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XLA Tech Updates: Spotify Misses Revenue Mark, Snap Releases Diversity Report, TikTok Jabs Facebook
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- Spotify has more listeners, but ad revenue drops
- 'We Must Do More': Snap Releases Dismal Diversity Report
- TikTok CEO Promises More Transparency, Jabs Facebook for 'Copycat Product'
TikTok CEO Promises More Transparency, Jabs Facebook for 'Copycat Product'
TikTok is promising more transparency.
The Culver City-based social media platform will release its algorithms and content moderation policies, CEO Kevin Mayer wrote in an open letter Wednesday. Owned by China's ByteDance, the company has been facing pressure as speculation grows that its content is being shared with Beijing.
"We accept this and embrace the challenge of giving peace of mind through greater transparency and accountability," Mayer wrote. "We believe it is essential to show users, advertisers, creators, and regulators that we are responsible and committed members of the American community that follows US laws."
Earlier this month, the Trump administration said it was "looking at" banning the app over those concerns. Then last week, the House prohibited U.S. federal employees from downloading the app on government-issued devices.
It's also notable that his letter was published the same day Facebook's Mark Zuckerberg as well as the CEOs of Twitter, Google and Apple testified before Congress on antitrust law. In the letter, Mayer takes a swipe at Zuckerberg for this upcoming Reels product.
What you need to know:
- Calling it the Transparency and Accountability Center, TikTok will let experts view the company's data practices and algorithms.
- Investors of parent company ByteDance are now valuing the app at $50 billion — surpassing the projected 2020 revenue by 50 times. Some are pushing for ownership over the platform.
- Mayer took jabs at the other tech giants in the letter:
- "This puts us a step ahead of the industry, and we encourage others to follow suit."
- "At TikTok we welcome competition. We think fair competition makes all of us better. To those who wish to launch competitive products, we say bring it on."
- Then he hit Facebook's forthcoming Reels feature, calling it a "copycat product."
'We Must Do More': Snap Releases Dismal Diversity Report
While much of the tech world was fixated on a blockbuster congressional hearing of four executives from top tech companies, Snap Inc. quietly released its first report on diversity since the company was founded in 2011 and the numbers were dismal.
Evan Spiegel, CEO of Snap, which has faced allegations of a racist and sexist workplace, as recently as last month told employees he wouldn't release the numbers publicly. The company has good reason to try to bury the news.
Blacks only represent 4.1% of Snap's U.S. workforce while Hispanic/Latinx makeup 6.8%, far below their numbers in the general population. At the top, 2.6% of leadership roles are held by Blacks while seven percent are held by Hispanic/Latinx. Women make up 32.9% of Snap's global workforce but only 16.1% of tech teams and just 6.7% of tech teams' leadership.
"To date, our DEI (Diversity, Equity & Inclusion) outcomes simply have not been good enough," the company said in the report. "We must do more." Snap has set a goal of doubling the number of women in tech roles by 2023 and doubling the number of underrepresented minorities at the company by 2025.
While its diversity numbers are low, Snap is not much worse than other tech giants, though most of those companies have released their numbers for years.
Last month, Snap was forced to remove a Juneteenth filter that prompted users to smile in order to break a series of chains, and that was not the first time the company was criticized for an offensive filter.
"We deeply apologize for the offensive Juneteenth Lens," the company said in a tweet.
Snap outlined a number of steps to improve its numbers, including changes to recruiting, setting representation goals for underrepresented groups, and instituting a $70,000 minimum living wage for employees working at its Santa Monica headquarters.
Spotify Has More Listeners, but Ad Revenue Drops
Spotify's second quarter earnings, released today, show listening and podcast streaming up even as revenue missed the mark with the pandemic hurting ad sales.
The Swedish music streaming service acknowledged slower business in April and May across emerging regions. Still, Spotify said its strength in North America offsets the setback, noting that it turned a corner in June.
"We believe the improved momentum we saw in the back half of the quarter has continued into Q3 and we expect to hit our full year targets," the company told shareholders.
What you need to know:
- Ad revenue, which makes up less than 10% of total revenue, is down 21% from last year, a nod to dropping sales brought on by the pandemic.
- The average revenue per Spotify Premium user (ARPU) is also down 9% as a fewer percentage of users pay the standard $9.99/month rate. More are opting in for family and student plans. Users in some countries also pay a lower price for subscriptions.
- 13 million new monthly active members brings Spotify's total to an all-time high of 299 million. Plus, 8 million new subscribers brings the total of ad-free premium customers to 138 million.
- Overall listening times have returned to pre-pandemic levels in all regions except Latin America.
- More users are listening on at-home smart speakers and smart TVs.
- In an effort to diversify Spotify content and move away from music, podcast options are expanding — including exclusive deals with big names like Joe Rogan, Kim Kardashian, DC Franchise, the Obamas and TikTok star Addison Rae.
- Since the start of 2019, overall podcast listening has doubled since. One fifth of monthly active members are tuning in.
- TikTok addresses 'tough but fair questions' about opportunities for ... ›
- PledgeLA Releases Report on Diversity in Los Angeles Tech - dot.LA ›
- TikTok's $2 Billion Creator Fund Goes After Instagram - dot.LA ›
- Microsoft Reportedly Looking to Buy TikTok ›
- Microsoft Reportedly Looking to Buy TikTok - dot.LA ›
- Snap Shares Soar on Upbeat Third Quarter Earnings - dot.LA ›
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
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Mother Blames TikTok For Daughter’s Death in ‘Blackout Challenge’ Suit
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
The mother of a 10-year-old girl who died after allegedly trying a dangerous online “challenge” has sued Culver City-based TikTok and its Chinese parent company ByteDance, claiming the social media app’s algorithm showed her videos of people choking themselves until they pass out.
Nylah Anderson, an intelligent child who already spoke three languages, was “excruciatingly asphyxiated” and found unconscious in her bedroom on Dec. 7, according to a complaint filed Thursday in federal court in Pennsylvania. She spent five days in pediatric intensive care until succumbing to her injuries.
The lawsuit, filed by her mother Tawainna Anderson, claims TikTok’s algorithm had previously shown Nylah videos depicting the “Blackout Challenge,” in which people hold their breath or choke themselves with household items to achieve a euphoric feeling. That encouraged her to try it herself, the lawsuit alleged.
“The TikTok Defendants’ algorithm determined that the deadly Blackout Challenge was well-tailored and likely to be of interest to 10-year-old Nylah Anderson, and she died as a result,” the suit said.
In a previous statement about Nylah’s death, a TikTok spokesperson noted the “disturbing” challenge predates TikTok, pointing to a 2008 warning from the Centers for Disease Control and Prevention about deadly choking games. The spokesperson claimed the challenge “has never been a TikTok trend.” The app currently doesn’t produce any search results for “Blackout Challenge” or a related hashtag.
“We remain vigilant in our commitment to user safety and would immediately remove related content if found,” the TikTok statement said. “Our deepest sympathies go out to the family for their tragic loss.”
At least four other children or teens have died after allegedly attempting the Blackout Challenge, according to the Anderson lawsuit. TikTok has grappled with dangerous challenges on its platform before, including one in which people tried to climb a stack of milk crates. That was considered so dangerous that TikTok banned the hashtag associated with it last year. In February, TikTok updated its content rules to combat the dangerous acts and other harmful content.
The Anderson lawsuit comes as lawmakers and state attorneys general scrutinize how TikTok and other social media can be bad for teens and younger users, including by damaging their mental health, causing negative feelings about their body image and making them addicted to the apps.
- Banning Snapchat Drug Sales Is 'Top Priority,' Snap Says - dot.LA ›
- TikTok Updates Content Rules and Guidelines - dot.LA ›
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Netflix Updated Its Culture Memo for the First Time in 5 Years to Address Censorship, Secrecy
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Netflix promised change after its poor first-quarter earnings. One of the first targets: the Netflix Culture document.
The changes, which Variety reported on Thursday, indicate a new focus on fiscal responsibility and concern about censorship. While promises to support honest feedback and open decision-making remain, the memo’s first update in almost five years reveals that the days of lax spending are over. The newly added “artistic expression” section emphasizes Netflix’s refusal to censor its work and implores employees to support the platform’s content.
The “artistic expression” section states that the company will not “censor specific artists or voices” and specifies that employees may have to work on content “they perceive to be harmful.” The memo points to ratings, content warnings and parental controls as ways for users to determine what is appropriate content.
Censorship has been a contentious issue within Netflix. Last year, employees walked out in protest after the company stood by comedian Dave Chappelle’s special, “The Closer,” which many said was transphobic. The streaming service has since announced four more specials from the comedian, who was attacked on stage at Netflix’s first comedy festival. The show will not air on the platform, as Netflix did not tape the event.
The reaction to Chappelle’s 2021 special ripples further in the updated memo. After firing an employee who leaked how much the company paid for the special, the new “ethical expectations” section directs employees to protect company information.
The memo also reflects pressure borught by poor first-quarter earnings. Employees are now instructed to “spend our members’ money wisely,” and Variety reported that earlier passages that indicated a lack of spending limits were cut. Variety also found that the updated memo removed promises that the company would not make employees take pay cuts in the face of Netflix’s own financial struggles.
These updates come as employee morale has reportedly dropped and editorial staffers at the Netflix website TuDum were laid off en masse. Those employees were offered two weeks of severance pay—and Netflix has now cut a section in the memo promising four months of full pay as severance.
As the company that literally wrote the book on corporate culture faces internal struggles, it's unlikely that making employees take on more responsibility while prioritizing corporate secrecy and discouraging content criticism will improve morale.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
‘Raises’: Mahmee Secures $9.2M, Wave Financial Launches $60M Fund
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
Venture Capital
Mahmee, an integrated care delivery platform for maternal and infant health that connects patients, health professionals, and healthcare organizations to increase access to prenatal and postpartum care, raised a $9.2 million Series A funding round led by Goldman Sachs.
FutureProof Technologies, a climate risk analytics platform, raised $6.5 million in capital led by AXIS Digital Ventures along with Innovation Endeavors and MS&AD Ventures.
Anja Health, a doctor-backed cord blood banking company, raised $4.5 million led by Alexis Ohanian's Seven Seven Six.
Funds
Wave Financial LLC, a digital asset investment management company, is launching a $60 million fund to deploy capital via cryptocurrency.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (decerrydonato@dot.la).
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.