Google and Facebook’s Decisions in Australia
Australia’s Media Bill Expected to Pass
For the past several months Google (GOOGL) and Facebook (FB) have been clashing with the Australian government. Australia’s parliament is expected to pass a law requiring search engines and social media companies to pay Australian news outlets for displaying their content.
Supporters of the law note that Google and Facebook rake in advertising money because of the links to media they provide. Together these companies have a market value of about $1.7 trillion.
Meanwhile, many news outlets are facing financial difficulties. The Australian government wants to ensure that journalism and media can thrive in the country, and it wants to spread revenue more evenly between the tech industry and media outlets.
Facebook Pulls Out of Australia While Google Makes Deals
Google and Facebook have had very different responses to the bill. Google recently entered a multiyear agreement with News Corp, the largest newspaper owner in Australia, through which Google will pay for content. The search engine has also reached similar deals with a number of smaller Australian publishers.
Just hours after Google disclosed its arrangement with News Corp, Facebook announced a very different decision. The social media giant will no longer allow Facebook users and media companies to share or view news on the site. Additionally, viewers around the world will not be able to access links to content from Australian publishers on Facebook.
Governments around the world are watching closely as events in Australia unfold. Lawmakers in the European Union are in the process of making big changes to regulations for tech companies in the bloc—a number of which relate to how news content is handled.
Many believe that the changes taking place in Australia will give journalism and media a much-needed boost. Others believe that forcing companies to pay for linking content on the internet is a slippery slope, and worry that if too many regulations like this are put in place, it could change the way people use the internet in negative ways.
Leaders in the tech and media industries, as well as everyday internet users, will be eager to see how events in Australia impact the decisions around the world.
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How to Analyze the Streaming War
Old and New Streaming Companies Vie for Viewers
People around the world have turned to streaming services during the pandemic to pass the time while practicing social distancing. The competition for their attention has been intense. More established streaming services like Netflix (NFLX) and Amazon (AMZN) have scrambled to maintain dominance, spending billions on content.
Meanwhile, newer services like Disney+ (DIS), HBO Max which is owned by AT&T (T), and Peacock which is owned by NBCUniversal (CMCSA), have seen their subscriber numbers pop thanks to exclusive content and marketing strategies. Other services like Quibi have shut down because they were unable to gain attention in such a crowded market.
Comparing Different Business Models
Each streaming service has a slightly different business model. Some hope to be a subscriber’s primary service while others aim to be a compliment to other platforms. Some offer free, ad-supported options while others are entirely focused on paid subscriptions. For people trying to compare streaming services for investment purposes, these different strategies can be confusing. But analysts do have some useful strategies for thinking about who is winning the streaming war.
Hitting 50 million subscribers is an important benchmark for newer services. As of last month, Peacock had 33 million and HBO Max had 37.7 million. As analysts consider the longevity of these platforms, they will be eager to see if they can reach 50 million subscribers over the course of 2021.
For context, Netflix currently leads the way with 200 million global subscribers. Disney+ is closing the gap, and currently has roughly 95 million.
Metrics for Success
Having a path to international expansion is also important. Especially for ad-supported services which will need to compete with Facebook (FB) and Google (GOOGL) for attention from brands, reaching viewers outside of the US will be essential.
Analysts also use ARPU, which stands for average revenue per user, to evaluate streaming services. They examine churn as well, meaning the number of people canceling their subscriptions during a given time period. As more people receive COVID-19 vaccines and eventually are able to do more activities outside their homes, investors will be eager to see which streaming services fall to the wayside and which ones are able to retain viewers’ attention.
Friday Fundings: Locus Robotics and Standard Cognition
Locus Robotics Offers Companies a Taste of Automation
Locus Robotics, a company specializing in flexible automation, raised $150 million in a Series E round led by Tiger Global Management and Bond. The company is now valued at about $1 billion.
Locus is a third-party logistics company which currently deploys its robots to about 80 sites, mainly warehouses, across the US and Europe. Ecommerce has boomed during the pandemic. But because these trends are so new, some businesses are reluctant to invest tens of millions of dollars in buying robotics solutions. Locus allows them to test out automation systems and experiment to find what will best meet their needs. With the new funding, Locus plans to grow its footprint, particularly in Europe and Asia.
Standard Cognition Creates Technology to Compete With Amazon Go
Standard Cognition is a startup building technology for cashier-less retail stores. It recently raised $150 million in a Series C funding round, bringing its valuation to $1 billion.
Standard Cognition offers clients a package of cameras and software that keeps track of what shoppers put in their carts. The system then charges people automatically when they exit the store. Amazon (AMZN) has been a leader in this technology with its Amazon Go stores, but the tech giant is now facing competition from Standard Cognition.