LA Tech Updates: Spotify Misses Revenue Mark, Snap Releases Diversity Report, TikTok Jabs Facebook

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'

    LA Tech Updates: TikTok Says it Will Pay Creators — and Universal Music Group

    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

    Snap's Accelerator Program Expands with 'Yellow Collabs'

    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 Earnings: The Music Streaming War Is Heating Up farm5.staticflickr.com

    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.

    Subscribe to our newsletter to catch every headline.

    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:

    • Fidelity Seeking to Unload Bird Shares at a Loss
    • Warner Bros.' 2021 Films Will Be Released in Theaters, HBO Max Simultaneously
    • Plug-In South LA Opens New Accelerator Cohort for 2021

      Fidelity Reportedly Seeks To Unload Bird Shares at a Loss 

      Escooter Unicorn Bird Seeks to Unload Santa Monica HQ upload.wikimedia.org

      Fidelity Investments is attempting to unload some of its shares in Bird Rides Inc. at a loss, according to a report published Wednesday night by Business Insider.

      The move comes after dot.LA reported in October that the mutual fund giant has marked down the value of its Bird investment by 17% since the beginning of the year.


      As a private company, Bird does not have to share its financials. Nor do the venture funds that hold most of its shares. However, Fidelity is required to account for shares at their fair market value so it provides a rare glimpse into the company's health.

      But a source close to the matter said the sale should not be seen as any indication of Bird's financial performance. The shares represent less than ten percent of Fidelity's position and the intended sale is the result of a new portfolio manager taking over who does not want to invest in pre-IPO companies, the source said.

      Neither Bird nor Fidelity would respond to dot.LA's request for comment.

      Bird became the fastest company in history to reach unicorn status in 2018 and achieved a $2 billion valuation less than a year later. But as the pandemic hit, it abruptly laid off 406 employees via a Zoom call and was forced to remove its fleet from city streets just as it was gearing up for its normally lucrative summer season.

      dot.LA reported in October the company put its Santa Monica offices up for sublease less than a year after completing a costly renovation.

      Bird has maintained the pandemic has been a positive as riders prefer scooters over crowded buses and subways. It says it is seeing riders take longer trips than they did before the pandemic.

      Last month, Bloomberg reported Bird is looking to go public via a blank-check company. Bird said it had no plans to go public "this year," which did not exactly rule out a SPAC sometime in the near future.

      ​Plug-In South LA Opens New Accelerator Cohort for 2021

      Plug In South LA's Accelerator Program is returning in 2021. The outfit is looking for 10 Black and Latinx founders who have proof of product-market fit and traction. The organization, founded in 2015 by Derek Smith, aims to build a network for Black and Latinx founders in South Los Angeles.

      Last year was the inaugural accelerator program funded by Verizon, Silicon Valley Bank and Nike. The 2019 cohort hosted five startups including Spooler, a tech-based clothing design startup that credits the program with helping to increase revenue two fold since March. During the program, the company received a contract to launch a Sesame Street active wear product line.

      The last day to apply for the program is Dec. 9

      Warner Bros.’ 2021 Films Will Be Released in Theaters, HBO Max Simultaneously

      Warner Bros. will be streaming all its 2021 theatrical releases on HBO Max in a blow to already struggling theater chains as the pandemic continues to reshape Hollywood.

      The AT&T-owned studio's 17-film slate, including "Godzilla vs. Kong," "Mortal Kombat," "The Suicide Squad" and "Matrix 4," will be available on the streaming platform exclusively for one month, starting when they are released in theaters and then will disappear from the platform.The move comes shortly after the company announced it would bring its expected blockbuster "Wonder Woman 1984" directly to HBO Max.


      "We're living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group," said Ann Sarnoff, chair and CEO of WarnerMedia Studios and Networks Group, in a statement released on Thursday. "No one wants films back on the big screen more than we do. We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021."

      Sarnoff said the model is a temporary one, but the decision will reverberate across an industry that has taken away screening exclusivity from theaters and reshaped how studios function.

      "With this unique one-year plan, we can support our partners in exhibition with a steady pipeline of world-class films, while also giving moviegoers who may not have access to theaters or aren't quite ready to go back to the movies the chance to see our amazing 2021 films," Sarnoff said. "We see it as a win-win for film lovers and exhibitors."

      AT&T's decision to favor its streaming service over theaters comes in response to the pandemic, but it also aligns with CEO John Stankey's public comments that he wants to center his company's strategy around streaming. It's part of a broader blueprint meant to goose AT&T's broadband business, which led the company to acquire Time Warner in 2018 for $85 billion. Comcast, AT&T's chief broadband rival, is pursuing a similar game plan with its own streaming service, Peacock, which falls under its subsidiary NBCUniversal.

      AT&T last month announced layoffs at WarnerMedia to focus the company around HBO Max. Elsewhere, Disney — which logged nearly 74 million paid subscribers to its Disney Plus streaming service last quarter — has refocused on that format. It's another example of a shift toward streaming that was already underway but which has been accelerated by the pandemic.

      CrowdStrike shares surged more than 13% Thursday after the Sunnyvale-based cybersecurity company once again reported blockbuster earnings. The stock is now up 184% this year, eclipsing the 38% gain for the rest of the Nasdaq.

      CrowdStrike's blistering performance is a big win for March Capital, the Santa Monica venture firm focusing on enterprise software founded by Jim Armstrong, Jamie Montgomery, Gregory Milken and Sumant Mandal in 2014.

      Read more Show less

      Warner Bros. will be streaming all its 2021 theatrical releases on HBO Max in a blow to already struggling theater chains as the pandemic continues to reshape Hollywood.

      The AT&T-owned studio's 17-film slate, including "Godzilla vs. Kong," "Mortal Kombat," "The Suicide Squad" and "Matrix 4," will be available on the streaming platform exclusively for one month, starting when they are released in theaters and then will disappear from the platform.The move comes shortly after the company announced it would bring its expected blockbuster "Wonder Woman 1984" directly to HBO Max.

      Read more Show less
      RELATEDEDITOR'S PICKS

      Trending