Taking the Temperature of Top Media/Tech Companies, Aug. 17-21
The VIP Heat Index evaluates the latest moves made by the businesses dominating the week’s biggest media and technology headlines: The hotter the score, the better the situation for the company in question. Here’s how the temperature checks stack up for the week of August 17…
TikTok Is the Hottest Acquisition Target in Tech Right Now
Yet another tech giant was interested in buying up popular social media platform TikTok. Google’s parent company, Alphabet, considered buying a small stake in TikTok as a part of a group bid before talks fizzled out, according to Bloomberg. This comes after the Financial Times reported earlier this week that legacy tech giant Oracle was also interested. Time is of the essence for TikTok’s parent company ByteDance to either make a deal and sell TikTok or face a ban in the U.S. Microsoft has already spoken to the White House about a possible acquisition and has said that it will move quickly to pursue the acquisition. A deal of this magnitude will surely shake up the tech world, but who will drop the hefty reported price tag of $50 billion? And who wants to deal with the headache of regulatory scrutiny?
Disney Strengthens Verizon Partnership With New Disney+ Bundle Offering
Disney positioned itself to accelerate uptake of its OTT services this week: Certain Verizon customers on Thursday gained access to the Disney+-Hulu-ESPN+ bundle as a new wireless plan perk. The deal expands Verizon and Disney’s bundle pact that hit the market last October, and should incentivize some Verizon subscribers to upgrade their plans. That’s a positive for Disney as it looks to retain its lead over other newer SVODs that are also bundling to get ahead in the streaming wars (like Apple TV+ and Quibi). It’s also great timing for Disney to boost the Disney+ audience as it means there will be more consumers eligible to purchase one of its biggest movies of the year “Mulan,” which a Disney+ subscription is needed to purchase, per Insider.
Facebook India in Hot Water After Reportedly Fumbling Hate-Speech Incident
Facebook is under pressure from staffers and regulators in India, its biggest market by users, after the WSJ last week reported the company protected politicians in India from being reprimanded for hate speech. An Indian parliamentary panel will now question Facebook execs in early September over how it moderates content in India, Reuters reported today. This quickly turned into a fire that Facebook needs to put out, given it (like all other tech giants) covets India for its lucrative business opportunities (see: Facebook’s $5.7 billion Reliance Jio investment in June). The whole debacle echoes the seemingly never ending black eyes Facebook gets from content moderation decisions. It was just two months ago that major brands boycotting Facebook amid hate speech concerns was the major tech headline.
Apple Becomes First U.S. Company to Hit $2 Trillion Valuation
Apple on Wednesday emphatically punctuated its stellar run this year by hitting a market cap of $2 trillion, which was a first for a U.S. company. The milestone, while largely symbolic, is a reflection of the tech giant’s enduring centrality to U.S. consumer life: Apple held 46% (the highest of any manufacturer) of the U.S. smartphone market share in Q1 ’20. This dominance contributed to the purchasing of Apple’s various services in a Q2 that was historically bad for the U.S. economy. The $2T milestone added on to Apple’s already eventful week, which saw it launch a CBS All Access-Showtime OTT bundle that should help lure Apple TV+ subs, but also get painted more as a villain in its ongoing saga with Epic Games (more on that below).
Sweeney’s Move Against Apple Reaps Further Consequences, But Some Allies
The lawsuit against Apple filed Monday by Epic Games revealed Apple is threatening to remove Epic’s developer accounts on August 28, following its blocking of Fortnite on the App Store. Furthermore, Apple asked a judge Friday to block Epic’s temporary restraining order request, saying Fortnite should not return until Epic accepts current terms. The odds are still in Apple’s favor, but Epic has succeeded in ascribing a more villainous image upon Apple. Removing Epic’s dev access would hurt their Unreal Engine business, impacting developers building mobile games on Unreal. Plus, several publications like the NYT and WaPo penned a letter Thursday, asking Apple what’s necessary to enact fairer App Store terms.
Snapchat Aims For More Gen Z Attention by Making Content More Shareable
Snapchat was not too long ago the challenger du jour in social media, though TikTok has stolen some of its steam since hitting the U.S. two years ago: 18-24 year-olds spent more time per day on TikTok than Snapchat in Q2, according to a June 2020 report by Cowen & Co. But Snapchat is swiping back, as Axios reported on Tuesday that the app is testing a feature that would make content like Snap Originals and Publisher Stories shareable off the platform. That’s a smart move to boost the profile of Snapchat-born content as TikTok has surely gained steam in part to consumers first seeing TikToks on other platforms like Reddit and Instagram.
AMC Clarifies Seating Situation for Concerned Moviegoers
Before Thursday’s reopening of 100 locations since COVID-19 closed theaters in March, AMC was on the defensive again Monday when theatergoers expressed concern over the ability to purchase seats online next to other customers. AMC clarified this was a system error and had already fixed the issue in order to make sure every location’s auditoriums would socially distance customers from each other while capping seats at 30% capacity. But this brief panic followed a more serious moment in June when AMC pledged masks would not be mandatory and only necessary for employees, a decision it quickly reversed course on after backlash over the health risk that would pose. At such a crucial moment, AMC cannot afford to scare customers again.