Lab Weekly - 02/23/2024
2024 Mobility trends; Plus, the latest news about Walmart buying Vizio, Adobe's new AI assistant, Reddit's unique IPO plan, and more
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Electrifying Rides & Robotaxi Growing Pains: Key 2024 Mobility Trends
The growth of EV sales is slowing down in the U.S., with some automakers blaming weak demand and slashing production, whereas the rollout of self-driving cars in the forms of robotaxi services has been fraught with tensions and setbacks, as public backlash over safety and ethical concerns continues to pose significant hurdles to widespread adoption. Yet, there is hope on the horizon. All these trials and tribulations of emerging mobility solutions are steering us closer to the “Remixed City” outlined in our Outlook report.
In case you missed it…
What Marketers Should Know About Apple Vision Pro At Launch
Nearly a week post-Vision Pro launch, much ink has been spilled over speculating on how Vision Pro might shift the paradigm of personal computing, entertainment, and digital interaction. Based on this initial wave of reactions and hot takes, some key aspects about this much-anticipated headset are becoming a bit more defined. By extension, its long-term impact on the media landscape is also starting to take shape.
What Arc Search Tells Us about the Future of AI Search
In this Lab Original article, we explore the shift in online search towards AI, focusing on the latest examples of Arc Search and Perplexity, both of which offer summary-based search experiences. Innovations in AI-led search challenge traditional search engines and could disrupt digital media's revenue models, causing new headaches for brand advertisers. Still, AI search would need to close the consumer trust gap first.
ICYMI — on the latest Floor 9 episode, your hosts Ryan and Adam are joined by Chelsea Freitas from our Strategy team to take a deep dive into the trends and themes from our latest annual Outlook report, which includes:
Macro trends in consumer behaviors — starting at 0:42
Life’s New Beats — starting at 13:36
The Remixed City — starting at 24:50
The Revenge of the Monoculture — starting at 37:50
The Expanding Experience Economy — starting at 45:48
If you enjoyed the episode, please consider giving us a five-star review on Apple Podcast. Follow the Lab on Twitter @ipglab and on Medium for our latest insights. Thanks for listening!
Walmart To Buy TV Maker Vizio For $2.3 Billion [CNBC]
Walmart announced a $2.3 billion deal to purchase TV maker Vizio as a way to expand its digital advertising business through Vizio’s SmartCast Operating System, which allows users to stream free ad-supported content on their TVs. It’s interesting to see Walmart expanding into the CTV ad business via this acquisition, partly to better compete with Amazon, whose ad revenues grew 27% year-over-year for a total of $14.6 billion in Q4 2023.
In response, shares of competitor Roku have begun to trade down this week, given that Roku’s revenues are primarily driven by its ad business on its free-to-watch Roku Channel. That feels like a market overreaction to me, given that Roku has built a solid business with over 75.8 million active accounts. It still has a much bigger market share in the US in terms of CTV OS, leading with 55%, versus the 11% share captured by Vizio.
It is worth noting that, in November, Vizio was reportedly planning to explore partnerships with third-party TV OEMs to license its OS to more TV sets. Unclear whether that is still on the table now that Walmart has acquired it, but if so, then Walmart could potentially harness a lot more consumer data and ad revenues from more of the TVs it sells.
Related: Roku stock sinks after Walmart’s Vizio acquisition [Investor’s Business Daily]; Disney harnesses AI to drive streaming ad technology [Reuters]
Adobe Brings Conversational AI To Trillions Of PDFs [The Verge]
Adobe has introduced a beta version of AI Assistant in beta to Reader and Acrobat, two of the most popular PDF readers. Besides standard functions such as summarization and reformatting for sharing, this AI Assistant will allow users to “chat with documents” to get the information they need, as it assesses the content and recommends questions that users may wish to explore.
Besides the standard use cases, this addition also makes me wonder about the future of reading. If rightly deployed, generative AI could potentially turn any written text into an interactive experience by adding a conversational layer on top of the content. Who needs a book club when you can simply chat with the book itself?
While the benefits are obvious, the integration of this type of AI Assistant into widespread productivity apps like Adobe Reader also raises all the standard concerns about data privacy, plagiarism, and the potential for misinformation that we’ve come to associate with generative AI. In particular, the ethical implications of AI bias and data privacy need careful consideration as AI tools become more integrated into workflows.
Related: Google’s Gemini assistant is a fantastic and frustrating glimpse of the AI future [The Verge]; NYT plans to debut new generative AI ad tool later this year [Axios]
Reddit Plans To Sell Stock To Loyal Users In Unusual IPO Wager [WSJ]
In a fascinatingly unusual move, Reddit announced plans to offer a big chunk of its upcoming IPO shares to some of its most loyal users. The company reportedly plans to reserve an unknown number of shares for 75,000 of its most prolific users when it goes public next month.
As an engagement strategy to reward loyal users and foster a deeper sense of ownership and loyalty among its user base, it is certainly not a bad idea on paper, especially after the way the company initially fumbled its community outreach regarding its API pricing changes last year. Of course, this approach would also run the risk of alienating the non-stakeholder users by creating a have-and-have-not divide among users, so some degree of transparency about the selection criteria is likely needed to mitigate that risk.
As a marketing stunt, offering shares to its most active users also effectively turns them into vocal advocates for Reddit and generates positive buzz around the IPO to attract more investors from their own social networks offline.
Moreover, Reddit users have already proven that they have a taste for trading volatile stocks — The WallStreetBets subreddit was the epicenter of the meme stock craze in 2021. The filing anticipates that “Redditors' participation in this offering could result in increased volatility in the market price of our Class A common stock," as users selected to participate in the IPO will not be subject to a usual lock-up agreement.
Overall, Reddit's strategy represents a broader trend of tech companies recognizing the value of their user communities not just for content creation but as stakeholders in their platform journey. It creates a unique opportunity to redefine the relationship between tech platforms and their users, potentially setting a precedent for future IPOs and community engagement strategies.
Related: Reddit reportedly struck a $60 million deal with Google to make its content available for the tech giant’s AI model training [Reuters]; Exploring Reddit’s third-party app environment 7 months after the APIcalypse [ARS Technica]
Situational Awareness:
Bluesky opens up federation, letting anyone run their own server [TechCrunch]
The dream of a fediverse of social media apps lives on! Your move, Threads!
Apple releases Apple Sports: a new free app that provides real-time scores and stats, designed to drive Apple TV+ tune-in [Variety]
Makes a lot of sense, considering Apple’s increasingly sport-leaning content strategy, especially Vision Pro. Expect it to be one of the pre-installed apps on iOS 18 this fall.
Apple reinstates Epic’s developer account, ‘Epic Games Store’ launching in the EU this year [9to5Mac]
And it will probably stay in the EU region for the foreseeable future, unless the U.S. somehow passes its own version of DMA. (Don’t hold your breath.)
Lady Gaga is headlining the 2024 Fortnite Festival [IGN]
All eyes on whether this high-profile headliner will successfully draw in a significant number of new users to Fortnite.
So far, Kesha has signed up and shared her own custom Lady Gaga skin, beating many older-millennial “little monsters” to the punch.
Apple Store sources claim that Vision Pro returns are between average and above average compared to other products; in-store demo conversion rate is as high as 10% to 15%, Bloomberg reports.
A new Gartner report predicts a 25% decline in traditional search engine volume by 2026 due to the rise of chatbots and virtual agents.
By the end of 2023, 48% of most widely used news sites were blocking OpenAI’s crawlers, and 24% were blocking Google’s, and legacy print publications were more likely to block than broadcasters or digital outlets, a report by the Reuters Institute found.
Game creators are earning more money than ever developing and distributing games on Roblox. In 2023, Roblox paid out a record US$740.8 million to game creators, according to a company filing on Wednesday, an increase of roughly 19% from the $623.9 million the year before.
If you find our insights valuable and would like to have a deeper conversation on technology and media innovations, or need to sound smarter in a client meeting or a pitch, please feel free to reach out to Chelsea Freitas, our VP of Strategy, at chelsea@ipglab.com.
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