Entertainment

Old media giants turn to VC for their next act

Posted by | 21st century fox, Activision Blizzard, Axel Springer, bertelsmann, Entertainment, epic games, Gaming, Hearst, Media, Naspers, Netflix, Sky, Tencent, Venture Capital, WndrCo | No Comments

The Web 1.0 and Web 2.0 eras weren’t kind to the world’s largest media conglomerates, throwing their business models into question, creating whole new categories of content consumption, and bringing online competition to subscription and ad pricing. Many of the media giants from the 1990s and early 2000s remain market leaders with multi-billion dollar valuations, however, and have become active investors in startups as a tactic to help themselves evolve.

Of the traditional media companies that have committed to corporate venturing, there are two distinct strategies: those whose investing seems to be about replacing the historic classifieds section of newspapers and diversifying into a range of consumer-facing marketplaces, and those whose investing is concentrated on capturing an early glimpse (and early equity stake) in startups reshaping media.

Replacing Classifieds, Investing in Marketplaces

Mathias Doepfner, CEO of Axel Springer. The company’s startup accelerator is one of the most active in Europe. (Photo by Michele Tantussi/Getty Images)

Given the first crisis newspaper groups faced from tech startups in the 1990s and early 2000s was the rise of online classifieds sites (like Craigslist) and transactional marketplaces (like eBay and Amazon), the disruption of their lucrative classified ads revenue stream drove their attention to e-commerce.

Aside from Hearst, the major US newspaper and magazine chains – like Gannett, News Corp, Meredith Corp / Time Inc, and Digital First Media – haven’t made many investments in startups. Perhaps the financial straits of most US newspaper companies have left little cash for VC investments that won’t pay off for years in the future.

But in Northern and Central Europe, where news readership and even print publishing remain healthy by comparison, the leading media groups have been aggressively investing in marketplace and e-commerce startups across the continent over the last decade.

Europe’s leading publisher, Axel Springer has made itself an established player in the European startup scene. Axel Springer’s Digital Ventures team has backed marketplaces from Caroobi (for cars) to Airbnb, and their Berlin-based accelerator (run in partnership with Plug & Play) has invested in over 100 young startups, like digital bank N26, boat rental marketplace Zizoo, and influencer-brand marketplace blogfoster. In a move more strategic to its business, the 15,000-employee group made a large investment in augmented reality unicorn Magic Leap this past February as well, forming a partnership to leverage its content IP in the process.

Meanwhile, Norway’s Schibsted, Sweden’s Bonnier, and Germany’s Hubert Burda Media (best know to many in tech for their annual DLD conference in Munich) and Holtzbrinck Publishing are each globally active, multi-billion dollar publishers who operate active early- or growth-stage VC portfolios composed mainly of e-commerce brands and marketplaces.

The most iconic corporate venture investment by a newspaper conglomerate (or any company for that matter) is without question the $32M check written into 3-year-old Chinese social web startup Tencent in 2001 by the South African publishing group Naspers (founded in 1915). Tencent, now valued around $400B, is Asia’s largest and most powerful digital media company and Naspers’ 31% stake was worth roughly $175B in March 2018 when it sold $10B in shares.

As a result, Naspers has transformed into a holding company that incubates, acquires, and invests in online marketplace businesses around the globe (though it still maintains a relatively small publishing unit).

The challenge for traditional media companies investing in startups beyond the realm of media is that even if wildly successful, those investments neither give them a distinct advantage in media itself nor make their business model like that of a tech company by way of osmosis. These investments can be flashy distractions to make management and shareholders call the company innovative while it fails to actually re-envision its core operations. Investing in Airbnb or BaubleBar doesn’t address the key challenges or opportunities a traditional publishing group faces.

Therefore the best case scenario in this strategy seems to be that these companies find enough financial success that they just transition out of the content game and become holding companies for other types of consumer-facing brands the way Naspers has. But even then the path seems uncertain: despite all its other activities, Naspers’ market cap is less than the value of its Tencent shares…it’s not clear that the best case scenario necessarily transforms the core organization.

Investing in the Next Generation of Media

Thomas Rabe, CEO of German media group Bertelsmann. Bertelsmann is unique in treating startup investments as a dedicated division of the conglomerate. (TOBIAS SCHWARZ/AFP/Getty Images)

The other track for “old media” giants has been to focus on venture capital as a means to uncover the future of the media business so the old guard can learn from the new generation of media entrepreneurs and react to market changes sooner than competitors. Intriguingly, it is consistent that the conglomerates who have taken this strategy are ones whose operations in television, radio, data, and telecom outweigh any involvement in newspapers.

Bertelsmann, Hearst, and 21st Century Fox have been the most aggressive corporate venture investors in startups working to shape the future of media, whether it be through streaming video services, crowdsourced storytelling platforms, or augmented reality.

With annual revenue over €17B, Bertelsmann is one of the largest media companies in the world, spanning television production and broadcasting (RTL Group), book publishing (Penguin Random House), newspapers, magazine publishing (Grüner + Jahr), and education. Unlike of media companies though, it treats venture investments in media startups as a key division of its company rather than as a side project.

The company’s core Bertelsmann Digital Media Investments (BDMI) invests across the US and Europe in companies like Audible, Mic, The Athletic, and Wondery (and in funds like Greycroft and SV Angel) but there are also the 3 regionally-focused funds investing in China, India, and Brazil plus the education-focused University Ventures fund it anchors in NYC. Collectively, Bertelsmann teams made 40 new startup investments in 2017 and generated €141M in venture returns, according to their 2017 Annual Report.

The investment arm of Hearst, one of America’s largest publishers with $10.8B in 2017 revenue, has likewise been a major backer of BuzzFeed, Pandora, Hootesuite, and Roku not to mention Chinese language app LingoChamp, live entertainment brand Drone Racing League, VR capture startup 8i, and dozens of other media-related startups. Hearst’s ownership in these ventures makes strategic sense: they provide market insights relevant to the core businesses, offer immediate partnership opportunities, and would be strategic acquisition targets that evolve the company’s position in a changing market.

21st Century Fox and Sky Plc (in which 21st Century Fox owns a 39% stake and is trying to acquire outright) have both made a whole slate of startup investments across the media sector in the last few years. In addition to its $100M investment in live-streaming platform Caffeine (announced on September 5) and similarly massive investment in WndrCo’s NewTV venture led by Meg Whitman, Fox has invested repeatedly in sports-centric OTT service fuboTV, hit newsletter brand TheSkimm, VR studio WITHIN, and fantasy sports app Draftkings with Sky often co-investing or building meaningful stakes in international startups like iflix (a leading streaming video service in Southeast Asia and the Middle East).

Since traditional media giants own extensive intellectual property of hit shows, films, and often exclusive rights to popular live events – not to mention established distribution channels to tens or hundreds of millions of people – there are immediate partnerships that can be signed to benefit both a startup and the incumbent. The incumbents often re-invest repeatedly to build their ownership and deepen the alignment between the companies, which rarely happens when media companies invest in marketplace startups.

Tencent’s always-be-evolving model

The new crop of digital media giants that includes Netflix, Snap, VICE, and BuzzFeed aren’t doing much if any strategic investing. Instead they’re keeping focused on growth of their core product offering. The notable exception is China’s Tencent.

In addition to dominating China’s booming messaging app sector with WeChat and QQ, owning 75% market share of music streaming in China, and being the world’s leading games publisher through its own studios (Riot Games, Supercell, etc.) and its minority stakes in Activision Blizzard, Epic Games, and others, Tencent has taken a strategy of investing often and early in promising digital media startups…and it has its tentacles in everything.

Based on Crunchbase data, Tencent has done over 300 investments in startups. It is likely the most active venture investor in China, where most of its portfolio is concentrated, but also backs Western media startups like SoundHound, Wattpad, Spotify, Smule, and Wonder Workshop.

Tencent can give distribution to these upstarts through its vast portfolio of digital properties and it can keep tabs on what new content formats or business models are gaining traction. It operates from a mindset of perpetually evolving, and trying to snatch up startups whose products could be key assets in the future of content creation, distribution, or monetization. This approach is one both old media giants and the next gen of unicorn media startups should consider.

The pace of innovation is moving so fast, and so many new doors are opening up – from subscription streaming and esports to voice interfaces and augmented reality – that corporate venture as a core strategy can unlock opportunities for the organization to evolve early, before it ends up being categorized as “old media”.

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GameFly to shutter streaming service this month

Posted by | closing, ea, Electronic Arts, Entertainment, gamefly, Gaming, streaming | No Comments

GameFly, the video game rental company, will be shutting down its streaming service at the end of the month, Variety reported earlier this week. This closure comes just over three years after the streaming service launched in 2015.

GameFly, the no-console streaming service for gamers, offered packages for $7 and $10 per month that gave users unlimited access to titles — as long as they had a smart TV like an Amazon Fire or Samsung Smart TV, in addition to a controller and access to the internet. Just as GameFly’s original snail-mail rental service for games mimicked Netflix’s from days of yore, many touted the streaming service as the Netflix of gaming.

Support for the service will be maintained through the end of August and accounts will not be charged for the service after that date, according to Variety. But people can still rent physical games (and movies) from the company for $9.50 per month (one rental at a time) or $13.50 per month (two rentals at a time.)

This news comes about three months after EA acquired the technology and team members from GameFly’s cloud gaming division — a division that helped make it possible to save your progress to the cloud while gaming on the streaming service. But the acquisition did not include GameFly’s streaming service.

“We acquired the team in Israel and the technology they’ve developed, we did not acquire the Gamefly streaming service,” an EA spokesperson told Variety. “We have not been involved in any decisions around the service.”

TechCrunch reached out to GameFly for comment but the company did not respond by the time of publication regarding the reasons behind this closure.

Meanwhile, the world of streaming games appears to be continuing on just fine. Sony’s PlayStation Now continues to add titles to its service, French startup Blade’s streaming service is expanding availability this week in the U.S. and EA itself announced at E3 this summer plans to start work on its own streaming service.

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Nintendo’s profit jumps 88% as it nears 20 million Switch sales

Posted by | Asia, computing, Earnings, Entertainment, Gaming, hardware, mario kart, nes classic edition, Nintendo, Nintendo Switch, super smash bros, Wii U | No Comments

Nintendo released its latest earnings report today and the headline is that the company has now sold nearly 20 million Switch consoles. The actual number is 19.67 million as of the end of June, so add July sales and the 20 million milestone is likely to have already been hit. Either way, it has easily surpassed its predecessor, the much-maligned Wii U.

Overall, the business recorded a 30.5 billion JPY ($275 million) operating profit, up 88 percent year-on-year, as revenue grew 9 percent to reach 168 billion JPY, or $1.5 billion.

The Japanese firm sold 1.88 million Switches in the most recent quarter, which is actually down from 1.97 million one year ago, although this quarter tends to be a slow one ahead of the holiday season. That slip was made up for on the software side as sales of Switch games jumped from 8.1 million last year to 17.96 million in the most recent quarter.

Nintendo has a bunch of new titles incoming — including Super Smash Bros. Ultimate and two Pokémon titles — while its Nintendo Switch Online service is due to launch in September so there’s plenty more to come. That said, Nintendo has some work to do if it is to hit its target of 20 million Switch sales during the current financial year.

Elsewhere, Nintendo said it sold 1.26 million of the NES Classic Edition when it was relaunched in June, while it sold 1.39 million Labo kits for the Switch.

The companies mobile gaming business continues to do well, grossing nine billion JPY, $81 million, in the quarter. That’s likely to spike when the company introduces Mario Kart Tour (huzzah!) and new title Dragalia Lost for mobile before March 2019. Although Nintendo suggested that the pipeline for new mobile games will slow once these two new arrivals are released.

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MoviePass borrowed $5M to end yesterday’s outage

Posted by | Entertainment, Media, Mobile, moviepass, Startups | No Comments

More bad news for subscription movie ticket service MoviePass, which acknowledged yesterday that there was an unidentified issue preventing people from using their MoviePass credit cards to get tickets.

A regulatory filing from parent company Helios & Matheson offers more insight about what happened. The filing (first spotted by Business Insider) announces a “demand note” of $6.2 million, including $5 million in cash that the company borrowed. It goes on to explain:

The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company’s merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. (“MoviePass”), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018.

In other words, it looks like MoviePass wasn’t able to pay one of its service providers, which led to the outage. In order to make those payments, it borrowed $5 million.

This doesn’t exactly inspire confidence in MoviePass’ finances. A Helios & Matheson filing from earlier this month suggested that the company was looking to raise up to $1.2 billion in equity and debt financing to fund MoviePass’ operations and growth.

Meanwhile, although the service is best-known for offering access to unlimited movie tickets for $9.95 per month, the specifics of the pricing model have been changing pretty frequently.

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Wilson is like Longreads for podcasts

Posted by | Apps, Entertainment, Media, Mobile, podcast, wilson | No Comments

Meet Wilson, a new iPhone app that plans to change the way you discover and listen to podcasts. The company describes the app as a podcast magazine. It has the same vibe as Longreads, the curated selection of longform articles.

With its minimalistic design and opinionated typography, Wilson looks like no other podcasting app. On an iPhone X, the black background looks perfectly black thanks to the OLED display. It feels like an intimate experience.

Every week, the team selects a handful of podcast episodes all tied together by the same topic. Those topics can be the Supreme Court, the LGBTQ community, loneliness, dads, the World Cup…

Each issue has a cover art and a short description. And the team also tells you why each specific podcast episode is interesting. In other words, Wilson isn’t just an audio experience. You can listen to episodes in the app or open them in Apple Podcasts.

Navigating in the app is all based on swipes. You can scroll through past editions by swiping left and right. You can open an edition by swiping up, and go back to the list by swiping down. This feels much more natural than putting buttons everywhere.

Wilson also feels like tuning in to the radio. Podcasts are great because they let you learn everything there’s to learn about any interest you can have. But it also narrows your interests in a way. Podcast apps are too focused on top lists and “you might also like” recommendations.

Gone are the days when you would switch on the radio and listen to a few people talk about something you didn’t know you cared about. Human editors can change that. That’s why Wilson can be a nice addition to your podcasting routine.

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And now, here’s a ‘Trumpy Cat’ augmented reality app from George Takei

Posted by | Apps, Entertainment, George Takei, House of Cats, Mobile, TC | No Comments

Anyone who follows George Takei on Twitter can tell you that Star Trek‘s original Sulu is not a fan of President Donald Trump. But he’s found a new way to express that criticism — not just in tweets, interviews and op-eds, but also in an augmented reality app called House of Cats.

The app was built in partnership with Montreal-based development company BMAD, and it allows users to interact with animated animal characters like Trumpy Cat, Meowlania, Vladdy Putin and Lil’ Rocket Pug. They can add their own voice recordings, superimpose the animals on real environments and take photos with them — Takei suggested including Trumpy Cat in photos of real-world protests.

When I asked where the idea came from, Takei had a simple explanation: “The Internet loves the combination of politics and cats.”

While the app looks pretty silly, Takei made the by-now-commonplace observation that satire is having a hard time keeping up with the daily news.

We spoke shortly after Trump had his press conference with Vladimir Putin — setting off this week’s cycle of criticism, denial and missing double negatives — and Takei told me, “No augmented reality could have created the true reality of what we saw this morning: Donald Trump standing shoulder-to-shoulder with Vladimir Putin … his denial of the attack on the core activity of our democratic system.”

Takei added that humor is a key ingredient in getting a serious message out into the world. He’s pointed to his embrace of memes (particularly Grumpy Cat) as one of the main drivers of his popularity on social media, which in turn gives him a bigger platform for his political views.

“I’m a political activist — I have been since I was a teenager, largely because of my childhood incarceration behind American barbed wire fences,” Takei said. He said his social media presence is meant to be an extension of that activism, but, “I notice that if I’m documenting the truth, people are nodding off. [So] I try to kind of inject a little humor into it.”

The app costs 99 cents, and there are plans for subscription content as well. It might seem strange to pay money for a satirical cat app, but keep in mind that some of the profits will go to Refugees International.

“Making a mockery of this particular person is going to be a very effective tool,” Takei said. “We’ll have fun while we also accomplish our mission to make this a better America.”

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Overwatch League strikes a milestone deal with Disney and ESPN

Posted by | abc, Activision Blizzard, disney xd, Entertainment, espn, esports, Gaming, Sports, TC | No Comments

If you’re sick of hearing about esports, you need to get over it. The space continues to grow, inching its way into the traditional media landscape. Today, in fact, Activision Blizzard announced that the Overwatch League playoffs will be aired on ESPN and Disney XD.

The Overwatch League in itself is a huge step for esports, as it’s the first true city-based league for a competitive video game. While most esports leagues consist of privately owned teams with little or nothing to do with geography, Overwatch League is a pro league made up of city-based teams such as the Dallas Fuel or the San Francisco Shock. Many of these teams are owned by big names in the traditional sports world, such as Robert Kraft (CEO and owner of New England Patriots, who owns the Boston Uprising) and Jeff Wilpon (COO of the New York Mets, who owns the New York Excelsior).

The agreement, which also includes a recap/highlights package from 2018 Grand Finals coverage on ABC on July 29, marks the first time that live competitive gaming has aired on ESPN in prime time, and will be the first broadcast of an esports championship on ABC. Activision Blizzard said in the announcement that this is just the start of a multi-year agreement.

That said, EA’s Madden NFL 18 did broadcast an esports tournament on ESPN2 and Disney XD earlier this year.

Overwatch League playoffs begin tonight at 8pm ET, and will culminate in the Grand Finals, taking place in the Barclays Center in Brooklyn, on July 27 and July 28.

Here’s what Justin Connolly, EVP of Affiliate Sales and Marketing at Disney and ESPN, had to say in a prepared statement:

The Overwatch League Grand Finals is by far our most comprehensive television distribution for an esports event over a single weekend: 10 total hours over four networks and three days. This overall collaboration with Disney/ABC, ESPN and Blizzard represents our continued commitment to esports, and we look forward to providing marquee Overwatch League coverage across our television platforms for fans.

The rise of Twitch stars, like Ninja, and the growth of the competitive gaming scene have paved the way not only for a new type of sports media, but for a growing new economy. While challenges remain around monetizing the content, the pieces of the puzzle are slowing coming together to create an audience large enough to incentivize advertisers to spend big money.

In fact, sponsorship revenue and ad spending revenue are expected to hit $655 million and $224 million, respectively, by 2020, according to Newzoo. That doesn’t sound like much when you think about the NFL, which raked in $1.3 billion in revenue in 2017 alone. But, like this deal proves, the esports space is growing and working its way into the mainstream, hoping to get the attention of young men between 18 and 34 who have become increasingly difficult to reach via traditional advertising.

Alongside the live TV broadcast of the Overwatch League playoffs on ESPN and Disney XD, the playoffs will also be live-streamed via Twitch, MLG.com and on the ESPN app and DisneyNOW.

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Apple could bundle TV, music and news in a single subscription

Posted by | Apple, apple music, apple news, apple tv, Apps, Entertainment, Mobile | No Comments

According to a report from The Information, Apple could choose to bundle all its media offerings into a single subscription. While Apple’s main media subscription product is currently Apple Music, it’s no secret that the company is investing in other areas.

In particular, Apple has bought the distribution rights of many TV shows. But nobody knows how Apple plans to sell those TV shows. For instance, you could imagine paying a monthly fee to access Apple’s content in the TV app on your iPhone, iPad and Apple TV.

In addition to that, Apple acquired Texture back in March. Texture lets you download and read dozens of magazines with a single subscription. The company has partnered with Condé Nast, Hearst, Meredith, News Corp., Rogers Communications and Time Inc. to access their catalog of magazines.

Texture is still available, but it’s clear that Apple has bigger plans. In addition to reformatting and redistributing web content in the Apple News app, the company could add paid content from magazines.

Instead of creating three different subscriptions (with potential discounts if you subscribe to multiple services), The Information believes that Apple is going to create a unified subscription. It’s going to work a bit like Amazon Prime, but without the package deliveries.

For a single monthly or annual fee, you’ll be able to access Apple Music, Apple TV’s premium content and Apple News’ premium content.

Even if you don’t consume everything in the subscription, users could see it as a good value, which could reduce attrition.

With good retention rates and such a wide appeal, it could help Apple’s bottom line now that iPhone unit sales are only growing by 0.5 percent year over year. It’s still unclear when Apple plans to launch its TV and news offerings.

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The Sonos Beam is the soundbar evolved

Posted by | Amazon, Android, apple music, Assistant, consumer electronics, Entertainment, film, Gadgets, Google, HDMI, home audio, loudspeaker, Pandora, Reviews, Sonos, sound systems, Speaker, Spotify, Surround Sound, tablet computer, TC, technology | No Comments

Sonos has always gone its own way. The speaker manufacturer dedicated itself to network-connected speakers before there were home networks and they sold a tablet-like remote control before there were tablets. Their surround sound systems install quickly and run seamlessly. You can buy a few speakers, tap a few buttons and have 5.1 sound in less time than it takes to pull a traditional home audio system out of its shipping box.

This latest model is an addition to the Sonos line and is sold alongside the Playbase — a lumpen soundbar designed to sit directly underneath TVs not attached to the wall — and the Playbar, a traditionally styled soundbar that preceded the Beam. Both products had all of the Sonos highlights — great sound, amazing interfaces and easy setup — but the Base had too much surface area for more elegant installations and the Bar was too long while still sporting an aesthetic that harkened back to 2008 Crutchfield catalogs.

The $399 Beam is Sonos’ answer to that, and it is more than just a pretty box. The speaker includes Alexa — and promises Google Assistant support — and it improves your TV sound immensely. Designed as an add-on to your current TV, it can stand alone or connect with the Sonos subwoofer and a few satellite surround speakers for a true surround sound experience. It truly shines alone, however, thanks to its small size and more than acceptable audio range.

To use the Beam you bring up an iOS or Android app to display your Spotify, Apple Music, Amazon and Pandora accounts (this is a small sampling; Sonos supports more). You select a song or playlist and start listening. Then, when you want to watch TV, the speaker automatically flips to TV mode — including speech enhancement features that actually work — when the TV is turned on. An included tuning system turns your phone into a scanner that improves the room audio automatically.

The range is limited by the Beam’s size and shape and there is very little natural bass coming out of this thing. However, in terms of range, the Beam is just fine. It can play an action movie with a bit of thump and then go on to play some light jazz or pop. I’ve had some surprisingly revelatory sessions with the Beam when listening to classic rock and more modern fare and it’s very usable as a home audio center.

The Beam is two feet long and three inches tall. It comes in black or white and is very unobtrusive in any home theater setup. Interestingly, the product supports HDMI-ARC aka HDMI Audio Return Channel. This standard, introduced in TVs made in the past five years, allows the TV to automatically output audio and manage volume controls via a single HDMI cable. What this means, however, is you’re going to have a bad time if you don’t have HDMI-ARC.

Sonos includes an adapter that can also accept optical audio output, but setup requires you to turn off your TV speakers and route all the sound to the optical out. This is a bit of a mess, and if you don’t have either of those outputs — HDMI-ARC or optical — then you’re probably in need of a new TV. That said, HDMI-ARC is a bit jarring for first timers, but Sonos is sure that enough TVs support it that they can use it instead of optical-only.

The Beam doesn’t compete directly with other “smart” speakers like the HomePod. It is very specifically a consumer electronics device, even though it supports AirPlay 2 and Alexa. Sonos makes speakers, and good ones at that, and that goal has always been front and center. While other speakers may offer a more fully featured sound in a much smaller package, the Beam offers both great TV audio and great music playback for less than any other higher end soundbar. Whole room audio does get expensive — about $1,200 for a Sub and two satellites — but you can simply add on pieces as you go. One thing, however, is clear: Sonos has always been the best wireless speaker for the money and the Beam is another win for the scrappy and innovative speaker company.

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Instagram launches IGTV app for creators, 1-hour video uploads

Posted by | Apps, Entertainment, instagram, Instagram IGTV, Mobile, Social, TC | No Comments

Instagram is ready to compete head-on with YouTube. Today at a flashy event in San Francisco, the company announced it will begin allowing users to upload videos up to one hour in length, up from the previous one-minute limit. And to house the new longer-form videos from content creators and the general public, Instagram is launching IGTV. Accessible from a button inside the Instagram homescreen, as well as a standalone app, IGTV will spotlight popular videos from Instagram celebrities.

The launch confirms TechCrunch’s scoops over the past month outlining the features and potential of IGTV that we said would arrive today, following the WSJ’s report that Instagram would offer videos up to an hour in length.

“It’s time for video to move forward, and evolve,” said Instagram CEO Kevin Systrom onstage at the event. “IGTV is for watching long-from videos from your favorite creators.” Just before he took the stage, Instagram’s business blog outed details of IGTV.

Kevin Systrom onstage at the IGTV launch

How IGTV Works

IGTV will let anyone be a creator, not just big-name celebrities. People will be able to upload vertical videos through Instagram’s app or the web. Everyone except smaller and new accounts will be able to upload hour-long videos immediately, with that option expanding to everyone eventually.

The IGTV app will be available globally on iOS and Android sometime today, as well as in the Instagram app through a TV shaped button above Stories. “We made it a dedicated app so you can tap on it and enjoy video without all the distraction,” Systrom explained.

In IGTV’s dedicated app or its in-Instagram experience, viewers will be able to swipe through a variety of longer-form videos, or swipe up to visit a Browse tab of personally recommended videos, popular videos, creators they’re following and the option to continue watching previously started videos. Users will also get callouts from the IGTV button alerting them to new content.

IGTV will also let creators develop Instagram Channels full of their different videos that people can subscribe to. Creators will be able to put links in the description of their videos to drive traffic elsewhere.

No Commercials In IGTV…Yet

“There’s no ads in IGTV today,” says Systrom, but he says it’s “obviously a very reasonable place [for ads] to end up.” He explained that since creators are investing a lot of time into IGTV videos, he wants to make that sustainable by offering them a way to monetize in the future. Instagram isn’t paying any creators directly for IGTV videos either, like Facebook did to jump-start its flopped Facebook Watch video hub.With 1 billion users on Instagram, IGTV could be popular with creators not only trying to earn money but grow their audience. Instagram is expected to build out a monetization option for IGTV creators, potentially including ad revenue shares. The big user base could also attract advertisers. eMarketer already expects Instagram to earn $5.48 billion in U.S. ad revenue in 2018. Facebook shareholders loved the sound of more premium ad inventory that businesses crave as they shift spend away from television. Facebook’s share price is up over 2.2 percent today to nearly $202.

Instagram has evolved far beyond the initial simplicity of just filtering and sharing photos. When it launched, mobile networks, screens and cameras weren’t ready for longer-form video, and neither were users. As more families cut the cord or teens ignore television altogether, though, Instagram has an opportunity to become the TV of mobile. YouTube may always have a wider breadth of content, but through curation of creators and publishers’ video content, Instagram could become the reliable place to watch something great on the small screen.

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