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In November, Netflix unveiled its long-anticipated ad-supported tier which offers customers in select markets, including the U.S., the ability to offset the cost of a Netflix subscription by allowing their viewing to be interrupted with ad breaks. At the Consumer Electronics Show in Las Vegas, Netflix President of Worldwide Advertising, Jeremi Gorman, offered some initial insight into how the product has been performing as well as the streamer’s future plans.

During an interview at Variety’s Entertainment Summit at CES, the exec said the company has been happy with the debut selection of advertisers and their diversity.

“It’s really across the board,” said Gorman, of the variety of brands participating. “We’re seeing CPG companies, luxury companies, automotive companies…[and] retail. We’re seeing a broad swath.” This is also good for the consumer experience, she noted, as it means viewers won’t be bored by one car ad after another. “There’s a wide variety of advertising types, and I think we’ll continue to see that,” Gorman predicted.

The interview also touched on some of the early complaints and concerns about Netflix’s foray into ads.

Among them is the key pushback the company has been receiving over its high ad prices, asking for what one industry exec dubbed “Super Bowl CPMs.” Gorman, however, justified the pricing but admitted the market will ultimately dictate what sort of pricing Netflix will be able to get.

“From a supply-demand perspective, the premium CPMs are reflective of two things: one is that we just couldn’t take that many advertisers. We certainly didn’t want to disappoint anybody. Then secondarily, the premium content environment in which the ads run I think warrants a high CPM.”

Whether Netflix constitutes a “premium environment” is up for debate, of course. But Netflix seems to be adjusting its expectations.

“I think we’re certainly humble enough to very much understand we’re top of market, and in addition to that, the market will more or less dictate to us what are reasonable CPMs,” Gorman said.

Another concern about Netflix’s ad-supported service has to do with which content can include ads. As the streamer wasn’t set up as an ad-supported service to begin with, many of its content deals didn’t include AVOD rights (advertising video on demand). That means Netflix has limited ad inventory, and couldn’t even run ads against some of its own “Netflix Originals” if the deals didn’t include the proper rights.

Gorman addressed this as well, saying Netflix was actively working on the licensing issues.

“That’s progressing, as we speak, day by day. We’re renegotiating deals we made a long time ago,” she said, adding that the “vast majority” of content that people watch regularly is available in the ad tier surface. In the meantime, Netflix has about 85% to 95% of its content available on the ad tier, Gorman said.

Then there’s the real concern that, from a business perspective, offering a lower-cost tier has the potential to cannibalize Netflix’s existing subscriptions as customers drop to cheaper tiers at a quicker rate that’s not offset by growth in the ads tier. Gorman, though, downplayed those concerns saying Netflix customers historically have remained on the plan they’re currently on.

The exec, unfortunately, couldn’t speak to the uptake of the ads-supported product, as Netflix is poised to announce earnings, but said “we’re pleased with the growth we’re seeing.”

At present, Netflix’s ad tier is available in the U.S., the U.K., France, Germany, Spain, Italy, Australia, Japan, Korea, Brazil, Canada, and Mexico. The company has no immediate plans to expand, but longer-term would aim to target any larger ad market. In addition to ads, subscribers on the Basic with Ads plan have to deal with lower video quality (720p HD) and are limited to streaming from one device. They also can’t download content to their devices for offline viewing.

Going forward, Netflix aims to do a bit more than just running typical ads, including things like dynamic insertion of ads near moments that are relevant to marketers, single-show sponsorships, and more. It will also later allow marketers to target ads by age and gender.

Despite challenges, Netflix says its ad tier is doing well by Sarah Perez originally published on TechCrunch

From the desk of ‘I’m not sure this is a good idea’ at CES in Las Vegas, comes 444. The early-stage startup is planning to combine pepper spray with some electronics so a potential attack victim’s friends can be notified when they’ve had to deploy the defence spray to get themselves out of a bind. The company is the brainchild of Logan Nash and Matt Rogan, who met at the University of Michigan and started developing the tech nine months ago.

“We called the company 444 because our target market is college women between the ages of 18 and 24. A very popular trend right now is Angel numbers. And 444 is an angel number that stands for protection,” Logan tells TechCrunch in an interview. “We are a self-defense company, so the name ties in very well with our company and our mission of self protection.”

The company is at the very earliest stages of its development; the prototype it showed at CES was a 3d printed prototype, and a early prototype PCB – more of a proof of concept than an actual product so far. The ultimate plan is to include a pepper spray aerosol and a Bluetooth transmitter that connects to a phone. If the pepper spray is deployed, the device signals to the would-be-victim’s phone, which then sends a message along with the current location to a number of pre-defined phone numbers.

A spicy getaway

“I see all these women carrying pepper spray devices. They’re normally large, pink, and bulky. They are just pieces of plastic that end up just being thrown in the backpack or in a purse. In a time of danger, they can’t get it in time,” says Logan, explaining that they designed a clip that makes it easier to carry in a place that’s available. “The clip attaches directly onto the user, whether that’s their sports bra if they’re going for a run, or their belt if they’re just walking around campus. So no matter what, it is an arm’s length away, and you’re not fumbling around to get in a time of danger. When they activate their device, not only will they have six to nine seconds of spray time, but their current location will also be sent to up to 10 contacts of their choosing through an app installed on their phone.”

The company believes that this second line of defense – texting the contacts – is very important, and claims it has customer discovery interviews to back that up. The target price point for the device is around $35 per unit. That’s significantly cheaper than, say, the fashion bracelets from Flare, but a lot more expensive than the $7 Amazon charges for the big, pink, and bulky pepper sprays the company is replacing.

Is it defendable?

We were a little curious to find two men at the helm of a company targeting women, but the founder says he doesn’t see a conflict there.

“We went through a program called iCOR at the University of Michigan, which was a three-to-four-month course. We each interviewed 15 or so of our target demographic every week, and asked them what they like, what they don’t like, why they use self-defense, why they don’t use self-defense,” Logan says, dismissing the question as to whether it would perhaps have made sense to add a woman or two to the founding team. “We asked them whether they look at each other’s current location and if they’re tracking each other, things like that. Our company and product were shaped by that customer discovery work.”

Far is it from me to discourage a couple of young entrepreneurs from following their dreams, but given that smartphones are starting to have more and more sophisticated emergency response measures built-in, I’m wondering if there’s really a space in the market for this product – doubly so given that it can’t communicate with emergency services or friends on its own, but needs to be Bluetooth-tethered to a smartphone.

As a 6-foot-4, martial arts-trained ex-cop, I’m willing to admit that it’s possible I’m being blinded by privilege in this case, so perhaps take my criticism with a fistful of sodium chloride. Having said that, everything I know about self-defense screams ‘keep it simple.’ A $7 canister of pepper spray in one hand and a phone in the other seems more reliable than the solution 444 is outlining with its vision for a safer future.

This pepper spray will phone your friends as you mace your assailants by Haje Jan Kamps originally published on TechCrunch

You probably haven’t heard of Brane Audio yet, but trust me on this one: You will. One of my highlights at CES in Las Vegas today was listening to the company’s debut speaker, the Brane X, side-by-side with some other well-known speaker brands. The company’s founder has a background from high-precision magnetics, and after exiting his previous company, decided to apply this expertise to another space where magnets are important: Speakers.

The company’s first product is the $700 Brane X, which is opening for pre-orders imminently. The big innovation is the company’s Repel-Attract Driver (RAD). It use a combination of moving and stationary magnets to create a force that is equal and opposite to the force caused by large air pressure changes within a speaker enclosure. The result is the ability to move a large amount of air (and therefore punch a lot of bass around), in a small package that the company claims consumes 10% of the power that a conventional-tech subwoofer would.

“We developed a new way of making audio. Specifically, we have a novel subwoofer. That uses a technology we call “repel attract driver” or RAD. It uses magnetic forces to cancel out the air pressure forces that are inherent when you’re creating low subwoofer notes. Using traditional technology, there’s even a law – Hoffman’s law – that says, can’t have deep bass, an efficient speaker and have it be compact. As you make a subwoofer smaller, the air pressure gets higher and higher, and you’re drawing more and more power,” explains Joe Pinkerton, co-founder and CEO at Brane Audio, in an interview with TechCrunch. “By canceling that pressure force with a magnetic force, it stays in its container. That means all you have to overcome its own inertia. It is a factor of roughly 100 times more efficient in the subwoofer range. That enables us to make it a tenth of the size and draw a tenth of the power.”

You’ve already done the math, dear reader: Smaller, lighter, and less power-hungry equals interesting tech for portable speakers. And that’s exactly what the company built in the Brane X. It contains an 8-inch subwoofer in a portable speaker that can run on battery power for 12 hours. It also has all the other bells and whistles you’d expect from a high-end portable speaker: It has Alexa, Wi-Fi, Bluetooth, and can run Spotify. In addition to the aforementioned bass-pumper, it contains a pair of tweeters and a pair of mid-range speakers, so it retains its power to play stereo sound. The speaker is IP 5x rated, meaning it is more resistant to rain than your BBQ or pool party.

In the suite where the tech was demoed, I found myself checking behind the sofa whether the company had hidden additional speakers: A huge amount of bass, plus a weirdly immersive soundscape coming from a box the size of a small toaster was a distinctly uncanny experience. I couldn’t locate the other speakers, and the team assured me that yes, it all really came from their little box.

Pinkerton started Active Power, a company in the energy space in the early 1990s that created huge 15,000-pound, magnetic-bearing flywheels for power storage. The precision needed to use a combination of static and dynamic magnets to keep these flywheels exactly balanced using an axial magnetic bearing meant developing an extremely precise feedback loop. A while after taking the company public in 2000, he started a Clean Energy Labs to start looking for other opportunities. One of the technologies the company looked into was using graphene to create more efficient switches.

“As we were switching it at 5,000 times a second. We were like, ‘wow, that’s making a lot of sound for its size,’ and that was just a chip-level device,” Pinkerton laughs. From there, he wondered what would happen if they were trying to make sound on purpose. “We span Brane Audio out of Clean Energy Labs in 2015, and just said ‘hey, let’s make this membrane-based speaker.’ We worked on that for and we worked on that for several years and were going to launch something in 2020. Then COVID hit, and the factory shut down.”

From there it was back to the drawing board — but Pinkerton wasn’t ready to let the technology rest quite yet.

“Our experience is something a normal audio engineer would have no idea even existed. It took us years to figure out to perfect the technology,” Pinkerton says, describing the path to a final, launchable speaker.

The speaker is big for a portable speaker; it’s more of a small boombox than the kind of speaker you can just lob in your hand luggage for a trip overseas. It seems like it’s better for a speaker you bring with you on a road trip, move from room to room in the house, or plonk down outside for a pool party.

“This is sneak peek of the Brane X. We’re doing a full-blown launch at South by Southwest in Austin in mid-March,” Pinkerton concludes, and suggests that the company has speakers with its tech in smaller form factors and with more modest price points on the drawing board.

Brane X portable speaker packs a hell of a punch in a small package by Haje Jan Kamps originally published on TechCrunch

A sharp-eyed developer at Krita noticed recently that, in the settings for their Adobe Creative Cloud account, the company had opted them (and everyone else) into a “content analysis” program whereby they “may analyze your content using techniques such as machine learning (e.g. for pattern recognition) to develop and improve our products and services.” Some have taken this to mean that it is ingesting your images for its AI. And… they do. Kind of? But it’s not that simple.

First off, lots of software out there has some kind of “share information with the developer” option, where it sends telemetry like how often you use the app or certain features, why it crashed, etc. Usually it gives you an option to turn this off during installation, but not always — Microsoft incurred the ire of many when it basically said telemetry was on by default and impossible to turn off in Windows 10.

That’s gross, but what’s worse is slipping a new sharing method and opting existing users into it. Adobe told PetaPixel that this content analysis thing “is not new and has been in place for a decade.” If they were using machine learning for this purpose and said so a decade ago, that’s quite impressive, as is that apparently no one noticed that whole time. That seems unlikely. I suspect the policy has existed in some form but has quietly evolved.

But the wording of the setting is clear: it may analyze your content using machine learning, not for the purposes of training machine learning. As it says in the “learn more” link:

For example, we may use machine learning-enabled features to help you organize and edit your images more quickly and accurately. With object recognition in Lightroom, we can auto-tag photos of your dog or cat. In Photoshop, machine learning can be used to automatically correct the perspective of an image for you.

A machine learning analysis would also allow Adobe to tell how many people were using Photoshop to, say, edit images of people versus landscapes, or other high-level metadata. That could inform product decisions and priorities.

You may very well say, but that language does leave open the possibility that the images and analysis will be used to train AI models, as part of the “developing our products and services” thing.

True, but Adobe clarified that “Adobe does not use any data stored on customers’ Creative Cloud accounts to train its experimental Generative AI features.” That wording is clear enough, though it also has the kind of legal precision that makes you think they’re talking around something.

And if you look closer at its documentation, it does indeed say: “When we analyze your content for product improvement and development purposes, we first aggregate your content with other content and then use the aggregated content to train our algorithms and thus improve our products and services.”

So it does use your content to train its algorithms. Perhaps just not its experimental Generative AI algorithms.

In fact, Adobe has a program specifically for doing that: the Adobe Photoshop Improvement Program, which is opt-in and documented here. But it’s entirely possible that your photos are, through one tube or another, being used as content to train a generative AI. There are also circumstances when it might be manually reviewed, which is a whole other thing.

Even if it isn’t the case that Adobe is harvesting your creativity for its models, you should opt out of this program and any others if you value privacy. You can do so right here at the privacy page if you’re logged in.

Is Adobe using your photos to train its AI? It’s complicated by Devin Coldewey originally published on TechCrunch

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We’ve made it to Friday! If you are looking for a good podcast episode, I highly recommend today’s Equity where Natasha M, Mary Ann and Becca talk about CES, NYE, SBF and FTX — oh my! Also, shout-out to you Daily Crunchers out there for reading yesterday’s newsletter and helping it be one of today’s top-read stories. It warms my heart, and I hope today’s news is equally enthralling. Without further adieu… — Christine

The TechCrunch Top 3

Knock, knock, it’s guaranteed renters at the door: Property owners don’t always have peace of mind while renting out their spaces, but Doorstead believes its approach is solving that. Mary Ann reports on the company securing $21.5 million new funding to not only tell you how much in rent you can expect, but also to make sure you always have a tenant for your rental property.
Credit buzz: Indian fintech KreditBee’s business model of underwriting to help people get microloans attracted even more venture capital — $100 million, in fact — to boost the company’s valuation to nearly $700 million, Manish writes.
Seeing is believing: Haje reports on “Lumus’ bid to make AR glasses a little bit less cringe.”

TechCrunch @ CES

If you liked that item above on Lumus, then you’ll love what else the TechCrunch team has in store for you today as they continue to cover the Consumer Electronics Show in Las Vegas. There’s two more days to go!

Gadgets and gizmos aplenty:

Tim Stevens doesn’t have a strong stomach, but he got in the back of a ’67 DeVille with a VR headset to test out Holoride’s new VR kit just for you.
If you don’t have your own camera crew, Studiobox has you covered with its interview-studio-in-a-box that Haje calls “a remote video team’s high-def dream.”
Kirsten has details on how Stellantis’ new business unit will turn vehicle data into cash.
Brian writes that Qualcomm deviated from its usual CES news to announce a new partnership with Iridium to bring satellite messaging to Android phones.

Will record levels of dry powder trigger a delayed explosion of startup investment?

There’s a subtext for the waves of layoffs and Craigslist ads for discounted office furniture: tech investors have amassed approximately $290 billion in dry powder.

“Despite the downturn, strong cash supply and tailwinds for spending on digitization are leading some market participants to believe we’re in a strong investment cycle,” says Raphael Mukomilow and Pierre Bourdon at Picus Capital.

After they tracked uninvested capital by year going back to 2006, the pair found that “a crisis within the investment landscape has often been followed by years of systematic outperformance of returns, and history has a way of repeating itself.”

Three more from the TC+ team:

Capital conundrum: It’s no secret that there was a venture capital slowdown in 2022. Kyle details PitchBook’s latest report on VC deal activity to see what happened and what’s likely to happen next.
Your art on a Mastercard: Credit card giant Mastercard is pairing up with blockchain startup Polygon to launch a web3-focused incubator for musicians. Jacquelyn has more.
Some good capital news: Though Black founders again raised just 1% of all VC funds in 2022, Dominic-Madori reports that total funding experienced an uptick. She speaks to founders and investors who agree there is still plenty of work to be done.

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

If you use Snap’s desktop camera to give yourself a fun filter during video calls, start saying your goodbyes to it now. Ivan reports that Snap is shutting down the camera app on January 25 to focus on its Camera Kit for Web feature. He also notes there might be more behind the move, writing, “The discontinuation of the Snap Camera app — spotted first by The Verge — is not entirely surprising. Last year, it cut 20% of its staff and shuttered its drone product months after first launching it.”

And we have five more for you:

We’re slashing prices left and right: Matt reports that Tesla slashed pricing for its Model 3 and Model Y in China for the second time in three months.
Plagiarism in the world of AI: If you were in school in the late 1990s or early 2000s, you might remember your teacher telling you not to use the internet because it was full of misinformation. Well, technology has come a long way, and even longer now that ChatGPT is a thing. Amid news that New York City public schools are blocking ChatGPT, OpenAI says it’s working on “mitigations” to help spot ChatGPT-generated text, Kyle reports.
TikTok, it’s time to go to bed: We’ve heard of alarms to wake you up, but that phone screen was meant to keep you engaged when you should be sleeping. “No problem,” says TikTok, which is testing a “sleep reminder” feature that nudges you when it’s bedtime, Aisha writes. And that’s not all — she also reports that TikTok has video scrubbing thumbnails now to make it easier to find specific parts of videos.
It’s enough to make you Twitch: Website and app outages happen all the time, but when Amanda saw it happened to Twitch for the second time in a week, she decided to get to the bottom of it.
Samsung not singing a happy tune: Kate reports on Samsung’s preliminary estimates of its quarterly profit, which don’t look good. The memory chip and phone maker says quarterly profit hit an eight-year low amid weak demand for its products.

Daily Crunch: Property management startup Doorstead raises $21.5M Series B by Christine Hall originally published on TechCrunch

HealthAtom is aiming to be the go-to cloud-based operations system for small and midsize healthcare companies across Latin America (LatAm). Although the company has been around since 2012, this is the first time it has announced fresh capital, in the amount of $10 million.

HealthAtom’s medilink and dentalink software suites let clinics create schedules, manage electronic health records, handle inventory, administer payroll, and provide budgeting breakdowns and regulatory filings. They also have telehealth capabilities that allow patients to access their records on a mobile device.

Provider will contact HealthAtom with information on the size of their operations and their needs and wants. After a consultation, a plan will be established and information can be transferred to the cloud platform, adhering to local regulations. According to the founders, a clinic can have its operations up and running on the system within 3 hours.

Depending on the size of the operation and local regulations a clinic can pay anywhere from $20 to $20,000 monthly. Today, HealthAtom has close to 6,500 clients across 20 countries with main operations in Chile, Colombia and Mexico. Additionally, 50 thousand doctors and dentists use the company’s services and process over 42 million appointments yearly.

“We are the point where the sales tension occurs, at an information level,” said co-founder and CEO Roberto León in an interview with TechCrunch (conducted in Spanish and translated by the author). “It is a tool that could transcend beyond the SaaS and transform us into a technology solution that has the whole ecosystem integrated to increase the transparency of health processes.”

According to a report conducted by the McKinsey Global Institute, digital adoption within healthcare systems in LatAm has catered to larger hospitals and disregarded small and medium buisinesses. Additionally, offerings available to SMBs are often less affordable and don’t provide what a clinic needs. HealthAtom wants to be a part of the solution by being the “one-stop-shop” for small and midsize healthcare clinics to run their operations.

Although there are some local and country-specific companies providing similar services, HealthAtom remains the only LatAm-wide provider. Though the company provides a continental outreach, the founders told TechCrunch it has been a challenge to cater to every country’s regulations.

“There is regulation and compliance regarding how things are signed, how information is stored, how certain health data should be recorded,” said co-founder and CPO Daniel Guajardo. “All this has country-to-country variations and has allowed us, in these 10 years of bootstrapping, to be able to focus on having a very regionalized product.”

HealthAtom has garnered support in the form of a $10 million Series A led by Kayyak Ventures, with participation from FJ Labs, Soma, Amador, Taram and a (number) of Angels.

This round’s funds will go toward incorporating embedded payments in its software, forming partnerships with insurance companies and developing a loan program for patients.

HealthAtom empowers LatAm’s small healthcare offices with cloud-based ops by Andrew Mendez originally published on TechCrunch

The NFT marketplace SuperRare is cutting 30% of its staff, according to a Slack message from CEO John Crain. Crain posted a screenshot of the message on Twitter.

“During the recent bull run, we grew in tandem with the market. In recent months, it’s become clear that this aggressive growth was unsustainable,” Crain wrote. “We over-hired, and I take full ownership of this mistake.”

TechCrunch reached out to Crain for comment.

SuperRare raised a $9 million Series A in March 2021, led by Velvet Sea Ventures and 1confirmation. The round also included celebrity investors like Mark Cuban, Marc Benioff and Ashton Kutcher.

SuperRare differentiates itself from competitors by focusing more closely on working with artists, but broader platforms like OpenSea were more successfully able to take advantage of the bull market. Yet even though OpenSea has managed to raise at a possibly inflated valuation of over $13 billion, it has not been immune to the downmarket. The company laid off 20% of its staff, or about 230 employees, in July.

“We know that there is still much innovation and transformation yet to come for Web3, NFTs, cryptoart, decentralized finance and governance,” Crain wrote. “We are facing headwinds, yes — but there remains an incredible uncaptured opportunity as we continue building something totally new.”

NFT marketplace SuperRare cuts 30% of staff by Amanda Silberling originally published on TechCrunch