Welcome to the Weekly Scan. Here’s what we’re following for the week of September 28, 2020.
Make sure to check back as we update these stories.
Droning home. Amazon revealed a new lineup of products last week, including an indoor drone with filming capabilities called the Ring Always Home Cam. Costing $249, the drone reportedly flies around the home and films everything. Intended as a home security device, it can monitor for potential burglaries, and to make sure windows are locked, according to Amazon.
- The takeaway: Despite Amazon’s claim that its drone is made for security purposes, it has raised concerns about users’ privacy. Amazon has previously come under fire for other products, including virtual assistant Alexa. Alexa has been found to unknowingly record owners’ conversations. In response, Amazon said that the drone would only film when it’s flight and that it would make a humming noise while flying to designate that it’s filming. The drone has yet to be approved by the Federal Communication Commission (FCC), the regulatory agency responsible for enforcing communication law. Pending that approval, the drone could be sold by the end of 2020, according to Amazon.
Spotify hits the big screen. Audio-streaming company Spotify announced last week that it will partner with production company Chernin Entertainment to turn Spotify original podcasts into TV series and movies. Spotify has shifted its focus from music streaming to podcasts in recent years, making deals with Gimlet Media, Anchor FM, Parcast Studios, and the Ringer. The company’s library of podcasts increased to 1.5 million in 2020 from 185,000 in 2018.
- The takeaway: Spotify currently produces 250 original podcasts, which are avenues for advertising and an increasingly important part of Spotify’s business model. TV and film could reportedly be an even bigger revenue source for Spotify. Chernin Entertainment has produced “Hidden Figures,” “The Greatest Showman,” “New Girl,” and “Homecoming,” which was based on a serialized podcast. Spotify and Chernin are currently collaborating on an adaptation of the true-crime podcast “The Clearing.”
Palantir goes direct. Data-mining company Palantir will start trading publicly via a direct listing on Tuesday, September 30. A direct listing happens when company insiders convert their shares into a public stock, and then sell it to the public through a stock exchange such as the New York Stock Exchange or the Nasdaq, without relying on traditional IPO middlemen such as investment banks. Experts expect Palantir, co-founded by Silicon Valley billionaire Peter Thiel, to begin trading around $10 per share, valuing the company at approximately $22 billion. The company is known as a data intelligence provider to U.S. security agencies, reportedly helping to track suspected terrorists including Osama bin Laden.
- The takeaway: Palantir’s public listing comes during a record year for initial public offerings (IPOs). As of the third week of September, 2020, investors have reportedly spent $95 billion on U.S. IPOs, compared to $84 billion for 2000, the last record year. Palantir has never turned a profit, losing $579.6 million in 2019. The company, which is known for an aggressive governance structure that gives its founders increasing control of the company even when it goes public, said that it expects to increase revenue by 42% in 2020. However, this claim doesn’t guarantee that the company will see this growth.
Ban slammed. Hours before President Trump’s ban on video creation app TikTok was scheduled to go into effect on Sunday, a federal judge ruled that the ban infringed free speech and due process. The ban would have removed TikTok from app stores in the U.S., meaning that people wouldn’t be able to download the app or update it. TikTok is owned by Chinese company ByteDance, and the Trump administration has argued that it, as well as WeChat and its parent Tencent, pose national security threats to U.S. consumers.
- The takeaway: Oracle and Walmart recently announced a partnership with ByteDance that would give them 20% of a newly formed TikTok Global, headquartered in the U.S. The Trump administration has demanded that TikTok’s U.S. operations should be majority owned by a U.S. company. Oracle, Walmart, and ByteDace have since been unable to come up with a satisfactory ownership structure for the company. A similar ban on WeChat was recently overturned by another federal judge in the U.S. in recent weeks.
Find out what we covered in last week’s Scan.