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July 9, 2020
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."
From Your Site Articles
- Roku's emerging as one of the streaming war's biggest winners ... ›
- Disney+ now has 28.6 million subscribers. - Protocol ›
- Why cord-cutting more than doubled in 2019 ›
- How coronavirus affects free ad-supported video services - Protocol ›
- With 24/7 programming, the future of TV looks a lot like its past - Protocol ›
- Pluto TV CPO Shampa Banerjee explains why free video is booming - Protocol ›
Janko Roettgers
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
People
Expensify CEO David Barrett: ‘Most CEOs are not bad people, they're just cowards’
"Remember that one time when we almost had civil war? What did you do about it?"
Expensify CEO David Barrett has thoughts on what it means for tech CEOs to claim they act apolitically.
Photo: Expensify
January 19, 2021
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.
January 19, 2021
The Trump presidency ends tomorrow. It's a political change in which Expensify founder and CEO David Barrett played a brief, but explosive role.
Barrett became famous last fall — or infamous, depending on whom you ask — for sending an email to the fintech startup's clients, urging them to reject Trump and support President-elect Joe Biden.
<p>"Anything less than a vote for Biden is a vote against democracy," Barrett said in the email.</p><p>It was an unprecedented political maneuver by a CEO-founder in Silicon Valley, and one that drew praise from a preeminent historian of the region.</p><p>"This was a moment that utterly transcended politics as usual, and his statement utterly transcended politics as usual," futurist and historian Paul Saffo told Protocol. "I'm sure investors got a little bit of a case of indigestion over this. It was a bold move and I would say it was made with considerable character."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>And it wasn't a one-off: Barrett sent another email to Expensify customers over the weekend, telling its users about its plans to spend $3 million on fighting inequality, while also railing against the "domestic terrorists" who invaded the Capitol earlier this month.</p><p>Barrett talked to Protocol last Friday, before the latest email, about the coming transition, which he reflected on in a celebratory mood even as he looked back on the controversial episode. "We just survived Trump. This is going to be an amazing year," he said. "The economy's coming back. The vaccines are rolling out. Travel is going to restart. We got a new administration that's going to make reasonable decisions. We avoided a civil war. Everything's on the up and up."</p><p><em>The interview has been edited for clarity and brevity.</em></p><p><strong>You sent that email taking a position on the election. I've talked to a lot of CEOs in Silicon Valley who'd rather stay in the middle. They're not going to say what they think or even who they voted for because it's safer.</strong></p><p>My opinion is a little bit different. I think this idea of "Oh, we're apolitical," I think that's kind of bullshit. I think there's no such thing in a democracy as being apolitical. Every action you take is your position. I think that a large number of these tech companies, by saying, "Oh, we're apolitical," that's a very convenient way of saying, "No, I'm voting for the status quo. I support the current administration, and I'm not going to take actions to do anything about it because it's actually good for business." I think it's actually pretty cynical.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p><strong>There's going to be a change, and there will be new issues. It's probably not going to be as intense as Trump, but there will be issues. How do you navigate them? It can be a slippery slope when you start to take positions.</strong></p><p>I think the litmus test is: What is the real-world potential impact of this? I don't anticipate to weigh in on the normal issues. It sounded bombastic back then when I wrote the newsletter: "Hey, I am genuinely concerned that we're going to have a true civil war, and that's going to be really bad for business. My business is great. We're profitable. We're growing. We're surviving the pandemic. So long as we don't descend into civil war, we'll be fine. But Trump is saying he's not going to leave office, and is anyone reading this crazy shit? We should take it seriously." </p><p>This is not normal politics. This is not taxes or health care or whatever. This is like the destruction of our nation up for discussion. The only reason I felt it was important as a CEO to weigh in was that the stakes are too high to be neutral here. </p><p>Even right now. The guy's still not out of office, by the way. The FBI's warning that we're going to have attacks on every state Capitol. Never has that happened in the history of the nation before. This is so wild, what we're talking about. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>I feel that we need to keep reminding ourselves just how beyond the pale this is. As business leaders, it's just shameful to just sit out this entire thing. It's like, "Oh, remember that one time when we almost had civil war? What did you do about it? Oh, fucking nothing? Oh, good job."</p><p><strong>What was the reaction to the email like? Did any of it give you pause?</strong></p><p>Expensify is not a product you adopt overnight. You also don't leave it overnight. We just didn't know what the reaction was going to be. We saw this thing just go so much bigger than we expected. We were like, "Oh, fuck. OK. That's exciting."</p><p>Most people ignored it, or agreed with it, or vented about it or whatever. The vast majority of people, they're too busy. And in this Twitter news cycle, sustaining anger for more than like 10 seconds is hard. It's like, "Fuck Trump! Oh, such a cute puppy!" It's so hard to do anything.</p><p><strong>Where does that come from, that belief in taking a position? Can you talk a bit about your background?</strong></p><p>My background has always been in hard engineering. Never been in finance. Never been in politics or any of that stuff. I think what you're getting at [is]: Why are you so outspoken? I'm in a lucky position to do that. I run a very profitable business that has a very distributed customer base. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>I think most CEOs, it's not that they're bad people, they're just cowards. They're like, "Yeah, I would like to take a stand, but I can't because of investors, customers and things like this." It basically comes down to, "I care more about hitting the next quarter results than preventing a civil war," which is so fucked up. They're more afraid of their investors than they are of militants. I'm in a lucky position where I don't have to be afraid of my investors. I'm super profitable. I can't get fired. There's no majority on the board that can fire me. So I think that I am in a position [where] I can take these stands much more than others. </p><p>I've heard from a lot of other CEOs [about speaking up, and they say]: "I can't. I wish I could. I feel bad. I feel ashamed. But I kind of can't." I feel I can give an example of, like, "Guys, speak up. The water's fine." Defending democracy is not actually a bold choice because most people agree with it.</p><p>Sure, we got a lot of shit on Twitter, or whatever. Those people weren't our customers anyway. It had no negative impact on revenue. If anything, I think we're gonna look back and this is going to be an incredible brand building event. We didn't expect this to go as viral as it did. It's like, "Shocker! Getting massive coverage for defending democracy is good for business, actually."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>I think that CEOs need to have the courage to actually step up for things that matter, and be less sort of afraid of the impact on their businesses. Because most customers, especially the people who are actually buying the software, they care about stability, they care about democracy.</p><p><strong>Would you consider politics after your business career?</strong></p><p>No, that sounds like a huge pain in the ass. Plus that assumes that there is an "after my business career." I just made this giant profitable business, and it's fucking awesome. I want to work here forever. My goal is just to stay here forever.</p>
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Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.
Power
Roku is becoming the most powerful company in streaming
A growing user base will give it even more power in content negotiations.
Roku's emerging as one of the streaming war's biggest winners.
Photo: Luke Sharrett/Getty Images
January 11, 2021
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
January 8, 2021
Roku's bet on smart TVs is paying off: Seven years after the company first began licensing its operating system to TV manufacturers, it has become a market leader in North America. Roku and its hardware partners sold more smart TVs in the U.S. in 2020 than competitors like Samsung, LG and Vizio, according to data from the NPD Group released by Roku on Friday.
Roku TVs had a 38% market share in the U.S. and a 31% market share in Canada, according to NPD's data. Roku also announced earlier this week that it had ended 2020 with 51.2 million active accounts, adding around 14 million accounts over the past 12 months. Altogether, consumers streamed 58.7 billion hours of entertainment through their Roku devices in 2020, according to a news release.
<p>Both data points demonstrate how much of a force the company has become in North America, giving it even more power in negotiations with media companies looking to run their services on Roku streaming sticks and TVs. However, they also highlight how much Roku's business has been solely focused on the TV space, giving competitors a chance to dominate other smart device categories.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>After first making a name for itself with its streaming boxes, Roku began licensing its operating system to TV manufacturers in 2014, with one of its early licensing partners including China's TCL, <a href="https://www.protocol.com/tcl-roku-tv-profit-smartphone" target="_self">then virtually unknown in North America</a>. With affordable TV sets and a UI that emphasized simplicity over fancy new features, TCL and Roku managed to grow their market share year after year; at the end of 2019, every third smart TV sold in the U.S. was running Roku's operating system.</p><p>The growing popularity of Roku TVs and streaming devices has helped the company grow its advertising business and negotiate more favorable contracts with media companies looking to launch their apps on its platform. Roku is not only demanding revenue and ad-sharing agreements for any app that runs on its platform, but is also increasingly pressing media companies to make parts of their catalog available via its own free Roku Channel streaming service. Last year, negotiations between AT&T and Roku broke down, resulting in HBO Max not being available in Roku devices for six months.</p><p>Roku's expansion into other hardware categories has been more of a mixed bag. The company has made its own wireless speakers that work only with Roku TVs and streaming devices, but listings on various ecommerce websites suggest only modest demand. Roku's wireless bookshelf speakers were ranked No. 2,850 on Amazon.com's sales charts for consumer electronics devices at the time of writing. For comparison, Amazon's own Echo Dot speaker ranked No. 1, with other Amazon speakers and smart displays following closely behind.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>At one point, Roku developed a dedicated Wi-Fi product <a href="https://www.techhive.com/article/3445378/a-fix-for-your-wi-fi-problems-from-roku.html" rel="noopener noreferrer" target="_blank">called Roku Relay</a> that was supposed to optimize wireless connectivity for Roku streaming devices. The company tested Relay with a small number of consumers, but ultimately decided to not bring it to market.</p><p>Roku has been making some headway in cooperating with third-party companies in the audio space with a licensing program for third-party sound bars and speakers. Participating companies can market their devices as Roku TV Ready and integrate software to simplify setup. Roku TV Ready partners include TCL, Hisense, Enclave, Sound United and Bose, with Element scheduled to launch its own Roku TV Ready products this month. On Friday, Roku also announced that TCL would launch the first Roku TV Ready wireless sound bar in the coming months.</p>
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Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Power
How Zoom won 2020 — and how 2020 changed Zoom forever
Zoom never imagined being the company the pandemic forced it to become. Now it has to grapple with what's next.
Zoom got so big in 2020 that even competitors like Facebook have embraced it.
Photo: Facebook
December 23, 2020
David Pierce ( @pierce) is Protocol's editor at large. 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.
December 23, 2020
Zoom never wanted any of this. Coming into 2020, the company was in great shape: It was growing quickly, making money and becoming an essential tool for tech-forward businesses everywhere. It's not that nobody at Zoom had ever imagined being a home for happy hours, book clubs, yoga classes, elementary schools and doctor visits. It's just that Zoom had decided, fairly definitively, it never really wanted to be any of those things.
At the beginning of 2020, just before the pandemic upended the world and the rest of the year, Zoom Chief Product Officer Oded Gal told me that Zoom had no plans to become a consumer application. "We are still a business application," he said, "and we don't see ourselves moving away from that." There were some prosumers using Zoom outside of the 9-to-5, he said, and he certainly understood that there were compelling uses for consumer videochat. But he and Zoom were happy to leave those uses to FaceTime and Skype. "We don't want to be a consumer product," he said.
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</div></p><p>Trying to be both a consumer and business tool, CEO Eric Yuan told me around the same time, would actually be a mistake. One that he learned the hard way. "We were too ambitious" in the early days of Zoom, he said, "with business and consumer. We realized that's not realistic, because there's feature conflict." A consumer app would build fun filters and lenses; those features would just be in the way for business users. So Yuan and Zoom decided, firmly, to stay focused on businesses.</p><p>And yet here we are. 2020 was a banner year for videochat no matter who it came from, and it seemed like every app and device on the planet now has its own way to video chat. But the company clearly saw both an opportunity to grow during trying times, and an obligation to try and help where it could. "The pandemic expanded Zoom's reach from a business platform to a central part of daily life as people worldwide transitioned to working remotely, distance learning, and virtual gatherings," Zoom CMO Janine Pelosi said. And that changed the way Zoom thinks about practically everything. </p><p>Few companies have benefited more from the pandemic than Zoom. Its stock is up roughly 6x since the beginning of the year. Its revenue was up 367% in the most recent quarter, compared to the same quarter in 2019. It's an even more essential tool to even more businesses, with 485% more customers with more than 10 employees than it had a year ago. Maybe most impressively, Zoom continues to sit at the top of app store charts everywhere. Zoom has entered the rarified territory of Google and Band-Aid and Kleenex: It has become so mainstream that it now essentially defines the category. Videochats are Zooms, Zooms are videochats. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>The Zoom Effect is permeating through the tech industry and through culture. Webcams were the year's hottest gadgets, and even camera manufacturers like Canon and GoPro rushed to build software to turn their products into top-notch models. Lots of people got plastic surgery just to look a little better on their Zoom calls. (Zoom's "touch up appearance" setting evidently doesn't go far enough for some people.) Devices like the Facebook Portal and the Google Home added support for Zoom, even though it competes with those companies' own products, because if you don't have Zoom you don't have anything. Zoom became an ongoing SNL punchline … and for a while, the only way the show got made at all. </p><p>Zoom is now officially and forever both a business and a consumer product. Which feels appropriate, really, given the way the pandemic has blurred the lines between work and life for everyone. "Nine months ago, if Zoom wasn't working, that was IT's problem," said Phil Libin, the CEO of video app Mmhmm. "And now it's not. It's your problem. That's a big change." That change forced Zoom to rethink the way its product worked: It stopped developing new features for months, opting instead to focus on increasing its security. "We now have a much broader set of users who are utilizing our product in a myriad of unexpected ways, presenting us with challenges we did not anticipate when the platform was conceived," Yuan <a href="https://blog.zoom.us/a-message-to-our-users/" rel="noopener noreferrer" target="_blank">wrote in a post </a>announcing the 90-day security sprint. Even now, Yuan <a href="https://www.cnn.com/2020/11/23/tech/zoom-founder-eric-yuan-risk-takers/index.html" rel="noopener noreferrer" target="_blank">told CNN</a> that his workdays are dedicated entirely to security and privacy.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Zoombombing, for instance, hadn't been an issue when Zoom was just for internal meetings, but suddenly Zoom's ease of use was a liability. The company also had to rethink the way it collected and stored user data, and even how it taught users to use the product. It's one thing to sell to IT departments, and quite another to get an influx of users who just found you on the App Store. That has changed Zoom in lots of little ways, too; it's now making a habit of lifting the 40-minute limit for free users around major holidays, and offering decidedly sillier <a href="https://zoom.us/docs/en-us/virtual-backgrounds.html?_ga=2.158835519.460244263.1607352335-1790513659.1595860336" rel="noopener noreferrer" target="_blank">virtual backgrounds</a> than you might find in your average business meeting.</p><p>The pandemic didn't catch Zoom totally off-guard, though. The company had been betting for years that remote work would become more the norm, and was already thinking about deeper ways to help people interact from afar. The team has been investigating features like real-time translation and automatic note-taking for a while. Yuan thinks a lot about augmented reality: how to make a virtual handshake feel like a real one, how to make it easier for people to make eye contact through a webcam, how to make it so that everyone on your call can smell the coffee you're drinking. (Seriously.) </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>Zoom's big plan, at least before the pandemic, was to take over other parts of business communication. Zoom Phone was a growing project, replacing one desk phone at a time. And Zoom was working on things like text chat, too. "We think about the ability to upgrade the modalities," Gal said. "It's kind of a food chain: You can start with chat, then you can upgrade to voice calls and then you can upgrade to a video." </p><p>Zoom's still working on all that, but its ambitions have also gotten decidedly bigger. Now, rather than taking on Slack and Teams, Zoom is working on becoming the internet's next great platform. Zoom Apps let developers build their own Zoom integrations, and On Zoom turns Zoom into a full-fledged events platform. Zoom has features designed specifically for health care, others specifically for education. It is reportedly building email and calendar services, to more completely compete with Microsoft and Google, <a href="https://www.theinformation.com/articles/buoyed-by-video-success-zoom-explores-email-calendar-services" target="_blank">according to The Information</a>. If video is indeed becoming more like an operating system than an app, Zoom might be Windows.</p><p>Being the center of modern life has its downsides, though. Zoom's connections to China, both within the company and inside the product, have raised concerns as high as Congress. Its security issues sparked an FTC investigation. And, of course, the video boom is turning into a crowded industry full of deep-pocketed players happy to give their stuff away for free just to take a bite out of Zoom.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>But there's no question that 2020 has put Zoom at the epicenter of the technology industry, whether you're a user or a cloud-services company competing for the hottest contract of them all. The pandemic was the story of 2020, and no company describes life in a pandemic better than Zoom. Same goes for life in 2021 and beyond: The new normal is going to be a little different, for everyone and for Zoom. And like the rest of us, it's still learning exactly how that's going to work.</p>
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David Pierce ( @pierce) is Protocol's editor at large. 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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Inside tech’s efforts to invest in Black banks
Tech companies are facing escalating calls to go beyond deposits.
Yelp is the latest company to announce it will be depositing $10 million across three Black-owned banks, including Carver in New York.
Photo: Mark Kauzlarich/Getty Images
December 21, 2020
Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.
December 21, 2020
Aaron Mitchell, the director of HR for Netflix Animation Studio, had already been working for months on a proposal to address the racial wealth gap when the killing of George Floyd rocked the country in May. Suddenly, it seemed like every company was coming out of the woodwork with pledges to invest and diversify and do better.
On May 27, Mitchell sent an email to Netflix CEO Reed Hastings asking him what he thought of a plan to invest $100 million in Black banks, a unique strategy to funnel more capital back into Black communities struggling amid the COVID-19 pandemic. At that point, no other corporation had made a similar public commitment. Mitchell said the $100 million was an arbitrary amount of money with symbolic significance: It was the same amount that Netflix spent on "House of Cards," a flashpoint in the company's history.
<p>"I said, 'What do you think about this as an action? There's a lot of angst, a lot of people calling for action, and I think we have something that might work,'" Mitchell told Protocol. "His answer was yes, let's work it out."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Within 30 days, Netflix became the first large tech company to declare that it would deposit up to 2% of its holdings with Black-owned and Black-serving banks, an effort to put real money toward the fight to end the racial wealth gap.</p><p>In the months since, tech companies have become some of the most aggressive corporate players to dive into the reinvigorated "Bank Black" movement, depositing millions of dollars in financial institutions and funds serving majority-Black populations amid escalating public pressure. Netflix, Twitter, Square, PayPal and Uber have entered the fray with their own slightly different plans to invest, pledging — in widely-circulated press releases — to do their part in creating economic equality. Yelp last week became the latest company to announce it will be depositing $10 million across three Black-owned banks: Carver in New York City, Broadway in Southern California and Citizens Savings Bank in Memphis.</p><p>"We were inspired by other companies' examples of doing this and the question that almost every leader in our company is asking themselves: 'What can I personally do … from my station inside the company?'" said Miriam Warren, Yelp's senior vice president of engagement, diversity and belonging.</p><p>"Putting some money into deposit in a bank is not a crazy, radical move," Warren added. "This is something that makes sense and is obvious and, frankly, why haven't we thought about this before now?" </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>In typical Silicon Valley fashion, the process has become almost competitive, with each company touting its strategy as the best model for others to follow. Some, like Yelp, are putting cash directly into Black-owned banks, while others are investing money in funds that have broader reach. One example: Twitter has committed $100 million to launch the Finance Justice Fund with the Opportunity Finance Network, which will invest in a network of community financial development institutions across the U.S. Twitter said it hopes its partnership will develop into a model that other companies will follow. </p><p>There's some mistrust of the Silicon Valley companies as they elbow their way into the space, considering their less-than-stellar track record on racial justice and diversity issues. And leaders in the "Bank Black" movement, including bank owners and advocates, say tech is only skimming the surface if their intention is to make a real difference in closing the country's deeply entrenched racial wealth gap, which has left white families with an average net worth that is nearly 10 times higher than the average Black family's. </p><p>"I don't think it's enough to say we're going to move deposits over, which is a great step," said Ryan Williams, the CEO and co-founder of real estate startup Cadre, who has been pushing for tech to partner more closely with Black-owned banks. "There also has to be a more holistic view on how else we can accelerate the growth and multiplication of capital these institutions are able to deploy among their communities." </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><h3>Different models</h3><p>Netflix was the first and largest tech company to choose to put money in Black-serving financial institutions this year. So far, the company has deposited $10 million with the Hope Credit Union and $25 million in financing for a new fund, the Black Economic Development Fund, which injects capital into Black-led banks, anchor institutions and business transactions. (The Black Economic Development Fund is run by Local Initiatives Support Corporation, a nonprofit.)</p><p>Last Monday, Enterprise Community Partners announced that Netflix committed $25 million toward its "Equitable Path Forward" fund, an effort to support historically marginalized housing providers. </p><p>Shannon Alwyn, Netflix's director of treasury, said more announcements are coming. She's working with a small team at Netflix to figure out where they'll put the rest of the money, in consultation with dozens of outside experts and organizations. </p><p>"When we started, we knew nothing," Alwyn said. "As I got a little more sophisticated in this, I see there's this spectrum in things you can do. On the one side it's something you'd think would be very easy, which is depositing money, which is what we did. Then the other side is creating a fund to tackle exactly what you want to do." </p><p>Each of the companies involved in the growing movement has its own model, typically using a mixture of direct deposits and investments with mission-driven funds, which provide an extra layer of distance between the companies and their money. A Twitter spokesperson said, while capital infusions directly to minority-owned banks can be beneficial, there are often limits to how much they can accept, so the Opportunity Finance Network is better equipped to handle large capital infusions. (Most community banks are not prepared to deal with an influx of millions of dollars.) </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>In September, Square committed $25 million in direct deposits with CDFIs and minority deposit institutions, or MDIs, as well as $50 million more to separate outside funds (as well as $25 million "reserved for future investment into social impact projects"). PayPal created a $500 million economic opportunity fund and has so far committed $50 million to early-stage Black and Latinx venture funds, $50 million in LISC's Black Economic Development Fund, and $50 million to Optus Bank, which has a stated commitment to ending structural racism. </p><p>Dominik Mjartan, the CEO of Optus Bank, said he was skeptical of PayPal's announcement when it first came out over the summer. "I really was suspicious of these big announcements coming because I've seen for years how community development banks, and particularly minority-owned banks, get used for PR stunts or for purposes that may not be aligned with the genuine needs of our communities," Mjartan said. But ultimately, he reached out with an offer to talk and found himself on the phone with PayPal executives within a few days. He said PayPal's commitment is not "just noise."</p><p>To Mjartan and others, the key now is keeping up the momentum and continuing to push for the best models possible to actually make a difference. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>"I think it's a good first step — and it's very incomplete," said Rodney Foxworth, CEO of Common Future, a network that pushes for economic equality. </p><h3>Calls to go further</h3><p>Ultimately, it's not particularly onerous for a tech company to switch a small percentage of its deposits from one bank to another. It's not a donation, so the company isn't parting ways with any money, and it doesn't put its cash at risk. "Deposits and this drive to deposit money into Black-owned banks or community development banks is a great start, but you cannot solve 400 years of systemic disparities with those deposits," Mjartan said. </p><p>So Black business leaders are pushing for more: equity investments. Mjartan said equity investment was one of his initial proposals to PayPal, and he's been advising other tech executives to follow the same route, though he hasn't found much success yet. Brian Betts, the president and chief financial officer of Operation Hope, which is partnering with Twitter, said he made the same suggestion to Twitter during initial conversations, but he recognizes it's a much tougher ask. </p><p>"The easiest way [to invest] is to put deposits in, but they're less impactful," Betts said. "The longer you commit to that deposit, whether it's five or 10 years, that does improve the ability to make more of an impact. And then, of course, equity's going to be the biggest bang for the buck. It's going to make the biggest impact."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>Equity investments are a much riskier and longer-term commitment, and there's often hesitance from companies' treasury departments to tie up capital for years. Netflix's Alwyn said the company realizes "that is the ultimate need," but buying shares in particular banks proved outside of the company's investment policy. "We weren't ready to make that full change as of yet," she said. </p><p>Experts agreed equity investments could become the next frontier in supporting Black financial institutions — as long as companies are willing to take the plunge. "It's my sense that that's a very unfamiliar place to the treasury departments of these tech firms," Foxworth said. </p><p>In the interim, leaders of Black banks and economic justice nonprofits are adapting to this new reality. Tech companies are cautiously forming new relationships on the ground within the movement, including with the banks and funds they're investing in, to see where the momentum will ultimately take them. </p><p>And of course, there's fear, even among some of the people partnering with tech, about the staying power of this movement and whether the powerful companies will pull their money or abandon their relationships with local banks as the public's attention wanes. </p><p>"We are making business decisions based on this movement," Mjartan said. "We are counting on this support that then allows us to lean in more than we would have otherwise. And if we lean in and they cut the ropes, we're going to crash. And that's my fear." </p><p>Cadre's Williams said companies should act aggressively now. "If we revert to the status quo and pretend there aren't real and growing disparities, five or 10 years from now, there's going to be another version of what we saw this past year," he said. "And you're going to be forced to reckon with, 'Why did you not do anything? What was the justification for inaction?'" </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.
Power
Disney+ reaches 86.8 million paying subscribers
Disney is still committed to theatrical release windows, but execs signaled that could change.
Star will be available as part of Disney+ in Western Europe, Canada and New Zealand starting in February.
Image: Disney
December 11, 2020
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
December 10, 2020
Disney's streaming service continues to grow at a rapid pace: The streaming service now has 86.8 million paying subscribers, Disney CEO Bob Chapek announced at the company's annual investor day on Thursday. Disney also announced a new Star-branded streaming service that is being integrated into Disney+ in some territories, and a slight price increase: Disney+ will cost $7.99, up from $6.99, starting next March. Pricing in other territories will also increase.
Star will be available as part of Disney+ in Western Europe, Canada and New Zealand starting in February. Star will offer a number of Disney shows and movies currently available to U.S. audiences on Hulu; consumers will have to unlock the content because it includes R-rated titles and other content that stands out from the family-friendly Disney+ fare.
<p>Star won't be part of Disney+ everywhere: The company will be making a standalone Star+ service available in Latin America. Disney is adopting the brand from India, where it acquired Hotstar last year, and used it as a key driver for Disney+ adoption. One-third of all Disney+ subscribers are currently located in India, said Disney International DTC Chairman Rebecca Campbell: "Our launches around the world have been a key factor to subscriber growth to date."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Disney executives also used the event to give investors an update on the company's other streaming services. Hulu now has 38.8 million subscribers, including 4 million who pay for the company's live TV service. ESPN+ reached 11.5 million subscribers by early December.</p><p>This puts Disney years ahead of its own forecasts for its direct-to-consumer businesses. When Disney first announced plans to launch Disney+, the company predicted that it would reach between 60 million and 90 million subscribers by 2024. The company had planned to reach 40 million to 60 million subscribers for Hulu by 2024, as well as 8 million to 12 million for ESPN+. On Thursday, Disney updated its Disney+ guidance; the company is now expecting the service to have 230 million to 260 million subscribers by 2024.</p><p>The latest number drop also means that Disney+ added more than 13 million subscribers over the past two months. <a href="https://www.protocol.com/bulletins/disney-reaches-73-7-million-subscribers-one-year-after-launch" target="_self">Disney executives revealed last month</a> that the service had reached 73.7 million subscribers on Oct. 3, which marked the end of its fiscal fourth quarter. </p><p>Disney executives said Thursday that the company was prioritizing its streaming services over other areas of its business going forward. As part of this strategy, Disney committed to the release of a number of original Marvel, "Star Wars" and Disney/Pixar series exclusively on Disney+ over the coming years. In addition, Disney will release 15 live action and animated Disney and Pixar feature films on the service.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>However, Disney stopped short of a day-and-date movie release strategy like the one Warner Bros. plans to implement in 2021. <a href="https://www.protocol.com/bulletins/warner-bros-hbo-max-releases" target="_self">WarnerMedia CEO Jason Kilar announced last week</a> that the studio would be releasing all of its movies on HBO Max on the day of their theater premiere — an announcement that caught theater chains like AMC by surprise.</p><p>Disney, on the other hand, is still nominally committed to the theatrical window, with some exceptions; the company will release the live-action movie "Raya and the Last Dragon" as a paid premium title on Disney+ when it reaches theaters next March, much like it did with "Mulan" last summer. </p><p>Disney media and entertainment distribution chairman Kareem Daniel signaled that the company could adopt similar models for other titles down the road. The company had the ability to "quickly reevaluate" its release strategy, Daniel said, adding that it would ultimately do what was best for consumers.</p><p><em><strong>Update</strong>: This article was updated at 5:30 p.m. PT to include more information about guidance and pricing. </em></p>
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Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
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