Year: 2018

I’ve been very lucky to have been in the animation industry since the mid-1980s, and I have lived through my share of big disruptions — most of them having to do with new technologies. What’s going on today is as significant as anything I’ve seen before, but it’s being driven by a whole new set of forces.

Here’s a quick survey of trends in the animation landscape that have me pretty optimistic about the future.

Technology is vanishing

By “vanishing,” I don’t mean going away; I mean disappearing from view. I’ve always said, “When technology can disappear, that’s when creativity can really begin.”

For the past 20 years, feature-film animation in particular has been an arms race of studios like Pixar and DreamWorks trying to out-engineer each other to deliver high-end character performances and visual effects that no one had ever seen. As a result, studios spent tens of millions of dollars becoming, essentially, IT companies with teams of creators producing stories to demonstrate their latest breakthroughs. Now, thanks to simpler, more intuitive tools, technology is becoming less intrusive in the creative process and animators can finally get back to doing what they love: telling stories.

New distribution platforms are driving demand

The explosion of new outlets on cable, over-the-top and online, is creating unprecedented opportunities for animated content in a wide range of styles, genres and formats. Netflix has found an audience for all kinds of quirky original animated programs, and its competitors are following suit. Cable networks are pushing the envelope in all kinds of ways, as well.

These new channels are opening up the world to artists and studios. Now anyone can create a compelling story in their basement and the world will have a chance to see it. And if it finds its audience, it can be as big as any studio release. Never before has that been possible.

Digital imagery is invading the physical world

If you love animation and digital imagery, you’re no longer limited to watching it on a screen. It’s spilling out into the world around us on mobile devices, augmented and virtual reality headsets, immersive smart spaces, holograms, giant flat panels and who knows what’s next?

The thing is, most of those hardware innovations are still waiting for their “killer app” — that must-have content or experience that pulls audiences to the new ways of experiencing stories. I firmly believe that animation and visual storytelling is going to drive those killer apps, particularly in VR.

Globally distributed workflow is transforming teamwork

The idea of a global distributed workforce isn’t new to most businesses, but it’s somewhat new for animation production. Sure, offshore outsourcing has been happening for years, but animation, at its best, is massively collaborative. Teams have to collaborate and share their ideas to help a story reach its full potential. Until recently, the connective technology hasn’t been up to the task. Now, at last, the cloud makes a lot of those limitations obsolete. It doesn’t matter if your teammate is sitting at the next desk or in Seoul, Dublin or Mexico City. And that means…

New voices are joining the conversation

All these trends are lowering the barriers and cost to entry for upstarts around the world. That means we’ll be hearing from lots of people and perspectives that haven’t been part of the animation industry before. In a world where creativity is the coin of the realm, that means we’re all going to be a whole lot richer.

Honk Technologies, a marketplace for towing services for consumers and insurance companies, has raised $18 million in a new round of funding a little over a year after inking a massive contract with the insurance company, Farmers.

The investment was led by Altpoint Ventures, with participation from existing investors Structure Capital and Venture 51.

The company said it would use the funds to build on its network of 75,000 tow truckers and roadside assisters; and add new services for insurers, fleet managers and manufacturers. 

Company chief executive Corey Brundage declined to comment on the company’s revenue, path to profitability, or valuation in an interview.

Honk basically applies the same technology ride-hailing uses to the towing business, making trucks more responsive and slashing the time that a customer waits to get help when they need it, according to Brundage.

As we wrote last year, roadside assistance is a huge, fragmented market. According to the market research firm, IBISWorld, customers spend roughly $6 billion on roadside assistance services.

Customers call for a tow directly from HONK via mobile web or the company’s app to find a nearby professional and track the location and estimated time of arrival of their tow truck in real-time. Insurance companies, auto OEMs, and fleets use the company’s transparent platform to reduce wait times by over 50%, improve customer satisfaction, harness their roadside assistance data and receive industry leading net promoter scores, according to a statement.

Microsoft’s facial recognition tools just made some significant technological strides, though the timing probably couldn’t be worse.

On Tuesday, the company revealed in a blog post that its Face API, part of Azure Cognitive Services, can now identify men and women with darker skin far more successfully than previous iterations of the technology. The updates particularly improve the system’s recognition capabilities for women with darker skin tones, reducing error rates for darker-skinned men and women by as much as 20 times and reducing error rates for all women by nine times.

Microsoft stated that it was able to “significantly reduce accuracy differences across the demographics” by expanding facial recognition training data sets, initiating new data collection around the variables of skin tone, gender and age and improving its gender classification system by “focusing specifically on getting better results for all skin tones.”

“The higher error rates on females with darker skin highlights an industrywide challenge: Artificial intelligence technologies are only as good as the data used to train them. If a facial recognition system is to perform well across all people, the training dataset needs to represent a diversity of skin tones as well factors such as hairstyle, jewelry and eyewear.”

Microsoft notes that it incorporated bias training, spearheaded by Microsoft Senior Researcher Hanna Wallach, who specializes in AI fairness, accountability and transparency. Another senior researcher involved in the effort focuses on bias in training data that can result in biased systems, like the “underrepresentation of darker skinned women that may lead to AI systems with unacceptable error rates on gender classification tasks.”

While the eradication of bias in tech systems is a noble cause, the potential surveillance and policing applications of facial recognition in particular gives many critics pause. Microsoft is currently facing a backlash for its relationship with U.S. Immigration and Customs Enforcement (ICE), though the company opposed the border separation policy being enacted by the agency.

In January, Microsoft announced its intentions to move forward in contracting with ICE after securing an Authority to Operate (ATO) from the agency. The Face API within Azure Cognitive Services is part of a suite of tools offered in Azure Government contracts.

“This ATO is a critical next step in enabling ICE to deliver such services as cloud-based identity and access, serving both employees and citizens from applications hosted in the cloud,” Microsoft wrote in January.

“This can help employees make more informed decisions faster, with Azure Government enabling them to process data on edge devices or utilize deep learning capabilities to accelerate facial recognition and identification.”

Audi is turning to Israeli startup Cognata to help the automaker validate its autonomous vehicles in the virtual world before they head out on the road for testing.

Autonomous Intelligent Driving, Audi’s self-driving unit led by a team of former Microsoft, Tesla, and internal Audi veterans, says it will use Cognata’s autonomous vehicle simulation platform to test and develop its technology.

AID says the multi-year partnership will help it bring its self-driving vehicles to market faster. The partnership illustrates the demand for advanced simulation technology as companies race to safely develop and deploy autonomous vehicles.

“At AID, we are convinced that simulation is a key tool to increase our development speed and a necessary one for the validation of our product and for proving it is safe” according to AID CTO Alex Haag, who had a brief stint at secretive self-driving startup Zoox and as a senior manager on Tesla’s semi-autonomous Autopilot team.

The deal also highlights the growing ecosystem of Israeli startups, many of which developed technology initially designed for military, such as drones and other defense applications, only to find a hungry customer base within the autonomous vehicle industry.

Cognata, which raised $5 million last year from Airbus Ventures, Emerge and Maniv Mobility, recreates cities in its 3D simulation platform to give customers a variety of testing scenarios. The platform pulls in layers of data to help build these virtual environments. It starts with recreating real cities, adds in AI-based traffic models to simulate real-world conditions as well as data from the vehicle’s sensors.

As there’s clearly too much ad revenue potential to ignore, Facebook today announced it’s reversing its cryptocurrecy ad ban effective immediately. The decision comes with a few caveats, however. The company says it will allow ads and related content from “pre-approved advisers,” but will still not allow ads promoting binary options and initial coin offerings.

Facebook had first enacted the ban in January, saying at the time that too many companies in this space were “not currently operating in good faith.”

While it admitted that banning all crypto advertising was a broad change, the company said that its new policy would “improve the integrity and security of our ads, and to make it harder for scammers to profit from a presence on Facebook.”

But it had also said the policy would be revisited over time, as its ability to protect deceptive ads improved.

Fast forward six months, and apparently Facebook is ready for the crypto ad onslaught yet again.

This time around, it’s making advertisers go through an application process to determine their eligibility. Facebook will ask advertisers to include on their applications details like what licenses they’ve obtained, whether they’re a publicly traded company, and other relevant background information regarding their business.

How thoroughly this information is fact-checked by Facebook staff remains unclear.

The company reminded users in the same announcement that they should continue to flag ad content that violates its guidelines. In other words, expect some bad ads to get through.

Facebook explains its new requirements will keep some crypto advertisers from being able to hawk their businesses on the social network, but adds that its policy in this area continues to be a work in progress.

“…We’ll listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time,” says Rob Leathern, Product Management Director, in Facebook’s announcement.

Facebook’s original decision to ban crypto ads was followed by Google in March, when the company cited the “unregulated” and “speculative” nature of many of the advertised products. Its new policy begin this month. Twitter and Snap also have some policies around crypto ads, with Twitter only showing ads for exchanges and wallets provided by publicly traded companies and Snap allowing crypto ads but banning those for ICOs.

The crypto industry is rife with scams, so it makes sense that these major platforms would need some rules around what’s allowed. According to the FTC, consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018, Coindesk reported on Monday. And an agency official warned that consumers will lose more than $3 billion by the end of the year.

Facebook says the full crypto ad ban is lifted today for approved advertisers.

CarBlip, a new car-buying mobile application that’s aiming to compete with services like Wyper, has raised $2 million in a new round of financing.

The investment was led by Nordic Eye Venture Capital with participation from the startup studio and seed investment firm, Science.

CarBlip chief executive Brian Johnson, said that the company’s main purpose was to bring the used-car buying experience online.

“One of the main things about why we started CarBlip is we wanted to circumvent the in-person negotiation process and avoid the influx of calls that a buyer gets,” says Johnson. 

The user just downloads an app and looks for the brands they want that are available in an already geo-located area, Johnson said. Shoppers can submit bids on a vehicle privately and receive counter-offers via the app. Then, when they’re ready, they can head down to a dealership to move forward with the purchase, Johnson said.

While Johnson doesn’t have much auto experience himself (outside of marketing), co-founders Eric Brooks and Kim Lane both spent time in the car business, Johnson said. Brooks founded LA Car Connection, a local car dealership, while Lane spent over a decade at Ford, according to the company’s website.

Like Wyper, CarBlip touts a Tinder -like interface that lets users swipe to select vehicles they’re interested in, what Johnson says differentiates his business is the ability to negotiate on the platform for the vehicle. It’s a feature that’s bound to attract interest from dealerships because they’re pretty much assured a sale, Johnson said.

“We loved the value proposition that they were signing up dealers directly,” said Richard Sussman, a the managing partner for Nordic Eye in the U.S.

This post has been updated to indicate that CarBlip is selling new cars, Kim Lane is an executive in charge of business development and . 

Sequoia Capital, the 46-year-old venture firm, has secured $6 billion in capital commitments for an $8 billion global fund, according to a new report in the Financial Times. The report echoes a late April piece in the Wall Street Journal that reported Sequoia investors had already committed “roughly” $6 billion to the new fund.

A source familiar with the matter confirms for us that both stories are accurate.

The capital commitments thus far have come from investors with no prior relationship to Sequoia. The firm intends to turn to its previous investors for the rest of the capital commitments, which Sequoia is securing in increments of $250 million or more.

Sequoia now makes more than 50 cents from every dollar returned to its investors from its overseas bets, according to a separate source close to the firm, with the firm’s China strategy proving particularly fruitful. Like numerous Silicon Valley firms, Sequoia decided to dip its toe into the market beginning in 2005. Unlike most Silicon Valley firms that opted not to remain in China, owing either to attrition or because of tenuous relationships with local VCs, Sequoia stayed put, empowering the founder of Sequoia Capital China, Neil Shen, to eventually build up offices in Beijing, Hong Kong, and Shanghai — and to assemble a portfolio that is today rife with highly valuable companies.

Among the many companies Sequoia Capital China has funded: Meituan-Dianping, the group-discount service that sells locally found products and retail services and just filed to go public in Hong Kong; Ele.me, the food ordering company that sold a controlling stake in its business to Alibaba in April for $9.5 billion; DJI, the drone company, which was reported to be raising $1 billion in new funding this spring at a $15 billion valuation; VIP.com, the commerce platform that went public in 2012 and boasts a $7.2 billion market cap; and Didi, the mobile transportation giant that’s in a race against its U.S. rival Uber to conquer the global ride-hailing market. Sequoia is also an investor in the electric car company Nio, which filed confidentially for a U.S. IPO last month.

Many of those started as earlier-stage investments, and a source familiar with the matter to says expect the same, no matter how much Sequoia raises. This person observes that the majority of the funds from Sequoia’s first two global growth funds — which were $700 billion and $2 billion, respectively — have been funneled to companies with which Sequoia was already in business, adding that its new funds will also go mostly to existing portfolio companies and new opportunities.

The race to gather up an unprecedented amount of money — by Sequoia most notably, but also numerous other firms that are raising record-breaking amounts — is directly correlated to one of the biggest disruptive trends in the venture industry in recent years: Softbank’s Vision Fund, a $100 billion fund for now, though SoftBank CEO Masayoshi Son, talking with the Nikkei last fall, said to expect more gargantuan fund in the not-too-distant future.  “The Vision Fund was just the first step. Ten trillion yen [$88 billion] is simply not enough. We will briskly expand the scale. Vision Funds 2, 3 and 4 will be established every two to three years.”

As sources close to the Vision Fund explained its strategy to us last fall, its mission is not to produce venture-like returns. The idea is instead to return more money to investors than private equity firms like KKR, whose first 18 private equity funds wound up delivering more than two times total capital invested on a gross basis, and produced a net IRR of 18.9 percent. Said one source in particular, “If someone is investing in [Vision Fund], he’s expecting to get better returns than with KKR and Blackstone.” Indeed, added this person, 20 percent IRR over seven years — the time SoftBank estimates it will take most of Vision Fund’s bets to play out — is the “worst-case scenario.”

Shen meanwhile suggests that, SoftBank notwithstanding, the game has changed. As he tells the Financial Times of Sequoia’s massive new fundraising effort: “The magnitude is different today because the companies are different today . . . To be the lead investor in a company you can no longer just invest $100 million . . .if you want to build a company that is worth several billion. For that you need $400 million or $500 million.”

Billboard will begin using Pandora Premium and iHeartRadio subscription streams to inform its Billboard 100 and Billboard 200 charts, along with other streaming-inclusive charts, the company announced this week. Before, only Pandora’s radio spins were included.

According to Pandora, the change goes into effect on July 14 and will bring nearly 6 million Pandora subscribers’ spins into the chart, from those who weren’t being counted before.

iHeartRadio’s terrestrial radio stations nor its programmed radio streams will be reported to Billboard, and won’t impact chart rankings. Instead, its All Access and Plus subscription tiers will be added to the all-genre Hot 100, Billboard 200 and genre-based song and album charts, says Billboard.

These changes are launching alongside a big revamp of how Billboard weighs streaming data for its charts.

Starting with the rankings dated July 14, which cover streaming data from June 29 through July 5, Billboard will give more weight in the chart to plays on paid subscription streaming services like Apple Music and Amazon Music, as well as the plays on the subscription tiers of hybrid (paid/ad-supported) platforms, like Spotify and Soundcloud.

Meanwhile, plays on ad-supported services like YouTube and the non-paid tiers of hybrid services (e.g. Spotify’s free tier) will be given less weight.

Pandora’s radio plays have been a part of Billboard charts, including the Hot 100, since January 2017, but the addition of another 6 million users’ on-demand streams could greatly impact the rankings.

As Pandora noted today, its app has three times the monthly active streams compared to terrestrial radio’s online platform.

“The Billboard charts are our industry’s bible,” says Jeff Zuchowski, Pandora’s VP of Artist Marketing and Industry Relations, in a statement about Pandora’s inclusion. “The fact that all three tiers of Pandora streams are now included is a major milestone not only for us and our 72 million monthly active listeners, but also recognizes, in a very powerful way, the millions of fans who listen to their favorite artists via the Pandora platform,” he said.

Airbnb needs to find new places to list in Paris to keep up with growth. That’s why the company announced a partnership with real estate company Century 21 in France, according to Les Echos and various French media.

Airbnb is in an awkward position in France. It is the company’s most important market, but the Mayor’s Office has also been cracking down on illegal listings. Airbnb now needs to make sure that there’s enough supply for its userbase.

Since December 2017, you have to register your apartment with the city if you want to list it on an online renting platform, such as Airbnb. This way, Paris can keep track of apartments and see if they comply with the current law.

In Paris, you can’t rent an apartment for more than 120 days a year. As a renter, you also can’t sublet your apartment on Airbnb unless the landlord is fine with it. In most cases, the landlord prevents subletting.

But the issue is that many listings in Paris were sublets. A few days after the new rule was enforced, Paris flagged around 1,000 apartments that were not registered with the city, asking Airbnb to remove those listings. And it was just a start as there were tens of thousands of unregistered homes in Paris.

That’s why Airbnb is trying something new. In order to incentivize landlords, Airbnb has worked with Century 21 to authorize subletting. When Century 21 finds a new renter, the company will ask landlord if they want to sign a deal with Century 21 and Airbnb to facilitate subletting.

If everybody agrees, then renters can keep 70 percent of Airbnb revenue. Landlords get 23 percent of proceeds. Century 21 keeps 7 percent.

This seems like an insanely great deal for Century 21 as it’ll generate another revenue stream in Paris. Landlords can also make more money even though rents are already quite high in Paris.

But I’m not sure renters will list their apartments on Airbnb if they can’t make as much money and they have to pay taxes on their Airbnb revenue. It doesn’t seem to be the best way to cover part of your rent. But that should still help add new homes to Airbnb.

Starting today, customers at HSBC’s New York City flagship will be greeted by a friendly humanoid face. The bank’s Fifth Avenue location is employing Pepper, the customer service ‘bot that has become the face of Softbank’s growing robotics wing in recent years.

In the few years it’s been available, Pepper has held a veritable factotum of different gigs, from airport greeter, to shopping mall info desk staffer. The robot has held even more roles in its native Japan, finally grabbing some temp work in the U.S. back in 2016.

As far as what such a product offers that you won’t get with the standard flesh and blood bank employee, the answer still seems to come down to novelty, as HSBC looks to offer Manhattanites a glimpse at “the branch of the future.”

“We are offering the approximately two million people who live or work within a half mile radius of our flagship branch, and the millions more who walk Fifth Avenue daily, an experience in retail banking like never before,” HSBC’s Pablo Sanchez said in a press release tied to the next. “We’re focused on developing the ‘branch of the future,’ and our use of Pepper will streamline branch operations and delight our customers, allowing bank staff to have deeper, more high-value customer engagements.”

The robot will be tasked with informing patrons of self-service banking options and answering some basic questions. Oh, and it will also take selfies. No specific details on when additional units might be hitting more U.S. locations, but the company says, “Pepper is part of a larger vision being rolled out in the coming months that will transform HSBC’s branch banking experience.”

Pepper, is of course, one prong of Softbank’s robotics strategy, which now also includes Boston Dynamics, which is purchased from Alphabet.