Month: February 2019

Google has been lobbying hard to make sure the European Union doesn’t bring in changes to copyright laws that could lead the company to have to pay publishers and other rights holders for content that Google hosts on its platforms, like YouTube, or that Google services link to, like Google News. Google has repeated it opposes the changes on the basis that it could impede the free movement of information around the internet — and put a crimp on Google’s business model.

The tech giant’s stance is setting up as a major test for European regulators eager to rein in Google and Facebook, as Google tries to pressure the EU into making concessions by presenting doomsday scenarios for both consumers and small publishers, even going so far as threatening to pull Google News from the EU.

“There is certainly a lot at stake for both Google and publishers,” said Robert Guthrie, partner for international law firm Osborne Clarke. “If the final Directive is pro-rights holder, then this is going to give bigger publishers more ammunition to negotiate higher license fees from Google. The smaller publishers are worried that Google will simply stop linking to their content.”

Google is unlikely to have visibility over how changes would impact revenue. In the last month, the platform ran tests of what a very sparse Google News would look like should the reform go through, which was debunked as scaremongering from opposition lobbyists. The company said that these tests led to a 45 percent reduction in traffic to news publishers. Google’s suggestion to pull Google News out of Europe was seen as empty threats by some analysts. Google doesn’t make money from News, but the service keeps people coming back to the search engine, from which it can earn revenue on queries.

“In theory, any changes to the law should not shut down services as it should be in the interests of both Google and publishers to negotiate license arrangements,” added Guthrie. The trouble is, in practice these negotiations could be challenging, forcing Google to remove content in the short term.

“The consequences for small and medium publishers could be dire, their very existence may be at stake,” said Greg Witham, chief operating officer at aggregator and publisher NewsNow — which has been lobbying against the reform — as they rely on search engines and aggregators for their traffic and revenue.

Others share the view.

“I saw estimations from very large publishers indicating that through [Google News] removal, between 15 and 45 percent of the non-organic reach will be at risk,” said Oliver von Wersch, CEO and founder of Von Wersch Partners, digital strategy consultant for publishers. “In general, news media will suffer, special interest media will win.” Von Wersch also suggests that Google AMP, its faster-loading mobile pages product, will shutter to avoid licensing trouble.

François Godard, a European media analyst at Enders Analysis, points out media casualties are a symptom of lack of a diversified business model.

“Relying on Google and digital advertising is leading them up a blind alley; this is cause to wake up,” he said. “The digital advertising model doesn’t finance journalism. This is just an acceleration of the underlying existing trend.”

Larger publishing groups with healthy direct traffic and no small amount of ill-feeling toward the U.S. tech giant are staunch advocates of the reform.

“It’s being blindly supported by big publishers who think it will return them to the glory years of controlling information and subsequent profits,” said a publisher who asked not to be identified. “It could actually have the reverse effect and accelerate the decline as consumers find alternative and better ways to consume content. I’m not convinced that blocking Google News or Apple News means users flock back to the original source of a press news story or publisher apps.”

Instead, the publisher said this is an indication of Europe’s aggressive desire to break up the power of the platforms through regulation.

“I fear it’s an example of how too much regulation can stifle market growth,” this publisher added.

Fears of how slow-moving bureaucracy can harm rapidly innovating technology have some sway. The current version of the reform has come under fire from publishers and lobbyists for being poorly crafted and not informed about the technical routines of the open web, while not accounting for potential investments into the necessary infrastructure needed, like content matching technology.

Ultimately, larger publishers are unable to flex as much muscle as U.S. tech platforms, leading down the route to regulation. And Google, with thousands of engineers and deep pockets, will manage to find services that comply.

“U.S. tech platforms have had extravagant privileges that negate the principles that have been at the heart of copyright since the 19th century,” said Godard. “I’m pretty sure Google will adjust.”

The post In EU copyright battle, Google challenges the will of regulators appeared first on Digiday.

HQ is cozying up with Google.

Most famous for viral app HQ trivia, the company is launching an “action” for Google Assistant called HQ University. The game is quite similar to HQ trivia: Players answer 12 questions that get increasingly challenging. Players are walked through the game with HQ trivia host Scott Rogowsky and teacher’s assistant Fredo (a voice bot).

However, people playing HQ University don’t have the chance to win cash. The game is intended to help users get better at playing trivia. The game is available on Google Home, Smart Displays that have Google Assistant and the Google Assistant app on smartphones. Even though it’s a voice-first experience, players using Smart Display or Android phones will have special interactions on their screens.

This game is part of an ongoing sponsorship deal between Google and HQ, which began last year. HQ declined to share how much Google has paid, so far.

HQ’s move to expand to Google Assistant comes as the company looks to build a media business. The app quickly gained traction, attracting more than 1 million players per game at the end of 2017, but it has since lost some of that momentum. The fad has faded, and HQ is now facing competition from The Q and Facebook. The company behind HQ has raised $15 million in venture capital funding, led by the Founders Fund. Disney also has invested in the company.

HQ has been expanding its product portfolio with an Apple TV app launched in August 2018, as well as new spinoff games such as HQ Sports and HQ Words.

Creating a voice-first experience is another way for HQ to expand.

“Google is one of the most innovative brands in the world. We believe in the power of voice and how Google Assistant can impact people’s lives. Partnering with Google to bring HQ to fans on demand to practice their trivia skills was a no-brainer,” said Brandon Teitel, svp, programming and partnerships at HQ.

While the initial hype has faded, HQ is still attracting a large live audience every day. On Feb. 7, more than 500,000 people played the nightly game that was sponsored by Lego.

The company has been experimenting with different game formats and prizes. HQ trivia has introduced awarding users points for each question they get correct. These points translate into levels, which allow users to get questions wrong but still move on to the next questions in future games. The company recently experimented with hosting games that didn’t have a cash prize and only awarded users points, but they reserved that decision after some backlash. Indeed, audience sizes seem to depend on the prize pool.

Google has been focusing on growing its smart speakers and voice product, as it competes with Amazon’s Echo products with Alexa, Apple’s Siri and Microsoft’s Cortana. Publishers, including BuzzFeed, have been investing in Google’s voice-first products. CBS Sports and The Guardian also have built actions for Google Assistant.

HQ does not currently have plans to launch on other voice-assistant devices, the company said.

The post HQ trivia expands to Google Assistant for voice-first trivia appeared first on Digiday.

Early last year, Matt Alexander, co-founder of Neighborhood Goods, sat down with 20 executives and founders from direct-to-consumer brands in New York City, including Hims, Stadium Goods and Away, and asked them what their biggest priority was in the next two years.

The biggest priority for everyone was physical retail stores. Most important: how to do it without cumbersome years-long leases or transient pop-ups.

The post Retail Briefing: Neighborhood Goods is building the DTC mall of the future appeared first on Digiday.

“QB1: Beyond the Lights” is a reality show that follows three star high school quarterbacks during their final season before they move on to play college football. Produced by Complex Networks with “Friday Night Lights” director Peter Berg, the first two seasons of the show originally aired on Go90, the now-defunct video streaming platform from Verizon, which funded “QB1” and other Complex shows as part of a lucrative content deal between Go90 and Complex Networks. Season 3 will premiere later this year on Netflix, as part of a broader licensing arrangement between Complex and the streaming giant.

This year is shaping up to be a big year for Complex’s video licensing and development business, which is a “high eight-figure” business, according to Christian Baesler, president of Complex Networks.

In total, Complex has licensed 16 of its existing series to Netflix and Hulu. Netflix will have six shows, including all three seasons of “QB1,” as well as other shows such as “Instafamous” and “Top Grier.” Hulu, meanwhile, has licensed 10 series from Complex, including “Sneaker Shopping,” “The Burger Show,” “Complex Closets” and “Sean in the Wild.”

Complex Networks also has licensing deals with Fuse and MSG to air programming on their cable channels. And a partnership with international streaming service iFlix brings Complex shows to countries such as Malaysia and the Philippines.

All of these licensing deals cover shows already made by Complex, a key part of the company’s business strategy. “All of them are licensed, so we own all of the IP,” said Baesler.

Publishers with TV and entertainment ambitions love talking about the value of intellectual property — “IP” in industry-speak — and how smart development of IP can help create new revenue streams. It’s great to create a show for a network, but if you own the underlying IP, then you have the chance to make more dollars through licensing, commerce and other ancillary revenue streams.

This has been the backbone for the TV industry for quite some time. Complex Networks says it has been able to successfully bring that IP mentality to its company — and has been doing it for years. For instance, its hit show, “Hot Ones,” drove $7 million in hot sauce sales last year. Through its iFlix deal, the companies are also creating localized versions of “Hot Ones,” with local hosts and guests. Complex has also used its various media brands and original series for different physical activations at ComplexCon.

One key reason why Complex Networks has been able to build out franchises is that it programs itself “like a linear cable channel,” Baesler said. “We have 30 daily and weekly shows that we make and put on our channels. All 30 of these shows have 20-minute-plus episodes with seasons. The goal is to create them and monetize them over time, all the way down the line to licensing them directly to linear networks or Netflix, or using the format to license a new version of the show like what we did with ‘Hot Ones.’”

This doesn’t mean that Complex is not developing projects with the intention to pitch and sell them to third-party buyers — a model primarily used by digital publishers such as Attn, BuzzFeed and Vox Media that have begun to build studio businesses. In fact, Complex has five such series currently in production, which will come out later this year. The company is also considering “first look” — which means the buyer gets the first pass on Complex’s development slate — with studios and networks, Baesler said.

“Our focus is on building IP that we own and can then license, which is a much bigger, longer-term value for us,” said Baesler.

Last August, Complex restructured its internal video operation. Whereas previously, video production was siloed to individual brands such as Complex and First We Feast, the company created three centralized units that span all of Complex’s video work. One unit is focused on external development; a second team is focused on licensing existing programs; and a third team is focused on video production, which includes creating different versions of Complex shows that are distributed on YouTube, Snapchat and other channels.

These teams are consistently collaborating with the managers and teams within each individual media brand, Baesler said.

The new structure streamlined process, which has made it easier to push deals across the finish line, Baesler said. The licenses to Netflix were mostly done in the third and fourth quarter of last year. “And the new shows that we are working on — the originals, which are coming out around Q2 and Q3 — all kicked off right after the [reorg] process started,” Baesler said.

Image via Complex Networks/”QB1″

The post Complex is licensing 16 shows to Netflix and Hulu in 2019 appeared first on Digiday.

President Trump is expected to sign an executive order Monday aimed at boosting U.S. development of artificial intelligence—and at blunting China’s momentum in the field.

Walmart is laying claim to a growing market for furniture products sold online with a new private-label brand called Modrn.

Anthony Soohoo, svp and group gm of Walmart eCommerce, wrote in a blog post Friday that the brand is geared at customers who want trendier furniture pieces at a lower price; it’s also a response to a 35 percent increase in visits to its Walmart.com’s home products page. Modrn will be sold through Walmart.com, Jet.com and Hayneedle, with prices ranging from $199 to $899 for product categories including sofas, beds, bar furniture, indoor and outdoor dining and chairs.

This isn’t the retailer’s first foray into online furniture brands: It acquired online furniture retailer Hayneedle for $90 million in 2016. By increasing its presence in the market, Walmart is staking out a competitive position against the likes of Wayfair, Target and Amazon by using the lessons from the companies it’s acquired and putting them into practice through newer private-label offerings. In addition to Hayneedle, Walmart has acquired online brands Jet.com, Bonobos, Modcloth and Moosejaw in an effort to expand its digital reach as well as learn about a younger and digitally native customer’s preferences and behavior.

“Walmart has to play in this space. They’re taking an approach from every possible angle, both acquiring brands and building new brands in-house,” said Tom Gehani, Gartner L2’s director of client strategy and research. “They acquired these companies like Bonobos, Modcloth and Hayneedle, and they’ve also started taking those design sensibilities and bringing those into new Walmart brands in their own light — a lot of the George [menswear] products look like Bonobos clothes, a lot of the furniture they’re launching looks what’s sold through Hayneedle.”

According to Gartner L2, the online furniture and home goods market is expected to double in the next five years. Online furniture and home good sales were valued at $50 billion in the U.S. in 2018, per an eMarketer estimate. Amazon has seen 40 percent sales growth in the home category over the last two years, and Walmart lacks an organic search presence, according to Gartner data. In addition, of the 277 home categories searched on Google, Walmart showed up in only 44 percent of them, compared to Wayfair at 81 percent and Amazon at 65 percent. Gartner predicts that the online furniture and home goods market will double in the next five years.

By acquiring data and insights from acquired brands, Walmart can reach a new type of customer that’s typically young and urban — a contrast from Walmart’s big-box discount store model.

“With their [acquired] digital-native brands, they have so much data; they’ve been online for a while and the advantage is knowing your customer in and out,” said retail analyst Jane Hali, CEO of Jane Hali & Associates.

An objective of launching online-only brands that have a more upscale air is to attract the type of customer who wouldn’t normally shop there. Bringing in Walmart brands that look and feel like the acquired direct-to-consumer products, Walmart can broaden its customer base. Private label, however, is a competitive game, with Amazon and Target adding to new brands to suit different audiences. What used to be a secondary strategy to push product at higher margins is now a core merchandising strategy, along with brand-exclusives offered only through specific retailers.

“There is a contingent of customers, and Walmart knows this, who might not want to shop at Walmart at all,” said Gehani. “Those customers are able to be served through an acquired brand, but Walmart also wants more people to shop at Walmart, so one way they’re able to do that is start bringing products like Bonobos to Walmart.com directly or Walmart stores.”

In recent years, Walmart’s private-label strategy has shifted from budget to upscale products, partly enabled by its DTC acquisitions.

“They’ve likely got access to a supply chain, factory and designer partnerships that have resulted in a better aesthetic than Walmart used to have,” said Gehani.

While Walmart is carrying some risk launching a new brand, its logistics network through its physical stores, as well as supplier and designer relationships give it an edge over competitors.

“I’m very bullish on this idea; they have incredible trust and distribution,” said Andrew Essex, CEO of Plan A and co-founder of Droga5. “It’s well-branded — it’s crisp and modern and feels like something completely new.”

Walmart’s biggest risk, said Essex, is a lack of patience and a competitive field of companies vying for the online furniture market like Amazon, Target and Wayfair. Despite these hurdles, Walmart’s scale will ensure it can hold its own among a suite of other companies vying for market share.

“The pendulum is swinging back where you have the incumbents learning from DTC unicorns and leveraging their massive hindquarters,” he said.

The post Walmart pushes forward private-label strategy with the launch of an online furniture brand appeared first on Digiday.

The US will join more than a dozen other countries with national AI strategies when President Trump signs an executive order to create the American AI Initiative.

The Amazon CEO cultivated a persona of the billionaire who did dishes, until his company moved into Hollywood. There, he took on the trappings of a very different lifestyle, where people and events are much harder to control.

People around the world agree that climate change poses a severe risk to their countries, according to a 26-nation survey conducted in spring 2018. Terrorism, specifically from ISIS, and cyberattacks are also seen by many as major security threats.

The post Climate Change Still Seen as the Top Global Threat, but Cyberattacks a Rising Concern appeared first on Pew Research Center.

More countries see climate change as a top international threat, but many people also name ISIS and cyberattacks as their top security concern.

The post Climate change is seen by more countries as a top international threat appeared first on Pew Research Center.