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Protocol Source Code
What matters in tech, in your inbox every morning.

The future of TV is really expensive

Image: 1516 / Protocol
TV money

Good morning! This Thursday, the future of TV keeps getting more expensive, tech's favorite email app is getting an update, and the Elon-Kanye photo you'll see everywhere.

Some housekeeping: We'll be off tomorrow, but back on Sunday with our weekend edition.

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People Are Talking

At the end of Zoom's 90-day security sprint, CEO Eric Yuan said there's still work to do:

  • "This period has brought about meaningful change at our company and made the safety, privacy, and security of our platform central to all we do, as we strive to be worthy of the trust customers place in us."

Google was planning to reopen its offices next week, but security chief Chris Rackow explained why that's not happening until September:

  • "While conditions do vary from state to state, we need to see that the U.S. outlook as a whole is stable before we move forward. As the recent resurgence of cases demonstrates, COVID-19 is still very much alive in our communities."

As Q2 comes to a close, Elon Musk sent a very proud (and very short) note to Tesla staff:

  • "Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!"

The Big Story

The new price of TV: $65

Here, in one very long sentence, is how the last several years of the TV industry has gone. Everyone thought their cable was too expensive and they were paying for channels they didn't use, some tech companies realized they could offer fewer channels for less money, lots of people signed up, then those people realized they actually missed a few of their old channels and that DVR is a cool invention, and so to accommodate those needs tech companies began offering cable-company features … at cable-company prices. Whew!

  • YouTube and Fubo both upped their live-TV prices this week, to $65 a month. Both also added features, including more channels — Fubo got all of Disney's stuff, while YouTube TV is getting Viacom programming.
  • Both YouTube TV and Fubo now offer upwards of 85 channels each, along with DVR features and all sorts of other cable-y things.
  • Sling, which has been losing customers in recent months (and has a price-hike history of its own), promised not to raise prices until at least next April. "We believe now is not the time to make our customers choose between staying informed and entertained, and putting dinner on the table," the company said, in whatever the opposite of a veiled shot at competitors is.

Let's just call this what it is: cable! Sure, the apps are better and it's easier to cancel than by calling Comcast and waiting on hold for six and a half months, but this is just cable TV. Because it turns out, for all the tech companies' wherewithal and leverage, they couldn't break the way the TV business works.

  • "While we'd like to offer channels a la carte, it's not fully up to us," YouTube TV tweeted from its official account. Most networks still only sell their channels as a full bundle — and the price of those bundles is increasing for anyone who wants them.

I don't think it'll be like this forever. But with a glut of new streaming services changing the way things are made, bought and sold, anything that feels familiar to a studio or network takes on extra appeal. And with fewer customers paying for live TV across the board, companies are looking to squeeze more out of every last consumer that remains.

Email

What's new from tech's favorite email app

People keep asking Rahul Vohra when he's going to change his business. His company, the ultra-powerful email tool Superhuman, still manually onboards every customer, still costs $30 a month, and still has a waiting list hundreds of thousands of people long. And with Hey, Apple and others bringing email back to the front of the tech conversation, you could imagine Vohra deciding to open the gates a little more. But he's not doing it.

  • "People say, you can't possibly build a business charging $30 a month for email," Vohra said. "And all that really tells me is they're not the target market." He's after the people who spend hours a day in their inbox, and those people continue to be happy to pay.
  • As for the onboarding thing? Vohra said that's going great. "It makes a lot more sense to onboard people at a rate at which you can fix bugs and build new features," he said.

The business has changed in one way over the last few months, though: Vohra said one of Superhuman's key growth drivers has always been "people seeing it over someone's shoulders," and that's just not happening right now.

  • Referrals have been down, he said, but they're more than offset by totally new signups. Lots of people and companies are rethinking their work tools thanks to COVID, and some of them are finding Superhuman.

As for the product itself, Vohra said he's thinking about lots of things. Superhuman's working on Office 365 support, for one: "It's the biggest drop-off reason in our signup funnel," he said. "Someone comes to us, and all their friends are talking about Superhuman, and then they can't use it because they're on Office 365. So that time's finally come." That's coming soon, along with an Android app and an improved iPad app.

  • The team's also working on more calendar integrations, and thinking about what the Superhuman take on tasks might be.
  • And Vohra's interested in note-taking, but thinks Notion's going to be tough to beat. "I wouldn't want to compete against me in email and I wouldn't want to compete against Ivan [Zhao] and Notion in notes."

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Looking to make an engineering career move? What we do extends far beyond finance. Explore open roles in engineering, and apply today.

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Regulation

The UK says it's time for serious antitrust action

The antitrust hits just keep coming. This time, Reuters reported that the U.K.'s Competition and Markets Authority is particularly interested in the billions of dollars that Google pays Apple every year to be the default search engine in Safari.

  • Google paid about £1.2 billion, or about $1.5 billion, for "default placements" in browsers, just in the U.K., just in 2019. That amount, the CMA said, is "one of the most significant factors inhibiting competition in the search market." Even the other companies that pay to be iPhone search engines can't outpay Google for the top slot. The CMA wants to restrict how much Apple and others can monetize that placement.
  • In general, the CMA's most recent report says defaults are powerful, and often overlooked: "Default settings and the way in which choices are presented to consumers have a strong influence on the ability of platforms – particularly social media platforms – to collect data about their users, and the ability of users in turn to control the use of their data."

The CMA's report is long, thorough, and totally unsparing. But it kind of boils down to this: "Google and Facebook have such entrenched market power as a result of these self-reinforcing entry barriers, that we have concluded that the CMA's current tools, which allow us to enforce against individual practices and concerns, are not sufficient to protect competition."

  • The numbers are genuinely mind-boggling. The CMA said Facebook accounted for more than half of display ad revenues in 2019, more than 5 times as much as second-place YouTube. Google, meanwhile, claims more than 90% of search ad revenue.

The report's recommendations go beyond fines and slaps on the wrist. The CMA wants to require Google to open up its search data to competitors, and to force Facebook to work with other social platforms. (Maybe we'll get Instagram embeds back on Twitter!)

  • Across the board, it wants more competition. Which means less Google and Facebook.

Making Moves

Chris Parnell is taking a "senior programming role" at Apple TV, after being co-president of Sony Pictures Television. He's rejoining old colleagues Jamie Ehrlicht and Zack Van Amburg, who used to run Sony Pictures Television and now run Apple TV.

Match Group added four directors to its board: Melissa Brenner, an exec at the NBA; Stephen Bailey, the CEO of ExecOnline; Wendi Murdoch; and Ryan Reynolds, Deadpool himself.

John Swieringa is the new head of Boost Mobile, which is now officially part of Dish. He'll try and build out a new major carrier, which was part of the plan when Sprint and T-Mobile were allowed to merge.

Pinduoduo founder Colin Zheng Huang is stepping back: He's no longer CEO of the ecommerce giant, and has sold around $14 billion worth of his shares. Former CTO Chen Lei is the new CEO.

Two senior Zoox engineers have left for Waymo, The Information reports. James Philbin and Marc Wimmershoff left Zoox a few days after it was acquired by Amazon.

In Other News

  • Jeff Bezos, Tim Cook, Mark Zuckerberg and Sundar Pichai will all testify before the House Judiciary Committee as part of its antitrust investigation. It will be the first time Bezos has appeared before Congress.
  • From Protocol: The big ad boycott has targeted Facebook, Instagram and Twitter — but not YouTube. That could be because of policy changes it made after it was boycotted back in 2017.
  • Apple has reportedly canceled contracts with game developers as part of a shift in focus for Apple Arcade. It wants developers to focus on "engagement," a bit of a departure from the short, artsy titles it touted at launch.
  • Don't miss this story from The Information about how Jason Kilar is shaking up WarnerMedia. We'll see how much success he has: The early response to HBO Max has disappointed executives, according to the article.
  • Apple is reclosing another 30 stores in the U.S., including a bunch around LA. It brings its total number of reclosures to 77.

One More Thing

Kanye and Elon, memelords

Every once in a while, you see a photo on the internet and you're like, "Oh, I'm going to see 400,000 memes made out of this photo." Yesterday Kanye West tweeted precisely one of those photos: West with Elon Musk, two rad dads with cool sneakers, captured by Grimes. And then came the memes. And the investigations into the statue in the background. And the body-switching. Someday, when our great-grandchildren ask about when Twitter was actually good, I hope we show them this thread.

A MESSAGE FROM GOLDMAN SACHS

Goldman

See yourself here

At Goldman Sachs, we think who you are makes you better at what you do. Discover Joan's journey as an engineer and explore our open engineering roles.

Learn more here.

Today's Source Code was written by David Pierce, with help from Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your holiday, see you Sunday!

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