Silicon Valley’s Best Pandemic Ever

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The New York Times 23 July, 2021 - 04:00am 43 views

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As the world reeled, tech titans supplied the tools that made life and work possible. Now the companies are awash in money — and questions about what it means to win amid so much loss.

SAN FRANCISCO — In April 2020, with 2,000 Americans dying every day of Covid-19, Jeff Bezos, Amazon’s chief executive and the world’s richest man, announced he was focusing on people rather than profits. Amazon would spend about $4 billion in the next few months “providing for customers and protecting employees,” he said, wiping out the profit the retailer would have made without the virus.

It was a typically bold Amazon announcement, a shrewd public relations move to sacrifice financial gain at a moment of misery and fear. Mr. Bezos said this was “the hardest time we’ve ever faced” and suggested the new approach would extend indefinitely. “If you’re a shareowner in Amazon,” he advised, “you may want to take a seat.”

At the end of July 2020, Amazon announced quarterly results. Rather than earning zero, as Mr. Bezos had predicted, it notched an operating profit of $5.8 billion — a record for the company.

The months since have established new records. Amazon’s margins, which measure the profit on every dollar of sales, are the highest in the history of the company, which is based in Seattle.

After stepping aside as chief executive early this month, Mr. Bezos flew to suborbital space for 10 minutes this week. Upon returning, he expressed gratitude to those who had fulfilled this lifelong dream. “I want to thank every Amazon employee and every Amazon customer, ’cause you guys paid for all this,” he said.

Mr. Bezos, who was not available for comment for this article, was the only chief executive of a tech company to enter zero gravity in his own spaceship in the past year. But Amazon’s pandemic triumph was echoed all over the world of technology companies.

Even as 609,000 Americans have died and the Delta variant surges, as corporate bankruptcies hit a peak for the decade, as restaurants, airlines, gyms, conferences, museums, department stores, hotels, movie theaters and amusement parks shut down and as millions of workers found themselves unemployed, the tech industry flourished.

The combined stock market valuation of Apple, Alphabet, Nvidia, Tesla, Microsoft, Amazon and Facebook increased by about 70 percent to more than $10 trillion. That is roughly the size of the entire U.S. stock market in 2002. Apple alone has enough cash in its coffers to give $600 to every person in the United States. And in the next week, the big tech companies are expected to report earnings that will eclipse all previous windfalls.

Silicon Valley, still the world headquarters for tech start-ups, has never seen so much loot. More Valley companies went public in 2020 than in 2019, and they raised twice as much money when they did. Forbes calculates there are now 365 billionaires whose fortunes derive from tech, up from 241 before the virus.

Silicon Valley made the tools that allowed Americans, and the American economy, to survive the pandemic. People got their jigsaw puzzles, air purifiers and digital thermometers delivered by Amazon instead of picking them up two blocks or two miles away. The consumer economy swerved from local to national.

Tech is triumphant in a way that even its most evangelical leaders couldn’t have predicted. No single industry has ever had such power over American life, dominating how we communicate, shop, learn about the world and seek distraction and joy.

What will Silicon Valley do with this power? Who if anyone might restrain tech, and how much support will they have? Wealth and the ability to command and control tend to produce hubris more than modesty. As algorithms and artificial intelligence rearrange people into marketing groups, it’s uncertain — to put it politely — how aware the tech industry is of the potential for abuse, especially when it generates profits.

With the House Judiciary Committee’s recent vote to advance a series of bills that aim to reduce the power of the most dominant tech companies, and with President Biden appointing regulators who have sharp views of Big Tech, these issues are finally set for a wider debate.

It has been a tumultuous 18 months, and even the tech companies are having trouble absorbing what happened.

PayPal, the digital payments company, had 325 million active accounts before the pandemic. It reported 392 million in the first quarter. “The winds were blowing in our direction, but we had to set the sails,” said Dan Schulman, the chief executive.

The wind was so strong it blew tech into another universe of wealth and influence.

On March 13, 2020, Glenn Kelman, the chief executive of the online real estate broker Redfin, was biking to work when he got a call from Henry Ellenbogen, a longtime investor in Redfin who had started his own fund.

At Harvard, Mr. Ellenbogen majored in the history of technology. One big thing he learned, he has said, was that technology is developed well in advance of people’s ability and willingness to use it.

“Tell me something,” Mr. Ellenbogen asked Mr. Kelman, according to an account the chief executive posted on Redfin’s website. “When people start touring homes via an iPhone, won’t a lot of them decide, even after this whole pandemic ends, that this is just a better way to see houses? And if this whole process of buying and selling homes mostly goes virtual, how will other brokerages compete with you?”

Mr. Kelman, a little preoccupied by how Seattle’s normally bustling streets were eerily empty, said he didn’t know.

“I do,” Mr. Ellenbogen said. “The world is changing in your favor.”

This was not a general view then, and it certainly was not what Mr. Kelman was experiencing. The first confirmed coronavirus death in the United States was a nursing home resident in a Seattle suburb on Feb. 29. Within hours, home sellers decided that maybe they did not want strangers breathing in their living room and bedrooms. Buyers began to pull out as well.

For Redfin, that was the beginning of a crisis. Within a few days, it shut down its 78 offices around the country. Its stock plunged, losing two-thirds of its value.

“The magnitude of the decline was increasing every day,” Mr. Kelman said. He agreed to sell Mr. Ellenbogen more stock for $110 million, thinking Redfin might need cash to make it through a long drought. In early April, Mr. Kelman furloughed 41 percent of the company’s agents, who were salaried employees. More than 1,000 people were affected.

By that point, real estate was already turning around. Instead of killing demand for housing, the pandemic fueled it.

“The economy split in two on about April 7, 2020,” Mr. Kelman said. “One part of the economy suffered greatly, but another did just fine — the people who said, ‘If the world is going to end in the virus-filled streets of New York, I’m going to Connecticut or Vermont or Maine and I need a house there.’ What we thought was a headwind was a tailwind.”

The pandemic as a whole, it became clear, was a tailwind for tech in very basic ways.

When tens of millions of people were urged and sometimes ordered to stay put in their homes, naturally companies whose very existence involves facilitating virtual lives benefited. The rise of the teleconferencing company Zoom as both a verb and stock market winner was perhaps the easiest call of the year.

“Call it half luck — being in the right place at the right time — and half strategic tactics by companies recognizing this was going to be a once in a lifetime opportunity,” said Dan Ives, a managing director at Wedbush Securities. “What for most industries were hurricane-like headwinds was a pot of gold for tech.”

Even companies that might have seemed vulnerable to stay-at-home mandates did well. Airbnb is a company whose whole existence was about going to stay in strangers’ homes. The pandemic should have killed the buzz for its long-awaited public offering in December. But its stock price doubled on the first day of trading, giving the company a value of $100 billion.

Tech companies like Redfin that reacted defensively in March risked being left out of the recovery in April. The 2020 housing market, pushed by pandemic demand and negligible interest rates, turned out to be the best since 2006.

Those furloughed at Redfin were soon hired back. Mr. Ellenbogen’s deal proved extremely lucrative. But an estimated 10 million people are behind on the rent even as eviction moratoriums start to expire.

Mr. Kelman, more introspective than most tech executives, feels a little queasy.

“Tech used to be delivering these wonders to the world, and all of us in the industry felt the human uplift of general progress,” he said. “With the pandemic, fortunes have really diverged and at least some people in tech are really uncomfortable about that.”

The biggest, and perhaps the only, threat to tech now is from government.

Tech antitrust reformers say the government response to the pandemic, including the national eviction moratorium, repudiated decades of entrenched belief in a hands-off economic approach. Now, the activists say, they will have their moment.

“When the government moved in a robust way to keep everybody afloat, free-market ideologies died,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy organization that fights corporate control. “People now appreciate that the government can either make choices that centralize power and wealth or it can structure markets and industries in way that deliver benefits more broadly.”

There are signs of pushback against tech that would have been unimaginable a few years ago, beyond the House bills. Ohio sued Google, saying it should be regulated like a public utility. The Teamsters, one of the biggest labor unions, passed a resolution to supply “all resources necessary” to help organize workers at Amazon. Lina Khan, who made her reputation as a critic of Amazon, was appointed Federal Trade Commission chair. On Tuesday, the White House said it would nominate Jonathan Kanter, a tech critic, to be the Justice Department’s top antitrust official.

But there are signs of movement in the other direction, too. The F.T.C. and a coalition of state attorneys general saw their antitrust lawsuits against Facebook dismissed by a Washington judge last month. The F.T.C. can refile an improved suit by the end of this month.

Any measures restricting tech will ultimately need public sentiment behind them to succeed. Even some of tech’s biggest supporters see the potential for worry here.

“We went from being pirates to being the Navy,” Marc Andreessen, a central figure in Silicon Valley for a quarter-century, told the Substack writer Noah Smith in a recent interview. “People may love pirates when they’re young and small and scrappy, but nobody likes a Navy that acts like a pirate. And today’s technology industry can come across a lot like a Navy that acts like a pirate.”

Beyond the threat of misuse of tech lurks an even darker possibility: a misplaced confidence in the ability of one loosely regulated sector to run so much of the world.

Weeks before the pandemic, the RAND Corporation published a study on systemic risk and how a problem with one company can imperil others in its network. Systemic risk was a big issue in the 2008 financial collapse, when the government propped up some companies because their downfall might imperil the whole system. They were too big to fail.

The research group investigated whether tech companies had supplanted financial firms as a key node in the economy, and if the economy was growing too dependent on them. Amazon, whose AWS cloud division has millions of customers, was highlighted.

In December, RAND’s point was made when SolarWinds, which makes software that allows other companies to manage their networks, was revealed to have been infiltrated by Russian hackers. Since SolarWinds had so many clients, including Fortune 500 companies and federal agencies, the breach became one of the worst on record.

Tech’s dominance means the risks are more concentrated than ever. There were problems at the security firm Cloudflare in July 2020, at Amazon in November, at the cloud provider Fastly last month and at the content distribution network Akamai on Thursday, all of which took down other sites at least briefly.

That’s typical of systemic issues, said Jonathan Welburn, a lead author on the RAND study. “Before 2008, when house prices kept rising and rising, no one wanted to hear how they were being artificially propped up and why that could be a problem,” he said.

The pandemic gave tech companies the power and the cash to make aggressive bets on their individual destinies. Buying another company was one way to do this. Global deal values in tech soared 47.3 percent in 2020 from a year ago.

Zillow, a digital real estate company in Seattle, spent $500 million in February to buy ShowingTime, a scheduling platform for home showings. A few weeks later, Zillow said it would hire 2,000 people, increasing its work force by 40 percent.

But its biggest bet will take longer to play out. Before the pandemic, Zillow discouraged working from home, like most companies. Then last summer, it said 90 percent of its employees could work remotely forever if they chose.

At the time, Zillow was in the vanguard of a movement. Now the idea of the non-virtual office is re-exerting its pull with managers.

Amazon says its plan “is to return to an office-centric culture as our baseline.” Google asserted the same thing, although it backed off after workers rebelled. IBM says 80 percent of its employees will be in the office at least three days a week.

“When people are remote, I worry about what their career trajectory is going to be,” IBM’s chief executive, Arvind Krishna, told the BBC.

Zillow is something of an outlier. Even after a year of working from home, 59 percent of its employees told the company they planned to go into the office once a month or less.

This may be the pandemic’s ultimate tailwind: not just the future coming much faster to your company, but actively pushing your company faster into the future. It is a risk that might be easier to undertake if your market value has suddenly tripled the way Zillow’s did.

If Zillow is wrong about the future and employees are less bound to an office they visit only virtually, the company will stumble. If it is right, it will increase its workers’ loyalty and outdistance earthbound competitors.

“The pandemic forced change on all of us,” said Jeremy Wacksman, Zillow’s chief operating officer. “We didn’t wish for it but now we’re learning from it.”

More than a third of Zillow employees moved in the year that began in March 2020. Many moves were from one part of Seattle’s metro area to another, indicating a general reluctance not to get so far away from the office you could not drive there. But other employees dispersed to New Mexico, Mississippi and Alabama. Nine moved to Hawaii.

“They liked their job but wanted to go somewhere else. That used to be a problem. Now it’s not,” said Viet Shelton, a Zillow spokesman who, as it happens, just moved to Manhattan from Seattle because he always wanted to live in New York.

Now that employees no longer have to live where Zillow has an office, interest has swelled. More than 55,000 applied to work at Zillow in the first quarter, up 51 percent from the prepandemic level and about 10 applicants for every person employed there. Zillow has hired more recruiters to deal with the onslaught.

Over at Redfin, the stock is up 400 percent from its pandemic bottom. Redfin paid $608 million in February to acquire a publisher of rental listings, its biggest deal ever. But while the company seems so rich, so successful, so lucky from the outside, it feels different within. Managing growth is almost as hard as managing a downturn.

“Customers are clamoring for service and we can’t hire fast enough,” said Mr. Kelman. “Redfin never had a moment when it was absolutely and totally killing it, but I always imagined when we did that it would be more fun than this.”

Read full article at The New York Times

Warner Bros. Will Release 10 Original Movies Straight to HBO Max in 2022

/FILM 23 July, 2021 - 08:10am

Posted on Thursday, July 22nd, 2021 by Vanessa Armstrong

Warner Bros. is getting real serious with its streaming platform, HBO Max. In an AT&T earnings call today (AT&T owns WarnerMedia, which oversees Warner Bros.), Jason Kilar — the CEO of WarnerMedia — said that at least 10 original movies will exclusively premiere on HBO Max in 2022.

This rollout of 10 straight-to-streaming-platform films makes clear that WarnerMedia wants HBO Max to be the next Netflix.

In the year-and-a-half that has been the pandemic, the corporation caused an uproar in Hollywood by simultaneously releasing all 2021 WarnerMedia movies — including tentpole ones like Godzilla v. Kong, The Suicide Squad, and Dune — in theaters and on HBO Max. Hollywood widely criticized the decision, an unexpected one for many involved in these films. The industry’s biggest complaint was that the move would hurt the success of these movies.

I’ve been lucky enough to see The Suicide Squad and part of Dune in the theaters. I loved watching both, and the experience would have been markedly different if I watched them in my cramped living room with my dog snoring at my feet. The creative teams behind these large films crafted these movies for us to see on a big screen. Seeing them on your television is just a different experience, and one that Warner Bros. likely prefers you don’t have, and not only because they need your movie ticket dollars (though that’s certainly a very large part of it).

AT&T apparently took that feedback and responded by putting WarnerMedia up for sale. If all goes according to Corporate America’s plan, Discovery will buy WarnerMedia from AT&T next year.

While those merger machinations continue, WarnerMedia is going back to a more traditional release schedule in 2022. There is one big change, however: they lessened the window for theater-only distribution to 45 days. Given AT&T is selling WarnerMedia to Discovery, however, chances are this plan may change again when that merger is complete.

In the meantime, Kilar promised on the call (via Variety) that “motion pictures matter and will continue to matter.” That doesn’t mean that HBO Max doesn’t matter, however, and Kilar’s promise for HBO Max feature films hammers that home.

Another thing we don’t know yet is what kind of movies those HBO Max originals will be. If I had to guess (and this is only a guess), I bet they’ll be smaller stories, things that don’t depend as much on creating an immersive storytelling experience for two hours. We’ll find out either way soon enough, as 2022 is only five months away.

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Everything Coming To HBO Max And HBO In August

We Got This Covered 23 July, 2021 - 08:10am

HBO Max and HBO subscribers have got a lot of hot new content still to come this summer. The full list of what’s due up on the platforms in August has been released, and it promises a ton of classic titles and some unmissable originals, including the return of a major TV series and one of the biggest movies of the month on any platform.

August 1st delivers a load of great freshly licensed films – mostly on HBO, but a number on HBO Max too. Including Christopher Nolan’s Inception, Harrison Ford thriller The Fugitive and 90s comic book flick Spawn. There’s also horror spoof Scary Movie, actual horror Thirteen Ghosts and Tom Hanks/Meg Ryan romcom You’ve Got Mail.

Skipping ahead to August 5th and we have the movie event of the month for superhero fans as James Gunn’s The Suicide Squad finally arrives. As with previous HBO Max simultaneous releases, subscribers will be able to catch the DCEU film for 31 days after its theatrical debut. This standalone sequel sees Task Force X reunite for what promises to be an R-rated, no-holds-barred war movie. Margot Robbie, Idris Elba, John Cena and Viola Davis star.

The treats don’t stop there for DC lovers either, as August 12th brings the premiere of Titans season 3, the show’s first to drop exclusively on HBO Max. This time around, the young heroes relocate to Gotham City, which means we can expect the introductions of iconic Bat-family characters like Barbara Gordon, Tim Drake and Red Hood. Fans may also want to check out Lois & Clark: The New Adventures of Superman, which lands on the 3rd.

On August 20th, the second biggest movie of the month launches – high-concept sci-fi Reminiscence. The directorial debut of Westworld co-creator Lisa Joy, Hugh Jackman stars as a private investigator who can access people’s memories, but things get complicated when he falls for one of his clients (Rebecca Ferguson).

Here’s the full list of everything coming to HBO/Max in August.

Small Town News: KPVM Pahrump, Documentary Series Finale (HBO)

Sin Aliento (aka Breathless), 2020 (HBO)

Hard Knocks ’21: Dallas Cowboys, Sports-Based Reality Series Premiere (HBO)

The White Lotus, Limited Series Finale (HBO)

Godzilla vs. Kong, 2021 (HBO) (Available in 4K UHD, HDR10, Dolby Vision and Dolby Atmos in English Only on supported devices)

The Other Two, Max Original Season 2 Premiere

Don’t miss everything here on HBO and HBO Max next month.

Source: Decider

Warner Bros. Will Produce At Least 10 Films Exclusively for HBO Max in 2022

HYPEBEAST 23 July, 2021 - 02:47am

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According to Variety, WarnerMedia’s CEO Jason Kilar announced during its Q2 earnings call that the massive media conglomerate will continue supporting its synergy with HBO Max by making at least 10 more films in 2022 that will release exclusively on the streaming platform.

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HBO Max Banks on ‘Phenomenal’ 2022 Content Slate to Offset Loss of New Warner Bros. Movies

Variety 22 July, 2021 - 05:31pm

By Cynthia Littleton

The movies have done their job for HBO Max.

The steady stream of new Warner Bros. theatrical releases landing on HBO Max this year as day-and-date theatrical and streaming premieres has delivered a big boost of buzz and, most importantly, subscribers to the fledgling streaming streaming service that launched in late May 2020.

But with this year half over, HBO Max leaders are looking ahead to 2022 when the service will not have high-wattage titles to help attract new paying customers and to encourage existing subscribers to sample original series content. New Warner Bros. such as “Wonder Woman 1984,” “Godzilla Vs. Kong,” “Mortal Kombat” “In the Heights” and “Judas and the Black Messiah” have been workhorses that definitely helped bring viewers to HBO Max and HBO’s recent breakouts “Hacks,” “Mare of Easttown” and the “Friends” reunion special.

“There’s been great interplay between those titles and the day-and-date films,” said Andy Forssell, executive vice president and general manager of HBO Max. “A huge percentage of the ‘Wonder Woman 1984’ audience watched ‘The Flight Attendant.’ That set the tone for the year. We’ve learned a lot abut how those (film) release schedules and episodic premieres can work together.”

The unexpected windfall of having so many Warner Bros. tentpoles available simultaneously on HBO Max has allowed the company to study “how users think about films and episodic content and how they drive acquisition and retention,” Forssell said.

But it’s clear that HBO Max won’t enjoy the same volume of day-and-date releases in 2022. WarnerMedia made the bold call to have Warner Bros.’ entire 2021 theatrical slate have simultaneous premieres given that the exhibition business was so hobbled by the pandemic and social distancing mandates. But comments from WarnerMedia CEO Jason Kilar on AT&T’s July 22 quarterly earnings call made it clear that the studio’s tentpoles will no longer be having a dual-release plan. Kilar did say that Warner Bros. will produce 10 or more movies exclusively for HBO Max for 2022.

For HBO Max, that means the original content from HBO and HBO Max will have to do more heavy lifting. Forssell assures that they are up to the task. For starters, one of the series on HBO’s 2022 slate is “House of the Dragon,” the much-anticipated prequel to “Game of Thrones,” and a big investment in the DC Comics property “Peacemaker,” a spinoff of “The Suicide Squad” — one of the 2021 movies that will bow Aug. 6 on HBO Max and as a wide theatrical release.

“2022 is going to be just a phenomenal year for episodic content,” Forssell said. “Not just better than 2021 but significantly better” in terms of volume. Of course, HBO Max’s best laid plans for original content were derailed in part by the pandemic and production shutdowns, so some of 2022 is catching up with shows that had been planned to be ready to air this year.

Forssell said it was too soon for a definitive answer as to whether HBO Max would have get any day-and-date movie titles from Warner Bros. next year. The studio has said that as of next year it will shift to an accelerated 45-day exclusive window for theatrical exhibition before the first home entertainment window kicks in — compared to the 75- to 90-day standard at present.

“The whole industry is experimenting with windowing in film across the board,” Forssell said. “That business will continue to be important to fans and to exhibitors and to us as well. Movies are really good for SVOD services.”

Kilar noted on the conference call that Warner Bros. will produce 10 or more movies exclusively for HBO Max for 2022. Forssell stressed that the made-for-Max titles will have significant budgets and well-known faces. In his view, the more WarnerMedia invests in content for HBO Max, the more it will be able to afford high-end content. Forssell said he has told his counterparts at Warner Bros, “my job is to expand the subscriber base so we can afford to pay more for your movies than your other buyers.”

The challenge HBO Max is facing on that score is reinforced by financials that AT&T released early Thursday. WarnerMedia’s programming costs jumped 75% from the year-ago period to $4.2 billion, while marketing expenditures shot up 80% to $983 million. Not all of that is attributable to programming for HBO/HBO Max, but certainly a big portion of the increase can be chalked up to the needs of a fledgling streamer hungry for content.

WarnerMedia disclosed to investors the the launch of HBO Max in some European territories would be pushed back to 2022 rather than the third quarter of this year. The service launched in June in Latin America and is off to a strong start, Forssell said. The delay in Europe should not be misread as a sign of a slowdown in its international rollout plans. Getting to global scale is the key to allowing WarnerMedia to recoup the $2 billion-plus invested in HBO Max to date.

“Global scale is critical for the SVOD business,” he said. “We’ve already made 80% of the technology investment that we need to serve the world but we’re only in 39 markets. Global scale is how you get a return on the investment in technology and programming.”

Moreover, the early experience in Latin America has shown Forssell and his team that its important to have a strong lineup of high-profile local content tailored to the needs of discreet markets, and that takes time to develop no matter how well the technology works.

“It is the entertainment business. It’s tech-enabled and tech-powered but great stories are what’s going to matter,” he said.

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