streaming

facebook-let-netflix-see-user-dms,-quit-streaming-to-keep-netflix-happy:-lawsuit

Facebook let Netflix see user DMs, quit streaming to keep Netflix happy: Lawsuit

ads, antitrust, facebook, Meta, netflix, privacy, Social Media, streaming, Tech / /
A promotional image for Sorry for Your Loss, with Elizabeth Olsen

Enlarge / A promotional image for Sorry for Your Loss, which was a Facebook Watch original scripted series.

Last April, Meta revealed that it would no longer support original shows, like Jada Pinkett Smith’s Red Table Talk talk show, on Facebook Watch. Meta’s streaming business that was once viewed as competition for the likes of YouTube and Netflix is effectively dead now; Facebook doesn’t produce original series, and Facebook Watch is no longer available as a video-streaming app.

The streaming business’ demise has seemed related to cost cuts at Meta that have also included layoffs. However, recently unsealed court documents in an antitrust suit against Meta [PDF] claim that Meta has squashed its streaming dreams in order to appease one of its biggest ad customers: Netflix.

Facebook allegedly gave Netflix creepy privileges

As spotted via Gizmodo, a letter was filed on April 14 in relation to a class-action antitrust suit that was filed by Meta customers, accusing Meta of anti-competitive practices that harm social media competition and consumers. The letter, made public Saturday, asks a court to have Reed Hastings, Netflix’s founder and former CEO, respond to a subpoena for documents that plaintiffs claim are relevant to the case. The original complaint filed in December 2020 [PDF] doesn’t mention Netflix beyond stating that Facebook “secretly signed Whitelist and Data sharing agreements” with Netflix, along with “dozens” of other third-party app developers. The case is still ongoing.

The letter alleges that Netflix’s relationship with Facebook was remarkably strong due to the former’s ad spend with the latter and that Hastings directed “negotiations to end competition in streaming video” from Facebook.

One of the first questions that may come to mind is why a company like Facebook would allow Netflix to influence such a major business decision. The litigation claims the companies formed a lucrative business relationship that included Facebook allegedly giving Netflix access to Facebook users’ private messages:

By 2013, Netflix had begun entering into a series of “Facebook Extended API” agreements, including a so-called “Inbox API” agreement that allowed Netflix programmatic access to Facebook’s users’ private message inboxes, in exchange for which Netflix would “provide to FB a written report every two weeks that shows daily counts of recommendation sends and recipient clicks by interface, initiation surface, and/or implementation variant (e.g., Facebook vs. non-Facebook recommendation recipients). … In August 2013, Facebook provided Netflix with access to its so-called “Titan API,” a private API that allowed a whitelisted partner to access, among other things, Facebook users’ “messaging app and non-app friends.”

Meta said it rolled out end-to-end encryption “for all personal chats and calls on Messenger and Facebook” in December. And in 2018, Facebook told Vox that it doesn’t use private messages for ad targeting. But a few months later, The New York Times, citing “hundreds of pages of Facebook documents,” reported that Facebook “gave Netflix and Spotify the ability to read Facebook users’ private messages.”

Meta didn’t respond to Ars Technica’s request for comment. The company told Gizmodo that it has standard agreements with Netflix currently but didn’t answer the publication’s specific questions.

Facebook let Netflix see user DMs, quit streaming to keep Netflix happy: Lawsuit Read More »

“disgraceful”:-messy-tos-update-allegedly-locks-roku-devices-until-users-give-in

“Disgraceful”: Messy ToS update allegedly locks Roku devices until users give in

arbitration, Policy, Roku, streaming, Tech, TVs / /

Show’s over —

Users are opted in automatically unless they write a letter to Roku by March 21.

–

A promotional image for a Roku TV.

Enlarge / A promotional image for a Roku TV.

Roku customers are threatening to stop using, or to even dispose of, their low-priced TVs and streaming gadgets after the company appears to be locking devices for people who don’t conform to the recently updated terms of service (ToS).

This month, users on Roku’s support forums reported suddenly seeing a message when turning on their Roku TV or streaming device reading: “We’ve made an important update: We’ve updated our Dispute Resolution Terms. Select ‘Agree’ to agree to these updated Terms and to continue enjoying our products and services. Press to view these updated Terms.” A large button reading “Agree” follows. The pop-up doesn’t offer a way to disagree, and users are unable to use their device unless they hit agree.

Customers have left pages of complaints on Roku’s forum. One user going by “rickstanford” said they were “FURIOUS!!!!” and expressed interest in sending their reported six Roku devices back to the company since “apparently I don’t own them despite spending hundreds of dollars on them.”

Another user going by Formercustomer, who, I suspect, is aptly named, wrote:

So, you buy a product, and you use it. And they want to change the terms limiting your rights, and they basically brick the device … if you don’t accept their new terms. … I hope they get their comeuppance here, as this is disgraceful.

Roku has further aggravated customers who have found that disagreeing to its updated terms is harder than necessary. Roku is willing to accept agreement to its terms with a single button press, but to opt out, users must jump through hoops that include finding that old book of stamps.

To opt out of Roku’s ToS update, which primarily changes the “Dispute Resolution Terms,” users must send a letter to Roku’s general counsel in California mentioning: “the name of each person opting out and contact information for each such person, the specific product models, software, or services used that are at issue, the email address that you used to set up your Roku account (if you have one), and, if applicable, a copy of your purchase receipt.” Roku required all this to opt out of its terms previously, as well.

But the new update means that while users read this information and have their letter delivered, they’re unable to use products they already paid for and used, in some cases for years, under different “dispute resolution terms.”

“I can’t watch my TV because I don’t agree to the Dispute Resolution Terms. Please help,” a user going by Campbell220 wrote on Roku’s support forum.

Based on the ToS’s wording, users could technically choose to agree to the ToS on their device and then write a letter saying they’d like to opt out. But opting into an agreement only to use a device under terms you don’t agree with is counterintuitive.

Even more pressing, Roku’s ToS states that users only have “within 30 days of you first becoming subject to” Roku’s updated terms, which was February 20, to opt out. Otherwise, you’re opted in automatically.

Archived records of Roku’s ToS website seem to show the new ToS being online since at least August. But it was only this month that users reported that their TVs were useless unless they accepted the terms via an on-screen message. Roku declined to answer Ars Technica’s questions about the changes, including why it didn’t alert users about them earlier. But a spokesperson shared a statement saying:

Like many companies, Roku updates its terms of service from time to time. When we do, we take steps to make sure customers are informed of the change.

What Roku changed

Customers are criticizing Roku for aggressively pushing them to accept ToS changes. The updates focus on Roku’s terms for dispute resolution, which prevent users from suing Roku. The terms have long forced a described arbitration process for dispute resolution. The new ToS is more detailed, including specifics for “mass arbitrations.” The biggest change is the introduction of a section called “Required Informal Dispute Resolution.” It states that except for a small number of described exceptions (which include claims around intellectual property), users must make “a good-faith effort” to negotiate with Roku, or vice versa, for at least 45 days before entering arbitration.

Roku is also taking heat for using forced arbitration at all, which some argue can have one-sided benefits. In a similar move in December, for example, 23andMe said users had 30 days to opt out of its new dispute resolution terms, which included mass arbitration rules (the genetics firm let customers opt out via email, though). The changes came after 23andMe user data was stolen in a cyberattack. Forced arbitration clauses are frequently used by large companies to avoid being sued by fed-up customers.

Roku’s forced arbitration rules aren’t new but are still making customers question their streaming hardware, especially considering that there are rivals, like Amazon, Apple, and Google, that don’t force arbitration on users.

Based on comments in Roku’s forums, some users were unaware they were already subject to arbitration rules and only learned this as a result of Roku’s abrupt pop-up.

But with the functionality of already-owned devices blocked until users give in, Roku’s methods are questionable, and Roku may lose customers over it. Per an anonymous user on Roku’s forum:

I’m unplugging right now.

“Disgraceful”: Messy ToS update allegedly locks Roku devices until users give in Read More »

max-confirms-2024-password-crackdown,-explores-adding-transactional-ads

Max confirms 2024 password crackdown, explores adding transactional ads

max, streaming, Tech, warner bros. discovery / /

Monkey see, monkey do —

WBD looking for ways to grow newfound streaming business profitability.

–

Ellie in the HBO show

Enlarge / Max viewers will soon need their own account to watch Ellie in The Last of Us.

Warner Bros. Discovery (WBD) has confirmed that it will be cracking down on password sharing for its Max streaming service starting this year. The news follows streaming rivals, including Netflix and, soon, Disney-owned Disney+ and Hulu, in banning the sharing of account login information with people outside of the account holder’s household.

As spotted by TheWrap, while speaking at Morgan Stanley’s Technology, Media, and Telecom 2024 conference in San Francisco on Monday, JB Perrette, CEO and president of global streaming and games at WBD, said that WBD sees a password-sharing crackdown as a “growth opportunity.”

“Obviously Netflix has implemented [its password crackdown] extremely successfully. We’re gonna be doing that starting later this year and into ’25,” Perrette said.

Netflix famously launched the password crackdown trend in March 2022 and brought the rule changes to US subscribers in May 2023. Netflix had excused password sharing for years, but in 2022, it lost subscribers—about 200,000—for the first time since 2011. At the time, Netflix had 221.64 million subscribers; its most recent subscriber count was 260 million.

However, Max is unlikely to see the same subscriber surge as Netflix did. After all, Netflix’s ban on password sharing started after 17 years of gaining millions of subscribers. The Max streaming service has only been around for four years, a number that includes HBO Max, as Perrette pointed out, noting that banning account sharing is still a ”meaningful” financial prospect.

Perrette didn’t get into details about how Max’s password crackdown would work and how it might apply to the Discovery+ streaming service that WBD also owns.

New types of ads on Max

WBD is aiming to grow its streaming business with more subscribers and less churn as it expands to other markets and tries to boost content selection following a light year impacted by strikes.

On Monday, Perrette also discussed interest in changing the types of ads its streaming service shows. On the network side, HBO is known as a channel with very few commercials and a primary focus on its own content. Now that WBD is focusing on driving the streaming side of HBO through the Max app, it would prefer that the content be more synonymous with ads. Streaming services report making more money per user on average when they use a streaming subscription with ads rather than paying more for no commercials.

Per Perrette:

On the ad format size, we’ve made lots of improvements from where we were, but we still have a lot of ad format enhancements that will give us more things that we can go to marketers with, [like] shoppable ads [and] other elements of the ad format side of the house that we can improve …

Again, Max isn’t starting a trend here. Amazon Prime Video, for example, is already looking at transactional ads. Disney+ announced beta testing for shoppable ads to advertisers in January. Hulu has worked with transactional ads for years. Peacock sells them, too. Apple TV+ still doesn’t have an ad tier for its streaming service, but recent hires have people suspecting that that may change.

Perrette also touched on scaling WBD’s streaming business by bundling with third-party services, as Max does with Verizon. Perrette said WBD is in discussions with other partners for potential bundles.

WBD’s strategies come as it tries to grow the profitability of its streaming businesses. In its earnings report shared on February 23, WBD said that its direct-to-consumer (DTC) business, which includes the Max and Discovery+ streaming services and HBO network, made a profit of $103 million in 2023. In 2022, WBD’s DTC business lost $2.1 billion. The company most recently reported having 97.7 million DTC subscribers, compared to the 95.8 million that it finished Q2 2023 with.

Outside of Max, WBD is planning to launch a joint sports-streaming app with Fox and Disney; some, including rival streamers, however, have challenged the proposed joint venture as monopolistic. This week, also at Morgan Stanley’s event, Fox CEO Lachlan Murdoch said he expects the future sports-streaming service to have 5 million subscribers five years after launch, Bloomberg reported.

But as streaming services like Max contemplate ways to make more money in the near term, subscribers are facing a pivotal point. Streaming is increasingly mirroring traditional cable companies in terms of being ad-driven, promoting long-term subscriptions, enacting price hikes, bundling, and threatening possible consolidation. While such moves might make sense from a business perspective, in many cases the result is unhappy subscribers.

Max confirms 2024 password crackdown, explores adding transactional ads Read More »

paramount-ends-warner-bros.-discovery-merger-talks,-continues-mulling-sell-off

Paramount ends Warner Bros. Discovery merger talks, continues mulling sell-off

max, paramount, streaming, Tech, warner bros. discovery / /

Max and Paramount+ staying separate —

Report: Paramount still contemplating selling to Skydance Media.

–

Paramount ends Warner Bros. Discovery merger talks, continues mulling sell-off

Paramount+

Warner Bros. Discovery (WBD) and Paramount Global are no longer considering a merger that would have put the Max and Paramount+ streaming services under one corporate umbrella. Per a CNBC report today citing anonymous “people familiar with the matter,” WBD and Paramount had been mulling a merger for “several months.”

In December, reports started swirling about WBD and Paramount discussing a potential merger. Axios even reported that WBD CEO David Zaslav and Paramount CEO Bob Bakish met in person for “several hours” and that Zaslav also met with Shari Redstone, the owner of National Amusements Inc. (NAI), Paramount’s parent company. Now, CNBC reports that discussions between the media giants “cooled off this month.” Paramount and WBD haven’t commented.

When news of the potential merger dropped, it was unclear what sort of regulatory hurdles the media conglomerates might have faced if they tried becoming one. Combined, the companies would have had the second-biggest streaming business by subscriber count, trailing Netflix.

Debt was also a huge concern. Paramount is $14.6 billion in debt, per its earnings report shared today. WBD was $40 billion in debt at the time of merger talks but said it was eyeing a profitable streaming business. WBD is still in debt currently but reported this month that its streaming business became profitable, making $103 million for the year. Max’s most recent subscriber count is 97.7 million compared to 67.5 million for Paramount+.

Merging with Paramount would have meant WBD added another company with struggling legacy media assets to its portfolio. It also would have meant buying a streaming service that has yet to turn a profit as of this writing. Paramount’s streaming business lost $1.66 billion in 2023, it reported today.

Merger still possible

Although things with WBD reportedly didn’t work out, Paramount is still seriously considering a merger. CNBC reported that the company formed a committee and hired a financial adviser focused on analyzing potential bids for all or parts of the company.

Suitors recently tied to Paramount include Byron Allen and, reportedly, Skydance Media. The David Ellison-owned company is “still performing due diligence on a potential transaction,” CNBC said today, citing two of its anonymous sources. In January, Bloomberg reported that Skydance made an all-cash offer for NAI.

Paramount could also try to bundle its services with another company’s, which could attract subscribers to Paramount+ and help Paramount save money. It has already considered bundling Paramount+ with Comcast’s Peacock through a partnership or joint venture, The Wall Street Journal (WSJ) reported earlier this month. But Comcast doesn’t want to buy Paramount, per one of CNBC’s anonymous sources from today’s report.

Some streaming rivals to Paramount+ are already bundled together (such as Disney’s Disney+ and Hulu) and exploring joint ventures. As streaming services race to achieve the sort of profitability that Netflix has, big strategic moves, such as mergers, partnerships, and price hikes, are expected soon. Meanwhile, subscribers remain worried about potential fallout, which could result in monopolistic practices that limit consumer options.

This article was updated to include information from Paramount’s latest earnings report. 

Paramount ends Warner Bros. Discovery merger talks, continues mulling sell-off Read More »

sony-claims-to-offer-subs-“appropriate-value”-for-deleting-digital-libraries

Sony claims to offer subs “appropriate value” for deleting digital libraries

anime, crunchyroll, funimation, Sony, streaming, Tech / /

(No) Funimation —

Customers confused as Sony claims to work with affected users individually.

–

Luffy from One Piece smiling with a treasuer

Enlarge / A scene from One Piece, one of the animes that Funimation has distributed.

Sony is making an effort to appease customers who will lose their entire Funimation digital libraries when the anime streaming service merges into Crunchyroll. Currently, though, the company’s plan for giving disappointed customers “an appropriate value” for their erased digital copies isn’t very accessible or clear.

Earlier this month, Sony-owned Funimation announced that customers’ digital libraries would be unavailable starting on April 2. At that time, Funimation accounts will become Crunchyroll accounts. Sony acquired Crunchyroll in 2021, so some sort of merging of the services was expected. However, less expected was customers’ lost access to online copies of beloved anime that they acquired through digital codes provided in purchased Funimation DVDs or Blu-rays. Funimation for years claimed that customers would be able to stream these copies “forever, but there are some restrictions.”

Rahul Purini, Crunchyroll’s president, explained the decision while speaking to The Verge’s latest Decoder podcast, noting that the feature was incorporated into the Funimation platform.

“As we look at usage of that and the number of people who were redeeming those and using them, it was just not a feature that was available in Crunchyroll and isn’t in our road map,” Purini said.

The executive claimed that Funimation is “working really hard directly” with each affected customer to “ensure that they have an appropriate value for what they got in the digital copy initially.” When asked what “appropriate value” means, Purini responded:

It could be that they get access to a digital copy on any of the existing other services where they might be able to access it. It could be a discount access to our subscription service so they can get access to the same shows through our subscription service. So we are trying to make it right based on each user’s preference.

Clarifying further, Purini confirmed that this means that Sony is willing to provide affected customers with a new digital copy via a streaming service other than Crunchyroll. The executive said that the company is handling subscribers’ requests as they reach out to customer service.

Notably, this approach to compensating customers for removing access to something that they feel like they purchased (digital copies are considered a free addition to the physical copies, but some people might not have bought the discs if they didn’t come with a free digital copy) puts the responsibility on customers to reach out. Ahead of Purini’s interview, Sony didn’t publicly announce that it would offer customers compensation. And since Funimation’s terms of use include caveats that content may be removed at any time, customers might have thought that they have no path for recourse.

But even if you did happen to demand some sort of refund from Funimation, you might not have been offered any relief. The Verge’s Ash Parrish, who has a free-tier Funimation account, reported today on her experience trying to receive the “appropriate value” for her digital copies of Steins;Gate and The Vision of Escaflowne. Parrish noted that Steins;Gate isn’t available to stream off Crunchyroll with a free subscription, meaning she’d have no way to watch it digitally come April 2. Parrish said Funimation support responded with two “boilerplate” emails that apologized but offered no solution or compensation. She followed up about getting compensated for a premium subscription so that she’d be able to stream what she used to digitally own through Crunchyroll but hadn’t received a response by publication time.

Following up with Funimation’s PR department didn’t provide any clarity. Brian Eley, Funimation’s VP of communications, reportedly told Parrish via email: “Funimation users who have questions about digital copies can contact Funimation here. A Funimation account associated with a digital copy redemption is required for verification.” Ars Technica reached out to Crunchyroll for comment but didn’t hear back in time for publication.

The downfalls of digital “ownership”

Sony’s plan to delete access to customers’ digital properties shows the risks of relying on streaming services. The industry is infamous for abruptly losing licenses to programming, changing prices and accessibility to titles, mergers, as is the case here, and collaborations that change what customers are entitled to.

When asked about this broader industry challenge on Decoder, Purini acknowledged customer inconvenience but noted the importance for Crunchyroll to “keep our resources and teams focused on what would help us bring the best experience for the broader audience.”

It’s unclear how many users were using their Funimation digital copies. However, some may consider their digital copies backups that they won’t use unless they’re no longer able to play their physical copy, giving Funimation customers peace of mind.

Although Funimation claimed that digital copies would be viewable “forever,” their terms of use note that Funimation can remove content “for any reason.” However, it’s not uncommon for customers to avoid reading lengthy, wordy terms of service agreements. Terms of service are easy to understand for an industry participant like Purini, he said, but “that might not be the case with a broader general audience.”

That said, with streaming becoming a more substantial part of people’s media libraries, users must understand what they’re spending money on. Access to beloved shows and movies over the Internet isn’t guaranteed, and inconsistent compensation plans are often the result.

Sony claims to offer subs “appropriate value” for deleting digital libraries Read More »

does-fubo’s-antitrust-lawsuit-against-espn,-fox,-and-wbd-stand-a-chance?

Does Fubo’s antitrust lawsuit against ESPN, Fox, and WBD stand a chance?

antitrust, Disney, Fox, lawsuits, Policy, sports, streaming, Tech, warner bros. discovery / /

Collaborating conglomerates —

Fubo: Media giants’ anticompetitive tactics already killed PS Vue, other streamers.

–

In this photo illustration, the FuboTV Inc. logo is displayed on a smartphone screen and ESPN, Warner Bros. Discovery and FOX logos in the background.

Fubo is suing Fox Corporation, The Walt Disney Company, and Warner Bros. Discovery (WBD) over their plans to launch a unified sports streaming app. Fubo, a live sports streaming service that has business relationships with the three companies, claims the firms have engaged in anticompetitive practices for years, leading to higher prices for consumers.

In an attempt to understand how much potential the allegations have to derail the app’s launch, Ars Technica read the 73-page sealed complaint and sought opinions from some antitrust experts. While some of Fubo’s allegations could be hard to prove, Fubo isn’t the only one concerned about the joint app’s potential to make it hard for streaming services to compete fairly.

Fubo wants to kill ESPN, Fox, and WBD’s joint sports app

Earlier this month, Disney, which owns ESPN, WBD (whose sports channels include TBS and TNT), and Fox, which owns Fox broadcast stations and Fox Sports channels like FS1, announced plans to launch an equally owned live sports streaming app this fall. Pricing hasn’t been confirmed but is expected to be in the $30-to-$50-per-month range. Fubo, for comparison, starts at $80 per month for English-language channels.

Via a lawsuit filed on Tuesday in US District Court for the Southern District of New York, Fubo is seeking an injunction against the app and joint venture (JV), a jury trial, and damages for an unspecified figure. There have been reports that Fubo was suing the three companies for $1 billion, but a Fubo spokesperson confirmed to Ars that this figure is incorrect.

“Insurmountable barriers”

Fubo, which was founded in 2015, is arguing that the three companies’ proposed app will result in higher prices for live sports streaming customers.

The New York City-headquartered company claims the collaboration would preclude other distributors of live sports content, like Fubo, from competing fairly. The lawsuit also claims that distributors like Fubo would see higher prices and worse agreements associated with licensing sports content due to the JV, which could even stop licensing critical sports content to companies like Fubo. Fubo’s lawsuit says that “once they have combined forces, Defendants’ incentive to exclude Fubo and other rivals will only increase.”

Disney, Fox, and WBD haven’t disclosed specifics about how their JV will impact how they license the rights to sports events to companies outside of their JV; however, they have claimed that they will license their respective entities to the JV on a non-exclusive basis.

That statement doesn’t specify, though, if the companies will try to bundle content together forcibly,

“If the three firms get together and say, ‘We’re no longer going to provide to you these streams for resale separately. You must buy a bundle as a condition of getting any of them,’ that would … be an anti-competitive bundle that can be challenged under antitrust law,” Hal Singer, an economics professor at The University of Utah and managing director at Econ One, told Ars.

Lee Hepner, counsel at the American Economic Liberties Project, shared similar concerns about the JV with Ars:

Joint ventures raise the same concerns as mergers when the effect is to shut out competitors and gain power to raise prices and reduce quality. Sports streaming is an extremely lucrative market, and a joint venture between these three powerhouses will foreclose the ability of rivals like Fubo to compete on fair terms.

Fubo’s lawsuit cites research from Citi, finding that, combined, ESPN (26.8 percent), Fox (17.3 percent), and WBD (9.9 percent) own 54 percent of the US sports rights market.

In a statement, Fubo co-founder and CEO David Gandler said the three companies “are erecting insurmountable barriers that will effectively block any new competitors” and will leave sports streamers without options.

The US Department of Justice is reportedly eyeing the JV for an antitrust review and plans to look at the finalized terms, according to a February 15 Bloomberg report citing two anonymous “people familiar with the process.”

Does Fubo’s antitrust lawsuit against ESPN, Fox, and WBD stand a chance? Read More »

report:-apple-is-about-to-be-fined-e500-million-by-the-eu-over-music-streaming

Report: Apple is about to be fined €500 million by the EU over music streaming

antitrust, Apple, Apple Music, EU, Policy, Spotify, streaming, syndication / /

Competition concerns —

EC accuses Apple of abusing its market position after complaint by Spotify.

–

Report: Apple is about to be fined €500 million by the EU over music streaming

Brussels is to impose its first-ever fine on tech giant Apple for allegedly breaking EU law over access to its music streaming services, according to five people with direct knowledge of the long-running investigation.

The fine, which is in the region of €500 million and is expected to be announced early next month, is the culmination of a European Commission antitrust probe into whether Apple has used its own platform to favor its services over those of competitors.

The probe is investigating whether Apple blocked apps from informing iPhone users of cheaper alternatives to access music subscriptions outside the App Store. It was launched after music-streaming app Spotify made a formal complaint to regulators in 2019.

The Commission will say Apple’s actions are illegal and go against the bloc’s rules that enforce competition in the single market, the people familiar with the case told the Financial Times. It will ban Apple’s practice of blocking music services from letting users outside its App Store switch to cheaper alternatives.

Brussels will accuse Apple of abusing its powerful position and imposing anti-competitive trading practices on rivals, the people said, adding that the EU would say the tech giant’s terms were “unfair trading conditions.”

It is one of the most significant financial penalties levied by the EU on Big Tech companies. A series of fines against Google levied over several years and amounting to about 8 billion euros are being contested in court.

Apple has never previously been fined for antitrust infringements by Brussels, but the company was hit in 2020 with a 1.1 billion-euro fine in France for alleged anti-competitive behavior. The penalty was revised down to 372 million euros after an appeal.

The EU’s action against Apple will reignite the war between Brussels and Big Tech at a time when companies are being forced to show how they are complying with landmark new rules aimed at opening competition and allowing small tech rivals to thrive.

Companies that are defined as gatekeepers, including Apple, Amazon, and Google, need to fully comply with these rules under the Digital Markets Act by early next month.

The act requires these tech giants to comply with more stringent rules and will force them to allow rivals to share information about their services.

There are concerns that the rules are not enabling competition as fast as some had hoped, although Brussels has insisted that changes require time.

Brussels formally charged Apple in the anti-competitive probe in 2021. The commission narrowed the scope of the investigation last year and abandoned a charge of pushing developers to use its own in-app payment system.

Apple last month announced changes to its iOS mobile software, App Store, and Safari browser in efforts to appease Brussels after long resisting such steps. But Spotify said at the time that Apple’s compliance was a “complete and total farce.”

Apple responded by saying that “the changes we’re sharing for apps in the European Union give developers choice—with new options to distribute iOS apps and process payments.”

In a separate antitrust case, Brussels is consulting with Apple’s rivals over the tech giant’s concessions to appease worries that it is blocking financial groups from its Apple Pay mobile system.

The timing of the Commission’s announcement has not yet been fixed, but it will not change the direction of the antitrust investigation, the people with knowledge of the situation said.

Apple, which can appeal to the EU courts, declined to comment on the forthcoming ruling but pointed to a statement a year ago when it said it was “pleased” the Commission had narrowed the charges and said it would address concerns while promoting competition.

It added: “The App Store has helped Spotify become the top music streaming service across Europe and we hope the European Commission will end its pursuit of a complaint that has no merit.”

The Commission—the executive body of the EU—declined to comment.

© 2024 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

Report: Apple is about to be fined €500 million by the EU over music streaming Read More »

lawsuit-against-prime-video-ads-shows-perils-of-annual-streaming-subscriptions

Lawsuit against Prime Video ads shows perils of annual streaming subscriptions

Amazon, amazon prime video, culture, streaming, Tech / /
Priyanka CHopra (left) and Richard Madden (right) in the AMazon Prime Video original series Citadel.

Enlarge / Priyanka Chopra (left) and Richard Madden (right) in the Prime Video original series Citadel.

Streaming services like Amazon Prime Video promote annual subscriptions as a way to save money. But long-term commitments to streaming companies that are in the throes of trying to determine how to maintain or achieve growth typically end up biting subscribers in the butt—and they’re getting fed up.

As first reported by The Hollywood Reporter, a lawsuit seeking class-action certification [PDF] hit Amazon on February 9. The complaint centers on Amazon showing ads with Prime Video streams, which it started doing for US subscribers in January unless customers paid an extra $2.99/month. This approach differed from how other streaming services previously introduced ads: by launching a new subscription plan with ads and lower prices and encouraging subscribers to switch.

A problem with this approach, though, as per the lawsuit, is that it meant that people who signed up for an annual subscription to Prime Video before Amazon’s September 2023 announcement about ads already paid for a service that’s different from what they expected.

And that’s not the only risk people face when opting-in to a yearlong relationship with streaming services these days.

Paying extra “for something they already paid for”

The lawsuit recently filed against Prime Video names California resident Wilbert Napoleon as a plaintiff and argues that Amazon’s advertisements for Prime Video made “reasonable consumers” think that they would get ad-free movie and TV-show streaming for the duration of their subscription.

The lawsuit reads:

Reasonable consumers expect that, if you purchase a subscription with ad-free streaming of movies and tv shows, that the ad-free streaming for movies and tv shows is available for the duration of the purchased subscription.

… however, Plaintiff and class members’ reasonable expectations were not met. Instead of receiving a subscription that included ad-free streaming of [TV] shows and movies, they received something worth less.

Napoleon bought an annual subscription to Prime Video in June 2023, per the court filings. The lawsuit accuses Amazon of falsely advertising Prime Video.

“Subscribers must now pay extra to get something that they already paid for,” the lawsuit says.

The idea of expectations not being met is common for streaming customers. That said, the lawsuit hasn’t gotten far enough yet where we should expect big changes to Prime Video or financial penalties for Amazon. Changing the user experience mid-deal is aggravating for customers, but Prime Video’s terms of use claim that Amazon maintains the right to diminish the value of Prime Video:

Offers and pricing for subscriptions (also referred to at times as memberships), the subscription services, the extent of available Subscription Digital Content, and the specific titles available through subscription services, may change over time and by location without notice (except as may be required by applicable law).

But there’s still a broader point to be made around streaming services trying to lure people into yearlong commitments knowing that the product they offer today might drastically change over the next 12 months.

Amazon, for example, announced that it would bring commercials to Prime Video in September and didn’t confirm when it would introduce ads until December, about a month ahead of the changes. Yet, Amazon reportedly had plans to bring ads to the service as early as June, per a report from The Wall Street Journal that cited anonymous “people familiar with the situation.” Despite these reported plans to alter the user experience significantly, Amazon continued to sell annual subscriptions to Prime Video. For months, people were committing to something that they expected would include commercial-free viewing, which used to be a popular draw of Prime Video compared to rival streaming services.

Prime Video also seemingly didn’t give a heads-up that it was removing Dolby Vision and Dolby Atmos support unless subscribers agreed to pay $2.99 more per month for an ad-free plan.

Amazon declined to comment on this story. Lawyers for the lawsuit filed against Amazon didn’t respond to a request for comment.

Lawsuit against Prime Video ads shows perils of annual streaming subscriptions Read More »

prime-video-cuts-dolby-vision,-atmos-support-from-ad-tier—and-didn’t-tell-subs

Prime Video cuts Dolby Vision, Atmos support from ad tier—and didn’t tell subs

Amazon, amazon prime video, culture, dolby atmos, dolby vision, streaming, Tech / /

Surprise —

To get them back, you must pay an extra $2.99/month for the ad-free tier.

–

High King Gil-galad and Elrond in The Lord of the Rings: The Rings of Power

Enlarge / The Rings of Power… now in HDR10+ for ad-tier users.

On January 29, Amazon started showing ads to Prime Video subscribers in the US unless they pay an additional $2.99 per month. But this wasn’t the only change to the service. Those who don’t pay up also lose features; their accounts no longer support Dolby Vision or Dolby Atmos.

As noticed by German tech outlet 4K Filme on Sunday, Prime Video users who choose to sit through ads can no longer use Dolby Vision or Atmos while streaming. Ad-tier subscribers are limited to HDR10+ and Dolby Digital 5.1.

4K Filme confirmed that this was the case on TVs from both LG and Sony; Forbes also confirmed the news using a TCL TV.

“In the ads-free account, the TV throws up its own confirmation boxes to say that the show is playing in Dolby Vision HDR and Dolby Atmos. In the basic, with-ads account, however, the TV’s Dolby Vision and Dolby Atmos pop-up boxes remain stubbornly absent,” Forbes said.

Amazon hasn’t explained its reasoning for the feature removal, but it may be trying to cut back on licensing fees paid to Dolby Laboratories. Amazon may also hope to push HDR10+, a Dolby Vision competitor that’s free and open. It also remains possible that we could one day see the return of Dolby Vision and Dolby Atmos to the ad tier through a refreshed licensing agreement.

Amazon has had a back-and-forth history with supporting Dolby features. In 2016, it first made Dolby Vision available on Prime Video. In 2017, though, Prime Video stopped supporting the format in favor of HDR10+. Amazon announced the HDR10+ format alongside Samsung, and it subsequently made the entire Prime Video library available in HDR10+. But in 2022, Prime Video started offering content like The Lord of the Rings: The Rings of Power in Dolby Vision once again.

Amazon wasn’t upfront about removals

Amazon announced in September 2023 that it would run ads on Prime Video accounts in 2024; in December, Amazon confirmed that the ads would start running on January 29 unless subscribers paid extra. In the interim, Amazon failed to mention that it was also removing support for Dolby Vision and Atmos from the ad-supported tier.

Forbes first reported on Prime Video’s ad-based tier not supporting Dolby Vision and Atmos by assuming that it was a technical error. Not until after Forbes published its article did Amazon officially confirm the changes. That’s not how people subscribing to a tech giant’s service expect to learn about a diminishing of their current plan.

It also seems that Amazon’s removal of the Dolby features has been done in such a way that it could lead some users to think they’re getting Dolby Vision and Atmos support even when they’re not.

As Forbes’ John Archer reported, “To add a bit of confusion to the mix, on the TCL TV I used, the Prime Video header information for the Jack Ryan show that appears on the with-ads basic account shows Dolby Vision and Dolby Atmos among the supported technical features—yet when you start to play the episode, neither feature is delivered to the TV.”

As streaming services overtake traditional media, many customers are growing increasingly discouraged by how the industry seems to be evolving into something strongly reminiscent of cable. While there are some aspects of old-school TV worth emulating, others—like confusing plans that don’t make it clear what you get with each package—are not.

Amazon didn’t respond to questions Ars Technica sent in time for publication, but we’ll update this story if we hear back.

Prime Video cuts Dolby Vision, Atmos support from ad tier—and didn’t tell subs Read More »

sony-is-erasing-digital-libraries-that-were-supposed-to-be-accessible-“forever”

Sony is erasing digital libraries that were supposed to be accessible “forever”

anime, culture, Sony, streaming / /
one piece

A shot from One Piece, one of the animes that Funimation made DVDs for.

How long is “forever”? When it comes to digital media, forever could be as close as a couple of months away.

Funimation, a Sony-owned streaming service for anime, recently announced that subscribers’ digital libraries on the platform will be unavailable after April 2. For years, Funimation had been telling subscribers that they could keep streaming these digital copies of purchased movies and shows, but qualifying it: “forever, but there are some restrictions.”

Funimation’s parent company, Sony, bought rival anime streaming service Crunchyroll in 2021. Since then, it was suspected that Sony would merge the offerings together somehow. This week, we learned how, as Funimation announced that its app and website would close on April 2, and Funimation accounts will become Crunchyroll accounts. Most of Funimation’s catalog is already on Crunchyroll, Funimation’s announcement claimed.

But in addition to offering video streaming, Funimation also dubbed and released anime as physical media, and sometimes those DVDs or Blu-rays would feature a digital code. Subscribers to the Funimation streaming service could add those digital codes to Funimation and then stream the content from the platform.

With Funimation claiming that customers could access these digital copies “forever,” I could see why someone might have thought this was a reliable way to access their purchased media. For people lacking the space, resources, or interest in maintaining a library of physical media, this was a good way to preserve treasured shows and movies without spending more money. It also provided a simple way to access purchased media online if you were, for example, away on a trip and had a hankering to watch some anime DVDs you bought.

But soon, people who may have discarded or lost their physical media or lack a way to play DVDs and Blu-rays won’t have a way to access the digital copies that they were entitled to through their physical copy purchase.

Funimation’s announcement says:

Please note that Crunchyroll does not currently support Funimation Digital copies, which means that access to previously available digital copies will not be supported. However, we are continuously working to enhance our content offerings and provide you with an exceptional anime streaming experience. We appreciate your understanding and encourage you to explore the extensive anime library available on Crunchyroll.

Regarding refunds, Funimation’s announcement directed customers to its support team “to see the available options based on your payment method,” but there’s no mention of getting money back from a DVD or Blu-ray that you might not have purchased had you known you couldn’t stream it “forever.”

Sony is erasing digital libraries that were supposed to be accessible “forever” Read More »

hulu,-disney+-password-crackdown-kills-account-sharing-on-march-14

Hulu, Disney+ password crackdown kills account sharing on March 14

Disney, Hulu, streaming, Tech / /

profit push —

New subscribers are already banned from sharing logins outside their household.

–

Selena Gomez and Martin Short on the set of <em>Only Murders in the Building</em> on February 14, 2022, in New York City. ” src=”https://cdn.arstechnica.net/wp-content/uploads/2024/02/GettyImages-1370661621-800×513.jpg”></img><figcaption> <p><a data-height=Enlarge / Selena Gomez and Martin Short on the set of Only Murders in the Building on February 14, 2022, in New York City.

Hulu and Disney+ subscribers have until March 14 to stop sharing their login information with people outside of their household. Disney-owned streaming services are the next to adopt the password-crackdown strategy that has helped Netflix add millions of subscribers.

An email sent from “The Hulu Team” to subscribers yesterday and viewed by Ars Technica tells customers that Hulu is “adding limitations on sharing your account outside of your household.”

Hulu’s subscriber agreement, updated on January 25, now states that users “may not share your subscription outside of your household,” with household being defined as the “collection of devices associated with your primary personal residence that are used by the individuals who reside therein.”

The updated terms also note that Hulu might scrutinize user accounts to ensure that the accounts aren’t being used on devices located outside of the subscriber’s residence:

We may, in our sole discretion, analyze the use of your account to determine compliance with this Agreement. If we determine, in our sole discretion, that you have violated this Agreement, we may limit or terminate access to the Service and/or take any other steps as permitted by this Agreement (including those set forth in Section 6 of this Agreement).

Section 6 of Hulu’s subscriber agreement says Hulu can “restrict, suspend, or terminate” access without notice.

Hulu didn’t respond to a request for comment on how exactly it will “analyze the use” of accounts. But Netflix, which started its password crackdown in March 2022 and brought it to the US in May 2023, says it uses “information such as IP addresses, device IDs, and account activity to determine whether a device signed in to your account is part of your Netflix Household” and doesn’t collect GPS data from devices.

According to the email sent to Hulu subscribers, the policy will apply immediately to people subscribing to Hulu from now on.

The updated language in Hulu’s subscriber agreement matches what’s written in the Disney+/ESPN+ subscriber agreement, which was also updated on January 25. Disney+’s password crackdown first started in November in Canada.

A Disney spokesperson confirmed to Ars Technica that Disney+ subscribers have until March 14 to comply. The rep also said that notifications were sent to Disney+’s US subscribers yesterday; although, it’s possible that some subscribers didn’t receive an email alert, as is the case with a subscriber in my household.

The representative didn’t respond to a question asking how Disney+ will “analyze” user accounts to identify account sharing.

Push for profits

Disney CEO Bob Iger first hinted at a Disney streaming-password crackdown in August during an earnings call. He highlighted a “significant” amount of password sharing among Disney-owned streaming services and said Disney had “the technical capability to monitor much of this.” The executive hopes a password crackdown will help drive subscribers and push profits to Netflix-like status. Disney is aiming to make its overall streaming services business profitable by the end of 2024.

In November, it was reported that Disney+ had lost $11 billion since launching in November 2019. The streaming service has sought to grow revenue by increasing prices and encouraging users to join its subscription tier with commercials, which is said to bring streaming services higher average revenue per user (ARPU) than non-ad plans.

Hulu, which Disney will soon own completely, has been profitable in the past, and in Disney’s most recent financial quarter, it had a higher monthly ARPU than Disney+. Yet, Hulu has far fewer subscribers than Disney+ (48.5 million versus 150.2 million). Cracking down on Hulu password sharing is an obvious way for Disney to try to squeeze more money from the more financially successful streaming service.

Such moves run the risk of driving away users. However, Hulu, like Netflix, may be able to win over longtime users who have gotten accustomed to having easy access to Hulu, even if they weren’t paying for it. Disney+, meanwhile, is a newer service, so a change in policy may not feel as jarring to some.

Netflix, which allowed account sharing for years, has seen success with its password crackdown, saying in November that the efforts helped it add 8.8 million subscribers. Unlike the Disney-owned streaming services, though, Netflix allows people to add extra members to their non-ad subscription (in the US, Netflix charges $7.99 per person per month).

As Disney embarks on an uphill climb to make streaming successful this year, you can expect it to continue following the leader while also trying to compete with it. Around the same time as the password-sharing ban takes full effect, Disney should also unveil a combined Hulu-Disney+ app, a rare attempt at improving a streaming service that doesn’t center on pulling additional monthly dollars from customers.

Hulu, Disney+ password crackdown kills account sharing on March 14 Read More »

netflix,-hungry-for-more-growth,-signals-more-price-hikes

Netflix, hungry for more growth, signals more price hikes

ads, netflix, streaming, Tech / /

“pay a little extra” —

Basic ad-free plan being ripped from subscribers in Canada, UK first.

–

Jason Bateman and Laura Linney in Ozark

Enlarge / Jason Bateman and Laura Linney in the Netflix original series Ozark.

Netflix subscribers can expect more price hikes as the company looks to grow revenue in 2024. In its Q4 2023 letter to shareholders, Netflix also revealed plans to eliminate the cheapest ad-free plan available to users.

In the January 23 letter (PDF), Netflix said:

As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service.

The statement will be unsavory for frugal streamers who have recently endured price hikes from Netflix and other streaming services. In January 2022, Netflix increased the price of its Basic no-ads tier from $8.99 per month to $9.99/month. In October 2023, that same plan went up to $11.99/month. Meanwhile, Netflix’s Premium ad-free plan increased from $17.99/month to $19.99/month in January 2022 and then to $22.99/month in October.

Netflix has attributed its price hikes to added features, like 4K streaming and gaming. But subscription fees remain the biggest source of revenue for Netflix, giving it obvious reason to leave a door open for even more price hikes in the near future.

Netflix has also used price hikes to encourage users to subscribe to its ad tier, where it has made more average revenue per user. Netflix with ads has cost $6.99/month since launching in November 2022 and has seen feature improvements, like moving from 720p resolution streams to 1080p.

Killing off the cheapest ad-free plan

In another attempt to push subscribers into watching ads on Netflix, the streaming company stopped offering new subscribers the aforementioned $11.99/month, ad-free Basic plan. It included 720p resolution, downloadable content, and support for one device. The change spiked the cheapest price for ad-free Netflix 55.06 percent to $15.49/month.

Netflix customers who were already subscribed to the ad-less Basic plan have been allowed to keep using it. But it seems like that grace period will soon end.

Netflix’s letter reads:

The ads plan now accounts for 40 percent of all Netflix sign-ups in our ads markets and we’re looking to retire our Basic plan in some of our ads countries, starting with Canada and the UK in Q2 and taking it from there.

Netflix originally cut the Basic plan in Canada before following suit in the US and UK. Combined with the fact that most of Netflix’s North American users are from the US, it’s expected that Netflix will cut the Basic plan in the US, too.

Netflix’s letter said ad membership grew when it stopped offering the Basic ad-free plan to new subscribers. Ad tier membership grew almost 70 percent quarter over quarter in Q4 2023. The tier has over 23 million subscribers, per Bloomberg.

During an earnings call on Tuesday, Netflix co-CEO Greg Peters noted Netflix’s 2024 priorities as including “pricing optimization” to help improve operating margins and grow revenue and its ad business.

Netflix’s ad business: years of work ahead

Netflix said this week that it has 260.28 million subscribers globally (for comparison, Disney+ has 66.1 million subscribers, Hulu 48.5 million, and Amazon Prime Video is estimated to have about 180.1 million). That’s after adding 13.1 million subscribers in Q4 2023, Netflix’s biggest Q4 yet.

But despite currently besting competitors in subscriber count and cash flow, Netflix faces similar challenges when it comes to wooing advertisers that may be unaccustomed to working with streaming services (which previously had limited advertising opportunities). While Netflix has seen revenue grow from other efforts, like password crackdowns and price hikes, it plans to focus heavily on scaling its ad business over the coming years.

“I’d say we got years of work ahead of us to take the ads business to the point where it’s a material impactor to our general business,” Peters said.

Netflix is already trying to strong-arm customers onto its ad plan. The streaming bundle plan that T-Mobile offers will no longer include ad-free Netflix. Anyone who had ad-less Netflix through a T-Mobile bundle is getting downgraded. Peters said this week that under the previous bundle, “it was hard to make the economics work for everyone.”

Ultimately, the amount of ad dollars up for grabs, including from the declining linear TV networks, is too tasty for streaming services to pass up.

On Tuesday, Netflix announced a $5 billion, 10-year deal to stream World Wrestling Entertainment’s (WWE’s) Raw live on Netflix. The company was able to win a deal out from long-time Raw network USA, which is owned by NBCUniversal. NBCUniversal’s Peacock streaming service also has the rights to some WWE events. But Netflix’s seizure of Raw illustrates its interest in ad dollars from live sports and its pull and budget compared to aging broadcast and cable networks. Looking ahead, we expect to see Netflix consider additional live events that can appeal to advertisers.

Netflix said this week that it’s not anticipating the same amount of subscriber growth that it enjoyed in 2023 in 2024. But it does expect double-digit revenue growth. That newfound money has to come from somewhere. If Netflix can’t pull it all from new subscribers, it will force it out of existing customers through higher prices and ads.

Netflix, hungry for more growth, signals more price hikes Read More »