TikTok Owner Seeks Injunction Stopping App Ban in the U.S.

ByteDance, the Chinese owner of social video platform TikTok, has filed for a preliminary injunction against the Trump Administration’s executive order banning U.S. access to the app, effective on Sept. 27. About 100 million Americans use TikTok on a monthly basis.

The request, filed Sept. 23 in the District Court for the District of Columbia, seeks to stop a DOJ mandate ordering Google and Apple to remove the TikTok app from their platforms on Sunday — in addition to ceasing to provide updates for current holders of the app.

ByteDance is currently in negotiations with Oracle and Walmart to sell 20% (for $20 billion) of a new corporate entity called TikTok Global. Trump last weekend publicly gave his approval of deal — until he found out the Chinese would still own 80% of the company. Oracle reportedly said the sale would preclude ByteDance from owning the TikTok app outright.

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Regardless, the Chinese government would have to approve of any deal, which seems increasingly unlikely following reports in the government-owned English newspaper China Times, which called the transaction “dirty and unfair,” and based on “bullying and corruption.”

The Trump Administration, which eyes TikTok as a threat to national security, continues to engage in a war of words with China over trade and technology.

ByteDance says the security fears are overblown and political in nature.

“There is simply no genuine emergency here that would justify the government’s precipitous actions,” read the filing. “And there is no plausible reason to insist the prohibitions be enforced immediately.”

Comcast Eyes Leasing X1 Software to TV Manufacturers

Comcast is reportedly considering licensing its X1 set-top box software to third-party consumer electronics manufacturers of smart televisions. Such a move would put Comcast in competition with Roku, Google and Amazon, among other tech companies affording TV manufacturers with Internet-connected consoles.

First reported by Protocol.com, citing sources familiar with the situation, Comcast engaged in initial discussions with TV manufacturers in January at the pre-COVID-19 CES confab in Las Vegas. The cable operator, which is slowly coming to grips with a changing pay-TV market — underscored by the departure of more than 815,000 subscribers through June 30 — currently licenses X1 technology for third-party set-tops to Cox Communications and soon Charter (Spectrum TV Plus).

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Roku cut its teeth licensing its operating system through set-top devices manufactured for the former 21st Century Fox’s NOW TV. Comcast now owns NOW TV through its acquisition of Sky from Fox. Samsung, one of the world’s largest TV manufacturers, has begun licensing its Tizen OS smart TV technology to third parties.

Comcast’s move into software licensing could be accelerating after attempts to sell NBCUniversal’s Peacock streaming service through the Roku platform fell through. Similarly to WarnerMedia’s HBO Max, Peacock is also not available on Amazon Fire TV.

Launched in 2012 as Comcast’s antidote to Netflix, Amazon Prime Video and Hulu, cloud-based X1 platform now represents about 60% of the cabler’s pay-TV subscriber base. Since then X1 offers subs access to Netflix and YouTube apps. Comcast also launched broadband-only Xfinity Flex online TV platform.

Revised Tech Encryption Bill Sent to U.S. Senate for Vote

A bill seeking to prohibit the exploitation of minors on the Internet July 2 was sent to the floor of the U.S. Senate for a full vote. While there is no argument against removing images of child abuse from the Web, technology and trade organizations contend the “Eliminating Abuse and Rampant Neglect of Interactive Technology” (Earn It) Act — introduced in March by Lindsey Graham (R-SC), Richard Blumenthal (D-Conn.), Josh Hawley (R-Mo), and Dianne Feinstein (D-CA) — could undermine user encryption safeguards and hold platforms such as Facebook and Google-owned YouTube liable for video images distributed by third parties.

Indeed, the bill would enable U.S. Attorney General Bill Barr to force tech companies to bypass encryption found on cell phones, computers and portable media devices for law enforcement purposes.

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“The Earn It Act could end user privacy as we know it,” the Electronic Frontier Foundation said in a statement. “Tech companies that provide private, encrypted messaging could have to rewrite their software to allow police special access to their users’ messages.”

Graham later issued a statement stressing the bill would not undermine existing encryption safeguards.

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‘The goal here is not to outlaw encryption … that will be a debate for another day,” Graham said.

Gary Shapiro, CEO of the Consumer Technology Association, said the bill would stifle legal online speech and harm American competitiveness.

“Rather than targeting the actual problem and giving prosecutors the resources to lock up [sex] offenders, the EARN IT Act would promote lawsuits against legitimate Internet companies,” Shapiro said.

He said the bill would allow states to create a “patchwork quilt” of civil and criminal liability without specifying a “knowledge” standard.

“We appreciate the Senate Judiciary Committee’s interest in fighting child exploitation and believe the committee should pursue more effective measures,” Shapiro said. “There is nothing in existing law … that prevents the Department of Justice from bringing charges against abusers right now.”

Interest in Digital Home Entertainment Spread in Pandemic, DEG Speakers Say

Staying at home during the pandemic increased digital home entertainment interest across the board — for free VOD, SVOD and TVOD — according to speakers at a virtual DEG Expo May 21.

“We’re seeing in this moment really strong momentum for content consumption, discovery, engagement across our whole ecosystem,” said Google’s Jonathan Zepp. “That’s especially true in our user-facing, consumer businesses. For example, since stay-at-home has been in place, our home entertainment transactional business has seen tremendous growth in consumption, and it’s driven not only by new-release, home-premiere titles, but also catalog titles that have been wonderful and enjoyed by families together.”

Consumers were also searching for older shows. As consumers began to shelter in place, search queries for “The Sopranos” grew 67%, “Game of Thrones” 36% and “Mad Men” 31%, noted Google’s David Wang.

“If you take even some of these older titles that are evergreen, we’re seeing significant increases in search volume for these titles over the past several months, and they all roughly correlate with the timing of stay-at-home orders,” he said.

Consumers also increased searches for “Marvel movies in order” and — perhaps coming as no surprise — “virus movies.”

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“Right around the time that the pandemic was declared, we saw a huge spike in the number of queries for virus movies, and thankfully that’s tapered off a little bit, and people are looking for a little bit lighter fare,” he said.

“Tiger King,” Netflix’s much talked about documentary about eccentric big cat collectors, also got a search boost.

Consumers were also looking for content broadly, with searches such as “what to watch on Netflix” up 114%, “best TV shows” up 62% and “action movies” up 58% as stay-at-home orders took effect.

“Eventually you run out of things that you know you want to watch, and you need to discover new content, so we see increases in broad inquires,” Wang said.

Consumers were also looking for specific content providers, with searches for “Disney+ movies” up 135%, “Netflix movies” up 86% and “Hulu movies” also up 86%.

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“Oftentimes, you want to maximize the value of an existing subscription that you have, and you want to find out what’s new or what’s hot on one of those services or maybe you’re trying to understand whether you want to subscribe to a new service,” Wang noted.

Searches for free content also grew, with “free TV websites” up 179% and “free movies” up 60%.

“What we’ve observed is that a lot of free content has been made available over the past couple of months, generally brought about by COVID and stay-at-home orders,” he said, adding, “I do think that the business model is changing slightly in terms of free content. We see more advertising video-on-demand players, so we see a definite shift in increasing query volume for that. I think we’ve established a new baseline.”

As some areas opened, such COVID-spawned entertainment search activity decreased, he said, pointing to South Korea, where the infection curve flattened early, as an example.

Still, he thinks there has been a permanent shift in viewing habits.

“Even as we start going out a little bit more, I think the general consumption of streaming over something more linear is probably here to stay,” Wang said.

More ViacomCBS Content Heading to YouTube TV

ViacomCBS and Google May 7 announced a multiyear distribution agreement to deliver more content from ViacomCBS’s portfolio of news, entertainment and sports networks for YouTube TV subscribers.

In addition to featuring continued carriage of CBS broadcast stations, CBS Sports Network, Pop TV, Smithsonian Channel, and The CW, the expanded agreement introduces 14 ViacomCBS channels to the live TV and on-demand subscription service.

BET, CMT, Comedy Central, MTV, Nickelodeon, Paramount Network, TV Land and VH1 will launch this summer for YouTube TV’s more than 2 million subscribers. BET Her, MTV2, Nick Jr., NickToons, TeenNick and MTV Classic will also launch on YouTube TV at a later date.

The deal also includes a continued commitment to distribute ViacomCBS’s premium subscription services, including Showtime, on YouTube TV, as well as an extended partnership on the broader YouTube platforms.

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“We are thrilled to have reached an expanded agreement with YouTube TV that recognizes the full power of our newly combined portfolio as ViacomCBS,” Ray Hopkins, president of U.S. networks distribution at ViacomCBS, said in a statement. “Google has been an excellent partner, and we look forward to bringing even more of our entertainment networks to YouTube TV subscribers for the first time.”

“We’re excited to launch ViacomCBS’s portfolio on YouTube TV this summer,” Lori Conkling, global head of partnerships at YouTube TV, said in a statement. “Our expanded partnership delivers on our promise to offer a premium portfolio of content to our YouTube TV subscribers, as well as across the YouTube platforms.”

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YouTube TV is a subscription streaming service that lets you watch live and on-demand TV from 70-plus networks. It offers live and local sports, news, shows, movies, and more, and can be watched on any screen (phone, tablet, TV, computer). Membership comes with free unlimited cloud DVR storage space to record favorites, personalized watch recommendations, and a family plan with six accounts per household.

Financial terms of the agreement were not disclosed.

FANG Plays Compassion Card in a Time of Crisis

As media companies large and small attempt to find their economic footing in the face of the coronavirus, Facebook, Amazon, Netflix and Google — companies CNBC’s “Mad Money” host Jim Cramer coined with the FANG acronym in 2013 in reference to their high-growth Internet stocks — are downplaying their relative fiscal fortunes in the midst of the pandemic.

Combined revenue for FANG skyrocketed to $441 billion at the end of 2019, from $51 billion a decade ago. None of the corporations have applied for government assistance.

Amazon saw sales increase 26% to a staggering $75.5 billion in the recent first quarter, from $59.7 billion in the previous-year period. The coronavirus has apparently affected company founder/CEO Jeff Bezos personally.

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Bezos and senior management spent the majority of the company fiscal release and webcast devoted to COVID-19, detailing what Amazon was doing for its 800,000 workers worldwide during the crisis.

The move was partially proactive after workers in select warehouses threatened to go on strike if safeguards protecting them from the virus weren’t put in place. Amazon needs healthy workers at a time when order fulfillment is stretched to capacity.

Amazon last month confirmed that a worker in Tracy, Calif., had died from the virus. An employee in the company’s Seattle headquarters tested positive, as reportedly did 48 workers in a New Jersey warehouse.

Eyeing a possible pandemic within its own company, Bezos re-assumed day-to-day operations of Amazon, ordering $600 million spending on virus-related expenses in the quarter. That amount is ballooning to $4 billion in the current quarter, which includes testing every Amazon employee.

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“The current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” Bezos said in a statement.

“We’ve put some of our best people on [testing],” added CFO Brian Olsavsky. “[Tests] are not readily available on the scale that we need for our employees.”

Michael Pachter with Wedbush Securities in Los Angeles, said the increased expenses include a $2 raise for hourly workers and the hiring of 175,000 workers — many displaced from other companies — costing about $1 billion. The company is also paying double-time for overtime, or about $1.5 billion (assuming around 12% of hours are overtime). Amazon is spending $700 million on virus testing, with another $800 million spent keeping facilities clean and virus free.

Pachter believes Bezos’ concern involves around the stress having to potentially expose hundreds of thousands employees to a health risk.

“[The pandemic is] obviously great for revenue, but Bezos is trying to be compassionate about the human toll,” Pachter said in an email.

With a quarantined audience throughout much of the world, Netflix added a record 16 million subscribers worldwide in the first three months of the year — about 7 million more than revised Wall Street estimates and 9 million more than what Netflix had expected.

At a time when media companies are scrambling to find liquidity, furloughing/laying off employees, Netflix has seen its stock reach record highs — briefly surpassing the slumping Walt Disney Co.

“It’s an incredible tragedy for the world,” Hastings said about COVID-19. “Everyone is wrestling with the implications, both on health, on hunger, poverty. And we, too, are really unsure of what the future brings.”

Netflix was one of the first media companies to establish a $150 million fund to support idled workers and production crew associated with its original programming.

Facebook, which saw Q1 profit and revenue increase 18% and 102%, respectively, from the previous-year period, said it committed $300 million to help its “broader community,” which includes $100 million grant program to help small businesses and another $100 million to support the news industry.

“Helping people stay connected while we’re all apart; assisting the public health response and working on the economic recovery, especially for small businesses,” CEO Mark Zuckerberg said in a statement.

Google-parent Alphabet Inc., saw quarterly income increase about $300 million, while revenue soared 13% to $41.1 billion from 2019. The company has expanded free video streaming and educational content through YouTube. Google and Apple also announced a joint effort to enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the virus, with user privacy and security central to the design.

“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time,” CEO Sundar Pichai said in a statement. “People are relying on Google’s services more than ever and we’ve marshalled our resources and product development in this urgent moment.”

HBO Max to Be Available Across Google Platforms and Devices at Launch

WarnerMedia’s pending SVOD platform HBO Max will be available across Google platforms and devices and on Google Play when it launches May 27, the company announced.

It will be available to U.S. customers across Android phones and tablets, Android TV devices and Chromebooks. HBO Max subscribers will also be able to stream their favorite shows and movies via Google Chromecast and Chromecast built-in devices. At launch, current HBO Now subscribers on Google Play will be able to log in and access the HBO Max app at no additional charge. New HBO Max customers will be able to subscribe directly in the app.

“The availability of HBO Max across Android, Android TV, Chromebook and Google Chromecast devices and on Google Play adds to our growing list of distribution options that will be offered to customers at launch,” said Rich Warren, president of WarnerMedia Distribution. “We’re pleased to make HBO Max available to the significant base of customers who access content across Google’s platforms and devices.”

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WarnerMedia April 27 announced that HBO Max would be available on Apple devices, including Apple TV, at launch.

The HBO Max service is priced at $14.99 a month.

YouTube Ups Q1 Revenue by $1 Billion

Google-owned YouTube continues to reign as the Internet’s top over-the-top video platform, generating more than $4 billion in first-quarter (ended March 31) ad-revenue. The tally topped the previous-year period that generated more than $3 billion.

YouTube revenue does not include the brand’s $50 monthly online TV platform, YouTube TV.

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Overall, Google parent Alphabet reported revenue of more than $41.15 billion, compared with revenue of $36.33 billion in the previous-year period.

Regardless, CFO Ruth Porat cautioned that while the company’s performance was strong during the first two months of the quarter, March experienced a significant slowdown in ad revenue due in large part to COVID-19 pandemic.

“We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities,” Porat said in an April 28 statement.

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YouTube Offering At-Home Education Videos During Pandemic

As schools around the world close their buildings and families with children find themselves at home due to the coronavirus pandemic, YouTube has partnered with learning creators to bring parents and families resources and activities to educate in the home.

YouTube says the resources — dubbed “Learning@Home” — are not meant to replace homework assigned by teachers, but meant to complement that work.

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The content, which is free, in eight languages and does not feature advertising, is categorized for families with teens, kids aged five and older and preschoolers. Subjects include science, math, humanities and electives.

The site has also partnered with Khan Academy to feature daily “homeroom” videos.

Google-owned YouTube also offers virtual field trips to destinations around the globe. The videos can be played on a Web browser, mobile phone, or by using a standalone virtual reality (VR) device.

“The resource will continue to evolve. We’ve built the hub with the support and cooperation of UNESCO Institute for Information Technologies in Education, who is also working with other education partners to respond to this emergency,” Google said in a statement.  “As we continue receiving feedback from teachers and partners on what’s most helpful, we’ll continue to build and improve this.”

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Discovery Hires Ex-Google Executive as CFO, Head of Strategy, Operations and Direct-to-Consumer

Discovery is ramping up over-the-top video distribution in the United States and internationally. The parent to HGTV, Discovery Channel, Food Network, TLC, Investigation Discovery, Travel Channel, Turbo/Velocity, Animal Planet, Science Channel, as well as OWN: Oprah Winfrey Network and Eurosport, March 10 announced the appointment of Neil Chugani as CFO and head of strategy and operations, Direct-to-Consumer.

The announcement was made by Gunnar Wiedenfels, CFO, Discovery, to whom Chugani reports. In the newly created role, Chugani will work closely with Peter Faricy, CEO, global direct-to-consumer at Discovery, and his team to drive the financial strategy of Discovery’s rapidly expanding DTC team. He will be based at Discovery’s London offices.

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Neil Chugani

“Neil is a highly respected digital finance leader, whose experience and skills will help us further accelerate our strategic pivot as we make our great content and brands available to our passionate fans across all platforms around the world,” Wiedenfels said in a statement.

Chugani will be responsible for formulating and implementing the financial strategy to help Discovery’s ambitious growth objectives in the DTC space. He will work with all of Discovery’s DTC business units, both in the U.S. and International markets to create consistent strategic, financial, and operational practices.

Prior to joining Discovery, Chugani was at Google since 2015, where he was a senior director and held a number of leadership positions. Most recently, he served as CFO for the business and operations of Google and YouTube in Europe, Middle East and Africa.

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