The Roundup
- Mary M Brinkopf
- Feb 16, 2019
- 5 min read
Welcome to a special edition of The Beta Byte I am calling The Roundup.
Yes, this week, I'll be discussing three interesting tech headlines that caught my attention and why you as a consumer should care. Let's get started!
Jeff Bezos v. National Enquirer
The recap:
This story needs no recap, however, if you do, visit Mr. Bezos post at Medium where he details the National Enquirer's attempts to blackmail him over sexts and dick pics on the heels of his divorce announcement.
Why this matters…
The subject matter is inconsequential, what is important are the players involved - big tech v. big media. In the past, big media titans like Harvey Weinstein, Les Moonves and Charlie Rose have thrown their weight around - dictating what type of movies are produced, news or celebrity reportings. And the National Enquirer is no different.
But we have reached the tipping point where that's no longer true. Why? Well let's take a stroll back to 2016 when a similar case hit the news cycle.
Gawker Media, the edgy online publication, filed for bankruptcy in 2016 after losing a lawsuit to Terry Gene Bollea (also known as Hulk Hogan) for invasion of privacy after publishing a sex tape.
Again, you can read the case at your own leisure, what's important is that Peter Thiel, a billionaire Silicon Valley entrepreneur and venture capitalist funded the entire defense for Mr. Bollea.
Why? Gawker Media had outed Mr. Thiel as being gay in 2007. When interviewed by The New York Times following the trial's decision several months later, Mr. Thiel noted the following
"I can defend myself. Most of the people they [Gawker Media] attack are not people in my category. They usually attack less prominent, far less wealthy people that simply can't defend themselves."
In comparison, here's what Mr. Bezos said in his post on Medium re:National Enquirer just days ago in 2019, nearly three years later after Mr. Thiel,
"If in my position I can't stand up to this kind of extortion, how many people can?"
Simply put, these organizations invaded the privacy of the wrong people - people who have the cajoles and wealth to actively fight back. Or drag out litigation until the white flag is raised. Jeff Bezos is no different from Peter Thiel in this matter.
Note - If you read the Thiel article you will discover that he financed multiple lawsuits against Gawker by different victims.
Therefore, I predict that large publications, especially ones like The National Enquirer will have to rethink their strategy of targeting high priority individuals if they wish to stay in business long term.
Further, we could be witnessing the beginning of the fight to regain privacy of the consumer here. For the last thirty years, news publications have claimed "freedom of the press" in publishing photos of famous people cheating, sex tapes, naked photos, etc. But these two cases show that defense is starting to fade and consumer privacy is in vogue again.
The Sound Wars Heat Up
The recap:
Spotify announced it was ponying up $340M to buy Gimlet, a podcast start-up known for shows like "Crimetown," "Reply All" or "Homecoming" (yes, the same title as the Amazon original show launched late last year).
Why this matters…
There's a joke amongst those that work in media - although your product may be losing money, at least you aren't a streaming music service.
Yes, for those of you unaware, your favorite streaming music services likes Spotify, Pandora or Amazon Music are not making much money as the labels and artists take a fair share of profits.
Note - In 2018, Taylor Swift announced that her new with Universal Music Group, if they sell their 3.5% stake (~$850M) in Spotify, those profits would be distributed to the artists it represents.
Yes, I recognize that Spotify had a successful IPO last year but look no further than its rivals to understand that it has to diversify its revenue if it wants to survive.
Case in point:
Amazon Music Unlimited and Apple Music are bankrolled by…drumroll…Amazon and Apple two titans of tech flush with cash
Pandora Music was acquired by Sirius XM in September 2018
As the music space becomes more cramped, Spotify must find extension industries. One of those industries is podcasting which is rapidly growing. Long sneered as a niche product with no pathway to the black, podcasting generated over $600M in 2018. Current projections expect podcasting to double its revenue to $1.2B in 2 years.
Note - Expect in coming weeks for a longer piece on podcasting.
More importantly for Spotify, there are no major, entrenched players in podcasting unlike the recording industry. With their significant user base (200M monthly active users and 87M total subscribers), this now makes Spotify a significant player in the podcasting industry.
Expect Spotify to experiment over the coming months with pricing, create more original content to be like Netflix or generate more advertising revenue.
Batten Down the Hatches
The recap:
Earlier this week it was reported that the tech cartels - Facebook, Amazon and Google spent $48M in lobbying in 2018.
Why this matters…
2018 was not a good year for tech companies who found themselves summoned to Capitol Hill and under attack by the media regarding data breaches, user privacy and election tampering.
The scuffles with the law has left several of the FAANGs reeling. And if the first 45 days of the year are an indication, this could be another rough year for these tech giants.
So, it's time to batten down the hatches and begin countermeasures. Specifically, to take control of the narrative by putting boots on the ground, talking to Senators and spending lots of money.
All of this is meant to put a pause on big tech regulation which many in the industry is coming based upon the following trends observed in 2018 -
Europe passes General Data Protection Regulation (GDPR) for data protection and regulation
California passes its own version of GDPR known as the California Consumer Privacy Act
Ro Khanna introduces in Congress the Internet Bill of Rights
Honorable Mentions:
I'd love to further delve into this one (perhaps in a few weeks) but I could only in good conscious highlight one Amazon story. Just know that Amazon is looking to dominate hardware and sound in your household.
See comment above.
As an occasional HQ Trivia player, this was an excellent but heartbreaking read on founder Colin Kroll who took his own life back in December 2018. Includes references to VC funding, #MeToo and corporate power struggles.
For months, Apple has been dropping hints that they will plunge into the news and video business only to go silent. Well, the gates in Cupertino were temporarily opened last week. Expect a full debriefing on March 25.
I hope you enjoyed this special edition. We will return to our normal programming next week. In the meantime, check out my previous blogs or post your comments below. I'd love to know if there were other trends left off!
@Benjamin Brinkopf - Agree with you that publications like "The National Enquirer" tend to concentrate on just a few. However, most of those individuals have shied away from taking action - I think this trend could change. It's important to note that the only two people successful in pushing back were men....
WOW- lots to think about and future trending...
I wonder if it’s true that most of the people Gawker-like media attacks are less wealthy, powerful or influential folks. It seems like a nice cover, but I’d have to imagine the most interest is concentrated in a few, and I don’t see that changing soon.
Do wonder how it may change those publications going forward!