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Situational Awareness: The Western world's Big Tech disillusionment grows...
- U.S.: Senators will unveil a measure today to crack down on manipulative design features in major web platforms, Axios' David McCabe scoops.
- U.K.: The government yesterday unveiled a sweeping plan to rein in tech firms by making them liable for unlawful or harmful content.
- Canada: The government said Monday that it's considering regulating Facebook and other social media giants.
- Australia: Officials passed a law last week to punish social media companies for violent content.
- New Zealand: The country's privacy watchdog called Facebook "morally bankrupt" yesterday and suggested that the country follow Australia's lead in passing a law to jail tech executives over violent streaming problems.
1 big thing: The war for your internet connection
The world’s biggest tech companies are spending billions of dollars on projects to get more people around the world connected to the internet.
Why it matters: Tech companies historically have specialized in services (like social media or payments) that ride on top of internet connections, rather than building the networks themselves.
- Yes, but: Their businesses can't grow without quick expansion of the web. So now, owning the broadband pipes is becoming just as important as owning the content that runs through them.
Driving the news: Facebook is in talks to develop an underwater data cable ring around Africa, the Wall Street Journal reports. The project aims to drive down internet costs so that Facebook can get more people using its services.
- Facebook and other tech firms have been partnering with traditional internet providers around the world to invest in underwater cables because the investment can require tons of cash upfront.
- The big picture: These partnerships have grown over the past few years, bringing tech companies to the forefront of underwater cable ownership. Google, for example, owns 8.5% (roughly 63,605 miles) of submarine cables around the world.
The internet space race is also heating up. Amazon said Wednesday that it will launch thousands of satellites into space to provide internet around the world via a new effort called Project Kuiper.
- Google’s parent Alphabet launched “Project Loon” in 2013 to provide internet access to rural and remote areas via high-tech, high-altitude balloons that are launched into the stratosphere.
The big picture: Telecom providers have traditionally managed internet expansion and footed the bill for the huge costs of digging fiber trenches and installing wireless infrastructure.
- U.S. broadband providers have invested more than $1.6 trillion in connectivity since 1996, according to industry group USTelecom.
- And U.S. wireless internet carriers are investing heavily to upgrade 4G networks with 5G technologies that will enable even more data-rich services.
Between the lines: Tech companies are pushing into the broadband space as many internet service providers (like Verizon, AT&T and Comcast) are buying up media properties to own more of the content that flows through those pipes.
- But because fewer people are paying for cable subscriptions, many of those companies are trying to expand their broadband businesses to accommodate the proliferation of streaming services.
- Be smart: This means that instead of racing to add new connections, some telecom providers are pushing to make more money off of existing customers.
The bottom line: The war for consumers' attention is intensely cutthroat, but the competition to get more people connected to the internet is just as fierce.
Go deeper: Read the full piece from Axios' Kim Hart and me.
2. Exclusive: The Athletic launches 20+ podcasts
The Athletic, a subscription-based digital sports media company, is launching a multimillion dollar podcasting business.
What's new: Over 20 exclusive, ad-free podcasts will debut behind the company's subscription paywall on its app and website on Tuesday. The podcasts will be produced in-house by a team of 12 new hires.
Why it matters: The sports podcasting space has become more crowded over the past few years, with digital upstarts like Barstool Sports, The Ringer and SB Nation, in addition to TV sports giants like Fox Sports and ESPN, all launching new podcasts. The Athletic is hoping to differentiate itself by focusing on quality, hyper-localized podcasts that live only behind a paywall.
Details: The programming strategy is to leverage The Athletic's 300+ sports reporters around the country and in Canada to create local and national podcasts, varying in topics and cadence. Most podcasts will range from 15–40 minutes long.
- The company has created several new podcasts, and has taken over the personal podcasts of some of its biggest stars.
- It's also begun acquiring podcasts, like "The Daily Ding" and "Birds All Day," and hopes to add more in the coming months.
The catch: The podcasts will only be available on The Athletic's owned and operated channels, and will not be accessible anywhere outside of its paywall, like on Spotify or Apple Music. The hope is that by keeping them behind a paywall, the company will be able to attract new segments of sports fans who engage with sports differently.
Read more of the full story, which has the list of debut programming.
3. Media talent strikes back
Dozens of media companies have unionized over the past 2 years in an effort to weather the turbulent economic environment for the content industry.
Meanwhile, Hollywood writers are waging war with talent agents who, writers claim, are taking an unfair cut of their profits.
Why it matters: Content creators have in some cases become collateral damage in a power struggle between the media industry and technology-driven business disruptions. Now, the talent is trying to fight back.
By the numbers: In the past 2 years, more than 30 media companies have partially or fully unionized — an unprecedented pace. Most are fighting for equal pay and job security.
- Several digital companies unionized earlier. For example, Gawker Media’s employees voted to unionize in 2015, which opened the door for several other digital outlets to do the same like Vice Media and HuffPost.
The other coast: Hollywood is experiencing a similar talent uprising. After failing to reach an agreement over the weekend, the Writers Guild agreed to extend to Friday the deadline to renegotiate a decades-old agreement with Hollywood talent agencies.
- The heart of the dispute centers around the Guild's assertion that Hollywood's biggest talent agencies, like ICM, WME, CAA and UTA, are undercutting the writers they represent by moving from a long-standing percentage cut model to a model focused around packaging fees and production.
- Many of these agencies have transitioned from strictly representing talent to becoming more involved in media production and distribution.
The bottom line: The media industry is facing unprecedented disruption, which is forcing the employment dynamics to change. Those transitions will come with pain points.
Go deeper: Read the full story from Axios' Marisa Fernandez and me.
4. Chinese news app battle heats up
Move over Apple and Google, the next big news efforts to follow are two Chinese news aggregation rivals: Qutoutiao and Toutiao.
Driving the news: Qutoutiao, the 3-year-old news and video aggregation startup backed by Tencent, recently announced that it is receiving a $171 million convertible loan from Chinese tech behemoth Alibaba.
- The company, whose name literally means “fun headlines,” went public in the U.S. last year with roughly 50 million monthly active users and a market value of $2.1 billion.
Why it matters: Tech giants like Alibaba and Tencent are backing Qutoutiao as it pushes to take on Toutiao, a popular news aggregation app owned by ByteDance.
- ByteDance, the Chinese tech company that also owns popular music app TikTok, poses a threat to the dominance in this sector of China's 3 biggest tech firms: Baidu, Tencent and Alibaba.
- Toutiao has become a news aggregation powerhouse in China. The company raised $2 billion in funds at an over $20 billion valuation in 2017. It reportedly has over 200 million daily active users.
Be smart: "It is prudent for both Tencent and Alibaba to invest in Qutoutiao given ByteDance's valuations and progression into the short-form video space," says Humphrey Ho, managing partner at Hylink, China's largest independent digital advertising agency.
- "Qutoutiao accomplishes Tencent and Alibaba's goals without much overlap. ... Qutoutiao would merely be a platform wherein Alibaba and Tencent can drive to their own platforms, similar to how as TikTok is owned by ByteDance."
5. Dems divided over Fox
Some Democratic candidates for president are adding Fox News to their campaign stops as the primary battle heats up, hoping to reach as many potential voters as possible.
Why it matters: The debate among Democrats over whether or how the party should engage with Fox News is sowing division within the party ahead of 2020.
- Driving the news: While a growing number of Democrats have appeared on the network over the past few months, it was Sen. Bernie Sanders' announcement last week that he will participate in a Fox News town hall in Pennsylvania on April 15 that has caused the most stir.
- Meanwhile, despite the efforts of presidential hopefuls, the Democratic party is still distancing itself from the network, while trying to be supportive of candidates' decisions.
6. Univision finally sells Gizmodo Media Group
After months of speculation, Great Hill Partners, a growth-oriented private equity firm, agreed to acquire Gizmodo Media Group and The Onion from Univision Communications.
- Gizmodo Media Group consists of a bunch of millennial-focused digital websites, like Jezebel, Splinter, Deadspin, Gizmodo and others.
Why it matters: Univision bought the digital conglomerate for roughly $135 million in 2016. Recode's Peter Kafka reports that Univision sold the sites to Great Hill for roughly $50 million — a more than 60% estimated write-down.
- The Wall Street Journal's Ben Mullin, who first reported the news Monday, confirmed those numbers.
Details: Digital media vet James Spanfeller will be CEO and is a significant investor in the company, which is rebranding as G/O Media Inc.
- Chris Gaffney, managing partner at Great Hill Partners, tells Axios the group has no plans to sell off any of the sites individually from the Gizmodo Media Group bundle, and will "absolutely" be looking to add to the bundle.
- "Part of value here that Univision put together was assembling something has scale. I think you'll see us adding to that scale, not taking it apart," he adds.
Cord-cutting: Video games are the next entertainment industry undergoing a major disruption, all the way down to the consoles and controllers. (Axios)
Snapchat's launches: Snap announced a new gaming service and updates to its ad service. Snap intends to keep growing its ad revenue while also building revenue-generating services that users can access across apps and activities. (Axios)
Accenture move: The company's marketing arm acquired the popular creative agency Droga5. With the deal, Accenture Interactive has bought out a 49% stake in the company — previously owned by talent agency Endeavor, which is reportedly about to file confidential paperwork for an IPO. (Axios)
Apple Music growth: Apple Music overtook Spotify in paid U.S. subscribers. Apple Music had more than 28 million subscribers in the U.S. as of February, compared with Spotify’s 26 million, according to people familiar with the numbers. (WSJ)
IHeartMedia's IPO: The company has filed for an initial public offering. It's the latest chapter in a complex corporate saga that began when iHeart (then known as Clear Channel) was acquired in 2006 for $18.7 billion. (Axios)
8. 1 retro thing: Online companies launch print products
Print is making a comeback. Digital media companies are launching print products to better market themselves amid a crowded digital field.
- Overheard, the Instagram local media brand that powers big accounts like @OverheardLA and @OverheardNewYork has launched a physical newspaper to the Los Angeles market called "Overheard Post." Overheard founder Jesse Margolis tells Axios that print can be good if you want to establish something tangible. "On social media it's gone in 24 hours."
- Bumble, the online dating app, announced Bumble Mag last week, a lifestyle publication that it's printing in conjunction with magazine giant Hearst.
- BuzzFeed printed its first edition of a print newspaper last month and distributed copies to consumers in New York.
- The New York Times, although originally a print-based news company, has created a section within its Sunday Times called “Internetting with Amanda Hess,” about online culture.
Why print matters: Via Andrew Sondern, art director at the New York Times: "It’s not that the medium is the message; it’s that the medium is a container and shapes the message to its contours."