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Daily Crunch: Spotify announces a high-end subscription

Published February 22, 2021

Spotify makes a bunch of announcements, Netflix introduces an intriguing new feature and Clubhouse faces security concerns. This is your Daily Crunch for February 22, 2021.

The big story: Spotify announces a high-end subscription

Spotify listeners will get the chance to pay for higher-quality audio when the streaming service launches a new tier that it says will offer “CD-quality, lossless audio.” The pricing and launch date have yet to be announced, but Spotify HiFi will, unsurprisingly, cost more than Spotify Premium and be marketed as a Premium add-on.

That was probably the biggest news that Spotify made at today’s “Stream On” event, where it also announced an audience development tool for artists, an audio ad marketplace, continued international expansion, a podcast co-hosted by Barack Obama and Bruce Springsteen and a test of paid podcast subscriptions.

The tech giants

Netflix launches ‘Downloads for You,’ a new feature that automatically downloads content you’ll like — After turning on the feature for the first time, you’ll be able to select the amount of storage space you want to dedicate for these recommended downloads.

Twitter explored buying India’s ShareChat and turning Moj into a global TikTok rival — According to sources, Twitter offered to buy the five-year-old Indian startup for $1.1 billion.

Startups, funding and venture capital

EquityBee raises $20M to help startup employees actually afford their stock options — EquityBee CEO Oren Barzilai says his company’s mission is to help educate startup employees on the meaning of their stock options, as well as provide them with funds to be able to purchase those options.

Splice gets $55M for its software bringing beats from bedrooms to bandstands — Splice gained a following for its ability to help electronic dance music creators save, share, collaborate and remix music.

A race to reverse-engineer Clubhouse raises security concerns — The fact that it takes programmers little effort to reverse-engineer and fork Clubhouse is sounding an alarm about the app’s security.

Advice and analysis from Extra Crunch

If Coinbase is worth $100B, what’s a fair valuation for Stripe? — We dig into Coinbase’s 2019 and 2020 financial performance.

Bain’s Matt Harris and Justworks’ Isaac Oates to talk through the Series B deal that brought them together — All the way back in 2016, Bain Capital Ventures caught a whiff of Justworks’ potential for success.

Winning enterprise sales teams know how to persuade the Chief Objection Officer — Many enterprise software startups have at some point faced the invisible wall.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Watch Perseverance’s harrowing descent to the surface of Mars — NASA has released video taken by the Perseverance landing module and rover showing the famous “seven minutes of terror.”

Calling Oslo VCs: Be featured in The Great TechCrunch Survey of European VC — TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.

Original Content podcast: Apple’s ‘Ted Lasso’ is all about relentless optimism — This will be our last episode on TechCrunch, as Original Content goes independent!

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Spotify to test paid podcast subscriptions this spring via new Anchor feature

Published February 22, 2021

During its livestreamed event today, Spotify officially confirmed its plans to launch paid podcast subscriptions on its platform. As a first step, the company will this spring begin beta testing a new feature in its Anchor podcast creation tool that will allow U.S. creators to publish paid podcast content aimed at their “most dedicated fans.” It also opened up signups for this and other new features, starting today.

Spotify had hinted at its plans for paid podcast content during its fourth-quarter earnings call earlier this month, when it said it was exploring ideas like paid podcast subscriptions and à la carte payments. But it didn’t detail when these new options would go live or how they would work.

At its online event today, Spotify more formally announced its plans to enter the market of paid podcasts, initially with a new service that would allow Anchor creators the ability to offer paid podcast subscriptions supported by their listeners.

This sort of idea is not new, to be clear. Already, some podcasters offer paid access to bonus material — for example, through a service like Stitcher Premium, which promises both an ad-free experience and bonus episodes. Some creators may even independently offer paid feeds through their own platforms.

Spotify plans for podcast subscriptions, à la carte payments

But until now, a similar option was not available to Spotify creators.

Anchor co-founder Michael Mignano said the company believes paid bonus material can work well as a means of podcast monetization, in addition to ads.

Image Credits: Spotify

“We have found that, through our research, it seems to work especially well for creators who have really engaged and dedicated audiences — regardless of the audience size,” he told TechCrunch in an interview following Spotify’s event. “We’ve also found that podcast listeners do tend to be open to financially supporting the shows they love,” he added.

The company was hesitant to detail some of the specifics of how paid subscriptions would work at launch, but did say that the model would involve a revenue share between creators and Anchor, where creators keep the majority of the earnings. Anchor will also allow creators to determine what price to charge their listeners for the paid experience and what that experience would include — like bonus episodes or interviews, or even ad-free content, if they prefer.

It will then use its understanding of what creators actually do with paid subscriptions to inform its product launch and its “best practices” recommendations in the future.

We also understand the offering will be limited to those who use Anchor to record and publish across podcast platforms. However, it will more immediately benefit creators with a strong Spotify presence and a loyal listenership.

But Mignano points out that creators may be able to grow their paid subscriber base thanks to Spotify’s tools for podcast discovery.

“The problem is the system for doing this type of paid subscription so far in podcasts has been really disjointed,” he explained. “It hasn’t been a really seamless experience for the listener, and it hasn’t really been a great experience for the creator. We feel like that’s really held this model back and hindered creators’ reach and ability to gain paid subscribers,” he said.

Image Credits: Spotify/Anchor

In other words, users may be open to the idea of paid bonus material, but they don’t necessarily want to switch between apps to gain access, nor do they want to figure out how to get paid RSS feeds into some third-party podcast listening app.

Spotify, meanwhile, will try to make discovery easier. It will highlight the paid content alongside the free material on the podcast’s main page, for example. Plus, in the same way that Spotify today helps users discover new podcasts they may like to try, it will also point to paid subscription-based podcasts in the future as the new model rolls out further.

Anchor says it will initially open up the beta test in the U.S. to a small number of creators, but aims to expand access to more creators as soon as reasonably possible. The test, for the time being, will only focus on paid subscriptions, but Mignano told us the company may explore the à la carte model in the future.

Paid podcasts were only one of several new features Anchor announced today at the Spotify event.

The company also announced the launch of a WordPress partnership that makes it easier for bloggers to turn their posts into podcasts, either by reading the blog posts themselves or leveraging third-party text-to-speech technology Anchor provides.

Anchor will also expand beta testing of video podcasts, which so far have been tested by only a handful of creators, including Higher Learning from The Ringer.

And it will begin beta testing new, interactive features, like polls and Q&A, with a small number of creators in the months ahead.

These features could potentially overlap with paid subscriptions. For example, some podcast creators may choose to make their videos a paid feature, or perhaps other interactive features. It remains to be seen how they’re put to use.

But more broadly, features like polls and Q&As could help Spotify better differentiate an interactive podcast from a live audio program, like those popularized by the buzzy new app Clubhouse. The advantage of the latter is that it allows for audience participation in the “show,” rather than being a one-way street where hosts control the experience. But on the flip side, Clubhouse rooms can also have folks who drone on and on, or they can become boring, when not carefully managed.

Anchor says it doesn’t intend to charge creators for access to its tools, beyond taking a rev share on subscriptions.

“I think our vision with Anchor and Spotify has always been to really empower creators. In the Anchor suite of tools, we’ve never charged creators for any features because we believe that charging creators can often represent friction that stands in the way of them trying to actually make something and getting it out into the world,” Mignano said. “We want to enable creators to do whatever they want, as far as expressing themselves through these new tools,” he added.

Report: Social audio app Clubhouse has topped 8 million global downloads

Spotify confirms it’s (finally) testing a live lyrics feature in the US

Published February 9, 2021

Spotify this morning confirmed it’s testing a new, synced lyrics feature in the U.S. market, following a report from Engadget. Though the streaming music service today offers live lyrics in a number of markets — 27, in fact, including its recent launch in South Korea — it has not offered lyrics in the U.S. for many years. Instead, Spotify here runs the “Behind the Lyrics” feature provided in partnership with Genius, which offers a combination of lyrics and trivia about the song being played.

Reached for comment, Spotify said the new lyrics feature rolled out as a test for some users in the U.S. starting today.

“We can confirm we’re currently testing our lyrics feature to a select number of users in the U.S.,” a spokesperson told TechCrunch. “At Spotify, we routinely conduct a number of tests in an effort to improve our user experience. Some of those tests end up paving the way for our broader user experience and others serve only as an important learning.”

The company declined to share additional details about its plans, but did note that its U.S. partner on the new lyrics feature is Musixmatch — a service that already powers Spotify’s lyrics feature in various non-U.S. markets.

This is not the first time Spotify has run a lyrics feature in the U.S., to be clear. The streaming service had originally worked with Musixmatch from 2011 through 2016, before ending that relationship to instead partner with Genius. But despite ongoing user demand for lyrics’ return, Spotify never brought the feature back to the U.S.

In more recent years, however, Spotify rekindled its relationship with Musixmatch. Last year, it announced the launch of real-time lyrics in, then, 26 worldwide markets across Southeast Asia, India and Latin America. This had been the first time lyrics were offered in 22 of these 26 markets, as only Thailand, Vietnam, Indonesia and Mexico had some form of prior lyrics support via other providers.

Spotify’s ongoing lack of support for lyrics in the U.S. has given its streaming music competitors an advantage. Amazon Music, for example, allowed users to view lyrics as songs played and tied the feature to its Alexa voice platform, so consumers could ask Alexa to search for songs by lyrics. Meanwhile, the updated version of Apple Music that rolled out with iOS 12 in 2018 included a way to search by lyrics, instead of just artist, album or song title. It later added live, synced lyrics with the launch of iOS 13. Siri can also respond to commands that involve lyrics.

Musixmatch additionally confirmed it has partnered with Spotify on the new U.S. test.

“Musixmatch is growing at a fast pace thanks to [the] continued investment we’ve made [over] a decade. We’re focused now on bringing more data to continue enriching the audio experience globally,” Musixmatch CEO and founder Max Ciociola told TechCrunch.

Because the lyrics feature is only a test, you may not see it yourself in the Spotify app, due to its limited availability. Spotify has not said if or when the test may be expanded.

In a significant expansion, Spotify to launch real-time lyrics in 26 markets

This Week in Apps: TikTok viral hit breaks Spotify records, inauguration boosts news app installs, judge rules against Parler

Published January 23, 2021

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, we’re looking into how President Biden’s inauguration impacted news apps, the latest in the Parler lawsuit, and how TikTok’s app continues to shape culture, among other things.

Weekly News

Platforms: Apple

Apple stops signing iOS 12.5, making iOS 12.5.1 the only versions of iOS available to older devices.
A report claims Apple’s iOS 15 update will cut support for devices with an A9 chip, like the iPhone 6, iPhone 6s Plus and the original iPhone SE.
New analysis estimates Apple’s upcoming iOS privacy changes will cause a roughly 7% revenue hit for Facebook in Q2. The revenue hit will continue in following quarters and will be “material.”

Platforms: Google

Google adds “trending” icons to the Play Store. New arrow icons appeared in the Top Charts tab, which indicate whether an app’s downloads are trending up or down, in terms of popularity. This could provide an early signal about those that may still be rising in the charts or beginning to fall out of favor, despite their current high position.
Google appears to be working on a Restricted Networking mode for Android 12. The mode, discovered by XDA Developers digging in the Android Open Source Project, would disable network access for all third-party apps.

Gaming

Goama (or Go Games) introduced a way for developers to integrate social games into their apps, which was showcased at CES. The company focuses on Asia and Latin America and has more than 15 partners, including GCash and Rappi, for digital payments and communications.

Goama lets developers integrate a social gaming platform into their apps

Fortnite maker Epic Games is getting into movies. The animated feature film Gilgamesh will use Epic’s Unreal Engine technology to tell the story of the king-turned-deity. The movie is not an in-house project, but rather is financed through Epic’s $100M MegaGrants fund.

Augmented Reality

Patents around Apple’s AR and VR efforts describe how a system could be identified in a way that’s similar to FaceID, then either permitted or denied the ability to change their appearance in the game.
Pinterest launches AR try-on for eyeshadow in its mobile app using Lens technology and ModiFace data. The app already offered AR try-on for lipsticks.

Pinterest launches an AR-powered try-on experience for eyeshadow

Entertainment

The CW app became the No. 1 app on the App Store this week, topping TikTok, Instagram and YouTube, thanks to CW’s season premieres of Batwoman, All American, Riverdale and Nancy Drew.
Users of podcasting app Anchor, owned by Spotify, say the app isn’t bringing them any sponsorship opportunities, as promised, beyond those from Spotify and Anchor itself.
YouTube launches hashtag landing pages on the web and in its mobile app. The pages are accessible when you click hashtags on YouTube, not via search, and weirdly rank the “best” videos through some inscrutable algorithm.

YouTube launches hashtag landing pages to all users

Apple’s Podcasts app adds a new editorial feature, Apple Podcasts Spotlight, meant to increase podcast listening by showcasing the best podcasts as selected by Apple editors.

E-commerce

WeChat facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs” in 2020. The figure is more than double that of 2019.

WeChat advances e-commerce goals with $250B in transactions

Fintech

Douyin, the Chinese version of TikTok, launched an e-wallet, Douyin Pay. The wallet will supplement the existing payment options, Alipay and WeChat Pay, and will help to support the Douyin app’s growing e-commerce business.
Neobank Monzo founder Tom Blomfield left the startup, saying he struggled during the pandemic. “I think [for] a lot of people in the world…going through a pandemic, going through lockdown and the isolation involved in that has an impact on people’s mental health,” he told TechCrunch.

Monzo founder Tom Blomfield is departing the challenger bank and says he’s ‘struggled’ during the pandemic

New estimates indicate about 50% of the iPhone user base (or 507 million users) now use Apple Pay.
Samsung’s newest phones drop support for MST, which emulates a mag stripe at terminals that don’t support NFC.

Social

Indian messaging app, StickerChat, owned by Hike, is shutting down. Founder Kavin Bharti Mittal said India will never have a homegrown messenger unless it bars Western companies from its market. Hike pivoted this month to virtual social apps, Vibe and Rush, which it believes have more potential.
Instagram head Adam Mosseri, in a Verge podcast, said he’s not happy with Reels so far, and how he feels most people probably don’t understand the difference between Instagram video and IGTV. He says the social network needs to simplify and consolidate ideas.
Facebook and Instagram improve their accessibility features. The apps’ AI-generated image captions now offer far more details about who or what is in the photos, thanks to improvements in image recognition systems.
TikTok launches a Q&A feature that lets creators respond to fan questions using text or videos. The feature, rolled out to select creators with more than 10,000 followers, makes it easier to see all the questions in one place.

TikTok’s new Q&A feature lets creators respond to fan questions using text or video

Health & Fitness

Health and fitness app spending jumped 70% last year in Europe to record $544 million, a Sensor Tower report says. The year-over-year increase is far larger than 2019, when growth was just 37.2%. COVID-19 played a large role in this shift as people turned to fitness apps instead of gyms to stay in shape.

Government & Policy

Biden’s inauguration boosted installs of U.S. news apps up to 170%, Sensor Tower reported. CNN was the biggest mover, climbing 530 positions to reach No. 41 on the App Store, and up 170% in terms of downloads. News Break was the second highest, climbing 13 positions to No. 65. Right-wing outlet Newsmax climbed 43 spots to reach No. 108. In 2020, the top news apps were: News Break (23.7 million installs); SmartNews (9 million); CNN (5 million); and Fox News (4 million). This month, however, News Break saw 1.2 million installs, followed by Newsmax with about 863,000 installs, the report said.
Ireland’s Data Protection Commission (DPC) sent a draft decision to fellow EU Data Protection Authorities over the WhatsApp-Facebook data sharing policy. This means a decision on the matter is coming closer to a resolution in terms of what standards of transparency is required by WhatsApp.

WhatsApp-Facebook data-sharing transparency under review by EU DPAs after Ireland sends draft decision

German app developer Florian Mueller of FOSS Patents filed a complaint with the EU, U.S. DOJ and other antitrust watchdogs around the world over Apple and Google’s rejection of his COVID-related mobile game. Both stores had policies to only approve official COVID-19 apps from health authorities. Mueller renamed the game Viral Days and removed references to the novel coronavirus to get the app approved. However, he still feels the stores’ rules are holding back innovation.

Productivity

Basecamp’s Hey, which famously fought back against Apple’s App Store rules over IAP last year, has launched a business-focused platform, Hey for Work, expected to be public in Q1. The app has more App Store ratings than rival Superhuman, a report found. Currently, Hey has a 4.7-star rating across 3.3K reviews; Superhuman has 3.9 rating across only 274 reviews.

Trends

Baby boomers are increasingly using apps. Baby boomers/Gen Xers in the U.S. spent 30% more time year-over-year in their most used apps, App Annie reports. That’s a larger increase than either Millennials or Gen Z, at 18% and 16%, respectively.

Funding and M&A

Curtsy, a clothing resale app for Gen Z women, raised an $11 million Series A led by Index Ventures. The app tackles some of the problems with online resale by sending shipping supplies and labels to sellers, and by making the marketplace accessible to new and casual sellers.
Storytelling platform Wattpad acquired by South Korea’s Naver for $600 million. The reading apps whose stories have turned into book and Netflix hits will be incorporated into Naver’s publishing platform Webtoon.

Wattpad, the storytelling platform, is selling to South Korea’s Naver for $600 million

On-demand delivery app Glovo partnered with Swiss-based real estate firm, Stoneweg, which is investing €100 million in building and refurbishing real estate in key markets to build out Glovo’s network of “dark stores.”
Pocket Casts app is up for sale. The podcast app was acquired nearly three years ago by a public radio consortium of top podcast producers (NPR, WNYC Studios, WBEZ Chicago and This American Life). The owners have now agreed to sell the app, which posted a net loss in 2020. (NPR’s share of the loss was over $800,000.)
Travel app Maps.me raised $50 million in a round led by Alameda Research. The funding will go toward the launch of a multi-currency wallet. Cryptocurrency lender Genesis Capital and institutional cryptocurrency firm CMS Holdings also participated in the round, Coindesk reported.
Bangalore-based hyperlocal delivery app Dunzo raised $40 million in a round that included investment from Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada and Alteria.
London-based food delivery app Deliveroo raised $180 million in new funding from existing investors, led by Durable Capital Partners and Fidelity Management, valuing the business at more than $7 billion.
Dating Group acquired Swiss startup Once, a dating app that sends one match per day, for $18 million.

‘Slow dating’ app Once is acquired by Dating Group for $18M as it seeks to expand its portfolio

Downloads

Bodyguard

Image Credits: Bodyguard

A French content moderation app called Bodyguard, detailed here by TechCrunch, has brought its service to the English-speaking market. The app allows you to choose the level of content moderation you want to see on top social networks, like Twitter, YouTube, Instagram and Twitch. You can choose to hide toxic content across a range of categories, like insults, body shaming, moral harassment, sexual harassment, racism and homophobia and indicate whether the content is a low or high priority to block.

Bodyguard is a mobile app that hides toxic content on social platforms

Beeper

Image Credits: Beeper

Pebble’s founder and current YC Partner Eric Migicovsky has launched a new app, Beeper, that aims to centralize in one interface 15 different chat apps, including iMessage. The app relies on an open-source federated, encrypted messaging protocol called Matrix that uses “bridges” to connect to the various networks to move the messages. However, iMessage support is more wonky, as the company actually ships you an old iPhone to make the connection to the network. But this system allows you to access Beeper on non-Apple devices, the company says. The app is slowly onboarding new users due to initial demand. The app works across MacOS, Windows, Linux‍, iOS and Android and charges $10/mo for the service.

Pebble founder launches Beeper, a universal chat app that works with iMessage and others

GetAccept raises $20M Series B, led by Bessemer, to expand its sales platform for SMBs

Published December 9, 2020

Last year all-in-one digital sales platform GetAccept raised a $7 million Series A funding round. The platform, which wraps in video, live chat, proposal design, document tracking and e-signatures, has now raised $20 million in Series B funding, led by Bessemer Venture Partners, as the company expands its platform aimed at SMBs. The funding comes as the pandemic means SMBs have largely shifted to remote, and so has their digital sales process.

Last year the funding was led by DN Capital, with participation from BootstrapLabs, Y Combinator and a number of Spotify’s early investors. This round brings GetAccept’s total financing raised to $30 million. GetAccept competes with several separate tools, including well-financed solutions like DocSend, PandaDoc, Showpad, Highspot, DocuSign and Adobe Sign.

Founded in 2015 by Swedish entrepreneurs and Y Combinator alumni Samir Smajic, Mathias Thulin, Jonas Blanck and Carl Carell, GetAccept has expanded from 30 to now 100+ employees over the last 18 months, with offices across the U.S. and EU countries.

Smajic said: “We believe in the power of relationships and want to bring personalized and engaging interactions back to the online sales process. We saw this digital sales shift and change in behavior back in 2015, which is why we founded GetAccept in the first place. The COVID-19 pandemic has accelerated and forced B2B buyers and sellers to go digital, which has placed digital sales models high up on the company agendas. We aim to be the online place where every B2B business happens, in a personal way.”

Alex Ferrara, partner at Bessemer Venture Partners commented: “Bessemer Venture Partners is thrilled to back the ambitious GetAccept team and their vision to empower millions of SMBs to streamline and digitize their end-to-end sales processes. They have built a world-class product, prepared for business transactions that continue to shift permanently online at a rapid pace. We look forward to partnering with GetAccept on the journey ahead.”

GetAccept’s workflow and e-signature platform for sales secures $7M Series A funding

Equity Monday: Vaccine news scrambles the stock market, shakes up startups

Published November 9, 2020

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and don’t forget to check out last Friday’s episode that we wound up titling “Fortnite is actually a SaaS company.”

It makes sense in context, I promise.

Anyway, here’s what’s on today’s show:

Joe Biden was elected president and the stock market is not mad about divided government.
Positive vaccine news sent many stocks sharply higher this morning, but not all. Some pandemic-favored tech companies instantly dropped double-digit percentage points of value.
Esign raised $151 million, showing strength in the Chinese startup market, and the e-signature space.
And this neat Series B for Cellwize caught our attention this morning.
Finally, a warning. The stuff that is changing lately may begin to change a bit less. We’ve lived in the pandemic economy long enough now that it’s hard to recall what life was like before. But, we’d best start remembering, as there’s a lot that is going to change in the next few quarters.

This has been a wild day to start the week, but with good news.

I suppose a vaccine was always going to eventually make it to this step, but, that said, the United States is seeing record COVID-19 cases today. So mask up and let’s get as many of us across the line as we can.

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Fortnite is actually a SaaS company

Facebook steps into cloud gaming — and another feud with Apple

Published October 26, 2020

Facebook will soon be the latest tech giant to enter the world of cloud gaming. Their approach is different than what Microsoft or Google has built, but Facebook highlights a shared central challenge: dealing with Apple.

Facebook is not building a console gaming competitor to compete with Stadia or xCloud; instead, the focus is wholly on mobile games. Why cloud stream mobile games that your device is already capable of running locally? Facebook is aiming to get users into games more quickly and put less friction between a user seeing an advertisement for a game and actually playing it themselves. Users can quickly tap into the title without downloading anything, and if they eventually opt to download the title from a mobile app store, they’ll be able to pick up where they left off.

Facebook’s service will launch on the desktop web and Android, but not iOS due to what Facebook frames as usability restrictions outlined in Apple’s App Store terms and conditions.

With the new platform, users will be able to start playing mobile games directly from Facebook ads. Image via Facebook.

While Apple has suffered an onslaught of criticism in 2020 from developers of major apps like Spotify, Tinder and Fortnite for how much money they take as a cut from revenues of apps downloaded from the App Store, the plights of companies aiming to build cloud gaming platforms have been more nuanced and are tied to how those platforms are fundamentally allowed to operate on Apple devices.

Apple was initially slow to provide a path forward for cloud gaming apps from Google and Microsoft, which had previously been outlawed on the App Store. The iPhone maker recently updated its policies to allow these apps to exist, but in a more convoluted capacity than the platform makers had hoped, forcing them to first send users to the App Store before being able to cloud stream a gaming title on their platform.

Apple lays out its messy vision for how xCloud and Stadia will work with its App Store rules

For a user downloading a lengthy single-player console epic, the short pitstop is an inconvenience, but long-time Facebook gaming exec Jason Rubin says that the stipulations are a non-starter for what Facebook’s platform envisions, a way to start playing mobile games immediately without downloading anything.

“It’s a sequence of hurdles that altogether make a bad consumer experience,” Rubin tells TechCrunch.

Apple tells TechCrunch that they have continued to engage with Facebook on bringing its gaming efforts under its guidelines and that platforms can reach iOS by either submitting each individual game to the App Store for review or operating their service on Safari.

In terms of building the new platform onto the mobile web, Rubin says that without being able to point users of their iOS app to browser-based experiences, as current rules forbid, Facebook doesn’t see pushing its billions of users to accessing the service primarily from a browser as a reasonable alternative. In a Zoom call, Rubin demonstrates how this could operate on iOS, with users tapping an advertisement inside the app and being redirected to a game experience in mobile Safari.

“But if I click on that, I can’t go to the web. Apple says, ‘No, no, no, no, no, you can’t do that,’ ” Rubin tells us. “Apple may say that it’s a free and open web, but what you can actually build on that web is dictated by what they decide to put in their core functionality.”

Facebook VP of Play Jason Rubin. Image via Facebook.

Rubin, who co-founded the game development studio Naughty Dog in 1994 before it was acquired by Sony in 2001, has been at Facebook since he joined Oculus months after its 2014 acquisition was announced. Rubin had previously been tasked with managing the games ecosystem for its virtual reality headsets; this year he was put in charge of the company’s gaming initiatives across their core family of apps as the company’s VP of Play.

Rubin, well familiar with game developer/platform skirmishes, was quick to distinguish the bone Facebook had to pick with Apple and complaints from those like Epic Games, which sued Apple this summer.

“I do want to put a pin in the fact that we’re giving Google 30% [on Android]. The Apple issue is not about money,” Rubin tells TechCrunch. “We can talk about whether or not it’s fair that Google takes that 30%. But we would be willing to give Apple the 30% right now, if they would just let consumers have the opportunity to do what we’re offering here.”

Epic Games launches a campaign (and lawsuit) against Apple

Facebook is notably also taking a 30% cut of transaction within these games, even as Facebook’s executive team has taken its own shots at Apple’s steep revenue fee in the past, most recently criticizing how Apple’s App Store model was hurting small businesses during the pandemic. This saga eventually led to Apple announcing that it would withhold its cut through the end of the year for ticket sales of small businesses hosting online events.

Apple’s reticence to allow major gaming platforms a path toward independently serving up games to consumers underscores the significant portion of App Store revenues that could be eliminated by a consumer shift toward these cloud platforms. Apple earned around $50 billion from the App Store last year, CNBC estimates, and gaming has long been their most profitable vertical.

Though Facebook is framing this as an uphill battle against a major platform for the good of the gamer, this is hardly a battle between two underdogs. Facebook pulled in nearly $70 billion in ad revenues last year, and improving their offerings for mobile game studios could be a meaningful step toward increasing that number, something Apple’s App Store rules threaten.

For the time being, Facebook is keeping this launch pretty conservative. There are just 5-10 titles that are going to be available at launch, Rubin says. Facebook is rolling out access to the new service, which is free, this week across a handful of states in America, including California, Texas, Massachusetts, New York, New Jersey, Connecticut, Rhode Island, Delaware, Pennsylvania, Maryland, Washington, D.C., Virginia and West Virginia. The hodge-podge nature of the geographic rollout is owed to the technical limitations of cloud-gaming — people have to be close to data centers where the service has rolled out in order to have a usable experience. Facebook is aiming to scale to the rest of the U.S. in the coming months, they say.

Apple goes to war with the gaming industry

Stitcher’s podcasts arrive on Pandora with acquisition’s completion

Published October 19, 2020

SiriusXM today completed its previously announced $325 million acquisition of podcast platform Stitcher from E.W. Scripps, and has now launched Stitcher’s podcasts on Pandora across all tiers of the streaming service. The deal brings top Stitcher titles to Pandora, including “Freakonomics Radio,” “My Favorite Murder,” “SuperSoul Conversations from the Oprah Winfrey Network,” “Office Ladies,” “Conan O’Brien Needs a Friend,” “Literally! with Rob Lowe,” “LeVar Burton Reads” and “WTF with Marc Maron,” among others.

On Pandora, the podcasts will be indexed using the company’s proprietary Podcast Genome Project technology. This system leverages automated technology — like natural language processing, collaborative filtering and other machine learning approaches — then combines that with human curation to make personalized recommendations to podcast listeners on Pandora’s app.

The podcasts will also continue to be available in the Stitcher app in North America, the company says.

SiriusXM buys Stitcher for $325 million, steps up its march into podcasts

The Stitcher acquisition brought with it several key assets, including its own mobile listening app, which includes a premium tier of exclusives, and the Midroll Media network for podcast advertising. Stitcher also creates its own original programs and runs multiple content networks, via Earwolf.

That means SirusXM gained thousands of top podcasts with the deal’s closure. The company also now claims it has the “largest addressable audience in North America” across all categories of digital audio, including music, sports, talk and podcasts thanks to the combination of satellite radio service SiriusXM, streaming app Pandora and now Stitcher.

The company believes the deal will help it attract more creators to its platform, thanks to the enhanced production, marketing and distribution capabilities it offers, following the deal’s close. Advertisers, meanwhile, will be able to more precisely target podcasts for better ad efficiency, and will gain access to improved measurements, says SiriusXM.

In terms of Stitcher’s execs, CEO Erik Diehn will now report to Scott Greenstein, president and chief content officer of SiriusXM, who also oversees content at Pandora. Stitcher’s chief revenue officer, Sarah van Mosel, will report directly to John Trimble, chief advertising revenue officer of SiriusXM.

“We are deepening our position in podcasting, the fastest-growing sector in digital audio, and with completion of this transaction, our vision is taking shape,” said SiriusXM CEO Jim Meyer, in a statement about the deal’s completion. “With Stitcher and its varied assets, we are now a one-stop shop able to meet the needs of podcast creators, publishers and advertisers, while also providing listeners with access to great shows, series and programming.”

Despite the coronavirus pandemic, which disrupted many consumer trends and accelerated others, podcasting still remains one of the fast-growing digital audio industries. Podcast downloads returned to pre-COVID levels this summer, and Spotify reported that podcast consumption more than doubled in Q2, and nearly a quarter (21%) of its active users now listen to podcasts.

Stitcher was not SiriusXM’s first acquisition focused on podcasts or ad technologies. It also bought podcast management platform Simplecast this June, and before that, it acquired AdsWizz for $66.3 million to power Pandora’s advertising efforts.

SiriusXM acquires Simplecast to double down on podcasts with distribution and analytics tools

Daily Crunch: Amazon unveils its own game-streaming platform

Published September 24, 2020

Amazon announces a new game service and plenty of hardware upgrades, tech companies team up against app stores and United Airlines tests a program for rapid COVID-19 testing. This is your Daily Crunch for September 24, 2020.

The big story: Amazon unveils its own game-streaming platform

Amazon’s competitor to Google Stadia and Microsoft xCloud is called Luna, and it’s available starting today at an early access price of $5.99 per month. Subscribers will be able to play games across PC, Mac and iOS, with more than 50 games in the library.

The company made the announcement at a virtual press event, where it also revealed a redesigned Echo line (with spherical speakers and swiveling screens), the latest Ring security camera and a new, lower-cost Fire TV Stick Lite.

You can also check out our full roundup of Amazon’s announcements.

The tech giants

App makers band together to fight for App Store changes with new ‘Coalition for App Fairness’ — Thirteen app publishers, including Epic Games, Deezer, Basecamp, Tile, Spotify and others, launched a coalition formalizing their efforts to force app store providers to change their policies or face regulation.

LinkedIn launches Stories, plus Zoom, BlueJeans and Teams video integrations as part of wider redesign — LinkedIn has built its business around recruitment, so this redesign pushes engagement in other ways as it waits for the job economy to pick up.

Facebook gives more details about its efforts against hate speech before Myanmar’s general election — This includes adding Burmese language warning screens to flag information rated false by third-party fact-checkers.

Startups, funding and venture capital

Why isn’t Robinhood a verb yet? — The latest episode of Equity discusses a giant funding round for Robinhood.

Twitter-backed Indian social network ShareChat raises $40 million — Following TikTok’s ban in India, scores of startups have launched short-video apps, but ShareChat has clearly established dominance.

Spotify CEO Daniel Ek pledges $1Bn of his wealth to back deeptech startups from Europe — Ek pointed to machine learning, biotechnology, materials sciences and energy as the sectors he’d like to invest in.

Advice and analysis from Extra Crunch

3 founders on why they pursued alternative startup ownership structures — At Disrupt, we heard about alternative approaches to ensuring that VCs and early founders aren’t the only ones who benefit from startup success.

Coinbase UX teardown: 5 fails and how to fix them — Many of these lessons, including the need to avoid the “Get Started” trap, can be applied to other digital products.

As tech stocks dip, is insurtech startup Root targeting an IPO? — Alex Wilhelm writes that Root’s debut could clarify Lemonade’s IPO and valuation.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

United Airlines is making COVID-19 tests available to passengers, powered in part by Color — United is embarking on a new pilot project to see if easy access to COVID-19 testing immediately prior to a flight can help ease freedom of mobility.

Announcing the final agenda for TC Sessions: Mobility 2020 — TechCrunch reporters and editors will interview some of the top leaders in transportation.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Caroline Brochado and Sophia Bendz on the boom in Europe’s early and growth-stage startups

Published September 17, 2020

As part of Disrupt 2020 we wanted to look at the contrasting positions of both early and later-stage investing in Europe. Who better to unpack this subject than two highly experienced operators in these fields?

After a career at Spotify and then as a VC at Atomico, Sophia Bendz has rapidly gained a reputation in Europe as a keen early-stage investor. She recently left Atomico to pursue her early and seed-stage passion with Cherry Ventures. Bendz is a prolific angel investor, with a total of more than 44 deals in the last nine years. Her angel investments include AidenAI, Tictail, Joints Academy, Omnius, LifeX, Eastnine, Manual, Headvig, Simple Feast and Sana Labs. She is known for being a champion of the femtech space, and her angel investments in that space include Clue, Grace Health, Daye, O School and Boost Thyroid.

Carolina Brochado, the former Atomico partner and most recently a partner at SoftBank Vision Fund’s London office, recently joined EQT Ventures to help launch EQT’s Growth fund, which is positioned between ventures and private equity. Brochado led investments in a number of promising companies at Atomico, including logistics company OnTruck, health tech company Hinge Health and restaurant supply chain app Rekki.

After establishing that these two knew each other while at Atomico, I asked Bendz why she headed back into the seed-stage arena.

“I’m a trained marketeer and storyteller by heart… What makes me excited is new markets opportunities, people, culture, teams. So with that, in combination with my angel investing, I think I’m better suited to be in the earlier stages of investing. When I was investing before joining Atomico, I said to myself, I want to learn from the best, I want to see how it’s done, how you structure the process and how you think about the bigger investments.”

Brochado says the European “cat is out of the bag,” as it were:

When I first moved to Europe in 2012 and first joined Atomico, after having been at a very small startup, there was still a massive gap in funding and Europe versus the U.S. I think you know the European secret is no longer a secret, and you have incredible funds being started at that early-stage seed and Series A, and because I was here in 2012, I’ve seen the amazing pipeline of growth companies that are coming up the curve, how the momentum of those companies is accelerating and how the market cap of those businesses are growing. And so I just became super excited about helping those businesses scale… I just now felt like bridging that gap in between was really exciting.

One of the perennial topics that come up time and time again is whether or not founders should go with VC partners who have previously been operators, versus those with a finance background.

“Looking back, my years at Spotify, we had great investors, but there were not many of them that had the experience of scaling a big company,” Bendz said. “So, I’m happy to give [a startup] more than just the check in a way that I would have wished I had a sounding board when I was 25 and tackling that challenge at Spotify.”

Brochado concurred: “Having operators in the room is just is an incredible gift I think to a fund and at certain levels, having people that understand you know different forms of financing and different structures can also be incredibly helpful to founders who may not necessarily have that background. So I think that the funds that do it best have that diversity.”

Bendz is passionate about investing in female founders and femtech: “It’s such a massive business opportunity that is completely untapped. We’ve seen it many times when you have a female investment partner [that] the pipeline opens up and you get more deal flow from female founders…. So I think we have a lot of work to do. I think it’s definitely improved a lot in the last couple of years but not enough… That is one of the drivers for why I put my money where my mouth is and invest in lifting the founders, but also because there are incredibly interesting business opportunities… There are so many opportunities and products or services that we will see being developed. When we have a more equal society, and more women, both building their own companies, coding and also investing… I can’t wait to see what that world will look like.”

Brochado’s view is that “even beyond founders… the best managers today are putting a lot of focus on this and I think what’s exciting is, I think we’re past the point where you have to explain to people why diversity matters.”

Is there a post-Series A chasm?

Bendz thinks: “We have more big funds in Europe [now]. We have a really solid ground here in Europe of A, B and C investors.”

Brochado said: “It’s definitely getting better. You don’t hear as many founders say that to do my Series B or my Series C I have to move to the Valley as you used to. But there’s a lot of room still for growth investors in Europe. I think Series B is the hardest round actually because, at seed or Series A, you can raise on very early traction or the quality of the management team. At Series B the price goes up but the risk doesn’t necessarily go down as much. And so I think that’s where you really need investors who are sector or thematic focused, who can come with conviction and also some knowledge around the company to really propel that company forward.”

Did they both see European entrepreneurs still making silly mistakes, or has the ecosystem mastered?

Brochado thinks 10 years ago it was hard for European founders as a lot of the talent to scale companies was still in the U.S. “What you’ve seen is a lot of big companies grow up in Europe, a lot of people come back from the U.S., and so I think that pool of talent now is larger, which is very helpful. I don’t think it’s yet at the scale of where the U.S. is. But it gives us, you know as investors, a great window of opportunity to help get some of that talent for our portfolio companies.”

The impact of COVID-19

Bendz thinks we will “see a much slower spring, but… I think it has been overall a good exercise for some companies, and I have not seen a slower deal flow. I’ve actually done more angel deals this spring than I normally do… Some businesses have definitely accelerated their whole business concept because of COVID. Investments are being made even though we haven’t met the founders. We’re able to do everything remotely so I think the system is kind of adjusting.”

Brochado’s view is that at the growth stage “there’s been a flight to quality. So actually, the really great companies or the companies that are seeing great tailwinds or companies that will still be category-leading once [have] seen a lot of interest. It’s been a very busy summer, which usually it isn’t, particularly at the growth stage… I think a lot of money is still in the system, and has flown into technology. And so if you look at how tech in the public markets has performed it’s performed extremely well. And that includes European public companies and within tech.”

Watch the full panel below.