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:
- Snap Stock Closes 6% Up After Pompeo's TikTok Threat
- Could the U.S. Ban China-Based TikTok?
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Snap Stock Closes 6% Up After Pompeo's TikTok Threat
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0MDk4NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODg3NTk5OX0.G1PsKdW-h4gVGZ0k_12ltp3eCO1VkH6IfRP6hPSzc6s/image.jpg?width=980" id="e9a13" class="rm-shortcode" data-rm-shortcode-id="5a81610e6918d3d6fd705458d371f4c4" data-rm-shortcode-name="rebelmouse-image" />silver iPhone 6 on top of yellow wooden surfacePhoto by Thought Catalog on Unsplash<p>Snap stock closed nearly 6% up on Tuesday after Secretary of State Mike Pompeo said the U.S. government is "looking at" a ban on Chinese social media apps, including TikTok, because of security concerns.</p><p>Snap didn't respond to a request for comment. TikTok said in a statement that it's a company that's led by an American CEO, with hundreds of employees and "key leaders" in safety, security, product and public policy in the U.S.<br></p><p>"We have no higher priority than promoting a safe and secure app experience for our users," the statement said. "We have never provided user data to the Chinese government, nor would we do so if asked."</p>Could the U.S. Ban Chinese-Owned TikTok?
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0MDg3Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODA0ODc0OH0.jiz5wtUGbDqa6Nqtj3gKbMLjYkzqIGqiBnGf2fv7PUE/img.jpg?width=980" id="d1531" class="rm-shortcode" data-rm-shortcode-id="e0516651b157cf7c6c38cc2df952823f" data-rm-shortcode-name="rebelmouse-image" /><p>The Trump Administration is "looking at" banning TikTok, the popular social media app owned by Chinese internet giant ByteDance, over concerns that information is being shared with Beijing.</p><p>Secretary of State Mike Pompeo told<a href="https://www.foxnews.com/media/mike-pompeo-tik-tok-china-communist-social-media-spying-fox-ingraham" target="_blank"> Fox News</a> Monday that the United States is considering whether to restrict TikTok and other social media apps after India banned its use. <br></p><p>"We are taking this very seriously and we are certainly looking at it," Pompeo said. "With respect to Chinese apps on people's cell phones, I can assure you the United States will get this one right too...I don't want to get out in front of the president, but it's something we're looking at."</p><p>Pompeo warned American users that downloading the app would leave their private information "in the hands of the Chinese communist party."</p><p><span></span>Culver City-based TikTok, has around 30 million active users in the U.S. and is owned by Beijing-based technology firm ByteDance Ltd. The social media app has received much scrutiny from the national security community. It's no longer allowed on Australian Defense Department devices following a similar ban by the Pentagon due to national security concerns surrounding China's potential access to data.<br></p><p>At the end of June, <a href="https://www.cnbc.com/2020/06/29/india-bans-tiktok-and-dozens-of-other-chinese-apps-over-security-concerns.html" target="_blank">India joined the ranks of those banning TikTok</a>, restricting it and other Chinese social media apps due to security concerns.</p><p>ByteDance has said that all U.S. user data is stored in the United States and Singapore, not on Chinese servers.</p><p>Meanwhile, the <a href="https://www.nytimes.com/2020/07/06/technology/tiktok-google-facebook-twitter-hong-kong.html" target="_blank">New York Times</a> reported, TikTok is withdrawing its app from Hong Kong stores and making it inoperable there after the government began using broad new security laws aimed at blocking opposition to the communist party in the former British colony.<br></p><p>Facebook, Twitter and Google stopped processing Hong Kong's request for user data, according to the report, a move that could hurt their ad revenue.</p><p>TikTok isn't available in mainland China and the company has said that executives outside China run operations.</p><p>___</p><p><em>Do you have a story that needs to be told? My DMs are open on Twitter </em><a href="https://twitter.com/latams" target="_blank"><em>@latams</em></a><em>. You can also email me at tami(at)dot.la, or ask for my Signal.</em></p>Related Articles Around the Web
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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:
- New Streaming Data Underline Quibi's Struggles
- John Legend Takes to Wave's Virtual Stage
- TIkTok Reportedly Rakes in $200M
- Snap Rolls Out Pride Lenses For U.S. Regions
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New Streaming Data Underline Quibi's Struggles
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGUVJwNjF1THhaY2wybHQxWjJ5SmNGSDd6QXQ5dmhsMS13VWxCUVU4SWNFOTVqWWxZY3NxZkJjOWhLVEk4T2RFbmUxaUZ4NFQ5Yzc4dWR5WTlXeW9MdW1LOFExNVdpQzQ1ZC1ZT0lUWDl0aUxILU8xUmx4clJ6M0tBUWdFVmJDM244TVh3MmprQyZobz1odHRwcyUzQSUyRiUyRmxoMy5nb29nbGV1c2VyY29udGVudC5jb20mcz0xODkmaD04NDUyMTY4Mjk0YTE5OGMwOTJkZjU3YmNhZmU5OGNjNjBjOGIxZWM0ODRlMDVlN2U4Y2Y2YTc5YzIwZDE3MTk5JnNpemU9OTgweCZjPTExNzU4Mjg2MTgiLCJleHBpcmVzX2F0IjoxNTk5MzgyMTg5fQ.a-Q2gq9m-vL_Iua4-8EQquKRzs9Akc6d5ULBzBYCjbM/img.jpg" id="202ee" class="rm-shortcode" data-rm-shortcode-id="ab3309389162b7f848f0f8304aeeb8c8" /> <p>Things started so rosily for Quibi, with a fat $1.75 billion fundraise, loads of content deals with A-listers, and a <a href="https://variety.com/2019/digital/news/quibi-sells-out-advertising-inventory-150-million-1203380540/" target="_blank">sold-out advertising slate</a>. But lately it's been nothing but bad news. </p><p>Recent reports have depicted all kinds of troubles: <a href="https://www.wsj.com/articles/quibi-jeffrey-katzenbergs-on-the-go-streaming-bet-adjusts-to-life-on-the-couch-11588266129" target="_blank">low demand</a>, <a href="https://deadline.com/2020/04/quibi-marketing-megan-imbres-leaves-launch-1202915748/" target="_blank">executive departures</a>, <a href="https://www.wsj.com/articles/advertisers-seek-to-revise-deal-terms-with-streamer-quibi-11590519825" target="_blank">unhappy advertisers</a>, an <a href="https://www.latimes.com/entertainment-arts/business/story/2020-05-04/elliott-management-funds-ekos-lawsuit-against-quibi" target="_blank">ongoing intellectual property lawsuit</a>, and a <a href="https://www.wsj.com/articles/quibi-katzenberg-whitman-streaming-startup-11592157291" target="_blank">potential rift between its two chiefs</a>, Jeffrey Katzenberg and Meg Whitman. All this on top of a global pandemic that has <a href="https://www.nytimes.com/2020/05/11/business/media/jeffrey-katzenberg-quibi-coronavirus.html" target="_blank">done no favors to the company's initial value proposition</a> of serving the "on-the-go" moments of consumers' lives.</p><p>Quibi is apparently trying to respond. Variety reported on Wednesday that the L.A.-based mobile-first, short-form video platform has been <a href="https://variety.com/2020/digital/news/quibi-streaming-roku-amazon-fire-tv-1234637152/" target="_blank">negotiating with Amazon and Roku</a> to accelerate its availability onto connected devices. Company executives have also <a href="https://www.wsj.com/articles/quibi-asks-senior-executives-to-take-10-pay-cut-11591206642" target="_blank">reportedly taken pay cuts</a>. </p><p>Data provided to dot.LA by <a href="https://www.justwatch.com/us/about" target="_blank">JustWatch, an analytics firm</a> with offices in L.A. and Berlin, show that in May, Quibi and its content library captured just 0.5% of the U.S. streaming audience's interest. Netflix led the way at 31%, followed by Amazon Prime Video at 18%, Hulu at 11%, and Disney+ at 8%. </p><p>Industry observers have frequently cited Quibi's lack of a hit show, combined with its nonexistent back catalog of familiar favorites, as a key reason why it has struggled since its April launch.</p><p>JustWatch's data suggest that <em>Reno 911!</em>, which debuted on Quibi in early May, was far and away the most popular show on the app last month. The firm estimates that the rebooted police satire was four times more popular than the runner-up, <em>The Stranger</em>, and 12 times more popular than Quibi's third-ranked title, <em>Most Dangerous Game</em>.</p><p>Quibi did not immediately respond to a request for comment. </p>John Legend Takes to Wave's Virtual Stage
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQwMDU4MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMzQxNzg2Nn0.EWmJ9avEF-GlUzE4JTaXXPCP_opTqqoefsDLj9HvRX8/image.jpg?width=980" id="f35ac" class="rm-shortcode" data-rm-shortcode-id="6319a8cc4e2b1540a0423135472fae0a" data-rm-shortcode-name="rebelmouse-image" /> <p><em></em>Wave, an entertainment technology company that turns performers into digital avatars and puts them on virtual stages where they can entertain and interact with fans, announced that John Legend will perform on the platform on Thursday, June 25th at 3:00pm PT.<br></p><p>Legend had previously been slated to participate in the L.A.-based entertainment firm's "One Wave" virtual concert series, but no date had been announced before Wednesday.</p><p>The performance, <a href="https://go.wave.watch/johnlegend" target="_blank">available via YouTube and Twitter</a>, will feature new songs from the EGOT winner's upcoming album, "Bigger Love." Leveraging the Wave platform's interactivity, attendees will be able to send "visual gifts" throughout the performance, with 100% of the proceeds going to Legend's FREEAMERICA criminal justice reform campaign.</p><p>Wave is partnering with PEOPLE for the Legend performance. Sponsors also include Yamaha and Valence, a "new social network addressing diversity by connecting Black talent with economic opportunity." The Ad Council will also be providing public service announcements and resources during the show for fighting racial injustice.</p><p>Fresh off <a href="https://dot.la/wave-virtual-concerts-2646166627.html" target="_blank">a $30 million Series B fundraise,</a> Wave has hosted over 50 events, for up to 400,000 people at a time.</p>TIkTok Reportedly Raked in $200M
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI4MTA2NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMTI4NDc0M30.F2EmQwLKpL0bqpvqRnKtfsESZGRp-fL7HNtQzPApv1I/img.jpg?width=980" id="f162f" class="rm-shortcode" data-rm-shortcode-id="c9e4b7ecdb23a3681081ff2365c5e5fa" data-rm-shortcode-name="rebelmouse-image" /><p><em>The Information</em> <a href="https://www.theinformation.com/articles/tiktoks-u-s-revenues-expected-to-hit-500-million-this-year" target="_blank">reported Wednesday</a> that TikTok earned between $200 million and $300 million in revenue worldwide in 2019. The news site also said the Culver City-based social media phenomenon's 2020 revenue goals are $500 million in the U.S. alone. These figures follow <a href="https://www.bloomberg.com/news/articles/2020-05-27/bytedance-is-said-to-hit-3-billion-in-profit-as-revenue-doubles?sref=QjdS4d5U" target="_blank">a separate report from</a> <em><a href="https://www.bloomberg.com/news/articles/2020-05-27/bytedance-is-said-to-hit-3-billion-in-profit-as-revenue-doubles?sref=QjdS4d5U">Bloomberg </a></em><a href="https://www.bloomberg.com/news/articles/2020-05-27/bytedance-is-said-to-hit-3-billion-in-profit-as-revenue-doubles?sref=QjdS4d5U">last month</a> that TikTok's parent company ByteDance raked in $17 billion in 2019, and pocketed over $3 billion in profit.<br></p><p>A TikTok company spokesperson would neither confirm nor deny the figures, saying "we don't publicly share company data or revenue metrics."</p><p>In response to <em>The Information's </em>report that TikTok is considering hiring an American executive to oversee its sales team, the spokesperson said, "We are always looking at new opportunities to scale and attract great talent for our teams."</p><p>TikTok, which is <a href="https://dot.la/kevin-mayer-leaves-disney-for-tiktok-chapek-regime-moves-on-2646028687.html" target="_blank">now under the leadership of former Disney streaming executive Kevin Mayer</a>, will be participating later this month in the <a href="https://www.iab.com/events/newfronts-2020/#index-1" target="_blank">NewFronts, the digital media world's jamboree of presentations to woo advertising buyers</a>, which will be virtual this year.</p>Snap Rolls Out Pride Lenses For U.S. Regions
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQwMDU4Ni9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MjI1MTkyM30.4r9f-Ek_dqXAquPqNEemT4LZu26rUe-0-EhYp0Nxkjc/image.png?width=980" id="9d768" class="rm-shortcode" data-rm-shortcode-id="3e2ed82098da7c317b825f37551a1847" data-rm-shortcode-name="rebelmouse-image" />Courtesy of Snap
<p>June is Pride Month, and instead of the annual in-person festivities, <a href="https://lapride.org/" target="_blank">L.A. Pride</a> has been celebrating its 50th anniversary with a series of virtual events. Now, Snap is adding augmented reality (AR) to the mix. The Santa Monica company released five new AR lenses on Wednesday in partnership with L.A.'s <a href="https://www.pridemedia.com/" target="_blank">Pride Media</a>. The "community of storytellers, innovators and influencers" reaches over 6 million monthly unique users, which Pride says surpasses any other LGBT media brand.</p><p>The new lenses, which is Snap-speak for the digital overlays that transform a camera image, "spotlight diverse, queer-identifying changemakers advancing equity for all people in every U.S. state," according to a company statement. The release is paired with the annual "<a href="https://www.advocate.com/champions-pride" target="_blank">Champions of Pride</a>" issue from <em>The Advocate</em>, a Pride Media subsidiary publication.</p><p>A Snap spokesperson describes the five new lenses as "art gallery-style spaces" that help Snap's young-leaning users learn about LGBTQ+ and BIPOC advocates. These include "Mighty" Rebekah, a 13-year-old who successfully lobbied for an LGBTQ-inclusive school curriculum in her home state of New Jersey, and Brandon Wolf, the first survivor of the 2016 Pulse nightclub shooting in Orlando to testify before Congress.</p><p>Snap tapped five designers from its official <a href="https://lensstudio.snapchat.com/creators/" target="_blank">lens creator cohort</a> to represent five U.S. regions. Each creator has regional ties and either identifies as LGBTQ+ or an ally, the company says.</p><p>Brielle Garcia, designer of the Pacific West lens, says, "I wanted to work on a Pride lens that was not just a celebration of the past, but a celebration of our future. I hope these Lenses can be an encouragement to everyone in the LGBT community. Encouragement that people as unique as you can have success in business, politics, art, or anything you can dream of. This message is important to me because this kind of success has not always been available to us. So many amazing people have come before us to pave the way and this is a celebration of their success and a guide to what you can achieve."</p><p>Joshua Keeney, repping the Northeast, says, "The takeaways that I want people to have with this Lens is that there is incredible diversity within the LGBTQ community, that everyone can be a champion in their own way, and can bring changes to their own communities."</p>From Your Site Articles
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The video clip shows NBA hall-of-famer Karl Malone, the bruising power forward for the Utah Jazz, barreling down the lane and crashing head-on into what awaits. But the highlight doesn't show "The Mailman" delivering one of his punishing slam dunks. Instead, Malone is driving a dune buggy, and the obstacle he's trampled along the dirt path is now roadkill.
Such is the kind of short-form video content that appears on More Sports, an app developed and produced by Beverly Hills-based AIB Sportsbrands — and currently exclusively targeting China.
<p>
As China's love for basketball has grown over the years, several NBA players have earned their own Mandarin monikers. Golden State Warriors sharpshooter Stephen Curry goes by
<em>Wa Wa Lian Sha Shou</em>: Babyfaced Assassin. 2019 NBA MVP Milwaukee Bucks forward Giannis Antetokounmpo, whose real name could stump a spelling bee champion, is called Alphabet Brother. And Demarcus Cousins, a big man in the twilight of his career, is <em>Kao Shen</em> – the transliteration of his last name, which also means "God of the Test." Some Chinese students have even been known to offer him a quick prayer before an exam.
</p><p>
"China is totally basketball crazy," summarizes Zak Dychtwald, author of "Young China" and consultant on all things related to the 400 million millennials in the biggest market on Earth.</p><iframe src="https://player.vimeo.com/video/427050462" width="100%" height="480" frameborder="0" scrolling="no" class="rm-shortcode" data-rm-shortcode-id="524f84d0c4acb5021c637b7469cc45d7"></iframe><p>And More Sports, which launched in 2019, believes it has a unique remedy for the Middle Kingdom's NBA infatuation.<br/></p><p>
The content on the app focuses on professional athletes' lives off the court. "It's what they do – how they train, their hobbies, what they cook. What they're like as real people," says Brooks Branch, AIB Sportsbrands' chief executive.
</p><p>
The roster of players who both star in the video content and are also equity partners with the company includes James Harden, and retired all-stars Steve Nash and Kevin Garnett.
<br/>
</p><p>
The Chinese market can be hard for players to access, Branch and his co-founder Fred Goldring note, and athletes have been enthusiastic about using the app as a way to build their brands in unfamiliar territory. Many also appreciate the opportunity to play an unfamiliar position as entrepreneurs.
</p><p>
Celebrity excitement for these kinds of extracurricular channels is "usually in proportion to the size of the check," Branch says. "(But) in this case, it's a little bit like when indie boutique studios were popping up – when Disney bought Miramax, and Warner bought New Line. We're almost like that, where the talent's excited to do what we're doing and loving the spirit of what we're doing."
</p><p>
"We're getting engagement from these partners in an entrepreneurial way, much deeper than traditional sponsorship," Goldring adds.
</p><p>
Following several years of complex and costly negotiations with the Chinese authorities, the company was able to design an acceptable corporate structure and obtain the necessary broadcast licenses before launching last year. Branch chalks up their ability to get situated in what can often be a tricky environment for foreigners to hard work, persistence, connections, luck and "guanxi" – a Chinese term that he says means "goodwill juju". In other words, it was about "getting the right people to endorse us and getting friends in the right places."
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<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM3NzMxOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0NTk2MjY0OH0.ItWb4NTV7cTEhZpWtknunwyx09O7WiAjIRZkKxHbbEA/image.png?width=980" id="c0e46" class="rm-shortcode" data-rm-shortcode-id="88d5696b9546a0f311dde78d56ac93f7" data-rm-shortcode-name="rebelmouse-image" />
</p><p>
The company says it has yet to make much money because most of the first year its app was in beta. But Branch tells dot.LA that things are off to a good start.
<br/>
</p><p>
"We'd hoped to have one million active users in the first year and we have 6-7 times that," he says.
</p><p>
As an indication of what's possible, Chinese firm iResearch forecasts that China's short-form video market revenues will grow to nearly $30 billion by 2021. For comparison, the entire global market for recorded music revenue in 2019 was about $20 billion.
</p><p>
Branch admits that the postponed NBA season has likely fueled demand for More Sports, as fans in and outside of China have been starved of content. But as the league prepares to resume its season with a truncated schedule starting July 31, Branch and Goldring think More Sports is poised for growth, and profitability. The app was designed, they note, to complement the on-the-court action, rather than substitute for it.
</p><h3>The Chinese Market </h3><p>
Dychtwald points to two trends that could make More Sports particularly well-suited for the Chinese market.
</p><p>
One is basketball's popularity. China's love for the NBA, Dychtwald says, has grown steadily since the 1992 U.S. Olympic dream team boosted the international cache of the league and its culture. Chinese national Yao Ming was the first overall pick in the 2002 NBA draft, and his subsequent success with the Houston Rockets brought China's enthusiasm to new heights. The 2008 Beijing Olympics — which Dychtwald says brought "Kobe Fever" to the mainland — sealed the deal. Today basketball is up there with soccer as "far and away" the most popular sports in China, at least among the youth.
</p><p>
The second factor is More Sports' focus on short-form video. TikTok raked in $17 billion of revenue in 2019, according to Bloomberg. It's a format that Chinese consumers understand well, Dychtwald says.
</p><p>
"TikTok was made for China, by China," he adds. "(Short-form video) is far more natural and native to China than here."
</p><p>
Dychtwald also notes a recent trend in China of successful "products around products" that offer an insider's view of what's going on behind the scenes of, say, scripted drama programs. The country's version of Dancing With The Stars, for example, has spawned a successful spin-off that follows the participants off the dance floor.
</p><h3>
Can More Sports Score More?</h3><p>
Branch, Goldring and More Sports head of talent Bill Sanders all have backgrounds that give the app an edge, they say. Goldring is an Emmy-winning executive producer and former entertainment lawyer whose clients included Beyoncé and Will Smith. Sanders is a sports agent who works with Yao Ming on his Napa-based wine company. And Branch has a long history in entertainment, branding and creative development, including running a division at Paramount Pictures and advising several other major studios.</p><p>
The team also highlights the deep market research they conducted as a reason for their initial success.
</p><p>
"What we did really well was not try to be anything other than what the fans wanted in China," Branch says.
</p><p>
They plan to take a similar, culturally tailored approach as they expand into other international markets. Launching in the U.S., they say, will come last.
</p><p>
Dychtwald wonders whether More Sports would benefit from pursuing a multi-platform strategy, providing content to the many short-form video platforms such as TikTok that already have a foothold in China. Goldring notes that the company has distribution partnership deals with Chinese digital incumbents including TikTok-parent company ByteDance's Douyin platform, WeChat and Tencent.</p><p>The company also touts another advantage: being based in Los Angeles, the world's center stage for where sports meets entertainment. It's no coincidence, they say, that the 1980s Los Angeles Lakers were known as "Showtime."
</p><p>This year's Lakers are among the 22 teams set to participate in the NBA's salvaged season. Fans in China, who've fallen increasingly in love with the purple and gold since catching Kobe Fever, will have plenty to watch, both on and off the court.
</p><p>---</p><p><em>Sam Blake primarily covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>
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