July 29, 2021
Good morning, and welcome to Protocol Next Up. This week: Redbox is going public this year and Facebook's has expensive plans for the metaverse.
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DVD kiosk rental company Redbox is scheduled to go public via a SPAC reverse merger later this year, and I caught up with Redbox CEO Galen Smith recently to learn how he wants to spend all the money the deal is expected to bring in. You can read more about Redbox and its unique take on the streaming wars in my Q&A with Smith, but it's worth looking a bit more closely at some of its post-SPAC investment plans:
Is all that enough to turn Redbox into a successful player in the streaming world? Honestly, I'm not sure. A recent investor presentation shows that the company only made $40 million with digital video last year, yet hopes to grow digital revenue to a whopping $384 million by 2023. At the same time, Redbox estimates that its kiosk revenue will recover from a pandemic low of $506 million last year to $728 million by 2023.
And Redbox isn't acting in a vacuum: Its digital initiatives compete with streaming services from media companies and device makers, including ad-supported services like the Roku Channel, Amazon's IMDb TV and Samsung's TV Plus. However, the company has a few things going for its digital push:
Redbox wouldn't be the first company to kickstart streaming with DVDs. Netflix essentially financed its entire streaming business through DVD rental profits (and still sends out red envelopes to a few million members every month). It will be interesting to see whether Redbox can follow in Netflix's footsteps.
"Tech companies are going to start calling everything a 'metaverse' soon aren't they." —CNBC tech editor Steve Kovach, probably actually predicting the future.
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Mark Zuckerberg told investors Wednesday that the metaverse will require "very significant investment" for years to come.
Zuckerberg has been on a one-man tour to sing the virtues of the metaverse, which continued with his appearance on the company's Q2 earnings call Wednesday. Outlining the company's key priorities for the next few years to come, he told investors and analysts that "the metaverse is going to be the next chapter for us as a company."
Analysts on the call seemed to be a little unhappy about the lack of details, and investors sent Facebook's share price down 4% in after-hours trading. However, this hasn't been the first time that Zuckerberg outlined a massive initiative seemingly on a whim, only to be proven right later.
In 2016, he predicted that "the vast majority of the content that people consume online will be video" in a few years. On Wednesday, Zuckerberg delivered a bit of an update on that prediction: "Video now accounts for almost half of all time spent on Facebook."
This story first appeared on Protocol.com.
VR motion sickness is a real thing, and the industry has been working hard to make sure people don't puke their guts out after wearing a headset. Personally, I don't experience it all that often, but I nonetheless do appreciate those comfort-level warnings on the Oculus Store. In fact, I wish that they would be available in the real world as well, including during a mini vacation I took last week. Sitting at the pool? Very enjoyable. Climbing up a 100-foot sand dune? Not that comfortable at all. Rolling down said sand dune? Apparently not something someone in their 40s should ever attempt.
Thanks for reading! See you next week.