September 8, 2022
Illustration: Christopher T. Fong/ Protocol
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re taking a look at the impact the midterms are having on the streaming industry. Plus: Snap is into enterprise AR now, and Apple confused a bunch of AR fans.
It’s been a rocky year for the streaming industry. Netflix stumbled, and it had to acknowledge that it’s facing a significant subscriber slowdown. Ad-supported streaming is still growing, but brands and marketers are cutting back, which has severely impacted companies like Roku. And Warner Bros. Discovery did a U-turn on many of its streaming initiatives, killing projects like “Batgirl” in the process.
The good news: Ad-supported streamers are about to get a big break, thanks to the midterms. Political campaigns are expected to spend a whopping $1.2 billion on political advertising on streaming services, and some insiders told me they’re already seeing spending way ahead of where it was just two years ago.
Spending more money on streaming ads makes a lot of sense for political campaigns. Not only did streaming surpass other forms of TV viewing for the first time ever in July, it’s also really the only way to reach younger audiences.
But will the cash influx be enough to help streamers recover? Major media execs did call out the impact election money will have on their streaming services during recent earnings calls, with NBCUniversal CEO Jeff Shell saying it would contribute to “some pretty strong results from Peacock in the coming fall.”
The big unknown: Netflix and Disney. Both companies are scheduled to launch ad-supported tiers for their respective streaming services before the end of the year, and both could theoretically provide many millions of additional eyeballs to political advertisers — if not for this election, then for 2024, when streaming spending is likely going to be even higher.
You can read my full report on political advertisers cutting the cord on Protocol.com.
— Janko Roettgers
Software is changing payments and banks should care:At Modern Treasury, we built a platform to complement banks’ existing products to help them prepare for a future led by software. We’re here to help them future-proof their business so that they can participate in and lead in the next phase of financial services.
“We saw challenges on the horizon, and hedged our bets accordingly, but still got punched in the face hard by 2022’s new economic reality.” —Snap founder and CEO Evan Spiegel addressed employees in an internal memo following the company’s recent massive layoffs. In the memo, Spiegel committed to developing future versions of the company’s Spectacles AR glasses and revealed that Snap has been building out an enterprise AR unit to license its tech to other companies.
“We are very serious about entertainment. We are in it for the long haul … we want to build the best selection of streaming content.” — Amazon CEO Andy Jassy sang Prime Video’s praises during a fireside chat with Kara Swisher at this week’s Code conference. Jassy has good reason to be bullish: The company’s “Lord of the Rings” series has been a big hit with viewers.
Netflix cuts costs, starts hiring junior staffers. Cost-cutting measures reportedly include reigning in cloud computing expenses, killing some homegrown production software and hiring junior staff — a big departure for a company that used to only recruit experienced employees.
Sony throws shade at Microsoft’s Call of Duty concession. Sony exec Jim Ryan told Gamesindustry.biz that Microsoft’s pledge to release Call of Duty on PlayStation for three years after its current agreement was “inadequate on many levels.”
VR hardware startup Varjo raises $40 million. The company, which makes high-resolution headsets for enterprise use, has raised around $150 million to date.
TikTok parent makes deep cuts to its gaming unit. ByteDance has reportedly laid off hundreds of employees in its nascent gaming division, according to a report this week from the South China Morning Post.
Google will announce its 1080p Chromecast next month. The new dongle, which we first reported on in January, will cost about 40% less than the company’s existing 4K version.
The owner of Regal Cinemas just filed for bankruptcy. Cineworld is said to be the second-biggest theater chain in the world; the company plans to reemerge from bankruptcy early next year.
A historic indie studio shuts down. Vodeo Games, the developer of indie game Beast Breaker and the first North American studio to unionize, said on Wednesday it was shutting down due to a lack of funding.
Gulf states want Netflix to censor its service. Countries including Saudi Arabia, the United Arab Emirates, Bahrain, Oman, Qatar and Kuwait want Netflix to remove “offensive” content.
Apple unveiled its new iPhones and watches yesterday, alongside a refreshed version of its AirPods Pro wireless earbuds that now personalize spatial audio based on a 3D scan of your ear. Which is pretty neat, but not the innovation that many had been waiting for: AR and VR enthusiasts everywhere had hoped that the company would give us at least a sneak peek at its still-unannounced mixed reality headset.
The anticipation was so high that more than one AR aficionadomistook the closing bumper of Apple’s keynote video for a teaser for future mixed reality products. In reality, it was just a clever plug for “Severance,” an Apple TV+-exclusive dystopian sci-fi show.
Come to think of it, “Severance” may be a perfect metaphor for the secrecy under which Apple is developing its AR and VR hardware. No one really knows what the company is working on, when it will get released or how much it will cost. For now, anyway. One day, we’ll just walk through that door, and accept our new Apple Reality. I just hope the waffle party will be optional.
— Janko Roettgers
Software is changing payments and banks should care: Activities that once took place in person or over the phone—getting a loan, making a payment, investing in a security—now occur entirely within software. Covid has only accelerated this trend. To remain a part of clients' financial lives, banks need to play well with software.
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