It recently announced ad revenue-sharing for creators — an obvious jab at TikTok — without ever mentioning “TikTok.”
YouTube is rolling out ad revenue-sharing for Shorts.
Tuesday’s “Made On YouTube” event was basically a competition to see how many ways creators and YouTube execs could talk about beating TikTok without actually saying the word “TikTok.”
YouTube is rolling out ad revenue-sharing for Shorts and lowering the barrier to join its partner program, which execs said will bring more “sustainability and inclusivity” to creators. Previously, both TikTok and YouTube paid short-form creators through a set fund.
The announcement is an obvious jab at TikTok, which has been a frontrunner in the short-form video race. And by the way, YouTube didn’t mention the word “TikTok” once.
Will YouTube’s moneymaking strategy for Shorts turn people away from TikTok? It’s likely too soon to tell, and many new creators have already built huge communities on TikTok. But if people can make money from short-form video elsewhere, don’t be surprised if they start flocking to Shorts. “Other platforms are focused on getting people their 15 seconds of fame, which is great. But YouTube is taking a different approach,” Collins said.
A version of this story appeared in Wednesday’s Source Code. Sign up here to get it in your inbox each morning.
Sarah (Sarahroach_) writes for Source Code at Protocol. She’s based in Boston and can be reached at firstname.lastname@example.org
Chief finally has a clubhouse in San Francisco, but don’t call it a coworking space. The 8,600 square feet do include conference rooms, one-person Zoom rooms, and open-plan seating, but it also has a bar, lounge seating, and — like Chief’s other clubhouses in New York, L.A., and Chicago — a piano.
“To me, what the piano represents is ‘this is not a coworking space,’” Chief co-founder Lindsay Kaplan told me on a tour of the clubhouse in advance of its official opening Thursday. “This is a place where you can sit back and take meetings in a very laid-back manner.”
Unlike the Wing, the women-focused coworking space and club that shut down this summer after a six-year run, Kaplan and co-founder and CEO Carolyn Childers are still much more interested in building and supporting Chief’s network than boosting its physical amenities.
That’s why Chief’s main offering, curated, 10-member “Core” peer groups that meet monthly with an executive coach, will still take place virtually.
“What we most optimize for is finding the right and perfect 10 people for you to be with,” Childers said. “Even in San Francisco, that might be somebody outside the city.”
Before Chief expanded outside of New York, the groups still met in person, but applicants who said they wanted to join for the space didn’t tend to make it off the waitlist. The network is about the peer group, and the space is more like “the container that it can happen in IRL,” Kaplan said.
The network is more closely modeled after the Young Presidents’ Organization, the 72-year-old network of under-45 chief executives who help each other work through professional and personal challenges. YPO is all about its network and doesn’t have spaces of its own, Childers said.
Kaplan and Childers also got inspiration from Carole Robin, a longtime facilitator of the popular “touchy feely” course at Stanford, in thinking through “how you create the right level of, frankly, vulnerability that you need to get to in order to truly work through things,” Childers said. “The Core [group] truly does get to a place of being able to talk to what’s really happening for you, both personally and professionally, because those two things very much mesh.”
That said, the clubhouse is also a place where members can host guests, hold their board meetings, and — yes — take Zoom calls. Ten percent of Chief’s 20,000 members live in the Bay Area, but when Chief was planning its next clubhouse, San Francisco was also the most requested city by members who don’t live in the Bay Area. In other words, Chief members in cities such as Boston and D.C. wanted a clubhouse in San Francisco where they could visit while in town.
Despite that, Childers and Kaplan try to more closely emulate a Harvard alumni club, which have clubhouses with “great amenities,” Kaplan said, but most of the real benefits come from being a part of a vast, powerful network. But with a mission to change the face of executive leadership, the women-focused atmosphere might also feel like something more approachable — Kaplan recalled a similar feeling of camaraderie with other women trying on clothes in the communal dressing room at the old New York department store Loehmann’s.
“It kind of reminds me of this intimate space,” Kaplan said. “If you tried on something and you went in front of the mirror, all the women around you were, like, ‘Honey, that looks good.’”
Microsoft said Wednesday that an unspecified amount of customer data, including contact info and email content, was recently left exposed to potential access over the internet as a result of a server configuration error.
Cybersecurity vendor SOCRadar, which reported the data leak to Microsoft, said in a blog post that data belonging to more than 65,000 companies was affected. Microsoft, however, said in its own post that SOCRadar “has greatly exaggerated the scope of this issue.”
Microsoft didn’t disclose specifics around the number of companies whose data may have been exposed in the leak or the amount of data involved.
The server misconfiguration was reported on Sept. 24, and the impacted server was “quickly secured” after that, according to Microsoft. Due to the configuration error, there was a potential that certain “business transaction data” could have been accessed without a need for authentication, Microsoft said.
The data corresponds to “interactions between Microsoft and prospective customers,” including around the planning and implementation of Microsoft services, the company said in its post.
Affected data may have included “names, email addresses, email content, company name, and phone numbers, and may have included attached files relating to business between a customer and Microsoft or an authorized Microsoft partner,” Microsoft said.
SOCRadar said that a “single misconfigured data bucket” was responsible the exposure of the data of the 65,000 affected companies, which the company said are based across 111 countries. The leak amounts to 2.4 terabyte of data, including 335,000 emails, and it involves more than a half million users, according to SOCRadar. The files are dated between 2017 and August 2022, the vendor said.
Microsoft disputed SOCRadar’s claims about the size of the leak, saying that an “analysis of the data set shows duplicate information, with multiple references to the same emails, projects, and users.”
“We take this issue very seriously and are disappointed that SOCRadar exaggerated the numbers involved in this issue even after we highlighted their error,” Microsoft said in its blog post.
The leak didn’t involve any vulnerability since it was solely caused by the server misconfiguration, the company said.
The risk is climbing that both Russia and China may look to bring an escalation in major cyberattacks against the U.S. and Western Europe, following Russian losses in Ukraine and the U.S. chip blockade against China, according to cybersecurity and geopolitics expert Dmitri Alperovitch.
“What I do think we’re about to enter is probably one of the most dangerous times that we’ve had in the history of the cyber domain, when it comes to our infrastructure here in the West — both because of what Russia may be doing against us, as well as China,” said Alperovitch, the co-founder and former CTO of CrowdStrike, on Wednesday during a livestream Q&A with The Washington Post.
When it comes to Russia, an increase in major cyberattacks against the West is looking a lot more likely as “we are entering a new phase of the conflict” over Ukraine, he said.
Russian President Vladimir Putin is “starting to realize that the war is not going well for him,” Alperovitch said. “He’s steadily losing territory, including territory that he has recently tried to annex. And that may mean that he’s going to be much more willing to confront not just Ukraine, but also the West.”
In terms of targeting the West, “Cyber probably is going to be his first weapon of choice,” said Alperovitch, who is currently the co-founder and executive chairman of Silverado Policy Accelerator, a Washington think tank. The U.S. and Western European nations have provided substantial support to Ukraine, including weaponry, following Russia’s invasion of the country in late February, which Alperovitch had predicted two months before it occurred.
Meanwhile, China may be jumping into the fray, too, in response to the recent U.S. move to block Chinese access to advanced chip technology, according to Alperovitch.
The U.S. chip blockade, he said, is “a declaration of economic war,” and “I doubt that they will take it sitting down.”
China’s leadership is currently preoccupied with this week’s Communist Party congress, Alperovitch noted.
“But once they get past the Congress and the changes that Xi Jinping is implementing within the party, I think you will see retaliation both against American companies in China as well as potentially through cyber operations, to try to compensate for the loss of access to technology with IP theft,” he said.
Update: The first sentence of this article was reworded to better describe the type of cyberattacks involved.
Ye could own Parler before the end of the year, according to Parler COO Josh Levine.
“This transaction will get closed very quickly,” Levine told Protocol on Wednesday. “There’s nothing to stand in the way of that except that, you know, we just [have] to go through the process of assuring it’s done correctly.”
Levine declined to provide information on the acquisition price or which banks are working on the transaction. He did, however, describe it as “the best possible outcome we could have had.” This acquisition deal is unlike the Musk-Twitter saga because it involves two friendly parties, and Parler is a private company, Levine said.
On Monday, Ye, formerly known as Kanye West, agreed to purchase Parler, the social media platform popular among conservatives and which launched in 2018. He had been attending fashion shows in Paris with conservative pundit Candace Owens, whose husband, George Farmer, is the CEO of Parler.
In an interview later that day, Ye said the Parler acquisition was motivated by his experience being “kicked off” Instagram and Twitter. Ye made anti-Semitic remarks on both platforms, prompting Twitter to lock his account and Instagram to delete his post and place other restrictions on his platform activity.
Ye has only doubled down on his anti-Semitic rhetoric in recent days. When asked whether any of Ye’s statements would or could lead to Parler backing out of the deal, Levine said he wouldn’t comment on anything Ye said in his personal life.
In the two days since the news of the acquisition broke, Parler has seen four times as many new users sign up as it did in the preceding month, Levine told Protocol. He also said the company wants to expand beyond politics by recruiting new users who are musicians, athletes, and comedians. Parler currently has around 70 employees, he said.
“That alignment with his brand and his brilliance in promotion and the people he can attract to this site are the perfect fit for us moving forward,” Levine said. Parler is working through the details of how the acquisition will affect its leadership team, according to Levine.
Major ISPs have consistently offered poor neighborhoods and communities of color slower base internet speeds than more affluent, white neighborhoods, despite charging all of these communities the same price for service, according to a new investigation by The Markup and The Associated Press.
The news organizations studied 800,000 internet offers from AT&T, CenturyLink, Verizon, and Earthlink across 38 cities and found that the worst deals — factoring in speed and price — were offered in poorer and less white neighborhoods. “Residents of neighborhoods offered the worst deals aren’t just being ripped off; they’re denied the ability to participate in remote learning, well-paying remote jobs, and even family connection and recreation—ubiquitous elements of modern life,” the report reads.
The investigation sheds light on the fact that worse broadband service in poor communities doesn’t necessarily equate to lower costs. In one instance, the investigation found that AT&T customers in a middle-class community of color in New Orleans were provided with just 1Mbps of download speed, even though the FCC defines broadband as having a minimum of 25Mbps. In a mostly white, wealthier neighborhood in the same city, internet speeds were “almost 400 times faster,” the report found. But residents of both neighborhoods paid the same $55 a month for service.
The ISPs mentioned in the report didn’t deny offering different speed rates for the same price, but said it’s not because they’re intentionally discriminating. “Any suggestion that we discriminate in providing internet access is blatantly wrong,” AT&T spokesperson Jim Greer told The Markup. An executive for the industry group USTelecom, which represents Verizon, attributed the speed and price discrepancies to the fact that “legacy technologies can be more expensive.”
The disparities in service provision were found to be especially felt in formerly redlined neighborhoods. The investigation also found that CenturyLink’s service produced some of the biggest price disparities, with residents of the same city being offered pricing as different as 25 cents per Mbps and $100 per Mbps depending on where they lived.
“It isn’t just about the provision of a better service. It’s about access to the tools people need to fully participate in our democratic system,” Chad Marlow, senior policy counsel at the ACLU told the AP and Markup. “That is a far bigger deal and that’s what really worries me about what you’re finding.”
Running a monopoly chip business has its advantages, especially as the rest of the industry is pushed into turmoil — the result of a rapid, significant reversal in demand for consumer chips and U.S. efforts to block semiconductor tech sales to China.
For Dutch semiconductor manufacturing equipment maker ASML, things are not so bad. The company is the exclusive manufacturer of tools that use extreme ultraviolet lithography tech, which is necessary to print-cutting edge chips.
ASML said early Wednesday when it held an earnings conference call with investors that some of its customers — Intel, Samsung, and TSMC, for example — had delayed equipment delivery dates. But, according to CEO Peter Wennink, customers “never cancel,” even amid a recession.
“What we’ve always seen in recession or downturn — that I’ve seen in the last 25 years — customers never cancel,” Wennink said on the earnings call, according to a Sentieo transcript. “They ask for a rescheduling of the shipment. And that’s basically depending on their capex plans and on the depth of the recession, about the ability to finance it depends whether it’s a few months out or a few quarters out.”
What does tend to happen, Wennink said, is that customers ask ASML to delay the delivery of the tools, pushing them out a certain period of time to more favorably suit whatever adjustments the chip manufacturers have had to make to their expansion plans.
Reading between the lines, it appears Wennink is talking about the fact TSMC recently downgraded its factory and tool spending plans to $36 billion from $40 billion to $44 billion earlier this year; Micron made cuts to its capital spending plans, as did Intel.
ASML is in an enviable position compared with some of the other tool makers. Located in the Netherlands, it can operate outside of the increasingly hawkish U.S. view of China and its ability to buy American chip technology.
Sales of the advanced EUV machines are blocked to Chinese customers, but only because one of the crucial submodules is manufactured by a San Diego subsidiary of ASML, and without that submodule the EUV machines would be unable to operate. The U.S. muscled the Dutch into themselves blocking the exports of the EUV systems to China as a result.
Other chip equipment makers are not likely to fare as well as ASML. At the same time as some consumer end markets for chips have dropped off sharply, the U.S. has introduced sweeping new restrictions on chip tech exports, ranging from blocking chips with specific computational throughput to preventing U.S. citizens and companies from servicing or supporting chip equipment machines already in China.
The fresh export restrictions caused Applied Materials to issue a revenue warning last week, cautioning investors that the damage would extend into the next quarter too. For American chip equipment makers, China represents roughly a third of their sales, though some of that revenue is tied to equipment or services that aren’t covered by the new restrictions.
But a lot of tools are subject to the new rules and — perhaps more importantly — so are the personnel needed to service and support existing equipment. The expensive, complex machines needed to perform the various aspects of chip manufacturing require consistent monitoring and upkeep, which has morphed into a lucrative business for the equipment makers.
To put a fine point on it, according to The Economist, Goldman Sachs now estimates that overall the new U.S. export restrictions could cost Applied, Lam Research, and KLA $6 billion this year, or nearly 10% of their projected sales.
You thought crypto winter was bad? Try the real, potentially harsh winter about to hit Europe. Shutting down a key segment of the crypto industry could be one solution to the crisis, officials believe.
EU members should consider cracking down on crypto mining to help the region cope with a severe energy crisis caused largely by the disruption of the war in Ukraine, the body’s executive arm said this week.
“In case there is a need for load shedding in the electricity systems, the member states must also be ready to stop crypto-assets mining,” the European Commission said in a report.
Crypto mining energy consumption has “more or less doubled compared to two years ago,” the report said, adding that when “harnessing the use of cryptocurrencies and other blockchain technologies in energy markets and trading, care must be taken to use only the most energy efficient versions of the technology.”
The report called crypto’s proof-of-work consensus mechanism — which is used on the bitcoin blockchain, the most popular crypto ecosystem — “outdated.”
The commission cited the Ethereum network’s “long-awaited switch to proof-of-stake consensus mechanism,” which is expected to cut the second-largest blockchain’s energy consumption by 99%.
The switch, known as the Merge, was completed last month and “shows that the crypto world can move towards a more efficient system,” the report said.
Targeting crypto mining in a push to drastically cut energy consumption makes sense for the EU, given the difficulties of making similar reductions at major industries. Miners have cited the flexibility they have in shutting down and spinning up their operations based on the cost and availability of energy as an advantage compared to other industries, and argued that they can actually help stabilize grids and lower the cost of energy.
The EU has also been moving to introduce rules for the fast-growing crypto industry, highlighted by the recent approval of the Markets in Crypto-Assets Regulation, which is expected to become law in 2024.
Somewhat good news for the planet: Global carbon dioxide emissions are set to grow less than 1% this year, according to a new report from the International Energy Agency. The rise of renewable energy and electric vehicles are helping slowly bend the emissions curve, but there’s still a lot of work to do.
In actual numbers, carbon dioxide emissions are projected to increase by 300 million tons in 2022 to a grand total of 33.8 billion tons. That growth is a lot less than 2021, when they climbed nearly 2 billion tons. (Last year’s rapid rise in emissions was due in part to the global economic recovery following pandemic lockdowns.)
The report credits this year’s increase in emissions to power generation and the aviation sector, as travel continues to rise to pre-pandemic levels. Russia’s invasion of Ukraine is also making natural gas more expensive. That’s impacting the European Union’s energy security, and the bloc and other countries are turning to coal as a cheaper (but dirtier) alternative. The IEA reported that coal use will rise 2% this year, resulting in 200 million more tons of carbon ending up in the atmosphere.
But this uptick in emissions tied to coal use is “considerably outweighed by the expansion of renewables.” A total of 700 terawatt-hours of renewable generation came online in 2022, a record increase. The IEA said that offset 600 million tons of carbon pollution, an amount that’s roughly on par with Canada’s annual emissions.
The group forecast that the world is on track for “consistent improvement” when it comes to transitioning to clean energy and that last year’s big emissions increase was a COVID-19-related blip. IEA executive director Fatih Birol said in a statement that “policy actions by governments are driving real structural changes in the energy economy. Those changes are set to accelerate thanks to the major clean energy policy plans that have advanced around the world in recent months.”
The IEA highlighted the Inflation Reduction Act as one of a number of government policies that could transform how electricity is generated. Venture capital is also flowing toward climate solutions that could further speed up decarbonization in other sectors.
Some regions are doing better than others and are poised to make greater progress in the coming years. The EU is actually on track to see its carbon emissions fall this year, despite the increase in coal use. The IEA expects that to be a temporary uptick and that 50 gigawatts of renewable projects expected to come online in 2023 will help put coal on the decline again. China’s emissions are set to stay flat, in part due to weaker economic growth and deployment of renewables (though this summer’s hydropower-killing drought hurt zero-carbon energy generation).
It’s not all good news, though. Oil-related emissions grew more than any other fossil fuel sector, in part because many countries lifted travel restrictions and commuters returned to the road. Nearly three-quarters of this increase is due to aviation, specifically international travel. And with sustainable aviation fuel still far on the horizon, that sector’s path to decarbonization remains out of reach.
While smaller growth in emissions is a step in the right direction, the world ultimately needs emissions to fall rapidly to keep the Paris Agreement’s targets in reach. Global carbon emissions need to drop 55% by 2030 to ensure the world has a decent shot at limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit). Blowing past that target will put millions more people at risk of facing climate change-fueled disasters. The modest increase in carbon pollution this year means the amount that the world will need to cut in subsequent years this decade will be that much steeper.
Correction: An earlier version of this story misspelled Fatih Birol’s name. This story was updated on Oct. 19, 2022.
Crypto winter doesn’t appear to be scaring away investors in the burgeoning NFT and blockchain gaming space. According to a new report from investment bank Drake Star Partners, crypto-related gaming companies accounted for roughly half of the last quarter’s private financing, or about $1.2 billion.
So far this year, investors have poured more than $3.4 billion into NFT and blockchain gaming companies. That’s remained steady for the past nine months, despite around $2 trillion of value disappearing from the crypto market since its November 2021 high.
“While the Crypto market continued to be under pressure, investors continued to show strong interest in blockchain gaming companies,” the company wrote. “Half of the total amount raised and 40% of all financing rounds for private gaming companies were investments in blockchain gaming.”
The blockchain gaming sector, which includes both collectible NFT projects and also games built entirely around blockchain technologies and cryptocurrency, continues to grow as Web3 hopefuls ride a wave of hype created around the metaverse. But so far, very few of these games have attracted more than a few thousand players, and the mainstream adoption and popularity of these technologies remains very much in question.
Earlier this month, crypto app platform DappRadar said it recorded fewer than 40 people interacting with proto-metaverse platform Decentraland’s smart contracts, after which Decentraland’s parent company clarified that about 8,000 people log in every day but mostly do not do anything blockchain-related. On the other end of the spectrum is Meta, the most high-profile company to plunge headfirst into Web3 with plans to build an interoperable, immersive metaverse. Yet even Horizon Worlds, Meta’s flagship social platform, has seen declining monthly users from 300,000 people per month in February to less than 200,000 this month.
As for NFTs, trading volume for the digital tokens has fallen 97% from its record high in January of this year, according to Bloomberg. NFT projects have also faced vocal backlash from the broader game community, a trend that does not appear to be abating any time soon even as more companies try to dip their feet into the market.
Sony this month launched a new loyalty program called PlayStation Stars in which players can earn digital collectibles for buying and playing games on the platform. When asked whether the program would be selling or offering NFTs, a PlayStation representative was emphatic in stressing to The Washington Post that it was not entering the crypto space: “It’s definitely not NFTs. Definitely not. You can’t trade them or sell them. It is not leveraging any blockchain technologies and definitely not NFTs.”
Without much fanfare, Oracle has now poured roughly $850 million into Arm server chip design startup Ampere since its inception in 2017, according to SEC filings.
Oracle’s stake in Ampere appeared to grow by more than $400 million earlier this year, after Oracle disclosed that it had invested $300 million in convertible debt issued by Ampere in fiscal 2022 and acquired more Ampere stock from an undisclosed investor for $127.8 million, according to the company’s proxy statement filed with the SEC.
Last year, Macom Technology Solutions, which divested its Arm chip business that became Ampere, said that it had sold its equity interest in Ampere to a buyer affiliated with Oracle for $127.7 million.
Ampere declined and Oracle did not respond to a request for comment.
The size of Oracle’s bet on Ampere became clear in March after Oracle blamed a wider-than-expected operating loss, in part, on Ampere, Protocol reported earlier this year. At the time, SEC filings revealed that Oracle had invested $426 million in the company, and including Ampere in its operating losses implied a stake of 20% to 50%, according to accounting rules.
Part of Oracle’s earlier investment in Ampere included another $300 million payment in an equity fundraising round in March of 2021, and an agreement to purchase tens of millions of dollars worth of server chips designed by Ampere. The most recent proxy statement indicates Oracle has purchased $50.9 million worth of Ampere chips in fiscal 2022, including a $21.6 million against a $25 million prepayment Oracle made in fiscal 2020.
Ampere’s founder and CEO, Renee James, also sits on Oracle’s board. Oracle has been quietly investing in Ampere since 2017, and prior to the investment James, who has served on Oracle’s board since 2015, was considered an independent board member. James was formerly president of Intel.
Ampere designs chips based on Arm technology and has made slow inroads into the data center CPU market, which is dominated by Intel and AMD. This market has long been dominated by Intel, but over the last few years it experienced manufacturing and other difficulties that led to delays launching new products, allowing AMD to pick up a bigger chunk of server chip sales and creating room for new entrants.
According to Jefferies, Ampere holds roughly 0.6% of cloud CPU instances, while AMD commands 17%, and Intel has 77.2% share. Graviton, Amazon’s in-house server CPU, has 4.2% share, though the company doesn’t sell its custom chips to other cloud vendors.
Netflix wants to extend its nascent gaming efforts to PCs and TVs, and it’s looking to launch its own cloud gaming service to do so, VP of game development Mike Verdu confirmed at TechCrunch Disrupt on Tuesday. “We’re very seriously exploring a cloud gaming offering,” Verdu said.
“We’ll approach this the same way as we did with mobile — start small, be humble, be thoughtful — but it is a step we think we should take,” Verdu added. “The extension into the cloud is really about reaching the other devices where people experience Netflix.”
Netflix’s cloud gaming ambitions don’t come as much of a surprise: The company has been looking to hire multiple staffers to build its own cloud gaming infrastructure, as Protocol was first to report in August.
Verdu didn’t share many additional details, but suggested the company was looking to launch more than just casual games on TVs. He declined to say whether Netflix would build its own game controllers like Google has done for its failed Stadia service, but he said the titles wouldn’t rely on TV remotes for input.
Netflix has released 35 games for mobile devices thus far, and the company said Tuesday as part of its earnings release that it had an additional 55 games in its pipeline. Fourteen of those games are being built by Netflix’s own studios, Verdu said, adding that the company was going to launch an additional studio in Southern California soon. The studio will be led by Chacko Sonny, who previously served as executive producer for Activision Blizzard’s Overwatch franchise, according to a Netflix spokesperson.
Verdu called Netflix’s expansion into gaming a pivotal moment for the company, but admitted that it was a slow and deliberate multiyear effort. However, the company may already be seeing some rewards from those efforts. “We’re seeing some encouraging signs of gameplay leading to higher retention,” the company wrote in its letter to investors Tuesday.
Update: This post was updated on Oct .18, 2022, with additional details on Netflix’s new Southern California studio.
Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.
Shares of crypto-friendly bank Silvergate Capital fell by more than 20% Tuesday after its earnings report showed a decrease in deposits and its leadership announced a delay for a major stablecoin project.
The California-based company is one of the top providers of banking services to exchanges and other crypto companies, a market that has seen its digital tokens lose more than $2 trillion in value over the past year during a so-called crypto winter.
Silvergate reported earnings per share of $1.28 against expectations from Wall Street of $1.45, according to Zacks Investment Research. The deposits Silvergate holds from digital asset companies fell to $12 billion on average during the quarter, down about 13% from the previous quarter.
Adding to its pain, the bank’s big stablecoin project will not meet its goal of launching this year, President and CEO Alan Lane said on the company’s analyst call. Silvergate in January purchased the assets of Meta’s failed Diem blockchain project with plans to use the technology to launch a U.S.-dollar-backed stablecoin.
“Unfortunately, we no longer expect that to happen this year,” Lane said.
The technology is ready to go but the firm is “working with regulators and policymakers and making sure we get this right,” Lane said.
Lawmakers in the House of Representatives have been negotiating for months on a bill to regulate stablecoins, but nothing has advanced.
Outside of that initiative, one of Silvergate’s key products is a network that allows crypto exchanges and other clients to instantly transfer funds. But payments on the Silvergate Exchange Network fell by 41% on the quarter, to $112.6 billion.
“Volumes were mainly impacted by trends in the broader industry, specifically within stablecoins, as volumes from stablecoin issuers, such as USDC, saw a sizable drop in market cap during the quarter,” Lane said.
Lane said the company expects usage of its network won’t always be closely tied to crypto market values. “We remain confident in the power of the platform and the opportunities for expansion within the network,” he said.
Silvergate has grown its deposits from under $1 billion a decade ago to more than $13 billion, largely through providing banking services to crypto companies. Wall Street investors rewarded it during boom times for crypto last year, with Silvergate’s share price peaking near $220 in November.
The firm hadn’t been hit as hard on Wall Street as other crypto-focused companies in the first half of the year. Its share price climbed following its second-quarter earnings in July.
But some analysts were beginning to have doubts. Wells Fargo warned in a downgrade a couple weeks ago that the growth outlook for Silvergate Capital as a “pure-play crypto banking solution” is limited during a crypto winter.
Research firm Keefe, Bruyette & Woods still held a positive “outperform” stance on Silvergate in a report following earnings Tuesday, but noted that “outflow was more than we expected, and overall digital asset activity clearly slowed in Q3 as measured by SEN transfers.”
Lane told analysts that the recent moves by Mastercard, BNY Mellon, and BlackRock to expand crypto offerings should be taken as a positive sign for the industry.
“There is a lot of institutional adoption that is still coming — none of these things are live yet, they’ve all been an announcement about things to come — so we could not be more optimistic on the long-term trajectory,” Lane said. “But these things take time to play out.”
Correction: The original version of this story cited erroneous timing for the release of Wells Fargo’s research report on Silvergate. This story was updated on Oct. 19, 2022.
Salesforce’s stock went up more than 7% on Tuesday, after activist investor Starboard Value revealed a significant stake in the company, according to CNBC. Starboard founder Jeff Smith told CNBC he remains confident in Salesforce’s ability to deliver value, and plans to invest in the company long term, but said the company has a “subpar mix of growth and profitability.”
The move should make the last quarter of 2022 a little more interesting for Salesforce’s executive leadership. During last quarter’s earnings call, Salesforce announced 26% year-over-year revenue growth, but also lowered its full-year guidance.
Then, during its flagship Dreamforce conference in September, the company announced new Slack features and the real-time customer data platform Genie, which were intended to push the company toward its $50 billion revenue goal.
But investors were skeptical that Genie was a real engine for growth. Although Salesforce has been a darling of the investor community based on its past performance, concerns about the company’s customer data platform vision, the price tag attached to the Slack deal, and its lack of profitability made more than one investor question the SaaS giant’s ambitions.
“I don’t see how they hit that $50 billion … It’s just not gonna happen,” Guggenheim Partners analyst John DiFucci told Protocol last month. “We can’t get there. I wish.”
And just weeks later, the company laid off a number of workers and implemented a hiring freeze through January 2023. At least 90 contractors were impacted by the layoffs, according to sources.
All of those developments sent Salesforce’s stock tumbling. So far this year, the SaaS giant’s stock is down more than 40%, making Tuesday’s gains rather notable.
But Salesforce has a rocky road ahead as investors pressure the company to transition away from growth mode. Activist investors have a mixed track record in forcing tech companies to make big changes, but there’s no question their presence makes the C-suite nervous; at least Salesforce has two people in the role to share the burden.
The Federal Trade Commission is planning to ask the public whether energy-efficiency labels on home appliances should also include information on repairing the tech as a way to help address its environmental impact, the agency said Monday.
The request for comment comes as FTC officials look skeptically at many restrictions on consumers’ ability to repair the products they own. The commission’s stance has been a boost for the so-called right-to-repair movement and helped nudge companies like Apple and Samsung to offer at-home, DIY fixes for smart devices like phones.
The right-to-repair movement has long looked beyond the highest-tech consumer gadgets, however, and modern home appliances increasingly have digital displays, internet connectivity, and even built-in smart assistants. Advocates of repair rights have also said that keeping devices from getting wheezy and ending up in a landfill is an environmental win.
The FTC said that, as part of seeking input on potential changes to the labeling rule, new language could also address the fact that many consumers buy their appliances online, while regulations only require manufacturers to put labels on physical devices such as dishwashers and refrigerators. In addition, the FTC asked about broadening the types of appliances that need to have the familiar yellow EnergyGuide tags, potentially adding clothes dryers, air purifiers, cooktops, electric spas, and others to the rules.
Still, any final move by the commission, which is already eying an expansive regulatory agenda that threatens to require years of work at the expense of other priorities, could be far in the future. The FTC has also previously sought comments on changes that wouldn’t have brought in label format or repairability.
Correction: An earlier version of this story misstated the date of the FTC’s announcement. This story was updated on Oct. 18, 2022.
Peter Thiel finally ponied up: The most prominent conservative figure in tech reportedly plans to give up to $5 million in additional funds to Blake Masters’ Arizona Senate campaign.
Thiel had originally been reluctant to spend any more on Masters, the Thiel Capital COO, beyond an initial $15 million donation to the Saving Arizona PAC. Instead, he wanted Minority Leader Mitch McConnell to foot the bill. After all, did McConnell want to win the Senate or not? But by playing hardball on funding, McConnell got Thiel to throw more funds at his pet political project, all while still reserving the McConnell-associated Senate Leadership Fund for other tight races.
McConnell’s gamble paid off. Now it’s time to see if Thiel’s will pay off too.
There’s a lot at stake, as the Senate races in Arizona and Ohio will determine Thiel’s role in shaping the future of the Republican party. Thiel has donated to over a dozen Congressional campaigns in this midterm cycle. But unlike the more established politicians in this cohort, Vance and Masters are homegrown, one-time employees of the man himself — Thielian without compromise.
If Masters and Vance win, so does Thiel’s vision for the GOP. It’s a vision of moving beyond the country club, NAFTA Republicans; it’s a more buttoned-up, competent version of Trumpism, capable of translating the former President’s blustery anti-establishment, anti-technocrat rhetoric into an actual social and economic program.
As it stands, Vance holds a strong lead in Ohio. Election models from FiveThirtyEight give Vance around a 71% chance of winning the race, despite his opponent Tim Ryan having outraised him nearly 11 to 1. At a recent GOP fundraising event, Thiel reportedly told guests Vance didn’t need more funding because the Ohio race was “done in my mind.”
But out in Arizona, Masters is still playing catch-up against incumbent Sen. Mark Kelly. Those same FiveThirtyEight models give Kelly an 80% chance of winning. And leading up to Election Day, Kelly will have a huge amount of money to spend on television ads since he outraised Masters by nearly 8 to 1, even accounting for Thiel’s latest $5 million pledge.
Masters dismissed polls that showed Kelly with a comfortable lead. He’s right to point out that this race is very much up for grabs — let’s not forget those 2016 election meters. In either case, Masters undeniably has a tougher road ahead compared to Vance.
Thiel is backing Masters and Vance in part because he believes Democrats have hitched their wagon to Big Tech, to the detriment of the American middle class. In his keynote speech at this year’s National Conservatism conference, Thiel took the established resource curse theory from economics and reconfigured it as the “tech curse,” which he defines as when a “strong technology industry is associated with social dysfunction rather than progress.” In both cases, the general idea is that an overabundance of wealth allows corrupt and incompetent governments to stay in power, while the economy sustains itself with minimal ingenuity.
Thiel posits that tech wealth enables distorted political dynamics, which have in turn led to the real estate crisis and broader hollowing out of the middle class. And though he identifies “wokeism” as the religion of our resource-rich state, Thiel still says it shouldn’t be mistaken as “the main thing that’s going on.”
Accordingly, Thiel tells us, Democrats have no choice but to hitch their wagon to tech and “pretend that they can make [the] California [model] work for the country as a whole.” Alternatives such as the “fake blue-collar” model or the redistributionist “globalist finance model” work even less well than California, he claims.
So where does that leave Republicans? Thiel criticizes the party as it stands now for being too nihilistic — only defining itself in opposition to wokeism and the broader California model. He instead wants the party to get back to “some broad-based growth that is not inflationary, not cancerous, and not some kind of narrow real estate racket.”
But that’s just about where the prescription ends. We can extrapolate from other Thiel statements that he wants more investment in non-software technology (“atoms, not bits”), and of course, he’ll always be in favor of less regulation. But other than that, Thiel’s vision seems more defined by what it isn’t rather than what it is. Ironically, then, it suffers from the same ideological nihilism he identifies within the conventional GOP.
It’s important to note that Thiel doesn’t want Republicans to kill the golden goose: A tech executive reading this might think Peter Thiel wants nothing more than to wrest the state power from the Democrats and use it to destroy tech companies, but that’s only half right: He wants state power, but not as a means of destroying tech.
“It’s just like Saudi Aramco isn’t the main problem in Saudi Arabia — it’s the most functioning institution,” Thiel analogized to suggest we should blame political dysfunction on the superstructure surrounding Apple and Google, not the companies themselves. So Thiel identifies tech as fundamental to the problem, but doesn’t want to destroy it as part of the solution.
Ye, the rapper and mogul formerly known as Kanye West, is planning to buy Parler. The deal will put yet another prominent conservative in charge of a social media service. The deal suggests, though, that the wars over controversial content are going deeper than apps, even as conservative sites try to build their own digital social ecosystems.
Parler, which touts itself as a free speech app that does a minimum amount of moderation, is popular among conservatives and right-wing users. Ye’s move to acquire the service follows the suspension of his Instagram and Twitter accounts after he made anti-Semitic posts.
Parler’s parent company, however, will be keeping the cloud firm it bought last month in what it said was a bid to power an “uncancelable” future. In other words, the company — which changed its name to Parlement Technologies when it made the cloud service acquisition — is leaving behind the conservative social media ecosystem that has mostly failed so far to challenge mainstream social media services. Instead, it’s moving up the chain and going all in on digital infrastructure, even as cloud providers, cybersecurity vendors, app stores, and payments processors have become focuses of the conflicts over content that any future conservative-allied app will need to contend with.
Earlier in October, for instance, PayPal walked back a policy saying it would begin to fine users up to $2,500 for spreading misinformation, saying the document outlining the change was sent in error. The potential fines had enraged conservatives, who say liberal leaders at social media sites unfairly use policies against misinformation to shut down right-wing views and personalities. Major sites including Twitter counter that they don’t moderate based on politics but instead try to focus on violence, harassment, and subversion of democracy.
Before that, in September, Cloudflare had booted Kiwi Farms, dooming the site known for violent anti-trans bigotry. Credit card companies also prompted OnlyFans to consider abandoning its pornographic creators last year.
For many conservatives, though, Parler itself is the poster child for the risk they face if they don’t control the digital infrastructure that keeps their companies running smoothly. Several Parler users participated in the Jan. 6 attack on the Capitol. The deadly riot was part of then-President Trump’s attempt to subvert U.S. democracy and stay in power. In its wake, both the Apple App Store and Google Play Store banned Parler for violating rules requiring apps to engage in basic content moderation. AWS followed suit, although the mobile OS providers eventually relented after Parler agreed to changes.
When it bought a cloud company, Parler’s parent company made clear that it was getting into the business to make sure it would have a say in digital choke points by “building out what will become an entire ecosystem to … help amplify free speech platforms.”
Those ambitions are likely far in the future. Parlement didn’t detail how much it paid for the cloud company, but said at the time it had raised $56 million in all its funding rounds. (Ye didn’t disclose how much he plans to pay for Parler, either.) By contrast, AWS brings in more than 100 times that amount in a single quarter.
Ye’s move and the pivot for Parlement are arriving right as Elon Musk appears poised to complete his deal for Twitter and scale back what he views as excessively liberal moderation policies there. The Google Play Store also recently approved Trump’s Truth Social app, a competitor to Parler, although the service is facing significant financial difficulties.
Together, the moves mean that increasingly prominent figures will be at the helm of widely available platforms that either appeal to conservatives or are trying to bring them back on, even as right-wing social media remains relatively niche. There’s ample room for conservative social networks to grow, joining the decades of runaway success by right-wing radio and TV, as well podcasts and livestreams in recent years.
Such a shift would upend the hope of early social media that everyone of all political stripes would gather in one place. And to pull it off, it might well require conservatives, sooner or later, to have a firm grip on more than just apps.
Mastercard said Monday that it will help banks offer a way for customers to buy and sell crypto, highlighting the push for infrastructure to enable traditional financial institutions to jump into the growing market.
Mastercard said its new Crypto Source program will make it possible for bank partners to offer crypto services to customers through a partnership with Paxos, the crypto investment services company. Mastercard will serve as the bridge between banks while Paxos, a regulated crypto bank, will provide “crypto-asset trading and custody services on behalf of the banks,” the company said.
The move creates a path for banks that are eager to enter the crypto market but face regulatory constraints related to holding digital assets for customers.
The move shows Mastercard’s focus on services “that will help bring users safely and securely into the crypto ecosystem,” Ajay Bhalla, Mastercard’s president of cyber and intelligence, said in a statement.
The Mastercard-Paxos partnership “will give financial institutions the fastest and most trusted way to offer safe, reliable crypto access for their consumers globally,” Walter Hessert, Paxos’ head of strategy, said in a statement.
The partnership is part of a growing trend in the financial services industry of big institutions turning to companies that offer tools and services for crypto trading for their clients.
One example is EDX Markets, a new exchange being developed by major Wall Street companies including Citadel Securities, Charles Schwab, and Fidelity Digital Assets. EDXM will also use Paxos’ infrastructure to run the exchange.
Climate tech is an investment bright spot, even as venture capital deals decline.
Startups in the climate and energy space raked in a significant share of venture capital funding in the third quarter, according to an analysis by CB Insights. Climate tech companies claimed five of the 10 biggest deals done in the third quarter, including the top two spots.
Swedish battery manufacturer Northvolt raised $1.1 billion in convertible notes from a collection of European investors, putting it at the top of the equity deal list. That influx of cash will be used to expand the company’s European factories as it scales its operations. The company’s largest shareholder so far is the automaker Volkswagen, which is one of a growing number of automakers investing in battery companies as electric vehicle sales pick up steam.
Fleet-focused EV charging company TeraWatt Infrastructure raked in $1 billion, putting it second on CB Insights’ list. Advanced nuclear startup TerraPower came in fourth, securing $750 million in funding in the third quarter. Investments in Black Sesame Technologies ($500 million) and EnergyX ($450 million) rounded out the quarter’s top climate tech deals. The Chinese chipmaker Black Sesame’s offerings include vehicle-to-everything charging technology, and EnergyX is a lithium extraction company that is angling to go public by 2024.
This boon for climate tech came as overall investments slump. The quarter saw $74.5 billion in venture capital funding, a total that’s down by 34% compared with the year’s second quarter. Silicon Valley tech startups specifically received 36% less funding. A separate report from Pitchbook found that venture-backed exits are set to hit a five-year low in 2022, which could further slow investments.
But climate startups continue to attract capital, particularly certain types of technology. Companies that could speed up the EV transition were big winners in the third quarter, but a Pitchbook analysis also shows that carbon capture and removal is going strong this year. The sector saw $882.2 million in investments across 11 deals in the second quarter of 2022.
Policies and government funding that could help these sectors grow, notably provisions in the Inflation Reduction Act, make EVs and carbon removal more of a sure bet. Tech companies have also committed nearly $1 billion to purchasing carbon removal services in an attempt to stimulate the nascent market.
A number of smaller VC firms are also popping up to make niche climate investments, whether into decarbonizing everyday goods or fighting wildfires. The surge in interest comes as the urgency to address the climate crisis grows.
Netflix is making it easier for people to disentangle their personal viewing data: The streaming service is rolling out a new feature worldwide this week that will let users transfer all of their personalized viewing data to a new account.
Netflix is billing the feature as a way for people to keep their viewing data and personalized viewing recommendations even if they leave the original account holder’s household. “People move. Families grow. Relationships end. But throughout these life changes, your Netflix experience should stay the same,” wrote Netflix product manager Timi Kosztin in a blog post Monday.
The feature is being introduced at a time when Netflix would very much like some of its members to spin out their profiles into new accounts. The streaming service has seen its growth stall and even decline amid strong competition from services like HBO Max and Disney+.
Netflix is blaming some of its woes on subscribers who share accounts with friends and relatives; the company estimates that around 100 million households participate in account sharing. Netflix plans to crack down on this in 2023 and began testing a few ways of doing so in Latin America earlier this year.
As part of those trials, Netflix tried giving people in Chile, Costa Rica, and Peru a way to take their profile data and transfer it to a new account. That was a hit with audiences, according to a spokesperson, resulting in Netflix now making it available globally. Until now, creators of new accounts have lost all access to their personalized data from previously shared accounts, including viewing history and suggestions.
Beyond Netflix’s challenges with account sharing, the new feature points to a growing importance of profiles and identity across the streaming landscape. Netflix was the first streaming service to launch individual profiles for family members almost a decade ago. Since then, most streaming services have adopted profile-based personalization.
Smart TV platforms like Google TV and Amazon’s Fire TV have gotten into the game as well, offering their users systemwide profiles. Netflix’s launch of profile portability is another first for the industry, and could lead to others building out their own profile-based streaming personalization.
Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.
Tech recruiting is a tough business right now. Layoffs in the industry have hit recruiting and HR teams harder than any other, and laid-off recruiters say they’re struggling to find full-time work in tech.
Tech companies that have conducted layoffs this year eliminated around half of their HR and recruiting staffers, according to a new analysis from mock-interview site interviewing.io.
Some recruiters held onto their jobs for months — even after hiring slowed to a trickle. Tim Nelson, who was laid off after six months at DocuSign along with the rest of the company’s sourcing team, said he was “twiddling [his] thumbs for four months” before ultimately being let go.
Many laid-off recruiters are now struggling to find full-time work in the industry. For some, the best option may be to take a sizable pay cut to go to non-tech companies.
Discord announced a suite of new features and an additional, cheaper subscription tier to its Nitro service on Monday designed to position its chat platform as not just a place to talk with your friends while you play video games, but also a place to play those games with friends and find new software.
Discord, started in 2015, has grown to more than 150 million monthly active users predominantly by being a free-to-use multiplatform chat application not unlike Slack. But where Discord thrives is less in work contexts and more for seamless voice communication and in allowing large communities to organize around their interests, with a large focus on gaming.
To make money, Discord has begun to rely on its Nitro subscription platform, which costs $10 a month or $100 a year and offers basic feature upgrades like more-customizable profiles and server upgrades like higher-quality uploads. (Nitro Classic, a cheaper $4.99 option, offers fewer perks; Discord says customers on Classic can keep the plan but it will no longer be allowing new sign ups.)
Beginning Oct. 20, Discord will start offering a new, $2.99 per month plan called Nitro Basic designed to make the service much more attractive to the scores of users who so far pay nothing to use Discord. The Basic offering allows for largely cosmetic upgrades, including animated emoji and special profile badges.
But to lure customers who might be considering a full Nitro subscription, Discord is now planning to sweeten the deal with the launch of a key new feature: in-app gaming. The hope that more players will come to think of Discord as a place to do stuff with friends instead of just chat. Discord is calling its new gaming initiative Activities, and these will start with a series of nine minigames that work well within the context of Discord’s voice chat capabilities.
Discord’s new Activities tab will let users play minigames with one another inside of the app, starting with more obvious use cases like poker and chess. Image: Discord
For example, Discord will now offer a Watch Together app for watching YouTube together with your friends, a poker app for organizing group card games, and chess. Only one user will need a standard Nitro plan to invite their friends to play these games. (Nitro Basic users do not get access to activities save Watch Together and Putt Party, which are also available to free Discord users.)
Discord is also launching a new app directory, which will serve to make the more than 500,000 apps on the platform more accessible. Apps on Discord function less like standard desktop applications and more like server bots you might be used to on Slack or elsewhere. Discord says it plans to start offering premium app subscriptions to developers who want to monetize this software in the future, and it’s launching a $5 million fund for new projects built for the Discord platform.
Discord is hoping its appeal to communities and app makers will help it generate enough subscription revenue to sustain the platform as a free-to-use service, while also turning Discord into a place developers might one day consider a potential revenue stream.
“I love that Discord is built in a way where communities get to customize it and make it their own,” said Justin Beckwith, the company’s director of engineering, in an interview with Protocol last week. “We’ve had this huge developer ecosystem that’s been thriving for years, and it’s exciting to give it a little bit more shape.”
Correction: A previous version of this post incorrectly implied Discord’s new Activities minigames are available to Discord Nitro Basic subscribers. That is untrue; only standard Nitro subscribers can access minigames.
Most startups aren’t ready for the pay transparency laws going into effect in the coming months, according to compensation experts. The first step for many will be setting up internal pay bands — a task that isn’t at the top of most startup leaders’ to-do lists.
A big part of standardizing pay: employee communication. Heather Sullivan, who took over as Astranis Space Technologies’ first permanent chief people officer in July, is only now setting up pay ranges at the company, which has around 270 employees.
Standardizing pay as early as possible can help companies know how they measure up to competitors and prevent pay inequity from forming, Knopp said. Pay disparities result from inconsistent practices.
Major social media services played a crucial role in the spread of falsehoods and disinformation about the 2020 election. Now a coalition of civil rights groups, good-government advocates, and liberal watchdogs say that Instagram, YouTube, TikTok, and others have more they can do in the next few weeks to avoid a repeat.
Even as the platforms try to stop new electoral disinformation and misinformation, they should also ensure they’re enforcing policies prohibiting lies claiming the 2020 election was stolen, 11 groups led by the Leadership Conference on Civil and Human Rights said in a letter to the companies.
With less than a month to go before the midterm election on Nov. 8, the letter also urges companies to clamp down on false statements targeted to non-English speakers, an area where platforms have typically fared poorly due to low investment. The coalition also says the firms should implement “friction to reduce the distribution of content containing electoral disinformation.” That friction could come from changes to “user interfaces, algorithms, and product design to proactively reduce mis/disinformation,” and it might “include modifications to demote or downrank this content and limit users’ ability to engage with it.”
The groups behind the letter — including Common Cause and the NAACP Legal Defense and Educational Fund — also say the platforms should be enforcing their policies on disinformation about political races and voting full-time, not just near elections.
The message comes as more than 100 Republican candidates on ballots this fall have declared their support for the “Big Lie” — a series of demonstrably false claims that President Joe Biden actually lost to former President Donald Trump — as well as unfounded conspiracy theories that U.S. elections are riddled with fraud to benefit Democrats. Despite the baseless attacks on the fundamentals of American democracy, most voters will have the option of an election denier on their ballots in November’s elections.
Many of those lies spread on the social media sites that are the target of Thursday’s letter, as well as through niche conservative services and traditional media. Election disinformation has also become an international concern.
Yet the bigger companies have announced election-protection measures that largely double down on their approach from 2020. Often the sites directed users to authoritative information even as the false claims continued to go viral, culminating in the violent attack on the Capitol.
Apple will team up with Goldman Sachs on a savings account for its cardholders, the latest expansion from the tech giant into financial services.
Apple said Thursday that holders of the Apple Card will soon be able to open a “high-yield” savings account through Goldman that will connect to Apple’s mobile wallet. The new savings account would include an option to automatically deposit Daily Cash rewards — Apple’s term for the cash back it offers on purchases.
The Apple Card is already offered through a partnership with Goldman Sachs. In June, Apple revealed a plan to offer a form of “buy now, pay later” financing through its wallet. Notably, the company reportedly intends to lend directly to Apple Pay Later users through a subsidiary rather than through a banking partner.
The Apple Pay Later product is still yet to launch. Bloomberg reported that technical challenges have held it up. But Apple’s growing push into financial services has also caught the eye of regulators. Consumer Financial Protection Bureau director Rohit Chopra promised a “close look” at the company’s plan in an interview with the Financial Times earlier this year.
Apple’s announcement did not say when the savings account will be available, and didn’t include an estimate for the interest rate it will offer. Goldman’s Marcus savings account offers 2.15% APY.
Correction: An earlier version of this story misstated Apple’s term for its cash back program. This story was updated on Oct. 13, 2022.
Netflix is launching its new ad-supported tier in 12 countries next month: The “basic with ads” plan will become available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, the U.K., and the U.S. in the first week of November. U.S. customers will be able to sign up on Nov. 3; the rollout in Spain comes a week later.
Prices for the new plan will vary from country to country, and range from 4.99 euros ($4.88) in Germany to 5.99 euros ($5.86) in France. Subscribers in Mexico will have to pay 99 pesos ($4.95).
Subscribers of the new plan will have to endure four to five minutes of ads per hour of programming on average. Each ad will be 15 or 30 seconds long; Netflix executives said Thursday that the company would not accept any political advertising.
The new plan will include most but not all of Netflix’s catalog at launch. Some movies and TV shows will be unavailable due to licensing restrictions. Netflix COO Greg Peters told journalists Thursday that these holdouts were different from market to market, and that the missing titles accounted anywhere from 5% to 10% of viewing on ad-free plans. “We will continue to work on reducing that number over time,” Peters said.
In addition to its new “basic with ads” plan, Netflix will continue to offer three ad-free tiers, priced $9.99, $15.49, and $19.99. In conjunction with the new plan’s introduction, Netflix is also upping the resolution of both of its basic plans from 480p to 720p. However, anyone who wants to watch Netflix programming in 4K HDR still has to subscribe to the company’s most expensive plan.
Asked whether the new plan could lead to cannibalization, with existing customers downgrading from a more expensive plan, Peters said that the company wasn’t too concerned with the issue. “We want to offer consumers choice,” Peters said, adding that the company modeled the pricing to be “neutral to positive to the comparable [ad-free] plan.”
Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.
Correction: A prior version of this article stated that Netflix’s ad-supported plan would be missing 5% to 10% of its catalog due to licensing restrictions. The story was updated on Oct. 14, 2022, to reflect that Netflix COO Greg Peters actually said that the missing titles would impact 5% to 10% of overall viewing.