HBO Max hits 28.7M subscribers in Q3, but few are over-the-top

AT&T painted a rosy picture of HBO Max adoption during the company’s earnings report on Thursday. Despite not being available on Roku, one of the top streaming platforms in the U.S., AT&T said new HBO Max activations more than doubled from second-quarter levels, reaching 8.6 million in Q3.

In total, 28.7 million customers were eligible to stream their HBO Max subscription by the end of the quarter, the company said.

Of these, 25.1 million came from “wholesale” agreements — meaning a pay TV provider of some kind, like Comcast, Charter, Verizon [TechCrunch’s parent], or AT&T’s own DirecTV, for example. But only 3.625 million were direct “retail” subscribers.

Combined, both HBO and HBO Max topped 38 million subscribers in the U.S. and 57 million worldwide. The 38 million figure put the company ahead of its previously announced year-end target of 36 million, the report said.

However, AT&T’s numbers alone don’t paint a true picture of who’s really watching HBO Max content.

AT&T touts its quarterly “activations” without clarifying that only a small portion of customers are choosing to sign up for HBO Max directly by paying $15 per month for a subscription. A larger portion are simply becoming eligible to watch the streaming service through their existing HBO subscriptions — but many haven’t yet signed in and actually streamed.

In fact, some significant portion of these 8.6 million new “activations” may not yet even know that HBO Max exists — especially if the service is unavailable on their favorite streaming platform, like Roku. Or they may know it exists but can’t find it on Roku, so they think it just hasn’t launched.

Roku finally took this issue into its own hands, and is now working around the stalled negotiations by adding support for AirPlay 2 on its newer devices. This will give Apple customers a way to stream from apps that haven’t launched on the Roku platform itself.

Roku introduces a new Ultra player, a 2-in-1 ‘Streambar’ and a new OS with support for AirPlay 2

AT&T also said it’s continuing to invest in HBO Max, having poured around $600 million in the service during Q3, bringing its investment to $1.3 billion for the year so far. And it’s on track for an estimated investment of $2 billion by year-end.

The company also said consumer engagement on the new platform was doing well, up nearly 60% from HBO Now levels. But it offered few other metrics of success, other than saying its “library” titles have been “performing incredibly strong” with its customer base. In addition, only 1 or 2 pieces of leased content have made it into the HBO Max top 10, but AT&T admitted it could have launched with a stronger slate of original programs.

On the product side, AT&T said it would be pushing out software updates every 45 days to improve the user interface and usability of the app. And it’s still on track to launch an advertising-supported version of the service (AVOD) in 2021, as planned, and expand internationally.

“AVOD not only allows us to broaden the offering [and] the amount of content we put on the platform,” explained AT&T CEO John Stankey, “it allows us to hit a different price point and attract different segments of the market and as a result of that we think that will be an important market expansion capability for us,” he said.

 

 

 

 

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This former Tesla CIO just raised $150 million more to pull car dealers into the 21st century

“I have to choose my words carefully,” says Joe Castelino of Stevens Creek Volkswagen in San Jose, California, when asked about the management software on which most car dealerships rely for inventory information, marketing, customer relationships and more.

Castelino, the dealership’s service director, laughs as he says this. But the joke has been on car dealers, most of whom have largely relied on a few frustratingly antiquated vendors for their dealer management systems over the years — along with more sophisticated point solutions.

It’s the precise opportunity that former Tesla CIO Jay Vijayan concluded he was well-positioned to address while still in the employ of the electric vehicle giant.

As Vijayan tells it now, he knew nothing about cars until joining Tesla in 2011, following 12 years in product development at Oracle, then VMware. Yet he learned plenty over the subsequent four years. Specifically, he says he helped to build with Elon Musk a central analysis system inside Tesla, a kind of brain that could see all of the company’s internal systems, from what was happening in the supply chain, to its factory systems, to its retail platform.

Tesla had to build it itself, says Vijayan; after evaluating the existing software of third-company providers, the team “realized that none of them had anything close to what we needed to provide a frictionless modern consumer experience.”

Tesla is a chain of startups, Elon Musk explains

It was around that time that a lightbulb turned on. If Tesla could transform the experience for its own customers, maybe Vijayan could transform the buying and selling experience for the much bigger, broader automotive industry. Enter Tekion, a now four-year-old, San Carlos, California company that already employs 470 people locally and in Bangalore and just attracted $150 million in fresh funding led by the private equity investor Advent International.

With the Series C round — which also participation from Index Ventures, Airbus Ventures, FM Capital and Exor, the holding company of Fiat-Chrysler and Ferrari — the company has now raised $185 million altogether.

It’s also valued at north of $1 billion. (The automakers General Motors, BMW and the Nissan-Renault-Mitsubishi Alliance are also investors.)

Eric Wei, a managing director at Advent, says that over the last decade, his team had been eager to seize on what’s approaching a $10 billion market annually. Instead, they found themselves tracking incumbents Reynolds & Reynolds, CDKGlobal and Cox Automotive’s Dealertrack — and waiting for a better player to emerge.

Then Wei met Tekion through Jon McNeill, a former Tesla president and an advisory partner to Advent.

Says Wei of seeing how Tekion’s tech compared with its more established rivals: “It was like comparing a flip phone to an iPhone.”

Unsurprisingly, McNeill, who worked at Tesla with Vijayan, also sings the company’s praises, noting that Tekion even bought a dealership in Gilroy, Calif., to use as a kind of lab while it was building its technology from scratch.

It’s nice, such acclaim, but more important is that Tekion is also attracting the attention of dealers. Though Vijayan declines to share how many customers have bought its cloud software — which connects dealers with both manufacturers and car buyers and is powered by machine learning algorithms — he says it’s already being used across 28 states.

One of these dealerships is the national chain Serra Automotive, whose founder, Joseph Serra, is now an investor in Tekion.

Another is that Volkswagen dealership in San Jose, where Castelino — who doesn’t have a financial interest in Tekion — speaks enthusiastically about the time and expenses his team is saving because of Tekion’s platform.

For example, he says customers need only log-in now to flag a particular issue. After that, with the help of an RFID tag, Stevens Creek knows exactly when that customer pulls into the dealership and what kind of help they need, making their arrival far more seamless.

Tekion can also make recommendations based on a car’s history. It might, for instance, suggest a brake fluid flush to a customer without an advisor having to look through that customer’s history, Castelino says.

As crucially, he says, the dealership has been able to cut ties with a lot of other software vendors, while also making more productive use of its time. Says Castelino, “As soon as a [repair order] is live, it’s in a dispatcher’s hand and a technician can grab the car.” It’s like that with every step, he insists. “You’re saving 15 minutes again and again, and suddenly, you have three hours where your intake can be higher.”

With converts like Castelino, it’s easy to image Tekion making serious strides in market share. And yet it does have rivals, some of which have long contracts in place with their customers.

Even steeper competition, should it come, might eventually be from Tesla itself.

In a Tesla earnings call earlier today, Musk told analysts that there are essentially a dozen startups housed inside of Tesla, including one centered on vehicle service. It’s the very business that Vijayan helped to create.

As for whether Musk might spin out any of these, he said Tesla currently has no plans to do so. He suggested it has enough on its plate for the time being. If Tekion takes off, however, that could well change.

Longtime Tesla Motors CIO Jay Vijayan has formed a stealth startup

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4 quick bites and obituaries on Quibi (RIP 2020-2020)

In memory of the death of Quibi, here’s a quick sendoff from four of our writers who came together to discuss what we can learn from Quibi’s amazing, instantaneous, billions-of-dollars failure.

Lucas Matney looks at what the potential was for Quibi and how it missed the mark in media. Danny Crichton discusses why billions of dollars in VC funding isn’t enough in competitive markets like video. Anthony Ha discusses the crazy context of Quibi and our interview with the company earlier this year. And Brian Heater looks at why constraints are not benefits in new products.

Lucas Matney: A deadpool company before it was even launched

There will be dozens of post-mortems on Quibi, but the fact is there were dozens of post-mortems written about Quibi before it even launched. The whole idea was, to be kind, audacious, though it was also clear to most people that weren’t personal friends with founder Jeffrey Katzenberg that it was doomed from the start.

Quibi’s death is an important moment for streaming, largely because it’s a pretty strong rebuke of services trying to one-up the Netflix model by solely focusing on high-dollar original content. I think Quibi made several mistakes, but its most pertinent ones can be tied to a lack of flexibility in vision.

The startup insisted that all of its titles were mobile-only, high-production value and relying on Hollywood star power when they probably could have succeeded by keeping a closer eye on what kind of quick-bite content was succeeding elsewhere. Snap has seen success with Discover after years of attempts, and there is space for a dedicated player here, but Katzenberg tried to level-up by throwing checks at his friends and not doing the hard work of scouting out rising trendsetters in the creator world.

There are other lessons here that apply to other streaming new-comers like Apple. Namely that creating a hit TV show is hard and buying a hit TV series is easier if you already have the money. Quibi and Apple TV+ both launched with plenty of new series and no back libraries of beloved legacy content for users to spend time digging into. There’s just so much good stuff out there already. Apple has shifted strategy here, but Quibi boxed itself in and probably couldn’t afford to play here once its error was made clear.

Quibi showcases how the streaming wars’ upending of Hollywood has probably eclipsed reason at this point. Players like Apple don’t belong here, and there’s just too much money pouring into original content that loosely fits the Hollywood mold.

Here’s why Netflix shares are off after reporting earnings

Netflix stock is down 7% today after earnings yesterday showcased slowing growth. With HBO Max, Disney+, Peacock and Apple TV+ all launching in the last 12 months, the streaming market’s cup runneth over. And while I don’t think a Quibi death spells the end for innovation here, I think that the market is ready for some 2021 consolidation.

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Quibi is dead

Plagued with growth issues, Quibi, a short-form mobile-native video platform, is shutting down, according to multiple reports. The startup, co-founded by Jeffrey Katzenberg and Meg Whitman, had raised nearly $2 billion in its lifetime as a private company. Quibi did not respond to requests for comment from TechCrunch.

The company’s prolific fundraising efforts spanned prominent institutions in private equity, venture capital and Hollywood, all betting on Katzenberg’s ability to deliver another hit. The startup’s backers included Alibaba, Madrone Capital Partners, Goldman Sachs and JPMorgan, as well as Disney, Sony Pictures, Viacom, WarnerMedia and MGM, among others. The Information reports that Quibi will have $350 million left to return to shareholders.

Their pitch was highly produced bite-sized content, packed with Hollywood star power, and designed to be “mobile-first” entertainment. For the YouTubes and Snaps of the world, producing mainstream content on a shoestring budget, Quibi wanted to be an HBO for smartphones. Investors and pundits questioned the firm’s ability to monetize this vision, and it became clear soon after launch that the company had miscalculated.

4 quick bites and obituaries on Quibi (RIP 2020-2020)

Rumors that Quibi was shutting down began early this week. The Information wrote that Katzenberg has told people within the industry that the company might need to shut down, after unsuccessfully pitching itself as an acquisition to Apple, Facebook and Warner Media.

In its first few months, Quibi was downloaded 3.5 million times and had 1.5 million active users. While those figures aren’t too shabby, the company had to adjust its original projections, which put the service on a trajectory to reach 7 million users and $250 million in subscriber revenue in its first year. Admitting that the launch hadn’t gone as planned, Katzenberg blamed the coronavirus for the streaming app’s challenges.

The company expanded in Australia in August with a free ad-supported tier for users. It is unclear if the tweak in the business model brought Quibi success, or if the problems for the app had to do with the business model in the first place.

Netflix earnings from earlier this week suggest that the pandemic entertainment boom is slowing. The consumer video service disappointed on new paying customer numbers, and shares were down sharply yesterday after it released its earnings report. Those numbers also potentially showcase just how crowded the market for subscription video content has gotten in the past 12 months, with players like Apple, Disney, HBO and NBC each launching new services and collectively spending billions to acquire rights to past television hits.

Quibi founder Jeffrey Katzenberg blames coronavirus for the streaming app’s challenges

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‘A Charlie Brown Christmas’ is now an Apple TV+ exclusive

On first screening, the network assumed it had a disaster on its hands. It was a quiet cartoon — more of a meditation on seasonal depression than a proper holiday film. The pacing was slow, it was voiced by a cast of amateur children and the soundtrack amounted to little more than the jazz piano stylings of a mustachioed North Beach hipster nicknamed “Dr. Funk.”

Worst of all, “A Charlie Brown Christmas” actively railed against the commercialization of the season, primarily in the form of an extended monologue from the blanket-wielding Linus set in the context of Jesus’s nativity.

“[The executives said], ‘We’ll play it once and that will be all. Good try,’ ” producer Lee Mendelson told me in an interview back in 2006. “[Director Bill Melendez] and I thought we had ruined Charlie Brown forever when it was done. We kind of agreed with the network. One of the animators stood up in the back of the room — he had had a couple of drinks — and he said, ‘It’s going to run for a hundred years,’ and then fell down. We all thought he was crazy, but he was more right than we were.”

“A Charlie Brown Christmas” has, of course, endured. The 25-minute animated special has aired on network television every year since its 1965 debut. It ran on CBS until 2000 and then on ABC each year subsequently, including special broadcasts on its 40th and 50th anniversaries on 2005 and 2015, respectively. For its 55th anniversary, it won’t appear on network TV at all.

In October, Apple acquired the exclusive rights to the special, as part of its ongoing, billion-dollar Apple TV+ push. The deal with Wildbrain, Peanuts Worldwide and the now-late Mendelson’s production company makes Apple’s streaming platform the exclusive rights holder for Peanuts content. That means that subsequent specials “A Charlie Brown Thanksgiving” and “It’s the Great Pumpkin, Charlie Brown” will see a similar fate.

Following Disney+’s successful launch, AT&T positions HBO Max as family-friendly

It’s become a familiar story in the era of streaming. Last year HBO Max locked down exclusive access to new episodes of “Sesame Street,” though that specific deal allowed for episodes to air on PBS at a later date. There’s a bit of a loophole here, too. The Peanuts deal requires Apple to offer the specials for free for a limited window. The “Great Pumpkin” will be free through the service from October 30 until November 1, “Thanksgiving” will be made available from November 25 to the 27 and “Christmas” will come decidedly earlier this year, from December 11 to the 13.

“[Peanuts creator Charles Schulz] would say things like, ‘I never thought it would be around 25 years later,’ ” his widow Jean Schulz told me in an interview for that same piece. “One of the reasons that Christmas is so great is that back in 1965 there were no VCRs or DVDs, so you saw that show once, and you had to wait a whole year to see it again. And when it came on, it still held up. It was still charming.”

More than a half of a century later, the special still qualifies as both. It’s a perfect artifact of American popular culture that is very much both a product of its own era and a gentle protest against it. Of course, all of the things that Linus warned us about back in 1965 have only compounded in the intervening decades. The media landscape, too, has transformed several times since then.

In a world in which change is the only constant, watching “A Charlie Brown Christmas” on TV has been something to rely on. This year, the short becomes the latest bit of content to get shoveled up in the great streaming wars of 2020, as media companies fight tooth and nail for back catalogues.

Cast as the perennial cynic and antagonist football mover, Lucy Van Pelt tells the titular character, “Look, Charlie, let’s face it. We all know that Christmas is a big commercial racket.” That, at least, hasn’t changed.

Apple TV+ now live, with one year free for new iOS, Apple TV and Mac purchases

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The smart speaker market is expected grow 21% next year

New numbers from Canalys point to a strong growth in smart speaker shipments in Mainland China this year. The market is on track to grow 2020, having gotten the COVID-19 pandemic mostly under control in recent months. The rest of the world — much of which continues to struggle with the virus — is only expected to see a 3% growth this year.

The global market will return to greater growth, per the firm, with numbers hitting 163 million units in 2021, marking a 21% growth overall. In spite of a slow down in purchasing non-essentials, a prolonged shutdown in many areas should lead more consumers to consider the possibility of introducing new devices into their homes — or replacing older and outdated units.

Amazon Echo review: Well-rounded sound

The last couple of months have been fairly busy for such products. Amazon, Google and Apple have all announced refreshes or additions to their smart speaker line. Google recently refreshed its baseline Home devices with new hardware and a new name, as the Nest Audio. Various Echo devices were updated as well, and Apple has finally introduced the long-awaited — and significantly less expensive — HomePod mini.

Image Credits: Canalys

Canalys notes that Apple is the only one of the big three U.S. companies sell their own smart speakers in Mainland China, and the new price point could help the company build more of a footprint in the market.

“The US $99 price segment is pretty much a no-mans-land in China, yet adequate to appeal to Apple’s user-base,” analyst Cynthia Chen says in a release. “Apple should take this opportunity to drive the uptake of its music and other services consumed at home.”

Apple reveals the $99 HomePod Mini

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E-bike subscription service Dance closes $17.7M Series A, led by HV Holtzbrinck Ventures

Three months on since the former founders of SoundCloud launched their e-bike subscription service, Dance they are today announcing the close of a $17.7 million (€15 million) Series A funding round led by one of the larger European VCs, HV Holtzbrinck Ventures.

Founded by Eric Quidenus-Wahlforss (ex-Soundcloud), Alexander Ljung (ex-Soundcloud) and Christian Springub (ex-Jimdo), Dance has ambitions to offer its all-inclusive service subscription package into expanded markets across Europe and eventually the US. Dance is currently operating the invite-only pilot of its e-bike subscription in Berlin, with plans for a broader launch, expanded accessibility and availability and new cities next year. 

Rainer Märkle, general partner at HV Holtzbrinck Ventures said in a statement: “The mobility market is seeing a huge shift towards bikes, strongly fueled by the paradigm shift of vehicles going electric. Unfortunately, the majority of e-bikes on the market today have some combination of poor design, high upfront costs, and cumbersome maintenance. We analyzed the overall mobility market, evaluated all means of transport, and crunched the numbers on all types of business models for a few years before we found what we were looking for. Dance is by the far the most viable future of biking, bridging the gap between e-bike ownership and more ‘joyful’ accessibility to go places.”

E-bikes tend to be notoriously expensive to purchase and a hassle to repair. That said, startups like VanMoof and Cowboy have brought an Apple-esque business model to the market which is fast bringing the cost of full ownership down.

After lockdowns lead to an e-bike boom, VanMoof raises $40M Series B to expand globally

Electric-bike maker Cowboy raises $26 million

Most commuters are put off cycling the average 10 kilometers (6.2 miles) commute but e-bikes make this distance a breeze. Dance sits in that half-way house between owning an expensive bike and having to hunt down a rentable ebike or electric scooter close to your location.

Additionally, the COVID-19 pandemic has brought individual, socially distanced, transport into sharp relief. UK sales of e-bikes have boomed, seeing a 230% surge in demand over the summer. This has happened at the same time as EU governments have put in more than 2300km of bike lanes, with the UK alone pledging £250 million in investment.

Quidenus-Wahlforss said the startup has been “inundated with positive responses from around the world since we announced our invite-only pilot program.”

Dance’s subscription model includes a fully assembled e-bike delivered to a subscriber’s door within 24 hours. This comes with maintenance, theft replacement insurance, a dedicated smartphone app, concierge services, GPS location tracking and unlocking capabilities.

Review: Handsome and nippy, new VanMoof e-bikes could be the shape of cities to come

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