Hello friends, and welcome back to Week in Review.
Last week, we dove into the truly bizarre machinations of the NFT market. This week, we’re talking about something that’s a little bit more impactful on the current state of the web — Apple’s NeuralHash kerfuffle.
In the past month, Apple did something it generally has done an exceptional job avoiding — the company made what seemed to be an entirely unforced error.
In early August — seemingly out of nowhere** — the company announced that by the end of the year they would be rolling out a technology called NeuralHash that actively scanned the libraries of all iCloud Photos users, seeking out image hashes that matched known images of child sexual abuse material (CSAM). For obvious reasons, the on-device scanning could not be opted out of.
This announcement was not coordinated with other major consumer tech giants, Apple pushed forward on the announcement alone.
Researchers and advocacy groups had almost unilaterally negative feedback for the effort, raising concerns that this could create new abuse channels for actors like governments to detect on-device information that they regarded as objectionable. As my colleague Zach noted in a recent story, “The Electronic Frontier Foundation said this week it had amassed more than 25,000 signatures from consumers. On top of that, close to 100 policy and rights groups, including the American Civil Liberties Union, also called on Apple to abandon plans to roll out the technology.”
(The announcement also reportedly generated some controversy inside of Apple.)
The issue — of course — wasn’t that Apple was looking at find ways that prevented the proliferation of CSAM while making as few device security concessions as possible. The issue was that Apple was unilaterally making a massive choice that would affect billions of customers (while likely pushing competitors towards similar solutions), and was doing so without external public input about possible ramifications or necessary safeguards.
A long story short, over the past month researchers discovered Apple’s NeuralHash wasn’t as air tight as hoped and the company announced Friday that it was delaying the rollout “to take additional time over the coming months to collect input and make improvements before releasing these critically important child safety features.”
Having spent several years in the tech media, I will say that the only reason to release news on a Friday morning ahead of a long weekend is to ensure that the announcement is read and seen by as few people as possible, and it’s clear why they’d want that. It’s a major embarrassment for Apple, and as with any delayed rollout like this, it’s a sign that their internal teams weren’t adequately prepared and lacked the ideological diversity to gauge the scope of the issue that they were tackling. This isn’t really a dig at Apple’s team building this so much as it’s a dig on Apple trying to solve a problem like this inside the Apple Park vacuum while adhering to its annual iOS release schedule.
Image Credits: Bryce Durbin / TechCrunch /
Apple is increasingly looking to make privacy a key selling point for the iOS ecosystem, and as a result of this productization, has pushed development of privacy-centric features towards the same secrecy its surface-level design changes command. In June, Apple announced iCloud+ and raised some eyebrows when they shared that certain new privacy-centric features would only be available to iPhone users who paid for additional subscription services.
You obviously can’t tap public opinion for every product update, but perhaps wide-ranging and trail-blazing security and privacy features should be treated a bit differently than the average product update. Apple’s lack of engagement with research and advocacy groups on NeuralHash was pretty egregious and certainly raises some questions about whether the company fully respects how the choices they make for iOS affect the broader internet.
Delaying the feature’s rollout is a good thing, but let’s all hope they take that time to reflect more broadly as well.
** Though the announcement was a surprise to many, Apple’s development of this feature wasn’t coming completely out of nowhere. Those at the top of Apple likely felt that the winds of global tech regulation might be shifting towards outright bans of some methods of encryption in some of its biggest markets.
Back in October of 2020, then United States AG Bill Barr joined representatives from the UK, New Zealand, Australia, Canada, India and Japan in signing a letter raising major concerns about how implementations of encryption tech posed “significant challenges to public safety, including to highly vulnerable members of our societies like sexually exploited children.” The letter effectively called on tech industry companies to get creative in how they tackled this problem.
Here are the TechCrunch news stories that especially caught my eye this week:
LinkedIn kills Stories
You may be shocked to hear that LinkedIn even had a Stories-like product on their platform, but if you did already know that they were testing Stories, you likely won’t be so surprised to hear that the test didn’t pan out too well. The company announced this week that they’ll be suspending the feature at the end of the month. RIP.
FAA grounds Virgin Galactic over questions about Branson flight
While all appeared to go swimmingly for Richard Branson’s trip to space last month, the FAA has some questions regarding why the flight seemed to unexpectedly veer so far off the cleared route. The FAA is preventing the company from further launches until they find out what the deal is.
Apple buys a classical music streaming service
While Spotify makes news every month or two for spending a massive amount acquiring a popular podcast, Apple seems to have eyes on a different market for Apple Music, announcing this week that they’re bringing the classical music streaming service Primephonic onto the Apple Music team.
TikTok parent company buys a VR startup
It isn’t a huge secret that ByteDance and Facebook have been trying to copy each other’s success at times, but many probably weren’t expecting TikTok’s parent company to wander into the virtual reality game. The Chinese company bought the startup Pico which makes consumer VR headsets for China and enterprise VR products for North American customers.
Twitter tests an anti-abuse ‘Safety Mode’
The same features that make Twitter an incredibly cool product for some users can also make the experience awful for others, a realization that Twitter has seemingly been very slow to make. Their latest solution is more individual user controls, which Twitter is testing out with a new “safety mode” which pairs algorithmic intelligence with new user inputs.
Some of my favorite reads from our Extra Crunch subscription service this week:
Our favorite startups from YC’s Demo Day, Part 1
“Y Combinator kicked off its fourth-ever virtual Demo Day today, revealing the first half of its nearly 400-company batch. The presentation, YC’s biggest yet, offers a snapshot into where innovation is heading, from not-so-simple seaweed to a Clearco for creators….”
“…Yesterday, the TechCrunch team covered the first half of this batch, as well as the startups with one-minute pitches that stood out to us. We even podcasted about it! Today, we’re doing it all over again. Here’s our full list of all startups that presented on the record today, and below, you’ll find our votes for the best Y Combinator pitches of Day Two. The ones that, as people who sift through a few hundred pitches a day, made us go ‘oh wait, what’s this?’
All the reasons why you should launch a credit card
“… if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users….”
Founders Fund and Paradigm are leading an investment in a platform that’s aiming to wed music rights with NFTs, allowing user to buy shares of songs through the company’s marketplace, earning royalties as the music they’ve invested in gains popularity.
The venture, called Royal, is led by Justin Blau, an EDM artist who performs under the name 3LAU, and JD Ross, a co-founder of home-buying startup Opendoor. Blau has been one of the more active and visible figures in the NFT community, launching a number of upstart efforts aimed at exploring how musicians can monetize their work through crypto markets. Blau says that as Covid cut off his ability to tour, he dug into NFTs full-time, aiming to find a way to flip the power dynamics on “platforms that were extracting all the value from creators.“
Back in March, weeks before many would first hear about NFTs following the $69 million Beeple sale at Christies, Blau set his own record, selling a batch of custom songs and custom artwork for a collective $11.7 million worth of cryptocurrency.
Royal’s investment announcement comes just as a broader bull run for the NFT market seems to reach a fever pitch with investors dumping hundreds of million of dollars worth of cryptocurrencies into community NFT projects like CryptoPunks and Bored Apes. While visual artists interested in putting their digital works on the blockchain have seen a number of platforms spring up and mature in recent months to simplify the process of monetizing their art, there have been fewer efforts focused on musicians.
Paradigm and Founders Fund are leading a $16 million seed round in Royal, with participation from Atomic — where Ross was recently a General Partner. Ross’s fellow Opendoor co-founder Keith Rabois led the deal for Founders Fund.
The company isn’t sharing an awful lot about their launch or product plans, including when the platform will actually begin selling fractionalized assets, but it seems pretty clear the company will be heavily leveraging Blau’s music and position inside the music industry to bring early fans/investors to the platform. Users can sign-up for early access on the site currently.
As NFT startups chase more complex ownership splits that aim to help creators share their success with fans, there’s plenty of speculation taking off around how regulators will eventually treat them. While the ICO boom of 2017 led to plenty of founders receiving SEC letters alleging securities fraud, entrepreneurs in this wave seem to be working a little harder to avoid that outcome. Blau says that the startup’s team is working closely with legal counsel to ensure the startup is staying fully compliant.
The company’s bigger challenge may be ensuring that democratizing access to buying up music rights actually benefits the fans of those artists or creates new fans for them, given the wide landscape of crypto speculators looking to diversify. That said, Blau notes there’s plenty of room for improvement among the current ownership spread of music royalties, largely spread among labels, private equity groups and hedge funds.
“A true fan might want to own something way earlier than a speculator would even get wind of it,” Blau says. “Democratizing access to asset classes is a huge part of crypto’s future.”
If viral TikTok songs like Dr. Dog’s “Where’d All the Time Go?” or Bo Burnham’s “Bezos I” weren’t already stuck in your head on loop, now they could be. Today SiriusXM launched a TikTok Radio channel, which features TikTok creators as channel hosts. The station is designed to sound like a “radio version of the platform’s ‘For You’ feed,” Sirius XM said.
SiriusXM, parent company to Pandora, announced this music channel in May, teasing the launch with curated Pandora playlists from influencers like Bella Poarch, whose lipsync video of Millie B’s “Soph Aspin Send [M to the B]” is the most liked video on TikTok.
With its TikTok partnership, SiriusXM is looking to capture a younger audience — on the TikTok app itself, DJ Habibeats (@djhabibeats) and DJ CONST (@erinconstantineofficial) will each go live on TikTok each week while DJing on TikTok Radio. Other creator hosts on TikTok Radio — like Billy (@8illy), Cat Haley (@itscathaley), HINDZ (@hindzsight), Lamar Dawson (@dirrtykingofpop), and Taylor Cassidy (@taylorcassidyj) — will deliver “The TikTok Radio Trending Ten,” a weekly countdown of songs trending on TikTok. To promote the station during its first week, artists like Ed Sheeran, Lil Nas X, and Normani will appear on air.
Music has such a strong footing in TikTok culture that it regularly influences the Billboard charts — Fleetwood Mac’s “Rumours,” originally released in 1978,” appeared in the top 10 Billboard albums again in 2020 after it was featured in a viral TikTok. Even a Fortnite-themed parody of Estelle’s “American Boy” — originally uploaded in 2018 to YouTube — had a beautiful moment on TikTok.
“We’re so excited to launch TikTok Radio on SiriusXM, which opens up artists and creators like this amazing group of hosts to new audiences,” said Ole Obermann, TikTok’s Global Head of Music, in a statement. “Now SiriusXM subscribers will have a new road to discover the latest trends in music and get a first listen to tomorrow’s musical superstars. The channel captures song-breaking music culture that creates so much joy and entertainment on TikTok through video in an all-audio format.”
Though SiriusXM’s subscriber base continues to expand — it saw a 34% year-over-year growth from last year to now — it still dwarfs in comparison to streaming giants like Spotify, which has 165 million paid users. SiriusXM reported a total of 34.5 million subscribers as of Q2 this year, the most it’s ever had, but even Apple Music and Amazon Music have reported nearly double the subscribers. Pandora has 6.5 million paid subscribers. Over the last few years, SiriusXM and Pandora have struck deals with companies like SoundCloud, Simplecast and Stitcher to become more competitive in both music and podcast streaming.
Still, other streaming companies have also shown interest in the market of Gen Z-ers on TikTok who want to listen to full versions of the catchy songs they hear in short videos. Apple Music and Spotify both host curated “viral hits” playlists. But a full-time satellite music channel is taking the trend a step further.
Music streaming service Spotify today said it will spend up to $1 billion between now and April 21, 2026 to repurchase its own shares. The dollar amount represents just under 2.5% of Spotify’s market cap, with the company valued at $41.06 billion this morning as its shares rose 5.1% following the repurchase news.
The company previously executed a similar buyback program in 2018.
A public company using some of its cash to repurchase its shares is nothing new. Many public companies, including Apple, Alphabet, and Microsoft, have active share repurchase programs, and it is common to see mature or nearly-mature companies devoting a fraction of their balance sheet or a regular percentage of their free cash flow to buying back their own equity.
The goal of such efforts is to return cash to shareholders. Buybacks, along with dividends, are among the key ways that companies can use their wealth to reward shareholders. Also, by buying their own stock, companies can boost the value of their individual shares. By limiting the shares in circulation, the company’s share count declines and the value of each share consequently rises, in theory, as it represents a larger fraction of ownership in the corporation.
Spotify shares have traded as high as $387.44 apiece in the past 12 months, but are now worth just $215.84, inclusive of today’s gains. From that perspective, seeing Spotify decide to deploy some cash to repurchase its own equity makes sense — the company is buying low.
But if you ask a recently public company what it intends to do with its excess cash, buybacks are not usually the answer. For example, TechCrunch asked Root Insurance CEO Alex Timm if his company intended to use cash reserves to purchase its own equity after its recent Q2 2021 earnings report. Root’s share price has declined in recent months, perhaps making it an attractive time to reward shareholders through buybacks. Timm demurred on the idea, saying instead that his company is building for the long-term. That translates to: That cash is earmarked for growth, not shareholder return.
But isn’t Spotify still a growth company? It certainly isn’t valued on the weight of its profits. In the first half of 2021, for example, Spotify posted net profit of a mere €3 million on revenues of €4.5 billion.
If Spotify is still a growth-focused company, shouldn’t it preserve its capital to invest in exclusive podcasts and the like — efforts that may grant it pricing power in the future and allow for stronger revenue growth and gross margins over time?
To answer that, we’ll have to check the company’s balance sheet. From its Q2 2021 earnings, here are the key numbers:
More simply, despite paying up for efforts that are generally understood to be key to Spotify’s long-term ability to improve its gross margins — and therefore its net profitability — the company is still throwing off cash. And with a huge bank account earning little, thanks to globally low prices for cash and equivalent holdings, Spotify is using a chunk of its funds to buy back stock.
By spending $1 billion over the next few years, Spotify won’t materially harm its cash position. Indeed, it will remain incredibly cash-rich. However, the move may help defend its valuation and keep itchy investors happy. Moreover, as the company is buying its stock at a firm discount to where the market valued it recently, it could get something akin to a deal, given Spotify’s long-term faith in the value of its own business.
Perhaps the better question as this juncture is not whether Spotify is a weird company for deciding to break off a piece of its wealth for shareholders, but instead why we aren’t seeing other breakeven-ish tech companies with neutral cash flows and fat accounts doing the same.
Most startup origin stories don’t begin on an NFL field, but that’s where founder, CEO and offensive tackle Jason Fox conceptualized the idea behind Earbuds. As he watched first overall draft pick Cam Newton warm up before a game in 2011, dancing to music, Fox couldn’t help but wonder what the future NFL MVP was listening to — and he bet that the crowd of 85,000 fans were curious too.
Ten years later, Earbuds has raised a $3 million Series A round for its social listening app, led by Ecliptic Capital with additional investment from the Andre Agassi Foundation and LFG Ventures.
Since its launch in 2019, Earbuds has allowed users — whether they’re famous artists, NFL stars or ordinary people — to share their favorite playlists, livestream music like a DJ and comment on other people’s music picks. Some notable figures on the app include the artist Nelly and professional quarterbacks like Baker Mayfield and Patrick Mahomes, the highest-paid player in the NFL. Mayfield and Mahomes are also investors in the app.
With this recent raise, Fox and his team of six plan to expand the app to add creator monetization tools, incentivizing people to use the app. Plus, Earbuds also announced that it hired two former product and engineering leaders from Apple, David Ransom and Sean Moubry, who joined Earbuds as head of Product and head of Engineering, respectively. Tech veteran Drew Larner also came aboard as a senior advisor and investor — in 2015, he sold the streaming app Rdio to Pandora. Pandora was then sold to Sirius XM for $3.5 billion in 2018.
Image Credits: Earbuds’ interface allows users to search for athlete accounts/Earbuds.
To use Earbuds, users must have a paid account on Spotify or Apple Music. Soon, Fox says, Earbuds should have integrations with paid versions of Amazon Music and Pandora, too. These integrations are how the app, available on both iOS and Android, is able to source music for streaming. But regardless of which platform a listener uses, they can still take advantage of the social features on Earbuds, listening along to live playlists and commenting along with other listeners.
When you connect your account, you’re able to easily import your existing playlists. Then, on the app, you can add voice clips to comment on your song choices. When listening to a stream, users have the option to save the playlist to their streaming service or share it as an Instagram story.
Fox declined to share monthly active user numbers, but expressed confidence that soliciting users from other streaming platforms’ existing subscriber base won’t be a big hurdle for user acquisition; when it comes to paid streaming music subscribers, Spotify has 165 million users, Apple Music has at least 60 million and Amazon music has at least 55 million.
“We want to continue to add additional streaming partners to accommodate everyone. We want to connect with all users regardless of what platform they use,” Fox said.
Image Credits: Earbuds founder and CEO Jason Fox/Earbuds.
Fox wants more musical artists to use the app, but given his background as an NFL player, much of the company’s existing marketing has been targeted toward athletes and sports fans — a particularly interesting potential market for Earbuds is NCAA athletes, who are newly able to monetize their image and likeness.
“You’ve got the quarterback before the big rivalry game, and they want to be able to monetize the fans while they’re listening to music and getting amped up with them before the game,” Fox explained.
Since these monetization tools haven’t rolled out yet, there’s currently no in-app purchases available on Earbuds. This would give Earbuds, which isn’t yet profitable, another income stream. So far, the app has made money through in-app sponsored posts from partners like the NBA, the NFL playoffs, smart speaker companies and beverage companies.
“We can continue to do that, but we feel like the majority of growth and revenue moving forward will be through partnerships, integrations and supporting the creator economy,” Fox said. Currently, Earbuds has a partnership with Apple Music, so if someone subscribes to the platform via Earbuds, Earbuds gets a cut of their subscription payment.
As streaming services like Spotify grow, social listening apps like Earbuds are emerging too. Spotify itself has rolled out more social listening features lately, including a Music + Talk platform similar to Earbuds’ existing offerings.
Last year, media software maker Plex released Plexamp, a subscriber-only music app whose name was a nod to the classic Winamp player it aimed to replace. Today, the company is upgrading the app with a new feature called Super Sonic, which offers new ways to mix up your playlists — including by matching songs that are “sonically” similar, instead of by metadata alone — like matching based on musical genre, for example.
The company explains that Super Sonic is designed to use the music’s sound to understand how different tracks relate to one another in your library. This is a different way of approaching a large music catalog and brings to mind something like Pandora’s Music Genome where songs are categorized based on attributes, like mood, tone, or beats per minute, among others.
Image Credits: Plex
But unlike the Music Genome, where trained musicologists analyze songs across hundreds of attributes, Super Sonic uses technology.
The new sonic analysis feature in Plexamp leverages a neural network and AI to map all the tracks, albums and artists in your library. Super Sonic extracts around 50 parameters from its analysis, which are then weighted appropriately. “Sonically similar” refers to two points in N-dimensional space being close to one another, Plex says.
The setup process for using the new feature is fairly CPU-intensive and can take hours or even days to complete, depending on your library’s size. However, once finished, you’ll be able to use a whole new set of features for discovering music. This can be particularly helpful if you listen to a lot of indie or obscure music, where metadata may be limited or perhaps not available at all.
After the analysis is complete, a new “Related Tracks” feature will let you see which tracks you have that are sonically similar, which can sometimes lead to surprises that you wouldn’t have otherwise found if only matching on standard metadata.
Another addition, “Mixes for You,” will cluster into mixes the songs you’ve had on heavy rotation, but then add sonically similar tunes alongside your recent favorites. The server will also look back in time to make a few historical mixes based on past habits, too, so you have more to explore.
The company is also rolling out new radio features to address the removal of the popular Plex Mix feature from a few years ago, after a metadata provider change. It now sees the new Sonic data as a way to replace the feature with Track Radio and Album Radio, which play either tracks or full albums that are sonically similar, respectively.
Image Credits: Plex
Other additions arriving alongside the Super Sonic launch include a new way to organize and filter albums by type (e.g. demos, live albums, etc.) and an “on this day” feature that reminds you of notable album milestones — like album releases that took place 20, 30 or 50 years ago.
Image Credits: Plex
To use the new sonic analysis feature, Plex users will need to be paid Plex Pass subscribers, and will need to be running Plex Media Server v1.24.0 on a macOS, Windows or Linux machine. ARM CPUs are not supported, however.
Image Credits: Plex
Plex has been working over the years toward making its subscription service more appealing to power users, who are a smaller part of the company’s some 25 million registered users. But the company is no longer fully dependent on subscriber revenue to remain profitable, as it’s expanded into the free, ad-supported streaming market and raised funding.
Today, Plex’s larger focus is on expanding the streaming business into areas like rentals, purchases and subscription content. But as Super Sonic proves, the team at Plex will continue to explore technology that will appeal to its core audience of digital media collectors and enthusiasts.
How much is your palm print worth? If you ask Amazon, it’s about $10 in promotional credit if you enroll your palm prints in its checkout-free stores and link it to your Amazon account.
Last year, Amazon introduced its new biometric palm print scanners, Amazon One, so customers can pay for goods in some stores by waving their palm prints over one of these scanners. By February, the company expanded its palm scanners to other Amazon grocery, book and 4-star stores across Seattle.
Amazon has since expanded its biometric scanning technology to its stores across the U.S., including New York, New Jersey, Maryland and Texas.
The retail and cloud giant says its palm scanning hardware “captures the minute characteristics of your palm — both surface-area details like lines and ridges as well as subcutaneous features such as vein patterns — to create your palm signature,” which is then stored in the cloud and used to confirm your identity when you’re in one of its stores.
Amazon’s latest promotion: $10 promotional credit in exchange for your palm print. (Image: Amazon)
What’s Amazon doing with this data exactly? Your palm print on its own might not do much — though Amazon says it uses an unspecified “subset” of anonymous palm data to improve the technology. But by linking it to your Amazon account, Amazon can use the data it collects, like shopping history, to target ads, offers and recommendations to you over time.
Amazon also says it stores palm data indefinitely, unless you choose to delete the data once there are no outstanding transactions left, or if you don’t use the feature for two years.
While the idea of contactlessly scanning your palm print to pay for goods during a pandemic might seem like a novel idea, it’s one to be met with caution and skepticism given Amazon’s past efforts in developing biometric technology. Amazon’s controversial facial recognition technology, which it historically sold to police and law enforcement, was the subject of lawsuits that allege the company violated state laws that bar the use of personal biometric data without permission.
“The dystopian future of science fiction is now. It’s horrifying that Amazon is asking people to sell their bodies, but it’s even worse that people are doing it for such a low price,” said Albert Fox Cahn, the executive director of the New York-based Surveillance Technology Oversight Project, in an email to TechCrunch.
“Biometric data is one of the only ways that companies and governments can track us permanently. You can change your name, you can change your Social Security number, but you can’t change your palm print. The more we normalize these tactics, the harder they will be to escape. If we don’t [draw a] line in the sand here, I am very fearful what our future will look like,” said Cahn.
When reached, an Amazon spokesperson declined to comment.
Epic Games is teasing the biggest in-game event since Travis Scott psychedelically stomped through Fortnite’s virtual meadows.
The mysterious new event, which Fortnite-maker Epic is calling the “Rift Tour,” will kick off on Friday, August 6 and run through Sunday, August 8. In the teaser announcement, Epic invites players to “take a musical journey into magical new realities where Fortnite and a record-breaking superstar collide.”
Escape into the Rift
— Fortnite (@FortniteGame) July 29, 2021
In-game events building up to the mystery show series will run from July 29 through August 8, so players can hop into Fortnite to check out new Rift Tour-themed quests and rewards now. The cotton-candy-colored event will offer a custom loading screen and a fluffy cloud kitty emoticon, among other digital prizes.
The Rift Tour isn’t a one-and-done event. Like the Travis Scott event, Fortnite will host five different show times across three days to make it easier for players to catch. Epic says they’ll have more details to share on Monday, August 2, so Fortnite players will have to wait for more hints or an official announcement about who’s performing.
So … who’s performing? So far, all signs point to Ariana Grande. Leakers have been saying as much for more than a week, and the documents revealed through Epic’s court battle with Apple also detailed plans for in-game events with both Grande and Lady Gaga.
Image Credits: Epic Games
Since Epic is calling its latest virtual event a tour, that suggests Grande won’t be alone, if she is indeed the mystery superstar. A Lady Gaga appearance could also be in the cards, since Epic apparently had plans for Gaga to appear in a December 2020 concert that never materialized. Kanye West is also releasing his newest album on August 6, but it seems less likely that Epic would be willing to partner with West given his myriad recent controversies. And “Donda,” West’s latest album, was originally scheduled for a different date before being delayed.
Whoever it winds up being, we’ll likely know more on Monday. Even if you’re not a Grande fan or a regular gamer, Fortnite’s in-game concerts are some of the most creative and visually exciting virtual events to date.
Everyone should fall through the metaverse with their friends while a skyscraper-sized virtual rapper shoots neon lightning bolts at least once.
In the minutes before its quarterly earnings call this morning, Spotify played advertisements for its originals and exclusives, like the true crime show “Deathbed Confessions,” and the sex and relationships podcast “Call Her Daddy,” which Spotify recently acquired in a deal worth $60 million. Sure, it’s kind of hilarious to hear a recording of host Alex Cooper’s voice say, “Hey, daddy gang!” as investors log in to an 8 a.m. call, but the subtext rang clear: Spotify is serious about growing its podcast business.
Given how many podcasting companies Spotify has acquired over the past few years, it would be concerning if there hadn’t been significant growth in this realm. Among Spotify users who already listen to podcasts, podcast listening increased 30% year over year, with total hours consumed up 95%. Meanwhile, podcast ad revenue increased by 627%, which outperformed expectations. Spotify attributes this success to a triple-digit year-over-year gain at its in-house studios (The Ringer, Parcast, Spotify Studios and Gimlet) and exclusive deals with “The Joe Rogan Experience” and the Obamas’ Higher Ground studio. Spotify also referenced its November acquisition of Megaphone, a podcast hosting and ad company.
“The continued outperformance is currently limited only by the availability of our inventory, which is something we’re actively solving for,” said CEO Daniel Ek. “The days of our ad business accounting for less than 10% of our total revenue are behind us, and going forward, I expect ads to be a substantial part of our revenue mix.”
Image Credits: Spotify
In April, Spotify launched paid podcast subscriptions — through Anchor, the podcast host that it bought in 2019, creators can choose to put certain content behind a paywall. Apple launched a similar feature, but it’s still too early to know how these subscription services will impact listeners and creators. However, Spotify did share a bit more information about its Audience Network, an audio ad marketplace. Since its rollout in April, Spotify’s “monetizable podcast inventory” tripled. Spotify has also seen a “meaningful” increase in unique advertisers and a “double-digit lift” in CPMs (cost per thousand ad impressions), but didn’t provide specific figures.
Still, the more power a platform like Spotify has over the podcasting industry, the fewer options creators will have for monetization — already, the ubiquity of streaming platforms has taken a toll on musicians, who are working together to demand better compensation from Spotify. The Justice at Spotify movement points out that on average, artists get $0.0038 per stream of a song, which means that a song needs to be streamed 263 times to make a single dollar. Spotify has continued to grow during the pandemic, but because live shows are musicians’ best way to make money in the age of streaming, artists have struggled while it’s unsafe to go on tour.
On this morning’s earnings call, Ek pointed to live performances as a potential way for musicians to increase revenue. In the past quarter, Spotify has tested live concerts as an income stream, partnering with artists like The Black Keys. Still, smaller artists might not trust the platform given its refusal to make streaming itself a more viable way to get paid for their work.
“Live is a meaningful thing for many of our creators, and it’s something that we’re excited about,” said Ek, adding that Spotify saw positive results from its digital live events thus far. “We want to provide as many opportunities for creators … to turn a listen into a fan, and turn fans into super fans, and increase the monetization for those creators.”
Though Spotify missed its target for monthly active users (MAUs) in Q2, other key metrics trended upward, like paid subscriber growth and revenue. The platform attributes this road bump in MAU growth to the lingering impact of COVID-19, as well as an issue Spotify had with its third-party email verification system.
“In full disclosure, this was an issue on our end,” said CFO Paul Vogel. “The estimate right now was that it was about 1 to 2 million of MAU growth that was impacted by the friction created by this email verification change. It’s since been corrected and should not be an impact in Q3.”
Of Spotify’s 365 million MAUs, 165 million (about 42.5%) are paid subscribers — that’s still far beyond its next biggest competitor, Apple Music, which had 60 million subscribers in 2019 but hasn’t released updated figures since.
It’s not too late to enjoy an epic pitch-off of global proportion. The Extreme Tech Challenge (XTC) Global Finals start today, July 22 at 9:00 am (PT). Register here for free, get instant access and tune in to see seven phenomenal startups — each one tackling some of the world’s most daunting social and environmental challenges.
The day also includes a keynote address from Beth Bechdol, the deputy director-general, Food and Agriculture Organization (FAO) of the United Nations, and five panel discussions ranging from powering clean energy startups to going green. Here are just two examples, and be sure to check out the event agenda so you don’t miss a minute.
Powering the Future Through Transformative Tech: XTC’s co-founders Young Sohn, Chairman of the Board at HARMAN International, and founding Managing Partner at Walden Catalyst, and Bill Tai, Partner Emeritus at Charles River Ventures jump into the breakthrough tech innovations that are transforming industries to build a radically better world. How can business, government, philanthropy, and the startup community come together to create a better tomorrow? Hear from these industry veterans and thought leaders about how technology can not only shape the future, but also where the biggest opportunities lie, including some exciting news about XTC and the FAO of the United Nations.
Cutting Out Carbon Emitters with Bioengineering: Bioengineering may soon provide compelling, low-carbon alternatives in industries where even the best methods produce significant emissions. By utilizing natural and engineered biological processes, we may soon have low-carbon textiles from Algiknit, lab-grown premium meats from Orbillion and fuels captured from waste emissions via LanzaTech. Leaders from these companies will join our panel to talk about how bioengineering can do its part in the fight against climate change.
The main event is, of course, the pitch competition. More than 3,700 startups applied, and these are the seven finalists who will compete one last time for the title of XTC 2021 champion.
In addition to choosing the winner of XTC 2021, the esteemed judges will announce the winners of the COVID-19 Innovation award, the Female Founder award, the Ethical AI award and the People’s Choice award.
One thing seems certain: The past year-and-a-half has fundamentally transformed the world of live events. The pandemic left plenty of venues scrambling for alternative revenue streams and, in many cases, shutting down for good.
On the flip side, it’s been a massive driver for those companies working to expand the reach of in-person events. Take LiveControl, which just raised a $30 million Series A led by Coatue and featuring existing investors First Round Capital, Box Group, Susa Ventures and TriplePoint. The round brings the So Cal company’s total funding to $33 million, on the heels of a $3.2 million seed led by FRC last August.
The company offers a production suite that’s a sort of plug and play solution for venues. “What if you could snap your fingers and an entire video product crew would appear, for just $150?” CEO Patrick Coyne asked, extremely rhetorically in a comment offered to TechCrunch.
Image Credits: LiveControl
LiveControl says its technology has been deployed in “hundreds” of spots in the U.S., everywhere from music venues and comedy clubs to Broadway theaters and religious institutions. With its device agnostic software and support, the company also provides third-party camera hardware as part of a package, for a more out-of-the-box solution.
The latest funding round will go toward accelerating its technology and expanding employee headcount from 40 people to 120 over the next year and a half. LiveControl and its investors are clearly bullish on the possibilities here. But there remain broader questions around how much audience members’ interest in remote viewing regresses to the mean once venues reopen across the country and world.
“Video is now table stakes for most organizations, venues and creators,” says Coyne. “We’re only seeing it accelerate, and everyone is forward leaning to make bigger investments to improve their video quality.”
Music app Breakr this week announced a $4.2 million seed round, led by Slow Ventures. The latest raise follows $700,000 in funding led by Andreessen Horowitz’s TxO fund – a round the people behind the service considered a sort of proof of concept as they worked to get the idea off the ground.
It’s clear why Breakr’s offering is an appealing one for investors. The product serves as a way to connect up and coming musicians with social media influencers. Musicians get exposure and the influencers get paid to effectively host an office hours listening session. Breakr, meanwhile, gets a 10% cut from the revenue.
Image Credits: Breakr
It’s a unique approach in an overcrowded music marketplace, where discovering music and being discovered have both proven difficult codes to crack. Though it’s less about tweaking the algorithm for music listeners than it is getting undiscovered music in front of the right set of ears. Speaking with two of the startup’s six founders, we reminisced about the days rappers stood outside of record stores, attempting to sell mixtape CD-Rs for $5 a pop — things have come a long way since then, but no one has fully solved the problem of music discovery.
“Breakr is a needed tool to efficiently connect artists, influencers and brands,” I know from first hand experience that this process manually is too time consuming to not only find an array of diverse influencers but activate them as well,” AMP Technologies’ Marc Byers said in a release. “They’ve created what I call a mall of influential marketers, where all you have to do is shop what talent fits the taste of your campaign needs.”
And while the medium has changed to social media, the hustle and feelings of futility haven’t. Not everyone gets their Mobb Deep story with Q-Tip stopping and listening to a few bars after coming out of the Def Jam offices. Obviously we need a lot more Q-Tips in the world, just as a general rule. With human cloning technology still lacking, however, Breakr is hoping to offer some approximation of the experience, with added financial incentive.
“If you’re a world-renowned DJ or A&R at a major label, these artists are already in your emails, and DMS, trying to get your attention,” says CEO Tony Brown, who previously worked for financial giant, Goldman Sachs. “We give them a unique URL, they send that unique URL and say, ‘hey, stay out of my DMS, meet me here. Here’s the cost. And let’s talk about it.’”
— Music Breakr (@MusicBreakr) July 2, 2021
Influencers charge artists on a sliding scale – likely commanding more based on their following. Breakr says around 12,000 users have signed up for influencer accounts, which the company is currently in the process of vetting. Between 3,000-4,000 accounts have been approved.
“We’ve worked with companies as big as Warner and Sony, as small as the SoundCloud rapper, and everybody in between,” adds Inventor and Head of Product Ameer Brown, who was formerly with Adobe.
Rapper, influencer and long-time friend Tobe Nwigwe is also on the long list of co-founders and has been active in helping spread the brand through social media, including hosting his own listening sessions.
“As soon as I saw the vision for what the Breakr team was building, essentially the tech-middle-man between influencers and artists, I immediately knew Breakr would be the future,” says Nwigwe. “Having cultural icons like Erykah Badu and Dave Chapelle rock with my music, and organically amplify me on their platforms, was major for me. Now, with Breakr, we make this happen authentically for artists and influencers of all levels.”
On the subject of cultural icons, Nas is also among the notable investors. “We loved the company before we knew the connection but that coincidence really made doing this deal even more special,” the rapper said in a comment provided to TechCrunch.