TLDR - If you read just one thing The New York Times have collated some good data on how the virus has changed how we use the Internet. No huge surprises other than a dip in mobile app use and a rise in web site visits. But it doesn't break out desktop web versus mobile web so this could be showing a change in device use? Or is it showing that these services are attracting more casual users who don’t have the apps downloaded?
Quibi is getting so much attention because it is so different to the rest of the competition. From Hollywood royalty with $1.75bn to spend and the jury is out - not least because the current crisis would seem to have eliminated the on the go opportunities to watch a new episode, that the service was designed around.
This Recode podcast with founder Jeffrey Katzenberg is good insight into how the business was shaped and his expectations. Worth the 50 minutes. A shorter TV interview is good if you don’t have the time.
One person came out swinging in his support for Quibi - arguing that it will be a multi billion dollar business. I buy these arguments and think the quality of content will prevail - and like the quote from Katzenberg;
“New platforms require the creativity of storytellers using their tools in ways that the inventors had never imagined.”
To me Quibi feels like the service AppleTV should be - quality content made specifically for the mobile device. Whilst in its current incarnation AppleTV looks like a pale imitation of everyone else's streaming service.
The service is free for 90 days and it's worth downloading the app and seeing what the fuss is about. And I also recommend checking out some of the Snap Original content - Dead of Night is good and a very clever format. They are a competitor in that they are one of the few that is making quality IP for mobile - and they just hired the head of sales from Hulu
Disney has raced to 50m subscribers. You might nitpick over the description ‘paid’ subscribers given all the promotions, but it's an amazing achievement. Especially as they last announced 28m at the start of February. This interview with one of Wall Streets best media analysts is a good summary of what's happening with Disney and the wider entertainment industry - they also get into the DTC release of Trolls, which would have been one of the big cinema openings and is now a $20 pay per view. Disney will take a similar approach with upcoming movie Artemis Fowl which will skip a theatre release and run on Disney+
The whole industry is in a state of flux and the new CEO of Warner epitomises this - a guy who gets digital jumps ahead of the more obvious candidates. His thinking on the future looks promising but can he take a big company with him
Wow, we’re in this unique moment of time where it’s never been more important to lean into the future and invent that future,
Verizon was a big company that seemed to get the future - it just never delivered despite the $4bn purchase of AOL. To be fair none of the other Mobile operators delivered on content but this still feels like an opportunity - people need a digital concierge and being the gateway gives you the right to play here.
Talking of AppleTV there is lots of speculation on quite what the Amazon Apple deal mentioned last week actually means. The Stratechery thinking is closest to mine;
In other words, Apple TV+ was actually about Apple TV Channels: give customers a reason to use the Apple TV app, and then sell subscriptions to HBO, Showtime, Crunchyroll, etc. That is certainly the best way to understand Amazon Prime Video: there is not nearly enough content to seriously challenge Netflix, but there are shows worth watching, which makes the Amazon Fire TV boxes worth owning, and the Prime Video App worth using — and that means more subscriptions on which Amazon can take an ongoing percentage.
What is really interesting is that Amazon have been insisting on have TV inventory to sell when they agree to sell subscriptions - including with Apple. Their squabble with Apple got sorted and Disney is now available on the Fire apps. But we don’t know whether this was resolved; Amazon was pushing for the right to sell a substantial percentage of the ad space on Disney apps Or maybe we do?
The first edition of our midweek Fix / Merchant went out on Wednesday and again a good reaction. This alternating (with newTV) will continue but do please share feedback - keen to improve both. Lots of data on which categories are doing well - and which are not - in there
This Harvard Business Review piece on reinventing DTC is a good read - looking at Community, vertical integration and Voice and ending with this validation of our pivot to Merchant
As brands begin to engage with these strategies, the term direct-to-consumer feels less relevant by the day. “DTC” was the product of a specific moment that catapulted a handful of early entrants to stardom. But today’s environment suggests that that model is no longer sustainable. Success today requires an understanding of both evergreen business basics and also the lasting ways in which the DTC model has permanently reshaped the industry.
The community piece is hard right now but one of our favourite Merchants Neighbourhoood Goods has a new initiative that will accommodate other brands, musicians and restaurants that have been adversely affected by Covid
As digital brands added physical stores to their strategy there was talk of rent being the new Customer Acquisition Cost. Now everyone is finding that rent takes a while longer to turn off or reduce than ads on Facebook.
With many destination streets the deal between brands and landlords can be mutually beneficial - attracting the right brands makes the property more attractive to others and hence more valuable. But at the best of times this is quite fragile. In New York Bleeker Street suffered when Marc Jacobs closed a number of stores at one time leaving the street littered with empty shops. Hudson Yards worked hard to get the right profile of brands that would bring shoppers off the beaten track. But now a quarter want to stop paying rent - putting the economics of the whole development at risk - the term anchor stores has real meaning.
Adtech Perfect Storm
This good Adweek article points out that brands are looking to better understand their tech stack and gain more transparency. UK finance journalist Martin Lewis advises people to go through their bank statement looking for things they no longer need and can therefore save money on. I think smart brands are going to do the same with their Tech Stack.
This Check your Tech should highlight which vendors are adding value and which are superfluous. And the issues of who is contracted will help with transparency too.
Now that Cookies are on their way out as a tracking tool Mozilla is pointing out Fingerprinting of browsers as an issue. One of the tools to reduce fingerprinting is the Privacy Budget outlined in the Chrome privacy sandbox. This is a good guide to what's covered in the Sandbox.
With the success of Animal Crossing Nintendo are right back as a major player in games - but it’s how people and brands are using it that highlight how games are driving culture. Fans are keen to dress their virtual avatars and Net a Porter is helping by selling a range of designer outfits in China - both virtually within the game and then real versions of the clothes through Tmall.
Esports collective 100 Thieves have made their entire clothes collection available in Animal Crossing - for free. All these items sold out soon after release and are only available for silly money on Grailed - so this is good branding.
When does this all go mainstream? Last week the Grand National was ran virtually and it was entertaining and raised £2.5m for the NHS - but it feels like we are not quite there yet
Or am I missing something?
We used to talk of BAT as the Chinese GAFA and the idea of that dominance changing seemed as unlikely as GAFA being disrupted. But ByteDance is now the 2nd Biggest Ads Platform in China, beating Tencent and Baidu and closing in on Alibaba
Now we find that TMalll have their own virtual influencer Aimee who was selling Prada through the live stream. Virtual avatars have really taken off in China, building on the success of anime across Asia. With avatar making apps popular do we see people enjoying Animal Crossing taking their avatars onto other platforms?
This is a fascinating area with China the world leaders in facial recognition - and increasingly using Deep fakes. A key actress in one of the bigger Chinese soaps was found to be carrying too much compressed gas (?) and was blacklisted. To avoid the drama being canned it was decided to use deep fake technology to replace the actress - but it was done really badly. This is a Google Doc with the translation from Mandarin with the full story
This all feels very futuristic but again lots to learn from China.
Apple are rumoured to have bought NextVR a firm that streams sports events to VR devices. With partnerships with the NBA and Wimbledon it sounds more about content than tech but they have 40 patents. And were valued at $800m a few years ago yet the current price is around $100m. Are MelodyVR – the music focused equivalent – next?
Bloomberg dishing the dirt on tensions between Instagram founder and Mark Zuckerberg. Sounds like a quite interesting book but nothing much to learn. This though is a good story - a tweet with a suggestion was made an Instagram product over night
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