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At The Ringer, Staff Writers Say They Are Second-String

The head coach of the Golden State Warriors. A former ace of the New York Yankees. A onetime star of “The Bachelorette.”

Steve Kerr, C. C. Sabathia and Rachel Lindsay were among the roughly 25 outside contributors to host or co-host new podcasts this year at The Ringer, the digital media company founded and run by the former ESPN personality Bill Simmons. The influx of celebrity talent being brought on as contractors has raised concerns among many full-time employees, who say it may close off their opportunities for advancement and weaken the company’s union.

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Credit…Willie J. Allen Jr./Associated Press

The Ringer, an outlet with a website and a podcasting network focused on sports and pop culture, became the property of Spotify this year in a roughly $200 million deal. The addition of The Ringer, with its more than 30 podcasts, has helped accelerate Spotify’s transition from a music-streaming platform into a general audiostreaming company.

Months before the Spotify deal, employees formed The Ringer Union, which is affiliated with the Writers Guild of America, East, and has about 65 members. Ringer management quickly recognized the union, but negotiations toward a collective bargaining agreement have stalled, and the company’s move toward outside contributors has been a sticking point.

Last month two Ringer employees with large followings — Jason Concepcion and Haley O’Shaughnessy — announced they were leaving. Several Ringer employees, who spoke on the condition of anonymity to describe internal matters, said that Mr. Concepcion and Ms. O’Shaughnessy had decided to leave after pay disputes. Mr. Concepcion declined to comment; Ms. O’Shaughnessy did not respond to requests for comment.

Mr. Concepcion, who had co-hosted a pop culture podcast and served as the main host of an Emmy-winning video program, left for Crooked Media, a podcasting company founded by Obama White House alumni. Ms. O’Shaughnessy, who had written on sports and appeared on The Ringer’s basketball podcasts, has joined Blue Wire, a sports podcasting network, where she plans to have an N.B.A. podcast.

The departure of the two homegrown stars, along with the arrival of high-profile outsiders, underscored concerns among many staff members that Mr. Simmons favored an approach that would allow him to produce a significant amount of content with contractors, who are not eligible for the union.

Mr. Concepcion and Ms. O’Shaughnessy left during a period of change that began in February, after Mr. Simmons announced the Spotify sale and started adding more big names to his booming podcast network, a roster that now includes the former N.B.A. player Raja Bell, the former ESPN personality Jemele Hill and the CNN commentator Bakari Sellers.

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Credit…Daniel Boczarski/Getty Images For Spotify

Ringer employees say Mr. Simmons showed signs of trying to marginalize the union dating back to when it was formed last year. Kate Knibbs, a staff writer who left for Wired in December, said that Mr. Simmons unfollowed her on Twitter after she indicated her support for the union and that he stopped promoting her work on Twitter. Three other Ringer employees at the time, who spoke on the condition of anonymity because they feared retaliation, said Mr. Simmons unfollowed them after they expressed support for the union as well.

The employees said the move was damaging to them because Mr. Simmons’s Twitter account, with its millions of followers, was a significant source of web traffic. Mr. Simmons declined to comment.

Around the same time, Mr. Simmons hired Ryen Russillo, a former ESPN colleague, to host a podcast. The union sought to include Mr. Russillo but management resisted, and the union eventually agreed to leave him out. Since that dispute, high-profile podcast hosts have joined The Ringer as contractors, who are ineligible to become union members, rather than as employees.

Four staff writers started at The Ringer this year, and several staff writers have received podcasting opportunities. Still, outside contractors have joined the company at a faster rate than employees, who complain that it is difficult to move up within the organization.

During negotiations, the union has made proposals that would limit the use of contractors and create a transparent system allowing staff writers to earn promotions based on seniority or achievements.

“If Spotify wants to make strides in original content they should do so by respecting the values of creators and recognizing our requests for guaranteed across-the-board annual increases, ownership of our derivative works and IP, and editorial pathways to promotion,” The Ringer Union said in a statement.

Ringer management has consistently rejected the union’s proposal on promotions without making a counteroffer, said two people with knowledge of the negotiations, which are continuing. Management made a counteroffer on the contractor proposal, and the two sides are still negotiating over the issue.

Spotify’s acquisition of The Ringer has brought benefits to staff members, including equity in the company and a monthly food stipend during much of the coronavirus pandemic. The increase in podcast content has also allowed The Ringer to increase the number of employees, such as producers.

“Throughout 2020, The Ringer has continued to hire new employees, increase the compensation of existing staff, prioritize diversity and invest in our business,” a Ringer spokesman said in a statement.

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Spotify takes on radio with its own daily morning show

Spotify’s streaming music service is starting to resemble terrestrial radio with today’s launch of the company’s first daily morning show, “The Get Up.” Like other morning shows designed for commuters, the new program will be led by hosts and will combine news, pop culture, entertainment and music. But in Spotify’s case, the music is personalized to the listener,

The show is not a live program, however. Unlike radio morning shows where content is broadcast live and often also involves interactions with listeners — like call-ins or contests — Spotify’s show is pre-recorded and made available as a playlist.

That means you can listen at any time after its 7 AM ET release on weekday mornings.

You can also opt to skip portions of the programming — like the music or some of the chatter — if you prefer. (Spotify, to be clear, refers to the show as a podcast, but the format actually splits the hosts’ talk radio-like content from the individual music tracks. In other words, it’s more like a mixed-media playlist than a traditional podcast.)

Another key thing that makes Spotify’s programming different from a radio show is that the music is personalized to the listener. Of course, that’s not always ideal. If you prefer to listen to new music during your commute, but have had been busy streaming oldies on Spotify’s service, your morning show will reflect those trends. There’s currently no way to program the show more directly by genre, either.

The show itself is hosted by three people: journalist Speedy Morman, previously of Complex; YouTuber Kat Lazo, known for her series “The Kat Call;” and Spotify’s own Xavier ‘X’ Jernigan, Head of Cultural Partnerships and In-House Talent.

The new playlist will be made available on weekday mornings in the Made for You and Driving hubs on Spotify for both free and premium subscribers in the U.S. You can also access the show directly from http://www.spotify.com/thegetup.

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Stitcher’s podcasts arrive on Pandora with acquisition’s completion

SiriusXM today completed its previously announced $325 million acquisition of podcast platform Stitcher from E.W. Scripps, and has now launched Stitcher’s podcasts on Pandora across all tiers of the streaming service. The deal brings top Stitcher titles to Pandora, including “Freakonomics Radio,” “My Favorite Murder,” “SuperSoul Conversations from the Oprah Winfrey Network,” “Office Ladies,” “Conan O’Brien Needs a Friend,” “Literally! with Rob Lowe,” “LeVar Burton Reads” and “WTF with Marc Maron,” among others.

On Pandora, the podcasts will be indexed using the company’s proprietary Podcast Genome Project technology. This system leverages automated technology — like natural language processing, collaborative filtering and other machine learning approaches — then combines that with human curation to make personalized recommendations to podcast listeners on Pandora’s app.

The podcasts will also continue to be available in the Stitcher app in North America, the company says.

The Stitcher acquisition brought with it several key assets, including its own mobile listening app, which includes a premium tier of exclusives, and the Midroll Media network for podcast advertising. Stitcher also creates its own original programs and runs multiple content networks, via Earwolf.

That means SirusXM gained thousands of top podcasts with the deal’s closure. The company also now claims it has the “largest addressable audience in North America” across all categories of digital audio, including music, sports, talk and podcasts thanks to the combination of satellite radio service SiriusXM, streaming app Pandora and now Stitcher.

The company believes the deal will help it attract more creators to its platform, thanks to the enhanced production, marketing and distribution capabilities it offers, following the deal’s close. Advertisers, meanwhile, will be able to more precisely target podcasts for better ad efficiency, and will gain access to improved measurements, says SiriusXM.

In terms of Stitcher’s execs, CEO Erik Diehn will now report to Scott Greenstein, president and chief content officer of SiriusXM, who also oversees content at Pandora. Stitcher’s chief revenue officer, Sarah van Mosel, will report directly to John Trimble, chief advertising revenue officer of SiriusXM.

“We are deepening our position in podcasting, the fastest-growing sector in digital audio, and with completion of this transaction, our vision is taking shape,” said SiriusXM CEO Jim Meyer, in a statement about the deal’s completion. “With Stitcher and its varied assets, we are now a one-stop shop able to meet the needs of podcast creators, publishers and advertisers, while also providing listeners with access to great shows, series and programming.”

Despite the coronavirus pandemic, which disrupted many consumer trends and accelerated others, podcasting still remains one of the fast-growing digital audio industries. Podcast downloads returned to pre-COVID levels this summer, and Spotify reported that podcast consumption more than doubled in Q2, and nearly a quarter (21%) of its active users now listen to podcasts.

Stitcher was not SiriusXM’s first acquisition focused on podcasts or ad technologies. It also bought podcast management platform Simplecast this June, and before that, it acquired AdsWizz for $66.3 million to power Pandora’s advertising efforts.

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Why are VCs launching SPACs? Amish Jani of FirstMark shares his firm’s rationale

It’s happening slowly but surely. With every passing week, more venture firms are beginning to announce SPACs. The veritable blitz of SPACs formed by investor Chamath Palihapitiya notwithstanding, we’ve now seen a SPAC (or plans for a SPAC) revealed by Ribbit Capital, Lux Capital, the travel-focused venture firm Thayer Ventures, Tusk Ventures’s founder Bradley Tusk, the SoftBank Vision Fund, and FirstMark Capital, among others. Indeed, while many firms say they’re still in the information-gathering phase of what could become a sweeping new trend, others are diving in headfirst.

To better understand what’s happening out there, we talked on Friday with Amish Jani, the cofounder of FirstMark Capital in New York and the president of a new $360 million tech-focused blank-check company organized by Jani and his partner, Rick Heitzmann. We wanted to know why a venture firm that has historically focused on early-stage, privately held companies would be interested in public market investing, how Jani and Heitzmann will manage the regulatory requirements, and whether the firm may encounter conflicts of interest, among other things.

If you’re curious about starting a SPAC or investing in one or just want to understand how they relate to venture firms, we hope it’s useful reading. Our chat has been edited for length and clarity.

TC: Why SPACs right now? Is it fair to say it’s a shortcut to a hot public market, in a time when no one quite knows when the markets could shift?

AJ: There are a couple of different threads that are coming together. I think the first one is the the possibility that [SPACs] works and really well. [Our portfolio company] DraftKings [reverse-merged into a SPAC] and did a [private investment in public equity deal]; it was a fairly complicated transaction and they used this to go public and the stock has done incredibly well.

In parallel, [privately held companies] over the last five or six years could raise large sums of capital, and that was pushing out the the timeline [to going public] fairly substantially. [Now there are] tens of billions of dollars in value sitting in the private markets and [at the same time] an opportunity to go public and build trust with public shareholders and leverage the early tailwinds of growth.

TC: DraftKings was valued at $3 billion when it came out and it’s now valued at $17 billion, so it has performed really, really well. What makes an ideal target for a SPAC versus a traditional IPO? Does having a consumer-facing business help get public market investors excited? That seems the case.

AJ: It comes down to the nature and the growth characteristics and the sustainability of the business. The early businesses that are going out, as you point out, tend to be consumer based, but I think there’s as good an opportunity for enterprise software companies to use the SPAC to go public.

SPAC [targets] are very similar to what you would want in a traditional IPO: companies with large markets, extremely strong management teams, operating profiles that are attractive, and long term margin profiles that are sustainable, and to be able to articulate [all of that] and have the governance and infrastructure to operate in a public context. You need to be able to do that across any of these products that you use to get public.

TC: DraftKings CEO Jason Robins is an advisor on your SPAC. Why jump into sponsoring one of these yourselves?

AJ: When he was initially approached, we were, like most folks, pretty skeptical. But as the conversations evolved, and we began to understand the amount of customization and flexibility [a SPAC can offer], it felt very familiar. [Also] the whole point of backing entrepreneurs is they do things differently. They’re disruptive, they like to try different formats, and really innovate, and when we saw through the SPAC and the [actual merger] this complex transaction where you’re going through an M&A and raising capital alongside that and it’s all happening between an entrepreneur and a trusted partner, and they’ve coming to terms before even having to talk about all of these things very publicly, that felt like a really interesting avenue to create innovation.

For us, we’re lead partners and directors in the companies that we’re involved with; we start at the early stages at the seed [round] and Series A and work with these entrepreneurs for over a decade, and if we can step in with this product and innovate on behalf of our entrepreneurs and entrepreneurs in tech more broadly, we think there’s a really great opportunity to push forward the process for how companies get public.

TC: You raised $360 million for your SPAC. Who are its investors? Are the same institutional investors who invest in your venture fund? Are these hedge funds that are looking to deploy money and also potentially get their money out faster?

AJ: I think a bit of a misconception is this idea that most investors in the public markets want to be hot money or fast money. You know, there are a lot of investors that are interested in being part of a company’s journey and who’ve been frustrated because they’ve been frozen out of being able to access these companies as they’ve stayed private longe. So our investors are some are our [limited partners], but the vast majority are long-only funds, alternative investment managers, and people who are really excited about technology asa long term disrupter and want to be aligned with this next generation of iconic companies.

TC: How big a transaction are you looking to make with what you’ve raised?

AJ: The targets that we’re looking for are going to look very similar to the kind of dilution that a great company would take going public —  think of that 15%, plus or minus, around that envelope. As you do the math on that, you’re looking at a company that’s somewhere around $3 billion in value.  We’re going to have conversations with a lot of different folks who we know well, but that’s that’s generally what we’re looking for.

TC: Can you talk about your “promote,” meaning how the economics are going to work for your team?

AJ: Ours [terms] are very standard to the typical SPAC. We have 20% of the original founders shares. And that’s a very traditional structure as you think about venture funds and private equity firms and hedge funds: 20% is is very typical.

TC: It sounds like your SPAC might be one in a series.

AJ: Well, one step at a time. The job is to do this really well and focus on this task. And then we’ll see based on the reaction that we’re getting as we talk to targets and how the world evolves whether we do a second or third one.

TC: How involved would you be with the management of the merged company and if the answer is very, does that limit the number of companies that might want to reverse-merge into your SPAC?

AJ: The management teams of the companies that we will target will continue to run their businesses. When we talk about active involvement, it’s very much consistent with how we operate as a venture firm, [meaning] we’re a strong partner to the entrepreneur, we are a sounding board, we help them accelerate their businesses, we give them access to resources, and we leverage the FirstMark platform. When you go through the [merger], you look at what the existing board looks like, you look at our board and what we bring to bear there, and then you decide what makes the most sense going forward. And I think that’s going to be the approach that we take.

TC: Chamath Palihapitiya tweeted yesterday about a day when there could be so many VCs with SPACs that two board members from the same portfolio company might approach it to take it public. Does that sound like a plausible scenario and if so, what would you do?

AJ: That’s a really provocative and interesting idea and you could take that further and say, maybe they’ll form a syndicate of SPACs. The way I think about it is that competition is a good thing. It’s a great thing for entrepreneurship, it’s a good thing overall.

The market is actually really broad. I think there’s something like 700-plus private unicorns that are out there. And while there are a lot of headlines around the SPAC, if you think about technology-focused people with deep tech backgrounds, that pool gets very, very limited, very quickly. So we’re pretty excited about the ability to go have these conversations.

You can listen in on more of this conversation, including around liquidation issues and whether FirstMark will target its own portfolio companies or a broader group or targets, here.

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To Fight Apple and Google, Smaller App Rivals Organize a Coalition

SAN FRANCISCO — For months, complaints from tech companies against Apple’s and Google’s power have grown louder.

Spotify, the music streaming app, criticized Apple for the rules it imposed in the App Store. A founder of the software company Basecamp attacked Apple’s “highway robbery rates” on apps. And last month, Epic Games, maker of the popular game Fortnite, sued Apple and Google, claiming they violated antitrust rules.

Now these app makers are uniting in an unusual show of opposition against Apple and Google and the power they have over their app stores. On Thursday, the smaller companies said they had formed the Coalition for App Fairness, a nonprofit group that plans to push for changes in the app stores and “protect the app economy.” The 13 initial members include Spotify, Basecamp, Epic and Match Group, which has apps like Tinder and Hinge.

“They’ve collectively decided, ‘We’re not alone in this, and maybe what we should do is advocate on behalf of everybody,’” said Sarah Maxwell, a spokeswoman for the group. She added that the new nonprofit would be “a voice for many.”

Scrutiny of the largest tech companies has reached a new intensity. The Department of Justice is expected to file an antitrust case against Google as soon as next week, focused on the company’s dominance in internet search. In July, Congress grilled the chief executives of Google, Apple, Amazon and Facebook about their practices in a high-profile antitrust hearing. And in Europe, regulators have opened a formal antitrust investigation into Apple’s App Store tactics and are preparing to bring antitrust charges against Amazon for abusing its dominance in internet commerce.

For years, smaller rivals were loath to speak up against the mammoth companies for fear of retaliation. But the growing backlash has emboldened them to take action.

Spotify and others have become more vocal. And on Monday, Epic and Apple are set to meet in a virtual courtroom in the Northern District of California to present their cases for whether Fortnite should stay on the App Store, before a trial over the antitrust complaint next year.

At the heart of the new alliance’s effort is opposition to Apple’s and Google’s tight grip on their app stores and the fortunes of the apps in them. The two companies control virtually all of the world’s smartphones through their software and the distribution of apps via their stores. Both also charge a 30 percent fee for payments made inside apps in their systems.

App makers have increasingly taken issue with the payment rules, arguing that a 30 percent fee is a tax that hobbles their ability to compete. In some cases, they have said, they are competing with Apple’s and Google’s own apps and their unfair advantages.

Apple has argued that its fee is standard across online marketplaces.

On Thursday, the coalition published a list of 10 principles, outlined on its website, for what it said were fairer app practices. They include a more transparent process for getting apps approved and the right to communicate directly with their users. The top principle states that developers should not be forced to exclusively use the payments systems of the app store publishers.

Each of the alliance’s members has agreed to contribute an undisclosed membership fee to the effort.

“Apple leverages its platform to give its own services an unfair advantage over competitors,” said Kirsten Daru, vice president and general counsel of Tile, a start-up that makes Bluetooth tracking devices and is part of the new nonprofit. “That’s bad for consumers, competition and innovation.”

Ms. Daru testified to lawmakers this year that Apple had begun making the permissions around Tile’s app more difficult for people to use after it developed a competing feature.

Apple did not immediately have a comment on the coalition; Google didn’t respond to a request for comment.

The coalition came together in recent months after discussions among executives at Tile, Epic, Spotify and Match Group, the four companies that have been most vocal in their opposition to the big tech companies, Ms. Maxwell said.

Some of the conversations took place after Apple and Google booted Fortnite from their app stores last month for violating their payment rules. As Epic’s fight with Apple and Google escalated, Spotify and Match Group spoke out in support of the video game company.

Apple has argued that Epic’s situation “is entirely of Epic’s own making.”

The new coalition could spur more companies to publicly voice longstanding complaints, its members said. Peter Smith, chief executive of Blockchain.com, said his cryptocurrency finance company had joined the group partly because it offered strength in numbers.

“Can they ban us all?” he said. “I doubt it.”

Apple has blocked Blockchain’s apps several times, Mr. Smith said. Some customers were so frustrated by the blockages that they posted videos of themselves destroying iPhones with machetes.

“These app stores have gotten so big that they are effectively deciding what customers get access to,” Mr. Smith said.

Tim Sweeney, Epic’s chief executive, said his company had received “vast, vast amounts of communication” from app developers who supported it after it sued. But many are afraid to speak up publicly, he said.

“Apple and Google have infinite ways of retaliating without it being obvious to the outside world” by slowing down apps, reinterpreting rules in negative ways or saying no to new features, Mr. Sweeney said in an interview this week.

He said Epic had a history of standing up for what it thought was right. “But of course,” he added, “it is very stressful to go through, you know, a fight with two companies that are over 200 times our size.”

Adam Satariano contributed reporting from London.

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Daily Crunch: Spotify is testing virtual events

Spotify explores virtual concerts, Twitter tests a “quotes” count and Google’s Nest Hub becomes more hotel-friendly. This is your Daily Crunch for August 26, 2020.

The big story: Spotify is testing virtual events

We can’t have real-world concerts at the moment, so the popular music streaming service is exploring virtual alternatives. The feature isn’t live yet, but reverse-engineering scoopster Jane Manchun Wong tweeted out photos of an “Upcoming Virtual Events” section.

Spotify already highlights upcoming concerts from artists you like through various ticketing partners, and the screenshots show Songkick as the ticketing partner. Presumably, Spotify would be able to support virtual events with only minor changes to its bargaining agreement.

And how big can these events be? K-pop megastars BTS raised nearly $20 million for a single show — but it’s probably safe to assume that most events will fall far short of that.

The tech giants

Twitter experiments with adding a ‘Quotes’ count to tweets — This engagement metric would sit alongside the tweet’s existing retweets and likes counts.

Instagram Guides may soon allow creators to recommended places, products and more — The feature, which launched in May, has allowed select organizations and experts to share resources related to managing your mental health.

Google is pushing to get the Nest Hub in more hotel rooms — A new update is tailored for the hotel experience, with key features like wake-up calls, weather and local businesses.

Startups, funding and venture capital

SpaceX will launch Masten’s first lander to the moon in 2022 — Masten’s first lunar mission is set to take place in 2022 if all goes according to plan.

Here are the 94 companies from Y Combinator’s Summer 2020 Demo Day 2 — So many companies!

Course Hero, a profitable edtech unicorn, raises rare cash — A Series B extension of $70 million, to be more specific.

Advice and analysis from Extra Crunch

Synthetic biology startups are giving investors an appetite — Impossible Foods is only the most public face of a growing trend in bioengineering.

Funding for mental health-focused startups rises in 2020 — As wellness startups drift generally, VC hotspots emerge.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

GM teases two new all-electric Chevy Bolt models — Both vehicles will go into production in summer 2021, according to GM.

Learn how to scale social impact startups at Disrupt with Phaedra Ellis-Lamkins and Jessica O. Matthews — Uttering the words “making the world a better place” isn’t the same as doing it, or doing it well.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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How Apple’s 30% App Store Cut Became a Boon and a Headache

OAKLAND, Calif. — Twelve years ago, Apple introduced the App Store, a peculiar online marketplace for the year-old iPhone. It had 500 offerings. Apple told app makers it would take a 30 percent cut of their sales, and few complained.

Today, the App Store is one of the world’s largest centers of commerce, facilitating half a trillion dollars in sales last year alone. And Apple still takes 30 percent of many apps’ sales.

That commission has proved hugely consequential for Apple. It has been the primary driver of growth in recent years for a company that has nearly $275 billion in annual sales. And it has created some of Apple’s biggest headaches, drawing antitrust scrutiny, fury from app makers and lawsuits from consumers and partners.

The headaches intensified this week when Epic Games, the maker of Fortnite, arguably the world’s most popular video game, sued both Apple and Google, accusing the companies of breaking antitrust laws by forcing app makers to pay their 30 percent fees. The lawsuits followed Apple and Google’s removal of Fortnite from their app stores because Epic encouraged users to pay it directly, rather than through Apple or Google, to avoid their fees.

“I think we’re realizing that 30 percent is way too much,” said Phillip Shoemaker, a former senior App Store executive, who left Apple in 2016. Credit card companies charge roughly 3 percent to process payments. “It should be closer to that,” he said.

That is the rising sentiment among app developers, consumers and regulators. Apple and Google, which together are worth more than $3 trillion, make the software that backs virtually all of the world’s smartphones. That dominance has allowed them to keep their commissions high.

But now that the tech giants’ smartphones have become the only way other businesses reach millions of people, those businesses are increasingly pleading: Do you really need a third of my sales?

“There are very few companies out there that have a 30 percent profit margin,” said Andy Yen, the chief executive of ProtonMail, an email service. “The only way we can support this fee is by passing that cost on to customers.” ProtonMail charges 30 percent less for subscriptions purchased on its website, but when the company advertised that to its iPhone users, Apple restricted its app.

Likewise, Spotify increased its monthly subscription to $13 from $10 in 2014 to account for Apple’s fee. A year later, Apple introduced a competing music service — priced at $10. To compete, Spotify opted out of Apple’s payment system, enabling it to avoid the commission. Now customers can still use Spotify’s app, but they must subscribe on Spotify’s website. Yet Apple bars Spotify from saying that in its iPhone app.

“Either we lose because we have to pay them a 30 percent tax just to operate and raise our prices for consumers as a result, or we lose because it becomes much more expensive to convert users from free to premium,” Horacio Gutierrez, Spotify’s chief legal officer, told reporters in June after European regulators opened an antitrust investigation into Apple based on Spotify’s complaint.

Even consumers have spoken up. An enormous class-action lawsuit accuses Apple of breaking antitrust laws to enforce its commission, inflating app prices for iPhone users. The Supreme Court ruled last year the lawsuit could proceed.

On Friday, Facebook chimed in, complaining that Apple is collecting 30 percent of sales on its new live-events service, where people can sell expert talks, fitness classes and cooking tutorials on Facebook’s app. Facebook said it wanted to process the payments itself so it could pass on 100 percent of the sales to the small businesses selling the talks and classes, but Apple declined.

Apple argues that it has actually cut software developers a break. Tim Cook, Apple’s chief executive, suggested to Congress last month that when software was still sold in brick-and-mortar stores, 50 percent to 70 percent of the retail price went to middlemen.

“In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee,” he told lawmakers. “The App Store evolves with the times, and every change we have made has been in the direction of providing a better experience for our users and a compelling business opportunity for developers.”

For Google, the stakes are lower. It allows people to download apps from outside of its Android app store, meaning app makers like Epic have ample ways to still reach consumers using Android devices. And Google’s vast online advertising business makes its app store a much smaller portion of its overall business.

Over the past year, Apple has collected $19 billion of the $63.4 billion in sales of digital goods and services on iPhone and iPad apps, according to Sensor Tower, an app analytics firm. Google collected $10 billion of the $33.8 billion in similar spending on its app store, Sensor Tower said.

Before Mr. Cook’s testimony to Congress, at a House hearing focused on the power of Big Tech, Apple commissioned a study that showed its cut was in line with what many other platforms charged for similar distribution, including the app stores from Google, Microsoft and Samsung, and the game stores from Nintendo, Sony’s PlayStation and Microsoft’s Xbox.

Amazon’s Twitch gaming platform collects 50 percent, according to the study. By comparison, Amazon, eBay and Walmart charge 6 percent to 17 percent for sales of goods on their websites, the study said.

What the study didn’t note: Apple popularized the 30 percent cut.

It applied that rate on any purchases of an app in 2008, and then a year later on any transactions inside of apps for digital goods and services, such as a virtual currency in a game or a subscription to a music, TV or dating app. Apple does not take a cut of apps’ sales of advertising or physicals goods, and thus most apps don’t pay a fee.

So how did Apple arrive at 30 percent?

There was some precedent; Apple had been charging roughly the same commission on music sales on its iTunes software. For each 99 cent song it sold, Apple passed on 72 cents to major music labels and 62 cents to independent labels, according to The Wall Street Journal in 2007.

When Apple began setting rules for the App Store, “30 percent was just kind of a no-brainer,” said Mr. Shoemaker, who joined the company in early 2009. “It was, ‘Of course that’s what we’re going to use.’ Nobody questioned it.”

In 2008, when Apple introduced the App Store, the company’s late co-founder Steve Jobs told The New York Times: “We are not trying to be business partners” with app developers. Rather, he added, Apple wanted to “sell more iPhones.”

At the time, there was far less pushback from app developers, in part because the App Store was so nascent and the digital transactions were complicated without Apple’s help.

With Apple, “it was pretty much one click and that was revolutionary,” Mr. Shoemaker said. “So people were willing to bite that 30 percent. But now, those kinds of tools are a dime a dozen.”

Indeed, many companies now protesting Apple’s fee seem willing to pay something, just not 30 percent.

Epic made $1.8 billion on Fortnite last year, in large part by selling digital currency that players need to buy new features inside the game. The game itself is free.

On Thursday, Epic started its confrontation with the tech giants by allowing Fortnite users to pay it directly in its iPhone and Android apps, rather than via Apple or Google’s payment systems.

Epic also offered a 20 percent discount on all purchases that used its payment system. That meant that if Apple and Google charged a 10 percent commission, their price would be about the same as the one Epic was offering its customers.

Epic has also shown that running a profitable app store is possible with a lower commission. It runs its own online marketplace for other developers to distribute their games on desktop computers. In that store, it takes 12 percent of sales — and still makes a profit of 5 percent to 7 percent, the company said.

Yet at Apple, the discussion has long been about how to maximize profits. In 2011, Apple executives were discussing how much to charge content providers like Hulu and the NBA for new customers who signed up via Apple TV, according to internal emails provided to House lawmakers investigating Apple.

Jai Chulani, one Apple executive, said in an email to colleagues that he worried that if Apple charged 30 percent of the first year of a subscription “we may be leaving money on the table.”

Eddy Cue, one of Apple’s most senior executives, responded with a better idea: “For recurring subscriptions, we should ask for 40%.”

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Warner Music acquires IMGN, a social media publishing platform, for under $100M

It’s a whole new playing field these days for music labels and publishers, and today one of the biggies made an acquisition to help it sharpen up its strategy to better understand what people want to see and hear online today.

Warner Music — with a market cap of $15.4 billion, one of the big three recording giants alongside Universal and Sony and which owns labels like Atlantic, Elektra and others and has a huge roster of artists that includes the likes of Madonna, Ed Sheeran and Linkin Park — is acquiring IMGN Media, a Tel Aviv and New York-based startup that builds and tracks viral social media content in categories like e-sports and gaming, ASMR and entertainment.

IMGN used be called Comedy.com. It widened its remit from simply funny stuff and rebranded in 2017, and according to its site has about 3 billion views per month and has some 40 million subscribers to its content, with some 85% of that classified as “Gen Z and millennials.”

The news caps off several weeks of speculation about the startup. In July, reports in the Israeli press emerged that said IMGN was being circled by Snap for about $180 million; and further to that, a source told us that TikTok was also in the frame, looking at the company at around a price tag of $150 million. In the end, the terms of the acquisition were not disclosed but we understand that the deal was done for just under $100 million.

IMGN was founded in 2015 and had raised about $6 million from a long list of angels and firms including Rhodium, Dot Capital and Prism Venture Management.

The plan will be to keep IMGN independent of Warner, continuing to develop and analyse viral content across a range of platforms, with founder Barak Shragai staying on to lead the team.

Warner, meanwhile, does not plan to use the platform to simply market Warner artists, but to tap it for more insights into where people are going online these days, and what they want to see, so that it can better target its own marketing efforts accordingly.

That’s not to say that the two will not work together at all. Warner became acquainted with the startup because it had been a customer of IMGN’s.

Warner has a history both of investing and acquiring startups, depending on its strategic interests. In July, for example, it took part in a Series B round for Canadian audio mastering startup Landr. Further back, it has acquired the likes of music concert listings platform Songkick and pop culture site Uproxx — which it also uses to help track trends in the world of music and among its target demographics.

IMGN will continue working with other third-party brands under its new owner. Past customers have included Electronic Arts, Burger King and Microsoft. The Microsoft deal was by way of its Mixer live game streaming platform, and the fact that this Twitch competitor was shut down last month says a lot about the state of the market and how precarious an audience can be.

Not just consumer tastes, but companies’ business strategies, shift all the time. Microsoft pulling the plug on Mixer underscores how IMGN itself can quickly lose a customer, pointing to why ownership by WMG can feel more secure. As for Warner — which is traded publicly these days but still majority owned by Access Industries, the holding company controlled by Len Blavatnik — the fact that Mixer is tracking and building content for a range of platforms gives it more of a bird’s-eye view on that bigger picture, rather than simply relying on data from the platforms themselves, or its own research, to figure out what the world wants to see and hear.

“WMG not only offers us greater investment and support, but an entrepreneurial environment to continue growing our business, with the people running our accounts having editorial independence,” said Shragai. “We’re excited to partner with them as we take our company into the future.”

The bigger picture here is that the music industry has evolved well beyond the traditional, analogue world of publishing and selling physical media, where consumers learned about and listened to new artists and songs over the radio and TV (and read about their favorite musicians or genres in magazines).

With the shift to mobile and digital platforms, there’s now a much wider, and quickly-shifting, plethora of places where people discover and listen to music.

And digital platforms themselves — from those focused specifically on audio and music, like Spotify, through to those where music is a side-hustle to continue to capture audience, like Facebook, through to those that are neither but are still huge music destinations, like TikTok — are also getting deeply involved in tracking how tastes are evolving, and where people are going to get their music fix.

So it’s only natural to see labels looking for ways to have more direct access to those insights themselves, bypassing all those platforms — even as they also work with them (and indeed, to help them negotiate better with those platforms, at the end of the day).

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NYSE seeks SEC approval for more direct listings

The New York Stock Exchange filed an amendment today with the Securities and Exchange Commission to allow for more direct listings.

Direct listings offer a more streamlined method for companies to go public and raise capital than traditional IPOs — which entail a lengthy roadshow process and involvement of underwriters to determine valuations and share-prices.

Traditionally, direct listings to raise capital have been available to companies only for follow on raises, after they’d completed the conventional initial public offering process.

The NYSE allowed tech companies Slack and Spotify to list directly in 2018 and 2019 and Silicon Valley insiders, such as VC Bill Gurley, have encouraged companies to pursue the method.

AirBNB — which this month revived talks of going public in 2020 — has said it would consider a direct listing rather than a traditional IPO.

The NYSE filed a proposal with the SEC in December to allow for more direct listings, but that was declined without public comment.

The amendment offered today provides more details on how the direct listing process — with a capital raise — would work, according to the NYSE’s Vice Chairman, John Tuttle.

“What we did, versus the early versions of the filing, is to [offer] a very granular, mechanical breakdown of how we would execute this type of transaction,” he told TechCrunch on a call.

Most of that surrounds how new shares are numbered, valued and priced in a direct listing. Traditional IPOs rely on underwriters —  that also charge hefty fees — to determine opening share-price, and that can swing widely once the stock actually goes to market.

The NYSE touts direct listings as a less costly way to go public and one that could lead to a less volatile price discovery process.

On when the NYSE’s proposed direct listing proposal could be approved or (denied), “The timeline is up to the SEC. Their first deadline for any action is this Saturday,” said Tuttle.

Updates to the listing process are just some of the changes that could come to New York Stock Exchange. The 228 year old, Wall Street based organization continued trading virtually through the COVID-19 outbreak, using digital platforms.

The pandemic could lead to the NYSE becoming less of a work from office entity and more a remote, work from home company in the future, Tuttle told TechCrunch in April.

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Facebook strikes global licensing deal with Indian music label Saregama

Facebook said on Wednesday it has entered into a global deal with Saregama, one of India’s oldest music labels, to license its music for video and other social experiences across its eponymous service and Instagram.

The partnership, which comes weeks after Swedish music giant Spotify also signed a deal with Saregama, will allow users to choose from a wide variety of music to add to their social experiences such as videos, stories via music stickers and other creative content, Facebook said. Users will also be able to add songs to their Facebook profile.

Saregama, one of the oldest music labels in the world, is the best place to find tracks from several India music legends including Lata Mangeshkar, R.D. Burman, Mohammed Rafi, Talat Mahmood, Manna Dey, Kalyanji-Anandji, and Hemant Kumar. The giant says its library contains over 100,000 songs, ghazals, and more in over 25 languages.

Facebook maintains similar deals with other music labels in India, its biggest market by users count, including Yash Raj Films, Zee Music Company, and T-Series, one of the top YouTube channels worldwide. Bloomberg reported last year that Facebook was also in talks with international music labels and had started testing video music in India and Indonesia.

“At Facebook, we believe music is an integral part of self-expression and bringing people closer together and creating memories that last. We are very proud to partner with Saregama that will allow people on our platforms, globally, to use their favourite retro Indian music to further enrich their content on our platforms,” said Manish Chopra, Director and Head of Partnerships at Facebook India, in a statement.

Facebook has also signed deals with music labels such as Universal Music Group in the past to license its recorded music and publishing catalogs for video and other content across its services including Oculus. In 2018, Facebook also signed a deal with Spotify to allow users to share Spotify albums, tracks to Instagram Stories — a feature it added to Facebook Stories last year.

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