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It is party time in Hollywood this weekend leading up to the Oscars ceremony Sunday evening. And yet for the business crowd, the movers and shakers who finance, negotiate, and otherwise operate the entertainment industry, the mood could not be worse. Guess who is ruining the fun? Yep, the giants of Silicon Valley, mostly notably Netflix, Amazon, and Apple.
Change is hard. And Hollywood has had lots of it, what with business models turned topsy-turvy and a new guard pushing out the old. “The playing field is totally confusing to a lot people,” says one trusted advisory to industry power brokers. “Change in the ecosystem is profound. We’re in between chapters right now, and you have all the angst and anxiety that goes along with it.” Adds the frenetic super-agent Ariel Emanuel, host of his own bold-faced-name party that kicks off the weekend: “All the traditional backbones of the business are disintegrating. It causes trauma.”
Netflix kicked all this off by making movie and TV-show streaming for real. What started as a cord-cutting trickle has become an “over-the-top”—meaning non-cable, non-broadcast—tsunami. Now the other highly capitalized tech powerhouses—including Google through its YouTube TV “skinny bundle” offering—are threatening to decimate the film and TV industries as we know them.
Indeed, the status of the much-maligned bundle is a good metaphor for the industry’s problems. For decades cable, satellite, and broadcast networks packaged programming at lucrative rates for themselves—until technology allowed consumers to rebel. Now new bundles are forming. Amazon is a delivery service with TV shows; Apple offers iCloud storage and also music. It’s all quite perplexing. “We have no idea what the bundle of the future is,” says media-and-entertainment analyst Rich Greenfield. “It turns out consumers love bundles. Just not the bundles they’re being offered.
Consolidation, already under way, will pick up steam. Announced blockbusters include AT&T-Time-Warner (though it’s in trouble), Disney-21st Century Fox, and Discovery-Scripps. Hollywood dealmakers expect a reunion of CBS and Viacom, and one smart observer I spoke to expects Verizon to come after them once they’ve merged.
It’s all enough to put someone at a traditional Hollywood entertainment company in a horrible mood to party.
Have a good weekend. (I’m rooting for The Post.)
Jumping ship. As Adam notes the forces of change engulfing Hollywood, the rate of consumers cutting the cord and dropping their cable and satellite TV packages hit an all-time high. Almost 500,000 people cut the cord in the fourth quarter, shrinking the audience for pay TV by 3.4% from a year earlier, the largest decline since the trend emerged in 2010.
Not jumping ship. With the shareholder vote coming up next week on Broadcom’s slate of directors at resistant takeover target Qualcomm, both sides are highlighting signs of momentum. On Thursday, relatively small fry Qualcomm shareholder the Parnassus Endeavor Fund publicly came out against Broadcom.
Shooting the rapids. A computer AI program being tested on old Atari video games found a novel way to win at the 1980s title Q*bert. The AI discovered a software bug that allowed it to rack ups millions of points. Clever girl.
Swimming upstream. Toyota wants to boost its autonomous car efforts with a $3 billion software push. The company’s new Toyota Research Institute-Advanced Development will be headed by James Kuffner, who used to run Google’s robotics program, and aims to hire 1,000 people.
Under fire. The famed RSA computer security conference announced 21 out of 22 keynote speeches would be given by men, leading to some criticism. The one lone woman speaker is Monica Lewinsky, who has become an anti cyber-bullying activist after her experiences in President Bill Clinton’s impeachment.
Under fire, part II. Twitter CEO Jack Dorsey asked for user suggestions to improve the quality of discourse on the social network that has become known as the source of too much misinformation and abuse. “We’re committing Twitter to help increase the collective health, openness, and civility of public conversation, and to hold ourselves publicly accountable towards progress,” Dorsey wrote in one of a series of tweets.
Under fire, part III. The diversity battle at Google has led to at least two recent lawsuits. Loretta Lee, a software engineer who worked at the company from 2008 until she was fired in 2016, filed suit alleging sexual harassment and gender discrimination. Arne Wilberg, a former recruiter for YouTube, in his suit alleges the company stopped interviewing white and Asian job candidates and set quotas for hiring minorities.
Under fire, part IV. The better-than-expected results at Snap that ignited a rally in the company’s stock price weren’t good enough to help the people who work at Snap. Employees will not be getting cash bonuses because the company did not hit its internal targets, Bloomberg reports.
IN CASE YOU MISSED IT
Facebook Just Ended This Big News Feed Test By Jonathan Vanian
How to Watch the Academy Awards on TV and Streaming Online By Tom Huddleston Jr.
FOOD FOR THOUGHT
The rise of digital currencies like bitcoin and Ethereum has not settled the debate over how important these new financial tools will be in the end. Extreme volatility, transaction processing slowdowns, and other problems have largely prevented cryptocurrencies from catching on as a way to pay for things, the most basic function of a currency. Fortune’s Robert Hackett has the scoop on a new effort started by Uber co-founder Garrett Camp to create a digital currency that can fulfill the original mission: an instant, affordable, and borderless means of payment for the masses.
To spearhead the Eco effort, Camp is creating a new non-profit organization, the Eco Foundation, that he plans to fund with $10 million from himself and a small number of partners affiliated with Expa, his 4-year-old startup accelerator. The foundation’s board—whose seats have yet to be filled—will likely consist of as many as nine people ranging from a diversity of intellectual and geographic backgrounds.
The project is still in the early stages. “This is the design phase,” Camp says. “We intentionally have not written a lot of code yet. Before we start getting deep into the implementation of the system, we want more experts, researchers, and scientists to weigh in.”
Camp is, in other words, inviting people to participate in a virtual jam session—not unlike the brainstorming huddle that led to Uber’s creation in 2009.
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across that are suitable for your weekend reading pleasure.
The New York Times Fired My Doppelgänger (The Atlantic)
The day before Valentine’s Day, social media created a bizarro-world version of me. I have seen strange ideas about me online before, but this doppelgänger was so far from resembling me that I told friends and loved ones I didn’t want to even try to rebut it. It was a leading question turned into a human form. The net created a person with my name and face, but with so little relationship to me, she could have been an invader from an alternate universe.
Palantir Has Secretly Been Using New Orleans to Test Its Predictive Policing Technology (The Verge)
Predictive policing technology has proven highly controversial wherever it is implemented, but in New Orleans, the program escaped public notice, partly because Palantir established it as a philanthropic relationship with the city through Mayor Mitch Landrieu’s signature NOLA For Life program. Thanks to its philanthropic status, as well as New Orleans’ “strong mayor” model of government, the agreement never passed through a public procurement process.
Inside the OED: Can the World’s Biggest Dictionary Survive the Internet? (The Guardian)
Spending 12 months tracing the history of a two-letter word seems dangerously close to folly. But the purpose of a historical dictionary such as the OED is to give such questions the solemnity they deserve. An Oxford lexicographer might need to snoop on Twitter spats from a decade ago; or they might have to piece together a painstaking biography of one of the oldest verbs in the language (the revised entry for “go” traces 537 separate senses over 1,000 years). “Well, we have to get things right,” the dictionary’s current chief editor, Michael Proffitt, told me.
The Wisdom of Keith Richards (Wall Street Journal)
Keith Richards, shrouded in an ever-present cloud of cigarette smoke, wheezes a laugh when it’s pointed out that many observers, based on evidence to date, disagree with his sense of his own mortality. “Well, yeah,” he says, “it’s between me and the roaches.”
BEFORE YOU GO
Mashing up one of the great musical artists of my kids’ youth with one of the maybe not great but brilliantly hilarious artists of my youth, Weird Al Yankovic is out with his own take on Hamilton. New York Magazine has the back story, but the song “The Hamilton Polka” is here.