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TikTok enlists a big name from Disney as its new CEO, Walmart is shuttering its Jet e-commerce brand and EasyJet admits to a major data breach.
Here’s your Daily Crunch for May 19, 2020.
1. Disney streaming exec Kevin Mayer becomes TikTok’s new CEO
Mayer’s role involved overseeing Disney’s streaming strategy, including the launch of Disney+ last fall, which has already grown to more than 50 million subscribers. He was also seen as a potential successor to Disney CEO Bob Iger; instead, Disney Parks, Experiences and Products Chairman Bob Chapek was named CEO in a sudden announcement in February.
Mayer was likely an attractive choice to lead TikTok not just because of his streaming success, but also because hiring a high-profile American executive could help address politicians’ security concerns about the app’s Chinese ownership.
2. Walmart says it will discontinue Jet, which it acquired for $3B in 2016
Walmart tried to put a positive spin on the news, saying, “Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”
3. EasyJet says 9 million travel records taken in data breach
EasyJet, the U.K.’s largest airline, said hackers have accessed the travel details of 9 million customers. The budget airline said 2,200 customers also had their credit card details accessed in the data breach, but passport records were not accessed.
4. Where these 6 top VCs are investing in cannabis
The results paint a stunning picture of an industry on the verge of breaking away from a market correction. Our six respondents described numerous opportunities for startups and investors, but cautioned that this atmosphere will not last long. (Extra Crunch membership required.)
5. Brex brings on $150M in new cash in case of an ‘extended recession’
Where upstart companies aren’t cutting staff, they are often reducing spend — which is bad news for Brex, since it makes money on purchases made through its startup-tailored corporate card. But co-founder Henrique Dubugras seems largely unbothered on how the pandemic impacts Brex’s future.
6. Popping the hood on Vroom’s IPO filing
Yesterday afternoon, Vroom, an online car buying service, filed to go public. What does a private, car-focused e-commerce company worth $1.5 billion look like under the hood? (Extra Crunch membership required.)
7. Experience marketplace Pollen lays off 69 North America staff, furloughs 34 in UK
Founded in 2014 and previously called Verve, Pollen operates in the influencer or “word-of-mouth” marketing space. The marketplace lets friends or “members” discover and book travel, events and other experiences — and in turn helps promoters use word-of-mouth recommendations to sell tickets.
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 9am Pacific, you can subscribe here.
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Kevin Mayer, head of The Walt Disney Company’s direct-to-consumer and international business, is departing to become CEO of TikTok, as well as COO of the popular video app’s parent company ByteDance.
Founder Yiming Zhang will continue to serve as ByteDance CEO, while TikTok President Alex Zhu (formerly the co-founder of the predecessor app Musical.ly) becomes ByteDance’s vice president of product and strategy.
“I’m thrilled to have the opportunity to join the amazing team at ByteDance,” Mayer said in a statement. “Like everyone else, I’ve been impressed watching the company build something incredibly rare in TikTok – a creative, positive online global community – and I’m excited to help lead the next phase of ByteDance’s journey as the company continues to expand its breadth of products across every region of the world.”
The news was first reported by The New York Times and subsequently confirmed in announcements from ByteDance and Disney.
Mayer’s role involved overseeing Disney’s streaming strategy, including the launch of Disney+ last fall, which has already grown to more than 50 million subscribers. He was also seen as a potential successor to Disney CEO Bob Iger; instead, Disney Parks, Experiences and Products Chairman Bob Chapek was named CEO in a sudden announcement in February.
Mayer was likely an attractive choice to lead TikTok not just because of his streaming success, but also because hiring a high-profile American executive could help address politicians’ security concerns about the app’s Chinese ownership.
Over at Disney, Rebecca Campbell (most recently president of Disneyland Resort, who also worked on the Disney+ launch as the company’s president for Europe, Middle East and Africa) is taking over Mayer’s role, while Josh D’Amaro is taking on Chapek’s old job as chairman of Disney parks, experiences and products.
In a statement, Chapek said:
As we look to grow our direct-to-consumer business and continue to expand into new markets, I can think of no one better suited to lead this effort than Rebecca. She is an exceptionally talented and dedicated leader with a wealth of experience in media, operations and international businesses. She played a critical role in the launch of Disney+ globally while overseeing the EMEA region, and her strong business acumen and creative vision will be invaluable in taking our successful and well-established streaming services into the future.
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Disney plans to bring its on-demand video streaming service to India and some Southeast Asian markets as soon as the second half of next year, two sources familiar with the company’s plan told TechCrunch.
In India, the company plans to bring Disney+’s catalog to Hotstar, a popular video streaming service it owns, after the end of next year’s IPL cricket tournament in May, the people said.
Soon afterwards, the company plans to expand Hotstar with the Disney+ catalog to Indonesia and Malaysia, among other Southeast Asian nations, said those people on the condition of anonymity.
A spokesperson for Hotstar declined to comment.
Hotstar leads the Indian video streaming market. The service said it had more than 300 million monthly subscribers during the IPL cricket tournament and ICC World Cup earlier this year. More than 25 million users simultaneously streamed one of the matches, setting a new global record.
However, Hotstar’s monthly user base plummeted below 60 million in the weeks following the IPL tournament, according to people who have seen the internal analytics. The arrival of more originals from Disney on Hotstar, which already offers a number of Disney-owned titles in India, could help the service sustain users after cricket season.
The international expansion of Hotstar isn’t a surprise as it has entered the U.S., Canada and the U.K. in recent years. In an interview with TechCrunch earlier this year, Ipsita Dasgupta, president of Hotstar’s international operations, said so far the platform’s international strategy has been to enter markets with “high density of Indians.”
In an earnings call for the quarter that ended in June this year, Disney CEO Robert Iger hinted that the company, which snagged Indian entertainment conglomerate Star India as part of its $71.3 billion deal with 21st Century Fox, would bring Star India-operated Hotstar to Southeast Asian markets, though he did not offer a timeline.
Disney+, currently available in the U.S, Canada and the Netherlands, will expand to Australia and New Zealand next week, and the U.K., Germany, Italy, France and Spain on March 31, the company announced last week.
Disney, which debuted its video streaming service in the U.S. this week and has already amassed more than 10 million subscribers, plans to raise the monthly subscription fee of Hotstar in India, where the service currently costs $14 a year, one of the two aforementioned people said.
A screenshot of Hotstar’s homepage
The price hike will happen toward the end of the first quarter next year, just ahead of commencement of next the IPL cricket tournament season, they said. The company has not decided exactly how much it intends to charge, but one of the people said that it could go as high as $30 a year.
In other Southeast Asian markets, the service is likely to cost above $30 a year, as well, both of the sources said. The prices have yet to be finalized, however, they said.
Even at those suggested price points, Disney would be able to undercut rivals on price. Until recently, Netflix charged at least $7 a month in India and other Southeast Asian markets. But this year, the on-demand streaming pioneer introduced a $2.8 monthly tier in India and $4 in Malaysia.
Hotstar offers a large library of local movies and titles syndicated from international cable networks and studios Showtime, HBO and ABC (also owned by Disney). In its current international markets, Hotstar’s catalog is limited to some local content and a large library of Indian titles.
In recent quarters, Hotstar has also set up an office in Tsinghua Science Park in Beijing, China and hired more than 60 engineers and researchers to expand its tech infrastructure to service more future users, according to job recruitment posts and other data sourced from LinkedIn.
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Video won’t start rolling on Meg Whitman and Jeffrey Katzenberg’s new bite-sized streaming service with the billion-dollar backing until the end of 2019, but talent keeps signing up to come along for their ride into the future of serialization.
The latest marquee director to sign on the dotted line with Quibi is Catherine Hardwicke, who will be helming a story around the creation of an artificial intelligence with the working title “How They Made Her,” according to an announcement from Katzenberg onstage at the Variety Innovate summit.
Hardwicke, who directed “Thirteen,” “Lords of Dogtown” and, most famously, “Twilight,” is joining Antoine Fuqua, Guillermo del Toro, Sam Raimi and Lena Waithe in an attempt to answer the question of whether Whitman and Katzenberg’s gamble on premium (up to $6 million per episode) short-form storytelling is a quixotic quest or a quintessential viewing experience for a new generation of media consumers.
Katzenberg also revealed in a LinkedIn post that Quibi would be working on a basketball-related series with Steph Curry’s production company. He wrote:
I announced a new docu-series by Whistle called “Benedict Men” coming exclusively to Quibi. “Benedict Men” will be executive produced by Stephen Curry’s Unanimous Media and will give viewers an inside look at one of the most unique high school basketball teams in America at St. Benedict’s Prep in Newark, New Jersey.
St. Benedict’s Prep is an all-boys secondary school founded on the core belief ‘What Hurts My Brother Hurts Me,’ and aims to foster a legacy of strong character, community, leadership, and faith. As one of the top athletic high schools with a storied basketball program and the highest graduation rate in New Jersey, the series will follow the brotherhood of young men who seek to balance life in complicated surroundings.
In some ways, the big adventure backed by Katzenberg, the former chairman of Walt Disney Studios and founder of WndrCo, and every major Hollywood studio — including Disney, 21st Century Fox, Entertainment One, NBCUniversal, Sony Pictures Entertainment and Alibaba Goldman Sachs — is the latest in an everything old is new again refrain.
If blogs reinvented printed media, and podcasts and music streaming reinvented radio, why can’t Quibi reinvent serialized storytelling.
Again and again, Whitman and Katzenberg returned to an analogy from the early days of the cable revolution. “We’re not short form, we’re Quibi,” said Whitman, echoing the tagline that HBO made famous in its early advertising blitzes. That Whitman and Katzenberg’s project to take what HBO did for premium television and apply that to mobile media is ambitious. Now industry-watchers will have to wait until 2019 at the earliest to see if it’s also successful.
In the interview onstage at a Variety event on artificial intelligence in media, Katzenberg cited Dan Brown’s “The Da Vinci Code” as something of an inspiration — noting that the book had more than 100 chapters for its 500 pages of text. But Katzenberg could have gone back even further to the days of Dickens and his serialized entertainments.
And right now for the entertainment business it really is the best of times and the worst of times. Traditional Hollywood studios are seeing new players like Netflix, Amazon, Apple and others all trying to drink their milkshake. And, for the most part, these studios and their new telecom owners are woefully ill-equipped to fight these big technology platforms at their own game.
Taking the long view of entertainment history, Katzenberg is hoping to win networks with not just a new skin for the old ceremony of watching entertainment but with a throwback to old style deal-making. The term serialization here takes on greater meaning.
Quibi is offering its production partners a sweetheart deal. After seven years the production company behind the Quibi shows will own their intellectual property, and after two years those producers will be able to repackage the Quibi content back into long-form series and pitch them for distribution to other platforms. Not only that, but Quibi is fronting the money for over 100 percent of the production.
Katzenberg said that it “will create the most powerful syndicated marketplace” Hollywood has seen in decades. It’s a sort of anti-Netflix model where Katzenberg and Whitman view Quibi as a platform where creators and talent will want to come. “We are betting on the success of the platform — and by the way, it worked brilliantly in the ’60s and ’70s and ’80s.” Katzenberg said. “Hundreds of TV shows were tremendous successes and [like the networks then] we don’t want to compete with our suppliers.”
In addition to the business model innovations (or throwbacks, depending on how one looks at it), Quibi is being built from the ground up with a technology stack that will leverage new technologies like 5G broadband, and big data and analytics, according to Whitman.
Indeed, launching the first platform built without an existing stable of content means that Quibi is preparing 5,000 unique pieces of content to go up when it pulls the curtains back on its service in late 2019 or early 2020, Whitman said.
And the company is looking to big telecommunications companies like Verizon (my corporate overlord’s corporate overlord) and AT&T as partners to help it get to market. Since those networks need something to do with all the 5G capacity they’re building out, high-quality streaming content that’s replete with meta-tags to monitor and manage how an audience is spending their time is a compelling proposition.
“We want to work to have video that looks good on mobile [and] ramp up content in terms of quantity and quality,” Whitman said. That quality extends to things like the user interface, search features and analytics.
“We have to have a different search and find metaphor,” Whitman said. “It takes eight minutes to find what you’re looking for on Netflix… We will be able to instrument this with data on what people are watching and using that in our recommendation engine.”
Questions remain about the service’s viability. Like what role will the telcos actually play in distribution and development? Can Quibi avoid the Hulu problem where the various investors are able to overcome their own entrenched interests to work for the viability of the platform? And do consumers even want a premium experience on mobile given the new kinds of stars that are made through the immediacy and accessibility that technology platforms like YouTube, Instagram and Snap offer?
“Where the fish are today is a phenomenal environment,” Katzenberg said of the current short-form content market. “But it is an ocean. We need to find a place where there are these premium services.”
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Mobile gaming company Jam City is announcing a multi-year deal to create mobile games based on Pixar and Walt Disney Animation characters and films.
As part of the agreement, Jam City is taking over development of the match-three puzzle game Disney Emoji Blitz, which launched in 2016. Jam City says that everyone at Disney’s Glendale game studio who’s affected by this will be offered new jobs at the company to continue working on the title.
The first new game, meanwhile, will be based on the upcoming sequel to “Frozen” (that’s right, there’s going to be a “Frozen 2”), though the companies aren’t revealing any details, like the type of gameplay or the release date.
“While our licensing business for Disney Animation and Pixar games has grown over the last year and we have several top developers creating Disney games, this deal with Jam City represents a significant long-term opportunity for our games business and for the future slate of Disney and Pixar games,” said Kyle Laughlin, Disney’s senior vice president of games and interactive experiences, in a statement.
Jam City was founded in 2009 by Chris DeWolfe (who previously cofounded and served as CEO of MySpace) and former Fox executive Josh Ygaudo. It was initially focused on social games and was known as MindJolt before becoming the Social Gaming Network (named after a company it acquired) and then rebranding again two years ago as Jam City.
While Jam City has created its own games like Cookie Jam and Panda Pop, it’s also been releasing titles based on well-known franchises and intellectual property, such as “Snoopy Pop” and “Marvel Avengers Academy.” Earlier this year, it launched “Harry Potter: Hogwarts Mystery,” a game that allows players to enroll in J.K. Rowling’s famous school for wizards and features the voices of several actors from the films.
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