×
United States

The US Military is Embedded in the Gaming World. Its Target: Teen Recruits (theguardian.com) 109

The U.S. Navy has ramped up efforts to recruit young gamers and esports fans to meet recruitment goals, allocating up to $4.3 million this year for esports marketing. This includes hosting video game tournaments and having sailors compete as the esports team "Goats & Glory." Critics argue targeting minors for military marketing normalizes war and raises ethical concerns, The Guardian reports. While the military cannot formally recruit those under 17, advertising and direct interaction with minors for recruitment purposes is permitted. Veterans groups oppose this, noting the military relies on gaming's appeal to young teens, whose brains are still developing, to influence future decisions about military service, the report adds.
Advertising

The Tech Company Super Bowl Ads of 2024 77

Technology made its mark on the Super Bowl ads this year. Microsoft purchased a long inspirational ad for Copilot, ending with the tagline "Your everyday AI companion." (Although another message made the opposite point. "With artificial intelligence, the future is in good hands," an announcer says ironically -- while the ad shows the minions from Despicable Me 4.)

Google's ad showed how its Pixel 8 smartphone helps people with vision problems take photos. T-Mobile touted its internet service.

And for some reason CrowdStrike's ad about its endpoint security software took place in the Old West...

VW ended an ad looking at its history with a shot of its new electric vehicle, the ID.Buzz minivan, while Kia had its own heart-tugging ad touting their electric EV9.

And Pfizer ran a minute-long ad showing the history of medical progress, culminating with a pointer to their new domain, LetsOutdoCancer.com.

Even NASA got into the action, releasing a video showing an astronaut catching a pass in zero gravity. ("Including its solar panels, the Space Station is the same size as a regulation football field.")

And some people even tried watching the Super Bowl on their new Apple Vision Pro...
Social Networks

Is AI Hastening the Demise of Quora? (slate.com) 57

Quora "used to be a thriving community that worked to answer our most specific questions," writes Slate. "But users are fleeing," while the site hosts "a never-ending avalanche of meaningless, repetitive sludge, filled with bizarre, nonsensical, straight-up hateful, and A.I.-generated entries..."

The site has faced moderation issues, spam, trolls, and bots re-posting questions from Reddit (plus competition for ad revenue from sites like Facebook and Google which forced cuts in Quora's support and moderation teams). But automating its moderation "did not improve the situation...

"Now Quora is even offering A.I.-generated images to accompany users' answers, even though the spawned illustrations make little sense." To top it all off, after Quora began using A.I. to "generate machine answers on a number of selected question pages," the site made clear the possibility that human-crafted answers could be used for training A.I. This meant that the detailed writing Quorans provided mostly for free would be ingested into a custom large language model. Updated terms of service and privacy policies went into effect at the site last summer. As angel investor and Quoran David S. Rose paraphrased them: "You grant all other Quora users the unlimited right to reuse and adapt your answers," "You grant Quora the right to use your answers to train an LLM unless you specifically opt out," and "You completely give up your right to be any part of any class action suit brought against Quora," among others. (Quora's Help Center claims that "as of now, we do not use answers, posts, or comments added to Quora to train LLMs used for generating content on Quora. However, this may change in the future." The site offers an opt-out setting, although it admits that "opting out does not cover everything.")

This raised the issue of consent and ownership, as Quorans had to decide whether to consent to the new terms or take their work and flee. High-profile users, like fantasy author Mercedes R. Lackey, are removing their work from their profiles and writing notes explaining why. "The A.I. thing, the terms of service issue, has been a massive drain of top talent on Quora, just based on how many people have said, Downloaded my stuff and I'm out of there," Lackey told me. It's not that all Quorans want to leave, but it's hard for them to choose to remain on a website where they now have to constantly fight off errors, spam, trolls, and even account impersonators....

The tragedy of Quora is not just that it crushed the flourishing communities it once built up. It's that it took all of that goodwill, community, expertise, and curiosity and assumed that it could automate a system that equated it, apparently without much thought to how pale the comparison is. [Nelson McKeeby, an author who joined Quora in 2013] has a grim prediction for the future: "Eventually Quora will be robot questions, robot answers, and nothing else." I wonder how the site will answer the question of why Quora died, if anyone even bothers to ask.

The article notes that Andreessen Horowitz gave Quora "a much-needed $75 million investment — but only for the sake of developing its on-site generative-text chatbot, Poe."
Media

Joe Rogan Gets New Spotify Deal Worth Up To $250 Million (wsj.com) 134

Spotify has reached a new deal with star podcaster Joe Rogan that will allow his hit show to be distributed broadly. From a report: Rogan's fresh deal, estimated to be worth as much as $250 million over its multiyear term, involves an upfront minimum guarantee, plus a revenue sharing agreement based on ad sales. Under the new licensing agreement, Spotify will sell ads for and distribute "The Joe Rogan Experience" across several podcast platforms, including in a video format on YouTube, the company said Friday. Under his previous deal, the show was exclusive to Spotify. The new deal is emblematic of shifting economics in podcasting, which has matured in both audience reach and advertising spending since Rogan's last deal. Spotify is working to revise the terms of its deals with top talent so that shows are distributed on several platforms to maximize their audience and ad sales, rather than requiring exclusivity.
The Internet

Comcast Reluctantly Agrees To Stop Its Misleading '10G Network' Claims (arstechnica.com) 67

An anonymous reader quotes a report from Ars Technica: Comcast has reluctantly agreed to discontinue its "Xfinity 10G Network" brand name after losing an appeal of a ruling that found the marketing term was misleading. It will keep using the term 10G in other ways, however. Verizon and T-Mobile both challenged Comcast's advertising of 10G, a term used by cable companies since it was unveiled in January 2019 by industry lobby group NCTA-The Internet & Television Association. We wrote in 2019 that the cable industry's 10G marketing was likely to confuse consumers and seemed to be a way of countering 5G hype generated by wireless companies.

10G doesn't refer to the 10th generation of a technology. It is a reference to potential 10Gbps broadband connections, which would be much faster than the actual speeds on standard cable networks today. The challenges lodged against Comcast marketing were filed with the advertising industry's self-regulatory system run by BBB National Programs. BBB's National Advertising Division (NAD) ruled against Comcast in October 2023, but Comcast appealed to the National Advertising Review Board (NARB). The NARB announced its ruling today, agreeing with the NAD that "Comcast should discontinue use of the term 10G, both when used in the name of the service itself ('Xfinity 10G Network') as well as when used to describe the Xfinity network. The use of 10G in a manner that is not false or misleading and is consistent with the panel decision is not precluded by the panel recommendations."

Comcast agreed to make the change in an advertiser's statement that it provided to the NARB. "Although Comcast strongly disagrees with NARB's analysis and approach, Comcast will discontinue use of the brand name 'Xfinity 10G Network' and will not use the term '10G' in a manner that misleadingly describes the Xfinity network itself," Comcast said. Comcast said it disagrees with "the recommendation to discontinue the brand name" because the company "makes available 10Gbps of Internet speed to 98 percent of its subscribers upon request." But those 10Gbps speeds aren't available in Comcast's typical service plans and require a fiber-to-the-home connection instead of a standard cable installation. Comcast said it may still use 10G in ways that are less likely to confuse consumers. "Consistent with the panel's recommendation... Comcast reserves the right to use the term '10G' or 'Xfinity 10G' in a manner that does not misleadingly describe the Xfinity network itself," the company said.

Privacy

Inside a Global Phone Spy Tool Monitoring Billions (404media.co) 40

A wide-spanning investigation by 404 Media reveals more details about a secretive spy tool that can tracks billions of phone profiles through the advertising industry called Patternz. From the report: Hundreds of thousands of ordinary apps, including popular ones such as 9gag, Kik, and a series of caller ID apps, are part of a global surveillance capability that starts with ads inside each app, and ends with the apps' users being swept up into a powerful mass monitoring tool advertised to national security agencies that can track the physical location, hobbies, and family members of people to build billions of profiles, according to a 404 Media investigation.

404 Media's investigation, based on now deleted marketing materials and videos, technical forensic analysis, and research from privacy activists, provides one of the clearest examinations yet of how advertisements in ordinary mobile apps can ultimately lead to surveillance by spy firms and their government clients through the real time bidding data supply chain. The pipeline involves smaller, obscure advertising firms and advertising industry giants like Google. In response to queries from 404 Media, Google and PubMatic, another ad firm, have already cut-off a company linked to the surveillance firm.

United States

FTC Bans TurboTax From Advertising 'Free' Services, Calls It Deceptive (cnn.com) 84

The Federal Trade Commission ruled in a final order and opinion Monday that TurboTax, the popular tax filing software, engaged in deceptive advertising and banned the company from advertising its services for free unless it is free for all customers. CNN adds: By running ads for "free" tax services that many customers were not qualified for, the tax filing software violated the FTC Act and deceived consumers, the agency said. The FTC had first sued Intuit, TurboTax's owner, for its deceptive advertising in 2022. The FTC staff alleged most tax filers couldn't use the company's "free" services -- "such as those who get a 1099 form for work in the gig economy, or those who earn farm income." TurboTax advertising their products as free misled those customers, according to the FTC.

The FTC Administrative Law Judge D. Michael Chappell announced the initial decision in September, which the commission upheld Monday. Intuit had appealed to the FTC as part of the process. In a statement Monday, Intuit said it has appealed "this deeply flawed decision" to federal circuit court outside of the FTC. "Absolutely no one should be surprised that FTC Commissioners -- employees of the FTC -- ruled in favor of the FTC as they have done in every appeal for the last two decades. This decision is the result of a biased and broken system where the Commission serves as accuser, judge, jury, and then appellate judge all in the same case," an an Intuit spokesperson said.

Businesses

Netflix Buys Rights To WWE's 'Raw,' Its First Big Live Event (bloomberg.com) 80

Netflix has acquired the exclusive rights to Raw as well as other programming from World Wrestling Entertainment, marking the streaming service's first big move into live events. From a report: Raw will air on Netflix in the US, Canada, Latin America and other international markets beginning in January 2025, after the expiration of the WWE's domestic deal with Comcast. The company will also become the exclusive home outside the US for all WWE shows and specials, including Smackdown and NXT, as well as pay-per-view live events like Wrestlemania, SummerSlam and Royal Rumble. The pay-per-view events will be included at no additional cost for Netflix customers.

After attracting more than 200 million customers by offering films and TV shows on-demand, Netflix has now committed to offering three hours of live wrestling a week starting next year. The company hopes the deal will bring in millions of loyal WWE viewers and provide a boost for its fledgling advertising-supported plan. Netflix has been dabbling in live events for the last year, airing a live comedy special, as well as a golf match, but this is the first long-term rights deal. The WWE is the latest major live event to shift from cable TV to streaming. Ultimate Fighting Championship, which like WWE is owned by TKO Group Holdings, offers many of its matches on ESPN+, while the National Football League sold Amazon the rights to Thursday Night Football. A playoff game on Comcast's Peacock just delivered the largest streaming audience for any professional sports event in the US.
The deal 10-year deal is valued at more than $5 billion, CNBC reported.
Facebook

Meta Now Lets EU Users Unlink Their Facebook, Messenger and Instagram Accounts (neowin.net) 13

To comply with the EU's Digital Markets Act, Meta is rolling out changes to give users in Europe the ability to unlink their Facebook, Messenger and Instagram accounts. Neowin reports: One key choice users will have is how information is shared between Facebook and Instagram. Instagram and Facebook users will be able to choose whether or not they want information shared between the apps. Those who currently have connected Instagram and Facebook accounts can opt to keep sharing data between the apps or separate their accounts. Furthermore, Messenger is getting a standalone option. Users can continue using Messenger with their Facebook account or create a new account completely independent of Facebook. This new Messenger account will still offer core features like messaging, chat, and voice/video calls, but without Facebook.

For Facebook Marketplace, the options will be a personalized marketplace experience that taps into Facebook profiles or an anonymized experience where buyers and sellers only communicate via email instead of Messenger. For gamers, Meta offers a similar choice to Facebook Gaming. Users can keep their Facebook info linked for access to features like multiplayer, in-game purchases, and personalized recommendations. Alternatively, they can opt for a Facebook-free gaming experience. Finally, an option introduced in November 2023 remains relevant -- European users can choose to pay a subscription to Facebook and Instagram ad-free. It ensures that their information is not used for targeted advertising.

Science

Why Every Coffee Shop Looks the Same (theguardian.com) 67

An anonymous reader shares a report: These cafes had all adopted similar aesthetics and offered similar menus, but they hadn't been forced to do so by a corporate parent, the way a chain like Starbucks replicated itself. Instead, despite their vast geographical separation and total independence from each other, the cafes had all drifted toward the same end point. The sheer expanse of sameness was too shocking and new to be boring. Of course, there have been examples of such cultural globalisation going back as far as recorded civilisation. But the 21st-century generic cafes were remarkable in the specificity of their matching details, as well as the sense that each had emerged organically from its location. They were proud local efforts that were often described as "authentic," an adjective that I was also guilty of overusing. When travelling, I always wanted to find somewhere "authentic" to have a drink or eat a meal.

If these places were all so similar, though, what were they authentic to, exactly? What I concluded was that they were all authentically connected to the new network of digital geography, wired together in real time by social networks. They were authentic to the internet, particularly the 2010s internet of algorithmic feeds. In 2016, I wrote an essay titled Welcome to AirSpace, describing my first impressions of this phenomenon of sameness. "AirSpace" was my coinage for the strangely frictionless geography created by digital platforms, in which you could move between places without straying beyond the boundaries of an app, or leaving the bubble of the generic aesthetic. The word was partly a riff on Airbnb, but it was also inspired by the sense of vaporousness and unreality that these places gave me. They seemed so disconnected from geography that they could float away and land anywhere else. When you were in one, you could be anywhere.

My theory was that all the physical places interconnected by apps had a way of resembling one another. In the case of the cafes, the growth of Instagram gave international cafe owners and baristas a way to follow one another in real time and gradually, via algorithmic recommendations, begin consuming the same kinds of content. One cafe owner's personal taste would drift toward what the rest of them liked, too, eventually coalescing. On the customer side, Yelp, Foursquare and Google Maps drove people like me -- who could also follow the popular coffee aesthetics on Instagram -- toward cafes that conformed with what they wanted to see by putting them at the top of searches or highlighting them on a map. To court the large demographic of customers moulded by the internet, more cafes adopted the aesthetics that already dominated on the platforms. Adapting to the norm wasn't just following trends but making a business decision, one that the consumers rewarded. When a cafe was visually pleasing enough, customers felt encouraged to post it on their own Instagram in turn as a lifestyle brag, which provided free social media advertising and attracted new customers. Thus the cycle of aesthetic optimisation and homogenisation continued.

Businesses

Reddit Seeks To Launch IPO In March (reuters.com) 45

According to Reuters, Reddit plans to launch its initial public offering (IPO) in March, "moving forward with a listing it has been eyeing for more than three years." From the report: It would be the first IPO of a major social media company since Pinterest's, opens new tab debut in 2019, and would come as Reddit and its peers face stiff competition for advertising dollars from the likes of TikTok and Facebook. The offering would also test the willingness of some Reddit users to back the company's stock market debut.

Reddit, which filed confidentially for its IPO in December 2021, is planning to make its public filing in late February, launch its roadshow in early March, and complete the IPO by the end of March, two of the sources said. The San Francisco-based company, which was valued at about $10 billion in a funding round in 2021, is seeking to sell about 10% of its shares in the IPO, the sources added. It will decide on what IPO valuation it will pursue closer to the time of the listing, according to the sources.

Google

Google CEO Tells Employees To Expect More Job Cuts This Year (theverge.com) 53

Google has laid off over a thousand employees across various departments since January 10th. CEO Sundar Pichai's message is to brace for more cuts. The Verge: "We have ambitious goals and will be investing in our big priorities this year," Pichai told all Google employees on Wednesday in an internal memo that was shared with me. "The reality is that to create the capacity for this investment, we have to make tough choices." So far, those "tough choices" have included layoffs and reorganizations in Google's hardware, ad sales, search, shopping, maps, policy, core engineering, and YouTube teams.

"These role eliminations are not at the scale of last year's reductions, and will not touch every team," Pichai wrote in his memo -- a reference to when Google cut 12,000 jobs this time last year. "But I know it's very difficult to see colleagues and teams impacted." Pichai said the layoffs this year were about "removing layers to simplify execution and drive velocity in some areas." He confirmed what many inside Google have been fearing: that more "role eliminations" are to come. "Many of these changes are already announced, though to be upfront, some teams will continue to make specific resource allocation decisions throughout the year where needed, and some roles may be impacted," he wrote.

Google

Google Lays Off Hundreds of Employees in Advertising Sales Team (reuters.com) 28

Google is laying off hundreds of employees in its advertising sales team, the Alphabet-owned company said on Tuesday, marking the latest cuts at the search giant. From a report: The move adds to signs that job cuts will continue this year, as companies look to adopt AI software and automation to lighten workloads. Last week, Google said it would lay off several employees in its Voice Assistant units, hardware teams responsible for Pixel, Nest and Fitbit, as well as in its augmented reality team. Google's customer solutions unit, which serves medium-level advertiser clients, will be the core team for growth moving forward, the company said.
Youtube

YouTube Begins New Wave of Slowdowns For Users With Ad Blockers Enabled (9to5google.com) 307

An anonymous reader quotes a report from 9to5Google: YouTube recently started slowing down its entire site whenever ad blockers are used. A new wave of slowdowns is hitting users, with the only resolutions being disabling the ad blocker or upgrading to premium. To combat the increasing frequency of ads on YouTube, people have employed the use of ad blockers for years. According to YouTube, that method of avoiding ads is deemed a violation of the terms of service. Of course, pre-video ads are a huge source of income for the service, and the only way to avoid them without the use of a third-party application is to pay YouTube directly for premium.

YouTube has since started discouraging the use of ad blockers in a couple of ways. The first is with a pop-up message that reads, "Ad blockers violate YouTube's Term of Service." The message then suggests you turn off your ad blocker. The user is not allowed to continue watching without doing so. The second method is one that's now starting to roll out to more users. YouTube has recently started slowing the entire site when an ad blocker is being used, referring to it as "suboptimal viewing." According to a post on Reddit, multiple users have noted that YouTube has become laggy and unresponsive, seemingly all of a sudden. It was quickly discovered that disabling whichever ad blocker is being used immediately revitalizes the site.

AI

Are Amazon's AI-Generated Review Summaries Part of a Larger Change in Online Shopping? (msn.com) 28

"Customer say," writes Amazon on at least some of their product pages, across from that grid showing the number of five-star and four-star reviews... But at the bottom of that summary is a disclaimer that what you read was "AI-generated from the text of customer reviews."

This has been going on for a few months now, points out the Washington Post's "Tech Friend" newsletter. And after reviewing how AI distilled nearly 40,000 reviews into a succinct summary, their impression has shifted to "hmm ... maybe this is a decent use of text-summarizing AI — as long as you learn to read Amazon's AI digests with a savvy eye..." Juozas Kaziukenas, founder of the e-commerce research firm Marketplace Pulse, pointed out that since Amazon started the AI-generated review summaries last year, the company has tweaked them to highlight terms or features that apparently come up a lot in customer ratings. The positive features are highlighted in green and the negative or neutral feedback is in yellow and gray... If you like to get a gist of what shoppers thought of a product, Amazon's AI summary can spare you from skimming the reviews yourself...

But as with Amazon reviews in general, the AI summaries might be incomplete or untrustworthy... Bloomberg News recently looked at dozens of AI review summaries and found in some cases they underplayed customers' negative feedback and exaggerated them for other products. And, of course, if the reviews themselves are misinformed or rigged, a summary of junk customer feedback will also be junk. Amazon said the company is "seeing positive feedback on our review highlights from both customers and sellers" but that it will "continually improve the review highlights experience over time."

But is this just the beginning? Amazon, eBay and Shopify are also experimenting with using AI to spit out descriptions of products from a photo or a few keywords. Some of this AI-generated text will be better than the confusing product listings you sometimes read online. A lot of it will be worse. A bunch of technology companies, including Amazon and Meta, are also betting that AI will be better and cheaper than current methods for creating product advertisements to clog your online shopping results and social media feeds. Hooray, right?!
The Media

Did a US Hedge Fund Help Destroy Local Journalism? (editorandpublisher.com) 125

"What is lost when billionaires with no background nor interest in a civic mission, who are only concerned with profiteering, take over our most influential news organizations? What new models of news gathering, and dissemination show promise for our increasingly digital age? What can the public do to preserve and support vibrant journalism?"

That's a synopsis posted about the documentary Stripped for Parts: American Journalism on the Brink, cited by the long-standing news industry magazine Editor and Publisher (which dates back to 1901). This week its podcast interviewed filmmaker Rick Goldsmith about his 90-minute documentary, which they say "tells the tale" of how hedge fund Alden Global Capital clandestinely entered into the news publishing industry in a big way — and then "dismantled local newspapers 'piece by piece,' creating a crises within the communities they serve, leaving 'news deserts' and 'ghost papers' in their wake." [Goldsmith] spent more than 5-years creating his latest work... a film that tells the tale of how newspapers business model is faltering, not just because of the loss of advertising and digital disruption; but also to capitalist greed, as hedge funds and corporate America buy them, sell their assets and leave the communities they serve without their local "voice" and a final check on power.
On the podcast, Goldsmith notes that in many cases a paper's assets "were the newspaper buildings and the printing presses... These were worth in many cases more than the newspapers themselves." After laying off staff, the hedge fund could also downsize out of those buildings.

By 2021 Alden owned 100 newspapers and 200 more publications — and then acquired Tribune Publishing to become America's second-largest newspaper publisher.

The hedge fund currently owns several newspapers in the San Francisco Bay Area, according to SFGate: At first, Goldsmith's documentary might seem like it's delivering more bad news. But it avoids despair, offering hope on the horizon for news deserts where aggressive reporting is needed. It introduces the notion that the traditional capitalist business model is failing the news industry, and that nonprofit organizations must be providers of local coverage.
Businesses

Amazon's Twitch To Cut 500 Employees, About 35% of Staff (yahoo.com) 75

According to Bloomberg, Amazon's livestreaming site Twitch is expected to cut 35% of its staff, or about 500 workers. "The cuts, which could be announced as soon as Wednesday, come amid concerns over losses at Twitch and after several top executives left the company in the span of a few months," notes Bloomberg. Slashdot reader quonset shares the report: Running a large-scale website supporting 1.8 billion hours of live video content a month is enormously expensive, despite Twitch's reliance on Amazon's infrastructure, company executives have said. In December, Twitch Chief Executive Officer Dan Clancy said the company would cease operations in South Korea, where the costs are "prohibitively expensive," according to a blog post he wrote. Twitch has increased its focus on advertising in recent years. Nine years after Amazon's acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information.

In the final months of 2023, several top executives announced their departures, including Twitch's chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon's Ads unit. "It's always bittersweet when talented leaders move on to pursue new opportunities,'" a Twitch spokesperson said at the time. "We are incredibly grateful for their contributions to Twitch and our community, and wish them all the best."

Google

Google's Chrome Begins Purging Third-Party Cookies (google.com) 19

"If you have been affected, you will will receive a notification when you open Chrome on either desktop or Android devices," reports Search Engine Land. But they add that "discussions among digital marketers on X indicate that advertisers are still not ready..."

An anonymous reader writes: Google started its campaign to phase out of third-party cookies as announced earlier. At the beginning cookies are turned off for 1% of users, and those lucky ones unlock a "tracking protection" in Chrome settings. In agreement with the UK Competitions and Markets Authority, third-party cookies will be completely removed at the end of this year, a move under tight anti-competition scrutiny also in Brussels. Meanwhile, a technology researcher released their privacy audit of Google's third-party cookie replacement, Privacy Sandbox's Protected Audience API, validating its standing against EU data protection, which may even close the ever-present cookie consent popups disliked universally in Europe.
Television

Vizio To Pay $3 Million Settlement for Misleading Advertised TV Refresh Rates (theverge.com) 22

Vizio has agreed to $3 million settlement over allegations it misled consumers on TV refresh rates. The TV maker denies wrongdoing but will cease advertising on "effective" refresh rates. Eligible buyers have until March 2024 to file claims and submit proof of purchase. Settlement includes enhanced one-year warranties. The Verge adds: TV makers often use marketing terms like "effective refresh rate" to refer to motion smoothing features, often called the "soap opera effect," that are intended to reduce motion blur on modern TVs. Motion smoothing is already controversial enough on its own, but companies like Vizio can be frustratingly casual with refresh rate terminology in their marketing.
Businesses

Disney, Warner, Comcast, and Paramount Are Contemplating Cuts, Possible Mergers (arstechnica.com) 100

After losing more than $5 billion in the past year, the world's largest traditional entertainment companies -- Disney, Warner Bros Discovery, Comcast and Paramount -- are contemplating cuts and possible mergers to ultimately help better compete with Netflix. The Financial Times reports (via Ars Technica): Shari Redstone, Paramount's billionaire controlling shareholder, has effectively put the company on the block in recent weeks. She has held talks about selling the Hollywood studio to Skydance, the production company behind Top Gun: Maverick, people familiar with the matter say. Paramount chief executive Bob Bakish also discussed a possible combination over lunch with Warner CEO David Zaslav in mid-December. In both cases the discussions were said to be at an early stage and people familiar with the talks cautioned that a deal might not materialize.

Beyond their streaming losses, the traditional media groups are facing a weak advertising market, declining television revenues and higher production costs following the Hollywood strikes. Rich Greenfield, an analyst at LightShed Partners, said Paramount's deal discussions were a reflection of the "complete and utter panic" in the industry. "TV advertising is falling far short, cord-cutting is continuing to accelerate, sports costs are going up and the movie business is not performing," he said. "Everything is going wrong that can go wrong. The only thing [the companies] know how to do to survive is try to merge and cut costs." But as the traditional media owners struggle, Netflix, the tech group that pioneered the streaming model over a decade ago, has emerged as the winner of the battle to reshape video distribution. "For much of the past four years, the entertainment industry spent money like drunken sailors to fight the first salvos of the streaming wars," analyst Michael Nathanson wrote in November. "Now, we are finally starting to feel the hangover and the weight of the unpaid bar bill." For companies that have been trying to compete with Netflix, Nathanson added, "the shakeout has begun."

After a bumpy 2022, Netflix has set itself apart from rivals -- most notably by being profitable. Earnings for its most recent quarter soared past Wall Street's expectations as it added 9 million new subscribers -- the strongest rise since early 2020, when Covid-19 lockdowns led to a jump. "Netflix has pulled away," says John Martin, co-founder of Pugilist Capital and former chief executive of Turner Broadcasting. For its rivals, he said, the question is "how do you create a viable streaming service with a viable business model? Because they're not working." The leading streaming services aggressively raised prices in 2023. Now, analysts, investors and executives predict that consolidation could be ahead next year as some of the smaller services combine or bow out of the streaming wars.

Slashdot Top Deals