Thomas's Innovation Wrap #42
š± A new short-form video contender, š² Warner Music's IPO, and ā” aircraft-destroying lasers
Greetings,
Hereās your weekly wrap of technology, innovation, and finance news.
š°ļø Space
SpaceX successfully launched two NASA astronauts into space, marking the first time a crewed space launch has been handled by a private company rather than a government agency. The launch paves the way for SpaceX to start offering private space flights, which should cost around $60 million per person.
SpaceXās test flight wonāt be over until the astronauts safely return to earth, and truly proving the Dragon is a safe and reliable transportation system will take multiple flights. But under SpaceXās agreement with NASA, it can now use its vehicleĀ to fly private missions, at a cost of around $60 million per person. Potential passengers might be astronauts from wealthy countries with new space programs, like the UAE; wealthy individuals, like the trip SpaceX already has under contract with the space tourism firm Axiom; or workers manufacturing unique goods in microgravity.
China is on track with its plans to send a rover to Mars in July. China also plans to launch its own space station above Earth by 2022.
This will be the first rover mission to Mars for Chinaās space program, and is one of the many ways that itās aiming to better compete withĀ NASAāsĀ space exploration efforts. NASA has flown four previous Mars rover missions, and its fifth, with an updated rover called āPerseverance,ā is set to take place this years with a goal of making a rendezvous with Mars sometime in February 2021.
š± App Economy
Competition in short-form video is increasing after Zynn jumped to the top of the US App Store last week. The TikTok clone is owned by Kuaishou, a well-funded video-sharing startup in China that competes with TikTokās owner ByteDance. This is also the first time Zoom hasnāt been in the #1 spot in the US iOS Store since March 15.
ByteDance made $3 billion in net profit last year on over $17 billion in revenue, which was more than double the companyās $7.8 billion revenue in 2018. Some analysts estimate that ByteDance could fetch a valuation of between $150 billion and $180 billion. The company was founded in 2012.
ByteDance, led by Zhang Yiming, is becoming a viable rival to the dominant American online behemoths,Ā Facebook Inc.Ā andĀ Alphabet Inc.Ā Facebook unit InstagramĀ brought inĀ aboutĀ $20 billionĀ in advertising revenue in 2019, Bloomberg previously reported.Ā GoogleĀ said its video unit YouTube recordedĀ $15.1 billionĀ in ad sales last year.
Instagram is making it easier for influencers to make money on the platform.
Instagram on Wednesday announced two new ways for users with ācreatorā accounts to make money: ads on IGTV and badges for Instagram Live. The IGTV ads will start showing up next week, and Instagram will split the revenue, with at least 55 percent going to creatorsācomparable to YouTube. The company will also give fans the chance to sponsor their favorite creators and businesses with paid ābadgesā on Instagram Live videos, which cost less than $5 and place a small heart-shaped icon next to their name. Instagram is testing both features with a small group of creators (and advertisers, for the IGTV ads), before rolling them out more widely.
š² Finance
Warner Music Group is listing this week after its owner, Access Industries, decided to sell 13.7% of the company to new investors. Warner Music is the third-largest music company in the world, after UMG and Sony Music, and is benefiting from the continued growth of music streaming.
The value of music assets has since skyrocketed. The music industry, decimated starting in 2001 by online piracy and the collapse of CD sales, has been on a tear for four years, with revenue from subscriptions to streaming services such as those offered byĀ Spotify TechnologyĀ SAĀ andĀ AppleĀ Inc.Ā turning around the fortunes of record companies. Global recorded-music revenue grew 8.2% last year to $20.2 billion, according to the International Federation of the Phonographic Industry, with streaming accounting for more than half of the total for the first time.
Digital health stocks like Livongo, Teladoc, and One Medical have been rallying as the pandemic changes how some health services are consumed, perhaps permanently.
Livongo founder and Executive Chairman Glen Tullman predicted that hospitals will increasingly start separating patients they need to see in-person versus those they can treat remotely. Services that provide home monitoring are taking off, he said, because they help medical teams determine whether an issue is urgent.Ā For example, the company is now pulling data from more than 20,000 blood pressure checks per hour.Ā
Covid-19 āhas been beneficial for our business, which is hard to say,ā Tullman said. āYou never want to benefit from something so terrible, but we are where we are.ā
š Working from Home
Sothebyās will start holding live video-streamed auctions in June, starting with their NY Contemporary Art Evening Auction on June 29. Sales at last yearās NY Contemporary Art Evening Auction topped $341 million, with Francis Baconās Study For a Head selling for $50.38 million.
āItās definitely a first,ā said Mr. Barker in the conference call. āThis will be the first time that I have taken to the rostrum in London in order to conduct a New York sale.ā
The CEO of VMware, Patrick Gelsinger, expects that 50% to 60% of the companyās employees will work from home after the pandemic ends, up from 20% before the pandemic, and he doesnāt think thatās atypical. VMware had 31,000 employees in 169 offices worldwide at the end of January.
Some companies are building virtual replicas of their offices that their employees can meet in to recreate the more social water-cooler conversations you can miss on Zoom.
Gordon Willoughby, the chief executive of WeTransfer, said the platform helps provide the social experience of office life in the way that Zoom calls and Slack have replaced business meetings and desk-side chats. That is particularly valuable for recent hires, he said.
āThose of us who have been working at WeTransfer for a while are able to live off the social capital we built up from all those serendipitous meetings and chats before,ā Mr. Willoughby said. āFor new people, thatās much harder. The 3-D office is a really good way of maintaining that unplanned connectivity.ā
ā” Other Snippets
Amazon is in advanced talks to buy self-driving startup Zoox, which they could potentially use to create a more efficient delivery network. An acquisition of Zoox could also make Amazon a new competitor of Uber and Lyft.
And hereās the kicker: āOver time, this acquisition would also open the door for Amazon to potentially begin to compete in the ride sharing and food-delivery industries,ā he writes.
Nowak theorizes that Amazon could offer discount ride-sharing to Prime membersāa move he thinks would be āa meaningful driver of Prime growth, retention and pricing power.ā He sees ride-sharing as a $60 billion bookings opportunity in the U.S. alone by 2023.
Google now lets merchants accept bookings for online services.
Google is also expanding itsĀ existing Reserve with Google serviceĀ ā which lets consumersĀ book tickets and make appointmentsĀ directly from Google ā to support bookings for online services. Initial partners include booking services like Booksy, WellnessLiving, Zooty, and Regis, which provide a range of beauty and health services. So merchants working with any of these platforms will now be able to offer online appointments from inside Google and display details such as how to pay and which video platform they use.
The US successfully tested a laser weapon that can destroy small aircraft mid-flight.
Researchers in Australia have broken the record for the worldās fastest internet speed, clocking in at 44.2 terabits per second.
āThereās a bit of a global race on at the moment to get this technology to a commercial stage, as the micro-comb at its heart is useful in a really broad range of existing technologies,ā Dr Bill Corcoran from Monash University, toldĀ The Independent.
āIād guess that we could see devices like ours available to research labs in two to three years, and initial commercial use in about five years.ā
Have a great weekend!
Thomas
About Thomas Rice
Thomas Rice is the portfolio manager for theĀ Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter atĀ @thomasrice_au.