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The latest news about Los Angeles' tech and startup scene.
Netflix/BossFight

Netflix is doubling down on its push into gaming.

The streamer is launching its own gaming studio out of Helsinki. Previously, Netflix’s gaming strategy has been acquisition-based; it bought Next Games, Boss Fight Studios and Night School Studio within the last year. Former Zynga and Electronic Arts executive Marko Lastikka will lead the Finnish studio. Developing a new studio is a bold move for a company whose previous gaming endeavors have been labeled a failure.

Having only been in the gaming industry for the last year, it’s still early days for Netflix’s future in the space. Still, convincing users to switch from passively watching shows to actively playing games has proven to be a difficult task. Complicating matters even further is the fact that games are exclusively accessed through the Netflix mobile app, which makes users who stream in other ways unlikely to access them.

In the past, Netflix has primarily drawn from its own shows to draw interest in its games. Hit shows like “The Queen’s Gambit” and “Stranger Things” have gotten the mobile game treatment, and Netflix has even explored the first-person shooter style. With their previous slate of titles, users access games through Netflix’s mobile app. The streaming company is also trying to give its current offering a more social feel as it introduces user-specific handles. Users can now create public usernames to identify themselves within games and on leaderboards.

Earlier this year, Netflix Vice President of Games Mike Verdu said the company is committed to its gaming endeavors even as it faces economic struggles. The goal: 50 games by the end of the year. But Netflix’s attempt to turn games into a lifeboat hasn’t worked out so far. As of August, less than 1% of its subscriber base actually engaged with the feature, drawing in about 1.7 million daily active users.

The limited engagement comes as Netflix’s subscriber count continues to drop, with the streamer losing 970,000 in the second quarter. As subscription costs rise, at least 40% of Netflix’s subscribers intend to ditch the platform. Planning to integrate ads by the end of the year, Netflix is competing with Disney Plus for both advertising dollars and mobile game users. Disney doesn’t offer its games through its streaming service, but the company has used its IP for a number of mobile games—including an apparent push for a slew of “Star Wars” games. For what it’s worth, Disney’s own attempt at an in-house gaming studio has so far failed as well.

Other entertainment companies are also exploring gaming as a new source of revenue. Netflix views TikTok as one of its major competitors, as the streamer battles the video-sharing app for people’s attention. For its part, TikTok’s gaming efforts have been rocky, too. It recently partnered with Gamelancer to launch minigames on the platform. But earlier this month, TikTok’s parent company ByteDance fired hundreds of employees in its video game department despite the fact that ByteDance’s mobile gaming strategy brought in $1 billion last year.

Writ large, the mobile gaming industry has seen a nearly 3% decline this year. Per one analyst, "It's unclear whether this softness in gaming revenue growth is because the software is underperforming or the hardware isn't there, but we're definitely seeing some hollowing out of demand." All of which is to say, Netflix’s road to gaming supremacy is a complicated one, to say the least. — Kristin Snyder

EVs Usher in Era of TaaS: Transportation as a Service

“Transportation as a Service” (Taas) solutions offer a way for companies to cut carbon emissions from their operations without investing millions into new vehicles and charging infrastructure.

Listen Up: Body Complete RX's Samia Gore on Building a Fitness Empire

On this episode of the Behind Her Empire podcast, Body Complete Rx founder Samia Gore discusses how her personal journey with health and fitness became the catalyst for a booming business.

Nominate LA's Top Startups for Our 2022 Startup Awards!

Help us shine a light on the best startups and founders in Southern California - submit a nomination for the 2022 dot.LA Startup Awards! Winners in the six categories will be announced at our annual Summit on October 21st. Register for the Summit here. Browse the categories and nominate a startup or individual before entries close Friday, October 7th. Questions? Email awards@dot.LA.

What We’re Reading...

- YouTube is still trying to bite off TikTok's style, adding the popular voiceover narration as one of its new features on iOS.

- EV maker Faraday Future soldiers on despite all those death threats last week, securing $100 million in new financing.

- Chipotle invests more money in AI, applying deep-learning to adjust kitchen management systems in real-time.

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How Are We Doing? We're working to make the newsletter more informative, with deeper analysis and more news about L.A.'s tech and startup scene. Let us know what you think in our survey, or email us!

The gaming industry’s annual expo is headed back to the Los Angeles Convention Center for one more year.

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A logo for the video platform Triller.

It might be too late for Triller to apologize to Timbaland, but the Grammy-winning artist and his partner Swizz Beatz are finally getting their dues from the music app – sort of.

Timbaland and Swizz Beatz sued TikTok competitor Triller in August for a cool $28 million, alleging that Triller missed several payments it agreed to send while buying the hip-hop legends’ rap-battle platform Verzuz.

Los Angeles-based Triller is a video-based social media app that uses artificial intelligence to help users with average tech know-how make music videos. It’s similar to TikTok, but specific to music videos.

It recently bought Verzuz, Timbaland and Swizz Beats’ webcast series that launched in March 2020 and pits music legends against each other for concerts in the form of live-streamed “battles” to millions of fans worldwide.

This week, the two parties settled their beef out of court. Triller refused to disclose terms of this new settlement or how much it planned to pay for the live rap-battle platform. But that price tag could be upwards of $50 million.

Verzuz blew up in popularity during the pandemic, as it gave music fans a chance to see artists they had no other shot at witnessing perform because of lockdowns.

Swizz and Timbaland were quick to flex their industry connections and landed some artists for concerts on the platform that hadn’t treated the public to performances in awhile, including Erykah Badu v. Jill Scott, or Gladys Knight v. Patti LaBelle. In one extra-memorable event last summer, Verzuz got Snoop Dogg to face off against DMX in what would be one of X’s final performances before his death last April.

Triller definitely needs Verzuz–with its 6 million Instagram followers and 5 million live viewers of its most recent event.

Verzuz is naturally tapped into Black culture in a way that Triller’s been trying to organically replicate – almost every Verzuz battle trends on Twitter, and the hip-hop community gets excited about it, too; most shows feel less like an “8 Mile” rap battle and more of a chill reunion with unique performances often fueled by plenty of Diddy’s Ciroc.

Speaking of Ciroc, Triller was also paying for a potential advertising gold mine here. Verzuz is already making use of this, most events are sponsored (including a partnership with Apple Music) but as the platform grows it's likely to attract bigger bucks.

Triller also recently put to rest a case with TikTok; both parties dropped opposing patent lawsuits this week.

Triller had sued TikTok in 2020, claiming TikTok ripped off its feature that let users sync up multiple music videos to one track… and then TikTok hit back with a suit claiming Triller actually stole its digital music tech. Reuters reported Triller and ByteDance asked the cases to be dropped Sept. 26.

The settlement isn’t the first time Triller’s been accused of not paying up, though. It’s currently facing a hefty suit from Sony Music Group for alleged breach of contract and copyright infringement, where Sony argued “ Triller displays brazen contempt for the intellectual property rights of Sony Music, its artists, and others.”

Of course, Triller denies this, telling Variety last month, “we are focused on furthering the creator economy, and we will continue to seek a contract that achieves that goal.”

Still, creators active in the economy Triller seeks to “further” aren’t happy with the platform either. Universal Music Group yanked hundreds of top acts including Drake and Ariana Grande off Triller last February, claiming the app didn’t pay them and refused to renegotiate new contracts; though the two sides ultimately did come to a deal.

And for all its focus on wanting to monetize Black Culture online, Triller seems to be making a pattern of not paying its creators of color on time. Last month, The Washington Post’s Taylor Lorenz reported that Triller promised Black creators $4,000 per month as an incentive to create content for the app, but that some influencers weren’t paid and resorted to “skipping meals to make ends meet.”

“They told us that so much was going to happen for us. We were made to look like fools,” influencer David Warren told the Post at the time.

Despite all this drama, Triller is still trying to go public. It originally was targeting a reverse merger with an ad firm called SeaChange, but scrapped that plan in June, in favor of a direct listing. That seems to still be the goal; in a Sept. 23 statement Triller CEO Bobby Sarnevesht told TechCrunch, “we look forward to bring Triller, Verzuz and the Trillerverz to the public markets as one happy family.”

Kumbaya, I guess? We’ll have to, uh, check on it in the coming months.— Samson Amore

Inside GrayMatter Robotics' Plant Building AI Arms

Gardena-based GrayMatter is programming robotic arms with artificial intelligence software to automate industrial fishing and sanding.

Cohabiting Startups Need to Grow Up

The live-in collaborator model is facing an existential crisis as Launch House faces multiple accusations of allowing sexual misconduct. What's so hard about hiring HR?

Gavin Newsom Vetoes Bill to Regulate Crypto 

Governor Gavin Newsom vetoed the state's 'Bitlicense' bill, which passed by the state assembly in a 71-0 vote at the beginning of September. The bill would have allowed California to set requirements for crypto exchanges.

TikTok Looking at $29M Lawsuit For Child Privacy Breach

British regulators warned TikTok that it might be found liable for having not received parental permission to handle children’s information, illegally processing sensitive details and not making its data policies understandable to children.

Nominate LA's Top Startups for Our 2022 Startup Awards!

Help us shine a light on the best startups and founders in Southern California - submit a nomination for the 2022 dot.LA Startup Awards! Winners in the six categories will be announced at our annual Summit on October 21st. Register for the Summit here. Browse the categories and nominate a startup or individual before entries close Friday, October 7th. Questions? Email awards@dot.LA.

What We’re Reading...

- Copyright lawsuits abound as Netflix sues the creators of the 'Unofficial Bridgerton Musical' for trademark infringement.

- NASA delays its Artemis launch yet again as Florida braces for Hurricane Ian.

- Whale Safe uses AI to help ships detect marine mammal presence and track speeds to avoid collisions.

- CSU Domingo Hills launches a new institute to train computer science teachers.

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How Are We Doing? We're working to make the newsletter more informative, with deeper analysis and more news about L.A.'s tech and startup scene. Let us know what you think in our survey, or email us!

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