This is a big deal, for multiple reasons. First, when Netflix recently announced a 130-country expansion, China wasn’t one of them. The world’s most populous nation and second largest economy is a notoriously complicated market for non-Chinese companies. It’s exponentially more difficult for media and entertainment companies, given China’s desire to control the content its consumers see and also to promote local players.
Netflix’s move, about which it disclosed few details, also is notable for its partner. The Silicon Valley company will enter China with a Chinese streaming service called iQiyi, a unit of struggling search engine giant Baidu. The Wall Street Journal reports that Netflix had tried going to China with Wasu Media Holding, an online consortium in which Alibaba’s Jack Ma is a member.
From the outside looking in, China is a massive and poorly understood market. From the inside looking out, China has developed into a mature economy with its own complex fiefdoms, alliances, and relationships. Giants like Tencent, Alibaba, and Baidu are posturing on every conceivable product, from self-driving cars to e-commerce to entertainment—just as their U.S. and European counterparts do in the west.
Staying with the China theme, file the following in the category of: “Oh, how the times change …”
The World Economic Forum has announced its co-chairs for its annual “summer Davos,” otherwise known as the New Champions meeting, held this year in Dalian, China. One is Jean Liu, president of Chinese ride-hailing leader Didi Chuxing. At last summer’s New Champions meeting, one of the co-chairs was Travis Kalanick, CEO of Uber, which exited China shortly after the meeting. Talk about complicated.
BITS AND BYTES
Toshiba is firing its latest auditor. The Japanese electronics conglomerate hasn’t released last year’s audited financial statement yet because PricewaterhourseCoopers questioned the validity of certain historical data related to the U.S. nuclear subsidiary Westinghouse Electric, which has filed for bankruptcy. Toshiba’s estimated loss has swelled to more than $9 billion as a result. PwC replaced Ernst & Young about a year ago, after that firm failed to catch discrepancies related to Toshiba’s last accounting scandal. (Reuters)
Is Spotify working on a hardware gadget? The Swedish music streaming service is looking for someone to help build a “category-defining product” akin to Pebble Watch, Amazon Echo, and Snap Spectacle. Spotify has more than 50 million subscribers but rivals like Apple Music are turning up the volume and it needs a way to capture new customers more easily. (Fortune)
Chipotle can’t catch a break, now it’s been hacked. The Mexican fast-casual restaurant chain said Tuesday that it believes its payment processing system was breached in late March and early April. Chipotle hasn’t determined whether data was actually compromised. (Fortune)
Struggling flash storage pioneer finds savior in George Soros. Quantum Partners, an investment fund controlled by the billionaire’s fund management company, has acquired once high-flying Violin Memory. The company, which sells data center storage devices, made its IPO in 2013 but struggled to make money and declared bankruptcy back in December. (Fortune)
AT&T’s wireless customers are holding onto their phones much longer. The telecommunications giant on Tuesday said just 3.9% of its regular monthly customers upgraded a phone in its latest quarter, down from 5% in the same period last year. In fact, smartphone sales have become so unpredictable that AT&T will no longer provide forecasts for its total revenue this year. (Fortune, Reuters)
Uber thinks it can have electric taxis in the air by 2020. The first test locations for its Elevate program will be Dallas and Dubai. The company is working on small, electric aircraft that take off and land vertically, called VTOLs, which could leapfrog urban traffic. If you think that idea sounds nuts, consider this tidbit: it also looks like Google co-founder Sergey Brin is working on a new-age aircraft, one that looks like an old-fashioned zeppelin. (Fortune, Reuters, Wall Street Journal, Bloomberg)
For Amazon’s Dash buttons, timing was everything. The small, thumb-sized devices that let customers reorder paper towels, laundry detergent, and toilet paper by merely clicking a button debuted on March 31, 2015. The public’s first reaction was that Amazon was playing a massive prank timed, of course, to April Fool’s Day.
Two years later, Dash is among Amazon’s fastest growing services, albeit from a very small baseline. Orders using Dash Buttons are placed more than four times a minute compared to once a minute a year ago, according Amazon. To be sure, Dash is just a tiny slice of the $136 billion company’s revenue. But Amazon told Fortune’s Leena Rao exclusively that many brands—such as Folgers Coffee, Peet’s Coffee, Pepperidge Farm, and Ziploc—are seeing more than half of their Amazon.com orders placed via the buttons. Household items are particularly popular.
STATS AND SURVEYS
People are pretty optimistic about the potential for artificial intelligence. Roughly two-thirds of the consumers and business decision makers surveyed by PwC believe the technology will help humans “solve complex problems that plague our society.” On the flip side, approximately 46% believe that AI will do more harm than good by eliminating jobs in industries such as transportation or customer service. (PwC, Fortune)
IN CASE YOU MISSED IT
Palantir Settles Federal Discrimination Lawsuit, by Michal Lev-Ram
Why Apple Is Hiring NASA Staffers, by Don Reisinger
T-Mobile CEO Sees His Company Ready to Lead Merger Wave, by Aaron Pressman
Why Cloudera’s IPO Pricing Isn’t As Bad As It Looks, by Erin Griffith
Verizon Plans to Offer Unlimited Data to Prepaid Customers, by Aaron Pressman
How Motorola Solutions Escaped Bankruptcy, by Susie Gharib
ONE MORE THING
More on what Facebook and Google are doing to fight fake news. Both Internet giants released new technologies this week. Facebook is testing a new filter that makes sure visitors see trending articles from major media outlets before they read ones shared by their friends network. The idea is to combat “filter bubbles” that reinforce certain biases.
Meanwhile, Google has adjusted its search engine to “demote low-quality content” that could come from questionable sources. Could the government actually take action on this whole issue? A former Facebook executive believes there’s a real possibility. (Fortune, Fortune, Fortune, Fortune)