making social moments.
Quibi’s success may simply be a test of how bad people are at cancelling 90-day free trials (hint: they’re bad at it!). The bull case is that absentminded subscribers among the 300,000 first-day downloads and some diehard fans of the celebs it’s given shows will bring Quibi enough traction to raise more cash and survive long enough to socialize its product and teach creators to exploit the format’s opportunities.
But the bear case is already emerging in Quibi’s rapidly declining App Store rank, which fell from No. 4 overall when it launched Monday to No. 21 yesterday after just 830,000 total downloads according to Sensor Tower. Lackluster content and no virality means it might never become the talk of the town, leading top content producers to slink away or half-ass their contributions, leaving us to dine on short video elsewhere.
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Disney debuts its streaming service in India for $20 a year
Disney+ has arrived in the land of Bollywood. The company on Friday (local time) rolled out its eponymous streaming service in India through Hotstar, a popular on-demand video streamer it picked up as part of the Fox deal.
To court users in India, the largest open entertainment market in Asia, Disney is charging users 1,499 Indian rupees (about $19.5) for a year, the most affordable plan in any of the more than a dozen markets where Disney+ is currently available.
Subscribers of the revamped streaming service, now called Disney+ Hotstar, will get access to Disney Originals in English as well as several local languages, live sporting events, dozens of TV channels, and thousands of movies and shows, including some sourced from HBO, Showtime, ABC and Fox that maintain syndication partnerships with the Indian streaming service. It also maintains partnership with Hooq — at least for now.
Unlike Disney+’s offering in the U.S. and other markets, in India, the service does not support 4K and streams content at nearly a tenth of their bitrate.
Disney+ Hotstar is also offering a cheaper yearly premium tier, priced at Rs 399 (about $5.3), that will offer subscribers access to movies, shows (but not those sourced from aforementioned U.S. networks and studios) and live sporting events; it won’t include Disney Originals.
Access to streaming of sporting events, especially of cricket matches, has helped five-year-old Hotstar become the most popular on-demand video streaming in India. During the cricket tournament Indian Premier League (IPL) last year, the service amassed more than 300 million monthly active users and more than 100 million daily active users.
It also holds the global record for most simultaneous views on a live stream, about 25 million — more than thrice its nearest competitor.
Prior to today’s launch, Hotstar offered its premium plans at 999 Indian rupees, and 365 Indian rupees. Existing subscribers won’t be affected by the price revision for the duration of their current subscription.
The service, run by Indian conglomerate Star India, offers access to about 80% of its catalog at no cost to users. The company monetizes these viewers through ads.
But in recent years, the company has begun to explore ways to turn its users into subscribers. Two years ago, Hotstar stopped offering cricket match streaming to non-paying users.
People familiar with the matter told TechCrunch that Hotstar has about 1.5 million paying subscribers, lower than what most industry firms estimate. But that figure is still higher than most of its competitors.
And there are many.
India’s on-demand video market
Disney+ will compete with more than three dozen international and local players in India, including Netflix, Amazon Prime Video, Times Internet’s MX Player (which has over 175 million monthly active users), Zee5, Apple TV+ and Alt Balaji, which has amassed over 27 million subscribers.
“The arrival of Disney+ in India is another case study in the globalization of entertainment in the digital era. For decades, the biggest companies in the world have expanded their reach into different markets. But it’s new, and actually quite profound, that everyone on earth receives the very same version of such a specific cultural product,” Matthew Ball, former head of strategic planning for Amazon Studios, told TechCrunch.
As in some other markets, including the U.S., streaming services have inked deals with telecom networks, TV vendors, cable TV operators and satellite TV players to extend their reach in India.
Most of these streaming services monetize their viewers by selling ads, and those who do charge have kept their premium plans below $3.
Why that figure? That’s the number most industry executives think — by spending years in the Indian market — that people in the country are willing to pay for viewing content. The average of how much an individual pays for cable TV, for instance, in India is also about $3.
“I think everyone is still trying to sort out the right pricing. It’s true the average Indian consumer is used to far lower prices and can’t afford more. However, we need to focus on the consumers likely to buy this, who have the requisite broadband access and income, etc,” said Ball.
Commuters drive along a road past a billboard in Mumbai advertising the Amazon Prime Video online series “The Forgotten Army”. (Photo by INDRANIL MUKHERJEE / AFP via Getty Images)
At stake is India’s booming on-demand video streaming market that, according to Boston Consulting Group, is estimated to grow to $5 billion from half a billion two years ago.
Hotstar’s hold on India could make it easier for Disney+, which has launched in more than a dozen markets and has amassed over 28 million subscribers.
As the country spends about two more weeks in lockdown that New Delhi ordered last month to curtail the spread of coronavirus, this could also compel many to give Disney+ a try.
On the flip side, if the lockdown is extended, the current season of IPL, which has been postponed until mid-April, might be further delayed or cancelled altogether. Either of those scenarios could hurt the reach of Hotstar, which sees a massive drop in its user base after the conclusion of each cricket tournament.
Disney initially planned to launch its streaming service in India on March 28, the day IPL was supposed to commence. But the company later postponed the launch by six days.
Industry executives told TechCrunch that if IPL is cancelled, it could severely hurt the financials of Hotstar, which clocks more than 50% of its revenue during the 50-odd days of the cricket season.
Some said Disney+’s premier catalog might not be relevant for most of Hotstar’s user base, who seem to care about this streaming service only during the cricket season or to catch up on Indian soap operas.
Hotstar has also received criticism for censoring more content on its platform than any other streaming service in India. Last month, Hotstar blocked from streaming on its platform an episode of “Last Week Tonight with John Oliver” that was critical of Indian Prime Minister Narendra Modi. YouTube made that segment available without any edits.
John Oliver slammed Hotstar for censoring the episode and noted that the streaming service had additionally edited out parts from his older episodes where he made fun of Disney. In 2017, Hotstar also edited out a segment from Oliver’s show in which he mocked Samsung for the Galaxy Note 7 fiasco. Hotstar and Samsung had a commercial partnership.
Hotstar did not respond to multiple requests for comment in 2017. Hotstar did not respond to multiple requests for comment on the recent controversy.
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Game downloads will be throttled to manage internet congestion
For the billions stuck at home during the global effort to flatten the curve, gaming is a welcome escape. But it’s also a bandwidth-heavy one, and Microsoft, Sony and others are working to make sure that millions of people downloading enormous games don’t suck up all the bandwidth. Don’t worry, though, it won’t affect your ping.
A blog post by content delivery network Akamai explained a few things it is doing to help mitigate the tidal wave of traffic that the internet’s infrastructure is experiencing. Although streaming video is of course a major contributor, games are a huge, if more intermittent, burden on the network.
Akamai is “working with leading distributors of software, particularly for the gaming industry, including Microsoft and Sony, to help manage congestion during peak usage periods. This is very important for gaming software downloads, which account for large amounts of internet traffic when an update is released,” the post reads.
Take the new “Call of Duty: Warzone” battle royale game, released last week for free and seeing major engagement. If you didn’t already own the latest CoD title, Warzone was a more than 80-gigabyte download, equivalent to dozens of movies on Netflix . And what’s more, that 80 gigs was likely downloaded at the maximum bandwidth home connections provided; streaming video is limited to a handful of megabits over the duration of the media, nowhere close to saturating your connection.
And Warzone isn’t alone — there are tons of high-profile games being released at a time when many people have nothing to do but sit at home and play games — PC game platform Steam posted a record 20 million concurrent players the other day, and one analysis saw a 400% increase in gaming traffic. So gaming is bigger than ever, while games are bigger than ever themselves.
As a result, gaming downloads will be throttled for the foreseeable future, at least in some markets. “Players may experience somewhat slower or delayed game downloads,” wrote Sony Interactive Entertainment CEO Jim Ryan in a brief blog post. I’ve asked Microsoft, Nintendo and Valve for comment on their approach as well.
It’s important to note that this should not apply to the rest of the gaming experience. Unlike downloading games, playing games is a remarkably low-bandwidth task — it’s important for packets to be traded quickly so players are in sync, but there aren’t a lot of them compared with even a low-resolution streaming video.
The best thing to do is to set your games to be downloaded overnight, as local infrastructure will be less taxed while everyone in your region is asleep. If you have downloads or updates coming during the day, don’t be surprised if they take longer than usual or are queued elsewhere.
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Netflix fights new streaming rivals with Samsung partnership
As the streaming battles heat up, Netflix is hoping a new partnership with Samsung will help it fend off rivals. At Samsung’s Unpacked event this week, the mobile device maker announced a deal with Netflix that will bring to its Galaxy smartphones special bonus content associated with several Netflix original shows. The partnership also allows Netflix to more deeply integrate its streaming service with Samsung devices.
The latter part of the partnership involving device integration is fairly standard. In Netflix’s case, Samsung will allow users to launch Netflix content by way of its voice assistant Bixby. Netflix will also deliver recommendations to Samsung users, and will be better integrated into specific Samsung mobile features, like search and its discovery platform, Samsung Daily.
It’s not unusual for Samsung to work with tech companies to offer tighter integration and distribution for their app. For example, Samsung and Spotify announced a formal partnership in 2018, which has since resulted in consumer-facing features like Spotify’s deep integration with the new Galaxy Buds+, Galaxy S20 and Galaxy Z Flip.
The new Netflix content partnership, on the other hand, is unique.
Though Netflix didn’t go so far as to announce original series or movies only available to Samsung users, it will offer bonus content to Samsung device owners that won’t be found elsewhere. This includes behind-the-scenes footage, companion stories and other bonus content — much of it filmed by the Samsung Galaxy S20’s new camera, of course.
Initially, bonus content will be available for shows including “Narcos: Mexico,” “Sintonia,” “Elite” and “Netflix is a Joke.” Netflix says more bonus content will become available in the future.
The two companies have a decade-long relationship, which has seen them working together on joint marketing campaigns and other advertising. However, they’ve not before done a content deal like this.
“The mission of this partnership [is] to make the Netflix viewing experience on Samsung mobile the absolute best it can be,” said Netflix CMO Jackie Lee-Joe, announcing the company’s plans at Samsung’s event. “This means that even more users can enjoy our best-in-class stories across all genres through even better product integration with Galaxy mobile devices,” she noted.
The partnership comes at a critical time for Netflix. Its subscriber growth in the U.S. has gone flat, even as its international growth is booming. More importantly, perhaps, is how Netflix is coming up against a whole host of new streaming competitors with money to burn — including Disney+, Apple TV+, WarnerMedia’s HBO Max, NBCU’s Peacock and Quibi.
What’s worse is that these new streaming services already have ways to tightly integrate with mobile devices or have partnerships allowing them to distribute their service to millions.
For example, [TechCrunch parent] Verizon is offering its mobile subscribers a free year of Disney+. Jeffrey Katzenberg’s mobile streaming service Quibi is partnering with T-Mobile. NBCU owner Comcast has its own mobile network, Xfinity Mobile, and HBO Max hails from AT&T’s WarnerMedia. And Apple, for now, is just giving away Apple TV+ for free to anyone who buys a new iPhone, iPad, iPod touch, Apple TV or Mac.
That leaves Netflix without a competitive distribution strategy. And its only viable option to get similar global scale is Samsung, which had an 18.8% worldwide market share in Q4 2019 (in terms of shipments), compared with Apple’s 20%. Samsung also has solid distribution in key international markets where Netflix is seeing its strongest growth.
One argument against the Samsung partnership is that offering bonus content to Samsung users could alienate those watching Netflix on other platforms. Forbes even referred to the move as “controversial.” However, a Netflix spokesperson confirmed with TechCrunch that the special content will be published on Samsung Daily, plus Samsung.com, and Samsung’s social channels “for all to enjoy.”
They also told us that Samsung won’t have the exclusive rights to the content — in fact, Netflix has the right to publish the content to its own social media channels, if it chooses.
“We believe this significant partnership will provide millions of Samsung Mobile users across the globe the best mobile entertainment experience, and make discovering new stories around the world easier than ever,” said Lee-Joe.
Update, 2/13/20 4:30 PM ET to add that Netflix has the rights to publish the bonus content, too, making this a non-exclusive deal.
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Netflix begins streaming in AV1 on Android
Netflix announced this week that it has started to stream titles in AV1 on Android in what could significantly help the two-year-old media codec gain wider adoption.
The world’s biggest streaming giant said on Wednesday that by switching from Google’s VP9 — which it previously used on Android — to AV1, its compression efficiency has gone up by 20%.
At the moment, only “select titles” are available to stream in AV1 for subscribers “who wish to reduce their cellular data usage by enabling the ‘Save Data’ feature,” the American firm said.
Netflix hasn’t shared much about the benefit AV1 will provide to customers, but the new media codec’s acceptance nonetheless sends a message by itself.
Tech giants, including Google, have spent years developing and improving media codecs as consumption of data skyrocketed and low-cost devices began to sell like hotcakes. But they just can’t seem to settle on one media codec and universally support it.
Think of Safari and YouTube, for instance. You can’t stream YouTube videos in 4K resolution on Safari, because Apple’s browser does not support Google’s VP9. And Google does not support HEVC for 4K videos on YouTube.
AV1 is supposed to be the savior media codec that gets universal support. It’s royalty-free and it works atop of open-source dav1d decoder that has been built by VideoLAN, best known for its widely popular media player VLC and FFmpeg communities. It is sponsored by the Alliance for Open Media.
Who are the members of Alliance for Open Media? Nearly all the big guys: Apple, Google, Amazon, Netflix, Nvidia, ARM, Facebook, Microsoft, Mozilla, Samsung and Tencent, among others.
But that’s not to say there aren’t roadblocks in the adoption of AV1. Compared to HEVC — the format that AV1 is supposed to replace in popularity — encoding in AV1 was noticeably slower a year ago, as per some benchmark tests.
Adoption of AV1 by various browsers, according to analytics firm StatCounter. Safari is yet to support it.
Netflix’s announcement suggests that things have improved. The streaming giant said its goal is to support AV1 on all of its platforms. “In the spirit of making AV1 widely available, we are sponsoring an open-source effort to optimize 10-bit performance further and make these gains available to all,” it said in a blog post.
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Greylock’s Reid Hoffman and Sarah Guo to talk fundraising at Early Stage SF 2020
Early Stage SF is around the corner, on April 28 in San Francisco, and we are more than excited for this brand new event. The intimate gathering of founders, VCs, operators and tech industry experts is all about giving founders the tools they need to find success, no matter the challenge ahead of them.
Struggling to understand the legal aspects of running a company, like negotiating cap tables or hiring international talent? We’ve got breakout sessions for that. Wondering how to go about fundraising, from getting your first yes to identifying the right investors to planning the timeline for your fundraise sprint? We’ve got breakout sessions for that. Growth marketing? PR/Media? Building a tech stack? Recruiting?
We. Got. You.
Hoffman + Guo
Today, we’re very proud to announce one of our few Main Stage sessions that will be open to all attendees. Reid Hoffman and Sarah Guo will join us for a conversation around “How To Raise Your Series A.”
Reid Hoffman is a legendary entrepreneur and investor in Silicon Valley. He was an Executive VP and founding board member at PayPal before going on to co-found LinkedIn in 2003. He led the company to profitability as CEO before joining Greylock in 2009. He serves on the boards of Airbnb, Apollo Fusion, Aurora, Coda, Convoy, Entrepreneur First, Microsoft, Nauto and Xapo, among others. He’s also an accomplished author, with books like “Blitzscaling,” “The Startup of You” and “The Alliance.”
Sarah Guo has a wealth of experience in the tech world. She started her career in high school at a tech firm founded by her parents, called Casa Systems. She then joined Goldman Sachs, where she invested in growth-stage tech startups such as Zynga and Dropbox, and advised both pre-IPO companies (Workday) and publicly traded firms (Zynga, Netflix and Nvidia). She joined Greylock Partners in 2013 and led the firm’s investment in Cleo, Demisto, Sqreen and Utmost. She has a particular focus on B2B applications, as well as infrastructure, cybersecurity, collaboration tools, AI and healthcare.
The format for Hoffman and Guo’s Main Stage chat will be familiar to folks who have followed the investors. It will be an updated, in-person combination of Hoffman’s famously annotated LinkedIn Series B pitch deck that led to Greylock’s investment, and Sarah Guo’s in-depth breakdown of what she looks for in a pitch.
They’ll lay out a number of universally applicable lessons that folks seeking Series A funding can learn from, tackling each from their own unique perspectives. Hoffman has years of experience in consumer-focused companies, with a special expertise in network effects. Guo is one of the top minds when it comes to investment in enterprise software.
We’re absolutely thrilled about this conversation, and to be honest, the entire Early Stage agenda.
How it works
Here’s how it all works:
There will be about 50+ breakout sessions at the event, and attendees will have an opportunity to attend at least seven. The sessions will cover all the core topics confronting early-stage founders — up through Series A — as they build a company, from raising capital to building a team to growth. Each breakout session will be led by notables in the startup world.
Don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s app to connect founders and investors based on shared interests.
Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts that we’ve announced. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)
Grab yourself a ticket and start registering for sessions right here. Interested sponsors can hit up the team here.
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Former Google Pay execs raise $13.2M to build neo-banking platform for millennials in India
Two co-founders of Google Pay in India are building a neo-banking platform in the country — and they have already secured backing from three top VC funds.
Sujith Narayanan, a veteran payments executive who co-founded Google Pay in India (formerly known as Google Tez), said on Monday that his startup, epiFi, has raised $13.2 million in its Seed financial round led by Sequoia India and Ribbit Capital. The round valued epiFi at about $50 million.
David Velez, the founder of Brazil-based neo-banking giant Nubank, Kunal Shah, who is building his second payments startup CRED in India, and VC fund Hillhouse Capital also participated in the round.
The eight-month-old startup is working on a neo-banking platform that will focus on serving millennials in India, said Narayanan, in an interview with TechCrunch.
“When we were building Google Tez, we realized that a consumer’s financial journey extends beyond digital payments. They want insurance, lending, investment opportunities and multiple products,” he explained.
The idea, in part, is to also help users better understand how they are spending money, and guide them to make better investments and increase their savings, he said.
At this moment, it is unclear what the convergence of all of these features would look like. But Narayanan said epiFi will release an app in a few months.
Working with Narayanan on epiFi is Sumit Gwalani, who serves as the startup’s co-founder and chief product and technology officer. Gwalani previously worked as a director of product management at Google India and helped conceptualize Google Tez. In a joint interview, Gwalani said the startup currently has about two-dozen employees, some of whom have joined from Netflix, Flipkart, and PayPal.
Shailesh Lakhani, Managing Director of Sequoia Capital India, said some of the fundamental consumer banking products such as savings accounts haven’t seen true innovation in many years. “Their vision to reimagine consumer banking, by providing a modern banking product with epiFi, has the potential to bring a step function change in experience for digitally savvy consumers,” he said.
Cash dominates transactions in India today. But New Delhi’s move to invalidate most paper bills in circulation in late 2016 pushed tens of millions of Indians to explore payments app for the first time.
In recent years, scores of startups and Silicon Valley firms have stepped to help Indians pay digitally and secure a range of financial services. And all signs suggest that a significant number of people are now comfortable with mobile payments: More than 100 million users together made over 1 billion digital payments transaction in October last year — a milestone the nation has sustained in the months since.
A handful of startups are also attempting to address some of the challenges that small and medium sized businesses face. Bangalore-based Open, NiYo, and RazorPay provide a range of features such as corporate credit cards, a single dashboard to manage transactions and the ability to automate recurring payouts that traditional banks don’t currently offer. These platforms are also known as neo-bank or challenger banks or alternative banks. Interestingly, most neo-banking platforms in South Asia today serve startups and businesses — not individuals.
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Virtual product placement is coming for TV and movies and Ryff has raised cash to put it there
In a world where ad rates are declining for traditional broadcast media, the corporations responsible for making the fictions that millions devour daily need to find a new business model.
Subscription services are on the rise — with every major broadcaster launching an on-demand service — and so are ad-supported video streaming services to replace the traditional networks.
But there’s another Holy Grail of the advertising industry, long thought to be too technologically difficult to achieve, that may finally be within reach. It’s the on-demand product placement of branded goods in a video, and it’s the technology that Ryff has been developing since it was founded in early 2018.
Product placement is an increasingly big business in the U.S., raking in some $11.44 billion in 2019, according to data collected by Statista. That figure is up from $4.75 billion in 2012. The same report indicated that roughly 49% of Americans took action after seeing product placement in media.
The effectiveness of product placement has even been proven by researchers from Indiana University and Emory University. They found that “prominent product placement embedded in television programming does have a net positive impact on online conversations and web traffic for the brand.”
And while streaming services enjoy the dollars their subscribers are throwing at them, they’re also looking at ways to diversify their revenue streams. Netflix and Hulu are both expanding their product marketing divisions and analysts like those from Forrester Research predict that product placement will be a huge moneymaker for the company as traditional ad rates decline.
There are companies that handle product placement already. Startups like Branded Entertainment Network, which works with brands and producers to place real brands into contextually relevant scenes in movies and television, and Mirriad, which adds branded billboards to scenes, are working to bring more money to platforms and producers.
Ryff takes the technology to the next level, using computer vision, machine learning and rendering technologies to identify objects in a scene and replace them with branded products that can be tailored based on customer data.
“The infusion of SVOD/streaming platforms into the market, combined with platforms like Netflix that are unsuccessfully trying to grow their subscriber base will force those same platforms to explore and embrace alternative revenue streams,” said Marlon Nichols, managing general partner at MaC Venture Capital, and a new director on the Ryff board. “In addition, consumers on paid platforms do not want their content consumption interrupted by ads. As such, product placement will be an important growth channel and Ryff’s new marketplace and unique technology set it up to be the unequivocal growth market leader.”
To continue its technology development and ramp up sales and marketing, the company has raised $5 million in financing. According to Crunchbase, Ryff had previously raised $3.6 million from investors, including a subsidiary of the Mahindra Group and undisclosed investors. The new financing came from Valor Siren Ventures, MaC Venture Capital, Moneta Ventures and Vulcan Capital.
“Ryff’s offering is well-timed with the rapidly increasing demand for solutions that extend the reach of a brand’s content and drive business results,” said Uday Ghare, vice president for media and entertainment at Tech Mahindra, in a statement at the time of the company’s investment. “We believe the market will continue to see a shift of brand dollars to both content marketing and programmatic advertising as brands increase their reliance on content-centric programs and look to scale those efforts.”
Ryff’s ads can be tailored to the viewer’s taste, the platform on which video is being distributed, the geography of the broadcast, the date and time of the broadcast and a broader demographic profile, according to the company. Basically it’s like AdWords for videos.
In a blog post writing about the rationale behind his investment firm’s capital commitment to the company, Marlon Nichols of MaC Ventures wrote:
Imagine a future where an IP owner can maximize the value of its content by putting it on the Ryff marketplace, where that content will be mapped for dozens if not hundreds of product placement opportunities and be layered with restrictions that comply with creative needs. Those opportunities will be ranked and priced by their effectiveness to drive marketing goals for brands. Brands can bid on in-video placement opportunities that fit their marketing strategies and budgets. 3D brand assets can be uploaded and inserted dynamically into content right before the moment of video delivery.
Ryff’s first disclosed partnership is with the “reality” television producer Endemol Shine.
“Ryff successfully takes the concept of product placement, the only advertising format that can’t be skipped by the viewer, and delivers a scalable and adaptable advertising solution that can be applied to any content, at any time and in any market,” said Roy Taylor, founder and CEO of Ryff, in a statement. “The result benefits all — content free from annoying distractions, audience-specific brand placement and delivering a new means towards monetizing video assets.”
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Netflix earmarks $420M to fight Disney in India
Netflix continues to bet heavily on India, one of the world’s largest entertainment markets, where it competes with more than three dozen rivals, including Disney.
Reed Hastings, the chief executive of Netflix, said on Friday that the company is on track to spend 30 billion Indian rupees, or $420.5 million, on producing and licensing content in India this year and next.
“This year and next year, we plan to spend about Rs 3,000 crores developing and licensing content and you will start to see a lot of stuff hit the screens,” he said at a conference in New Delhi.
The rare revelation today has quickly become the talk of the town. “This is significantly higher than what we have invested in content over the past years,” an executive at one of the top five rival services told TechCrunch. Another industry source said that no streaming service in India is spending anything close to that figure on just content.
While it remains unclear exactly how much capital other streaming services are pouring into content, a recent KPMG report estimated that Hotstar was spending about $17 million on producing seven original shows this year, while Eros Now had pumped about $50 million into its India business to create 100 new original shows. (The report does not talk about licensing content expenses.)
Netflix, which entered India as part of its global expansion to more than 200 nations and territories in early 2016, has so far produced more than two dozen original shows and movies in the country and inked partnerships with a number of local studios, including actor Shah Rukh Khan’s Red Chillies Entertainment.
Hastings said several of the shows the company has produced in India, including A-listed cast thriller “Sacred Games” and animated show “Mightly Little Bheem,” have “traveled around the world.” More than 27 million households outside of India, said Hastings, have started to watch “Mighty Little Bheem,” a show aimed at children.
Netflix, which is expected to spend about $15 billion on content globally next year, has never shared the number of subscribers it has in India. (It has over 158 million subscribers globally.) But the company’s financials in the country, where it employs about 100 people, have improved in recent quarters. In the financial year that ended in March, the company posted revenue of $65 million and profit of about $720,000 for its India business.
The big, big, big Indian market
India has emerged as one of the last great growth markets for global technology and entertainment firms. About half of the nation’s 1.3 billion population is now online and the country’s on-demand video market is expected to grow to $5 billion in the next four years, according to Boston Consulting Group.
But the propensity — or the capacity — of most of these internet users to pay for a subscription service remains significantly low. Most services operating in India today generate the majority of their revenue from ads. And others, which rely on a recurring model, are making major changes to their offerings in the nation.
To broaden its reach in the nation, Netflix earlier this year introduced a new monthly price tier — $2.8 — that allows users in India to watch the streaming service in standard quality on a mobile device. (The company has since expanded this offering to Malaysia.)
Netflix competes with more than three dozen on-demand video streaming services in India. Chief among its competitors in the nation is Disney’s Hotstar. Hotstar’s content includes live TV channels, streaming of sports events and thousands of movies and shows, many syndicated from global networks and studios such as HBO and Showtime.
The ad-supported service offers more than 80% of its catalog at no charge to users and charges 999 Indian rupees ($14) a year for its premium tier.
Among the licensed content that Hotstar — or its operator Star India — owns in the country includes rights to stream a number of cricket tournaments. Cricket is incredibly popular in India and has helped Hotstar set global streaming records.
In May this year, Hotstar reported that more than 25 million people simultaneously watched a cricket match on the platform — a global record. The service, at the time, had more than 300 million monthly active users.
Commenting on the competition, Hastings said the next five to 10 years is going to be “the golden age of television” as “unbelievable and unrivaled levels of investment” go into producing content. “They are all investing here in India. We are seeing more content made than ever before. It’s a great export,” he added.
Disney+, the recently launched streaming service from the global content conglomerate, is set to be available in India and Southeast Asian markets next year through Hotstar, TechCrunch reported last month.
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