The UpStream (Page 97)

A few weeks ago, rumors began circulating that Apple wanted to purchase Tidal, the troubled music streaming service purchased by Jay Z. The company has had trouble since it began, and padded its numbers when Jay Z showed interest, in order to get a higher purchase price. Despite constant work, the service has not had any luck in turning around.

Those rumors made little sense to our team, and seemed to make little sense to the rest of the industry. Why would Apple be interested in purchasing another struggling streaming service when they already have one? Beats Music was a disaster before the minor rebrand that left us with Apple Music. That service has had more success under the new name, but that would have only worked once.

The only thing that Tidal has going for it is a small number of exclusives, but that is a trend that will not last long. Tidal may pay artists more, but they can only do that for as long as they have revenue. A former colleague of mine once said in regards to MetroPCS, though it applies here as well,

You can sell dollar bills for 90 cents and you will do well, but eventually you will run out of dollar bills.

That is the scenario that Tidal is in with artists, and one that the rumor would have transferred to Apple. Apple has played the loss-leader game before, but unlike Wal-Mart, Apple does not know how to make that work. They are far more comfortable selling dollar bills for $5 each and burying the extra money in a hole in the middle of nowhere.

This week, Apple confirmed what everyone already knew - they had no interest in Tidal. Jimmy Iovine said in an interview with BuzzFeed,

We're really running our own race. not looking to acquire any streaming services.

There's no arguing what the firmness of that statement. There is also no arguing that position - Apple does not need to acquire anyone to become competitive. They merely need to beat Google at their own game, by bundling the service with their devices.

Google and Europe do not have the best relationship most of the time. The EU has fought to breakup the company, as well as creating a special tax, or more accurately collection of taxes, aimed directly at them. Those taxes have created some problems within Europe already, with Google shutting down Google News in Spain.

The move that Spain made that pushed Google's hand was to charge Google for use of any content reproduced within Google News. The immediate response was a full service shutdown. Germany made a similar move, making Google pay 11 percent of revenue generated by content to the original authors. To this day, Germany's law has not generated any revenue for content producers because Google News does not generate any revenue.

Following in Spain's massive success, the EU is currently considering enacting the same ruling throughout Europe, with an added detail: it would affect all syndicated content. That means that if Google shows any snippet of content, they would be required to pay the content creator for the use of that content. Most, including Google, would argue fair use, though Spain and the EU disagree. They are not the first to disagree, either. IN 2011, Rupert Murdoch said,

There's a doctrine called fair use, which we believe to be challenged in the courts and would bar it altogether, but we'll take that slowly. The people who simply just pick up everything and run with it - steal our stories, we say they steal our stories - they just take them.

There is no telling if the EU will actually pass this regulation. If they do, it is even harder to guess what Google's response will be. In China, Google was willing to be censored completely rather than do it themselves, denying a government demand. Clearly this would not be the first time Google has shut down or ignored a government rule in the interest of an open and accurate internet, so it is likely that Google will fight with everything they have.

Since the launch of Pokémon GO, popularity has obviously waned. Many less informed writers have suggested that this is an indication that the game was already over. More informed writers, and anyone that has ever played a videogame at launch, will tell you that this is what happens with every game after release: its popularity is high when it is new and slows down as other titles premiere.

The same behavior is experienced with every product ever, from technology to t-shirts. The way to offset this, especially in the technology industry, is to refresh the product. Smartphones, tablets and computers do this regularly by releasing a new version of their models, adding new features to make them attractive once again. Software does this by adding new features as well, including in gaming.

This week, Niantic released an update to Pokémon GO, adding some new features that make parts of the game feel new again. The most significant and important addition is the buddy system. Now you can choose one of your Pokémon to follow you around at all times, generating rewards for their loyalty. Those rewards are important and in the form of candies, one of two resources used to train and enhance your Pokémon.

This upgrade is important for two reasons. First, it creates an environment in which you can now upgrade the more rare Pokémon, or ones that are rare in your area. This will become even more essential when the Legendary Pokémon are finally released in the future. Second, and possibly more important, it adds excitement back into the game in the form of adjusted grinding.

This kind of large development this early in the lifecycle of the game indicates to me that Niantic is dedicated to the game and its players. There may have been some missteps early on, but it appears that good things are on the horizon for dedicated players.

In March of this year, an FBI employee made a mistake while interacting with the iPhone of San Bernardino attacker Syed Farook Rizwan. It locked the device, requiring a long delay between PIN attempts to open the device in an attempt to retrieve important information. The FBI asked Apple to help them unlock the device, but the company refused. A case was scheduled to attempt to force the company to comply, but before it happened, the FBI dropped the case.

In April, FBI Director James Comey spoke at a conference in London at which he made a comment which suggested why they changed directions. Rather than waiting for Apple to refuse a court order, the FBI decided to employ a software firm to exploit a zero-day to unlock the device. The FBI allegedly paid $1.3 million for this exploit, which Comey described as "worth it." Avoiding the time and hassle of Apple for $1.3 million seems less than what it would have cost to fight.

This week, a new suit was filed relating to the situation, and it comes from a surprising place: The Associated Press, USA Today and Vice Media. This small coalition of media companies wants the details on the deal that led to the unlocking of the iPhone. All three companies have requested the information separately under the Freedom of Information Act, which primarily consists of contractual details, including finances. These requests have been denied.

The complaint states,

Information about the FBI's contracting arrangement would also ensure transparency about the expenditure of public funds. Understanding the amount that the FBI deemed appropriate to spend on the tool, as well as the identity and reputation of the vendor it did business with, is essential for the public to provide effective oversight of government functions and help guard against potential improprieties. Further, the public is entitled to know the nature of the vendors the Government finds it necessary to deal with in cases of access to private information, including whether or not the FBI feels compelled to contract with groups of hackers with suspect reputations, because it will inform the public debate over whether the current legislative apparatus is sufficient to meet the Government's need for such information.

Another interesting clash is getting started, between a side that says it is protecting government overreach and a side that will likely argue this type of information could make difficulties for future negotiations, as well as cause problems for the firm that provided the exploit information.

Early in the week, a video showed up in my Facebook feed from a couple of different sources. The video was from popular YouTube news commentator Philip DeFranco. In it, he talked about an issue he had recently discovered on YouTube: he received an email saying that a few of his videos had been removed from monetization because they were not advertiser-friendly. The first video he investigated had no inappropriate language, tags or content. The only thing that could have been in question was the actual topic of the video, which was the news.

As the week went on, other YouTube personalities began receiving similar emails with similarly vague explanations. Beauty and Lifestyle personality Melanie Murphy received one of these emails over a few videos, including one of her most successful: a video about acne. She said of her video,

There is no bad language in these videos, nothing inappropriate in the tags, so I'm left with the assumption that the fact that acne is visible in the thumbnails... is off-putting to potential advertisers. If that's the case, it's very upsetting.

If you watch any 30 minutes of television on any network, you will likely see several advertisements for health and beauty products, including acne treatments. Clearly that cannot be the problem here - how could advertisers be offended by such a highly marketable video? So, what is actually going on here?

Google has responded to the issue, which prompted the hashtag #YoutubeIsOverParty, saying that they have not changed any policies other than their notification policy. In the past, apparently, they were turning off monetization without even informing the channel owners. This did not sit well with many creators, with DeFranco saying,

So before you were just turning off ads and not emailing us?

It will be interesting to see what the results of some of these channels appeals look like. Will they get their ad revenue back, or will Google ignore their concerns, as it appears they have done initially? Will this actually be the beginning of the end for YouTube as the home for original content? Who can step in to fill that gap? My prediction is, this is the push Facebook needs to make their video delivery platform better, and find a way to share monetization with creators.

Last week it was revealed that Google Fiber might be scaling down, both in number of new cities and in staff size. It is not a surprising move for a brand that has never managed to gain marketshare even close to what they had predicted. This lack of customer acceptance would, naturally, have led to financial troubles for the brand.

While parent company Alphabet might be concerned about how to handle the news, AT&T seems to be enjoying what they are hearing. AT&T and other telecom companies have said for years that building out a market, especially into the far reaches of a market, is difficult and expensive. Consumers have complained that other countries have internet speeds above that in the US, and carriers have always responded by saying that smaller, denser countries are easier to roll out major upgrades.

AT&T VP of Federal Regulatory Joan Marsh, who oversees many of the stumbling blocks that make these build-outs so difficult and expensive, wrote a blog post in which she explains why Google has not succeeded the way they thought they would. In it, she talks about Google's misunderstanding of how pole access works, the intricacies of interacting with local governments and the challenges of getting permits block-to-block.

Google Fiber will no doubt continue its broadband experiments, while coming up with excuses for its shortcomings and learning curves. It will also no doubt continue to seek favoritism from government at every level. Just last week Google Fiber threatened the Nashville City Council that it would stop its fiber build if an ordinance Google Fiber drafted wasn't passed. Instead of playing by the same rules as everyone else building infrastructure, Google Fiber demands special treatment and indeed in some places is getting it, unfairly.

Google Fiber still complains it's too hard... and costs too much... and takes too long... even as it's reported that Google Fiber will now try to do all this with half its current workforce. Meanwhile, without excuses or finger-pointing, and without presenting ultimatums to cities in exchange for service, AT&T continues to deploy fiber and to connect our customers to broadband services in communities across the country. Welcome to the broadband network business, Google Fiber. We'll be watching your next move from our rear view mirror. Oh, and pardon our dust.

It will be interesting to see how Google Fiber decides to proceed. Will they rely on their Webpass acquisition to avoid poles and city ordinances? Will they finish the cities they are currently working on and abandon the project? Obviously, only time will tell, but I suspect, like Marsh, that they will continue their experiment with the same zeal and confusion with which they started. Marsh's view of that future looks like this,

Google Fiber discovers that wireless networks are expensive to build as well and learns that microwave broadband may work well in dense urban areas, particularly where supported by higher cost commercial services, but offers tougher economics when trying to serve residential customers.