Power

Ad-supported video services are booming. Are free downloads next?

Even during shelter-in-place, interest in video downloads remains stable. Will free video services finally take notice?

NBCUniversal's Peacock on a laptop

Peacock, the streaming service from NBCUniversal, will restrict downloads to its ad-free tier.

Photo: Gabby Jones/Bloomberg via Getty Images

Penthera bills itself as the "download-to-go guys," the company that makes it possible for subscribers to Starz, Showtime and the like to download videos so they can watch them during flights and off-the-grid vacations.

So what happens when everyone stops flying and stays at home?

Penthera Chief Sales Office Dan Hurwitz says video downloads have actually gone up by 15% over the last few months as customers download content to their kids' phones and tablets so they can save their Wi-Fi for work-related Zoom calls. Eighty percent of those downloads are being watched while the device is online, suggesting that consumers are becoming more mindful about avoiding traffic peaks.

As a result, Penthera is now looking to reframe video downloads, moving away from the portability aspect and putting a bigger emphasis on network management. "Downloading to a mobile device has major benefits for a network operator," Hurwitz said. "We're just extending the edge."

Video subscription services like Netflix and Amazon Prime have been offering their customers mobile video downloads as an alternative to traditional streaming for years, and both Disney+ and Apple TV+ incorporated downloads at launch. But now Penthera is betting that its newfound success with stay-at-home downloads will help it to finally crack the code on free, ad-supported video downloads. "It used to be that download was this premium feature," said Hurwitz. Now, it's a must-have.

As consumers are defecting from pay TV to cut costs, free and ad-supported services like Pluto, Tubi and the Roku Channel have seen massive growth. Digital TV Research recently predicted that ad-supported video service revenue would grow 120% year-over-year, outpacing subscription video growth.

However, thus far, this crop of free services has shied away from downloads. That's in part because advertising has long been seen as incompatible with offline viewing. "Ad tracking is the issue," said former Viacom exec turned media analyst Andrew Rosen. "How do you verify if and when an ad ran and whether it ran without flaws? Who confirms that? It invites whole new levels of ad tech fraud."

Hurwitz argues that these challenges can be solved with technology; to track ad playback, Penthera uses beacons, which are cached locally in case a device is offline. What's more, ads for downloaded content are frequently refreshed. "We do that over and over again," he said.

There are some signs that ad-supported video services are starting to change their tune on downloading. Roku applied for a patent for downloadable ad-supported video content last year. (Asked about the patent, a Roku spokesperson declined to comment except to say: "We are always innovating.") And Hurwitz hinted at plans by a major media company to start testing ad-supported downloads this month, but he declined to comment further.

Still, some industry insiders expressed reservations in conversations with Protocol, wondering whether it was really worth the trouble. Rosen, for instance, pointed to licensing as another point of contention. Even Netflix, which first began offering downloads in 2016, still hasn't extended the feature to its entire catalog. Disney movies like "Mary Poppins" and "The Princess and the Frog" are among the titles that can only be streamed from Netflix.

Complications around licensing and ad tracking also seem to have turned off others. Hulu first announced two years ago that it would roll out "the industry's first ad-supported downloadable content experience," as ad sales executive Peter Naylor put it at the time. When Hulu finally added downloads to its mobile apps late last year, the feature was available only to subscribers to its ad-free tier. (A Hulu spokesperson declined to comment.) Peacock, the streaming service from NBCUniversal that's scheduled to launch on July 15, will also restrict downloads to its ad-free tier, Protocol has learned.

Still, Hurwitz believes that ad-supported video downloads are just around the corner: "You're going to see it happening in Q3."

Enterprise

Why software releases should be quick but 'palatable and realistic'

Modern software developers release updates much more quickly than in the past, which is great for security and adding new capabilities. But Edith Harbaugh thinks business leaders need a little control of that schedule.

LaunchDarkly was founded in 2014 to help companies manage the software release cycle.

Photo: LaunchDarkly

Gone are the days of quarterly or monthly software update release cycles; today’s software development organizations release updates and fixes on a much more frequent basis. Edith Harbaugh just wants to give business leaders a modicum of control over the process.

The CEO of LaunchDarkly, which was founded in 2014 to help companies manage the software release cycle, is trying to reach customers who want to move fast but understand that moving fast and breaking things won’t work for them. Companies that specialize in continuous integration and continuous delivery services have thrived over the last few years as customers look for help shipping at speed, and LaunchDarkly extends those capabilities to smaller features of existing software.

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Tom Krazit

Tom Krazit ( @tomkrazit) is Protocol's enterprise editor, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire, and served as executive editor of Gigaom and Structure.

COVID-19 accelerated what many CEOs and CTOs have struggled to do for the past decade: It forced organizations to be agile and adjust quickly to change. For all the talk about digital transformation over the past decade, when push came to shove, many organizations realized they had made far less progress than they thought.

Now with the genie of rapid change out of the bottle, we will never go back to accepting slow and steady progress from our organizations. To survive and thrive in times of disruption, you need to build a resilient, adaptable business with systems and processes that will keep you nimble for years to come. An essential part of business agility is responding to change by quickly developing new applications and adapting old ones. IT faces an unprecedented demand for new applications. According to IDC, by 2023, more than 500 million digital applications and services will be developed and deployed — the same number of apps that were developed in the last 40 years.[1]

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Denise Broady, CMO, Appian
Denise oversees the Marketing and Communications organization where she is responsible for accelerating the marketing strategy and brand recognition across the globe. Denise has over 24+ years of experience as a change agent scaling businesses from startups, turnarounds and complex software companies. Prior to Appian, Denise worked at SAP, WorkForce Software, TopTier and Clarkston Group. She is also a two-time published author of “GRC for Dummies” and “Driven to Perform.” Denise holds a double degree in marketing and production and operations from Virginia Tech.
Workplace

Building an antiracist company: From idea to practice

Twilio’s chief diversity, inclusion and belonging officer says it’s time for a new approach to DEI.

“The most impactful way to prioritize DEI and enable antiracism is to structure your company accordingly,” says Twilio’s head of DEI Lybra Clemons.

Photo: Twilio

Lybra Clemons is responsible for guiding and scaling inclusion strategy and diversity initiatives at Twilio.

I’ve been in the corporate diversity, equity and inclusion space for over 15 years. In that time, I’ve seen the field evolve slowly from a “nice-to-have” function of Human Resources to a rising company-wide priority. June 2020 was different. Suddenly my and my peers’ phones started ringing off the hook and DEI leaders became the most sought-after professionals. With so many DEI roles being created and corporate willingness to invest, for a split second it looked like there might be real change on the horizon.

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Lybra Clemons
Lybra S. Clemons is a seasoned C-suite executive with over 15 years of Human Resources, Talent and Diversity & Inclusion experience at Fortune 500 companies. She is responsible for guiding and scaling inclusion strategy and diversity initiatives across Twilio's global workforce. Prior to Twilio, Lybra was global head of Diversity & Inclusion at PayPal, where she managed and oversaw all global diversity initiatives. Lybra has held critical roles in Diversity & Inclusion with Morgan Stanley, The Brunswick Group and American Express. She serves on the board of directors of Makers and How Women Lead Silicon Valley Executive Board of Advisers, and has been recognized by Black Enterprise as one of the Top Corporate Women in Diversity.
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Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs WordPress.com, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool Parse.ly and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

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David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

China

Why China is outselling the US in EVs 5 to 1

Electric cars made up 14.8% of Chinese car sales in 2021, compared with 4.1% in the U.S.

Passenger EV sales in China in 2021 jumped 169.1% to nearly 3.3 million from a year ago.

Photo: VCG/VCG via Getty Images

When Tesla entered China in 2014, the country’s EV market was going through a reset. The Austin, Texas-based automaker created a catfish effect — a strong competitor that compels weaker peers to up their game — in China’s EV market for the past few years. Now, Tesla’s sardine-sized Chinese competitors have grown into big fishes in the tank, gradually weakening Tesla’s own prominence in the field.

2021 was a banner year for China’s EV industry. The latest data from the China Passenger Car Association shows that total passenger EV sales in China in 2021 jumped 169.1% from a year ago to nearly 2.99 million: about half of all EVs sold globally. Out of every 100 passenger cars sold in China last year, almost 15 were so-called "new energy vehicles" (NEVs) — a mix of battery-electric vehicles and hybrids.

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Shen Lu

Shen Lu covers China's tech industry.

SKOREA-ENTERTAINMENT-GAMING-MICROSOFT-XBOX
A visitor plays a game using Microsoft's Xbox controller at a flagship store of SK Telecom in Seoul on November 10, 2020. (Photo by Jung Yeon-je / AFP) (Photo by JUNG YEON-JE/AFP via Getty Images)

On this episode of the Source Code podcast: Nick Statt joins the show to discuss Microsoft’s $68.7 billion acquisition of Activision Blizzard, and what it means for the tech and game industries. Then, Issie Lapowsky talks about a big week in antitrust reform, and whether real progress is being made in the U.S. Finally, Hirsh Chitkara explains why AT&T, Verizon, the FAA and airlines have been fighting for months about 5G coverage.

For more on the topics in this episode:

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David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

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