Wall St analyst Laura Martin on the fate of Netflix, breaking up Google, EU regulation, and a decade of more money for Hollywood

The rise of streaming video platforms like Netflix and Amazon Prime has upended traditional power balances in Hollywood and is reorganizing the way we consume films and TV series as consumers.

Following her talk at the recent Banff World Media Festival in Canada, I interviewed Laura Martin, the senior analyst covering entertainment and internet stocks at leading investment bank Needham & Company, to sort out how the pieces are moving in this chess game between content creators, streaming services, consumers, and government regulators.

We discuss why Netflix is still at risk of a downfall, the effect of EU content quotas, why Martin thinks regulators should break up Google, and why video streaming and game streaming are likely to merge into the same subscription products.

Here is the transcript of our discussion, edited for length and clarity:

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Eric Peckham: There’s an optimistic case that the rise of online video streaming is a win for both consumers and content creators because it creates a vast landscape of content platforms. Onstage in Banff, you argued that the number of content platforms (and thus the number of content buyers) will in fact shrink. Why do you see it going that direction?

Laura Martin: There are 4,000 video apps on the Roku platform today (and similarly on Samsung and on Amazon Fire). What you’ll see is a consolidation in the industry as we get big players like the Walt Disney Company, AT&T, and Apple coming into the DTC business with big, deep pockets. Although we have more buyers of content today, it’s driving prices up.

It is likely that the big players are just battling out between themselves, putting smaller players out of business. Over a 10-year time frame, I expect just three or four winners, and that will bring more discipline back into the financial aspects of the business.

Peckham: What will separate the winners from the losers here?

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What Huawei didn’t say in its ‘robust’ half-year results

A guide to Virtual Beings and how they impact our world

Money from big tech companies and top VC firms is flowing into the nascent “virtual beings” space. Mixing the opportunities presented by conversational AI, generative adversarial networks, photorealistic graphics, and creative development of fictional characters, “virtual beings” envisions a near-future where characters (with personalities) that look and/or sound exactly like humans are part of our day-to-day interactions.

Last week in San Francisco, entrepreneurs, researchers, and investors convened for the first Virtual Beings Summit, where organizer and Fable Studio CEO Edward Saatchi announced a grant program. Corporates like Amazon, Apple, Google, and Microsoft are pouring resources into conversational AI technology, chip-maker Nvidia and game engines Unreal and Unity are advancing real-time ray tracing for photorealistic graphics, and in my survey of media VCs one of the most common interests was “virtual influencers”.

The term “virtual beings” gets used as a catch-all categorization of activities that overlap here. There are really three separate fields getting conflated though:

1. Virtual Companions
2. Humanoid Character Creation
3. Virtual Influencers

These can overlap — there are humanoid virtual influencers for example — but they represent separate challenges, separate business opportunities, and separate societal concerns. Here’s a look at these fields, including examples from the Virtual Beings Summit, and how they collectively comprise this concept of virtual beings:

Virtual companions

Virtual companions are conversational AI that build a unique 1-to-1 relationship with us, whether to provide friendship or utility. A virtual companion has personality, gauges the personality of the user, retains memory of prior conversations, and uses all that to converse with humans like a fellow human would. They seem to exist as their own being even if we rationally understand they are not.

Virtual companions can exist across 4 formats:

1. Physical presence (Robotics)
2. Interactive visual media (social media, gaming, AR/VR)
3. Text-based messaging
4. Interactive voice

While pop culture depictions of this include Her and Ex Machina, nascent real-world examples are virtual friend bots like Hugging Face and Replika as well as voice assistants like Amazon’s Alexa and Apple’s Siri. The products currently on the market aren’t yet sophisticated conversationalists or adept at engaging with us as emotional creatures but they may not be far off from that.

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Google’s Pixel 4 smartphone will have motion control and face unlock

Google’s Pixel 4 is coming out later this year, and it’s getting the long-reveal treatment thanks to a decision this year from Google to go ahead and spill some of the beans early, rather than saving everything for one big, final unveiling closer to availability. A new video posted by Google today about the forthcoming Pixel 4 (which likely won’t actually be available until fall) shows off some features new to this generation: Motion control and face unlock.

The new “Motion Sense” feature in the Pixel 4 will detect waves of your hand and translate them into software control, including skipping songs, snoozing alarms and quieting incoming phone call alerts, with more planned features to come, according to Google. It’s based on Soli, a radar-based fine motion detection technology that Google first revealed at its I/O annual developer conference in 2016. Soli can detect very fine movements, including fingers pinched together to mimic a watch-winding motion, and it got approval from the FCC in January, hinting it would finally be arriving in production devices this year.

Pixel 4 is the first shipping device to include Soli, and Google says it’ll be available in “select Pixel countries” at launch (probably due to similar approvals requirements wherever it rolls out to consumers).

Google also teased “Face unlock,” something it has supported in Android previously — but Google is doing it very differently with the Pixel 4 than it has been handled on Android in the past. Once again, Soli is part of its implementation, turning on the face unlock sensors in the device as it detects your hand reaching to pick up the device. Google says this should mean that the phone will be unlocked by the time you’re ready to use it, as it does this all on the fly, and works from pretty much any authentication.

Face unlock will be supported for authorizing payments and logging into Android apps, as well, and all of the facial recognition processing done for face unlock will occur on the device — a privacy-oriented feature that’s similar to how Apple handles its own Face ID. In fact, Google also will be storing all the facial recognition data securely in its own dedicated on-device Titan M security chip, another move similar to Apple’s own approach.

Google made the Pixel 4 official and tweeted photos (or maybe photorealistic renders) of the new smartphone back in June, bucking the trend of keeping things unconfirmed until an official reveal closer to release. Based on this update, it seems likely we can expect to learn more about the new smartphone ahead of its availability, which is probably going to happen sometime around October, based on past behavior.

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Google’s Pixel 4 smartphone will have motion control and face unlock

Google’s Pixel 4 is coming out later this year, and it’s getting the long reveal treatment thanks to a decision this year from Google to go ahead and spill some of the beans early, rather than saving everything for one big final unveiling closer to availability. A new video posted by Google today about the forthcoming Pixel 4 (which likely won’t actually be available until fall) shows off some features new to this generation: Motion control and face unlock.

The new “Motion Sense” feature in the Pixel 4 will detect waves of your hand and translate them into software control, including skipping songs, snoozing alarms and quieting incoming phone call alerts, with more planned features to come, according to Google. It’s based on Soli, a radar-based fine motion detection technology that Google first revealed at its I/O annual developer conference in 2016. Soli can detect very fine movements, including fingers pinched together to mimic a watch-winding motion, and it got approval from the FCC in January, hinting it would finally be arriving in production devices this year.

Pixel 4 is the first shipping device to include Soli, and Google says it’ll be available in “select Pixel countries” at launch (probably due to similar approvals requirements wherever it rolls out to consumers).

Google also teased “Face unlock,” something it has supported in Android previously – but Google is doing it very differently than it has been handled on Android in the past with the Pixel 4. Once again, Soli is part of its implementation, turning on the face unlock sensors in the device as it detects your hand reaching to pick up the device. Google says this should mean that the phone will be unlocked by the time you’re ready to use it, since it does this all on the fly, and works from pretty much any authentication.

Face unlock will be supported for authorizing payments and logging into Android apps, as well, and all of the facial recognition processing done for face unlock will occur on the device – a privacy-oriented feature that’s similar to how Apple handles its own Face ID. In fact, Google will also be storing all the facial recognition data securely in its own dedicated on-device Titan M security chip, another move similar to Apple’s own approach.

Google made the Pixel 4 official and tweeted photos (or maybe photorealistic renders) of the new smartphone back in June, bucking the trend of keeping things unconfirmed until an official reveal closer to release. Based on this update, it seems likely we can expect to learn more about the new smartphone ahead of its availability, which is probably going to happen sometime around October based on past behavior.

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Report claims all three new iPhones planned for 2020 will support 5G

Apple analyst Ming-Chi Kuo — sometimes described as “the most accurate Apple analyst in the world” — has written a new note to investors saying that the three iPhones expected to launch in 2020 will feature support for 5G. In previous Kuo reports, it’s said the 2020 iPhones could be available in new sizes: a 5.4 and 6.7-inch high-end iPhones with OLED displays, along with a 6.1-inch model with an OLED display.

Previously, he predicted that only two of the three new iPhones slated for 2020 would support 5G. But with well-spec’d Androids flooding the market, he says it looks like Apple will offer 5G in all models in order to better compete. He’s also confirmed the view that Apple will be able to throw more resources into developing the 5G iPhone now that it has acquired Intel’s smartphone modem chip business.

The report, leaked to MacRumors, contains this quote:

We now believe that all three new 2H20 iPhone models will support 5G for the following reasons. (1) Apple has more resource for developing the 5G iPhone after the acquisition of Intel baseband business. (2) We expect that the prices of 5G Android smartphones will decline to $249-349 USD in 2H20. We believe that 5G Android smartphones, which will be sold at $249-349 USD, will only support Sub-6GHz. But the key is that consumers will think that 5G is the necessary function in 2H20. Therefore, iPhone models which will be sold at higher prices have to support 5G for winning more subsidies from mobile operators and consumers’ purchase intention. (3) Boosting 5G developments could benefit Apple’s AR ecosystem.

The report expects all three 2020 iPhone models to support both mmWave and Sub-6GHz spectrum (two different kinds of 5G) for the US market. Whether Apple will launch a 5G iPhone that only supports Sub-6GHz, allowing for a lower price and thus making it suitable for the Chinese market, remains unclear.

mmWave is the ‘fastest 5G’ that’s most often referred to, but as it is suited to denser, urban areas, it will not be used as much in rural or suburban areas, where mid-bands and low-bands, called sub-6GHz 5G, will be employed. All are banks are faster than 4G, with mmWave the fastest.

Apple will use modem chips from Qualcomm in its 2020 5G iPhones, while it works on its own modem chips, due in 2021.

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Report claims all three new iPhones planned for 2020 will support 5G

Apple analyst Ming-Chi Kuo — sometimes described as “the most accurate Apple analyst in the world” — has written a new note to investors saying that the three iPhones expected to launch in 2020 will feature support for 5G. In previous Kuo reports, it’s said the 2020 iPhones could be available in new sizes: a 5.4 and 6.7-inch high-end iPhones with OLED displays, along with a 6.1-inch model with an OLED display.

Previously, he predicted that only two of the three new iPhones slated for 2020 would support 5G. But with well-spec’d Androids flooding the market, he says it looks like Apple will offer 5G in all models in order to better compete. He’s also confirmed the view that Apple will be able to throw more resources into developing the 5G iPhone now that it has acquired Intel’s smartphone modem chip business.

The report, leaked to MacRumors, contains this quote:

We now believe that all three new 2H20 iPhone models will support 5G for the following reasons. (1) Apple has more resource for developing the 5G iPhone after the acquisition of Intel baseband business. (2) We expect that the prices of 5G Android smartphones will decline to $249-349 USD in 2H20. We believe that 5G Android smartphones, which will be sold at $249-349 USD, will only support Sub-6GHz. But the key is that consumers will think that 5G is the necessary function in 2H20. Therefore, iPhone models which will be sold at higher prices have to support 5G for winning more subsidies from mobile operators and consumers’ purchase intention. (3) Boosting 5G developments could benefit Apple’s AR ecosystem.

The report expects all three 2020 iPhone models to support both mmWave and Sub-6GHz spectrum (two different kinds of 5G) for the US market. Whether Apple will launch a 5G iPhone that only supports Sub-6GHz, allowing for a lower price and thus making it suitable for the Chinese market, remains unclear.

mmWave is the ‘fastest 5G’ that’s most often referred to, but as it is suited to denser, urban areas, it will not be used as much in rural or suburban areas, where mid-bands and low-bands, called sub-6GHz 5G, will be employed. All are banks are faster than 4G, with mmWave the fastest.

Apple will use modem chips from Qualcomm in its 2020 5G iPhones, while it works on its own modem chips, due in 2021.

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