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next-upnext upauthorJanko RoettgersNoneDo you know what's coming next up in the world of tech and entertainment? Get Janko Roettgers' newsletter every Thursday.9147dfd6b1
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.
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.
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, then virtually unknown in North America. 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.
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.
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.
At one point, Roku developed a dedicated Wi-Fi product called Roku Relay 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.
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.
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.
Twitter’s future is newsletters and podcasts, not tweets
With Revue and a slew of other new products, Twitter is trying hard to move past texting.
We started with 140 characters. What now?
Image: Liv Iko/Protocol
January 26, 2021
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.
January 26, 2021
Twitter was once a home for 140-character missives about your lunch. Now, it's something like the real-time nerve center of the internet. But as for what Twitter wants to be going forward? It's slightly more complicated.
In just the last few months, Twitter has rolled out Fleets, a Stories-like feature; started testing an audio-only experience called Spaces; and acquired the podcast app Breaker and the video chat app Squad. And on Tuesday, Twitter announced it was acquiring Revue, a newsletter platform. The whole 140-characters thing (which is now 280 characters, by the way) is certainly not Twitter's organizing principle anymore. So what is?
<p>Twitter was always just about speed. The initial 140-character limit that became associated with the platform was a technical limitation — required to fit everything into a text message, then the quickest way to reach people — not a statement about brevity being the soul of anything. Many of the moves Twitter has made over the years have been in service of making Twitter even faster: faster to show users good stuff with algorithms, faster to publish with Fleets, faster to spread information with RTs and quote tweets. Even when Twitter decides not to do something, the reasons usually come back to speed. Take the much-desired edit button: One reason Jack Dorsey has given <a href="https://www.wired.com/story/jack-dorsey-wont-get-edit-tweet-button/" target="_blank">for not including one</a> is that it "means we'd have to delay sending that tweet out … we'll probably never do it."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Rather than think of Twitter as a social network or a 140-character writing tool, it's helpful to think of Twitter the way Dorsey does. "At its core Twitter is public messaging," he <a href="https://twitter.com/jack/status/684496529621557248" target="_blank">said in 2016</a>. "A simple way to say something, to anyone, that everyone in the world can see instantly." </p><p>That tweet came in part in response to <a href="https://www.vox.com/2016/1/5/11588480/twitter-considering-10000-character-limit-for-tweets" rel="noopener noreferrer" target="_blank">a Recode story</a> that claimed Twitter was considering expanding its text limit to 10,000 characters. Dorsey didn't quite acknowledge the plan, but he didn't shoot the report down, either. He also explained why longer-form text might be a powerful part of Twitter. "We've spent a lot of time observing what people are doing on Twitter, and we see them taking screenshots of text and tweeting it," he tweeted (in a Notes app screenshot, of course). "Instead, what if that text … was actually text? Text that could be searched. Text that could be highlighted. That's more utility and power." </p><p>Increasingly, Twitter is also thinking about what Twitter looks like outside of its own apps. With Project Bluesky, the company is investigating turning Twitter into a protocol rather than a platform, so the Twitter that users know today would be just one way to tap into the social graph and content flowing through it. And with Revue, Twitter is heading into users' email inboxes. Revue appears to be a good fit at Twitter, actually: Its platform has always focused on curation, making it easy for newsletter writers to grab a bunch of links, add commentary and send it to subscribers. Which sounds an awful lot like Twitter — only longer.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>The Revue acquisition, and some of Twitter's other recent moves, also make clear where the company is headed as a business. It's leaning into working with creators, trying to help people build audiences and make money on the platform so that they'll keep spending time there. Twitter is way behind on this front. Twitter is, for most creators, a marketing vehicle, a public way to send fans to the Instagram/Twitch/TikTok/Substacks that make them actual money. </p><p>By acquiring a newsletter provider, Twitter brings at least one part of that in-house. "Revue will accelerate our work to help people stay informed about their interests while giving all types of writers a way to monetize their audience," Twitter's Kayvon Beykpour and Mike Park wrote in <a href="https://blog.twitter.com/en_us/topics/company/2021/making-twitter-a-better-home-for-writers.html" rel="noopener noreferrer" target="_blank">the blog post</a> announcing the acquisition. The same could soon be true for Breaker with podcasts, and Spaces with audio events. If 280-character Twitter can continue to be a powerful marketing engine, but all that marketing can drive toward Twitter's other, higher-fidelity messaging tools, Twitter stands to be a useful home for lots of creators. And, of course, if creators stay, so do users.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>When Dorsey said last year that Twitter was thinking about what <a href="https://www.cnn.com/2020/07/23/tech/twitter-subscription-earnings/index.html" rel="noopener noreferrer" target="_blank">a subscription model for Twitter</a> might look like, these are almost certainly the products he was thinking about. "$9.99 a month for the really good tweets" is a tricky line to walk for an ad-based business, and it's not in line with the way Dorsey has always thought about Twitter. (After all, is there anything slower than a paywall?) But paid newsletters, paid podcasts, ticketed Spaces events and all manner of other similar products could add new revenue streams. Twitter could also be trying to make money from creators themselves, too: It has at least <a href="https://www.searchenginejournal.com/twitter-is-considering-these-premium-features-in-a-subscription-model/376287/" rel="noopener noreferrer" target="_blank">run surveys</a> asking how users would feel about paying to upload longer videos, get better analytics, or add custom badges to their profile. </p><p>There's no guarantee any of this will work. Twitter's history with integrating new products is spotty, and many creators are still wary of the company after it was so quick to kill Vine. But this is what Twitter wants to be: the internet's universal communication tool, with all the new features that requires.</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.
Power
It chased fraudsters. Now, Pindrop wants to simplify streaming.
The security startup has struck a partnership with TiVo to personalize voice search.
Pindrop is partnering with TiVo to bring its voice authentication technology to smart TVs and streaming devices.
Photo: Scott Eells/Getty Images
January 26, 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 26, 2021
Chicken Man was trying to be clever.
Calling up banks to trick unsuspecting customer service agents, the scam artist would always play a recording of chickens in the background to mask his voice. Security experts at Pindrop, a voice authentication startup used by major financial institutions to screen 1.1 billion calls last year, got such a kick out of his efforts that they even named a conference room after him. However, Chicken Man couldn't defeat Pindrop's technology, and ultimately helped the company prepare for a new challenge: a typical family's living room.
<p>On Tuesday, Pindrop announced a partnership with TiVo to bring its voice authentication technology to smart TVs and streaming devices. Instead of weeding out fraudsters, the technology is now being used to personalize voice search results and present the right content recommendations to each member of the family. Soon, the company even plans to infer emotional states from a person's voice, and tweak content recommendations accordingly.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Thanks to the unwitting help of fraudsters like Chicken Man, Pindrop has gotten very good at dealing with background noise. During a demo given to Protocol, an Android TV device featuring Pindrop's tech was able to identify two different speakers even with a blender running on high gear, as well as with one of the participants wearing a muffling N95 mask. <br></p><p>Personalization for smart devices is nothing new. Streaming services like Netflix and Disney+ have for years offered user profiles to personalize content recommendations. Similarly, Google and Amazon are both offering consumers a way to personalize responses from their respective voice assistants. </p><p>But while the tech and streaming giants require users to actively set up user profiles and authenticate the voices of each member of their household, Pindrop is taking a more organic approach. "We do something called passive clustering," explained CEO Vijay Balasubramaniyan. Pindrop's algorithms analyze over 250 voice characteristics, including intonation, rhythm and style. </p><p>In the living room, the technology is being used to develop unique profiles for everyone in the household; the profiles are then connected to content recommendation engines like the one developed by TiVo. Consumers can decide to name the profiles for each family member, but Pindrop doesn't need to know anything about the real identity of each user.</p><p>Once the first streaming products powered by Pindrop launch, the startup wants to fine-tune its technology to detect the emotion and age of consumers to further improve recommendations. TiVo has yet to announce any products that will feature Pindrop's technology, but Balasubramaniyan said that we may get an update on that in the next few months. In addition to its legacy DVR business, TiVo also launched its own Android TV streaming dongle last year, and is licensing its voice technology to other companies.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Pindrop's work for the living room also helped the company improve some of its other security efforts. One example: Live call center conversations are typically a lot longer than the voice commands used to search streaming services, but by optimizing for these short phrases, Pindrop was also able to improve its screening of interactions with the kind of automated call center platforms that ask consumers for one-word choices.</p><p>"Solving this problem for TV has helped us in the call center world," Balasubramaniyan said.</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.
The key to American economic recovery? Automation.
A manufacturing sector revitalized by technology could help President Biden secure long-term economic growth, argue Rick Lazio and Myron Moser.
Technology could play a vital role in bolstering the economy.
Photo: Hans-Peter Merten/Getty Images
January 26, 2021
Rick Lazio is currently a senior vice president at alliantgroup and is a former U.S. Representative from New York. After Congress, Rick moved to the private sector working for JPMorgan Chase as a managing director and then executive vice president.
Myron Moser is chairman of Hennepin Technical College Foundation Board, the former chairman of the board of Hartfiel Automation and a current strategic advisory board member at alliantgroup.
January 26, 2021
The economic impact of COVID-19 will be with us for years to come.
The U.S. economy is working its way back, albeit slowly, with the economy recovering only half of the more than 22 million jobs lost in March and April due to the pandemic and operating at 82 percent capacity compared to the first quarter of 2020.
<p>Despite these economic headwinds, there is light at the end of the tunnel. Vaccinations and the potential for additional relief from Capitol Hill make the prospect of stronger economic growth in the near future compelling.</p><p>However, sustainable economic revival depends on more than just government aid in the short term. In order for President Joe Biden to usher in an era of long-term economic growth, he will need to lean on one of America's historically core industries: manufacturing.</p><p>A revitalized manufacturing sector will require a myriad of changes, but the payoff would be a boon for the U.S. economy that could drive us out of economic doldrums, take market share away from an adversarial China and provide increased economic and national security.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>The most important and pressing trend is undoubtedly the digital revolution of the industry. Cloud and automation technologies, alongside AI and machine-learning tools, will increasingly drive efficiencies in the industry that will allow the U.S. to compete and win on the world stage. </p><p>Countries such as <a href="https://www.cnbc.com/2020/03/02/the-rush-to-deploy-robots-in-china-amid-the-coronavirus-outbreak.html" rel="noopener noreferrer" target="_blank">China</a>, <a href="https://www.ft.com/content/87ac09b0-8c9a-11e9-a24d-b42f641eca37" rel="noopener noreferrer" target="_blank">Japan</a> and <a href="https://www.bloomberg.com/graphics/2019-new-economy-drivers-and-disrupters/south-korea.html" rel="noopener noreferrer" target="_blank">South Korea</a> have all embraced automation. Their ability to adapt to market demand,<a href="https://roboticsandautomationnews.com/2020/07/30/opinion-a-coronavirus-induced-acceleration-of-robotics-and-automation-is-happening-in-china/34618/" rel="noopener noreferrer" target="_blank"> particularly during this pandemic</a>, proves their infrastructure's effectiveness. America's failure to keep pace with those major overseas players is a problem that demands immediate action. </p><p>Specifically, Biden should name a Cabinet-level working group to develop a set of broad initiatives to encourage the integration of automation technologies in the manufacturing industry.</p><p>This type of initiative also would be a positive for job growth in the automation and tech industry, which develops the equipment and programs necessary for the manufacturing industry to thrive. It's a win-win for any politician willing to throw their political capital behind the effort to promote the integration of the two industries. The bolstering of American manufacturing has enjoyed bipartisan support for years.</p><p>The potential benefits are huge. Robotic process automation <a href="https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-next-acronym-you-need-to-know-about-rpa" target="_blank">has proven to show ROI</a> for companies between 30% and 200% in the first year, all while bringing new, safer and better-paying jobs to the factory floor. A study from <a href="https://protect-us.mimecast.com/s/hvIbCZ60jKuyvX9Hj4JkT?domain=personal.lse.ac.uk" rel="noopener noreferrer" target="_blank">the London School of Economics</a> found that automation increased annual productivity of companies by 0.36 percentage points — more than the 0.35 percentage points added by the British industrial revolution. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Biden should seize on these facts and help lead a digital revolution of the manufacturing sector. To do this, the president must set aside the reflexive urge to withdraw from any of former President Trump's industrial and trade policy, and think about what is best for the industry and economy as a whole.</p><p>We've <a href="https://www.newsweek.com/what-american-manufacturing-really-needs-opinion-1554902" rel="noopener noreferrer" target="_blank">written before</a> on the manufacturing industry's hesitation when it comes to a Biden presidency. A full pull-back from targeted tariffs, effective tax reforms and a return to regulatory overreach — all of which collectively drew U.S. firms back from overseas where cheap labor remains tempting bait — would do more harm than good.</p><p>These campaign promises, if put into action, would run contrary to his stated goal to get the American employers hiring and growing again. It would hamstring businesses that are trying desperately to hold onto jobs, and would not just impede innovation, but do long-term damage to the sector.</p><p>Instead, Biden, with his extensive Washington experience and legislative relationships, should seize the moment to work with members of both parties. He should make clear that his administration is behind the notion that a technological revolution in the American manufacturing sector will be vital to our country's economic wellbeing in the decades to come.</p><p>How? By maintaining the tough but fair trade policies that have provided room for American manufacturers to ramp up; through the promotion of incentives for employers to work with technical schools and other training institutions to increase the supply of technical workers who can support automation; and by recognizing that tax policy has to promote innovation generally and automation specifically, which includes leaving the capital earned by manufacturers with them so that they can afford to invest and grow their technological capabilities. Higher taxes on this sector will simply thwart the traction that we have begun to witness.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Those Democrats in Senate whose home states rely on manufacturing — including Sherrod Brown (Ohio), Dick Durbin and Tammy Duckworth (Illinois), Gary Peters and Debbie Stabenow (Michigan), and Bob Casey (Pennsylvania) — should lead the charge on this effort as members of the Congressional majority.</p><p>Successful manufacturing policy requires policymakers to listen first to those who are doing the training, investing, designing and operating. Here, a healthy modesty by the political class is in order. President Biden should not play a game of picking winners or losers. Instead, he should reach out to critical members of the manufacturing and technology sectors to see what they would need to bring American jobs back home.</p><p>It's not lost on us that firms that want to be a part of this digital revolution will need to have capital on hand. After consulting with industry experts, Biden and his allies in Congress should work to provide financial incentives, such as tax deductions for embracing industry 4.0 tools and automation, or amplified credits such as the research and development tax credit.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>What's also apparent is that a technological revolution in the manufacturing sector is only as good as the amount of readily-available skilled labor. A revamped STEM education system in America will also be necessary, and will include increased investment in technical colleges, as well as strengthening recruitment and awareness at the high school level. This effort should also include increasing access to Pell Grants and opening up more opportunities for minority and underserved individuals.</p><p>Our final plea? Look beyond the politically-safe options of tariff drawbacks and tax hikes, and toward technologies that will carry our economy into the future. If we don't act quickly, the U.S. runs the risk of falling further behind China and others, whose hare-paced response during the pandemic should put all Americans on notice.</p><p>The tech and manufacturing sectors in the U.S. are a match made in heaven: one that could prove Biden's ability as a leader who can effectively reach across the aisle to restore America's manufacturing leadership.</p><p>Indeed, a matchmaker that could win the hearts of all American business owners.</p>
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Rick Lazio is currently a senior vice president at alliantgroup and is a former U.S. Representative from New York. After Congress, Rick moved to the private sector working for JPMorgan Chase as a managing director and then executive vice president.
People
What Tracy Chou learned about online harassment while trying to stop it
Her new app, Block Party, aims to give people control over harassing content.
Block Party founder and diversity activist Tracy Chou became the target of a Reddit harassment campaign while trying to promote the importance of anti-harassment tools.
Photo: Tracy Chou
January 26, 2021
Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
January 26, 2021
When Tracy Chou decided to host a Reddit "Ask Me Anything" about online harassment over the summer, she knew it probably wouldn't be the easiest experience, but she'd been dealing with trolls for most of her career. How bad could it really be?
A vitriol-filled nightmare, it turns out. The woman hosting a forum on why she was building an app to protect against online harassment was the target of one of the biggest harassment campaigns of her life. Reddit users mocked her inability to answer their questions (she had, but due to a system error, her comments were disappearing before anyone could read them). They ridiculed her appearance and motivations. Someone created a campaign to say nasty things about her on Substack, attaching her name and photo to some of the posts. They moved to Twitter, and then to 4chan, where they organized a group that flooded her site with a denial of service attack until it went down.
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</div></p><p>It took her weeks to get everything back under control. "I was getting harassed by trying to tell people about this anti-harassment software I'm building. It was awful," she said. </p><p>Chou made a name for herself as an outspoken diversity activist making common-sense arguments about why the tech industry needs serious culture change. Now, she's building an app to protect people from online abuse and harassment, inspired by her own experience engendering hate that grew along with her public profile. Her startup, called <a href="https://www.blockpartyapp.com/" target="_blank">Block Party</a>, provides a tool to filter trolling and harassing posts, and it launched for public signups last week. </p><p>People have asked Chou why she just doesn't stay off Twitter. But instead of allowing harassment to push her off the internet, she wants to feel safe and comfortable online, and that's what Block Party is supposed to help do. For Chou, it seems obvious that people shouldn't be afraid to avail themselves of social platforms just because they have "controversial" ideas or an underrepresented background.</p><p>The premise of Block Party is simple. Based on your needs, you set up filters that take messages and comments out of your Twitter experience and into a folder on Block Party, which you can then review when you feel comfortable and prepared. It also has a function for people who need to compile evidence of harassment or stalking (say, for a police report) which allows users to have a friend go through that evidence for them (a tool based on Chou's personal experience; she's filed several police reports in the U.S. and the U.K. about dedicated stalkers who escalated from online harassment).</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Chou has big-time ambitions for Block Party. She wants to increase the types of filters people can apply to their accounts. She hopes the app will one day be able to interface with every social media account, not just Twitter, becoming a portable safety net people can take with them to have more control over their online experience. She'd like to eventually build Block Party APIs for new social platforms as they come online, so that they can integrate the tool into their own platforms as a "trust and preferences layer." "This stuff is cross-platform. People move around to harass, but platforms don't collaborate on this stuff," she said. </p><p>The idea for Block Party grew out of Chou's early experiences as an engineer. She was among the first 10 employees at Quora and then at Pinterest, and at both places her own need to protect herself from harassing users shaped the products she built. At Quora, one of the first products she shipped was a block button, designed because she needed a way to protect herself from someone targeting her with angry comments on the site. "If you don't have representation or these perspectives in a room, when people are deciding what to work, it gets very influenced by the people who are there. There's no ill intent," she explained. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>The typical approach to content moderation is a machine-learning black box that filters content, and human moderators then do the same for everything missed by the system. Because machine learning is not as effective as it needs to be, social media companies rely on huge teams of content moderators that have to make quick decisions about a flood of often traumatizing content. "The whole approach seems pretty flawed to me," Chou told me (she has a master's degree in artificial intelligence). "Machine learning is not going to be the magical solution. People who think ML is going to solve everything are generally men who are enamored with this technology. They don't experience the problem and see how much basic stuff you can do with simple products."</p><p>Her approach with Block Party instead considers the very human aspect of what people who are dealing with abuse actually need. "There's a lot of really unpleasant content that a lot of people get, but it's not that people need to be deplatformed. There's a huge margin between bad enough to get deplatformed and stuff I actually want to see. Your Twitter account doesn't need to be taken away because you called me an ugly, skinny Chinese girl, but I don't want to see it," she said. </p><p>Her tool gives the consumer control over that content. Rather than delete the comment or deplatform the person who made it, settings could allow a user to filter that comment out of their Twitter experience and into a folder in the Block Party app, which they can then revisit later and review on their own terms. It's about allowing people to have a chance to prepare themselves to deal with whatever someone may or may not say, according to Chou. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>Alex Stamos, an early Block Party investor and the director of the Stanford Internet Observatory, used the app recently for just that purpose. After a television appearance discussing the right-wing media ecosystem in late January, a QAnon leader suggested Stamos was a pedophile to his followers, leading to a massive Twitter attack and series of death threats. "I ended up using Block Party, and I blocked over 2,000 people over the weekend, and it was incredibly successful. I had a very tense situation there, and it's the only thing that kept Twitter usable for me. And it made me feel pretty darn good about investing in it," Stamos said. </p><p>Though Twitter has its <a href="https://www.protocol.com/christine-su-twitter-safety" target="_self">own plans</a> to change and invest in content moderation and user experience, Chou's relationship with the company has actually been fruitful. "It's been interesting to see how many different people within Twitter have reached out to say it's great," she said. "They have acknowledged that as much as they are going to do, they aren't going to be able to solve this problem themselves." And she really believes they are serious about doing it: "There's been a bit of a sea change within Twitter over the last few years."<br></p><p>"There's been a lot of discussion about the broad trust and safety problem at companies, and it's great for the companies to do what they can to improve, but the truth is that there are a number of people who have very intense safety issues and are also willing to take charge of it themselves," Stamos said. He's hoping that over time, Block Party's success will encourage companies to build their APIs for easy interface with tools like Chou's. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>While Chou has convinced Twitter of the need for her work, persuading investors has been a far more difficult battle, especially when she encounters groups of all-male or mostly male panels, which tend to be heavily skeptical of any actual demand for Block Party's product. </p><p>Along with Stamos, her first investors were people who inherently understood the need for the app: Alexia Bonatsos, the former co-editor of TechCrunch and part of Block Party's target audience, and Charles Hudson, the managing partner and founder of Precursor Ventures, one of the few Black-founded VC firms. "Hudson got it immediately," she said. </p><p>Block Party has escaped serious criticism from moderation foes so far because it's "content-neutral," Stamos explained. Because each user decides for themselves what to filter and block, there are no debates about the types of appropriate or "allowed" content like those that plague social media companies. "But there will always be a tension between allowing for open debate and the tools that allow people to block, and that includes tools like Block Party," Stamos said. </p><p>While it's been difficult to persuade investors of the need for a product they personally can't relate to, the launch of Block Party's open signups might change that. To participate in the open registration and skip the app's traditional waitlist, people had to pay $8. And they did, increasing the app's number of users by 50% in one week and proving both interest and potential for monetization far beyond Chou's expectations. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>"My production intuition around this is pretty good. Sometimes you worry that your own experience doesn't generalize, but it turns out that my experience isn't that unusual," she said. And demand for the app isn't coming just from prominent women on the platform in positions like Chou's, illustrating the ubiquity of online harassment; many of Block Party's recent new users are scientists and doctors facing online hate for their posts about coronavirus.</p><p>When I asked Chou what kept her determined to do this work despite the fear of abuse and harassment, she seemed almost confused. "It takes a toll, yes," she said. "It also feels like the only thing I can do to solve it is work on this."</p>
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Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
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Everything you need to know about the Kuaishou IPO
Kuaishou could raise just over $6 billion at a $60 billion valuation.
Kuaishou's livestreaming platform is part Twitch, part QVC.
Photo: Visual China Group/Getty Images
January 26, 2021
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
January 25, 2021
Kuaishou has more daily active users than Twitter and Snapchat. Still, it wouldn't be all that surprising if you've never heard of the short-form video and livestreaming platform; Kuaishou maintains a relatively low profile outside of China. Within China, the Beijing-based company has charted an ambitious plan to create a platform that seamlessly blends ecommerce, livestreaming, short-form video and gaming distribution.
In the lead-up to its Hong Kong stock exchange trading debut slated for Feb. 5, Kuaishou could raise just over $6 billion at a $60 billion valuation. If Kuaishou succeeds, it will have pulled off one of the largest IPOs in recent years.
<p>Here's everything you need to know about Kuaishou and its market debut.</p>
What Does Kuaishou Do?
<p>Since launching as a GIF-making tool in 2011, Kuaishou has <a href="https://www1.hkexnews.hk/app/sehk/2020/102806/documents/sehk20110501767.pdf" target="_blank" rel="noopener noreferrer">transformed itself</a> into a short-form video and livestreaming juggernaut with 776 million monthly active users. The average daily active user on Kuaishou spends over <a href="https://www1.hkexnews.hk/app/sehk/2020/102806/documents/sehk20110501767.pdf" target="_blank" rel="noopener noreferrer">85 minutes</a> on the platform per day. </p><p>Kuaishou's short-form video app isn't as popular as <a href="https://www.scmp.com/tech/apps-social/article/3101626/douyin-chinas-tiktok-grows-daily-active-users-600-million-home" target="_blank" rel="noopener noreferrer">ByteDance's Douyin</a> (China's version of TikTok), which reported 600 million daily active users in August 2020. Kuaishou is nevertheless growing at a rapid pace, with daily active users nearly doubling every year since 2017. For the six months ended June 30, 2020, Kuaishou reported 257.7 million daily active users, up from 155.4 million during the same period in 2019. Relative to those on Douyin, Kuaishou users <a href="https://www.scmp.com/tech/enterprises/article/3117572/ipo-prospect-kuaishou-has-big-issue-how-bag-profit-300-million-who" target="_blank" rel="noopener noreferrer">tend to be</a> younger, less educated and <a href="https://asia.nikkei.com/Business/China-tech/Video-app-Kuaishou-offers-window-into-China-s-rural-life" target="_blank" rel="noopener noreferrer">less cosmopolitan</a>. This makes it more difficult for Kuaishou to monetize its short-form video users through targeted ads and ecommerce integrations. </p><p><strong>Kuaishou's livestreaming platform is part Twitch, part QVC. </strong>Users can broadcast their gameplay to a live audience and receive <a href="https://www.ft.com/content/c42f500a-5a9c-4fd5-a165-f7402a8cdae5" target="_blank">virtual gifts</a> from viewers in return. The app also has a separate games tab, allowing people to <a href="https://www1.hkexnews.hk/app/sehk/2020/102806/documents/sehk20110501767.pdf" target="_blank">download mobile games</a> from third parties, which in turn gives Kuaishou a share of in-app purchase revenue. On the ecommerce side, influencers take to Kuaishou to host live events where they promote products. Kuaishou receives commission on ecommerce items sold through its platform. Merchants can either sell directly through Kuaishou or through <a href="https://techcrunch.com/2020/05/27/chinas-top-short-video-apps-and-e-commerce-giants-pally-up/" target="_blank">third-party integrations</a> with partners such as JD.com. Kuaishou has also partnered with Alibaba in the past, as when the companies together <a href="https://www.asiatimesfinancial.com/chinese-tiktok-equivalents-racing-for-ipos-in-hong-kong" target="_blank">generated 2.1 billion yuan</a> ($324 million) in sales from Singles' Day 2019.</p>KUAISHOU’S FINANCIALS
<p>Kuaishou issued preliminary <a href="https://www1.hkexnews.hk/app/sehk/2020/102806/documents/sehk20110501767.pdf" target="_blank">financial filings</a> ahead of its Hong Kong stock exchange listing. The filing showed that Kuaishou has prioritized user growth ahead of profitability: In the first six months of 2020, Kuaishou posted a net loss of 68 billion yuan ($10.5 billion) from its total revenue of 25 billion yuan ($3.9 billion). The financial disclosures show that Kuaishou hasn't posted an annual profit since 2017, though it has managed to come close to or exceed doubling more annual revenue between 2017 and 2019.</p><p><strong>Kuaishou recognizes three revenue segments: </strong>livestreaming, online marketing services and other services. Livestreaming accounted for nearly 69% of total revenue in the first sixth months of 2020, while online marketing services accounted for 28% and other services just 3%. Investors may worry that Kuaishou is too dependent on livestreaming revenue, which is itself beholden to a handful of celebrity influencers; in 2019, for instance, the <a href="https://www.scmp.com/magazines/style/news-trends/article/3076436/meet-xinba-chinese-billionaire-sales-king-kuaishou-who" target="_blank" rel="noopener noreferrer">celebrity influencer Xinba</a> accounted for more than 20% of the gross merchandise value sold on Kuaishou, <a href="https://www.scmp.com/tech/enterprises/article/3117572/ipo-prospect-kuaishou-has-big-issue-how-bag-profit-300-million-who" target="_blank" rel="noopener noreferrer">according to</a> the South China Morning Post. </p><p><strong>Selling and marketing expenses are a key contributor to Kuaishou's net losses.</strong> In the first half of 2020, Kuaishou accrued 13.7 billion yuan ($2.1 billion) in selling and marketing expenses, which was more than half the company's total revenue. In previous years, Kuaishou mostly managed to keep these expenses below 20% of total revenue. The company resorted to more aggressive growth tactics in 2020, the most notable of which was a <a href="https://www.chinadaily.com.cn/a/202001/25/WS5e2bce36a310128217273354.html" target="_blank" rel="noopener noreferrer">Lunar New Year promotion</a> in which it gave away 1 billion yuan ($154 million) worth of virtual red envelopes to some 2.2 million viewers. </p>WHAT COULD GO WRONG?
<p>Two themes stand out from Kuaishou's financial filing: government regulation and long-term profitability. </p><p><strong>China's government is monitoring the livestreaming industry closely,</strong> and in late 2020 it <a href="https://asia.nikkei.com/Business/Media-Entertainment/China-bans-spending-by-teens-in-new-curbs-on-livestreaming" target="_blank" rel="noopener noreferrer">imposed new rules</a> that ban teenagers from gifting to streamers and require all users to register with their real names. Kuaishou discusses how future regulation could affect its business:</p><ul><li>"If we fail to comply with PRC laws and regulations, we may face fines or other penalties or may lose licenses we need to operate our business and suffer reputational harm, which may materially and adversely affect our business, financial condition, results of operations and prospects," Kuaishou writes. </li><li>Kuaishou adds that this would not be without precedent, since it had to temporarily suspend platform functionality in 2018 due to <a href="https://www.scmp.com/tech/apps-social/article/2180194/heres-how-chinas-new-e-commerce-law-will-affect-consumers-platform" target="_blank" rel="noopener noreferrer">compliance</a> issues. It also discusses how these regulations could affect both media and ecommerce operations. </li></ul><p><strong>In terms of achieving long-term profitability,</strong> Kuaishou emphasizes the risk associated with its reliance on influencers and its general user monetization challenges:</p><ul><li>Douyin is the elephant in the room when it comes to Kuaishou's risk factors. Though the competitor is never named directly, Kuaishou writes: "Although we have adopted various measures to further strengthen the relationships between us and our content creators, such content creators may still choose to leave our platform, and their departure may cause a corresponding decline in our user base." </li><li>And though this is somewhat of a catch-all risk disclosure, Kuaishou acknowledges its difficult path to profitability: "Our ability to continue to improve operational efficiency will depend on, among other things, our ability to attract and retain users, to enhance the interactions among our users, to optimize our operations, and to further achieve economies of scale."</li></ul>WHO GETS RICH?
<p>It's hard to precisely say how firms will benefit from the IPO, since Kuaishou's financial disclosure has been partially redacted and the investor roadshow is ongoing.</p><p><strong>Here's where things stood when Kuaishou</strong><strong> filed </strong>its <a href="https://www1.hkexnews.hk/app/sehk/2020/102806/documents/sehk20110501767.pdf" target="_blank" rel="noopener noreferrer">preliminary financial filing</a> in <a href="https://www.techinasia.com/kuaishou-open-books-5b-ipo-hong-kong-week-sources" target="_blank" rel="noopener noreferrer">November 2020</a>:</p><ul><li>Tencent owned just under 21.6% of Kuaishou. The tech giant is a key strategic investor since it owns WeChat and is one of the <a href="https://www.pcgamer.com/every-game-company-that-tencent-has-invested-in/" target="_blank" rel="noopener noreferrer">biggest players</a> in the mobile gaming space. The relationship between Tencent and Kuaishou is a bit strange, however, since Tencent has <a href="https://kr-asia.com/wechat-makes-30-second-weishi-video-sharing-integration-official" target="_blank" rel="noopener noreferrer">launched numerous competing</a> short-form video apps. In January 2020, Tencent launched a beta for Channels, a short-form video platform <a href="https://www.scmp.com/tech/apps-social/article/3094861/wechats-short-video-feature-channels-has-drawn-200-million-users" target="_blank" rel="noopener noreferrer">integrated with WeChat</a>, which has already attracted over 200 million users.</li><li>5Y Capital owned 16.7% of outstanding shares.</li><li>DCM owned 9.2% of outstanding shares.</li><li>DST Global owned 6.4% of outstanding shares.</li></ul><p>And based on an IPO roadshow terms sheet <a href="https://asia.nikkei.com/Business/Markets/Big-US-funds-stake-claim-on-quarter-of-Kuaishou-s-5.4bn-IPO" target="_blank" rel="noopener noreferrer">obtained by Nikkei Asia</a>, Kuaishou has also attracted the following investors:</p><ul><li>Capital Group will invest $500 million.</li><li>Invesco will invest $270 million.</li><li>Fidelity will invest $270 million.</li><li>Morgan Stanley Investment Management will invest $125 million.</li><li>Nikkei Asia added that the Singapore sovereign wealth fund GIC, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, and Boyu Capital were among the other companies that agreed to purchase Kuaishou shares.</li></ul>WHAT PEOPLE ARE SAYING
<ul><li><strong>"On the surface, both Kuaishou and TikTok are short video and live-streaming platforms that allow users to upload clips ranging from 15 seconds to 30 minutes. Kuaishou's product philosophy is around allocating attention to as many people as possible, so that 'everyone has a chance to stand in the sun'. TikTok's philosophy is about providing the end-user with the most engaging and stimulating content as effectively as possible."</strong> —Lillian Li wrote on the <a href="https://lillianli.substack.com/p/the-product-philosophy-of-kuaishou" target="_blank" rel="noopener noreferrer">Chinese Characteristics</a> substack.</li><li><strong>"Douyin (and all ByteDance algorithmic products) are based on the concept of distributing information as efficiently and effectively as possible. Therefore, community building is not a priority. Kuaishou, however, sees itself as a social product. It emphasizes interaction between the creator & viewers (actual comments versus just watching or even liking the video). Douyin, in a sense, focuses on building your loyalty to the platform, whereas Kuaishou is more interested in how connected you feel to others on the platform."</strong> —Rui Ma <a href="https://twitter.com/ruima/status/1351317022915715072?s=20" target="_blank" rel="noopener noreferrer">wrote</a> on a Twitter thread exploring the differences between Douyin and ByteDance.</li></ul>
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Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
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