May 19 2023 - Double down Disney, AI & More

👋Happy Friday everyone. We've got a lot on the plate today, but more importantly, Heinz is back with another breakthrough in ketchup delivery. All that and more below–

Quick Take

• Disney stock surges on reports of ESPN to launch streaming service – and the battle with Florida is just heating up
• Instacart with some impressive ad revenue numbers
• Meta layoffs are coming again, but to be expected

Disney has canceled a $1 billion office complex development in Florida, which would have created over 2,000 jobs. The decision comes amid an ongoing feud between Disney and Governor Ron DeSantis. The project, known as Lake Nona Town Center, involved relocating Disney employees from Southern California to Florida. The cancellation is seen as a response to the company's battle with the governor and his allies in the Florida Legislature. Disney's CEO Bob Iger had previously warned that the company's planned $17 billion investment in Walt Disney World was at stake due to the feud. The cancellation of the project highlights the strained relationship between Disney and the state of Florida, with both sides engaging in legal battles and retaliatory measures.

OpenAI has launched an official iOS app for its ChatGPT AI chatbot, allowing users to access it on the go. The app, initially available for U.S. users, provides voice input and syncs user history across devices. ChatGPT Plus subscribers can access GPT-4 capabilities through the app, along with other benefits.

ESPN is reportedly making plans to offer its channel directly as a subscription streaming service in the future. The project, internally named "Flagship," is part of ESPN's preparation for the inevitable shift towards stand-alone streaming services as more consumers abandon traditional cable TV. The move could have significant implications for cable providers as ESPN is one of the main attractions of cable bundles. ESPN has started securing flexibility in deals with cable providers and pro sports leagues to offer the channel directly to consumers. The company's existing streaming service, ESPN+, does not include access to the ESPN channel itself, so the "Flagship" project aims to transition the full channel to streaming.

Walmart reported its first-quarter 2023 earnings, with total revenue reaching $141.6 billion, up 2.4% despite a negative impact of $5 billion due to divestitures. The company raised its full-year guidance as earnings exceeded expectations, driven in part by the growth of its grocery business. Walmart's e-commerce also contributed to its positive financial results, with U.S. first-quarter store sales growing 3.0% and U.S. eCommerce sales growing 1% or 38% on a two-year stack. The company's Sam's Club saw a significant increase in sales and membership income.  While the topline performance was strong, the bottom line was impacted by increased operating costs and margin pressure caused by inflation levels.

• Kraft Heinz has unveiled the Heinz Remix sauce dispenser, a device that allows users to customize sauces through a touchscreen interface. Users can choose from base sauces and add "enhancers" at various intensities to create personalized flavors. The company plans to test the dispenser at select restaurants in late 2023 to early 2024. While pricing details have not been disclosed, the device is expected to be used in commercial settings rather than for home use. The introduction of the Heinz Remix dispenser follows the success of custom drink dispensers like Coca-Cola's Freestyle, which have increased business at restaurants. Heinz aims to use the dispenser as an "insights engine" to understand customer flavor preferences and potentially introduce new sauce combinations based on data from restaurant guests.

• Meta is set to begin another round of layoffs next week. The exact timing and scope of the layoffs were confirmed to employees during a company-wide meeting. Meta's president of global affairs, Nick Clegg, acknowledged the anxiety and uncertainty surrounding the layoffs and praised employees for their resilience.
• Apple has filed a patent application revealing the possibility of incorporating their Digital Crown feature, currently used on Apple Watch, AirPods Max, and potentially their upcoming XR Headset and future iPads. The Digital Crown would serve as a multi-functional button for controlling aspects of three-dimensional environments and the spatial arrangements of virtual objects. By pressing the button, users could update the positions of multiple virtual objects, move objects within the environment, or recenter the three-dimensional space. The patent application also suggests that turning the dial could adjust the visual emphasis of virtual objects.

• Microsoft is exploring the possibility of allowing players to view ads in exchange for a limited period of game time. Sarah Bond, Xbox Corporate VP for Game Creator Experience and Ecosystem, mentioned the company's interest in diversifying business models and incorporating advertising in games during an interview. This follows earlier indications of Microsoft's exploration of ad-supported options for Xbox Game Pass. Microsoft is seeking revenue-generating alternatives for Game Pass as subscription growth slows down.
• Meta is introducing a new ad format called promotional ads to help shoppers find deals from retail brands. When users see an ad with a special promotion, they can click through to claim the offer and the discount code will be automatically applied. This move comes as Meta aims to enhance its ecommerce capabilities following Apple's privacy changes.

• Apple is highlighting the stories of two creatives in the disabled community, Esmé Moore and Ian Treherne, as part of its celebration of Global Accessibility Awareness Day. The focus is on how iPhone's accessibility features enhance their creative perspectives and assist them in capturing portraits. Apple will showcase their work through portraits and Instagram reels on the Apple Instagram page.
• Google plans to integrate generative AI into its Performance Max program, allowing advertising customers to create sophisticated ad campaigns. The AI will generate advertisements based on supplied imagery, video, and text, tailored to reach the intended audience and sales targets. Concerns have been raised about potential misinformation, but Google assures it will implement safeguards to prevent errors and misinformation when launching AI-powered ads.
• Acura has successfully utilized an anime content series to engage with a new generation through its original series, "Chiaki's Journey." The series combines racing and adventure, representing Acura's passion for performance. Acura extended the series into the real world with an experiential installation at the Acura Grand Prix of Long Beach. The success of the series has exceeded expectations, and Acura looks forward to the future of "Chiaki's Journey."

• Twitter now allows Twitter Blue subscribers to upload videos up to two hours long, with 1080p resolution and a maximum file size of 8GB. This feature is currently available on the web and iOS, while Android users are limited to 10-minute videos. Non-Blue subscribers can post videos up to 140 seconds long.
• FIFA has unveiled the logo for the 2026 World Cup, which will be held across 16 cities in the U.S., Canada, and Mexico. The logo features the iconic shape of the World Cup trophy overlaid with a bold "26." The design can be customized for each of the 16 host cities and the 48 participating national teams.

• WeWork continues to face challenges as its stock dropped 25% following news of CEO Sandeep Mathrani's upcoming departure. WeWork's stock has plummeted by 98% since its public debut in 2021. The company has been burning cash rapidly, with a loss of $343 million in the first quarter of 2023 and $5.6 billion between 2020 and 2022. WeWork's major investor, SoftBank, has reportedly lost over $12 billion on its investment.
• Elon Musk's lawyer sent a letter to Microsoft CEO Satya Nadella accusing the company of violating Twitter's developer agreement. The alleged violations include unauthorized use of Twitter's APIs and failure to disclose app use cases. The letter requests a compliance audit and information on Twitter data usage. Microsoft stated it will review the allegations. Previously, Musk threatened to sue Microsoft for training language models with Twitter data.
• YouTube is set to introduce 30-second unskippable ads to top-performing content watched on connected TVs. Instead of two consecutive 15-second ads, viewers will see a single 30-second ad. These longer ads will be available through YouTube Select, a curated advertising platform targeting the top five percent of YouTube content. YouTube also announced testing of "pause experiences," ads that appear when a viewer pauses a video on a connected TV, similar to Hulu's pause ad feature. The paused video will shrink to accommodate the banner-style pause ads, which can be dismissed. YouTube has not provided a specific timeline for the rollout of these changes.

• Meta has developed a generative AI tool for coding called CodeCompose, similar to GitHub's Copilot. CodeCompose is currently used internally by Meta's teams to receive code suggestions. CodeCompose was fine-tuned on Meta's own codebase and filtered for poor coding practices and errors, the largest CodeCompose model has 6.7 billion parameters. Meta claims that thousands of employees accept suggestions from CodeCompose each week, with an acceptance rate of over 20%.
• Instacart's advertising revenue reached approximately $740 million in 2022, marking a 30% increase from the previous year. This surge in ad business is noteworthy as the digital ad market experienced stagnation during the same period. Nearly 30% of Instacart's total revenue in 2022 came from advertising sales rather than its core grocery delivery service. The company's success in building its advertising business strengthens its pitch to potential investors as it awaits a favorable market for its IPO. Unlike Instacart, DoorDash has taken a more cautious approach to developing its advertising business to avoid negatively impacting the customer experience. Instacart employees have expressed concerns that the advertising business could strain the company's relationships with grocery retailers seeking to build their own ad networks.

• Apple TV now offers a multiview feature that allows users to watch up to four live sports games simultaneously. Users can customize their viewing layout, enlarge one game while keeping the others small, or choose a split-screen layout for two to four games. Apple TV's multiview feature supports Major League Soccer (MLS) and Friday Night Baseball games.
• A new study has found that about half of the people who played online multiplayer games in major gaming markets encountered extremist statements in the past year. The study, conducted by the NYU Stern Center for Business and Human Rights, highlights the prevalence of misogyny, racism, and other extreme ideologies in video game chat rooms. The report reveals that extremist views are easily found within games, social media services, and platforms like Discord and Steam, which are popular among gamers. These views are spread by a minority of users who have built virtual communities to recruit young people with hateful and violent content. The study argues that these users have a significant impact on gamer culture and real-world events. The gaming industry, historically male-dominated, has faced issues of problematic behavior in the past. The report emphasizes that gaming platforms and social media sites are particularly vulnerable to extremist groups due to the young and impressionable player base and the lack of moderation on some platforms.
• Netflix stock experienced a 10% jump after the company reported positive metrics for its ad-supported plan. The new tier, which offers cheaper subscriptions with ad breaks, has gained 5 million monthly active users since its launch six months ago. This represents significant growth compared to the 1 million monthly active users reported in March. Netflix did not disclose specific subscriber figures or revenue from the ad-supported plan, but analysts estimate that the reported 5 million monthly active users translate to 2-3 million subscription accounts. Despite concerns about downgrades, a quarter of new sign-ups opted for the ad-supported option.
• Nike and Strava have partnered to simplify the sharing of activity data between their platforms. This collaboration allows Nike+ users to connect with Strava's extensive community of fitness enthusiasts and clubs. In addition to data sharing, Nike will create curated content on Strava, featuring renowned coaches and athletes. The partnership aims to inspire engagement and connection through shared challenges, offering unlockable rewards. Strava will also enhance its community-based clubs and introduce new features, including the integration of videos, routes, and activities.
• Mojo Supermarket Appointed Creative AOR for Death Wish Coffee

• Meta Made Its AI Tech Open-Source. Rivals Say It’s a Risky Decision.
• Apple TV+ Hits All-Time Viewership Highs
• Adobe Tells Users They Can Get Sued for Using Old Versions of Photoshop
• Google's new registered domains include .zip and .mov
• Futurama season 11 starts on July 24th, with half the episodes promised
• Dispatches From The WGA Picket Lines, Day 17
• Mercedes-Benz USA hires former Cadillac marketer as CMO
• Another Side of the A.I. Boom: Detecting What A.I. Makes
• Media360: Don’t go in-house just to save cost, PepsiCo marketer says
• Existing-home sale prices fall at the sharpest annual pace in a decade
• Ex-Apple marketing executive says the company's upcoming 'Reality' headset risks being 'one of the great tech flops of all time'
• Elon Musk told a Twitter advisor at 4 a.m. that the company would only pay rent over his 'dead body,' lawsuit says
• Disney’s absurdly expensive Star Wars hotel is shutting down
• How we made Eurovision 2023's visual identity
• Humble’s new lineup of indie games is full of beautiful animation
• Why are video games always falling?
• Elon Musk claimed he gave $100 million to OpenAI. Filings show he gave far less
• The Xbox web store now includes accessibility filters

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